So I received a letter from Greg McDonald today. Nothing big - I buy his book from him through the mail so he sends me an order form each year. In it it includes a letter where he does a bit of rambling. Personally I find it quite interesting in what he has to say so usually read it cover to cover. In it he says something interesting. In short he says that because of the changes in DIY Superannuation funds the price of Numismatics is tanking at the moment.
Having to pay around 1k/year to insure anything up to 50k of valuables (he used a price for books, but coins would be similar) and having to store them not at your house or business means the yearly cost of keeping them will decrease their overall profitableness and therefore decrease the demand for them.
In his researching the current prices for the 20th year book some of the prices had gone down by 40%. He has experienced the same this year. Take a look at the 18th and 20th editions of the George Vth notes. They have all pretty much gone down - and some of them substantially. My EF 10 pounds Riddle Sheehan (Mc 80)has gone down from 28k to 24k - and that isn't too bad. The Unc Half Sovereign Collins/Allen (Mc 4) has gone from 535k to 257k - that is a much bigger decrease.
He is expecting the decreases to continue in the upcoming book at the end of the year.
And for the first time in as many years as he cares to remember, Numismatic Notes investments were not at the top of the list and coins were not in the top 10 in Access Economics. They rank investments of coins, rare wines, taxi plates, real estate etc...
He states at the end that of course the prices will increase again. As with everything there is cycles and Numismatics is going through a bit of a down period at the moment. Will they pick up - yes.
What I took away from it:
If you want to buy some great items that are rare and usually expensive - now is the time to do it.
The question will be - how much do we kick ourselves in 7 years time for not buying when the market was down as much as it is today?
Or when will the market recover?
The problem with "the market" is that it isn't pure. Not only does it comprise people who have zero interest in the commodity itself, but it is also subject to government and corporate meddling. With the stroke of a pen, demands such as the superannuation changes, or the new ID checks on off-market share transfers, or a slew of other measures, make investments less attractive, and money flows out of them.
But why are we IN this hobby anyway? Are we interested in what we collect, or are we just trying to make a buck? If we are truly collectors, surely market values are irrelevant, because we're never going to sell?
The wholesale note market collapsed years ago, while retail dealers didn't lower their prices anywhere near as much as the wholesale market dropped by, the drop was certainly felt in the form of a huge drop in liquidity. The retail market needs to drop by same % as the wholesale market in order to restore liquidity - the liquidation of John Petit and the Rare Coin Company will contribute to this. The current 100%+ premium between auction realisations and retail prices make it completely unpalatable for new collectors to enter the market.
Buy and collect what you love. If you cannot buy insanely cheap I believe that investment returns are simply luck. Perhaps with education you can become more "lucky" but even then I believe that luck is the major component.
Quote from: 'markn' pid='24379' dateline='1376039508'...luck is the major component.
Absolutely spot on.
Downturns in the market are good in one sense because it forces the shonky dealers out - eg Rare Coin Co.
Thank goodness they are gone.
Good riddance.
ANDA - get your act together - don't allow crooks like this in.
Rob Jackman was vice president of ANDA for a long time.
In my opinion a disgrace to ANDA.
IMO Notes in general have been going backwards in price ever since Ebay started in Oz.,cheaper retail now than 25 years ago,One thing that puzzles me is the rise in demand for silver coins even though the silver price is struggling,hard to get a decent 38 Crown for under $150 as they head towards $200,37 is slowly moving towards $50,
Quote from: 'Fulvio' pid='24371' dateline='1376034473'But why are we IN this hobby anyway? Are we interested in what we collect, or are we just trying to make a buck? If we are truly collectors, surely market values are irrelevant, because we're never going to sell?
For those of us still in the purely "buying" phase of our hobby it is good news. I can get items cheaper now than they have been for years.
Whilst I doubt I will ever sell there is still the pleasure of chasing a good deal and watching my collection appreciate in value.
A related article in today's Courier Mail:
(http://www.australian-coins.net/gallery/albums/userpics/10124/Article22.jpg)
sensible advice from Mr Noble
although one fears they aren't too far behind the demise of the rare coin company if they don't pick up their act too, having a friend who they took more than 2 years and a court submission to get his money from a Nobles auction consignment - the customers had paid and left with the goods and the collector then didn't have his coins or his $260,000 + money - it was disgraceful
Good artice Steve thanks for sharing.
Wow, thanks for that Robbiegal, will file that in the back of my mind should I ever be considering auctions.
I felt a bit slack writing that but having gone through sharing his excitement and all the trouble he went to for a pre-grading & lodgement and then only getting his final payment early this year after more than 2 years and court action, it was downright disgraceful, so Nobles may ride on the back of the rare coin company failure and promote themselves as trustworthy, but be warned
they offer some measly 2% or the like (might even be more or less) interest' but when you have bills to pay etc - it doesn't cut the mustard in my books
Nobles may take offence but I can name names if I have to
Quote from: 'Steveqld' pid='24431' dateline='1376098248'A related article in today's Courier Mail:
Gotta love journos and their sloppy reporting. Here's the original article from Barron's, which has nothing to do with Oz:
http://blogs.barrons.com/penta/2013/07/29/small-coins-big-money/
Interesting guys .... enjoying being educated thanks :)
Quote from: 'Fulvio' pid='24461' dateline='1376137862'Quote from: 'Steveqld' pid='24431' dateline='1376098248'A related article in today's Courier Mail:
Gotta love journos and their sloppy reporting. Here's the original article from Barron's, which has nothing to do with Oz:
http://blogs.barrons.com/penta/2013/07/29/small-coins-big-money/
Yes all related so borrow from each other. The CM article comes from the "Eureka Report" that is also owned by News Limited. The Barron's report is owned by Dow Jones & Co which became a News Limited subsidiary in 2007. Otherwise there could have been copyright issues.
Quote from: 'Steveqld' pid='24485' dateline='1376175369'News Limited.
Don't get me started on these guys.... a greater pack of scumbags never crawled the earth, and likely never will. If you should ever find yourselves involved in anything "newsworthy", make sure you stay
RIGHT away from them, or you will regret it. :(
this story must be in all papers as it was in the local rag as well
Harsh words Fulvio
Quote from: 'runway' pid='24574' dateline='1376226906'Harsh words Fulvio
You have no idea.... quite mild compared to what was said at the time. They are the lowest lowlives you are ever likely to cross paths with, trust me.
Unbelievable :dash1:
I checked the mail today and I still haven't got a letter from Macca yet :laugh2:
Has any subscriber to Greg McDonald Insider Club got a newsletter this year?