Lessons Learned: The Kentucky Collection

Lessons Learned: The Kentucky Collection

On Monday I purchased a nice specialized collection of 20 Liberty Head quarter eagles from an individual in Kentucky. As of Thursday the entire collection had been sold...let's chat about why.

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Why Some Coins Sell and Why Some Don't

At a typical coin show, I buy between 25 and 75 new coins. I like every coin  I buy and I always think think that they have something worthwhile about them; something that will find them a new home. The majority of the new purchases  I put on my website sell quickly. But, from time to time, a good coin doesn't sell quickly or even doesn't sell at all. Why?

One of the things that I like about my business is that it is somewhat predictable but not so rote that at this point I don't have to think about it. I am well known as a good source for buying and selling rare United States gold coins but enough quirky things happen to me on a week-by-week basis that it still makes it challenging (and fun) to do what I have done as a full-time profession for my entire adult life.

Why is it that some of the coins that I think are going to sell well on my website do not while others that I worry if they will even get a nibble receive multiple orders within hours of being posted? Here are some thoughts:

1.  The Coin Didn't Image Well

Numismatics has become an extremely visual hobby with the proliferation of coin related websites. As recently as a decade ago, people relied on verbal descriptions. Today, it is all about images. I am lucky that I have one of the best coin photographers in the world working for me and her images are generally top-notch; certainly clear enough to give potential buyers an excellent idea of what the coin will look like in-hand. But even Jenna doesn't nail every image.

There have been a number of times I have gone through the coins on my site and noticed that a good coin that has sat around for a few weeks has an image that isn't quite perfect. Virtually every time the coin has been re-shot, it has sold.

Another thing that I have found is that sometimes NGC or PCGS holders need to be freshened. They might have scratches which appear to be on the coin in an image or they may be "scuffy" from spending too much time going from show to show in double row boxes. Sometimes, a fresh holder will get a coin sold.

2. They Are Too Expensive

I work on a pretty tight mark-up and I think I'm a savvy buyer who is able to buy nice coins at fair market value. But ultimately, it is up to my wholesale and retail buyers to determine if a coin is or isn't fairly priced. Usually my coins sell quickly and this is a validation of my pricing.

What about coins that have sat in my inventory for a month without a single inquiry? Sometimes they don't sell because they are perceived as being too expensive. In most cases, I have to agree with the market and re-price these coins accordingly.

On a number of occasions, I've taken a coin of mine which hasn't sold and put it in an auction where it has brought a good deal more than the price I had it for on my website. I would have to assume these coins were sold to buyers who don't go on my website at all and therefore didn't recognize where the coins were from.

3.  Too Many Other Examples Have Sold

Some esoteric rare coins have a limited amount of demand.

As an example, I recently spoke with a very knowledgeable collector who passed on a coin on another dealer's website which I thought was an excellent value (I tried to buy it and was too late). I asked him why he passed on it and he replied that so many examples of this issue had been available in the last few major auctions that his perception was that it wasn't rare. While I didn't agree with him in this instance, this was still a good point.

Many of the higher end coins that I sell have reasonably limited demand. A New Orleans quarter eagle may be one of only six to eight known in Uncirculated but if all the major players in this area have one, a truly tough coin might take a while to sell. I generally have a good idea which coins have the strongest level of demand but my potential selling scenarios do not always come to pass. And sometimes, I am surprised by who buys a very rare coin; the New Orleans quarter eagle cited above may be purchased by someone who until now has only bought double eagles from me.

4.   The Market For That Coin Is Slow

One of the odd things about a collector-driven market is that it can come to a screeching halt very quickly.

About seven or eight years ago, I quick-started the market for Three Dollar gold pieces. Within six months to a year, prices had risen and the market seemed self-sustaining with a high quality of demand. And poof!--just like that this seemingly strong market came to a screeching halt. Luckily, I was tuned into the market enough to know not to have a huge inventory of Threes and didn't get caught holding to many high-powered pieces when the market crumbled.

I notice the same thing happening from time to time in 2012-2013 although not on this level of magnitude. All of a sudden shipwreck coins are hot as a pistol and as a dealer I have to judge if the quality of demand is good enough that I would stock a $10,000 shipwreck double eagle that was $7,500 last year. This is one reason why I tend to be highly specialized in what I buy and sell. It's hard enough to know the vicissitudes of the market for 18th and 19th century gold coins let alone having to keep track of what Morgan dollars are selling in MS65 and what the premium factor is for PCGS/CAC coins in this series.

