The King of Coins & Collectibles - Van Simmons | #624
Van Simmons, president of David Hall Rare Coins and co-founder of PCGS, discusses the current state of collectibles markets, particularly rare coins and sports cards. He explains how the market is bifurcated between high-end rare items that remain strong and common items that have lost value due to oversupply.
Summary
Van Simmons returns to discuss the evolution of collectibles markets over the past decade. He explains how PCGS revolutionized coin grading in 1986 by creating standardized grades in plastic holders, essentially securitizing coins and making them easily tradeable. The rare coin market has become bifurcated - high-end, rare quality coins maintain strong demand from collectors wanting only the best pieces, while common coins have lost value due to massive supply increases from discovered hoards. Simmons describes a major hoard discovery worth billions containing every $5, $10, and $20 US gold coin from 1850 onward, which flooded the market with previously rare dates. He discusses the grading scale from 1-70, explaining how modern computer-struck coins can achieve perfect grades while older hand-pressed coins rarely exceed 68-69. The sports card market has exploded, with a Roberto Clemente rookie card selling for $20 million and even damaged Honus Wagner cards bringing $1 million. Simmons notes that cards under $100,000 are difficult to sell while those over that threshold remain very liquid. He observes similar patterns in watches, where COVID production disruptions created supply shortages that drove prices up dramatically. For future collectibles, he suggests focusing on cross-collected items like Indian peace medals that appeal to multiple collector bases. Simmons recommends platinum as undervalued compared to gold, trading at historically inverted ratios. He emphasizes buying established collectibles with proven track records rather than speculating on newer items, though he acknowledges trends like sealed iPhones and vintage items from collectors' youth driving current markets.
Key Insights
- The rare coin market has bifurcated into high-end rare items with strong demand and common items that have lost significant value due to oversupply
- A massive hoard discovery contained billions of dollars worth of US gold coins from 1850 onward, fundamentally changing the supply dynamics for many previously rare dates
- PCGS revolutionized the coin market in 1986 by creating standardized grading in plastic holders, essentially securitizing coins and making them easily tradeable
- Sports cards under $100,000 are difficult to sell while cards over that threshold remain very liquid, with some selling for over $20 million
- Platinum is significantly undervalued compared to gold, currently trading at inverted historical ratios despite being 80 times rarer than gold
- The collectibles market follows supply-and-demand economics where supply can create demand for rare items but destroys value for common items
- Vintage watches experienced dramatic price increases during COVID due to production disruptions from quarantine requirements for Swiss-based workers
- Computer-assisted grading technology existed 25-30 years ago but wasn't adopted because collectors prefer the gambling aspect of human grading
- Cross-collected items like Indian peace medals are valuable because they appeal to multiple collector bases including numismatists, presidential collectors, and Native Americans
- Milton Friedman argued that gold will eventually reach extreme values as politicians create debt to fulfill promises, making currencies worthless like every other currency in history
- People tend to collect items from their youth, driving current markets for sealed vintage electronics and items from the 1980s-1990s
- High-end collectibles like rare guns and coins have appreciated dramatically, with some items increasing 10-20 times in value over decades
Topics
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