Some FUN-based Market Observations

The FUN show is clearly one of the two major market indicators. Symbolically, it is the beginning of a New Coin Year but it is, most of all, a huge economic event with hundreds of millions of dollars changing hands. For me, a good FUN show is a clear indicator that the first quarter—if not half—of the coin year will be strong.

This was one of the strangest FUN shows I can recall. I was constantly busy and there were people at my table from the beginning of dealer set-up on Wednesday until I was packing up to go home on Friday afternoon. It was one of the easiest selling shows I can ever recall having, and my wholesale numbers were well above average. But it was also a hugely difficult show at which to buy. If, like me, you were a dealer who buys choice, cool, rare coins there were slim pickings at best. I was able to buy a number of great coins (some of which are now posted on my website; others never made it back from Orlando) but I knew as early as Thursday morning that I was going to fall well short of my numeric goals in terms of coins bought.

Clearly, one of the facts of life about major coin shows (FUN and ANA in particular) is that the huge auctions that surround them have a profound and significant impact. I talked to numerous well-heeled collectors who roamed the floor but stated that they were “waiting until after the auction” to make purchasing decisions. Considering that the major segment of the auction was Thursday night, this left a short window of opportunity for them to buy coins.

Heritage should be credited for producing one of the all-time great FUN auctions, and although I don’t know exactly what their final numbers were, I am assuming the FUN sale set an all-time record, given that Platinum Night alone did north of $50 million dollars.

I spent a lot of money at the Heritage auction(s) but didn’t buy a lot of coins; at least not in terms of useful, “bread and butter” coins that I could turn around and immediately place into inventory. Some of the dates that I will always try to purchase were represented by coins I just didn’t like, while other areas of the market seem to have quickly jumped to new levels with which I’m not yet comfortable.

Some observations from the auction are in order:

1. Rarity is clearly in vogue right now and even off-quality examples of truly rare issues are commanding huge premiums. As an example, an NGC EF45 1864-S brought just a shade under $100,000. And other seldom-seen eagles such as the 1863, 1873, and 1876 brought what I thought were enormous prices based on their actual quality.
2. There were a number of really exceptional coins in the auction and they brought exceptional prices, as they should have. My two personal favorites were David Akers’ personal 1826 half eagle graded MS66 by PCGS which brought $763,750 (a price which I thought was strong but not at all outrageous), and the Eliasberg Proof 1889 double eagle, graded PR65 by PCGS but in an old green holder and looking more like a PR67 Deep Cameo by today’s standards, which sold for an extremely strong $352,500.
3. Speaking of exceptional, the market for Liberty Head double eagles continues to rage on. The FUN sale had a deep offering with coins ranging from off-quality and very choice for the grade and issue. But it almost didn’t matter what the coin looked like as prices were strong across the board. Type One O mints? Very strong. CC’s? Very strong, although the nice PCGS AU50 1870-CC at $329,000 seemed like a much better value than the really unappealing PCGS EF45 at $282,000. Civil War dates? Crazy strong including a record-for-the-grade prices on the 1861-S in PCGS MS62, the 1863 in PCGS AU58, and the PCGS MS62 1864. I was taken aback by prices for the Big Five late date Type Three issues. An 1881 in PCGS AU58 sold for $111,625, an 1882 in NGC AU58 realized $94,000 and perhaps most incredibly, a tooled no grade 1886—the ultimate “what a shame” coin—brought a staggering $129,250. No grades in general did very well in this sale, by the way, but that’s another story.
4. The best values in the 19^th century series are clearly in the Liberty Head half eagle series. Prices on double eagles have made this series the playground of the 1%, and the eagle series has gone from neglected to flavor of the year (smart buys still can be made in this series but proceed with caution!). Even though there were some price records set in the FUN sale for finally-recognized date rarities such as the 1863 and 1865, there are still many dates in the $2,500-15,000 range which seem very fairly priced relative to their rarity. Given the great prices that schlocky rare date coins brought in the auction, I’d like to think that DWN-quality examples are even better values.

