Pre decimal value - where is it heading?

[autocoupler]

Crappy day outside so it's inside for me, and at the risk of spiralling into a whirlpool of negativity, just my two bobs worth. Firstly I agree with much of what's already been said, but from where I sit it's been the familiar old cycle of boom and bust / greed and disappointment.

I'm probably generalising here so not entirely directing this at slabbed coin values, but eight to fifteen years ago auction and general sale results were driving perceived values higher and higher and people were throwing any amount of cash at collectable coins and notes, and on one occasion I remember spectating at an IAG auction where the crowd would erupt into ecstatic applause when as it seemed every banknote sold for a record price. I remember thinking at the time this was too good to last, then with asking prices eventually reaching unrealistic and unsustainable levels and a GFC not helping, the obvious correction that needed to happen, happened. At this point we saw the demise of two main players in the numismatic industry, as well as many ordinary collectors deciding that life's priorities needed reassessing.

Being a keen predecimal collector, it was during this period I decided my pockets weren't deep enough to be chasing high grade examples so my interest in penny varieties heightened, and have concentrated my collecting chasing the more elusive types in reasonably good grade which were cheaper. Ironically it's these very varieties that have had the biggest surge in interest and value at auctions in recent years, not that it's a big deal to some, especially not to one of our better known catalogers who still refuses to update the main penny listing to a relevant level. Just thought I'd throw that in :blush:    

There were no doubt other factors contributing to collectors reducing their activity in the hobby or leaving it altogether, much of which being mentioned countless times by many on this forum, with dodgy practises by some operators in the trade being the reason put forward for feelings of disappointment, distrust and of being conned.

Another issue has been the values published by catalogers. On more than one occasion I have heard a dealer make the unsavory quip that they loved seeing collectors roaming the floor of coin shows clutching a coin and banknote values pocket book. Whilst that type of talk infuriates most, the fact is they were right to think that because the catalogue values had been thought of by many as being irrelevant for a long time, and IMO the only reason these overinflated values were eventually downgraded was due to being  dragged squealing by the short and curly's to the editors desk by a market that was sadly out of tune with the numbers. The big problem was that some  collectors after placing blind faith in these numbers being presented, understandably, could be heard screaming from the rooftops when the values were eventually reassessed.

Now that at long last the reset button has been pressed, things will go forward just as they did after the excesses of the eighties, and that just happened to be when my Dad's interest in the hobby also declined to a point.

[ausproofs]

Very nicely put together Auto, I totally agree.. When I started collecting coins, I was referring to some of the coin catalogs and buying coins... guess what winner was not me.. it was the dealers and auction houses.. What I have also note is some catalogues dont update their sources that regularly and prices privided are very much outdated ( note this is only true when the prices go down, when they go up this may not be the case)...

Now I try to use my head when buying coins.. my old mate Rob from here is the one to knock some sense in to me... (thanks mate)...

This is the reason why (as you said there ) buyer should go by gut feel and commen sense ratherthan a plan old catalogue. (1948 3D in MS66 were selling for $000's at some auction houses and the catalogue was sitting at $800 ++ when the coins were selling elsewhere for $200..)...

Anyways this is really good dialogue.. keep it going guys..Thanks all..

[trout]

As my greatest passion has always been Fishing and I embedded my first  treble hook in my knee at the ripe old age of 4 , Whatever the coin market does IS relevant but not That important to me in the overall scheme of things.
Just like my fishing gear and boat etc I would never hope to recover the expense put into my coins and fishing gear  But both have brought me immeasurable pleasure over the years and I have absolutely NO regrets.
I am only 62 at the moment But I am thinking that in the next couple of years I may downsize my collection considerably and turn whatever funds I can recover into memories of the fish I catch and the places that I caught them in
I think that I have pretty much "Been there Done that" with coins and there are literally thousands of Beaches, reefs, rivers and creeks in Australia that I Haven't fished yet and it is getting close to the time where I should be spending more time out of my office at home and more at my office on the boat or beach, fishing and camping at various different places around Aus :yahoo:

[ausproofs]

Now thats a retirement plan ! Good luck with it all mate.. may be post some photos of Barra when you get a whopper...

