Some Recent Observations From A Coin Show Perspective

Having just come from the Philadelphia Whitman Coin Expo show and, the week before this, the Long Beach show, I feel pretty qualified to make some market observations. Without further ado, I'd like to share them with you. 1. There Are Too Many Coin Shows Right Now. I'm sure I'm not going to make any friends with coin show promoters for saying this but with Long Beach occurring last week, Philly this week and the St. Louis show next week, this is too many coin shows in a short period of time. I saw few fresh coins in Philadelphia because I looked at many dealer's coins in Long Beach and the thought of turning around next week and going to St. Louis...uh, no thanks. The market just can't support this many shows and this is why you are seeing many formerly good regional three and four day events beginning to die rapid deaths.

2. Buying Nice Coins Is Tough, Tough, Tough. If you thought it was hard two or three years ago to buy nice coins at shows, it is as tough now as its ever been; maybe tougher. I've heard dealers all of all sizes and shapes complain how hard it is to find interesting fresh material at recent shows. I was lucky and I had an amazing ANA show with lots and lots of great new coins to offer DWN clients. But it is a real grind to find coins now and, clearly, the good stuff is going off the market and staying there.

3. Everyone Wants to Buy Type One Double Eagles. There are many firms and individual dealers (myself included) who are very active buyers right now of Type One double eagles. At the Philadelphia show I saw almost nothing for sale other than the usual motley assortment of Uncirculated S.S. Central America 1857-S , a few lower grade common dates and the odd overpriced rarity here and there. This is clearly an extremely popular area of the market and coins in the $2,000-15,000+ price range are exceptionally popular right now.

4. And CC Double Eagles Too. You can add $2,000-10,000+ Carson City double eagles to this list as well. They are most definitely in strong demand and if the coins are properly priced (or even just a hair too expensive) they are easy sellers. Even big money coins like 1870-CC double eagles are beginning to sell again and I am aware of at least two EF examples changing hands since ANA. If you have any nice CC double eagles for sale, please contact me as I'd like to buy them from you!

5. Nice New Orleans Gold Has Disappeared. Where has all the nice New Orleans gold gone? Good question. The last few months have seen very, very few interesting New Orleans gold coins available and the few choice or rare pieces that I have had in stock have sold quickly. Clearly, this is an area of the market that is very active.

6. And Dahlonega Gold Also. I think you can safely add choice, original Dahlonega gold in all denominations to the "where the heck are the coins?" list. I can generally only find two or three decent D mint coins at a major show and they seem to sell very quickly when I list them on my website.

7. Coin Pricing Is a Total Disaster. I've mentioned this a number of times but I am finding it more and more of a hassle that coin pricing is such out of touch with reality. What typically happens is that one very low quality rare coin trades cheaply at auction and Trends whacks the price for the issue down. This has recently happened with rare, desirable coins like the 1796 No Stars and 1808 quarter eagles and the 1795 eagle. I look at this as, in its own way, as big a concern in the coin market as the doctoring issue. One reason why good coins aren't being sold is that pricing doesn't reflect the real value of choice, high end pieces. Fix this problem and you will fix the lack of supply that is hurting the market right now. Don't fix it and new buyers will be more interested in purchasing MS64 Saints than "real" coins.

8. I'm Not Seeing Many PCGS "Secure" or "Plus" Coins. Either the new PCGS Secure and Plus program isn't working or its working so incredibly well that the coins in these holders never make it to the market, But I am not seeing many of these coins and I continue to feel that CAC has really set the pace in the high end segment of the market. It remains hard to price PCGS Plus and Secure coins when so few trade at auctions or at shows.

9. The Birth of the "Lucky Charms" Grade. I wish I was clever enough to have invented this term but, alas, I'm not. But I recently have seen coins graded "AU58+*CAC" and these pieces with all the attached symbols and stickers are now known as "Lucky Charms" coins because they seem to have imported their verbiage from the shapes found in this cereal. Magically delicious, no?

How Does DWN Prices Rare Coins?

