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Who drives prices up?


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I wonder if there is a way to know why prices go up for certain coins.

I've read a book where the author advises to invest in coins where the

majority of coins have been bought by collectors rather than

speculators. The question is then how I know whether more collectors

than investors/speculators have bought specific coins.

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... invest in coins where the majority of coins have been bought by collectors rather than speculators.

 

Would that not then create an oxymoron in which the many people who read this book then invest in coins that were not previously investments? That would then narrow the field of available coins until, ultimately, none was left.

 

What was the book?

 

The question is then how I know whether more collectors than investors/speculators have bought specific coins.

 

Know many dealers well. Be a dealer yourself, known well to others. Be a large buyer of expensive material known to many dealers. Then, chat them up often.

 

Knowing the numismatic markets is a fulltime job because that is markets plural. Are you only thinking of US Federal Type ...

 

I ask because in fact as above, the very coins people collect are the ones attractive to investors: Half Eagle and smaller US Gold; key dates (1877 IHC; 16-D Merc; etc.); DMPL Morgan Dollars; all the ones you already know about. Otherwise, there would be no reason to invest.

 

... or are you including medals.

 

This book was just released http://www.french-medallic-art.com/

I read about it on the Esylum maillist.

 

When a book comes out, the subject becomes interesting to new buyers. Without a book, this is just a quiet area of collecting for aficiandos. I don't think that the market is ruined for lovers here, that people in the USA are going to abandon VAM Morgan Dollars and flock to French Medals. Still, the point is that this is no longer an area for pure collectors, but will inevitably attract some investors.

 

So, how long should a secret investor wait? You could have had all the French Medals you wanted and held them for 50 years and never had this book come out in your lifetime. The same holds true for minor works of the US Mint such as Secretary of the Treasury Medals or Inaugural Medals.

 

Ancient coins, medievals, the entire matrix of so-called "Islamic" (Western Asia) issues, which would include the coins of England's King Offa... If you just take ancients and in that look at Celtic and in that consider the Danubians or the Gallo-Romanic, you have narrower and narrower fields in which there are no investors. Are you willing to buy into that in the hopes that someone else will come along later?

 

The advice seems facile, at best. You want to get rich? Think up something everyone wants that no one else has and then sell it for a lot of money to a lot of people. I should write a book. :)

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gold and silver prices are pushing those up, in the UK the only penny prices have been pushed up, i'm gessing the reaccurance of the 1933 penny has opened awareness of these, russian coins have been up for a while.

it could be a bit of both, but investing is a bit of a hard area, i would wait for the base metal prices to fall before going there now. i own some rare pieces, some by accedent some by a lucky bargain on ebay.

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Coin prices, like many items with no real manufacturer's price on them, fluxuates due to many reasons. With Coins and some items the price is almost purely popularity. The more people talk about a coin, dealers push that coin, book, magazine, web sites discuss that coin, the price go up and up and up.

A really good example is the 1955 Lincoln Cent Double Die. If you go to www.coppercoins.com web site you would see that there are Double Dies for almost every year of that coin. Yet just about every collector and dealer mentions the 55 DD as if it was the only one. This popularity makes that coin worth many times what it really is worth and since no one knows how many are out there, the price has little to do with available quantities.

If you look at the auto industry that also is true of many of the older cars. For example all you hear about is the famous 1957 Chevy Convertible. Same thing there with prices. The more that car is mentioned, the higher the price. Ever hear anyone talk about a Hudson, Nash, etc.?

If you wanted to start something similar with a certain coin, you too could hit all the coin forums and mention how difficult it is to find a 1931D Mercury Dime. Then go around to coin stores, coin shows, write in to coin magazines about that coin. Possible you could start a massive climb in prices for that coin yourself. Just popularity.

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What was the book?

The Expert's Guide to Collecting & Investing in Rare Coins: Secrets Of Success

 

When a book comes out, the subject becomes interesting to new buyers

It is one of the answers I was looking for. Thanks, I did not think about that before. You must be up to date with new books issues

 

..russian coins have been up for a while

I might be wrong but as far as I noticed premiums on Russian coins are much higher than on Canadian coins. This is not the time I want to invest in Russian coins.

 

On this site coinvaluesonline.com you can see graphs of different US coins, if the price dropped significantly for a certain coin investors definitely lost money and it might be time to buy.

Unfortunately this site has only US coins and I do not know other sites with the similar features.

So knowing how much a certain coin was worth several years ago might (not necessarily will) help you to find a investment bargain. Once again, I accept that I may be wrong in my thinking.

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This book was just released http://www.french-medallic-art.com/

I read about it on the Esylum maillist.

 

When a book comes out, the subject becomes interesting to new buyers. Without a book, this is just a quiet area of collecting for aficiandos. I don't think that the market is ruined for lovers here, that people in the USA are going to abandon VAM Morgan Dollars and flock to French Medals. Still, the point is that this is no longer an area for pure collectors, but will inevitably attract some investors.

Phew, checked your link and 'French medallic art 1870-1940' is later than the period I collect, you gave me a fright.

 

I guess whether we are collectors, investors or a combination of the two we all affect prices. If we all took an hiatus from buying, prices would come down. Obviously the more people follow a hot trend the more pricing will be affected. Collecting the unloved or the unknown can be a rewarding experience & you might still find at the end of the day a wise investment, even if not monetarily, at least of your time.

 

Also, as others have mentioned, gold & silver prices are rising & bring investors into the numismatic market, not really the right time for a collector to be buying gold & silver coins, unless he wants to go along for the ride & see how much higher those prices will go.

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Ha ha ha! :) You beat me to that link ;)

 

It's interesting for me to read about the hobby as an investment. As a collector I don't think in terms of return on investment. Rather I think in terms of "do I have that coin or medal?" and "can I afford to pass on it at this price or will I ever see another?" Those who collect relatively narrow niches have less competition but also far less possible examples. A common medal in the Napoleonic / Regency period might number 500 struck with less than half still in existence. When a rare American coin numbers in the thousands of existing examples the scale is different. But so is the vast increase in people after that coin... I have paid more for a medal than it probably is worth, as an investment. But since I'm not looking at increase it scarcely matters whether or not it made good fiscal sense - if it made good collecting sense... Counting on a collector's good fiscal sense is not always smart. :)

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