My point being...a coin I buy in January because I think it is going to sell might, through some quirk, become less easy to sell in February. That tends to be why I stick with coins that have multiple levels of demand and which are less subject to these shifts in demand.

5.  Sheer Happenstance

I have this conversation at least once a week:

Collector: When did you add that nice 1873-CC eagle to your website? I need that coin! It's nice!

Me: Uh, I've had it up for six weeks. I was really surprised that no one asked about it until now....

My point being, sometimes through weird quirks of fate, a seemingly very easy to sell coin lasts weeks before it sells. Other times, I get four inquiries in a day about a coin I'm worried if it will sell, even though I like it. I'm sure if you asked five coin dealers the same question they would all agree: some coins that should sell quickly don't and for not good explanation.

Why do you think some coins sell and some don't? Add your comments below and let me know. Do you have any questions you'd like to ask about which specific coins sell well for me and which do not? Feel free to email me at dwn@ont.com


Five Things You Can Do to Make Your Coins Worth More

If you have been collecting rare coins for more than a few years, there is a good chance that you have "found money" in your holdings. What I mean by this is that there are a number of things that you can do--often with little or no cost--that can significantly improve the appearance and value of your coins. Here are five suggestions: 1. Send Your Coins to CAC. CAC is now well established as an important factor in the high-end segment of the market. In certain areas, CAC coins trade for a nice premium and there is no doubt in my mind that a CAC sticker makes a coin more marketable. Submitting a coin to CAC is very inexpensive; typically just $10 to $20 per item. Another thing that's nice about submitting coins to CAC is that you are getting an expert's opinion (in this case John Albanese) for next to nothing. You might try sending a sample of your five best coins to CAC. If you get CAC approval on all five coins, you know you are doing something right. If only one or two get the coveted "green bean" then you can assume that the dealer you are buying from needs to be replaced.

2. Attribute Your Coins. Let's say that you are a date collector of early half eagles. It makes sense to purchase the Bass-Dannreuther book on early gold to attribute all your coins to "BD" numbers. You might get lucky and find that one of the coins that you own is a very rare die variety. This isn't necessarily an immediate financial upgrade, as it would be in a series like Bust half dollars or Large cents which are avidly collected by variety. But wouldn't you rather keep the potential financial upgrade for yourself than to read on page three of Coin World how some lucky collector just cherry-picked an excessively rare variety of 1806 half eagle? Also, if PCGS or NGC attributes varieties in the series you collect and you find a good variety, have it marked on the slab.

3. Pedigree Your Coins. If you have a coin from a famous collection like Bass, Garrett, Eliasberg or Norweb, a pedigree can add value. Some coins from these collection are clearly marked on the PCGS or NGC insert. But there are hundreds of others that have "lost" their pedigree for one reason or another. I'd suggest that you purchase all of the major auction catalogs in the area that you specialize in and spend a few hours searching through them. Your coin(s) may have a different appearance than they did in an earlier sale, but if they have an obvious mark this will make it easy to trace them. If a great pedigree is easy to prove, send the coin along with a xerox of the catalog page to PCGS or NGC.

4. Reslab Your Coins. Please note that I didn't say "regrade" your coins. That's another subject entirely and one that, if you have coins in old green label or "fatty" holders, I do not necessarily think will add value to your coins. What I mean by "reslabbing" is that many coins are in holders that show severe scuffing, wear, or dullness. A great coin can look just so-so if the holder it's in doesn't present itself well. I know this sounds a little hokey but its no different than deep-cleaning your house when you get ready to sell it. If all of your coins are in pretty, fresh slabs it is going to make your coins look nicer.

5. Create a "Cult of Personality." For a number of reasons, there are many collectors who become larger than life because of what they collect. Some of these individuals become famous because they buy seven figure coins. Others become famous because they write books or articles about the area(s) that they specialize in. And others become famous because they are "mensches" who endear themselves to collectors and dealers alike. A collector who has worked hard to establish himself as a leading authority on Charlotte gold coins is probably going to have an easier time selling his coins than a collector who is totally unknown; even if the mensch has inferior coins, the belief that he has high quality will typically outweigh the reality. The same holds true for collectors on the PCGS and NGC Message Boards. Creating the illusion of collecting greatness is a lot easier today than it was in the pre-Internet era.

These are just five suggestions. There are many others that I can think of, and I'd be interested in hearing your suggestions as well.

