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Mandela Coins - Big Crash Coming!

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EWAAN Galleries    10
EWAAN Galleries

Seems like the prices of Mandela coins are finally coming down. Strange though that even that the prices have dropped buyers are not buying. Market is down on most Mandela coins.

 

Some examples:

 

2004 Mandela Warrant of Arrest Launch Set. Initially was selling in 2004 for under R6000. Then went to R30000, R50000, R70000 and R100000. Now sellers asking around R200000-00. And no buyers for the set even at R140000. We would pay maximum R100000 now. Not more. So if investors paid R200k they have paid way too much.

 

2007 Mandela De Klerk Proof Set. This is a good one. Launched at under R10000. Went to the roof R45000. Now no buyers even at R38000 - R40000.

 

2008 Mandela 90th Birthday Celebration Set. Same story. Nobody wants them like before. The SA Gold coin half oz sells for more than the SA Mint ones.

 

Seems like all Mandela coin prices dropping tremendously. Prices have come down and still no buyers. Times are tough!

 

Advise to all. Look for bargains. Do not pay full retail prices. Rather keep your money for now.

 

The BIG CRASH IS STILL COMING.

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jwither    10
jwither

Apparently, you and I have a completely different definition of the word "tremendously". I do not see those decreases (which are only in ASK prices) as significant at all and hardly "bargains".

 

It is hard to make an evaluation from the information you provided because you did not provide the mintage figures. And when I attempted to find them in my 2008 Hern reference, they are either not listed or I could not find the issue at all. For the issues with no mintages listed (unless i missed them and they are actually there), it is hard to make any evaluation on what to pay and only speculation would have pushed the prices up substantially as you showed.

 

And that is exactly what it has been, speculation. For even the issue (much less recent) prices to be considered reasonable (taking into account the gold spot price at the time), some context needs ot be provided. From the way I see it, yes I know that these coins are more compelling to many because of the association with Mandela, but until at least recently, that has been used to rationalize prices that by any logical standard are completely absurd.

 

The fact of the matter remains that most of these Mandela issues are either the most expensive or among the most expensive of any "modern" coins, modern in this context to mean either the advent of base metal coinage or the mid-1960's when most countries discontinued silver coinage. And they are also more expensive than many other coins from earlier periods, whether from South Africa or elsewhere, that have a lot more going for them.

 

I doubt I will ever be a buyer of any of these issues, but I would not even consider them as a speculation unless they fall far more than what I would describe as the meager decreases included in your post. The first reason is as I just stated, from a collectible standpoint, these coins are simply not that compelling compared to others that cost the same or in many instances, even much less which are VASTLY more desirable.

 

The second is that, when a mania breaks, it can take a long time for prices to reach the prior levels, much less exceed them by a substantial margin which is what would be required to make such coins compelling "investment" prospects at this time given their current prices. If anyone wants an example, take a look at the prices of US "classic" commemoratives struck from 1892 to 1954. These were subject to a speculative bubble right after the introduction of TPG. I believe the crash occurred in 1989 or 1990. Prices on many of these coins (subject to grade and appearance of course since the full set includes 144) are still LESS than then. Yes, even though silver prices are so much higher now.

Edited by jwither

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EWAAN Galleries    10
EWAAN Galleries
Apparently, you and I have a completely different definition of the word "tremendously". I do not see those decreases (which are only in ASK prices) as significant at all and hardly "bargains".

 

It is hard to make an evaluation from the information you provided because you did not provide the mintage figures. And when I attempted to find them in my 2008 Hern reference, they are either not listed or I could not find the issue at all. For the issues with no mintages listed (unless i missed them and they are actually there), it is hard to make any evaluation on what to pay and only speculation would have pushed the prices up substantially as you showed.

 

And that is exactly what it has been, speculation. For even the issue (much less recent) prices to be considered reasonable (taking into account the gold spot price at the time), some context needs ot be provided. From the way I see it, yes I know that these coins are more compelling to many because of the association with Mandela, but until at least recently, that has been used to rationalize prices that by any logical standard are completely absurd.

