Coins vs. Cards -- Anyone here know the facts??

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Posted By: Hal Lewis

If I am correct, it seems as if baseball card grading companies have been around for about 12 years now.

How much longer have the COIN grading companies been around??

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It seems to me as if baseball card values really started to boom after grading of cards became widespread.

Did this also happen with the COIN market??

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The baseball card market has not yet experienced any major "correction" since grading began.

Did the COIN market ever dip or dive after grading became prevalent?

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Some individual baseball cards have REALLY gone WAY up in price due to the "Pop Reports."

Is the same true in COINS... and if so, are there any instances where a coin that was THOUGHT to be rare for decades has turned out NOT to be so rare?

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There have been times when all of us baseball card collectors MISSED a chance to buy a card and would now GLADLY pay much more than we were willing to spend back then.

Has the COIN market ever reached a peak or plateau... or do the prices just CONTINUE to keep rising??


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The PSA 8 T206 Wagner is our hobby's "Top Dog"... with a recorded sale of $1,200,000... and a CURRENT value of probably about twice that much if big egos wanted to own it.

What is the COIN collecting "Top Dog"... what did it sell for publicly... and HOW MANY TOTAL COINS are there out there that are worth MORE than the T206 PSA 8 Wagner??

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Thank you in advance to the people who have the knowledge to contribute to this thread, as I am curious to see whether Card collecting is following any trends from COIN collecting or not.

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Posted By: BlackSoxFan

LOL ... can't keep up with all your threads, if someone doesn't jump in and answer these for you Hal, i'll be glad to. Don't want to spend all day posting though !!!

Regards,

Black Sox Fan

- - - - - - - - - - - - - - - - -

email me

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Posted By: Andy Baran

The ONLY thing that I know about coin collecting is that Terry Knouse Sr. is an avid collector. He would be a great resource to contact.

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Posted By: identify7

Here is my take on some of those questions:

Coin grading companies have been around since the eighties (if anyone knows when that was) and they are mainly the same companies which we have: PSA & SGC.

Following the start of the grading of coins, prices increased. And the liquidity of coins was viewed as improved. So much so, that the consensus was that they could trade sight unseen, by slab grade only, with minimal vig. Like gold, pork bellies and other commodities. And they did, up to a point.

Collectors soon realized that attractive coins could grade equivalently with others that exhibited less desireable characteristics (toning, for example). At approximately that instant, investment companies decided that coins liquidity made them a good investment vehicle, and the upswing in the market would likely be prolonged. These companies sunk significant dollars into the coin market, choosing mainly the highest graded examples of each issue. Pricing went through the roof, and peaked around 1989. Collector's preferences did not support sight unseen trading with minimal vig. A sizable prolonged correction followed.

I believe that independent grading population reports defined the 1881S silver dollar as the coin which was as common as all other dates and mintmarks combined. Prices on that coin plummeted right away.

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Posted By: Ted Zanidakis

Hal

I collected coins as a kid, prior to the "slabbing" or grading
of coins. But, this is what I recall during the '70s regarding
the coin hobby. For many years it was growing and the usual
investors were heavy into it. The same applies to the Stamp
hobby, in fact these two hobbies have experienced parallel paths.

In the late '70s a combination of factors caused the coin hobby
values to "crash". Two major ones are:

(1) The economy was suffering.

(2) Most significant were the very high interest rates (20%).

People were putting their $$$$ into bank CDs instead of coins.
After all, the powerful magic of compounded interest with a 20%
bank CD, you could double your investment in just 3.5 years.
So, why buy coins, stamps or any other collectibles.

By about 1980 large coin Shows nationwide were total busts.
The coin values plummented. And, many of those dealers switched
into the BB card market, which was just starting to grow.

In 1980 in Philadelphia there was an event which got nationwide
attention.......three 1952 Topps Mickey Mantle cards sold for
$10,000 at a local auction. This made the front page of the
Philly Inquirer, and shall I say....the rest is BB card history.

P.S.....Cannot tell you about the Wagner equivalent in Coins.
In stamps it is the unique 1856 British Guiana 1 cent (Magenta)
which is worth several millions of $$$$.