Cleaning Up Your Collection

As I write this, there is a real disconnect in the coin market. Simply put, despite what is very probably the worst economic year since the height of the Depression, the coin market remains comparatively vibrant. I think this represents something that many collectors are overlooking: this could be a great opportunity to clean up some of the messes in your collection and come out without taking a nasty financial hit.

This statement is making a big assumption: that the financial mess we are in now will impact the coin market more intensely than it has so far. Who knows; maybe it won’t. But my guess is that we will see a further drop in prices on coins that aren’t really exciting, either off-quality, not rare or a combination of the two.

If you are like most collectors, you’ve probably made some mistakes over the years. And if you are like most collectors you may have hidden your mistakes in the back of your safety deposit box and figured “out of sight, out of mind.” As I mentioned above, this might be a really good time to consider trimming the fat.

I have long been an advocate of the “quality trumps quantity” school of numismatics. In my experience, most collectors own too many coins. Some collectors own way too many coins and they have a considerable amount of money tied-up in “stuff” that has little relevance to their current collection. I think it’s a great idea every few years to weed out some of the stuff that has accumulated in your collection.

The coins that are most likely to lose value in the coming year are coins that have either gone up too much in value in the last few years to sustain their market or coins that have a limited amount of demand. You might want to include these along with the “what was I thinking when I bought that...” coins.

When you look through your collection, you should use what I called the “ahhh.... test.” Coins that you like are going to make you go “ahhh...” when you view them and you can probably remember the exact circumstances in which you purchased them. Coins that don’t speak to you or which don’t tweak your memory haven’t passed this test and they might be candidates for a purge.

You might own coins that you don’t really care much about but which are still strong. A great example of this is generic gold. Many collectors have salted away a few St. Gaudens double eagles or Liberty Head eagles over the years. They might not care at all about these but they might also be able to make a nice profit if they sell them at the currently-high premiums in the market. If I had a decent position of generics in my collection, I’d seriously consider taking a few and selling them right now.

I’d be even more interested in selling these Misfit Coins in my collection if I had an alternative coin coming down the pike that seemed like it was too good a deal to pass up...and I didn’t necessarily have the ready cash to make this deal happen.

Here’s another circumstance where you might have coins that are no longer useful to your collection. Let’s say you started a collection but lost interest and now you have a 50% complete set lying around. If the coins are nice quality and price levels aren’t way off on the series in question, it might not be a bad idea to sell the coins you have and use the money on coins in the set(s) you are actively collecting.

What is the best way to clean up your collection? You have a number of options and these options depend, at least in part, on the type(s) of coins that you own. If you live in a town with a reputable brick and mortar coin shop and you have pounds and pounds of “stuff” then selling this material outright or on consignment might be a good idea.

If what you have fits more into the specialist category, choose a specialist dealer to make an outright offer or to take the coin(s) on consignment.

And, of course, you can always go the auction route if you are thinking of selling very high-powered or highly specialized material.

In conclusion, this might be a good time to get rid of some of your less-exciting material at levels that aren’t going to insult your sensibilities. For what’s its worth, this is exactly what I’ve been doing with my own inventory for the last four to six months and even though I’ve had to make a few decisions that were painful at first, I’m very glad that I sold some of the coins I did at the prices they went away at.

Economic Impact on Numismatics

Coin dealers are lousy economists so I don’t want to waste your time discussing the economic background of the last few days. What I would like to share with you is my take on how it’s impacted my business and what I see are the short term effects of the credit crunch, liquidity crisis, Dow meltdown, etc. on the coin business. My business was screamingly active in July and August. It slowed down considerably in September and it has been extremely slow in October. I have read on a few dealers’ websites that they are still selling lots of rare coins and that they have people calling from out of the blue purchasing items from their inventory. I think this is a crock. Unless you are a dealer selling bullion right now, you probably (there are exceptions...) are not doing much coin business. You might be purchasing coins from clients who bought them a year or two ago but selling your existing inventory right now? I doubt it.

That’s not to say that the coin business has shut down entirely. It definitely has not. I’ve sold some nice collector grade coins in the past week and my wholesale business is actually a bit better than I would have expected. But my regular clients are taking a wait and see attitude towards the coin market, as am I. With the Dow dropping hundreds of points every day, it’s hard to be excited about the coin market right now.

As recently as a few weeks ago, I commented that the generic gold market was very weak and that premiums for $20 Libs and Saints were as low as at any time I could remember. You literally could not give away double eagles. Three weeks later and the world of generics is a very, very different place. As I write this, gold has a spot price of around $863 but Brilliant Uncirculated (MS60 to MS61) double eagles are worth between $1250 and $1300 each.

