Quote:
Originally Posted by begsu1013
will only be a matter of time before the first piranha bites and this thread gets turned into a stake burning.
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I'm more of a minnow than a piranha, and I can't find my lighter right now, but I think my experience is relevant here.
Brent, you bring up the examples of coins and fine art. I was active in the rare coin market for about 10 years, from the late 1970s to the late 80s, mostly on the dealer side, so I had a front-row seat for the commodification of coins--both rare and not-so-rare. There were a number of factors behind the change in the marketplace:
- Inflation and interest rates were relatively high, so cash investments were getting hammered. This led to a flight to value, especially precious metals.
- For a short period individuals were allowed to put non-cash items into their IRAs, increasing the demand.
- Several very high-profile collections came on the market that caught the public's attention (Garrett, Eliasberg, Jerry Buss, etc.).
Back in the boom days of the coin market, early- to mid-80s, the poster child for all the craziness was proof 3-cent nickels (look it up). Original mintage numbers for each date are fairly high (500 to a few thousand each year), so these are not what you'd call rare, or even particularly scarce. Within about 6 months the active trading price of these coins went from around $2,500 up to $8,000 or more. I had several of these pass through my hands. Not a one went to a long-time collector. Some went from hand to hand, while others went to people looking to protect their money. Current value, 30 years on? A nice clean MS-63 1878 proof (a proof-only date) sold not that long ago for a bit under $2,000.
Yes, this is an isolated example. It was part of a years-long trend, though, that brought many people into the market for the first time. This influx can be a good thing, but if those new people are the "Ooh! Shiny!" folk, then they're not going to last long or provide long-term price support. Some of them will get hooked by the allure of the product and stay around, but soon enough most will move on to the next thing. And yes, you do still see record prices set. But that's for the rarest of the rare, and Mantles don't qualify there. As a whole, the high end coin market turned out to be a lousy investment.
Where I see the similarity is that, at the time, even the sophisticated coin dealers completely bought into the idea that the trend would continue. For lots of reasons that's natural; if you don't believe in your product or the market, maybe you should be doing something else. I'm not saying that baseball cards are tulip bulbs, but I believe, based on what I've seen, that at some point the music will stop.