Coin market ready to take a dip?

[truthteller]

Over the last two weeks, I have spoken to several coin collectors who, as of 8 months ago, were very aggressive coin buys. I don't mean $1000 a year, I mean $50,000 a year. Several have since pulled back citing tougher economic times. A few had lost their big ticket jobs and are struggling to get another comparable position. For one collector, the severance package ran out recently. For another, he is a net seller to raise cash. I know this wouldn't sound bad if it were a couple of aggressive collectors, but it's quite a few. In addition, TomB's post on the Amgen job fair got me thinking, are we sure the coin market is healthy? Remember, the time it takes for the collector to find out if the market is kaputt is usually two months from when the dealer knows. Any opinions?

 

 

TRUTH

[Tradedollarnut]

Depends on what part of the market you are talking about. Interest rates are still very low and loans are available. The dollar is quite low and foreign buyers are very active. I know of at least one major rarity going overseas and at least one super big foreign buyer of proof gold. There is at least one fund in its formulative stage. Coins that have been off the market for decades are starting to come available. Additionally, the economy is at least decent. All of this leads me to believe that there is still one or two years left in the bull run for significant coins.

[TomB]

The may sound terrible, however, if the market took a dip then I would not necessarily be unhappy since I am into numismatics for the long-term and would take advantage of a perceived dip to purchase pieces that might make more economic sense to me.

[andy007]

I can see a dip occuring, but I'm far from an expert. The coins I purchase are full of eye appeal with a cost usually less than $300, so I definitely can't speak of the larger dollar coins, but every series where I was picking up suberbly toned pieces has gone up past my threshold. It makes it pretty tough to pick up: a) a coin that is suberbly toned and/or full of eye appeal b)one that fits those criteria that I can afford or feel comfortable with. I agree with Tom that it wouldn't hurt my feelings to have a bit of a dip, so that I can actually add some more coins to my collection.

[dakra]

Truth, I agree with what you see as I have seen it myself. In fact, last year I was one of the people who sold a good chunk of my collection to make ends meet. During my time of misfortune, I slowly accumulated what I could and now I am buying more than ever... why? because I'm getting good deals on coins. I see more people going to the local coin shop to sell rather than to buy.

 

I was buying some coins yesterday and saw a lady come in with bag full of silver coins, although I would have loved to have gone through them yesterday... I ended up going through them today. Most were circulated but I found a bunch in MS60+, in fact, I had my list with me and knew I was picking some doubles but some of the coins were in such incredible shape, I had to pick them up... and based on the price guides, I made a killing.

 

In past years I did very well for myself in stocks by buying while other people sold, I see a bear coin market on the horizon... although I am a collector first, I always buy with an 'investment' in mind.

 

...and if I see "THIS COIN MARKET IS HOT HOT HOT" again, I'm gunna yuke!

 

-Dave

 

 

[Legend-migration]

If there is a dip then no one told me! I can confirm that the high end market not only is alive, but is as competitve as ever! Legends sales are at all time records. Without going into details, we just turned down a VERY HEALTHY PROFIT on our beloved 1913 Liberty 5C. While that may be an extreme, it should be noted that big money is not stupid money and does shop around in a falling market. Also, every fresh or nice coin that hits the market today sells instantly for near RECORD prices. Speculators have NOT entered or cornered any area of this market (like they did in 1989). Thats critical to note for stablity reasons.

 

The internet has dramtically changed the coin market. Demand is now truely international and bigger than it EVER was. Coins are being held by collectors who are driven to finish their sets.

 

It would take a MAJOR ECONOMIC EVENT for the coin market as a whole to suddenly slow. Thats not dealer hype talking. That just fact from where I see it.

 

I too think the market has another 3-4 years of strong bull left.

 

(greatest icon ever!)

[dakra]

Laura,

Fortunately you are in a good niche. The Rare coin market and the registry market will continue to be driven by people who have the money to spend.

 

Unfortunately, there are a great many in the hobby who are feeling the crunch of the current economic times and are starting to hold back on their coin purchases. Like I said in my earlier post, I see more people selling than buying and some of the prices I have seen on coins are incredibly low. In the stock market, this is a good indicator that the market is heading down.

 

It's easy for a "Donald Trump" to look down from his Penthouse Suite and state "I don't see a problem with the economy" but to the "Bunkers", times are tough.

 

-Dave

[lclugza]

If a coin dealer thought the coin market was headed down, do you think he or she would admit it?

[truthteller]

Laura,

 

I would agree with most of what you have stated, but disagree as to the overall market. The very spectacular coins are still moving quite well from what I understand, because the end user is economically insulated at this point. Remember, my topic refered to a 'dip' , not a nosedive. Usually when the economy is REALLY hurting, the good coins go away and are just not offered or traded. However, coin collectors who spend $50k a year are not those who spend $50k a coin. That's the area of the market that I feel might be set for a downturn. The ultra neat rare coin market is fairly safe for the moment. My

 

 

TRUTH

[Tradedollarnut]

I have to disagree. Interest rates are still headed lower. Home refinancing is still hot. For every one person that is economically pinched, three saved money on the tax cut or on lower interest rates and have more to spend. What drives the market is disposable income, not income. One guy losing his lower paying job doesn't pull near as much disposable income out of the market as is put in by the three guys having more to spend. I actually see it expanding for a while now that the market has gotten its post war bounce out of the way.

