2007 FUN Show Preview

Remember when you were a kid and 6th grade took around two and a half years (or so it seemed) to complete? I guess the best sign of getting older is that your perspective of time changes completely. It literally feels like I was just at the 2006 FUN show a few months. Is it possible that we’re just a week or so away from the 2007 edition? As I’ve written before, FUN is one of my favorite shows. From a psychological standpoint, it feels “new” since it’s the first show of the year. Dealers come to this show more ready to do business than probably any other show. Many dealers have spent the last two or three months trimming their inventories down and divesting themselves of their bad deals. They come to FUN all cashed-up and ready to spend money.

FUN is one of the strongest shows for collectors as well. Unless you live in Hawaii, the chances are that the weather is better in Orlando during January than where you are now. So this tends to be a show that collectors come to with their spouses, significant others and even, on occasion, the entire family. The atmosphere tends to be more relaxed than the ANA show (which I have always thought has a sort of tense undercurrent).

Of course, if the FUN show wasn’t well-run, it might be a lot harder to get excited about it. After all, many people are catching flights on New Year’s Day in order to get there in time to do the pre-show auctions. But unlike other shows that I always hear dealers kvetching about, I never seem to hear anyone complain about FUN being too long or too expensive or in too weird a location.

I think what people like about FUN is its continuity. I’ve been a professional coin dealer since the early 1980’s and I’ve always associated the New Year with the FUN show. I don’t especially like Orlando but I think the Convention Center is better than average (and it is now as big as a small city) and the show is very well-run and professional.

I am a bit concerned by this year’s FUN show being diluted by the size and magnitude of the various and sundry auctions. Until a few years ago, FUN was all about the show itself and the auction(s) surrounding it were secondary. This changed once Heritage started producing $25-50 million dollar FUN sales.

How will the auctions affect the show? I think the biggest affect will be with collectors who might have a budget of, say, $10,000 to spend on coins at FUN but who get carried away at the auctions and spend it all there. I would expect that my retail sales at the show will be down considerably from where they were in the past. I don’t think that the size of the auctions will have all that much affect on wholesale business at FUN. If you have neat coins, dealers are going to want to buy them and many realize that coins on the bourse floor could be a much, much better deal than their counterparts at auctions.

What will be interesting is the impact on dealer cash flow, especially 45 to 60 days from now when auction bills come due. I can think of a number of well-known dealers who already have precarious cash flows. How are they going to pay a $500,000 auction bill with Heritage or Stack’s when a check they write me for $10,000 needs to be held for thirty days? This could be very interesting…

That said, I personally think the 2007 FUN show is going to be very strong. There is no doubt in my mind that people want to buy coins and, despite the fact that the auctions contain a seemingly unlimited number of lots, there really aren’t all that many fresh or very interesting pieces available; at least in the area of pre-1900 United States gold.

In some market areas, we are going to be able to figure out what some very rare coins are really worth. I expect that we’ll see a dip in the Indian Head eagle market and significant strength in rare date Saints. Proof gold is going to be very interesting to monitor, especially Matte Proof issues. I personally think the coins in the auction shouldn’t sell for strong prices given their quality but I’m willing to bet that I’m wrong and that they sell for strong prices to people who don’t know what original examples are supposed to look like.

2007 is going to be a very interesting year in the coin market and I’m guessing that the FUN show should be a good barometer. I hope to see you there!