 

The fact of the matter remains that most of these Mandela issues are either the most expensive or among the most expensive of any "modern" coins, modern in this context to mean either the advent of base metal coinage or the mid-1960's when most countries discontinued silver coinage. And they are also more expensive than many other coins from earlier periods, whether from South Africa or elsewhere, that have a lot more going for them.

 

I doubt I will ever be a buyer of any of these issues, but I would not even consider them as a speculation unless they fall far more than what I would describe as the meager decreases included in your post. The first reason is as I just stated, from a collectible standpoint, these coins are simply not that compelling compared to others that cost the same or in many instances, even much less which are VASTLY more desirable.

 

The second is that, when a mania breaks, it can take a long time for prices to reach the prior levels, much less exceed them by a substantial margin which is what would be required to make such coins compelling "investment" prospects at this time given their current prices. If anyone wants an example, take a look at the prices of US "classic" commemoratives struck from 1892 to 1954. These were subject to a speculative bubble right after the introduction of TPG. I believe the crash occurred in 1989 or 1990. Prices on many of these coins (subject to grade and appearance of course since the full set includes 144) are still LESS than then. Yes, even though silver prices are so much higher now.

 

 

 

Mintage Figures:

 

2004 Mandela Democracy Warrant of Arrest Launch Set - 394 Minted

2007 Mandela De Klerk Proof Set - 5000 Minted

2008 Mandela 90th Birthday Celebration Set - 5000 minted.

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jwither    10
jwither

A mintage of 394 is "low" for a "modern" proof issue. but not otherwise. The other two at 5000 are not low at all by my standards for a South African coin, though association with Mandela gives it a substantial edge over others that lack it.

 

The United States 1997 Jackie Robinson $5 gold commemorative has a mintage of 5000 and it sells for a big premium to other modern commemoratives partly for this reason. The second reason is probably that his entry into US Major League Baseball is correctly considered a significant cultural milestone and one of the key turning points in the reversal of overt discrimination and (limited) integration. Most other US modern commemoratives have the unenviable combinaiton of much larger mintages and either obscure or even irrelevant historical linkages.

 

I'm not sure what this coin sells for now, but as a PR-70 or MS-70, it used to be vastly overpriced given that the generic demand for modern commemoratives is weak or very weak. Mandela is one of the cultural icons of the 20th century but this in and of itself does not "trump" all other factors which make one coin more numismtically appealing than others. Given the same set of characteristics, I admit and agree that these coins deserve a reasonably strong premium over others that lack his association, but still nowhere near the post-issue prices you quoted above. There are too many other coins which are vastly better and more desirable.

Edited by jwither

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EWAAN Galleries    10
EWAAN Galleries

If the 2007 Mandela De Klerk Proof Set for example has a mintage of 5000. Set consists of 5 coins (1oz Gold, 2 x 1/10th Gold and 2 X R1 Silver) - what would you estimate current market value to be on the set? (Hern's Catalogue price is I think R41000-00)

 

And what do you think will happen to the price if one seller had to offer just 100 of the 5000 sets for sale?

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jwither    10
jwither

I know you are more familiar with these coins than I am, a lot more because you sell them or at least I understand that you do. But from a "value" standpoint, for the 2007 set you are using as an example, I really do not see why it should sell for more than maybe twice the metal content, at most.

 

Personally, I think even twice the metal content is very generous but I can see how others might be willing to pay it anyway. I would not even pay that for it because I think that 5000 just makes them too common. I will admit though that this is not quite as overpriced as I originally thought because that would make it worth around $4000 (or just under R32000) based upon a current gold price of $1600 to $1700 per ounce.

 

On the second part of your question, it will just depend upon how strong the real collector demand is for the set. 100 sets represents 2% of the mintage which might not seem like a lot, but this must be considered in the context of how many are normally available for sale at once. Usually, I would expect that this level of ADDITIONAL supply would depress the prices quite a bit.

 

And in saying so, I am not singling out these coins because i believe it is also true of most others, including many or even most "investor" coins from the United States. For some of the more common US Morgan dollars which have over 200,000 in the combined census, 2% would represent at least 4000 coins since there still likely many available to grade. That is also a lot of ADDITIONAL supply to unload at one time and I just do not believe there are normally enough buyers to absorb it on short notice at the existing price, though of course how much above "fair value" it happens to be will also make a difference. Over a longer period of time (subjetive I admit) yes, but not otherwise.