A few other non-auction observations, based on looking at dealer’s inventories: nice quality early gold is still in very short supply, Dahlonega gold is literally nowhere to be seen (I’m embarrassed to admit this but I came home with exactly two new D mint coins…two! From the FUN show!!! How is this possible?!?), CAC premiums are really noticeable - especially from sellers who don’t typically handle nice coins, and if I had listened to myself and bought Civil War gold coins when I predicted they’d be the Next Big Thing I’d have made myself a tidy little profit.

Do you buy rare gold coins?

Do you have coins to sell?

Would you like to have the world's leading expert with you assembling a set of coins?

Contact Doug Winter at (214) 675-9897 or by email at dwn@ont.com.

Three Great New Orleans Coins

I’ve heard it said many times that, “All the great coins can only be found at auction.”

As my recent experience at the 2013 FUN show in Orlando will prove, this is far from the truth. At this show—and at most other major conventions—I am able to purchase great coins via private treaty from dealers and collectors. Many of these are fresh as the proverbial daisy having either never appeared at auction before or, if they have, many years ago.

As a dealer who specializes in choice and rare 18th and 19th century United States gold coins, I have a special place in my heart for important coins from the Eliasberg sale. Held in October 1982 by Bowers and Ruddy, this was arguably the single greatest collection of gold coins sold in the modern era. Unlike many other great gold sales, the Eliasberg pedigree is synonymous with high quality and, in most cases, when I see a coin is ex: Eliasberg, I get the mental picture of a very high end piece for the date.

On the first day of the FUN show, I got a text message from a dealer who I have known for many years and who I do business with from time to time. He told me to come to his table to look at a group of coins and I went there quickly as I know this dealer isn’t someone who will waste my time with marginal stuff.

When he showed me the small group of coins, my heart skipped a beat as the group contained a number of New Orleans gold coins that I immediate recognized as being from the famous Eliasberg sale. One of these coins was something that I had been chasing since the mid-1990’s. That was the good news. The bad news was that this dealer is one of the very smartest guys in the coin business and he is not exactly known for giving things away. I knew I had to buy these coins; it was just a question of how much would I have to pay.

I’m going to discuss these coins in some detail. Since they are already sold, I’m not going to reveal what I paid for them but I will discuss how I figured values for each.

1842-O Half Eagle, Graded MS63 by NGC/CAC approved

The New Orleans mint produced a total 16 Liberty Head half eagles from 1840 to 1894, in two different designs. The No Motto coins, issued from 1840 to 1857, tend to be scarcer than their counterparts from Charlotte and Dahlonega and nearly all are very rare in Uncirculated.

The 1842-O is the second rarest half eagle from this mint. Of the 16,400 struck there are around five or six dozen known. When available, the typical 1842-O is very well-worn with most in the VF-EF range. In About Uncirculated, the 1842-O half eagle is quite rare with probably less than a dozen properly graded pieces known. But in Uncirculated, this date is of the highest rarity.

There are exactly three 1842-O half eagles known in Uncirculated: an NGC MS63 (the present coin), a PCGS MS61, and an NGC MS60. Remarkably, I have now sold all three of these coins, meaning that there are no longer any Uncirculated pieces available.

Of the three known in Uncirculated, this example is the finest and it has a wonderful pedigree. It was last sold in Stack’s May 1995 auction for $31,900 as part of the famous collection of No Motto half eagles owned by the late dealer Ed Milas. It was earlier in the Eliasberg collection where it brought a whopping $3,850 in October 1982. Eliasberg obtained the coin from the Clapp collection and it was first recorded in the George Earle collection sale of June 1912, conducted by Henry Chapman.

A number of things appealed to me about this coin as I made the decision to purchase it. The first was that I would be able to sell it. I had a specific collector in mind but even if he passed on it, I had enough confidence in the coin to buy it “on spec.” Probably even more important was that I loved the coin when I first saw it two decades ago and I loved it even more when it reappeared. It was still in the same old NGC “fatty” holder in which it appeared in the 1995 Milas sale and, even without having access to that catalog, I knew that it had not been messed with.