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Posted By: Glenn

http://archives.cnn.com/2002/US/07/30/double.eagle/

$7,600,000

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Posted By: barrysloate

Here are some of the things that happened in the early days of coin grading: I believe grading began in the early 80's as none of the catalogs from the late 70's have graded coins. It gained pretty widespread popularity until a scandal broke. It became known that big time dealers were getting all sorts of preferential treatment, ranging from leniency on coins they submitted to having their orders expedited while the average collector waited weeks to receive his coins back. Then somewhere in the 90's, grading standards got so much stricter that coins graded before a certain cutoff point had to be resubmitted to be taken seriously in the market. Also, when grading started- using a scale from MS-1 to MS-70 (perfect coin) there were three levels of uncirculated; MS-60 (average), MS-65 (choice) and MS-70 (gem), or something like that. Today, there are 11 levels of uncirculated (MS-60, 61, 62...etc.) making the whole proces extremely complicated. I'm sure you can see some parallels with the coin and card markets. Today, virtually every rare coin is slabbed, save the legendary King of Siam 1834 Proof Set which is still housed in its original velvet case (it just traded recently for $8.5 million).

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Posted By: identify7

T-Rex: are you sure about the dates which you cite? My recollection is that in the late '70s gold and silver went up substantially. This resulted in a melting of many coins, which were viewed as bullion in most grades.

The 21% interest rates did not occur until the early 80s. Then grading population reports showed which and how many coins had been melted. There was quite a rearrangement in the values of (even relatively) recent Franklin Half Dollars. These apparently suffered most from the melt.

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Posted By: warshawlaw

http://www.us-coin-values-advisor.com/grading-coins.html

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Posted By: Hal Lewis

Thanks Adam!

I don't understand all the abbreviations...

but the "rate of return" percentages are easy to comprehend.


Definitely would have been GREAT to buy a bunch of old coins in 1975 and sell them in 1985.

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Posted By: Mark

Interesting article, Glenn. I wonder if collecting aspirin bottles and old razor blades will ever catch on here.

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Posted By: Ted Zanidakis

Barry

I did not say Coin grading started in the '70s. If I recall correctly, you
were into Coins before Cards; do you recall Coin values dropping in the late
'70s ?

Gil

I am not sure where we differ. If you recall, the economy was in trouble
by 1979 with high inflation (near 15%), high unemployment (over 8%), Stock
Market down (Dow Jones under 900), and do not forget those contentious long
gas lines (oil embargo). Jimmy Carter's famous "malaise" speech pretty well
summed up our national situation at that time.

And, you are right, when such conditions prevail investors turn to Gold and
Silver and other rare metals. By, the mid-'80s the economy turned around. And,
we enjoyed lower inflation, lower interest rates, the Dow Jones was up over
2000 and climbing. I remember re-financing my 14% mortgage to a mere 7% in 1986.

Meanwhile, our BB hobby was booming, people were no longer investing their
money into bank CDs (interest rates had dropped to 5 -6%). Instead they were
putting their $$$$ back into collectibles. Coins, Stamps, model Trains, BaseBall
cards were flourishing by 1985 and into the '90s. You could no longer buy
T206's for $10 a common card, or 1952 Topps High #s for $25 a card.

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Posted By: sagard

I don't collect coins, but this was a fun and easy read.

http://www.amazon.com/gp/product/0743245741/002-8791933-6377615?v=glance&n=283155

Made me want to purchase a $20 Double Eagle, but as of now I've resisted the urge.

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Posted By: Jay Miller

Hal--There are several coins that are more valuable than the PSA8 Wagner. The 1913 Liberty Nickel (5 copies known) sold in 1996 for about $1.5 million. The coin most comparable to the T206 Wagner might be the 1804 silver dollar which was hyped in comic books in a similar way to the Honus Wagner card. I know one copy has sold for over $4 million but I'm not sure if this remains the record price for the coin.

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Posted By: Alan

There used to be combined card & coin shows together !!!

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Posted By: barrysloate

Coins were extremely hot in the late 1970's. One of the most famous collections ever assembled, the Garrett Collection, was sold in four installments between late 1979 and early 1981. It sold for a total of around $25 million, a princely sum today and even greater then. By the mid-1980's it was clearly taking a dip, but I wasn't involved with them anymore.