 

If you know otherwise, let me know but here is how I see it. I am aware that the post 1994 coinage in SA is more popular than the pre-1994 RSA issues and in many instances, even Union. You can see the same situation with modern issues in the United States and to my knowledge, at least in other English speaking countries like the UK and Canada.

 

That is why even in these countries, the price levels are higher than for older coins given the relative mintages. The reason for this in these examples is because there are more collectors of modern coins (whether commemoratives, proofs or even circulating) than older and non-circulating series. The further reason for this are two:

 

First, there are many, many non-collectors buying the current US Mint offerings and probably likewise in the UK and Canada. These three mints are probably the best coin marketing organizations in the world, by far. Second, casual collectors disproportionately buy these coins. And by non-collectors, I am including "investors" but these are not necessarily all of them. In the US, there are many people who buy from the US Mint or in the secondary market for gifting purposes, though not a set like the 2007 you profiled. I believe they do so because it is what they know and because the likelihood of getting cheated by buying fakes, over graded coins and problem coins is much less. The risk still exists that you can lose money because the price may decline, but the knowledge barrier is much lower which means that they are competing on a far more level playing field (so to speak) versus the "experts".

 

The difference between South Africa and these other countries as I see it are these two. In South Africa, I do not see that there is much collector demand for these coins. Maybe it is more than I believe but I see a disproportionate number of buyers as "investors" because the prices you are quoting are substantial to the typical South African, unless the profile of these people is different and they are far more affluent than I believe them to be. In the United States, Canada or the UK, there are far more who can afford to pay this type of price because the income and asset bases to support them are also higher or much higher.

 

Second, with some coins such as the Mandela issues, yes I understand why more people want them, possibly mostly the majority population who does not collect other coins. Maybe they only collect post-1994 coinage or just Mandela issues and nothing else. This would justify a higher premium on these coins than others with the same mintage as I mentioned before.

 

How much more is the question. There is no absolute answer to it but my response is, not a lot. However, per other posts I have written when the subject of valuation comes up, I cannot account for why others habitually pay such exorbitant prices for any number of coins given what I consider to be their relative merits. So despite what are (more or less) their relative numismatic merits, they are probably going to sell for more than I think they should, but still unlikely to turn out to be satisfactory "investments" for those who bought them at anywhere near peak prices. In the examples covered by this thread, gold bullion I would expect to perform better.

Edited by jwither

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PBGold    10
PBGold

EWAAN, you're obsessed with crashes.

 

If gold drops, its crashing, if the price on coins drop, its crashing.

 

If the prices go up we hear nothing from you.

 

Looks to me like a BMW dealer trying to sell BMW's by telling everyone how bad MERC is.

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honestabe    10
honestabe

As a person who has been involved in the coin business for over ten years it is no surprise that the Mandela coins and medallions as a whole have lost their attraction to investors . The main reason they enjoyed a growth in percieved value to the extent they did was due to unscrupulous dealers preying on uneducated buyers who had too much loose cash at their disposal , sometimes illicit/undeclared cash.

The market for these coins was nothing more than a pyramid scheme by any other name , these dealers would sell for R10000 today , mark the balance of their stock up to R20000 and continue to advertise and make empty promises based on nothing more than their own ability to sell their new stock onto some poor schmuck at a higher price ....thus when they needed more stock they could pay their existing client a decent return as they had the next poor fool lined up already ...Good luck to you all , you are reaping what you sowed .

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ATOMICSQUIRREL    10
ATOMICSQUIRREL

The gravy train will come to a halt sooner or later.

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honestabe    10
honestabe

i have stood on the side of the proverbial track and watched as this goes on and shook my head in disgust !

You would not believe the number of calls i get daily from people wanting to sell their Mandela coins , be it the ubiquitous R5 coin to the gold medallions/coins and I wont touch them ! 90% of these people have approached the original sellers and been told that they do not buy back in under 5 years , these are big companies who have "sales consultants" manning the phones and stores waiting for the next fool to walk in so they can "diversify " their portfolio with gold coins .It is giving the industry as a whole a bad name , yet these guys continue to advertise and offer goods at inflated prices to unsuspecting fools .A similiar thing happened with slabbed ZAR coins a few years back and that bubble has also taken a bit of a knock , but at least with ZAR you are buying an item with a track record as well as some historical significance . There were unscrupulous sellers trading low grade coins for massively over inflated prices in the ZAR market and now people are left with goods they cannot move on .

