It seems like only yesterday, but it was 11 years ago in 2005 that Whitman published The Expert’s Guide to Collecting and Investing in Rare Coins. Since then it has been a best seller and has been nicely reviewed. Recently the stock market has taken hits—this time due to uncertainty in China, falling oil prices, concerns about the strength of the dollar, and more. So, what else is new? At any given time analysts of securities have enthusiasm and also have worries. That said, I reprint below what I wrote in 2005.
Have a nice week!
Dave Bowers
From 2005:
Relating selected bear or down-markets for stocks to the situations at the time with the rare coin market shows this:
1930s • Bear stock market of the 1930s Depression: Time of great growth in the rare coin market.
1946-1947 • Bear stock market of May 1946 to May 1947: Boom time for the coin market.
1961-1962 • Bear stock market of December 1961 to June 1962: Boom time for the coin market, when all of those 1950-D nickels were rising in price.
1966 • Bear stock market of February to October 1966: Bear time in the coin market as well as the stock market; gloom prevailed.
1973-1974 • Bear stock market of January 1973 to December 1974: Boom time for the coin market.
1976-1978 • Bear stock market of September 1976 to September 1978: Boom time for the coin market.
1981-1982 • 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!
2000-2003 • Bear stock market of 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 October 9, 2002. The Dow-Jones Industrial Average fell, but not nearly as much, as it was/is composed of more seasoned stocks. The coin market is afire with interest in ultra-high grade certified modern coins.
I discuss separate movements of the rare coin market later in this book. The coin market has had its share of knocks, such as 1947-1950, when stocks were doing very well, but buyers for coins, even rarities, were scarcely seen. A fair summary is to say that while both the coin and stock markets have their own cycles, hardly ever do the twain meet.
It is also probably fair to say that choice rare coins have been a great passive investment, when bought carefully and held. In contrast, successful investing in stocks would seem to require constant management. The darlings of a generation ago can be dead today.