I’ve been asked a few times recently how I price the coins that appear for sale on my website. No, the answer does not involve dart boards, a small man behind a curtain or invoking the spirits of coin dealers past. I have a system that is partially observational/deductive and partially intuitive that allows me, I think, to price coins in a consistent, coherent fashion. Obviously, my cost basis is a factor in pricing. But I don’t just apply a standardized mark-up to every coin I purchase. And don’t giggle when you read that last remark because I know a number of dealers who simply apply a 15%, 20% or 25% mark-up (or more) to virtually any coin they purchase, whether it’s a 1911 quarter eagle in MS62 or a 1911 quarter eagle in PR68.

When I am pricing my new purchases from a coin show, I generally take a few factors into consideration. The first is current auction prices realized. In some cases, auction prices are really helpful. Let’s say I have a certain Charlotte half eagle in AU58. There have been four separate auction transactions this year and they have ranged in price from $4,250 to $4,750. If my coin is average quality for the grade, I’m probably going to price it at the lower part of this range. If it’s what I regard as a high end coin for the grade, I’m going to price it at the high end of the price range.

I also check to see what I’ve sold the last example(s) of a certain coin for. If it’s something like an 1855-O gold dollar in AU58 (a coin that I handle on regular basis) I’m going to use my last sale(s) as a guidepost. If it’s a really rare coin like an 1855-O half eagle in MS61 (a coin that I have handled only twice in the last decade) than I will have to take other considerations into account: have other 1855-O half eagles in MS61 been graded since I sold my last coin? How is the overall strength of the New Orleans half eagle market? How many collectors are actively looking for this coin at this point in time?

What about a coin that is rare enough that none have appeared at auction since, say 2005? Or a coin that only one or two auction appearances have occurred but at least one of them is considerably higher than the other? This is where my knowledge of the coin market and coin pricing comes into play.

Let’s say the coin in question is a PR65 gold dollar with an extremely low mintage. The coin is attractive for the grade and truly rare. I would use a few criteria in this instance. First, I’d look to see if there were auction records for other Proof gold dollars with comparable mintages and comparable survivors. Second, I’d try to figure what percentage over “basal value” this coin was worth (in this case, “basal value” means what is the most common date of the type worth in this grade). Thirdly, I use the “gut check” theory of pricing. I’d ask myself, “if this coin walked-up to my table at a major coin show and I was thinking of buying it purely ‘on spec’ what would I pay?”

The two published guides for coin prices that I use most often for pricing remain Coin World’s Trends and the CDN or “Greysheet.” However, due to the fact that they are not updated as much as they should be, these two guides are beginning to become less relevant to me and the PCGS on-line guide, which is updated on a much more regular basis (and by a pretty knowledgeable dealer named David Hall) is now more of a factor in influencing my pricing of certain coins.

The knowledge part of pricing comes into play as far as coins that are undervalued by published price guides. Let me give an example. If I were to price an 1838 eagle in EF45 at 75% of Trends (which is a pretty standard pricing percentage of this series by DWN) I would be offering it around $3,100. I’m guessing if I did this, I’d have twenty orders for the coin in a day. Why? Because the coin is worth over $10,000 and all the published pricing guides (except for PCGS’, I should note) fail to reflect an accurate value. As someone who knows the Liberty Head eagle series very well, I know that the 1838 is worth far in excess of published values and will price it accordingly.

There are a few other pricing questions that I get asked frequently. Here are a few of them:

1. How do I price PCGS coins vs. NGC coins? I am a pretty strong believer in the old “look at the coin and not the holder” argument. If an NGC EF45 Dahlonega half eagle is very choice and original and I agree with the grade, I’m going to price it at the same level as a nice, original PCGS example. If an NGC AU55 Dahlonega half eagle seems overgraded to me and I think it’s really an AU53, I am going to price it at a lower percentage relative to Trends than a coin that I think is solid for the grade. But the exact same statement is true with a PCGS coin. One instance where a so-so PCGS coin might get an unfair price advantage versus a nicer NGC coin is where the PCGS population for the coin is decidedly lower. As an example, let’s look at an 1844-O eagle in AU58. The PCGS population is six in this grade with three better while the NGC population is forty-nine with thirteen better. By virtue of its much lower population, I’d price a PCGS coin at a 10-20% premium by virtue of its significantly lower population.