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EWAAN Galleries    10
EWAAN Galleries
EWAAN, you're obsessed with crashes.

 

If gold drops, its crashing, if the price on coins drop, its crashing.

 

If the prices go up we hear nothing from you.

 

Looks to me like a BMW dealer trying to sell BMW's by telling everyone how bad MERC is.

 

 

Yes we do love the crashes. And if you notice in other posts I did make mention of Mandela coins going up. Follow the thread.

 

Have to accept it PB Gold. Prices will come down further. I can't wait for that. you should be fine with one or 2 sets. Will not really affect you that much.

 

For the record ZAR and Union prices have also come down. So please tell me which is the BMW of coins currently? Would love to know.....

Edited by EWAAN Galleries

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ATOMICSQUIRREL    10
ATOMICSQUIRREL

Def a big drop in ZAR and Union coins sales, but i would pick a ZAR/Union coin over a madiba coin any day.

 

Ewaan, I am sure you still have no shortage on customers!

 

Your KungFu is Strong!:ninja:

Edited by ATOMICSQUIRREL

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EWAAN Galleries    10
EWAAN Galleries
Def a big drop in ZAR and Union coins sales, but i would pick a ZAR/Union coin over a madiba coin any day.

 

Ewaan, I am sure you still have no shortage on customers!

 

Your KungFu is Strong!:ninja:

 

 

Actually coins is not our main business - We just love the Crazy R1 Start Auctions... At least no buyers can say we ripped them off 6 months later - we force nobody to bid, thats the fun of the R1 start auctions......

 

But I would still love to know which is currently the BMW of coins???

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MiemsJewels    10
MiemsJewels
Def a big drop in ZAR and Union coins sales, but i would pick a ZAR/Union coin over a madiba coin any day.

 

Ewaan, I am sure you still have no shortage on customers!

 

Your KungFu is Strong!:ninja:

 

You want to buy my MS 66 & MS67 coins ATOMICQUARREL?

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EWAAN Galleries    10
EWAAN Galleries
I know you are more familiar with these coins than I am, a lot more because you sell them or at least I understand that you do. But from a "value" standpoint, for the 2007 set you are using as an example, I really do not see why it should sell for more than maybe twice the metal content, at most.

 

Personally, I think even twice the metal content is very generous but I can see how others might be willing to pay it anyway. I would not even pay that for it because I think that 5000 just makes them too common. I will admit though that this is not quite as overpriced as I originally thought because that would make it worth around $4000 (or just under R32000) based upon a current gold price of $1600 to $1700 per ounce.

 

On the second part of your question, it will just depend upon how strong the real collector demand is for the set. 100 sets represents 2% of the mintage which might not seem like a lot, but this must be considered in the context of how many are normally available for sale at once. Usually, I would expect that this level of ADDITIONAL supply would depress the prices quite a bit.

 

And in saying so, I am not singling out these coins because i believe it is also true of most others, including many or even most "investor" coins from the United States. For some of the more common US Morgan dollars which have over 200,000 in the combined census, 2% would represent at least 4000 coins since there still likely many available to grade. That is also a lot of ADDITIONAL supply to unload at one time and I just do not believe there are normally enough buyers to absorb it on short notice at the existing price, though of course how much above "fair value" it happens to be will also make a difference. Over a longer period of time (subjetive I admit) yes, but not otherwise.

 

If you know otherwise, let me know but here is how I see it. I am aware that the post 1994 coinage in SA is more popular than the pre-1994 RSA issues and in many instances, even Union. You can see the same situation with modern issues in the United States and to my knowledge, at least in other English speaking countries like the UK and Canada.

