The state of the market

[EVillageProwler]

Yesterday, I went to a local show (in White Plains, NY). I got there early, and left early (unrelated to the show). For the brief time I was there, I noticed that there was a marked paucity of nice, fresh coins. Generic slabbed Morgans, Walkers, etc., abound, as usual, and problematic raw higher-end coins also were here and there.

 

The market is supposedly HOT. Not hot. HOT. H-O-T. How is a H-O-T market sustained by such marginal material?

 

Last night, I pestered a prominent board member for an explanation. He said that the market hasn't peaked yet, and that the nice coins come out when the market peaks.

 

As much as I respect this guy's coin-related business expertise, I don't buy what he said. It can't be that all the would-be sellers of nice material are simply waiting for just the right moment. They can't possibly know when the right moment is. It's like being able to predict the stock market. We all try, but we all do it differently.

 

What I would like to know -- from the NON-DEALERS -- is what your thoughts are on the state of the market. Having a dealer tell me that the market is hot and that we should keep on paying more and more money is only one single point of view.

 

(Ok, dealers can respond, but please keep in mind that dealers have a huge financial stake in the market being hot.)

 

Moreover, I'd like to know what's happening to the nice, fresh material out there. Where are they?

 

EVP

 

[GDJMSP]

As with any market - it is defined as being HOT when prices are rising. And prices have been rising. Maybe not in every category, but in regard to the market as a whole they have been. It is also the nature of any market that when demand outstrips supply - prices go up. So in effect - it is the lack of new material being available that causes prices to rise. If high end coins were plentiful marekt wide - prices would quickly drop.

 

As to why there is a lack of new material - that has been a complaint of dealers & collectors alike for some time now. I think there are several reasons for this. For one thing there are a lot of new collectors and they are buying coins up. They have no desire to sell them as a general rule because in a lot of cases they just bought them. And there is a limited number of coins in any given category.

 

As for the collectors who have been involved in the hobby for some time - some of them just don't sell - ever. Once they buy a coin - they keep it. True there are some who sell coins to upgrade or because they need the money. And there are some who sell a part of their collection because they are tired of it and want to move on into a new area. But these type of sales do not happen often enough to bring an abundance of new material into the market.

 

I also think the Registry Sets have helped cut back on the material available. Many have worked long and hard and spent a great deal of money to achieve their current ranking - and they want to keep it. And if they sell their collections - they can't.

[keithdagen]

The market is dead right now. The only people who say otherwise are trying to convince you to buy something.

 

Now, certain aspects of the market (like toned coins) may be on fire, but the overall market is very slow. I went to a coin show 2 1/2 months ago and saw a bunch of great stuff. Went 2 weekends ago, and only one dealer had anything new that stuck out, and I bought the best he had. Other than that, there was little turnover.

[jtryka]

Well EVP, I really don't play enough in the broader market to tell you if it's really hot or not, and I really only play in the stuff I collect at the moment (primarily Saints), and I would agree with you that the market is pretty dead for the rarer stuff. Well, dead is probably not the right term, as I can't say how prices are considering the dearth of material to be had! I can't tell you the last time I saw a nice 08-S, or 13-S, or 09-D on the market, and let's not even talk about the branch mint pieces from the 20s. The common date stuff is selling really well though, and as a testiment, I used to be a strong buyer of 14-S and 15-S coins in MS-63 and 64, and in late 2000 and early 2001, you could buy all you could carry in 63 for under $400 each. Now you're likely looking at $500-550, not bad over a year and a half. I'm sure the rarer stuff would be fetching some handsome prices, but the holders of such coins realize that the strength in this market is in the lower end, with newer collectors striking at the common stuff first, after all, how many of you started collecting with a series of bust dollars? (don't answer that EVP, you aren't representative of the average beginner, even when you were a beginner!). As the modern registry mania subsides, a good number of these new collectors will advance, and the good stuff will find its way to market. In the mean time, I am pursuing a value strategy, just like I did in the stock market, buying what I believe are undervalued pieces based on condition and scarcity relative to the price.

[Tradedollarnut]

I totally disagree, Keith. The market is thriving. Look at the prices realized in auction lately - not just the records, but the total realized. B&M just sold $7M, Heritage sales keep getting bigger and bigger - even TAGZ's Superior is going well! (gasp!). Sure, certain areas are slow, as is December in general, but on the whole record business is being done by almost every dealer and auction company.

