Moderns bubble about to burst?

[reid1836]

Well, indications are that the modern wave of astro-prices is about to end !

As most experienced collectors suspected, the high prices that modern coins were bringing were unrealistic. The supply would eventually be far greater than the demand. After reading an article in this weeks COINWORLD magazine.( The publication that also publishes COINVALUES. A magazine that indicates relative retail values for U.S. coins, more commonly refered to as Trends.) It appears that the proverbial bubble is about to burst ! The article indicates that the supply of high grade modern coins is greater than the demand . It also leads the reader to expect adjustments to the current values for said coins to move in a downward direction. How sharp a drop and how soon it will happen is still left to the reader to speculate. But the article does seem to indicate that we are definitly on the eve of such a movement. The article also states that the ealier series in U.S. coins are stable and still in a bull market.

Seasoned collectors have been aware all along that these high prices were a temporary market. The older series are the real meat and potatoes of the coin market. Good luck and best wishes to those who have invested greatly in the high grade moderns market. It may be time to reassess your investments in moderns. Before the great bailout !

"Remember the 80`s" Oh yeah, and the Alamo !

[braddick]

Interesting.

 

And your agenda is?

[reid1836]

Personally I don`t have any modern coins in my collection period.

I somewhat interested in low mintage modern commem gold and the bi-metalic $10 Library of Congress. But that is the extent of my interests in the modern area.

Both of which I feel do not qualify for the modern coin dilemma of a greater supply than there is a demand. Other than the above mentioned I have absolutely no inclination to ever possess any. But, in the words of a well known comedian. I could be wrong but, I don`t think so !

[braddick]

Personally I don`t have any modern coins in my collection period.

I somewhat interested in low mintage modern commem gold and the bi-metalic $10 Library of Congress. But that is the extent of my interests in the modern area.

Both of which I feel do not qualify for the modern coin dilemma of a greater supply than there is a demand. Other than the above mentioned I have absolutely no inclination to ever possess any. But, in the words of a well known comedian. I could be wrong but, I don`t think so !

Even after reading your post twice I'm left with the thought you believe Moderns are bad outside of the $10. Library of Congress. But it's not really a "Modern" because it's scarce (and, because you own one).

 

Wrong?

[Leothelion]

Well, indications are that the modern wave of astro-prices is about to end ! Seasoned collectors have been aware all along that these high prices were a temporary market. The older series are the real meat and potatoes of the coin market. Good luck and best wishes to those who have invested greatly in the high grade moderns market. It may be time to reassess your investments in moderns. Before the great bailout !

"Remember the 80`s" Oh yeah, and the Alamo !

 

Out of all the special attributes and pop tops, Full heads, tails and horns, bells and steps will live on and settle down to respectable values among true collectors of fully struck coins.

As for the rest, !!! And it's all due to the inconsistency of grading coins!

 

Here's the senario: Novice buyer buys one coin at xxxx dollars and enjoys his new found investment. Novice buyer buys a second coin at xxxx dollars and compares it to #1 coin. Novice buyer becomes temperarily confused because coin #1 and #2 look different, they don't have the same quality! Novice buyer goes to whomever turned him on to coins and gets smoothed over and now all is ok again. Novice buyer may buy third coin or several others for xxxx amount of dollars before learning something contrary to his beliefs, possibly from another source. This senario repeats itself until the novice buyer loses faith and sells! But only to face the hard truth when he watches his coins fetch much lower prices then he paid.

What are some of the hard facts a novice buyer may learn about buying over-rated certified coins?

That there are two markets for grading coins; technical and market grading.

The problem with the inconsistencies with certified graded coins.

Another could be fingerprints or milk spots magically appearing on coins.

And there are many others but I'll leave that to anyone else who would like to add

their two cents.

 

Leo

[DonHeath]

Leo,

 

He's not talking to us collectors. He's talking to the investors. I'd be amazed if they take investment advice about moderns from someone who doesn't collect them, but stranger things have happened. I hope he runs the investors off. It'll help me when I buy. Ironically, I do remember the 80's, and I don't remember it being specific to moderns.

