The Danger Of Population Increases On Coin Prices 1 1

[zadok]

On 12/19/2022 at 9:40 AM, World Colonial said:

@zadok

I started looking at this but topic for two reasons.  First, to compare the scarcity of better-known coins (mostly US) to those I collect(ed) to obtain a better idea of the feasibility of completing my sets.  Second, due to differences of opinion I continually had with South African based collectors who consistently exaggerated the scarcity of their coinage for the same reasons US collectors usually do.

South Africa has a TPG preference similar to the US (something most or none here will know), so the TPG counts are a lot more representative of actual availability versus practically all other non-US coinage.  The counts are usually at least somewhat low and definitely by US standards but have increased a lot since TPG became widespread around 2004.

As one example, the 1948 half crown has a mintage of 1600.  In Kaplan's 1950 price guide, it lists for 60 shillings (24X FV) or more than most prior dates, all but the 1931 and 1925.  This makes it evident that almost no one found it in circulation which isn't surprising.  If it were a US coin, at least 80% would still survive and mostly in AU-MS.  The last time I checked (8/22), NGC and PCGS recorded 73 MS or slightly more than 4%.  It's not "common" but a lot more available than they thought and probably something like 10% to 20% (at least) actually exist.  The big unknown is the large scale melting up to 1980.

Even my primary interest which is definitely hard to buy potentially has a lot more available than is apparent even in better quality than almost always seen.  It wasn't until I bought Yonaka's reference than I finally knew the mintages which are not low for the time for the 1/2r, 1R, and 8R.  Due to the availability of other coinage (mostly Liberty Seated in this instance), absent hoards I doubt there is a large number floating around but it's still potentially many more proportionately than what I or anyone else sees.

On your comments on 20th century US coinage, I'd only describe the 1933DE, 1913 LHN, 1927DE, and maybe some of the proof eagle and double eagle dates as hard to buy.  This is based upon my assumption of holding period.  A few of the Saints (like the 1929-1932) have low absolute survivors but due to the price, presumably can be bought mostly within a few months and almost certainly within one year.  Every other series (including all Barber denominations) can be bought in one day "nice", except when arbitrary quality criteria is applied.

...pretty much my assessment as well...the few south africa coins i ever bought were just for resale due to the hyper prices they were selling for, never bought any to hold on to...the US market is also hyper inflated but mostly due to the craze for finest knowns n ultra high grades desired n the market feeding that craze...there r a few more truly rare US coins, i dont really consider the 1933DE rare, just its availability status makes it rare, not the absence of the coins....

[GoldFinger1969]

On 12/19/2022 at 11:52 AM, zadok said:

...the US market is also hyper inflated but mostly due to the craze for finest knowns n ultra high grades desired n the market feeding that craze...there r a few more truly rare US coins, i dont really consider the 1933DE rare, just its availability status makes it rare, not the absence of the coins....

On the 1933 DE....even if you include the Langbord 10, there are only 11 coins, give or take 1 or 2 still in hiding.  To me, that's rare.  A TOTAL population of about 1 dozen.

On the craze for finest knowns.....I agree it drives up the price of lots of coins, but still there are coins with thousands or tens of thousands that sell at rich premiums to lower-graded coins or their melt value.

Maybe it's just me, but I always compare scarcity to BOTH supply and demand, not just supply.

[World Colonial]

On 12/19/2022 at 12:13 PM, GoldFinger1969 said:

On the 1933 DE....even if you include the Langbord 10, there are only 11 coins, give or take 1 or 2 still in hiding.  To me, that's rare.  A TOTAL population of about 1 dozen.

I consider this number rare, but there is a difference between rarity and availability.  If all 11 were available, it wouldn't necessarily be that hard to buy.  Look at the 1804 dollar and 1913 LHN.

I don't collect ancients but there are potentially tens of thousands.  Outside of hoards, Roman, and Greek, my guess is that difficult as my primary interest is to buy especially nice, it's downright common compared to most other ancients.

It's simple math.  Lower or much lower mintages combined with 2000 or more years of attrition.

On 12/19/2022 at 12:13 PM, GoldFinger1969 said:

Maybe it's just me, but I always compare scarcity to BOTH supply and demand, not just supply.

It's not just you but it's still another attempt to exaggerate the scarcity. 

Demand never determines rarity.  It does impact availability in a low to very low minority of instances through the holding period (as I described in another thread) and whether collectors are likely to know it is for sale, but that's different.  The coins still exist whether available for sale or not.

The other consideration is that no coin which can be bought on demand or short notice can be considered rare. Of course, "short notice" is subjective but if a coin is available within a week, a month, a few months, or even one year, it isn't actually hard to buy.  Look at the Hansen thread to get an idea how quickly he has been able to buy practically every US date/MM.  I'd only call the coins he had to pay a "noticeable" premium to "market" hard to buy, if it is otherwise not available.