2. How much of a premium do CAC coins get? In the generic market(s), this is a pretty easy question to answer. John Albanese typically posts his bids for CAC-stickered Morgans, Walkers, higher grade 20th century gold, etc. and they are at premium prices over non-stickered coins. In the rare date gold arena this is a harder question to answer. When I offer a Dahlonega quarter eagle in AU55 with a CAC sticker I don’t (yet) ask any premium for it. But if I have an early half eagle in MS63 or a Proof quarter eagle in 66CAM, I charge at least a 10% premium for a CAC coin. This is due to the fact that John himself is willing to pay premiums in these markets for coins that meet his standards.

3. How do I price OOG coins? I define an OOG coin as “original but overgraded.” An example would be a nice, dirty 1838-C half eagle in an EF45 holder that faces-up well but, in my opinion, is really just a nice VF coin. My typical solution to this problem is to offer a coin like this wholesale at fair market value and to offer the coins that I have that I agree with the grades to my retail clients.

Coin pricing remains difficult, especially in a market such as this but I believe that well-informed coin dealers (and collectors) can apply published information and their personal knowledge to establish reasonably accurate levels.

The New Rules: Coin Buying In 2009

The realities of the new coin market are such that I have refined and revised my buying strategies for 2009 and, most probably, beyond. I think my “dealer strategies” can be easily applied to “collector strategies” and they are useful for most people. My first strategy isn’t so much “new” as it is a refinement of an existing strategy. I have always considered myself to be a fussy, critical buyer with what I believe is one of the better eyes around when it comes to originality. Well now I’m even fussier than before. If a coin isn’t all there, I don’t want to buy it; even if it is a special date that I have a soft spot for.

Let me give you an idea of how this strategy works. At the recent FUN show, I saw two comparably high grade examples of the 1856-O half eagle. This is a scarce issue that I really like and it has always been a good seller for me. I generally would have no problem with owning two (or even three) pieces simultaneously. The first example I saw was an NGC AU58. It was priced fairly but it really wasn’t very nice for the grade with little of its originality intact. This is a coin that I might have bought a few months ago, given that it was fairly priced and really rare in this grade. A few hours later I saw an NGC AU53 example of the same date that was choice and fully original. I bought it without hesitation. In this market, it pays to be a fussy buyer. If I were a collector of New Orleans half eagles, I would personally rather have a choice, original AU53 than a not-so-choice and not-so-original AU58. Even though the holder says that one of the coins is five points “better” than the other, my eyes told me that the lower grade coin was aesthetically superior.

My buying guidelines have always been that I want a coin that is in the top 5-10% for the grade with choice, original surfaces, nice color and good eye appeal. I want the sort of coin that will get a sticker when I send it to CAC. In the new coin market of 2009, I am repeating this to myself every time I look at a coin (be it at auction, in another dealer’s inventory or when a collection is sent to me by a specialist-collector). I’m being ultra-careful not to slacken on my quality standards and neither should you.

Another thing that I am focusing on is a lower price point. Some dealers are still able to sell coins priced at $10,000 and up. I find these pretty hard to sell right now unless they are extremely special. Generally speaking, I’d rather have ten interesting $5,000 coins in stock than one not-as-interesting $50,000 coin.

There are exceptions to this. Obviously, if I want to participate in the early gold market, I’m not going to go very far if I limit myself to $5,000 coins. And I would without a doubt be a buyer of a $25,000, $50,000 or even $100,000 early gold coin if it met the following parameters: really choice, really original, really rare and really saleable. But expensive “product” is an area of the market that has already begun a significant downwards correction and I think such coins could go a lot lower in the coming months.

How does this apply to you? If you are a high-end collector who purchases expensive coins I am certainly not telling you to stop (in fact, I’d be thrilled to sell you all the expensive coins you’d like right now...just call me on the phone to discuss this!). What I am saying is that the expensive coin market has shifted from a seller’s market to a buyer’s market. You might be able to buy a coin that was $35,000 a few months ago for $30,000 today; maybe even a hair cheaper. If this is your price point, though, I think it is more important than ever to be hyper-critical about every potential new purchase you contemplate making.