 

As prices head higher, people will just buy different coins - they will seek out areas that aren't hot.

[braddick]

People will always seek a diversion and collecting offers it. I see NO indication of otherwise almost all across the board.

 

Plus, as pointed out above. If this was the case you'de be reading about it big time in the hobby press editorials.

[dakra]

So, your saying for every guy who loses his job, there are 3 that have more to spend?

One guy losing his lower paying job doesn't pull near as much disposable income out of the market as is put in by the three guys having more to spend.

 

Unemployment is at an all time high, the economy is bad, consumer confidence is down. Interest rates may go down again but they may also remain the same. Do you honestly believe if "Joe Public" gets a few thousand dollars it's going towards coins? It's going towards lowering his debt, Towards savings and towards home improvements.

 

Perhap's the high end market is doing quite well but it does not speak for the entire market. In recent times I have seen more people cashing in then buying, when people start cashing in, more coins flood the market, there is less of a demand for those coins and then the prices drop. I shouldn't just say coins, I should add that collectibles are way down as well. Some prices are half of what I realized a year or two ago. The dealers by me are taking in more coins and are selling less.

 

With the last paragraph in mind, I have been someone who has been very succesful in investing in the past and when I see the type of action mentioned above, a "BUY" signal goes off. Why, because I know I can get the coins I need dirt cheap. It's a hobby for me but you can't take the instinct out of a good investor.

 

-Dave

 

 

[Tradedollarnut]

Unemployment is NOT at an all time high - not even close. The economy is NOT bad. It is weak, but not BAD. The coin market is not bad at all - some areas are just less hot than others....

 

 

[Legend-migration]

Okay, forget my ego driven big girl coins.

 

I know several MAJOR lower to middle market dealers ($100-$2,500.00) who are telling me (and proving) that there businesses are exploding. I don't want to say names, but they are at the very tops of their markets. The ONLY complaint they have, they can't find enough nice coins to sell. They also tell me Ebay is cranking. So, hearing a layer or two has stopped buying, is of no real concern to me. When these dealers tell me sales have slowed, then I'll take notice. Remember, these guys cover the entire market and have hundreds to thousands of customers world wide (thanks to the internet).

 

Again,the overall coin market is too big and wide spread for it just to stop. Even if 5-10% of the people who buy were to stop today, the market would not feel it. There are too few coins available, and any coins sold by that group would be quickly absorbed.

 

 

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[dakra]

Braddick,

I tend to disagree a bit about that. Dealers, Grading Services and all of the publications have a vested interest in seeing that the HOT market doesn't cool off. It's their lively hood. Most will not report on a downward movement in the hobby until after the fact.

 

I could be wrong but I will put faith in my instinct, the same instinct that told me to pull totally out of the stock market prior to it heading south. Thankfully, that move enabled me to buy a house...which is an investment in itself

 

-Dave

[dakra]

Well, I see no reason to continue to beat a dead horse. I've said what I have to say and I've heard more than one person in recent weeks say that they feel the coin market is getting weak.

 

We had some feedback from TDN and Laura who represent Legend, how about other dealers and collectors?

 

Good Night!

-Dave

[Tradedollarnut]

When I post on this or any other board I represent myself as a collector - not Legend [unless specifically mentioned].

 

 

[cladking]

There could be selected areas of the market which will pull back a little or consolidate. These would be areas which haven't experienced much increased demand yet or ares which have been smoking hot and need to cool a little. But the fact remains that overall demand is continuing to explode and this demand envelopes virtually the entire market. There are buyers now for buffalo nickels for 55 cents and unc '76 dollars at $4.25!

 

The stock market has apparently bottomed out and optimism seems to be returning, but even if we don't pull out now or even sink a little deeper there would still be no reason the market has to decline. Many people have jobs and coins are not usually a large part of expenditures. There are increasing numbers of wealthy collectors who seem to be relatively immune from the ups and downs of the economy.

 

This market will continue to surprise on the upside regardless of the overall economy.

[Oldtrader3]

I put a lot of stock in large-national auction results as an indicator of the market, collector wise. Recently, auction prices for higher collector grade/better date material have been very strong. I am not talking about really high priced material but that market segment between $500-$2000. This segment seems to be building momentum recently rather than declining.

[michael]

for me i think certain areas of the market are going to take a huge nose dive by the beginning to the end of the first quarter of next year

 

but overall the market is going to be lots less liquid than right now

 

some coins will remain strong ot at the very least but those coins are coins that have exceptional/monster qualities

 

but i think if collectors can hold on for the long haul and do some selective buying in the beginning they will do well in the long term

 

i mean really nice neat better date original xf/au seated dollars like 1861 will still be saleable at good levels

 

monster toned early commems still saleable at good levels

 

monster deep cameo proof coins still saleable at good levels

 

early commems with greawt colors still saleable at good levels

 

xf barber material and xf indians will still be saleable as long as they got great eye appeal

certian areas of the market will be okie but much less liquid but good for collectors that hold their stuff and then buy more selectively

 

but bad for other many other series of coins say where especially so where the holder makes most of the value and where these coins where the holder makes all of the value and are available most of the time will take a huge monster fall

 

of if not a fall......... then total almost total illiquidity

 

 

but i guess only time will tell

 

or in the next 9 months if you got good scarce stuff where it is generally not available with monster quALITIES ABOUT THE COIN AND IT IS opriced right maybe not full retail or low wholesale but at a good priced it will still be saleable

 

but many other coins and i am not going to name them on here.......

