2007 FUN Show Review

To borrow from a Chinese Proverb, after this year’s FUN show it looks like we will be living during interesting numismatic times in 2007. I would give the FUN show a grade of B (or possibly a B+) on the Winter Coin Show Grading Scale. It wasn’t the best FUN show I’ve had but certainly not the worst. Most of the dealers I spoke with had similar mixed results.

I go to coin shows mainly to buy and from that standpoint, FUN was a rousing success. I was thrilled with what I was able to purchase (much of which is already listed on my website, FYI. I try to have the majority of my new purchases described and imaged within 24-48 of returning from a major show, even if it means working all day on Sunday). Through a combination of luck and hard work, I was able to purchase some of the most interesting United States gold coins I’ve owned in some time.

You are, no doubt, wondering what was hot at the show and what wasn’t. Unlike last years’ FUN convention where just about anything that was round and gold flew out of my case, buyers were more selective this year. I noted a lot of interest in choice, original coins (I think my years and years on the Originality Soapbox may finally be paying off!) in a number of areas. Nice, affordable Charlotte and Dahlonega issues in all denominations were in demand but were, as usual, hard to find. Rare Liberty Head double eagles were highly sought after as were interesting, truly rare early gold coins. Carson City gold also seemed to be in strong demand, especially rare dates in higher grades and nearly all CC double eagles priced in the $1,500-15,000 range.

What wasn’t hot? Coins which were schlocky. By this I mean coins which had an obvious “processed” look; items which, although over 100 years old, had surfaces which seemed irradiated. These were nearly impossible to sell, although they were very easy to buy. Generic gold wasn’t helped by the fact that bullion dropped around $30 per ounce while we were at the show.

I had wondered if the gigantic Heritage sales would take the wind out of the FUN show. While over $75 million in coins sold at auction in the space of just four days, it didn’t have as big an effect as I thought. No, there were no Numismatic Tumbleweeds blowin’ down the aisles while crowds swarmed at the auction. I guess if you had a coin like a 1930-S eagle (of which there were no less than five in the Heritage auction) you were going to have a hard time selling it at the show. But if you had nice, attractive coins they were selling.

Being the Numismatic Contrarian that I am, my FUN strategy was probably different than most other people. Instead of focusing on the auctions as a place to buy coins, I figured that I would aggressively pursue my various dealer contacts on the bourse floor. As I mentioned above, I think it really paid off. There weren’t all that many interesting dated gold coins in the Heritage sale but I found many neat items on the floor.

You might also be curious to know what my take was on the Heritage sale. Basically, any really fresh, really nice coin brought big bucks. Tired coins brought prices which ranged from downright cheap to surprisingly strong. There were instances where too many examples of the same date or same type appeared in the sale and in these instances, the lower quality coins tended to really suffer. I will be very interested to see how many of the big coins which were sold reappear in sales a few months from now and how many go away. I’m guessing more of the latter than the former will occur.

One observation I made from attending the auctions is that the day of the Instant Expert Investor may be coming to an end. The market has been so good for the last few years that it was possible for a new investor/collector to roar through a high dollar set in a year or two, place it in an auction and reap good rewards. In my opinion, these days may be coming to an end. In 2007, buyers seem to be more sophisticated than in the past and they will pass on certain coins in order to merely fill holes. This is just fine with me as I have been preaching patience when in comes to collecting for as long as anyone would listen.

I will be adding some more comments about the show in the days to come and invite you to check back for these.

Coin Price Perspectives

If you ask ten knowledgeable people if coins are too cheap or too expensive, you’ll probably get ten different answers. I think certain coins are clearly too expensive but I think others are dirt cheap. Read on for my explanation. Coin prices depend a lot on perspective. I’ve been involved with coins since the 1970’s and in the market as a professional since the early 1980’s. I’ve seen markets go up and go down and watched the cycle repeat itself. As 2007 begins, I think there are certain coins that seem very pricey; primarily due to the fact that they’ve been promoted and that these promotions appear to have run out of steam.

Let me give you an example. Everyone knows that Indian Head quarter eagles have been brilliantly promoted for the last four or five years. During this period of time, the key issue, the 1911-D rose dramatically in price -as it should have. After all, hundreds of new collectors starting working on Indian Head quarter eagle sets and everyone needed a 1911-D.

When the Indian Head quarter eagle market was at its frothiest (in late 2005 to early 2006), an MS63 1911-D would have cost you around $30,000. When the Indian Head quarter eagle series was first being promoted, back in 2001, you could have bought a 1911-D in MS63 for $9,000-10,000. This coin tripled in value in five years and actually became somewhat more available during this time period due to relaxed grading standards. In retrospect, $9,000 for an MS63 1911-D seems pretty cheap while $30,000 for the same coin in MS63 seems pretty pricey. Or is it? If the promotion had continued for another five years, could the 1911-D risen to $50,000 or even $75,000 in MS63? My guess is that, yes, it could have (although I certainly wouldn’t have wanted to buy an MS63 1911-D quarter eagle for $50,000…)

Coin market observers (including, alas, myself) tend to think small and don’t often look at the big picture. The fact is that there is a tremendous amount of wealth in the United States right now and not a lot of places that wealthy individuals feel safe putting some of their excess cash.