I actually recommended in one my recent blogs that it might be a good idea to stock up on gold as the premiums got so low and, for once (!) I was right. I think the moral of the story is that it’s a good idea to have a small position in double eagles for your personal protection and to move in and out of as premiums ebb and flow. My guess is that the premiums will stay very high for a while.

Here are some more thoughts and suggestions for rare coin collectors in these uncertain economic times:

1. If you are looking to time the market perfectly and sell at the height, you are probably too late. It looks like the peak for certain series may have been the spring of 2008. While I think it’s safe to say that faux rarities, widgets and low end “stuff” have seen their best days, I don’t necessarily think that the good times are over for really neat coins or really popular coins or coins that seemed undervalued as recently as thirty days ago.

2. If you were smart enough to buy double eagles at last month’s low premium, pat yourself on the back and start selling into the market. Yes, there is a good chance that gold will continue its upward climb but once the panic buyers have established their positions I would think that the currently high premiums will erode. I would certainly keep some of your position but I would strongly consider selling some of what you have at a nice profit and to maybe even considering putting the profit into rare coins.

3. Clearly, there will be new price levels soon for many series. If you collect early gold or Type Two double eagles or even modern Proof gold, the chances are pretty good that what you were buying on September 14 probably isn’t worth what it is on October 7th. No one—not even a connected expert like myself—is exactly certain what the new levels will be. Part of this depends on the willingness of dealers to sell coins for losses. I expect that the smart dealers out there will take the losses that make sense to them while the not-so-smart dealers will be stubborn and refuse, at least for now, to sell anything for a loss. I would think we’ll really start seeing what the new levels are at the 2009 FUN show and at the auctions surrounding this convention.

4. Whatever you do, don’t be a panic seller. Hopefully you bought coins with discretionary income and you made the decision to be a long-term collector who would stick with their coins through thick and thin. The last year or two was a good time to prune your collection and to get rid of mistakes, duplicates, widgets, etc. Hopefully you listened to my advice and did this. Hopefully you’ll also listen to me when I tell you that selling anything now that isn’t totally top quality might not be the best idea.

5. The “wild card” effect of the current economic chaos is that we may see a dramatic upward movement in gold, a wild run away from anything resembling stocks or bonds and even the return of rampant inflation. Any of these factors would have a significant impact on the rare coin market.

6. If prices do begin to drop and you have the assets available to allocate on coins, it might be a great time to buy. I heard lots of collectors complain that they’ve been priced out of their end of the market in the last few years by Nouveau Riche Accumulators. What if the majority of these NRA’s go away and you can suddenly afford to collect nice coins again?

Improving Your Collection Without Spending Alot

Someone recently asked me a question that I thought was interesting and that merited a detailed response. To paraphrase this question, they basically asked me this: can you tell me some ways that I can improve my collection while spending little or no money? Are there any actual ways that you can make your collection better without dropping a lot of coin (bad pun intended)? I believe that there are and here are a few that came to mind:

1. Bring Out Your Dead. Every collector has them. Duds. Bad deals. Low end duplicates. You know what I’m talking about: the Dead Zone of your collection. These coins may represent more value than you realize. As an example, I recently had a relatively expensive double eagle in stock that a collector wanted for his set but he had no extra money at the time. I had him send me a list of the dead coins he owned; bullion, generic Saints, Morgan dollar rolls, etc. The value of his “stuff” was considerably more than he realized and he was actually in a nice profit position on his bullion. The choice to trade spillage for one nice, rare coin was easy for him to make. And the good news was that he had enough money left over so that he can actively pursue another neat coin or two.

2. Attribute Your Coins. If you collect series like Bust half dollars or large cents you are probably already a die variety collector and all of your coins are properly attributed. But what if you are a collector of early half eagles and you have never bothered to attribute your coins to Bass-Dannreuther variety numbers? And what if one of your supposedly common half eagles turns out to be a very rare die variety that is worth a 30-50% premium? Seems like a no brainer to me. Even if you collect a series for which there is no standard reference work, it makes sense to examine your coins with a 10x glass and see if anything interesting is happening. Who knows, maybe you’ll discover a previously unknown mispunched date or a cool double date that has not been recorded.