 

That is why even in these countries, the price levels are higher than for older coins given the relative mintages. The reason for this in these examples is because there are more collectors of modern coins (whether commemoratives, proofs or even circulating) than older and non-circulating series. The further reason for this are two:

 

First, there are many, many non-collectors buying the current US Mint offerings and probably likewise in the UK and Canada. These three mints are probably the best coin marketing organizations in the world, by far. Second, casual collectors disproportionately buy these coins. And by non-collectors, I am including "investors" but these are not necessarily all of them. In the US, there are many people who buy from the US Mint or in the secondary market for gifting purposes, though not a set like the 2007 you profiled. I believe they do so because it is what they know and because the likelihood of getting cheated by buying fakes, over graded coins and problem coins is much less. The risk still exists that you can lose money because the price may decline, but the knowledge barrier is much lower which means that they are competing on a far more level playing field (so to speak) versus the "experts".

 

The difference between South Africa and these other countries as I see it are these two. In South Africa, I do not see that there is much collector demand for these coins. Maybe it is more than I believe but I see a disproportionate number of buyers as "investors" because the prices you are quoting are substantial to the typical South African, unless the profile of these people is different and they are far more affluent than I believe them to be. In the United States, Canada or the UK, there are far more who can afford to pay this type of price because the income and asset bases to support them are also higher or much higher.

 

Second, with some coins such as the Mandela issues, yes I understand why more people want them, possibly mostly the majority population who does not collect other coins. Maybe they only collect post-1994 coinage or just Mandela issues and nothing else. This would justify a higher premium on these coins than others with the same mintage as I mentioned before.

 

How much more is the question. There is no absolute answer to it but my response is, not a lot. However, per other posts I have written when the subject of valuation comes up, I cannot account for why others habitually pay such exorbitant prices for any number of coins given what I consider to be their relative merits. So despite what are (more or less) their relative numismatic merits, they are probably going to sell for more than I think they should, but still unlikely to turn out to be satisfactory "investments" for those who bought them at anywhere near peak prices. In the examples covered by this thread, gold bullion I would expect to perform better.

 

 

Many thanks for your interesting posting - seems like nobody else can stick to the topic...

 

Appreciate your input :)

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ATOMICSQUIRREL    10
ATOMICSQUIRREL
You want to buy my MS 66 & MS67 coins ATOMICQUARREL?

 

r those the biffday coins miems?

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MiemsJewels    10
MiemsJewels

Yes ATOMIC. Worthless, I presume............

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republikein    10
republikein

 

But I would still love to know which is currently the BMW of coins???

 

I can think of two current maybe BMW's - graded Mandela 2000 R5 coins and American Eagles. I have seen these selling for attractive prices.

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jwither    10
jwither
i have stood on the side of the proverbial track and watched as this goes on and shook my head in disgust !

You would not believe the number of calls i get daily from people wanting to sell their Mandela coins , be it the ubiquitous R5 coin to the gold medallions/coins and I wont touch them ! 90% of these people have approached the original sellers and been told that they do not buy back in under 5 years , these are big companies who have "sales consultants" manning the phones and stores waiting for the next fool to walk in so they can "diversify " their portfolio with gold coins .It is giving the industry as a whole a bad name , yet these guys continue to advertise and offer goods at inflated prices to unsuspecting fools .A similiar thing happened with slabbed ZAR coins a few years back and that bubble has also taken a bit of a knock , but at least with ZAR you are buying an item with a track record as well as some historical significance . There were unscrupulous sellers trading low grade coins for massively over inflated prices in the ZAR market and now people are left with goods they cannot move on .

 

The primary reason why I believe what you see is true is because there are apparently a disproportionate number of speculators (aka, "investors") in South African coins. I do not live in your country and mainly come to this conclusion from the prices I see on BoB and what I read on this board, but I see no other explanation for it.

 

I see that you do not post often here (at least yet), but if you go back and read historical commentary, you will see that the financial considerations outweigh the collecting by a lopsided margin. Given that the sums in question are often substantial, to the buyer if not absolutely, I do not expect buyers to ignore them altogether. But what I see is a complete lack of realism in many comments on both what is a "reasonable" amount to pay based upon what people can LIKELY afford and the merits of the coins in question.

 

In comparison to the United States where i live or Australia, South African Union and ZAR are mostly reasonably priced. But not otherwise. And though they are relatively scarce or rare, this does not mean that prices can perpetually outrun the financial capacity of those who collect them, which is apparently what many here both seem to think should and will happen.