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Posted By: scott brockelman

as someone who was involved in the slab coin industry in the late 1980's i could write a thesis on it.

there are several factors that differentiate the situation of coins and cards, the foremost one being supply, the number of high grade coins available then and now is HUGE! dealers had rolls and rolls and boxes of rolls of high grade raw coins, mainly silver dollars fresh out of bank vaults to grade and promote. we do not have that luxury in the vintage card area, their is no endless supply. if you look at the pop report of any given Morgan dollar by date and mint mark, they are 10 fold, 100 fold even 1000 fold the number of T206's for instance, even the rare dollars 1893-S and CC's are very plentiful. the key to the skyrocketing coin prices was dealer manipulation of the prices. they formed an alliance that bought and sold off of a daily teletype The American Numismatic Exchange, called the "Annie Wire" daily buy and sell prices were listed of all major denominations and grades. here's where it gets slick. lets say you had some rare type pieces in low pop(there were a few) such as $5 indian in 64, the pop at the time was around 20, extremely low for a coin where pops in the 100's can be considered "tough". someone would buy 5-8 of the available 64's and slowly start to pump up the buy price, knowing that they probably would not have to make good on it, if they did, no problem, they had made the odds even better, after several months of running the bid to to the moon, they would slowly start to sell the coins back off into the market for a sizable gain.

this is just one of the many tricks that were done. the main difference again is supply. the supply was available that a dealer could buy 1000's of 1881-S dollars and run a full blown ad promoting them at insane prices. this was a little before the pop reports and the public did not know the amount of them that existed. you could never do this in cards, you simply could not gather enough cards to do such a promotion.

in a nut shell, grading didn't kill coins, the dealers did.

in New Jersey, New York, CT and various other places back east there were many boiler room operations selling high grade coins by the dozens daily and we are talking $5K-$25K coins that they would pound the phone for hours soliciting mailing lists of people with money, touting them as super investments and rattling off returns, performance, predictions, etc. each day a new list of coins was generated and the process started all over again. these were very slick professionals, making very nice commissions and "spiffs".

There's more, but this type of activity does not and cannot happen in the card market, higher grade and togher issues are scarce enough to drive there own prices up and not bottom out unless the demand drops. i could only see this happen on a few single occassions where big money collectors have let a little "irrational exhuberance" get them carried away and pay way more than the current market would bear. making taking a bath possible if a sudden liquidation were neccessary.

Scott

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Posted By: Steve

Made me want to purchase a $20 Double Eagle, but as of now I've resisted the urge.

Sagard
Good idea to resist as Gold is at a 25 year high.

Even before grading of coins a bottom fell out of a rare coin issue.

I think it was a 1904 coin (could be wrong) The story is that for the longest time hardly any one could find the coin in mint state and the price of an example was high. Then one day thousands were found laying in a bank vault. Some dealers found out and bought them all (at face) and the market flooded. This I think happened in the early 60's. The first grading company was called ANACS and it was created by the American Numismatist assoc. PCgs and NGC followed. Q D Bowers also had a company called hallmark that predates the former 2.

When you see an ad that touts coins as the best investment for a period of years it is for SELECTED coins during that period not coins in general.

One of the reasons the card industry boomed in the mid to late 80's was the influx of coin dealer money.


Steve

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Posted By: Hal Lewis

Looking at CLOSED auctions on EBay over the past month:

There are 68 individual coins that sold for $13,000 or more...

while there were only 12 individual baseball cards that sold for $13,000 or more.

Wow!!

(This INCLUDES all of the big items in Sotheby's for baseball cards, and all of the big items in Heritage for coins.)




Baseball had the THREE HIGHEST spots, however, with the California League Old Judge card at $100k, the "quad-autographed cuts" card at $85k, and the E107 Wagner at $80k.

After that, however, the next highest baseball card was a 1952 Mantle at $30,000.




The highest individual coins were at $78k, $70k and $68k... but there were at least another 25 coins that sold for MORE than the $30k 1952 Mantle.




This supports what Scott B. was saying about the abundance of high-priced coins out there.

