A downside to a hot coin market?

[jtryka]

I know the coin market is as hot as it's been in almost 2 decades, and that should make us all happy, but for me it hasn't. I think it all started with the Jules Reiver sale, with all the crazy prices being paid for those coins, and it seems to me at least that the craziness has only intensified since then. It's come to a point where for some of us this hobby isn't as fun as it used to be. When you are bidding against people with less experience and knowledge but bigger bank rolls, collecting your favorite series takes on an added dimension that really takes a lot of the fun out of it. Better dates and key dates are getting harder to find, and when you do find them you need to double or triple your budget for the coin if you even want a realistic shot at getting the coin. Maybe some of you find that fun, but unless I am selling I don't like it one bit!

 

So maybe it's time to take a break from US coins. Recently I started working on a set of Mexican Libertads as I like the design, and that's been fun. After all, me and may a dozen other people on the planet are working on this series, so it's not has hard to find the coins you need. Maybe I'll start working on a set of Type 2 Liberty double eagles as that segment seems perennially dead despite the rise in gold. Or maybe I need to start collecting euros or some other darkside tokens. Who knows? The only thing I can say with certainty is that when the people with little knowledge and large bank accounts start pushing aside the little collectors like me, the market is nearing a top! It hasn't happened yet, but I feel it's getting closer, just like when all the Wall Street folks invaded in the late 1980s driving Morgans to ludicrous levels.

 

Are any of you feeling squeezed out yet?

[EZ_E]

Great post, Jeff! I've experience some of this in auctions. I bid a realistic price for a proof NM SL half but, for reasons mentioned, I was more than outbid. And what is sad is that unknowledgeable newbies with deep funds are setting new market price trends. Does this make the new market prices realistic? Or, is it irrelevant?

[Morgannut]

I agree-- It's not all "fun" anymore. I feel like I'm reading the Wallstreet Journal here sometimes!!

[Jazzy]

Indeed.

 

I frequently get overbid.

 

And then there are the collectors who like to brag about what a "bargain" they got for a choice piece. I have to wonder how much of that is bravado - like bragging about the size of your doo-hickey. Since nobody's going to see it, you can put any number on it you want.

[TwoKopeiki]

Jazzy, my dad can beat up your dad!

 

But seriously, I was going to mention something about it on these boards. I got into numismatics relatively recently and was curious if it was a normal occurence for auctions to be selling way over the catalogue price. It looks like just my luck that I picked the wrong time to start this particular hobby. But I'm in it for the long run, so hopefully I'll see a market for coins stabilizing in the future.

 

Jtryka, I know what you mean about Libertads. I love mexican coin designs. That's the main reason I got into collecting spanish colonials minted in Mexico City and later Mexican silver.

[rexcat]

Indeed.

 

I frequently get overbid.

 

Me too Jazzy.

 

I started my present type set ten years ago, times where great

wish I would have bought more back then…

 

Trying to get good stuff just keeps getting harder and harder.

 

Of course this is good for the value of want I do own,

 

but I’m not selling!!

[CTcollector]

Every market has its cycle and will run its course. Tech stocks have gone full circle, the housing market is starting to putter, and the coin hobby will normalize once again. There were alot of macro economic factors that came together the last few years that gave the coin market a boost. Cheap credit, low taxes, high bullion prices, and a flat stock market. These circumstance will inevitably change. For example, it will cost you almost twice as much to borrow against your home equity today versus 18 month's ago. As these circumstances change it will have an impact on the overall coin market. I think the market will slow down as money is siphoned out to service debt, pay uncle sam, or to pursue greater returns in the equity markets. There is nothing wrong with taking it slow or sitting on the sidelines for a while. That would be my suggestion. I think some of the stuff you are currently getting grossly out bid on will come back to you cheaper in the future - patience is the key. Be selective and smart. Don't chase the nonsense or settle for inferior coins. There are tons of people taking shots right now. Know the value equation that works for you and execute when an opportunity arises. Everything else can wait.

[Oldtrader3]

I don't know Jeff, even the Type II Double Eagles are starting to get a little pricey compared to some I bought (4) years ago. Many dates and MM's are awfully scarce though, in higher grades. Finding nice ones without excessive bagmarks is the challenge on this series.

[Jazzy]

I'm not particularly waiting in the wings for a better day, so to speak.

 

I occasionally add a piece to my primary collections, although it's slowed down considerably over the past three years.

 

In the meantime, I've done some speculation buying in series that I consider sleepers.

[scroll]

Great post, Jeff! I've experience some of this in auctions. I bid a realistic price for a proof NM SL half but, for reasons mentioned, I was more than outbid. And what is sad is that unknowledgeable newbies with deep funds are setting new market price trends. Does this make the new market prices realistic? Or, is it irrelevant?

 

OTOH, I have seen some modern coins ungraded at WS Coin for more than NGC graded coins on eBay. And graded older coins, like Peace Dollars, at WS Coin going for way more than their opinion grades, again probably higher than a normal eBay auction.

 

OTOH, I did purchase a proof & a MS Marine $1 from them at about the same price (a tad lower actually) as the going auction right after the mint sold out. I worried about the grade but both came back from NGC as 69s and I used a free grading coupon so that was pretty good.

 

As you probably gather I don't shop around a lot. At the moment I generally buy raw from the mint or graded from eBay after getting burned by body bag coins raw at auction. But as has been said some of these eBay auctions make no sense at all. No interest in a coin at all until the last minute and the final price a joke.

 

I started buying NGC graded Roosie dimes when they were dirt cheap and now they even bid up those in lesser quality. Go figure.

 

As I've said in the past somewhere, maybe not here, I think some people are just addicted to winning like a gambling addiction. They need that rush from seeing YOU WON!

[EZ_E]

I think some people are just addicted to winning like a gambling addiction. They need that rush from seeing YOU WON!

 

I think that that sums it up pretty good.