 

If the comments on this board reflect general opinion among South African collectors and "investors", they just do not "get it". Yes, in a market like the United States, there are many coins that sell for exorbitant amounts of money, much more than SA. But the proportion is low which leaves a wide range of choice to the hobbyist.

 

Aside from the "hard times" that are metioned here often, the better explanation for why prices are falling (to the extent this is true) is because most existing buyers cannot afford to pay what is required to buy them, good times or bad. I do not know what the typical financial profile is of the "investor" in SA, but I suspect that it is less favorable than what it is in the US. So where exactly are these people supposed to get the money to pay these prices?

 

The answer I believe for the most part is, they do not have it and never did. I have sold coins to a decent number of SA buyers and from what I can tell, in some instances they apparently were using much, most or even all of their discretionary income to pay for them. That is what I would attribute the exorbitant price differences between conditional rarities and other MS coins versus others such as AU-58. Because ZAR is far more popular and has much stronger internaitonal demand, these prices have been and will remain much stronger than Union, but it apparently has not been enough to support those of the more common issues.

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PBGold    10
PBGold

I'm more of a Merc man myself, but there are good BMWs out there.

 

I have never been a fan of 'negative marketing', where a business tries to sell a product by trashing that product's competition.

 

If you want me to buy your product, tell me why your product is good, not why your competitor's products are bad. If you want me to buy a BMW then tell me why a BMW is good, not why a Merc is bad.

 

If you want me to buy a ZAR tell me why a ZAR is good, not why a graded R5 Mandela is bad.

 

If you want me to use Bidorbuy and not Ebay then tell me why Bidorbuy is good, not why Ebay is bad.

 

If you can't, then you're a short term amateur.

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geejay50    10
geejay50

These booms and busts of Mandela derivative coins are unsurprising.

 

The fundamentals of grading numbers , big margins above the bullion price speak of unhealthy profit taking with prices set by self serving companies who are involved in the profit taking. So what if they only made 350 of a certain exclusive Mandela derivative, the survival is close to 100% and there are not enough interested collectors to support these prices in the long run.The market gets jaded with the prices and the aggressive glitsy sales talk where tellingly the buyer is told to keep his purchase for five years. In five years time another five Mandela derivatives will be on offer and the market will be conned yet again by the cynical originators of the bubble and their hangers on.

 

No, enough of lies - this all is far removed from Numismatics and really has to come to an end eventually. It doesnt help to tell the market as Ewaan says "times are tough" the truth is the market is I think starting to see through all the hype and lies . Many have read the damning articles written in this month's Personal Finance against the "Mandela Coin and Medallion Industry". That was investigative journalism at its best in my view.

 

If times are that tough, then why are verifiable old rare coins still holding their price like the George V Coppers in high MS that sold last night? The answer is simply because the real collectors know what time and grading numbers have proved to be of real value.I spoke to a collector who held a large number of top class Numismatic Coins for ten years only to sell them overseas. When I asked him whether he did well, he laughed and said he had multiplied his money by ten !!!

 

Not a single Mandela derivative is offered on overseas auctions of status like Heritage but the auction sells many really top class Numismatic coins and Patterns. Naturas are included as are the Krugerrands.All the thousands of Mandela coins in graded form that clutter ebay are very seldom sold. My view is that his death, which may not be soon will make the glut worse. The brand has been oversold for a long time by people who have less to do with his principles and more to do with making a quick buck.

 

Geejay

Edited by geejay50

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jwither    10
jwither

Geejay,

 

What you say is true, to a point. I agree with you on everything you say about the Mandela coins. It was a mania.

 

However, do not think for a minute that prices cannot decline substantially with other coins simply because they are scarce or rare. It is much less likely to happen to them but in a thinly capitalized market like South Africa, the price swings both up and down can be a lot more than in a deeper market like the United States, even though the prices are much lower and the coins far more reasonably valued. The fact of the matter is most of those posting on this board have never seen a real bear market in SA (or maybe any) coin prices, only a bull market. But for SA, it is mainly because until about 10 or 15 years ago, they were vastly underpriced versus other coins and were not viewed as :investments".