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Posted By: Andy Baran

Hal,

As you are aware, the E107 was not a normal Ebay auction. Even though the "Ebay Price" was $80,000, there was a 20% Buyers Premium, putting the actual cost @ $96,000.

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Posted By: Brian Daniels

Hal-there are 50000x collectors of coins x=card collector. I buy and sell coins weekly. Coins do not need e-bay to sell as the demand is far greater for quality pieces.Yes,there are also a gazillion more of most everything in coins but there are also a lot more people who "hold" coins longer than people do cards.

Scott B

-I know you know this but pages 399-403 of the official Redbook of U.S.Coins( the Bible )2006 edition ,has the 250 highest "known" auction records for coins...........

this of course excludes the "TEN" other known 1933 double eagles the owner got scammed out of by the Government recently! There are actually 11 known now.....funny how the alleged only one known at the time was removed from the World Trade Building just two days before 9/11 !

Hal,the coin market (not bullion***) is very ,very strong right now!

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Posted By: Hal Lewis

Andy:

ALL of the coins that I mentioned would also have been subject to 17.5% juice as well... because ALL of them were "EBay Live" items from another official auction house.

Thus, everything is still relative... so I just decided NOT to do all that math!!



But YES, since you own an E107 Wagner, I can respect your desire for accuracy.

It certainly did cost someone $96,000 to buy that Wagner in the auction.

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Posted By: scott brockelman

Hal,

there are many major and minor coin auctions each year, and the prices that many of the key pieces bring blow cards away. true, there is a larger and well heeled coin clientele but as we have seen the card market is changing as people of this calibre have begun putting money into this area. once the true rarity of some cards and the big money hits, we may have much stronger prices than we currently do. this is not to say that all cards will rise exponentially, low grade and common varieties will not see the appreciation of high grade and the tough issues.

Scott

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Posted By: Hal Lewis

That is part of what I was wondering.

Could it be that a lot of money comes into our card market and drives prices up to where a current $5,000 card becomes a $50,000 card?

Scary thought... but I guess that would be good news for everyone on this board who is gathering up everything they want NOW.

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Posted By: identify7

It could happen Hal, and it would take far less a capital influx than coins required, but why should it? That is: if money is to come into a collectible market which hasn't yet even identified what exists, much less quantified it; why baseball cards?

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Posted By: .

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Posted By: barrysloate

Anyone involved in coins remember the Redfield silver dollar hoard of 1976? Lavere Redfield was an eccentric and reclusive millionaire who lived alone in a mansion in Las Vegas and who in the 1950's and 1960's secured unopened bags of Morgan silver dollars (1000 to a bag, as issued by the Mint) and stashed them away quietly. When he died around 1975, word got out that he had these dollars but nobody could find them. The IRS even sent agents to his home looking for them to no avail. Then one agent noticed a wall in his basement that didn't look right. They took the wall down and behind it they found over 400,000 silvers dollars, many of them uncirculated bags of really rare dates. They also found among the bags cartons of canned peaches, which exploded because of the Las Vegas heat covering many of the dollars with peach juice. The collection was sold in its entirety, virtually sight unseen, for $7.3 million. Today, it might be worth over $50 million. Many of the rare silver dollars we have today came out of this hoard. It is perhaps the most famous hoard in numismatic history.

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Posted By: identify7

Baseball cards to me are fascinating because of the preservation of the history of the sport and its records; and my ability to correlate and commemorate events through the selection and assembly of specific cards.

But not everybody gives a hoot about baseball.

Coins are fascinating to me because of the nuances in the final product attributable to their manufacturing technique (applicable to pre-1800 U.S. coins, by preference).

This area of study is not one which many give a hoot about either.

Therefore, there is no real reason to collect either. Please go away, buy figurines, paintings or something else of universal interest. Impress your friends and have your enemies envy you. Just stop buying all of the stuff I like, so the prices begin falling.

< insert a Hal happy face here >

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Posted By: Ted Zanidakis

Mike McAvoy

Thanks for confirming my comments on the US economy at the
end of the '70s and into the 1980 - 82 time frame, which I
believe made a great impact on the BB card hobby as it was
beginning to grow. There was a lot of Coin dealers and $$$$
that came into our hobby back then. I remember (as another
Forum member) that in that time period BB card advertised
shows would actually have coin dealers selling coins and
BB cards.