 

EVP, what I meant by the nice stuff being seen at the market peak is this: On the way up, that stuff never even hits the bourse floor or the website - it's sold the second the dealer owns it. To me, the definition of the peak is when this immediate sale of the good stuff ends and it starts staying in the dealer's inventory for a period of time - that's when the good stuff "appears"for the general collector and that's when the market has peaked (temporarily or permanently - ya never know).

[gmarguli]

Look at the prices realized in auction lately - not just the records, but the total realized. B&M just sold $7M,

 

This is meaningless. What if that $7 million in coins ahd a Bluesheet value of $9 million? Would the market still be HOT HOT HOT?

 

Generic coins are dead. So-so coins are dead. Rare coins are selling like they always will. Nice toned coins are selling like they always will.

 

90% of the market is dead. 10% is hot and that is what is getting all the press.

[cladking]

The modern market is a tiny percentage of the overall market but it is still very hot. Prices are up at least 20% this year which makes this the slowest year in the last three. This market seems to have just caught it's breath. A few areas which were heavily promoted have aken it on the chin, but these were a small segment of the modern market. There are a few more areas which may be in for a smaller drop.

[Guest]

I have to agree with TDN on this one. Nice coins just aren't staying on the market for any length of time. And they won't until prices move up a ways. Want lists have these sold for months to come. Dealers lament that they can't find or buy nice coins. I believe them. The market is hot for fresh and appealing coins. Rare coins too. The auctions consistently show that top material is bringing top dollar. Dealers are stumbling over each other to one up each other. And like Greg stated, average swill is still going begging. If you have what everyone else has, it's not rare, and likely, not even in great demand. The big problem still is that the majority of the slabbed coins sitting on the market aren't nice for the grade. Too many are cleaned, overdipped, ugly and just plain nasty for the grade. It's still a big hurdle to get over. No one wants those coins except for someone who doesn't know exactly what it is. When an honestly graded coin shows up, bells and whistles go off.

 

roadrunner

[GDJMSP]

The market is dead right now. The only people who say otherwise are trying to convince you to buy something.

 

I'm saying the market is hot - and I'm not rying to sell anything to anyone. Matter of fact - I'm not buying much either except an occassional columnario.

 

I went to a coin show 2 1/2 months ago and saw a bunch of great stuff. Went 2 weekends ago, and only one dealer had anything new that stuck out, and I bought the best he had. Other than that, there was little turnover

 

How much new material that one sees at a coin show - or in any venue - does not determine the strength of a given market. It is rather the lack of new or high end material that determines a markets strength. When the coin market is strong - or hot if you will - good finds are awfully hard to come by. Good prices for good finds are even harder.

[Guest]

"The market is dead right now......only those who say otherwise are trying to sell you something."

 

I'm not trying to sell anyone anything. But I'll put in my order to BUY a dozen gem no motto seated halves in PCGS or NGC 64/65 at CDN type coin "ask." All that I ask is that the coins have original toning, be decently struck, eye appealing, have full and booming luster, no rub, and with minimal marks. Basically solidly graded coins. Package securely and ship off to me. If the market is dead, I should get many offers.

 

roadrunner

[EVillageProwler]

Ok, fellas, let me see if I got this straight so far:

 

It is too simplistic to say ``the market is hot.'' There are segments within this market, and they perform differently. And, there are sub-segments too, and they perform differently as well.

 

Some segments perform well, and others not so well.

 

So far so good?

 

Now I am wondering why HOT implies rising prices. To me, HOT suggests a frenzied market activity. It is an activity of much product in as well as much product out. But, my observations indicate that the good material do get gobbled up fast and hard. But, they are not readily replaced by good incoming material. If the market is only evidenced by product out, but no product in, then how is the market activity sustained?

 

TDN says that the good, fresh material doesn't show up in dealers' inventories because they get sent off to never-never land right away. If that's the case, then how does the show circuit sustain itself?

 

Here's my view, in a nutshell: I am guilty of buying stuff and holding onto them like they were the last drop of water for miles around. For over a year now, I search dealer and auction inventories and I find very little stuff that interests me. Sure, the Vermuele, Hain, San Marino, Dave Queller and Russ Logan material interested me, but there was little more than that. Perhaps a couple of pieces here and there, but not much really.