 

will just be illiquid

 

but i guess only time will tell and i hope everyone makes all the right decsisons

 

oh and also the huge big boy coins will do well but that was the case at the height of the great depression but i am talking monster super coins

 

the ultimate rarities

 

sincerely michael

 

 

 

 

[IrishMike]

I don't have any expertise that qaulifies me to comment on the market for the coins Legend sells. I will say that the dealers at the local monthly coin show in South Bend are selling coins in unprecedent numbers. The economy here is no better or no worse than most of the country. There are a lot of baby boomers out there who now have the money and time to allot resources to hobbies, including coins.

 

Harleys, RVs, etc.are all moving well. This is a strange economy with 10 year bonds at all time lows, the stock market in disarray, and certain segments of the economy in a slump. Car sales are miserable but hobby related vehicles are selling. Hobbys are an escape from bad economic news such as 401Ks and savings interest rates. I don't see bargains to be had in the $300-$1500 price range, which is the range where nice classic coins can be purchased without much downside risk.

[CarlWohlforth]

There seems to be broad interest in the lower end of the market from my limited view. Proof Jeffersons are not as popular as other stuff but it seem to me interest is building and more people are buying Jefferson nickels than last year.

 

My economic interests have picked up a lot this year. So I am buying for my collection again. Clearly those out of work would, on average, be net sellers.

[BushMan]

Virtually all the coins issued from 1930 to present have been in a downdraft for the past 2 years. Doesn't appear to be slowing any currently. That would exclude the finest graded for any date or mintmark. Plenty of classic coins purchased in the $3,000 to $6,000 range during the past 3 years that would never receive those prices today. Personally, I see it continuing for the forseeable future.

[dakra]

Lot's of mixed feelings....

 

One item I want to point out is the modern market (not neccesarily along the lines we discussed earlier) but when the new coins hit the market, the demand is high for the perfect coins, people will pay top dollar. It seems to cool off a bit until these coins are no longer available at the mint, they do a "dead cat" bounce again when the coins are sold out at the mint.

 

When the State Quarters first hit the market, there was a great deal of excitement but... although some items are still going 3x-4x the original purchase price , there doesn't seem to be as much of that excitement that we originally saw. I have a feeling that things will remain on the same level until the end of the series when people realize that they want to have this series as part of there collection. In the coming months/years, I can actually see this market consolidating a bit before it takes a nice bounce in the later years.

 

In regards to where the coin market is going, there have been a few people who stated they think this "bull" market has a year or two to go. You can't expect the Bull market to last forever... but how long does it take before an official "bear" coin market takes place. It doesn't happen over night, it happens over time. Could it be possible that they are beginning to see a slight pull back? In past bear coin markets, what coins declined first? What coins were affected by it? What were the last coins to see a decline in those bear markets? I'm not wishing anything bad on the coin industry, just making an observation based on what I have seen in recent times.

 

-Dave

[truthteller]

From past history, the generics fall first. Then the modern issues, when there is no support. Usually the modern collectors are the average collector with limited budget. When they lose their job, the coins are the second to the last to go(usually the house or car is the LAST to go). Next, the average collector coins begin to drop, then the better collector material. The mega rare coinage usually gets taken off the market and stays put. Rarely does a mega collector sell his/her rarities in a bear market.

 

TRUTH

[Elcontador]

Not for the top end material, but possibly for the next tier & below. For the last three years, people with $ really had no place to put it; the stock market was in the toilet. In the last year, this accelerated, interest rates on CDs, etc. also were in the toilet.

 

With the broad market up 15-16% in the last three months, I think you'll find less serious $ going into numismatics.

 

Actually, look at coins by series & see what has appreciated in the last 2 years. Most of the hottest material, I don't collect, so I don't know about it. Moderns for one. Gold for another. Add Morgans to that list (okay, I have 3 CC$s from the GSA auction that were slabbed & otherwise ignored the series).

 

Higher end Walkers have gone up. Bust $ have gone up. Seated $s in 3 & better have gone up. Liberty Nickels in MS 6 & better have gone up. Older copper (Coronet Head & older) in 5 or better has gone up. Trade $s have been steady or gone up.

 

But think of all of the material which has either been flat or dropped in price. Less than supergrade Liberty Nickels have dropped in price. Ditto re virtually all Barber Coinage & Seated Dimes & N/M Quarters (Seated Halves have remained steady).. SLQs have been flat.

 

With the S & P climbing as it has recently, the idea of putting serious $ into coins IMO doesn't make sense right now.