On the PCGS forum, someone recently mentioned the low mintage 3CS dates.  Some of the mintages are really low (as low as 1000) but the survival rates are not that low even in high quality. (Maybe fewer in low circulated grades.)  The TPG populations are not that low and it's evident just from Heritage that none of these coins are really that hard to buy.  Any difficulty is only through the application of arbitrarily narrow quality criteria.

On 12/19/2022 at 12:13 PM, GoldFinger1969 said:

On the craze for finest knowns.....I agree it drives up the price of lots of coins, but still there are coins with thousands or tens of thousands that sell at rich premiums to lower-graded coins or their melt value.

Yes, and every one of these are common or very common.

Another coin mentioned recently on the PCGS forum is the 1916 SLQ.  Someone bought an album with one that graded MS-65.

A great find?  Yes

Rare? 

No.  It's common.  It doesn't matter that the mintage is only 52,000, and it's a mid-five figure coin.  There are over 100 grading events in MS-65, and it's been available in multiple in this grade every single time I have looked, probably always is literally all the time. 

Grade rarity (regardless of the grade) reflected on a holder label is an arbitrary and marketing driven invention.  As I explained in the past, it's somewhat different when the coin isn't available in "collectible quality", but that's not what applies here.  We're talking quality differences that were not considered important, until US collecting became financialized first in the 70's and later with TPG. 

If you could even find a sale of these common coins 50+ years ago, it usually would have sold for nominal amounts, from a few dollars to mid two figures.

The reason? 

The price reflected its actual relative numismatic merits, not financialization and marketing.

[Sandon]

On 12/19/2022 at 12:13 PM, GoldFinger1969 said:

On the 1933 DE....even if you include the Langbord 10, there are only 11 coins, give or take 1 or 2 still in hiding.  To me, that's rare.  A TOTAL population of about 1 dozen.

   As I recall, the Treasury preserved two 1933 double eagles in the 1930s and gave them to the Smithsonian Institution, which has displayed them.  After the Langboards lost their case and the government kept their ten, a collector surrendered another one to the government.  Accordingly, there are fourteen known pieces, only one of which can be privately owned.

   Regarding this topic more generally, coin collecting is one area where in some cases supply does create its own demand.  A 1901 Morgan dollar, a coin with a high mintage of which relatively few survived in uncirculated grades, presently lists $3,000 MS 60, $7,000 MS 62 and $10,000 MS 63. There is a tremendous demand for these coins, and it would probably take the find of a number of thousand-coin bags to have much downward effect on the price. The find of only a few thousand pieces might actually make the price increase because a number of collectors and speculators would enter the market and attempt to purchase examples.  It is well known that nearly the entire 1.1 million coin mintage of 1884-CC Morgan dollars still exists in uncirculated condition, yet it now costs over $300 to purchase a low-end example!

[World Colonial]

On 12/19/2022 at 2:37 PM, Sandon said:

 Regarding this topic more generally, coin collecting is one area where in some cases supply does create its own demand.  

This is very true.

Coins with a high preference but an (abnormally) low supply potentially do or will sell for less than if the supply were somewhat larger.  I believe this to be true with my primary interest and much of Latin America coinage generally where the survival rates are (very) low and the quality distribution doesn't meet (primarily US) minimum quality standards.

Many collectors want to collect something "scarce" (however defined) as their primary interest but the lack of supply in acceptable quality convinces them to collect something else.  It's a combination of liquidity preference and limited availability.

In US coinage, the constraint is usually financial. The absolute supply and supply across the quality distribution enables most collectors to afford something they actually want to buy in a minimum quality they will accept.  If prices rise as recently, they can move down one or a few TPG grades lower or shift to another series.

With non-US coinage, the limited supply often means that a (very) low number own the better coins while (almost) everyone else is "locked-out", relegated to buying the "leftovers" which in my primary series is disproportionately dreck.

[GoldFinger1969]

On 12/19/2022 at 2:37 PM, Sandon said:

Regarding this topic more generally, coin collecting is one area where in some cases supply does create its own demand.  A 1901 Morgan dollar, a coin with a high mintage of which relatively few survived in uncirculated grades, presently lists $3,000 MS 60, $7,000 MS 62 and $10,000 MS 63. There is a tremendous demand for these coins, and it would probably take the find of a number of thousand-coin bags to have much downward effect on the price. The find of only a few thousand pieces might actually make the price increase because a number of collectors and speculators would enter the market and attempt to purchase examples.  It is well known that nearly the entire 1.1 million coin mintage of 1884-CC Morgan dollars still exists in uncirculated condition, yet it now costs over $300 to purchase a low-end example!