 

I get bored. I got bored. I read all sorts of bulletins about how H-O-T the market is, but I'm usually bored. How can that be? I love coins. I'm a coin addict. How can a coin addict be bored in a H-O-T market?

 

EVP

 

[EVillageProwler]

RR:

 

Can you put in an order for me too? I'll take MS63 Seated Dollars or EF45 Early Dollars. Same criteria as yours.

 

EVP

 

[Tradedollarnut]

The show circuit sustains itself NOT as a vehicle for the dealers to SELL, but rather as a vehicle for them to BUY. The newps are put away and offered to the best clientelle before they are put on a price list. Most collectors never see the fresh stuff, except at auction where usually they are blown out of the water because they go off sheet. Sheet buys average stuff - it rarely is indicative of the value of a truly nice and fresh coin!

[Oldtrader3]

I agree with what you are saying TDN. I have been paying over sheet for some key Peace Dollars, 1900-1908 Liberty Half Eagles and Saints. I am paying more than last year on Saints, but Half Eagles are about the same. I am having to pay over sheet for nice MS64/65 Peace Dollars, but that is always the case. The only place that I can find new material is in the large auctions. Occasionally, I can cherry-pick Jack Behmer.

 

Since I do not sell anything but coins that I upgrade, I do not worry a lot about paying more for nice material. I do think that some series are neglected, namely Seated/Barber dimes and quarters. There are some really rare coins in both series and current prices do not reflect this. Look at Herritage Auction History on gold coin prices. It will scare you, because the prices are so low for generic Eagles and Half-Eagles

[michael]

wow waht great responses but greg-gmarguli sums it up really nicely and to the point!

 

grreat coins with exceptional attributes fantastic eye appeal

be it deep cameo proof coins pre 1915

key dates any grade

really nice looking fantastic eye appealling ms 63/64/65 saints

monster or really nice toned type coins

proof 36 to 42 coinage

early commems

the list goes on and on

 

the above coins are selling fast and delars cant replace such coins at sheets

 

it is for me the beginnig of a bull market in coins and it hought i could predict it i cant and it is ever changing

if someone told me about waht the state quarter program would have done i would have laughed

 

but the personbs that make out best in coins are not the so called investors which is really a spectulation

and usually most all spectulators lost their shirts

 

but the true collector as he she is the real investor by collecting one by one great coins for thier collectkions

over the long haul buying coins that are attractive eye appealling holding good value and that the collector

likes to own this is the real market and many who have done the above as an enjoyable hobby seems to always

come out ahead so to speak

 

and even at the worst possible scenero breaks even money wise but has lots of fun learns something

meets others and develops friendships along the way !

 

i would not be to concerned with weather a market is hot or not i think for me you should be concerned with

 

are you having fun and enjoying what you are learning and meeting new friends! and looking for coins that are

pleasing to you and that hold great eye appeal for you and also coins you think are greAT VALUES!!

do this with a descerning eye put a collection

together how you want to one coin at a time!

and i think you will do fine and at the worst case seeneiro break even

 

sincerely michael

 

[michael]

is the market hot well maybe warming up yes yes yes for great stuff but that is only like 5% of what is out there

only buy great coins coins with a reason to rise in value that you love the look of and that are great values

 

if you have to ask which ones are these then you have not really learned anything about coins or the coin market

once you can deside for yourself and look at a coin and know it is great for eye appeal and value and you like it

and want to keep it and build a collection in any parameters you want to then i think the market will for the most part

be hot and saleable for you!

 

the market has a ways to go and anything is possible up or down but if you are a true collector and are in it for

the long haul the hot and cool markets should not really bother you as you only buy great value coins that are great

eye appea, wise for you then you are always one step ahead of the market!

 

if you do see opportunities to selli guess you could do so and again only buy coins that are great coins in terms

of eye appeal and what you like along with great values coins that are underapprecaited or sleepers then again

i think no matter waht the current state of the markets you can always come out smelling like a rose overall

 

yes there are bumps in the road like always but overall i think you will have fun learn lots to the point to

reconice great coins with a reason to rise in value meet many new friends and just ride out the waves

 

always coming up to the top for air

 

sincerely michael