[Leothelion]

Leo,

 

He's not talking to us collectors. He's talking to the investors. I'd be amazed if they take investment advice about moderns from someone who doesn't collect them, but stranger things have happened. I hope he runs the investors off. It'll help me when I buy. Ironically, I do remember the 80's, and I don't remember it being specific to moderns.

 

Aren't novice buyers investors!

 

Leo

[Oldtrader3]

If I remember correctly, very few moderns (post 1950) were being certified in the '70's because most were not worth the cost of certification. Also, there were no MS70 coins around then.

[DonHeath]

Aren't novice buyers investors!

 

Without a doubt. Hopefully some of the investment is their time and energy. Those are the folks that find the hobby rewarding. Buying a collection just takes cash.

 

Oldtrader3, did you mean to say the 70's? Was anyone slabbing moderns then?

[reid1836]

Hmmm. Let`s see. I believe I already stated that I do NOT have any moderns in my collection PERIOD ! Only that the aforementioned issues held an interest for me.

[reid1836]

Seems as if I`ve stirred up quite a snit. As to the advice. Opinions are like******** everybody`s got one. My point about the 80`s was that high grade common coins caught many with there pants down when the supply greatly out numbered the demand for them. As an example, the MS65 common date Morgans. Which soared to great heights. Being valued at thousands of dollars for what you can easily purchase today for perhaps a few hundered or less. But by all means don`t heed my opinions. You may want to talk to some of those collector/investors who lost their shorts in that debacle. Perhaps even ask how many highgrade moderns they have and the prices they are willing to pay for them ? Although I wasn`t one of the fleeced. I do know several collector friends who were. Most of which do have some high grade moderns that are in mint or proof sets. With only a couple having expensive high grade certified coins. But alas, some people never learn.

[cladking]

Seems as if I`ve stirred up quite a snit. As to the advice. Opinions are like******** everybody`s got one. My point about the 80`s was that high grade common coins caught many with there pants down when the supply greatly out numbered the demand for them. As an example, the MS65 common date Morgans. Which soared to great heights. Being valued at thousands of dollars for what you can easily purchase today for perhaps a few hundered or less. But by all means don`t heed my opinions. You may want to talk to some of those collector/investors who lost their shorts in that debacle. Perhaps even ask how many highgrade moderns they have and the prices they are willing to pay for them ? Although I wasn`t one of the fleeced. I do know several collector friends who were. Most of which do have some high grade moderns that are in mint or proof sets. With only a couple having expensive high grade certified coins. But alas, some people never learn.

 

Again, you really need to keep this in perspective. In the 1980's the common coins soaring to high valuations were far more available. There were tens of thousands of many of these coins and there were even more buyers. Everyone believed that these were the future of the hobby (they weren't far off), and huge numbers of people were chasing them for speculation. Many of these "common" moderns exist in numbers of a few dozen and the hobby holds them in disdain and predicts their demise when collectors finally come to their senses.

 

There was almost no collecting of Morgans at the grass roots level. Yes, there were some people putting together circ sets and the like but they had to get in the market at least to get the keys even if they could find many dates at flea markets and garage sales and non-hobby sources. The moderns are being collected by the masses on a grass roots scale. People are filling blue folders and various maps. They are buying mint and proof sets and don't have to go to a shop or even on-line. They are scouring the circulating coins to flesh out their collections. Many of these people have never bought any coin before and may not even realize they are coin collectors. They aren't going away, they aren't going to decide the XF '68-D quarter they plucked from circulation is too risky to keep, and they may not even know if the high grade market collapses.

 

Price decreases are very beneficial to most modern speculators (if there are any others) in the long run. Decreases are also beneficial to most modern collectors since few are very far along in their collections and most have started in only the last five years. Decreases might also help spur demand by getting a few fence sitters into the moderns who are looking for bargains but don't want to buy into a rapidly rising market.

 

Moderns are going to be around for a long long time. Just like all the other artifacs of our heritage they will endure and they will come in and go out of style as a collectible.

[Oldtrader3]

The laws of supply and demand apply to coins (just like everything else). Dates and MM's are like real estate, they won't make any more. As prices increase and high grade, modern cert. numbers increase, demand will slacken and prices will fall accordingly. When prices fall to a certain level and new collectors enter the market, prices will rise again.