I think the 1884-CC price issue and the amount you would need to satiate the 1901 Morgan demand are related.

It's all about satisfying enough of the Top Registry and then Type & Collector demand.  These are the first 2 sets of demand for a coin; the third would be the Investor class who are looking to buy Morgans strictly as a silver play (similar to those who buy low-grade Saints or commons for spot gold). 

The differeence is.....you only need about 25-30,000 to satiate the 2 demand groups for Saints before you have enough to drive the price down for the Investor class to the price of the metal (gold).  For Morgans, given the much lower entry price to collect this American classic, you probably have over a million collectors and buyers which probably explains why even the plentiful 1884-CC supply can't satiate the demand.  Even hundreds of thousands of collectors is probably enough demand to absorb more of the coins, since unlike with Saints or higher-priced coins, collectors might get 2 or 3 of a particular year/mintage.

JMHO. 

[zadok]

On 12/19/2022 at 12:13 PM, GoldFinger1969 said:

On the 1933 DE....even if you include the Langbord 10, there are only 11 coins, give or take 1 or 2 still in hiding.  To me, that's rare.  A TOTAL population of about 1 dozen.

On the craze for finest knowns.....I agree it drives up the price of lots of coins, but still there are coins with thousands or tens of thousands that sell at rich premiums to lower-graded coins or their melt value.

Maybe it's just me, but I always compare scarcity to BOTH supply and demand, not just supply.

...rare, a subjective term...to me in coins 5 or less...theres most likely slightly over a dozen remaining id consider that scarce just as the 1804 dollar is scarce but not rare....

[World Colonial]

On 12/19/2022 at 3:41 PM, GoldFinger1969 said:

The differeence is.....you only need about 25-30,000 to satiate the 2 demand groups for Saints before you have enough to drive the price down for the Investor class to the price of the metal (gold).  For Morgans, given the much lower entry price to collect this American classic, you probably have over a million collectors and buyers which probably explains why even the plentiful 1884-CC supply can't satiate the demand.  Even hundreds of thousands of collectors is probably enough demand to absorb more of the coins, since unlike with Saints or higher-priced coins, collectors might get 2 or 3 of a particular year/mintage.

JMHO. 

Someone has to own every coin but see no basis to believe it's mostly for collecting.

I have previously estimated about 2MM "active" US based collectors.  It's a guess which includes those collecting out of pocket change to paying millions. 

If it's even close to "directionally" accurate, maybe 20% or about 400,000 own a coin in the price range of an 1884-CC Morgan.

If this number is also "ballpark" accurate, there is no reason to believe that up to 50% own this Morgan date or any other, as there isn't single coin in this price range which is compelling enough as a collectible.

If there really are about 1.1MM Morgans of this date, probably over 90% are owned by the same collectors in multiple, for financial speculation, or as dealer inventory.  No different for any other.

Non-US ownership of the series isn't likely to be substantial.  It's probably a rounding error, just as it almost certainly is for practically every US coin.  The series even at moderate price points by US standards isn't competitive versus local coinage from elsewhere.

[zadok]

On 12/19/2022 at 4:32 PM, World Colonial said:

Someone has to own every coin but see no basis to believe it's mostly for collecting.

I have previously estimated about 2MM "active" US based collectors.  It's a guess which includes those collecting out of pocket change to paying millions. 

If it's even close to "directionally" accurate, maybe 20% or about 400,000 own a coin in the price range of an 1884-CC Morgan.

If this number is also "ballpark" accurate, there is no reason to believe that up to 50% own this Morgan date or any other, as there isn't single coin in this price range which is compelling enough as a collectible.

If there really are about 1.1MM Morgans of this date, probably over 90% are owned by the same collectors in multiple, for financial speculation, or as dealer inventory.  No different for any other.

Non-US ownership of the series isn't likely to be substantial.  It's probably a rounding error, just as it almost certainly is for practically every US coin.  The series even at moderate price points by US standards isn't competitive versus local coinage from elsewhere.

...oh i think ur estimate on US collectors is way too low...i believe its in excess of 10 million....

[World Colonial]

On 12/19/2022 at 5:14 PM, zadok said:

...oh i think ur estimate on US collectors is way too low...i believe its in excess of 10 million....

At least one out of every 33 people in the country are coin collectors?

If this is true, we should run into them everywhere.

The demographic profile of the collector base doesn't seem to support it.  The hobby is overwhelmingly male and presumably still mostly Caucasian, certainly for US coinage. 

African American and immigrant participation from the developing world is probably a rounding error of the total.  Combined, this is at least 20% of the population, most of whom cannot really afford a CC Morgan dollar anyway and have no cultural affinity for it either. 

