US Coins

Coins' First Boom and Bust: Q. David Bowers

The Joys of Collecting column from the April 4, 2016, Monthly issue of Coin World:

I have liked to study cycles in the rare coin market, which are well-defined and usually predictable. In 1963 I did the first-ever study of this subject. 

Recently a client who is deep into the stock market asked me if that market paralleled the pricing of rare coins. I pointed him to comments I made in 2005 in The Expert’s Guide to Collecting and Investing in Rare Coins:

??1930s: Bear stock market of the 1930s Depression: Time of great growth in the rare coin market. 

??1946 to 1947: Bear stock market of May 1946 to May 1947: Boom time for the coin market. 

??1961 to 1962: Bear stock market of December 1961 to June 1962: Boom time for the coin market, when all of those 1950-D Jefferson 5-cent coins were rising in price. Kept it up until crashing in 1964.

??1966: Bear stock market of February to October 1966: Bear time in the coin market as well as the stock market; gloom prevailed.

??1973 to 1974: Bear stock market of January 1973 to December 1974: Boom time for the coin market.

??1976 to 1978: Bear stock market of September 1976 to September 1978: Boom time for the coin market.

??1981 to 1982: Bear stock market of April 1981 to August 1982: Bears everywhere, in coins and in stocks.

??1987: Bear stock market of August to October 1987: Boom time for the coin market.

??1990: Bear stock market of July to October 1990: So many bears were prowling around the coin market that only Bayer aspirin could solve the headaches!

??2000 to 2003: Bear stock market starting in March 2000 for the next several years. NASDAQ peaked at 5048.62 on March 10, 2000, and fell to a bear-market low of 1114.11 on Oct. 9, 2002. The coin market was afire with interest in ultra-high grade certified modern coins. 

Remind me sometime to discuss coin bull and bear markets independent of the above. For example, the coin market was asleep from 1948 to 1951.

??Back to 2016: In the long term the Dow-Jones Industrial Average and the Standard & Poor 500 have richly rewarded investors who buy carefully and avoid speculation. The same thing can be said, and in spades, for rare coins. 

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Now to 1858: Coin collecting became dynamic. There developed a craze for small medals 30 to 32 millimeters in diameter. It started during the super excitement of August when the Atlantic telegraph connection was completed across the Atlantic. George H. Lovett, a New York die sinker, produced medals for the occasion. Soon, these dies were combined with other dies, often irrelevant, and made in different metals.

Within the next two years, thousands of commemorative medals were made.

George Washington was foremost as a popular subject, and a subculture arose with hundreds of collectors endeavoring to get as many different as possible, some dating back to the previous century.

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Leading the pack was Mint Director James Ross Snowden, who offered to trade coin restrikes and patterns for Washington pieces the Mint Cabinet needed. In the marketplace, prices doubled and doubled again. A peak was reached in 1860 and 1861 when new faces failed to appear, and there were more sellers than buyers. Prices collapsed! Thus the first boom in the market came and went.

Time seems to heal all (or most) coin crash wounds. Today, Washington medals are worth dozens of times their crashed prices of the early 1960s. On the other hand a roll of 1950-D Jefferson 5-cent coins can be bought for a fraction of its $1,200 price in 1964. 

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