As you can see from the photo above, the most remarkable thing about this coin is its color. Both the obverse and reverse have splendid rich orange-gold and coppery color. If you don’t know what “real” color on a gold coin of this era is supposed to look like (and many collectors, I’m afraid, do not…) take a careful look at the toning pattern and the hues on this coin. Note how the color is perfectly blended and how it lays on the surfaces. Note how it doesn’t suddenly become darker exactly where there is a mark (as on coin where color is applied to masks flaws). And note the richness and the “purity” of the color.

Having sold the other two Mint State 1842-O half eagles, I had a good idea of the “base line” value for a high grade 1842-O. Knowing this, I factored in the amazing appearance of the coin, its pedigree and its numismatic significance as the finest known example of a truly rare coin. This was an easy decision for me to make and I doubt that there will be many New Orleans half eagles that I buy in 2013 with more panache than the Eliasberg 1842-O half eagle.

1844-O Half Eagle, Graded MS64 by NGC/CAC Approved

By the standards of New Orleans No Motto half eagles, the 1844-O is a “common” coin. It is plentiful in circulated grades and available, from time to time, in the lower Uncirculated grades. There are an estimated two to three dozen in Mint State with most in the MS60 to MS62 range. In MS63 the 1844-O is rare and it is very rare in MS64 with around five or six known to me. There is a single Gem known (graded MS65 by PCGS) and it is ex Bass II: 937 where it sold for a reasonable $34,500. A few years ago, it was re-offered to me by a Midwestern dealer for a six-figure sum.

In my opinion, this NGC MS64 has the best pedigree of any 1844-O half eagle. It was last sold as Lot 457 in Stack’s Milas collection in May 1995 where it brought $20,900. Before this, it was Lot 434 in the October 1982 Eliasberg sale, where it brought $4,620. It was earlier in the Clapp collection and it is not pedigreed prior to be obtained by the Clapp family.

As with the 1842-O half eagle described above, this coin was in the same old NGC “fatty” holder in which it had resided when offered in the May 1995 Milas sale. It was a degree of comfort to me to know that it hadn’t changed in appearance since then.

This coin had a very different look than the 1842-O. Where the first half eagle was all about its color, this 1844-O was more about its blazing mint luster. Unlike some of the high grade 1844-O half eagles which I have handled, this piece was very frosty in texture; most of the others are grainier and present a different appearance. The Milas/Eliasberg 1844-O half eagle had lovely light to medium yellow-gold color and really the only thing keeping it from an MS65 grade was a few small marks in the left obverse field.

While the purchase of the 1842-O half eagle was a no-brainer, I had to think a little bit harder about this coin. I generally don’t care for common dates in uncommon grades. But how often do you see any No Motto half eagle in real MS64, let alone one from New Orleans? So I thought for another two or three seconds…then happily bought the coin.

1841-O Eagle, Graded AU58 by PCGS/CAC approved

Every dealer and many collectors have coins that are White Whales. If you don’t get that Ahab-ian reference, I mean an elusive coin that you are literally on a quest to buy, even if it takes years to track down. And when it becomes available…Ahab-ian things can and will happen.

While still not that widely known, the 1841-O eagle is among the most numismatically significant gold coins from the New Orleans mint. It is the first eagle struck at this mint and only 2,500 were made. It would remain the largest coin struck at a southern branch mint until 1850, when the double eagle denomination was introduced to New Orleans.

Of the 21 No Motto eagles from New Orleans, the 1841-O is the second rarest in overall rarity with around 60-70 known. This is an issue which was placed immediately into circulation and it saw hard use. When available, an 1841-O is likely to grade VF and a decent-looking EF coin is very scarce. In higher grades, I regard this issue as the single rarest eagle from New Orleans. It is unknown in Uncirculated and I believe that there are only two properly graded AU55 and finer pieces known: a PCGS AU55 in a California collection which I sold in 2007 and the present example. Having now owned both of them, I can pretty boldly pronounce that the PCGS AU58 is clearly the finest known.