Asian and "Hispanic", somewhat more but not candidates to buy CC Morgan dollars either.  Why would they want it?  Most of them have limited or zero cultural affinity for US coinage at all.

The only way I can see that a higher proportion of the Morgan dollar is owned as a collectible is through Coin TV and similar sources.  It's possible more did or do that than I believe, but I probably wouldn't consider hardly any of them "active" or even collector.

[VKurtB]

On 12/19/2022 at 3:32 PM, World Colonial said:

Someone has to own every coin but see no basis to believe it's mostly for collecting.

I have previously estimated about 2MM "active" US based collectors.  It's a guess which includes those collecting out of pocket change to paying millions. 

If it's even close to "directionally" accurate, maybe 20% or about 400,000 own a coin in the price range of an 1884-CC Morgan.

If this number is also "ballpark" accurate, there is no reason to believe that up to 50% own this Morgan date or any other, as there isn't single coin in this price range which is compelling enough as a collectible.

If there really are about 1.1MM Morgans of this date, probably over 90% are owned by the same collectors in multiple, for financial speculation, or as dealer inventory.  No different for any other.

Non-US ownership of the series isn't likely to be substantial.  It's probably a rounding error, just as it almost certainly is for practically every US coin.  The series even at moderate price points by US standards isn't competitive versus local coinage from elsewhere.

One thing that took me by surprise when I attended the Bloomsbury London Coin Fair in 2019 was the amount of U.S. coin inventory in dealers’ cases and stock books. Some amazing quality stuff too. I’d say maybe 60-70% had U.S. material worth a look.  

[World Colonial]

On 12/19/2022 at 7:05 PM, VKurtB said:

One thing that took me by surprise when I attended the Bloomsbury London Coin Fair in 2019 was the amount of U.S. coin inventory in dealers’ cases and stock books. Some amazing quality stuff too. I’d say maybe 60-70% had U.S. material worth a look.  

I'd like to know who in the UK is buying it and at what price points.

With one exception, I've never heard or seen any evidence that collectors in one country will pay even the same prices much less far more for coins from another one.  To the extent it happens, until demonstrated otherwise, my assumption is it is a relatively niche market or primarily for US expats of which there are many.

The only exception I know is ancient Greece and Roman, presumably mostly by those in Europe.  I attribute this to the historical interest the buyers have in these cultures, an interest I don't see virtually anyone elsewhere having for the US.

US collectors buy coins from everywhere at high prices, usually setting the price level for most expensive non-US coinage.  The difference though is that the US price level is such an outlier (completely in deep outer space), it's easy enough for the much larger far more affluent collector base to outbid everyone else.

Quality UK coinage has become a lot more expensive in the last 15 to 20 years and it's substantially due to US based buying.  I infer that this has attracted newer more affluent local collectors or provided the confidence for previous ones to pay (far) more.

Concurrently, there is still no comparison in what you can buy (in terms of the coin attributes) for the same money.  As one example, AU or MS medieval gold quarter noble, half noble, and nobles.

[zadok]

On 12/19/2022 at 5:42 PM, World Colonial said:

At least one out of every 33 people in the country are coin collectors?

If this is true, we should run into them everywhere.

The demographic profile of the collector base doesn't seem to support it.  The hobby is overwhelmingly male and presumably still mostly Caucasian, certainly for US coinage. 

African American and immigrant participation from the developing world is probably a rounding error of the total.  Combined, this is at least 20% of the population, most of whom cannot really afford a CC Morgan dollar anyway and have no cultural affinity for it either. 

Asian and "Hispanic", somewhat more but not candidates to buy CC Morgan dollars either.  Why would they want it?  Most of them have limited or zero cultural affinity for US coinage at all.

The only way I can see that a higher proportion of the Morgan dollar is owned as a collectible is through Coin TV and similar sources.  It's possible more did or do that than I believe, but I probably wouldn't consider hardly any of them "active" or even collector.

...3% thats bout right...active?...various definitions, many coin collectors dont buy coins...pocket change n roll search, lots of casual type collectors n curiousity buyers that want to dabble, i go to several estate sales every week if guns or coins r mentioned there r 3 times as many people show up n the activity on the lower grade circ common coins is  pronounced, n these r buyers who dont go to coin shows or subscribe to anything, just buy when the opportunity presents itself....

[World Colonial]

On 12/19/2022 at 9:13 PM, zadok said:

...3% thats bout right...active?...

Maybe, but still seems the participation by the primary collector demographic (Caucasian males) will have to be a lot higher than 3% to pull the overall participation rate to this level.