 

Another point I will make is that the historical returns that have been realized (such as the example you used) are not representative of the returns the most recent buyers are going to realize in the future. I'm not sure what coins this collector sold but I will go back to prior examples I have used in my other posts.

 

The KGV MS 1/2D in the Heritage sale earlier this year sold for about $24,000 USD which was also about 10 times what they sold for in the Remick sale just five years ago. Does anyone here believe that those returns are remotely going to be replicated in the future? I do not for the reasons I have explained many times.

 

The same applies to many of the coins I have sold myself. That 1892 ZAR NGC MS-64 RB PL penny, I bought it for $50 USD (the Krause catalog price for a generic UNC at the time) ungraded from Staples Numismatics on eBay in October 2002. I traded it in late 2010 for the equivalent of five ounces of low premium numismatic gold.coins, about $7000 at the time. (An NGC MS-65 RB PL sold for $11500 on Heritage previously.) If I had lived in South Africa, I almost certainly could have sold it for more, maybe a lot more but it was the best I could do under the circumstances. Same goes for that 1944 NGC AU-58 1/. I paid $50 USD plus the grading fee when I bought it as part of a group lot in September 2008. I sold it in early 2010 for $2500 which is probably also less than what I could have realized if I were in South Africa.

 

The point i am trying to make is that the returns that you used in your example and that I used in mine, they were a once-in-a-lifetime occurrence. Those who do not believe it are simply in denial. Yes, the buyer of these may make more in the future in absolute USD or ZAR, but not proportionately which is the only valid method to measure returns and profitability.

 

What this means from a practical standpoint is that SA coins generally for the most part are going to a lot less competitive with alternative "investments". The "law of large numbers" works against these and any other coins which either reduces the probability of outsized returns or makes them practically impossible to achieve.

 

That matters little to me because I do not and never did view my collection as a profit center, a part of my "investment portfolio or as a substitute for other forms of speculation. Obviously, I was careful in what I bought but I have not bought most of my coins exclusively or even mostly to make money on them. I do not have a disproportionate amount of my assets tied up in them and I only still own mostly what I intend to keep. So if they lose value, it does not really matter to me.

 

In some ways, I would PREFER that they lose value because then I could buy far more of them (when they are available) for the same money. At one point before I sold most of my better SA coins, my entire collection (including non-SA coins) was probably worth in the vicinity of $100,000 USD. I have never spent more than in the $6000 range in a single year on my collection. How much would that buy now? The answer is, not much whether we are talking about South African coins or most of the other series I collect.

 

Lastly, on the "times are tough" question, I believe that this is true for the typical collector but just not for the more affluent "investors" or those who are able to buy the coins you described. I'm not up to date on current economic circumstances in South Africa in any detail, but this is definitely true of the United States, regardless of any supposed economic "recovery".

 

Those who have the financial capacity to pay these types of prices, whether in South Africa or the even higher ones in the US, they currently are willing to do so. Personally, if I wanted to go out and spend a lot of money on coins, I could do so by South African though not US standards. I have declined to do so for a variety of reasons, the prime one being that I have other uses for my money and I expect the prices of many coins to be lower later than they are now.

Edited by jwither

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EWAAN Galleries    10
EWAAN Galleries
These booms and busts of Mandela derivative coins are unsurprising.

 

The fundamentals of grading numbers , big margins above the bullion price speak of unhealthy profit taking with prices set by self serving companies who are involved in the profit taking. So what if they only made 350 of a certain exclusive Mandela derivative, the survival is close to 100% and there are not enough interested collectors to support these prices in the long run.The market gets jaded with the prices and the aggressive glitsy sales talk where tellingly the buyer is told to keep his purchase for five years. In five years time another five Mandela derivatives will be on offer and the market will be conned yet again by the cynical originators of the bubble and their hangers on.

 

No, enough of lies - this all is far removed from Numismatics and really has to come to an end eventually. It doesnt help to tell the market as Ewaan says "times are tough" the truth is the market is I think starting to see through all the hype and lies . Many have read the damning articles written in this month's Personal Finance against the "Mandela Coin and Medallion Industry". That was investigative journalism at its best in my view.