If you have ever seen a typical quality 1841-O eagle, you are aware that this date just doesn’t have very good eye appeal. Most are very heavily worn and extensively abraded. More significantly, most have been processed and stripped to the point where they have zero original luster or surfaces. And that fact makes the existence of this choice 1841-O so miraculous.

While it is “only” graded AU58 by PCGS, I feel that this coin is actually Uncirculated as it has no real wear. Because of the fact that it is semi-prooflike, the surfaces appear a bit more abraded than they are in person. When I first saw this coin two decades ago, I thought it was a “baggy Unc” and I still believe this today; probably even more so.

The pedigree of this 1841-O is impressive. It was last sold as Lot 6238 in the Heritage 10/95 auction as part of Warren Miller’s collection (a set of Liberty Head eagles that is still probably the finest ever assembled). It was earlier sold as Lot 934 in Stack’s 10/86 auction and before this it was Lot 665 in the Eliasberg sale where it brought $4,400. Eliasberg bought it as part of the Clapp collection in 1942 and it was earlier purchased from the Massachusetts dealer Elmer Sears in 1920.

Of the three coins, this was the hardest to buy as it was many multiples more expensive than any other example of this date which has ever sold. But it was the coin I wanted the most. So how did I justify paying what I did?

In the last few years, the 1883-O has become the coin du jour of all New Orleans eagles. At least two AU58’s have sold for over $100,000 and this is a coin that is clearly more available in comparably higher grades than the 1841-O. I asked myself: “Self, what coin would you rather have: an AU58 1841-O eagle or an 1883-O eagle?” The answer was almost immediate: the 1841-O is an issue which I think has more upside than the 1883-O and it is an issue that is rarer; despite the very low mintage for the latter. I sucked it up, wrote a check and haven’t looked back since…

So how was your FUN show? Mine was pretty incredible actually. I was able to buy many, many impressive coins there but the three which will stand in my memory are these wonderful New Orleans pieces from the Eliasberg. This is what makes being a coin dealer fun and why I still look forward to major coin shows even after all the years I’ve spent going to them.

For more information on great New Orleans gold coins, Eliasberg pedigree gold coins or cool coins in general, please feel free to contact me by email at dwn@ont.com.

The Art Basel Fair Versus The FUN Show: An Analysis

I recently returned from a week long trip to Miami where I attended the Art Basel art fair. I went primarily to look at art and to purchase some pieces for my collection but I also went to closely observe what has become the most significant art fair(s) in the world. For a person like myself, who attends many coin shows each year and who had never been to Art Basel, I found the contrast to be both educational and totally fascinating. I thought it would be interesting to compare and contrast the annual Art Basel show with the upcoming FUN convention that will also be held in Florida. For those of you who aren't familiar with Art Basel, I think a little background information is in order. This was the 11th annual edition of Art Basel in Miami and this show is a spin-off of the original fair that is held each year in Switzerland. The main Art Basel show was held in the Miami Beach convention center and it featured virtually all of the leading dealers in the world. I believe there were in the area of 400-500 dealers and I saw booths hailing not only the United States but from all over Europe, Latin America, South America and the Far East.

I could go on and on about comparing/contrasting Art Basel with the FUN show but I will keep the points to a manageable number and try to be as relevant as possible.

*Art Basel is a far more international fair than any coin show I have ever attended. The FUN show is not an especially international show and a better comparison is the NY International show which, ironically, is held at exactly the same time as FUN and which, therefore, is now impossible for me to attend. At various times at the fair, I felt like English was a second language. It was an interesting polyglot of Spanish, Italian, Portuguese, Chinese, Russian and more. The international scope of the attendees and the material at the fair was really, really exciting.