[zadok]

On 12/19/2022 at 9:20 PM, World Colonial said:

Maybe, but still seems the participation by the primary collector demographic (Caucasian males) will have to be a lot higher than 3% to pull the overall participation rate to this level.

...can only say what i see n many r not males im bidding against...not sure which pronoun to use anymore but i still know what a female looks like....

[VKurtB]

On 12/19/2022 at 8:12 PM, World Colonial said:

I'd like to know who in the UK is buying it and at what price points.

With one exception, I've never heard or seen any evidence that collectors in one country will pay even the same prices much less far more for coins from another one.  To the extent it happens, until demonstrated otherwise, my assumption is it is a relatively niche market or primarily for US expats of which there are many.

The only exception I know is ancient Greece and Roman, presumably mostly by those in Europe.  I attribute this to the historical interest the buyers have in these cultures, an interest I don't see virtually anyone elsewhere having for the US.

US collectors buy coins from everywhere at high prices, usually setting the price level for most expensive non-US coinage.  The difference though is that the US price level is such an outlier (completely in deep outer space), it's easy enough for the much larger far more affluent collector base to outbid everyone else.

Quality UK coinage has become a lot more expensive in the last 15 to 20 years and it's substantially due to US based buying.  I infer that this has attracted newer more affluent local collectors or provided the confidence for previous ones to pay (far) more.

Concurrently, there is still no comparison in what you can buy (in terms of the coin attributes) for the same money.  As one example, AU or MS medieval gold quarter noble, half noble, and nobles.

Don’t misunderstand me. Except for one or two ancients-only dealers, everybody had both quasi-modern British and European continent material. Mostly pre-decimal and pre-euro. But there IS something inexplicable going on in Britain regarding U.S. coins too. A friend in North Wales asked me to bring Innovation dollars. Now I have to search out some nicer BU’s for her. Also my late father has a friend who is still alive in Leverkusen, Germany who likes to keep a Kennedy half set current. 

Edited December 20, 2022 by VKurtB

[Henri Charriere]

THE DEFENSE:  OBJECTION, YOUR HONOR!  Speculative and immaterial!

THE: COURT: SUSTAINED! The witness is directed to confine his remarks to the facts and refrain from  engaging in hearsay.  The final remarks of the witness are to be stricken from the records as nonresponsive and the jury is directed is directed to disregard them.

[Aside:  One cannot confirm with any degree of certainty whether one subscribes to an identity as being of the Caucasian persuasion much less of the traditional cisgender sex.]  

 

[GoldFinger1969]

On 12/19/2022 at 4:32 PM, World Colonial said:

I have previously estimated about 2MM "active" US based collectors.  It's a guess which includes those collecting out of pocket change to paying millions.  If it's even close to "directionally" accurate, maybe 20% or about 400,000 own a coin in the price range of an 1884-CC Morgan.

Sounds about right.  When you say 2 MM "active" collectors, you mean ADULTS as opposed to kids being guided by their parents I take it ?

On 12/19/2022 at 4:32 PM, World Colonial said:

If it's even close to "directionally" accurate, maybe 20% or about 400,000 own a coin in the price range of an 1884-CC Morgan. If this number is also "ballpark" accurate, there is no reason to believe that up to 50% own this Morgan date or any other, as there isn't single coin in this price range which is compelling enough as a collectible.

What IS the price range for an 1884-CC Morgan, GSA or non-GSA ?  

On 12/19/2022 at 4:32 PM, World Colonial said:

If there really are about 1.1MM Morgans of this date, probably over 90% are owned by the same collectors in multiple, for financial speculation, or as dealer inventory.  

Agreed.  You can keep alot of Morgans as inventory compared to other coins.

[GoldFinger1969]

On 12/19/2022 at 9:12 PM, World Colonial said:

Quality UK coinage has become a lot more expensive in the last 15 to 20 years and it's substantially due to US based buying.  I infer that this has attracted newer more affluent local collectors or provided the confidence for previous ones to pay (far) more. Concurrently, there is still no comparison in what you can buy (in terms of the coin attributes) for the same money.  As one example, AU or MS medieval gold quarter noble, half noble, and nobles.

You're saying Americans are buying non-PM British coins, the equivalent of our pennies, nickels, and quarters ?  Or is it silver and gold coins like British crowns and the like ?

[World Colonial]

On 12/20/2022 at 1:47 AM, GoldFinger1969 said:

Sounds about right.  When you say 2 MM "active" collectors, you mean ADULTS as opposed to kids being guided by their parents I take it ?

Haven't thought about it in this context.

Whatever the actual number is, it has to be large enough to realistically support the current price level. That's the number which matters. 