I have a  no major issue not being able to recovering my money spent on coins... I have wasted lot of money on other passions I had when I was in my 20's and early 30's...  thats life.. my main question was around the market trends.. I have invested nothing compared to buyers putting 20 big ones for a coin at auction... I see a downward spiral.. wonder how far or how long it would go for... on the otherhand I am happy if the price goes down as I have a few more coin needing to finish off my collection:yahoo:

[ausjack]

That 22 6D has a few nice die cracks

[echidna]

My guess is that the overall market for PCGS graded pre-decimal will go sideways until confidence comes back.

If its not quite top pop then there are bargains out there.
Top pop will continue to do well as usual.

[ausproofs]

My guess is that the overall market for PCGS graded pre-decimal will go sideways until confidence comes back.

If its not quite top pop then there are bargains out there.
Top pop will continue to do well as usual.

Yes I agree, in saying that our coins still do well in US auction houses ! I think some of the coins that are going cheap since they are the top pop are still very hard to come by... people have this idea MS64 coins comes around everyday.. for earlier years that is only wishful thinking if you ask me ... only time will tell....:angel:

[nealeffendi]

Surely the collapse of the Rare Coin Company put a flood of nice coins on the market and possibly scared off many "investors" (and some collectors) who had been buying coins until then expecting guaranteed returns . Also I remember a decade ago all those expensive coins that were jumping 10-20% each year as self managed super funds were creating a bubble. and a buy now or miss out mentality. According to a website (Commbank) the ATOs rules about SMSF investing in artworks/coins etc were tightened in July 2011 and come into full effect in July 2016. The amount of those investments have fallen from 713 million to 419 million and as a percent of SMSF investments the fall is even greater (from 0.18% to 0.07%).
As for actual prices of slabbed coins I offer the following purchase prices that I've paid for 1943D threepences (all in MS66).
9/12/13 PCGS $338
5/6/15 PCGS $120
8/12/15 NGC $42.50
29/12/15 PCGS $63.90
22/2/16 NGC $50 (Benchmark coin)
So a drop of over 80% in under 3 years. When I paid $338 I missed out on another one for also over $330, IIRC there were over 30 at that grade then and maybe another 10 have been added to the population report.
I'm averaging buying a slab a week now as I pick up bargains, not sure that prices won't drop a bit more but in the long run I think the prices will rise (but in real dollar terms after inflation adjustment I think the rise will be very low and the prices paid 3 years ago will not be achieved for many years).

[stevo1962]

Fortunately I have only started buying PCGS slabbed coins this year previously preferring to buy raw and
send for slabbing myself,but I have been recently able buy high grade KGV PCGS coins as low as half
the bluesheet value which is much cheaper than I have seen them as a rule ,I don't know how much longer it will last

[ausproofs]

Surely the collapse of the Rare Coin Company put a flood of nice coins on the market and possibly scared off many "investors" (and some collectors) who had been buying coins until then expecting guaranteed returns . Also I remember a decade ago all those expensive coins that were jumping 10-20% each year as self managed super funds were creating a bubble. and a buy now or miss out mentality. According to a website (Commbank) the ATOs rules about SMSF investing in artworks/coins etc were tightened in July 2011 and come into full effect in July 2016. The amount of those investments have fallen from 713 million to 419 million and as a percent of SMSF investments the fall is even greater (from 0.18% to 0.07%).
As for actual prices of slabbed coins I offer the following purchase prices that I've paid for 1943D threepences (all in MS66).
9/12/13 PCGS $338
5/6/15 PCGS $120
8/12/15 NGC $42.50
29/12/15 PCGS $63.90
22/2/16 NGC $50 (Benchmark coin)
So a drop of over 80% in under 3 years. When I paid $338 I missed out on another one for also over $330, IIRC there were over 30 at that grade then and maybe another 10 have been added to the population report.
I'm averaging buying a slab a week now as I pick up bargains, not sure that prices won't drop a bit more but in the long run I think the prices will rise (but in real dollar terms after inflation adjustment I think the rise will be very low and the prices paid 3 years ago will not be achieved for many years).