If you follow the art market at all, you might have noticed that auction prices for Contemporary Art in the past few years have truly gone through the roof. It is not uncommon for good but not great examples of paintings by relatively good but not great Contemporary painters to sell for well over $1 million. In fact, in the upper echelon of the art world today, $1 million does not buy you very much at all.

We know who is buying many of these paintings. Hedge Fund managers and other successful Wall Street types have targeted Contemporary Art as their “Place To Make A Splash.” And why not when many of these individuals got $5 million, $10 million or even $20 million dollar bonuses this year? When you already own a killer apartment in Manhattan and a great weekend house in The Hamptons, what’s a million dollars here or there on a nice piece of art for the walls?

So what would happen if a small number of these Hedge Fund Superstars got interested in coins? They already have the perfect personality to be coin collectors and many of them probably dabbled with Lincoln Cents and Mercury Dimes when they were kids.

If you are brand new to the coin market and you have this kind of discretionary income, coins seem dirt cheap. Just the other day, I was talking to a client of mine about purchasing a major rarity in an upcoming auction. This is a true museum quality coin and one of the two or three finest known examples of an issue with probably less than a dozen known. To buy this coin, he’ll probably have to spend $125,000 or so. To you and me, that’s a lot of money. But to someone who sees “unspecial” paintings selling at Sotheby’s auction for $2.5 million+ this seems very cheap.

Clearly, these Hedge Fund guys will see their salaries come down to earth someday, possibly soon. But what if, in the meantime, a few of these guys started buying coins? And what if I told you a small but meaningful number of them already are?

The result of this, I suppose, will be an even further bifurcation of the market. The meat and potatoes coins that most of us buy and sell on a routine basis will go up and go down but shouldn’t be affected by Harry Hedge Fund’s foray into coins. But what about coins that are extremely rare or those with great stories or those which are finest known? My guess is that coins like this could get really expensive. Because, if you really think about it, the truly great coins out there actually are dirt cheap when you compare them to other collectibles.

2007 FUN Show Preview

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

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

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

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

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

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

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

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

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

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

Can You Determine a Market Trend From One Auction Result?

Can you determine a market trend from one auction result? A few mixed results from a recent coin auction caused a number of clients to call me and ask me this question. My answer(s) were that, in each case, I did not feel that changes in the market could be determined from these results. Let me be more specific. In the November 2006 Heritage sale there was an 1845-O quarter eagle in NGC AU53 offered as Lot 1937. If you’ve read any of my articles on New Orleans quarter eagles, you’ll know that I LOVE this date and almost always try to buy it. But this coin was an exception to the rule.

Although you couldn’t really see them in the Heritage online images, this 1845-O quarter eagle had some really detracting marks on the surfaces. They were the sort of marks that, eight out of ten times, NGC would have no-graded the coin in question for “damage.” Which was sort of a shame, as the coin, with the exception of the marks, was not bad looking. But I decided to pass on the coin as I though the marks made it too hard to sell.

The coin was reserved for somewhere in the $5,000 range which means that it could have been purchased for $5,750 including the 15% buyers charge. In my opinion, $5,750 for an AU53 1845-O quarter eagle is very reasonable. Except in this case.

After the sale, a client called me (one who owns a nice AU58 example of this date, by the way…) and asked me if the fact that this coin didn’t sale indicated a weakness in the market for 1845-O quarter eagles. I told him that I didn’t think so, given the fact that the coin in question was not very nice.

Another lot in the same sale provided another interesting test case. This was an 1879-O double eagle graded AU50 by NGC and it was Lot 2570.

If you follow New Orleans double eagle prices at all, you know that nearly any 1879-O that has been offered at auction in the past four or five years has sold for full Trends or, in many cases, considerably more. But the 1879-O in this sale sold for around 75-80% of Trends. Did this suggest, my client asked, that the market for this date was getting weak and could he finally buy one for a reasonable price?

I had viewed this coin in person and hated it. I thought it had zero eye appeal. It was not only overgraded, in my opinion, but it had some detracting spots as well. Apparently other bidders agreed with me as well as it brought at least $5,000 less than what a nice looking example would have.

Does this weak auction result mean that the market for 1879-O double eagles is tanking? Not in the least. Now, if this trend continues for the next two or three times that an 1879-O is offered, my opinion would change. Especially if any of the future coins that sell cheaply happen to be nice for the grade.

The bottom line is this: I do not think you can make any profound analysis about values decreasing (or increasing) for a specific issue based solely on a single transaction.