 

If times are that tough, then why are verifiable old rare coins still holding their price like the George V Coppers in high MS that sold last night? The answer is simply because the real collectors know what time and grading numbers have proved to be of real value.I spoke to a collector who held a large number of top class Numismatic Coins for ten years only to sell them overseas. When I asked him whether he did well, he laughed and said he had multiplied his money by ten !!!

 

Not a single Mandela derivative is offered on overseas auctions of status like Heritage but the auction sells many really top class Numismatic coins and Patterns. Naturas are included as are the Krugerrands.All the thousands of Mandela coins in graded form that clutter ebay are very seldom sold. My view is that his death, which may not be soon will make the glut worse. The brand has been oversold for a long time by people who have less to do with his principles and more to do with making a quick buck.

 

Geejay

 

 

Hi Geejay

 

When I said times are tough was actually talking about the Mandela Coins (This Thread is about drop in prices of the Mandela Coins).

Remember we do get offered Mandela coins from many sellers on a daily basis.

 

If I see a nice Union or ZAR coin on auction I would buy it... Same goes with a modern coin - if a coin is cheap (any coin) then obviously will buy it. But I will not pay the same prices that certain coins were selling for 3 years back. Other coins I will pay 5 times more than what I would have paid 3 Years Back - So Depends on actual coin in current times.

 

Top end coins will always hold value but only if there is an actual buyer for that coin at the time.

 

Georg - I love both ZAR and UNION coins and will never stop buying them in as long as prices are decent.. But will not pay anything near Herns Catalogue Prices or DEALER RETAIL PRICES..(The Union Coins you mentioned I think still sold for under Catalogue Price right?) - Sorry do not have a Hern's Catalogue with me.

 

A BUYER FOR A UNIQUE RARE EXPENSIVE COIN IS MORE RARE THAN THE ACTUAL COIN (WE BOTH KNOW THAT) :bigsmile:

Edited by EWAAN Galleries

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EWAAN Galleries    10
EWAAN Galleries
I'm more of a Merc man myself, but there are good BMWs out there.

 

I have never been a fan of 'negative marketing', where a business tries to sell a product by trashing that product's competition.

 

If you want me to buy your product, tell me why your product is good, not why your competitor's products are bad. If you want me to buy a BMW then tell me why a BMW is good, not why a Merc is bad.

 

If you want me to buy a ZAR tell me why a ZAR is good, not why a graded R5 Mandela is bad.

 

If you want me to use Bidorbuy and not Ebay then tell me why Bidorbuy is good, not why Ebay is bad.

 

If you can't, then you're a short term amateur.

 

 

What "Negative Marketing"??? - We have way more Mandela coins on R1 starts compared to any other coins!

 

We do not want you to buy anything - THIS IS NOT MARKETING IN ANY WAY! - We are just stating facts. For the record most bidders do not even have a look at the forum - So why market on the Forum when we have spent SO MUCH MONEY on advertising this month on BOB.

 

I Think I may have just found me a BMW and a MERC but both sold....

 

Gold & Bullion Coins - 2002 Johannesburg World Summit R1 Silver NGC PF69 # RARE # Highly Sought After ### R1 Start was sold for R11,000.00 on 6 Mar at 14:16 by EWAAN Galleries in Johannesburg (ID:58887825)

Graded - 1993 Nelson Mandela & FW De Klerk 1oz Silver NGC PF69 Cameo ### R1 Start was sold for R5,300.00 on 27 Mar at 14:16 by EWAAN Galleries in Johannesburg (ID:60312994)

 

That Should cover almost half my airline ticket to Chicago :bigsmile:

Edited by EWAAN Galleries

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honestabe    10
honestabe

Geejay50 has pretty much hit the nail on the head ...

my biggest frustration is with the people hawking R5 Mandela coins and creating huge amounts distrust in the industry as well as imho ripping people off with their glib sales pitch and empty promises . At one time these Mandela R5 coins were being shipped out of SA at a rate i am told of 20000 per month ...now how in the Lords name can this be remotely collectable or valuable ...who cares if this coin is MS or whatever grade , it is a common coin intended for circulation . Because of these falsehoods you have people of seriously lower income levels stashing these coins when they should be using them as currency.

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