 

The coin collector base is many times larger than it was in the '80's. This prevents a few dealers from manipulating bidding and the market, as they did then. I do not see the mechanics of similar crash occuring in today's market.

[reid1836]

Price decreases are very beneficial to most modern speculators (if there are any others) in the long run? Hmmmmm. Let`s put this to a hypothetical test of sorts shall we ?If I were to purchase one of these high grade moderns with oh let`s say with a dozen or less certified for that grade. Let`s use perhaps the 1998-s Silver kennedy half (mintage-878,792 pcs) in PFCA-68 of which only one specimen has been certified to that grade with none higher as of July, 2004 by NGC. Let`s say the cost was $300 give or take. Now let`s travel in time to 1 year later . Now there are perhaps 123 specimens certified in that grade and my coin is now worth only $75 in the market place. Another year goes by and 375 more have certified to the grade and my coin is now worth $35. Granted that this is only a hypothetical situation but, I don`t think I would have wanted to buy anymore of them at the later date at a lower price. Sounds to me a lot like throwing good money away after bad and hoping for a miraculous turnaround.

[cladking]

Price decreases are very beneficial to most modern speculators (if there are any others) in the long run? Hmmmmm. Let`s put this to a hypothetical test of sorts shall we ?If I were to purchase one of these high grade moderns with oh let`s say with a dozen or less certified for that grade. Let`s use perhaps the 1998-s Silver kennedy half (mintage-878,792 pcs) in PFCA-68 of which only one specimen has been certified to that grade with none higher as of July, 2004 by NGC. Let`s say the cost was $300 give or take. Now let`s travel in time to 1 year later . Now there are perhaps 123 specimens certified in that grade and my coin is now worth only $75 in the market place. Another year goes by and 375 more have certified to the grade and my coin is now worth $35. Granted that this is only a hypothetical situation but, I don`t think I would have wanted to buy anymore of them at the later date at a lower price. Sounds to me a lot like throwing good money away after bad and hoping for a miraculous turnaround.

 

I know nothing about '98 silver halfs. If I were to pay $300 for one then I would first want to learn something about them. Even a cursory study of a pop 1 coin which later becomes a pop 498 would show that the coin might be pretty common and should be avoided at a high premium. Even if this weren't obvious then it would certainly be obvious that the coin is distressingly common in only one grade lower. Of course in the long run a pop 498 coin may well be worth $300 or more but it makes no sense to buy such a coin if you can get something else that will be much scarcer in the long run for the same money.

 

If you check the pop reports you'll see many issues which have very slow or no increases. If you buy coins less than three years old you are taking on much additional risk. Proofs tend to have much less variability in quality and this is especially true for the post-'82 issues which are almost invariably high quality. If you don't like moderns, and know nothing about them it would be extremely foolhardy to pay large premiums for most coins. But if you collect moderns there are still tremendous opportunities on greatly underappreciated coins. If you must speculate in moderns it might be wise to buy only the rarities or raw coins and stay away from high grades.

[DonHeath]

Reid,

 

I won't argue the virtues of moderns. It's an exhausted argument that's been rehashed so many times I can recite the pros and cons. There are classic collectors who routinely pay a premium for particular holders without regard for the coin, there are classic collectors who regularly buy overgraded junk in 3rd tier holders that the seller calls PQ, there are classic coins in 65 holders that on the right day become a 66 and change in value $70,000 with a simple reholder. Buy what you like. Just don't kid yourself and call it an investment, or pretend one part of the market is safer than another. The coins you'd likely endorse got their butts kicked in the last crash too, not just the common Morgans. A collector who loses $3000 in a set of Ikes is likely at less risk than the collector who has a maxed out holdered set of Barber halves. When the market gets funny, grade inflation changes direction, and the iffy coins become ugly. Good old harsh technical grading takes over.

 

Price of a 1932 $10 Indian in MS66 in 1989 - $40,000.

Price of a 1932 $10 Indian in MS66 today ? - $7,000 ? give or take?

 

I'll leave you guys the last word, but will say that for me, the values don't matter much. I just study and collect the coins I like.