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

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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