Which brings me to another point: buying the right coins. When the market is on an unstoppable upwards course, you can make sloppy decisions and the greater fool theory will inevitable rescue you. How many collectors made poor buying decisions in 2005 or 2006 and were saved by putting lemons in an auction and having their mistakes become lemonade? This is unlikely to happen in 2009, 2010 and beyond. You want to be really careful with what you buy. Collectors with short attention spans are going to find it hard to get rid of pieces that they lose interest in after a few months because something else has captured their fancy. My suggestion is to buy every coin like you are going to keep it for five or ten years.

Another decision that I am going to try to rigorously adhere to in 2009 involves over-expanding my numismatic horizons. In years past, I dabbled in areas that I really didn’t know that well because they “seemed cool” or I “thought they were good value.” In 2009, I am going to stick with what I know best. That doesn’t mean that I’m going to stop buying bust silver coins or rare date Seated quarters and half dollars. I like these coins and I know these areas of the market well enough not to make dramatic mistakes. But I am definitely establishing a stronger “comfort level” this year and will likely coinslap myself anytime I am tempted to stray from it.

One last strategy I am zealously adhering to seems like a no-brainer but I think it’s important enough to bear repeating. I am going to try very hard to have an inventory that is full of popular “bread and butter” coins like nice 1854-O three dollar gold pieces and 1839-O quarter eagles. These aren’t necessarily the rarest coins but they are very popular and have multiple levels of demand. Liquidity is a key factor for collectors and dealers alike in the New Market.

Are there coins that I haven’t really specialized in the past that I will be buying more of in 2009? I anticipate buying and selling more No Motto Philadelphia half eagles and eagles in the AU55 to MS63 range because I think they are great values. I’ll probably buy more non-New Orleans Type One double eagles because this is an active market and a number of the dates are still undervalued, in my opinion. And I think I’ll start moving back into the Three Dollar gold piece market again because I like these coins at current levels.

2009 FUN Show Report

As I stated in my last Market Report (and you have no doubt read on many other numismatic websites) the 2009 FUN show promised to provide interesting insights into the State of the Coin Market in 2009. What happened and what numistidbits did I glean from my week in Orlando?I decided to arrive a day and a half earlier than usual this year for two reasons. The first was to get out of the awful weather we’ve been having in the Northwest and to get a little Florida sunshine and the second was to give myself a bit more time to get prepared for the show. When I arrive the night before an East Coast show starts it’s hard to face the first day of trading when I’m still on West Coast time and have woken-up at the equivalent of 4 a.m.

I went to the pre-show for little more than a cameo appearance and found it extremely depressing. I hate the FUN and ANA pre-shows because I think they mentally drain dealers. I understand why they exist. Wholesale-oriented firms like these shows as it gives them an opportunity to engage in some serious dealer-to-dealer trading. The problem is that encourages dealers to leave the “real” show early. For one-person operations like myself, the thought of attending a two to three day pre-show and following this up with a four to five day regular show is a bit of Numismatic Hell that I’d rather not subject myself to.

I also made a cameo appearance at the Stack’s sale and noted what seemed to be an inordinate amount of buybacks (i.e., coins not meeting their reserves and going back to their owners). I don’t attribute this to a weakness in the market as much as I do the auction firm not vetting the reserves as well as they should have. There were some great coins in the sale but many of them had been in other auctions within the last year and were reserved for numbers higher (or even much higher) than their last sale. In this market, that dog ain’t gonna hunt...

The show opened to dealers and collectors with early admissions badges on Wednesday. These opening hours were an interesting buyer vs. seller dance. Most dealers seemed unwilling to pull the trigger on any interesting coins but, conversely, there didn’t seem to be much available to buy and the consensus seemed to be “let’s wait until the Heritage auction(s) occur to see exactly how bad the market is.”