*Art Basel has thematic dealer exhibits; something that is not typically done at a coin show. Because of the theme(s), some dealers at Art Basel had very challenging exhibits (bananas in cars, scattered boulders on the floor, odd video, etc). This was a definite contrast to the FUN show which is more straight-forward.

*A table at the FUN show for the average dealer costs around $1,500-2,500. At Art Basel, I was told that for most dealers, a table was upwards of $50,000 and that some of the prime tables were $250,000 and up. When you combine this along with the cost of attending the show, crating and uncrating the art, setting up and breaking down the booth and countless other expenses, the cost for a dealer to attend Art Basel is staggering. Thus, prices were reflective of this (more about this in a minute...)

*At Art Basel, if you weren't Puffy Combs, an A-list collector or introduced/escorted by a well-known dealer, forget it. I was ignored for three days at the main fair. At the FUN show, the average collector isn't ignored and if he is lucky, he can interact with such luminaries as Q. David Bowers, Mark Salzberg and David Hall. At Art Basel, dealers like Larry Gagosian or Edward Acquavella wouldn't have thrown water on my if I was ablaze (unless I was about to set one of their works on fire; then they would have sent an assistant to douse me).

*The iPad is clearly changing the way collectors and dealers buy and sell art. I noticed that most booths no longer had exhibit catalogs but now used an iPad to show collectors images of artists whose art wasn't on the walls or of paintings they might have had in stock but which they didn't bring. On at least two occasions, I searched for quick information about a specific artist I liked but wasn't familiar with on my iPad. You are starting to see iPads at coin shows but they seem to be more the province of dealers than collectors.

*I paid careful attention to which artists were common at the show and which were not; just like I do at a coin show. I noted an abundance of Leger, Miro, Dubuffet and Picasso. These are artists whose works typically sell for high six figures to well into seven figures. They are the art world's equivalent of High Reliefs or Stellas: expensive, beautiful and with a sexy back story but ultimately common and typically available except in the highest grades.

*Art Basel is a show that celebrates dealers and the relationship between the dealer and the collector. There are no auctions taking place during the show and it is not like FUN that sometimes seems like a huge Heritage auction with the bourse floor thrown-in as an afterthought. Art dealers have strange, conflicted relationships with auction houses and for good reasons. Sotheby's and Christie's are not only openly competing for clients but they also have retail departments, trust and estate planning services, consultation services and offer financing. This situation is a bit different in the coin markets where dealers tend to be able to co-exist, more or less, with the two major auction firms.

*I was surprised at how out-in-the-open deals were at Art Basel. I expected deals to be done in secret areas of each booth or, more likely over dinner but I saw collectors openly writing checks.

*I was also surprised at how poorly marked most booths were at the fair. I didn't expect most paintings or sculptures to have clearly marked price tags but I was very surprised at how few pieces had name tags. I was able to identify some paintings I saw but others, especially those that were from new artists or foreign painters, were unidentifiable. And there were definitely times that I didn't want to ask...

*It was hard to tell how well the art was selling. For whatever reason, many of the A-level dealers appear to think it is tacky to stick a red-dot (equating something is sold) on a $5 million dollar painting. I can certainly see their point but the dealer in me was hoping to have a vicarious thrill or two see a $5 million dollar painting with a red dot next to it.

*One of the major differences between Art Basel and the FUN show was the level of enthusiasm exhibited by collectors at the former. At a coin show, buyers seem excited to be there but at Art Basel the adrenaline level was palpable. Maybe Picassos are just sexier than Dahlonega quarter eagles or maybe I've been to so many coin shows that it's become hard for me to be excited but the buzz at Basel, especially as the week wore on, was great.

*To me, probably the most impressive thing about Art Basel was how it literally changed the entire city of Miami for a week. There were tens of thousands of people at the show and they were not bashful about booking the best rooms in the best hotels, the best tables at the best restaurants and generally pouring money into the local economy. I don't know what the impact of the FUN show is on Orlando but the average person at Art Basel, independent of his or her art purchases, was a lot more lavish than at FUN (where I have seen collectors who spend $25,000 on a coin balk at spending $250 on a nice room).

