Thoughts on coin market dynamics ....

[Zoins]

Some observations that have been made:

 

(a) Market: the market is softening for classic widgets

(b) Market: the demand for high grade material is still high

© Market: moderns and ultra-moderns have become a big part of the coin market

(d) TPGs: gradeflation is increasing in prevalence

(e) TPGs: net-graded problem coins exist and have their defenders

(f) Dealers: an increasing number of operators

(g) Collectors: more less knowledgeable collectors in the market

 

Are all of these related? Here's one thought:

 

If less knowledgeable collectors in aggregate recognize that they are less knowledgeable and also recognize that operators exist and increase the prevalence of gradeflation and net-graded problem coins, will a sizable number of them feel safer with moderns where the chance of getting a problem coin or a coin that's been cracked out 25x is lower? Will this soften the demand for classic widgets and increase the market for moderns?

 

Is it use to consider the coin market in three segments and collectors into two segments:

 

(1.1) classic high quality coins

(1.2) classic widgets and problem coins

(1.3) modern coins

 

(2.1) numismatists

(2.2) hobbyists - less educated collectors.

 

Would it be reasonable to assume that given the prevalence of operators, gradeflation and net-graded problem coins that in aggregate:

 

(3.1) numismatists concentrate on classic high quality coins

(3.1) hobbyists retreat to moderns where less problems are likely to exist

 

... resulting in a shrinking of the market for classic widgets and problem coins?

 

While there were issues in the "gold ole days", today, the Internet makes it much easier for hobbyists to learn about market issues and hopefully avoid them.

[cladking]

Probably the driving force is simply the demand of all the new and returning collectors. The number of returning collectors peaked three or four years ago but there are still substantial numbers continuing to add to their collections. The number of new collectors might not peak for a few years yet. But they are adding to collections as well as adding new collections. Many of these people are young and will be the hobby in another generation.

 

The trend toward quality does not seem to be reversing a great deal which isn't extremely surprising give the new structure of the market and the new processes for its operation. Grade it and they will come. Ebay it and they will buy. Catalogue it and they will want it.

 

It will be interesting to see how all the new factors manifest themselves in time but the hobby will change and no one knows what it will look like in a few years.

 

One can have good guesses about where the hobby is going but markets tend to do whatever's necessary to make everyone wrong.

[James_OldeTowne]

I can tell you this, from the show I just attended, the real market for generic Morgans is very soft.

[coinman1794]

I will agree, I have seen prices come down for common Morgans, even in high grades. Solid MS67s with great eye appeal are below $900 these days, wheras they were $1100+ a year ago.