On Wednesday night, Heritage sold the Quellar-Lemus collection of Pattern coinage. While I don’t really deal in patterns anymore, I did attend the sale for a few hours mostly for educational purposes. I thought this was an important auction for a few reasons. It was a “fresh” deal, it was a highly specialized collection and it involved very rare coins in a very thinly traded market. The results were extremely impressive. The collection brought at least 20-30% over pre-sale estimates and the bargains that many bidders thought they’d be able to find in pre-sale discussions were, for the most part, non-existent. Something that I found especially interesting was the activity for the extremely rare but very esoteric patterns. There were a number of issues that weren’t especially attractive or historically important but they were R-8 (meaning that an estimated one or two were known) and buyers had to pay record-smashing prices for these. This proved to me that the market is still there when it comes to seemingly irreplaceable coins.

Thursday was the opening day for the public and, at least for me, I found it to be the slowest first day at FUN that I could remember. That’s the bad news. The good news is that the crowds were excellent and collectors were most definitely out in full force. The feeling I got from most of my encounters with collectors and dealers during the early part of Thursday was that their buying was curtailed but not necessarily for the “right” coin.

Something interesting happened to me later that day while I was looking through a dealer’s boxes. I pulled out about six or seven coins to ask for prices. As he was figuring out levels he said to me: “You’re one of the few people all day that has actually pulled out anything numismatic. It seems like all everyone wants to price is cheaper stuff.” This made me reach a conclusion: if this is indeed the case, the current market malaise is tailor-made for collectors who still appreciate rarity.

The Thursday night Heritage Platinum sale was interesting as it contained a mix of coins that ranged from fresh and highly desirable to not-so-fresh and not-so-desirable. For the most part, I’d say the prices and the sell-through rate were about what I expected. Coins that I knew had sold within the last year or so generally brought around 10-20% less this time. Expensive faux-rarities did better than I would have expected (these same coins were very, very hard to sell on the bourse floor). As recently as a few weeks ago, I had wondered if the Platinum Night session was going to be an unmitigated disaster. Because of Heritage’s exceptional Internet presence I’d have to say it was better than I would have imagined although still not the blockbuster extravaganzas of FUN 2006 or FUN 2007.

Friday was my last day at the show. And for some reason, the vibe seemed a lot more upbeat. I sold three expensive coins to collectors and had a few nice wholesale transactions. I left feeling a lot better than I had when I left the show on Wednesday and Thursday.

So what was my overall take on FUN 2009? I’d say that it was bit better than expected. All markets are psychological in nature and as long as the participants in the coin market are relatively upbeat, the market will be OK. Until the economy turns around (and I think we are looking at another year of Recession) people will likely cut back on their coin purchases. But most collectors are unwilling to totally give up their purchases. The bottom line was that at FUN, collectors were active but more selective than I can remember.

What sold and what didn’t sell at the show? For me, interesting coins in the $5,000 and under range were good sellers as was anything with choice, original surfaces. I noticed strong demand for CAC-stickered coins. And I was surprised at the number of people looking for New Orleans gold. Expensive coins were hard to sell. This wasn’t always the case at the auctions but on the bourse floor you literally had to plead with dealers to look at your “big boy” coins. I expect that this will continue for the next few shows as well, if not longer.

ValueQuest 2009

I have the feeling that the Numismatic Buzzword for 2009 is going to be “value.” If you are like most collectors, your purchases in the coming year(s) are not going to be as extensive as they were in the past. If you are buying fewer coins, you’ll want to stretch your coin purchasing dollars and look for pieces that offer the biggest bang for the buck. I have a few suggestions, which are mainly conceptual in nature, to guide you along the Value Trail. Regardless of series, date or mint, coins that have a nice, original appearance are very rare. My definition of “original” is a coin that appears to not have been cleaned, dipped, processed or otherwise enhanced in recent generations. In many series, especially ones like early gold and southern branch mint gold, truly original coins probably represent less than 5% of the available population. If you don’t believe me, take a look sometime at a large auction that is held in conjunction with a major convention. Assuming that you know what you are looking for, my guess is that you’ll see coin after coin that is too bright or bleached out or bedecked with “unusual” coloration. In some sales there may be thirty or forty early gold coins and only a small handful that fit my criteria of originality.

It makes sense to me that if you are going to buy fewer coins in 2009 (or, who knows, maybe you won’t buy fewer coins, just less expensive ones...) you should be buying prettier, more aesthetically appealing ones. And one of the things that I am continually amazed about in the rare date gold market is that, when they are available, choice, original pieces tend to only bring a small percentage (10-20% at most) over the typical “schlock” that is usually offered.