In case you can't tell, I came away very impressed with Art Basel. It was well-attended, very entertaining (unbeatable people watching!), extremely well promoted and it seemed flawlessly run. The FUN show, in my opinion, is about as good as it gets in the numismatic world but it seemed like a bake sale compared to the fair!

Some Random Observations About the 2010 FUN Show

Just like that (cue snapping fingers and whooshing sound) the 2010 FUN show came and went. For me, FUN is always productive and this year was no exception. I had a very good show and instead of the usual tedious (and self-serving) show report, I’d rather share a few random observations about the convention. *I looked at oodles and oodles of coins at the show and what I didn’t see is, to me, every bit as interesting as what I did see. Two market areas that I participate in but found virtually impossible to buy in were early gold and Type One Liberty Head double eagles. I wanted to come back from the show with at least five pieces of early gold. I returned with none. Zero. Zilch. I saw some overgraded, dipped out coins that had been around the block. I looked at an interesting deal of early quarter eagles that was priced “enthusiastically.” But I saw virtually no fresh, interesting pieces of early gold. My take on this is that most of the nice examples that have been sold in the past few years are in strong hands and people just don’t want to sell right now; especially with prices being a bit flat in this area. Same with Type One double eagles. I saw about thirty 1857-S and 1861 but virtually none of the interesting dates. I think this is due to the fact that there are many collectors interested in these coins right now (especially the better dates priced below $10,000).

*Fairly expensive coins sold very well at the show, at least for me. In the new market reality I define “fairly expensive” as $10,000 and up. I came to the show with around 20 coins that fit into this category and sold every single one. If the coin was interesting or fresh or nice for the grade, there were ready and willing buyers.

*Unlike Long Beach or some other shows, FUN seems to bring out new faces. I sold coins to four or five collectors that I had never met before.

*I was a bit surprised that Thursday seemed quiet while Friday was a madhouse. Usually, at least at FUN shows, the opposite is true. For whatever reason, people appear to have come a day later than normal. Friday was one of the busier days at a coin show for me that I can recall with two, three and even four people continually at my table buying, selling and trading. It was one of those days when I say to myself “Self, I’m hungry” and then find out its 2:15.

*One of the highlights of the show was having Dale Friend take me on a personal tour of his fantastic collection of Bust half dollars which were on display at the PCGS table. Something that Dale did which I was impressed with was choosing a “look” for his coins then not deviating from this. In Dale’s case, he decided that he liked superbly toned coins; specifically pieces that had album-style color with lighter centers darkening towards the edges. What makes this set so remarkable is that even though it was assembled from many different sources, it looks like an old-time collection that had been stored in paper coin envelopes or albums for years and years. I’m told that these coins will be on display again at the Long Beach show and if you are attending, I urge you to view them (even if you don’t collect silver) and learn a few tricks from a master collector.

*I saw Lou Piniella at the coin show. For those of you who aren't baseball fans, Lou is manager of the Cubs and a former New York Yankees great. Being a huge Yankee fan, I personally thought it was pretty cool to see Lou at the show. Interestingly, I read an article a few months ago about Charlie Manuel, the manager of the Phillies and it stated that he, too, was a coin collector. Is there some sort of coin collector-major league manager connection going on here that we don't know about?

Preparing Yourself for the FUN Show

Amazingly, the 2010 FUN is a scant two weeks away. If you have decided to attend the show (and I strongly suggest that if you go to just one show all year that this you consider this one) here is a short list of things to consider. 1. Bring a good lamp. Viewing conditions at the FUN show are not optimal and a good coin viewing lamp is essential. Try if possible to recreate the conditions that you use when you view coins at your home or office.