Hal

In 1986 a 1933 Goudey Ruth in near Mt would sell for $500; and,
that same card today sells for $5000. So, to follow up on your
concern, we can extrapolate that this same card will soon be
selling at $50K. Is it possible? It all depends on the American
economy....that's the point I have been trying to convey. Right
now, the economy is doing good it it all depends on low lending
interest rates and low inflation. Those are the keys and the
sky is the limit.

T-Rex Ted

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Posted By: Hal Lewis

Put your right finger on this key and press => :

Now put your left finger on this key and press => )


Voila!!

You can do it!

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Posted By: barrysloate

Ted- trying to guess the future of baseball cards is just speculation. They will always be popular and widely collected, but will they continue on a never-ending upward spiral? Hard to say. But Scott Brockelman pointed out how dealers would manipulate the coin market. They would often buy up bags of a particular date silver dollar, and then when they had a large enough holding, advertise to buy the very same date way above market prices. They might have to buy a handful for a bit more than they wanted, but they were pumping up the prices along the way. When they got the price pumped high enough, they would start putting their own stash on the market. Happened all the time. Can the same thing happen in baseball cards? Some dynamics are a little different, since you can't find original bags of specific T206 or N172. But can wealthy people buy enough of a particular card to artificially pump up the prices? Enough said.

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Posted By: Hal Lewis

But Barry...

wouldn't the rich investor have to buy up all of those cards WITHOUT the public knowing about it??

I just can't see this happening.


In other words, I could theoretically buy up every 1951 Toleteros Gibson that appears on the market...

but if everyone keeps seeing these cards coming up for sale, then nobody will consider them rare when I try to start selling my hoard.


Also, if everyone KNOWS that I am buying up all of these cards, then they will know what kind of stunt I am trying to pull when I eventually start trying to sell them for big bucks. They will know that I am trying to set a price and NOT the free market.


Am I right? Or am I missing something from the coin example.

Isn't the "key" to pulling this "cornering of the market" an ability to HOARD up a bunch of the cards without anyone knowing it??

I guess this could happen with a "Factory Find"... but probably not any other way.

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Posted By: Joe Jones

This sort of trick has already happened in the baseball card industry. I think it is more prevelant in the more common 50's and 60's cards. I susspect if it were to happen with pre war cards then it would be with more accessable cards like the T206 which would be tougher to notice if someone was hording a certain card.

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Posted By: barrysloate

No- I did say that the dynamics of coins and cards are different. But do we all remember how large groups of Old Judges began to sell for ever higher prices every time a group came on the market? Well, we don't see that anymore, and if anything the Old Judge market is a little soft (rare cards excepted). You don't have to buy everything to manipulate a market, but you can buy just enough to influence it. Or maybe it's just that all the collectors who wanted those large groups have acquired what they need and nobody new has come along to take their place.

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Posted By: identify7

T-Rex: the following excerpt from your original post were the dates that I referenced as questionable.

"In the late '70s a combination of factors caused the coin hobby
values to "crash". Two major ones are:

(1) The economy was suffering.

(2) Most significant were the very high interest rates (20%).

People were putting their $$$$ into bank CDs instead of coins.
After all, the powerful magic of compounded interest with a 20%
bank CD, you could double your investment in just 3.5 years.
So, why buy coins, stamps or any other collectibles.

By about 1980 large coin Shows nationwide were total busts.
The coin values plummented. And, many of those dealers switched ..."

My specific notation regarding these dates are:

The coin hobby did not crash in the late '70s. Due in part, to bullion values, the coin hobby was alive and well but refocused on to this new profit generator.

Very high interest rates (20%) did not occur in the late seventies.

By 1980 neither were coin shows busts, nor did coin values plummet. Bullion prices peaked and rapidly declined. But those who purchased for example double eagles for their bullion value at about $400, found that their numismatic value supported that price as gold bullion value dwindled. Of course, those who purchased bullion related coins at their peak, lost during the decline.

This is my recollection, Ted.