3. Invest $500 to $1000 in improving your library. If you collect early gold coins you probably own the Bass Dannreuther book and a few other standard references. But do you own pertinent auction catalogs? It has long been my belief that one of the best uses of your money is a good library. You’ll get more enjoyment out of your coins if you know more about them and there is no better way to learn about a series, especially one that is somewhat obscure, than reading books and catalogs. If you don’t know which books or catalogs to pursue, ask a specialist dealer which ones he refers to or, better yet, contact a numismatic literature dealer and ask for some suggestions.

4. Improve your peripherals. If you are using an old, slow computer you are missing out on the “full experience” when it comes to coins. Not everyone has the luxury of owning a sporty, brand-new computer but with the price of monitors having dropped so considerably in the last few years treat yourself to a 16 inch or 18 inch flat screen monitor. It’s just a few hundred bucks and it sure beats viewing coin images on an old, low resolution screen. Spend some money on a good quality new magnifying glass and a high quality lamp to view your coins as well. You’re looking at $50-100 for a world-class loupe and around $100-150 for a professional quality halogen coin lamp.

5. Research the pedigrees of your coins. This area is not relevant if you a collect fairly common series. If you are working on a set of business strike Indian Head quarter eagles in MS60 to MS62, it will be virtually impossible to determine the pedigree of these coins. But if you specialize in an area like Dahlonega quarter eagles or Fat Head half eagles, it is quite possible that some of the coins in your collection come from famous collections. Not everyone reading this will agree with me, but I believe that the “right” pedigree adds value and collectability to a coin and to discover that your 1847-D quarter eagle is from the Norweb collection or the Green Pond sale is pretty darn exciting. And if you collect Colonials or early cents, there is a possibility that a coin you own could have a pedigree that goes back over 100 years.

6. Start a cheap secondary collection. I’ve mentioned before that there is nothing more frustrating than being a collector who is either cash-strapped or at a point in his collection where there are no easily available holes to fill. In a scenario such as this, I always recommend having a cheap but interesting secondary collection to fulfill your “need” to buy something and to keep out of trouble. How about 18th century British Condor tokens? They are fascinating, well-designed and you can buy lovely examples for less than $100. Start a “one country one coin” collection where you purchase one coin from every country that currently makes coins. Or, focus on a certain year (say 1899), figure out every country that existed at the time and buy one copper or silver coin from each of these nations.

7. Immortalize your collection. Let’s say you’ve worked on a neat specialized collection for a number of years but you are currently “out of gas” due to finances or unavailability of stopper dates in the series. Why not create a website that focuses on your coins and/or the series you collect. As an example, say that you are working on a set of No Motto Liberty Head eagles. There’s never been a book that has specifically focused on these coins; just works such as my New Orleans reference that has included them as specific issues within a larger context. You could buy the URL nomottoeagles.com and create a research site that lists the finest known pieces, varieties for each year, auction records, etc and which had photos of each of your coins. I have seen this done for a few specific types (as an example, a collector has done this for Trade and Seated Dollars and the results are extremely impressive). Doing this is a win-win for everyone involved. It gets people more interested in the series you already collect and it gets potential buyers more interested in your coins when you are ready to sell. Plus, it seems like a fun thing to do in your free time.

Timing in the Coin Market

Assuming you want to sell coins at auction, does it make a difference when you do? In my opinion, timing in the coin market is everything. Here are some tips about when to sell and when not to sell at auction. Traditionally, people have assumed that it made more sense to sell coins at auction during major conventions like FUN or ANA. In the past, this was definitely true. Today, with the emergence of the Internet and a new mentality that an auction could occur on Mars and the buyers would still be there, I do not feel this is necessarily true.

It is expensive for a firm like Heritage to conduct a sale at a major convention. In addition to the fees that they have to pay to the organization who conducts the show (ANA, FUN, CSNS, etc) it costs more to run a sale in a major urban area. A seller has to ask himself if it is worth more money to sell coins at a major show than a not-so-major one. If it costs 4 or 5% more to put coins in the ANA auction that a pre-ANA sale, is this worth it?

This last question is an interesting one to ask. I can see the validity of both a yes and a no answer. Some people will contend that an ANA or FUN show brings out more buyers than, say, a Long Beach or Central States show and it is worth paying the extra money. Others people feel that, as I mentioned above, the buyers are going to find the coins regardless of what show the auction is being held in conjunction with and paying the premium price is a waste of money. I tend to agree with the former theory rather than the latter.

From experience, I have learned a couple of tricks as far as selecting a time and place in which to sell coins at auction. If I had a collection of “sophisticated” or historic coins (like Colonials or early type), I would sell them at an east coast sale since that’s where many of the buyers for these coins live. Logic dictates that a collection of Charlotte or Dahlonega coins should be sold in a venue like Atlanta although this is not always the case. And, as I will discuss below, New York City is an exception to every rule because of its incredible size and wealth.

