When assembling a collection, timing is truly everything. This goes for when you are in the process of adding to the collection or when you are disassembling it. In this article, I’ll explain how timing will, no doubt, affect you in the assembling of your set. I can’t count the number of times I have said to collectors that their holdings need to be looked at as a long-term endeavor. One of the truly amazing phenomenons of the Internet-driven coin market is that a new generation of collectors believes it is possible to very quickly assemble a set and then, just as quickly, consign it to an auction company and make a nice profit. In a rising coin market this has (sometimes) proven to be possible. But if and when the coin market corrects, I believe that you will see a return to the “old values” of assembling a collection that worked so well for the great collectors of past generations.
If you are assembling a world-class collection, you have to look at your collection as a series of opportunities. By this I mean that you have to be prepared to buy important coins for your set when the right opportunities arise. One of these is what I call the “generational turn.”
A generational turn occurs when an older collector decides that it is time to sell and he puts his coins on the market. This may occur when the collector is alive or his estate may make the decision for him. In a situation like this, it may mean that a number of coins that have not been available for a generation or more are finally up for sale.
For a younger collector, a generational turn may represent the only chance to acquire certain high grade, rare coins. As an example, for many collectors of United States gold coins, the sale of the Harry Bass collection in a series of four auctions from 1999 to 2001 enabled them to acquire a number of very rare coins that had been off the market since the 1960’s or 1970’s. In the ensuing half decade since the conclusion of the Bass sales, many of the coins offered in those auctions have not reappeared. Clearly, these went to serious collectors who were smart enough to know that this generational turn would be their only chance to acquire specific rare issues in high grades.
One reason that it is very important to stay on top of the developments in your field of specialization is to know, in advance, when a generational turn might occur. If you are, for example, very plugged into the demimonde of St. Gaudens double eagle collectors, you might know that Collector X is going to be selling his set of coins in the next six months and that there are at least three or four important rarities in this set that you would really like to own. Having this lead time to prepare yourself financially and mentally to acquire these coins is far preferable to simply picking up a copy of Coin World one day and seeing that this collector’s set is suddenly going to be sold at auction by Heritage or ANR.
Looking at the concept of the generational turn from the other point of view, as an older collector it is always important to pick a time in the market when there are younger, newer collectors clamoring for your fresh material. Now, obviously, no one knows exactly the right time to sell. But common sense dictates that it makes a lot more sense to sell when your area of specialization is “hot” than when no one really cares.
If you go back and study the coin market in the past few decades there are numerous points in time when a seller clearly made a bad decision to liquidate his holdings. An example that comes to mind is the Chestatee collection of Dahlonega gold that was sold in the 1999 ANA auction. There had already been two huge collections of Dahlonega gold sold at auction earlier that year (in the FUN and February Long Beach sales) and by the time the Chestatee coins became available, the market was clearly saturated. As a result, these coins sold very cheaply and the Dahlonega market entered a downward spiral that took a number of years to recover from.
If you have the luxury of deciding on an orderly schedule of dispersal for your collection, choose a point in time when your collection will be appreciated by a younger generation of specialists.
As a buyer, keep your powder dry and make certain that you are ready to be aggressive at the points in time when you are accorded unusual opportunities to acquire rare and/or exceptional items.