Thanks Neal,  some good points there ... I hope in the long run, prices will recover.. however as you said, some of the prices paid by various buyers will take a long time to recover.. Only time will tell..

[runway]

I don't buy slabs I send raw coins to PCGS that I love via Eric

[interest]

I know this is basically regarding  high end coins & banknotes, but since this was first announced back in 2011 I have noticed a decline in Pre-decimal banknotes in particular, & I have been told it has also effected the price of Penfolds Grange which many people had as investments. The main reason is you can't store them at home anymore.

Other collectibles from July 2016
If you hold artwork, antiques, coins, or other collectibles within your self-managed super fund, then you need to be aware of new rules regarding storage and insurance that originally came into effect from July 2011, and will reach their full effect from July 2016.
The new rules, taking full effect from July 2016, have been 5 years in the making, and I doubt the ATO will be lenient if you fail to ensure that your SMSF's long-held artwork (if any) is stored and insured according to the new rules.
The impending date of July 2016 has had a big impact on the level of collectibles held by SMSFs. In the ATO SMSF statistics as at June 2011, $713 million (0.18%) of all SMSF assets were held in collectibles, while 4.5 years later, as at December 2015, a mere $419 million (0.07%) of the massive $595 billion assets held by SMSFs were in collectibles. Although a relatively small allocation in both instances, in dollar terms and in percentage terms, the allocation to collectibles has apparently been savaged by the new storage and insurance rules. The allocation to collectibles has more than halved in a period of 4.5 years, and presumably you can expect SMSF investment in collectibles to fall further by July 2016.
Since 1 July 2011, new collectibles and 'personal-use' assets owned by SMSFs must be stored according to new guidelines, and must be covered by insurance, and the collectible asset must be independently valued. The storage requirement has been introduced to prevent SMSF trustees receiving a personal benefit from the SMSF investment. I explain what assets fall within the collectibles (collectables) definition and personal use assets definition later in the article.
Note: The new rules apply to all new SMSF investments purchased on or after 1 July 2011.Existing collectibles and person use assets held by a SMSF as at 30 June 2011 have not had to comply with the new rules but they will need to comply by the 30 June 2016 (a five-year transition period).
Why were the new rules introduced?
The flurry of activity and discussion relating to SMSF collectibles was initially triggered by the Cooper Review's recommendation (released in May 2010) that SMSFs be forbidden from investing in collectibles and personal-use assets; such as, art, jewellery, exotic cars, yachts, antiques, coins, banknotes race horses and wine.
What types of assets are covered by the guidelines?
Section 62A of the Superannuation Industry (Supervision) Act 1993 provides for regulations to be made in relation to collectibles (collectables) and personal use assets. Regulation 13.18AA (1) lists the assets that are considered collectibles and personal use assets for the purpose of the new guidelines:
   artwork (as per the meaning contained in the Income Tax Assessment Act 1997). In the ITAA, artwork is defined as a painting, sculpture, drawing, engraving or photograph, or a reproduction on of these items, or property of a similar description or use
   jewellery
   antiques
   artefacts
   coins, medallions or bank notes
   postage stamps or first day covers
   rare folios, manuscripts or books
   memorabilia
   wine or spirits
   motor vehicles
   recreational boats
   memberships of sporting or social clubs.

[ausproofs]

Thank you interest... I agree, nice article..

[trout]

I would think that the downturn in values for TPG graded coins is primarily because they were overvalued in the first place and are now finding their "level" now that more and more coins have been added to the slabbed populations.
There is probably also a perception amongst collectors that the current top of the pop's coins will be bettered by new submissions as time goes by as these slabbed coins are relatively new on the Australian collecting scene .

The upside of this is that the "Raw" coins in genuine high grades  have increased in value due to the competition from buyers that need them to be sent away to be graded by PCGS/NGC.

[ausjack]

Yes I've been saying to Belly for a while now about "sleeper" :winkextra: When they come out of the wood work as more of the older collectors kick the bucket and people don't know what they have inherited so flog them off cheap..sometimes