On one occasion, someone claimed 250,000.  They used a very narrow (and in my opinion, completely arbitrary) definition of "collector", but it should be obvious that since most collectors don't spend more than low amounts, it cannot possibly be anywhere near 250K.

Estimates will depend upon assumptions used.  In the case of the 84-CC, it has to be something like I am telling you because it's not credible to believe anywhere near 1.1MM coins are owned by set collectors, type collectors, or impulse buyers.  I see no basis to believe there are this many actual collectors buying any one coin, especially in this price range.  Maybe 100,000 or slightly more collect the series in some format (partial or full).  Even if 250,000, still nowhere near enough.  There aren't enough type collectors to meaningfully influence the price of any single date, as Morgan dollars are far too common.  This leaves primarily impulse buyers and I see no reason to believe there are so many either.

On 12/20/2022 at 1:47 AM, GoldFinger1969 said:

What IS the price range for an 1884-CC Morgan, GSA or non-GSA ?  

Recent sales on Heritage have all been over $300.  There is a dealer PCGS Forum contributor who has estimated 80% of the collector base don't spend more than $300 which I consider reasonable, based upon my definition of "active" collector.  If the collector base is noticeably more than my estimate, the proportion is probably (far) less.

[World Colonial]

On 12/20/2022 at 1:54 AM, GoldFinger1969 said:

You're saying Americans are buying non-PM British coins, the equivalent of our pennies, nickels, and quarters ?  Or is it silver and gold coins like British crowns and the like ?

All of it.

If you ever look at the TPG data, I'd guess the majority of those coins - certainly the more expensive coins - are owned by US based collectors.  A lot of British coins are on eBay from US dealers.  Heritage sells globally too but I infer that most British coins they sell are to US based collectors also.

Quality British coinage is a lot cheaper than US coinage, but it's not cheap and has increased over the years, a lot.  I attribute the majority of the price increase to US demand, as it's almost certainly not bought in volume by any other non-local collectors.  (Exception is probably some higher-profile coins but that's low volume.)  Along with ancient Greek and Roman, seems to be the most preferred non-US coinage by US based collectors.

Heritage is a good indicator of the relative preferences of other coinage by US based collectors, as I assume the majority of their coin collector customer base is US based.  By volume, UK is #1 by a substantial margin, about 13% of the total from world coinage, and between ancient Greece and Rome.  Above $10K, blows all others away.

[GoldFinger1969]

WC, 40 or more years ago, only the Truly Rich could pay big prices for coins and pursue the top-end of registries or whatever they were called back then.  Most of the famous collections were owned by wealthy businessmen or people from families with Big $$$.  Remember, back then being called a MILLIONAIRE was a big thing (ask Thurston Howell III !! ).

Today....the number of people with unlimited $$$ greatly exceeds that from 30 years ago let alone 50 years ago.  Just imagine 1 or 2 coin collectors as kids who work in Silicon Valley and now are each worth $50 MM at age 32 -- nothing compared to the real winners out there.  But those young adults can now EASILY spend MILLIONS on coins.  Decades ago, if they were each successful, they might have tens of thousands to spend assuming they were willing to part with dollars that were more dear (because they didn't have as much) because maybe they made $150,000 a year when the average salary was $25,000 a year.

It doesn't take many super-rich folks to enter this hobby and drive up prices, especially if they either throw Big $$$ around or focus on Top Pop coins.  Doug Winter's blog mentioned he was recently contacted by a wealthy venture capitalist who was all set to spend Big $$$ assembling a collection before it got too "confusing" for him and dropped the idea.

Edited December 20, 2022 by GoldFinger1969

[World Colonial]

On 12/20/2022 at 11:17 AM, GoldFinger1969 said:

It doesn't take many super-rich folks to enter this hobby and drive up prices, especially if they either throw Big $$$ around or focus on Top Pop coins.  Doug Winter's blog mentioned he was recently contacted by a wealthy venture capitalist who was all set to spend Big $$$ assembling a collection before it got too "confusing" for him and dropped the idea.

Yes, this is the theory, and the fantasy of the financial promoters of the "hobby".

I've read sentiments like these, many times.  The one question NO ONE can answer is, why would they ever want to do it in any meaningful number? 

Already, there are relatively newer collectors like Hansen who fit this profile, but they don't have much impact below the most expensive or highest quality coinage.

I can assure you that numbers on a TPG label and CAC stickers are of no interest to the non-collector, except as it impacts the price.  (That's the source of the confusion in your example.)  None of the attributes which (US) collectors consider so important are of any interest to the non-collector.  That's what differentiates collectors from non-collectors.

Thanks to the asset mania, there are far more affluent people, yet the most prominent expensive (mostly US) coinage sells year after year and none of these people buy it.  It's less likely (by a substantial margin) than being struck by lightning.