2. Pull the trigger on really cool coins. My gut feeling is that really good coins are going to be in short supply at this year’s FUN show. My best advice is that if you see something that looks really great or something that you’ve wanted for a long time, don’t waffle.

3. Take an hour lunch break every day. The FUN show is huge and it can be a pretty intense experience for the collector and dealer alike. I think it’s a great idea to leave the show for an hour every day in order to eat a good lunch and take a coin break. Some of the worst purchases I’ve ever made at shows have been when I’ve been tired, cranky and hungry.

4. Have a game plan. If you’ve never been to a major show like FUN, it can be really intimidating. There are hundreds and hundreds of dealers and it’s hard to know where to start. Before you go, spend time on the FUN website (www.FUN.org) and make a list of the dealers that you want to see first.

5. Look at auction lots. Even if you aren’t planning on bidding, the chance to see some of the great coins in the major sales is very educational and rewarding. The FUN sale is traditionally among the very best held each year and this year is no exception.

6. Come as early in the week as you can. Many dealers (not me...) get to Orlando almost a week before the show starts and between the pre-shows, pre-auctions and pre-show hotel room trading, they are burned-out by the time the show opens to the public. I’d say if you aren’t getting there until Saturday you are coming too late. Try, at the very least, to be there on Friday when the show opens.

7. Be safe. There have been a number of robberies after the FUN show ends and you need to remember to be safe. Don’t travel with a lot of cash, don’t display your coins outside of the show, don’t discuss your purchases among strangers and, if possible, have your expensive new purchases shipped to your home/office after the show.

8. Call your favorite dealer(s) before the show starts. Remind them what you are looking for and to hold any important coins for you until you arrive. Speaking from experience, there are a lot of distractions at the show and a gentle prod from a collector is a good way to remind me to hold a coin.

9. If you bring your family, keep them off the bourse floor. Hey, coin buying is serious stuff. Do you really need your wife and kids tagging along? The beauty of the FUN show is that the family can spend the day at Disney World while you play in the world of rare coins.

10. Don’t forget to bring pricing notes. Bring your laptop, your specialized books, your price guides, Trends, the Greysheet, etc. You want to be ready when that special coin turns up.

The 2010 FUN show begins to January 7th and if past shows are any indication, this one should be memorable. If you have any questions about the show, visit the official website mentioned above or feel free to email me at dwn@ont.com

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.

Pre-FUN Observations

I think this year's FUN show will reveal alot about the direction of the market for the year. On Wall Street, it's a known fact that if January is strong, the rest of the year is as well. I can't state this with total certainty as far as coins go but my experience is that a strong FUN generally means the rest of the year will be good as well. Early reports from the pre-FUN show (which I am not attending) are interersting. Some dealers clearly "get" the fact that the market isn't as strong as it was and that their coins need to be repriced to sell. Others appear to be in strong denial mode. If you notice minimal changes in your favorite dealer's inventory after this show, you'll quickly figure out if he or she "gets" it or not.

For me, a problem at past FUN shows has been a lack of material. I'm not sure this will be the case this year. I've already bought some pretty outstanding new coins and I have the feeling that buying this year will not be as hard as in the past. Plus there is always the looming specter of $100 milion+ in coins at the auctions.

Someone asked me the other day what the keys will be to a dealer's success (or lack of it) in 2009. I think it boils down to three simple things: ample capitalization, having good clients and having established programs to sell into. Any dealer who is weak in at least two of these three areas is in for a long year.

I'm not totally certain that the rare date gold market is going to be as easy to analyze post-FUN as is, say, the type coin or widget markets. None of the major auctions are especially strong in any of the important areas of dated gold. Early indications appear that nice pre-1834 gold seems to be doing fine, particularly if the coins have been approved by CAC. The Heritage sale contains an important collection of Indian Head eagles so we will, no doubt, get a feel for what gem examples of the rarities in this aerea are worth. But I'm afraid that areas like C+D gold, TYpe One and Two double eagles and Carson City issues won't be as easy to gauge; at least not for the next month or two.