Another important point to consider when purchasing coins with a newfound appreciation for value is current market price versus prices in 2002-2003. I use 2003 as the point in time that prices in many gold series began to rise significantly. As an example, many early gold coins that were worth $6,000-8,000 in 2002-2003 had been at that level for quite a few years. Today, these same coins may be worth $10,000-12,000 or even more in some cases.

If you own stocks, you are probably well aware of the fact that the drops in the market since early September have basically eroded all stock profits achieved in the last five years. While the coin market has, so far, held its value far better than I would have expected, it is certainly a possibility that today’s $10,000 coin could certainly drop to $6,000 in a fairly short period of time. By studying the past history of specific subsections of the market, the value- conscious collector should have a clearer idea of potential downside.

There are actually a number of rare date gold coins that are worth the same today as they were in 2002-2003. Examples include very high grade Charlotte and Dahlonega issues (in this case MS63 and above), many San Francisco issues from the 1850’s, 1860’s and 1870’s and even a number of New Orleans gold coins. The reasons for this range from the market being damaged by too many overgraded coins in holders (in the case of Charlotte and Dahlonega pieces) to collector indifference (in the case of the San Francisco coinage) to poor reporting of prices by Trends and CDN (in the case of New Orleans issues).

Just because a coin was worth $5,000 in 2003 and it is worth the same today does not mean that it offers the “best” value to a buyer in 2009. But, it is interesting to ponder if coins such as this might have less downside than areas of the market that have shot up considerably.

Which brings us to the third and final point to consider in our Valuequest 2009. Liquidity is likely to be a huge factor in the coin market in the coming year(s). This is probably no time to be “cute” when it comes to your coin purchases. My guess is that coins that had limited appeal and liquidity issues in the good market of 2003-2008 might have virtually no appeal and liquidity in the potentially-not-so-good market of 2009 and beyond. In other words, key dates may drop in price somewhat but they are still likely to have a lot of collector demand. And to use an analogy from the non-gold coin market, series such as Three Cent Nickels, Shield Nickels and Liberty Nickels have and will probably always be also-rans because they are just not especially interesting in the opinion of most collectors.

So, in summary, I believe that three of the key elements that will drive the market in 2009 are originality, current price levels versus pre-bull market prices and liquidity/popularity. These were obviously key elements in years past but with the market euphoria of the past not likely to be seen for awhile, I think they will be more important than ever.

Further Thoughts on the Coin Market in These Trying Times

If the Financial Crisis has proven anything, it’s that people seemed to have forgotten that stocks are volatile and that investing in the markets entails a degree of risk. Enough risk that you have to question the sagacity of middle-class people having the majority of their retirement funds tied-up in something as speculative as stocks. Through all of this chaos, tangible assets such as precious metals and rare coins appear to have held up pretty well. As I mentioned in my last blog, the demand for bullion-related coins such as Liberty Head double eagles and Saints has been nothing short of incredible and after a few very slow weeks, I’ve noted on a personal level that collector coins are beginning to sell again; albeit on a scale that is certainly reduced from what I was seeing a couple of months ago.

One comment I’ve heard from a number of clients in the last few weeks is that they are looking at their collections from a much different perspective now than prior to 9/15. Before the stock market imploded, many high net worth individuals viewed their coins as a minor part of their overall portfolio and thought of numismatics as a sort of a plaything. Now, after these individuals have lost 20%, 30% or even more of their net worth, their coin collections are suddenly a much more significant portion of their assets. And I believe that this will cause them to regard coins in a more serious light than in the past.

As someone who has lived through any number of bad coin markets, this one feels like it may be different. I can recall markets where you literally could not get other dealers to look at your coins and you could literally beg clients to buy something because it “was such an incredible deal” and they would pass. At this point in time, dealers are still buying coins and serious collectors seem to still want to make purchases; just maybe not at the level they might have been before.

It’s going to be really interesting to see what the new levels on rare coins are going to be in the coming months. There is no doubt in my mind that certain coins are worth 10-30% less today than they were a few weeks ago. The question is, of course, which ones are and which ones aren’t. I’m not sure that even the most sophisticated experts know with certainty.