Look at the data in the annual Ultra-Wealth Report. I'm sure you've seen it.  In the 2021 edition, 67,000 globally worth over $100MM with several hundred thousand worth over $30MM.

Outside the US, the number and proportion who are either collector at all or spend any meaningful amount is a rounding error and they certainly aren't candidates to spend millions on US coins.

Within the US, around 20,000 are worth over $100MM.  The participation rate is probably somewhat more than the general population, which by my estimate is around 1%.  If it were noticeably higher by these people and they spend even $5MM each, the price level would be much higher.

[VKurtB]

On 12/20/2022 at 12:54 AM, GoldFinger1969 said:

You're saying Americans are buying non-PM British coins, the equivalent of our pennies, nickels, and quarters ?  Or is it silver and gold coins like British crowns and the like ?

It’s primarily the former, IMO. The U.K, pumps out lots of non-PM coins in crown size, £2 bimetallic, and segment edged 50p which are very popular here. And the Britain alphabet 10p set of 2018 and 2019 were a huge hit. U.S. collectors LOVE TO beyatch about premiums over melt on our U.S. stuff. It’s nothing compared with the U.K. and most other countries. Even at our current prices, we’re still among the lowest. 

Edited December 20, 2022 by VKurtB

[World Colonial]

On 12/20/2022 at 3:35 PM, VKurtB said:

U.S. collectors LOVE TO beyatch about premiums over melt on our U.S. stuff. It’s nothing compared with the U.K. and most other countries. Even at our current prices, we’re still among the lowest. 

Yes, but that's predominantly or entirely due to the much lower mintages.  Most "Low" mintage US NCLT is common or very common versus mintages form elsewhere.

[Henri Charriere]

@World Colonial:

I am not ashamed to say I will recall every word you've ever uttered when the bottom falls out and I am sitting on a sidewalk somewhere with a cardboard cup soliciting contributions from those who would be inclined to commit a random act of kindness.  

[GoldFinger1969]

On 12/20/2022 at 12:09 PM, World Colonial said:

I've read sentiments like these, many times.  The one question NO ONE can answer is, why would they ever want to do it in any meaningful number? 

Same reason some people (more) collect art....and some collect classic cars (fewer).....and some collect stamps....or comic books....or movie props....or whatever. 

To me, the interesting thing is that you have the POTENTIAL for certain series to slide between pure bullion collectors and pure numismatic collectors.  Saints, Libertyt's, Morgans, and the various Eagle/Half-Eagle/Quarter-Eagle collectors I would include in that bunch.

Again, I segued into Saints from bullion and a stray purchase of the 2009 UHR. 

On 12/20/2022 at 12:09 PM, World Colonial said:

Thanks to the asset mania, there are far more affluent people, yet the most prominent expensive (mostly US) coinage sells year after year and none of these people buy it.  It's less likely (by a substantial margin) than being struck by lightning.

Well, the 1933 Double Eagle was purchased by a non-collector, Stuart Weitzman.  I agree that large numbers are unlikely as per your post....but I think it's increasing.  The big potential is that there are more wealthy and super-wealthy people that if they accidentially get into coins or if they re-discover a passion they had as youths, you get some Big $$$ into the hobby.  Not saying it's good or bad, just saying they're there and SOME OF THEM are going to wander in.

The art world never or rarely had Wall Street types buying 30 or 50 years ago.  Today, they are a constant source of buying.

On 12/20/2022 at 12:09 PM, World Colonial said:

Within the US, around 20,000 are worth over $100MM.  The participation rate is probably somewhat more than the general population, which by my estimate is around 1%.  If it were noticeably higher by these people and they spend even $5MM each, the price level would be much higher.

But lots more with liquid financial net worths over $50 MM and $20 MM and even $10 MM.  If you have $10 MM in financial assets and homes largely or fully paid for (primary, vacation or shore)...that's ALOT of financial firepower to put into coins.  You can spend 5% on PM's/coins and that's $500,000.

I'm not predicting that is going to happen....I'm saying this is a hobby where you get a small increase in the general population buying....or a tiny increase in the wealthy buying.....or a MINISCULE increase in the super-wealthy buying....and you are talking Big $$$.

 

 

[GoldFinger1969]

Doug Winter, from his blog piece on The Million Dollar Liberty Eagle:

"...Before the Trophy Coin Era (which really began in earnest around 2020), the price of rare coins went up incrementally. A coin like an AU 1875 eagle was worth $150k in the 2000s, $250k in the early 2010s, and $350k in the early 2020s. Given its price history, one would have expected the next price increment for this date to have been $450k (maybe even $500k) in 2022. But this isn’t how values work today, and as a result we have yet another record price which is multiples higher than the previous peak of $372,000.