There is no question that in 2007 Manhattan is the undisputed center of the world as far as selling art. Incredible amounts of money are in or near New York and it’s nice to think that some of this will be flowing into the coin market. I think this is true from the standpoint of people who already like coins and there are certainly a lot of serious collectors in the New York/New Jersey/Connecticut tri-state area. But it’s a pipedream to think that the guys who just dropped $15 million at the Christie’s Contemporary Art auctions are going to wander into a New York coin auction and be factors there.

When you are deciding on when to sell your coins at auction, use a calendar and a little common sense. This year’s pre-FUN auctions didn’t do well because in order to properly view the lots and figure your bids, you had to fly down to Orlando on either December 31st or January 1st. Realistically, how many people (even coin dealers) don’t have better things to do on New Year’s Eve or New Year’s day than flying to Orlando and slogging through a bunch of coins?

Is the auction you are considering being held on the Jewish holidays? Even those of us who don’t attend services think it’s tacky to be spending the High Holy Days at a coin auction.

Certain times of the year are traditionally slow in the coin market. November and December are always slow months due to the fact that there are few major shows and traveling becomes difficult due to bad weather and holiday conflicts.

Certain venues are traditionally bad coin towns as well. I have a personal grudge against St. Louis as a coin town and despite the fact that I’ve probably gone to ten coin shows there in the past two decades, I have had continually bad numismatic experiences in the Gateway City. Therefore, I’m just not going to put coins in an auction that occur in St. Louis; even if Tony LaRussa personally comes to my office and solicits a consignment.

What about when there are numerous auctions stacked up against each other during short periods of time; like before and during the ANA when three or four competing firms all have sales? Which sale do you pick—the first one (when people will be fresh and have money to spend) or the last one (when they will be burned out and broke)? The answer is not as cut and dry as you might think.

Importance of Timing When Assembling a Collection

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.

Coin Consignment Questions

As a dealer there are few things I like more than getting coins on consignment. To my way of thinking, you’ve got to love receiving nice coins for inventory without having to write a check for them. In a market like this, where it is very hard for me to buy nice, fresh coins, I am enthusiastic about receiving consigned coins from gold collectors. But I have noticed that many potential consignors do not fully understand the process. Here are my answers to some consignment related questions. What consignment rate do most dealers charge?

The usual rate ranges from a low of 5% to a high of 10%. The rate depends, of course, on the size of the consignment, the relationship of the consignor to the dealer and what sort of coins are involved. If one of my very best clients was consigning a nice group of fresh $5,000-10,000+ coins, I would be likely to charge a lower rate than for someone I barely knew offering me a group of slightly better date Type Three double eagles. Consignment rates are generally lower when the money generated by sales is applied towards new purchases from the firm chosen to handle the consignment.

What should consignors expect from dealers?

The consignor should expect full paperwork from the dealer explaining the consignment rate and the expected length of the consignment process as well as payment and return terms. The consignor should also expect that the coins will be imaged and described in a fairly prompt period of time. The image(s) and description(s) should be of a similar quality to the dealer’s regular inventory.

What consignor requests are considered unrealistic by dealers?

Some consigned coins sell quickly and some take a long period of time to sell. Don’t expect the dealer to sell all of the coins in a week. Price your coins fairly. If the consignor paid too much for a coin from another dealer do not expect the dealer who is now trying to sell the coin to be a miracle worker. The dealer should not be expected to write unrealistic descriptions or to make an ugly coin look nice through the miracles of digital photography.

Are consignment sales better than putting coins in auctions?

This really depends on the coins and the firm(s) in question. Without blowing my own horn too loudly, I would say that in most situations my firm is a far better choice to sell certain coins than a major auction company. The main reason for this is personal service. At an auction, you’ll be one of 100+ consignors at any given time while at my firm, you may be one of only two or three consignors. I tend to know the coins I specialize in far better than an auction company and, in my opinion, can do a better job pricing and marketing them. But my ability to outperform an auction company is probably best exhibited in my ability to sell United States gold coinage. I do not think I would be a great choice to sell a collection of Peace Dollars. I think the same can be said for most specialist-dealers when they operating outside their realm(s) of expertise.

In most cases, consignment sales can be a true win-win situation for dealers and collectors. It is a scenario in which both parties are working for the same goal and one that, as long as everyone understands what is expected of each other, should turn out well.