One thing I do know is that in spite of the substantial losses in the markets there is still a lot of cash in the world. I can’t imagine that Joe Investor is going to be hugely anxious to run back to Wall Street or to buy real estate. And returns on conservative investments are so bad right now that once people get over their fear and we see a few days of decent to good economic news (and we will see this sometime in the not-so-distant future) they will regain their sea legs and look for something that provides them with a hedge against inflation and that offers some future potential.

I’m not naïve enough to think that tens of thousands of Intel and Oracle investors are going to come running into the coin market. But is it so hard to think that a small number of investors are going to turn to coins? And I’ve got to think that the part of the market that will benefit most from this is gold.

To be more specific, I think an area that will see a real surge in demand in the coming months will be slightly better date large-sized coins in the $1,000-5,000 range. Even without any of the expected promotions that are likely to occur in the near future, the specific sort of coins that I think will see renewed interest are slightly better date Liberty Head eagles (I particularly like reasonably priced but attractive New Orleans eagles given their ability to be collected as a set), pre-Civil War era Type One double eagles and better date Saints with little or no (current) market premium factor.

I also have to think that really rare material is going to retain a good amount of its value in the long run. If you own a gold coin that is among the finest known of a popular issue or it is one of just 50 known in all grades combined, there is enough money left in the world for the demand level on these kinds of coins to remain high—and maybe even to become higher in the future.

Going back to something I mentioned earlier in this blog, I think it is important to regard your collection right now as an important asset in your overall financial portfolio. I’m not necessarily saying that coins should become a greater percentage of your net worth (the housing, stock and credit markets actually already did that for you, like it or not...) but I think the current economic slowdown should not preclude you from buying coins. In fact, I think it should encourage you, given the fact that your stock picking abilities are likely to be far inferior to your ability to by nice coins.

These next few weeks are going to be very interesting times in the markets. Perhaps I’m biased, but I’m focusing my energies on coins—the one market that I understand.

July 2006 Coin Market Assessment

When’s the last time you a coin dealer told you the market was going to be slow for a while? Take a deep breath…July is going to be a slow month. I think a short-term slow-down in the market is actually much needed and will, in the long run, be good for everyone’s mental health.

Just think about it. For the last few years nearly every month the coin market has seen never-ending auctions, continual shows and intense flurries of activity. I, for one, am tired. I’m not asking for this paragraph to be accompanied by strings but I could use a break. And you know what? I’m going to take it easy for the next few weeks.

A number of factors are conspiring to make the upcoming four to six weeks a slow-down period. First of all, with the exception of the Baltimore show (July 13-16), there are no significant conventions. Secondly, there are (as amazing as it seems…) no major auctions until the middle of August. Thirdly, the slowdown in metals prices has brought some activity to a halt. And, finally, it’s the summer. People are taking vacations and enjoying the nice weather.

Now I know some dealers just never slow down and they will tell you that they’ll be as busy as ever in July. Don’t believe them because they won’t be. There are just not a lot of coins available now and even the seemingly-insatiable demand of early 2006 has slowed down.

Will this fallow period last long?

Nope. Be prepared for a very active August as the pre-ANA and ANA auctions come around and then the ANA convention takes place. I personally think this year’s ANA will be a true barn-burner and am bracing for one of the busiest shows of my professional career.

I’m told that between the auctions being conducted by Superior, ANR, Bowers and Merena and Heritage that there will be well over 10,000 lots with a value of over $50 million available for sale. Am I worried if the market can absorb them? Not really. This has now happened for the past three or four summers and every year, despite dire end-of-the-world prognostications from certain quarters, the market seems to be doing just fine, thank you.

What really worries me is how I’m going to physically handle viewing four auctions, attending God knows how many sessions, being at the coin show for four or five days for ten hours each day and, gasp, having to wear nice clothes for a week.

I’m planning on enjoying my new place of residence (Portland is phenomenally nice in the summer, FYI), working on a top-secret new book project and getting a tan so I look spiffy in those nice clothes that you’ll see me in Denver this August.