I will freely admit that I was stunned by the price."

[VKurtB]

On 12/20/2022 at 3:20 PM, World Colonial said:

Yes, but that's predominantly or entirely due to the much lower mintages.  Most "Low" mintage US NCLT is common or very common versus mintages from elsewhere.

Not always so if we look at final mintage numbers. Yes, if we look at initial authorized mintage, you’re absolutely correct. Look at final numbers lately. The LOWEST sales are for items that have ridiculously HIGH authorized mintage. But if a maximum of any number that SOUNDS limited, it can sell out in mere minutes. More mass psychosis from coin people. Make no mistake - we coin people are NUTS!

Edited December 21, 2022 by VKurtB

[World Colonial]

On 12/20/2022 at 6:12 PM, GoldFinger1969 said:

Same reason some people (more) collect art....and some collect classic cars (fewer).....and some collect stamps....or comic books....or movie props....or whatever. 

It was a rhetorical question, not a real one.  The answer is, there isn't one.

Look at the math yourself.  Pick a price point over the last 50 years since coins were first widely bought as "investments", multiple it by the number of times a coin above this price point sold, and then look how many times a non-collector bought it.  To the extent it can be confirmed, it's essentially zero.

No one who is interested in inflating the price level wants to admit this, but it's still a fact anyway.  There is a difference between coins and art, where these buyers have another motive for buying it.  I've gone over this before with you.

On 12/20/2022 at 6:12 PM, GoldFinger1969 said:

Well, the 1933 Double Eagle was purchased by a non-collector, Stuart Weitzman.

Weitzman wasn't a random non-collector buyer, according to Coin Week.  We discussed this before.

On 12/20/2022 at 6:12 PM, GoldFinger1969 said:

I agree that large numbers are unlikely as per your post....but I think it's increasing.  The big potential is that there are more wealthy and super-wealthy people that if they accidentially get into coins or if they re-discover a passion they had as youths, you get some Big $$$ into the hobby.  Not saying it's good or bad, just saying they're there and SOME OF THEM are going to wander in.

It's going to be of no financial relevance to hardly any of the coins anyone buys.  That's why I gave you the example of Hansen.  He's trying to "beat" Eliasberg mostly measured by numbers on TPG labels, but his buying has done little if anything for the coins hardly anyone owns.

I've discussed this before with you before.  Coins aren't financial "widgets" and lack the scale to accommodate any meaningful financial flows.  These people can't spend any meaningful amounts without the entirely self-defeating outcome where their own buying inflates the price level to a point where they can't get out without losing money. 

Most of the more expensive US coinage already sells for prices (completely) disproportionate to the merits as a collectible because it's substantially if not mostly tied to the TPG label. It's also concurrently irrelevant that coins are much cheaper than art or something else, as there is zero equivalence.  To the extent it happens, it will probably be in the series where it's already disproportionate now, US pre-1933 gold and Morgan dollars.

On 12/20/2022 at 6:12 PM, GoldFinger1969 said:

The art world never or rarely had Wall Street types buying 30 or 50 years ago.  Today, they are a constant source of buying.

Like I told you before, the wealthy have a potential non-financial motivation to buy art or other "trophy" assets, if nothing else as a status symbol.  No coin is a status symbol to a non-collector.

Art has been supported by the wealthy, at least for 500 years. It doesn't have to be Wall Street.  How do you think Rennaissance artists made a living?

What does a wealthy non-collector get out of buying any coin, other than hoping to sell it for more money later?

On 12/20/2022 at 6:12 PM, GoldFinger1969 said:

But lots more with liquid financial net worths over $50 MM and $20 MM and even $10 MM.  If you have $10 MM in financial assets and homes largely or fully paid for (primary, vacation or shore)...that's ALOT of financial firepower to put into coins.  You can spend 5% on PM's/coins and that's $500,000.

I'm not predicting that is going to happen....I'm saying this is a hobby where you get a small increase in the general population buying....or a tiny increase in the wealthy buying.....or a MINISCULE increase in the super-wealthy buying....and you are talking Big $$$.

As I stated in my post to which you are replying, anyone can talk in the abstract why they think it will happen, but no one can give any believable reason for it.  You haven't provided one now.

You're talking about random buying with no predictability.  Replace coins with something else and you can make essentially the same claims.  The only reason it has any more credibility is because coins are more liquid financially. 

It isn't like I haven't heard your general claim before.  On the PCGS Forum, I took the opposite side of the argument against those who claimed it was believable that a non-collector would buy the 1794 SP dollar and 1933 Saint.  If it did happen, I'm sure someone would have told me.  Even if it did, it has zero future predictability anyway, for the reasons I told you, now and previously.