Assembling a Set of Liberty Head Eagles

Let’s say you want to assemble a set of Liberty Head eagles. You’ve got a daunting task ahead of you. This design lasted from 1838 through 1907 and it features over 180 issues including numerous rarities which are very expensive and/or extremely rare in higher grades. Unless you have a large coin budget, you are going to be priced out, right? Maybe you just need to look at gold collecting differently. How about doing a year set of Liberty Head eagles? A year set includes one example of every year in which this design was produced; in this case a total of seventy years. By choosing a year set (instead of a date set), the collector can significantly reduce the number of coins he needs to complete a set.

Another great feature of a year set is that you can avoid having to buy prohibitively rare and expensive issues like the 1875. The year set collector can fill his 1875 hole with a far more affordable 1875-S or 1875-CC.

The two most intimidating things about assembling a date set of Liberty Head eagles are the length and the cost. As I just pointed out, a year set reduces both of these immeasurably. It also allows the condition-oriented collector the chance to pursue higher grade coins.

Take, for instance, the eagles struck in the year 1849. There are two: the Philadelphia and the New Orleans issues. The former is relatively affordable in comparatively high grades (the collector should be able to find an MS60 to MS61 coin for around $5,000) while the latter is not only expensive in higher grades (an MS60 if available would sell for $30,000+) but it is incredibly rare.

Even the collector on a relatively tight budget can participate in the Liberty Head eagle series. How about a 20th century Liberty Head eagle set? This would consist of 21 coins, produced from 1900 to 1907. The beauty of this set is that every single date can be purchased in MS60 or better and most of these dates can be found in reasonably high grades for under $1,000.

What if you only buy Gem coins and can’t “deign” to own anything below MS65? How about a year set of 20th century Liberty Head eagles? This consists of just eight issues and every one can be found in MS65 (or in some cases better).

It’s about time that the popularity of Set Registry collecting which has fueled the market for 20th century gold coinage starts to take hold with the far rarer but less popular issues from the 19th century. How many collectors who pay $50,000+ for a St. Gaudens double eagle with an in-grade population of, say, ten or more (plus others in higher grades) would reassess their collections if they know that they could buy far rarer Liberty Head eagles for a fraction of the price?

Are date sets of Liberty Head eagles going to suddenly replace St. Gaudens double eagles as the hot new trend in gold collecting? Probably not. But what if set collecting of Liberty Head eagles were better marketed? What if more (and better) categories for these existed in the PCGS and NGC Set Registries? Could this change in the next few years? I contend that this is a possibility. After all, who would have ever thought that collectors would pay $10,000++ for high grade modern coins?

Rating the Numismatic Auction Companies

For better or worse, auctions have become a more integral part of the numismatic scene than at any time in recent memory. In 2006, hundreds of millions of dollars worth of coins traded at auction and a number of price records were set. How do I rate the auction companies and what are their strengths/weaknesses? I thought it would be interesting to share my opinions of the five major American numismatic auction firms. There are five categories that I feel are important to consider: catalogs (and the ability to accurately catalog coins), websites (ease of use, usefulness, technology, content and images), customer service (how well do these companies handle problems), prices realized (what types of coins bring the most money at each sale) and overall strengths and weaknesses. Each of these categories is then ranked as follows: excellent, very good, good and poor.

1. Heritage: In the past few years, Heritage has clearly become the industry leader. It is now common for Heritage to conduct a $20-30 million dollar sale which features a huge variety of coins ranging in value from a few hundred dollars to hundreds of thousands of dollars. Heritage has become dominant for two reasons: their use of technology is incredibly innovative and they are extremely aggressive when it comes to securing consignments.

Catalogs: Heritage produces a good catalog. Their use of graphics is exceptional and the design is far more professional than any other firm. Their photography is not as good as certain other firms but I would attribute this primarily due to the fact that they tend to have so many more coins for sale that they can not spend enough time on quality control. I regard their cataloging as good to very good. They write nice, accurate descriptions of coins but tend not to have enough time or manpower to do much in-depth, original research.

Website: No one has a numismatic website with more useful bells and whistles than Heritage. It is incredibly easy to bid online in their sales and their auction archives feature is wonderful. My one complaint about the Heritage website is that it is a bit cold and impersonal. But its overall ranking is excellent and no other numismatic auction firm even comes close.

Customer Service: Since Heritage sells more coins than anyone else, they make more mistakes. But I’ve found them to be excellent at dealing with these issues in a timely and fair fashion. I would advise the collector to find someone at Heritage they like and build a long-term relationship with that person. I personally recommend Sam Foose.

Prices Realized: Prices in a typical Heritage sale tend to be strong, especially due to the fact that they have dramatically more retail buyers participating than anyone else. The areas that Heritage does best in are 20th century issues and Registry Set quality coins. Their weakest areas tend to be the more sophisticated, esoteric areas that Stack’s/ANR excel in.

Strengths and Weaknesses: Heritage has the best website and the greatest number of bidders of any numismatic auction firm. They are extremely easy to do business with despite their size. My major complaint with Heritage as a consignor is that their sales are way too big and coins can get lost in 5,000+ lot sales. But they are clearly the leader in this segment of the market and this does not appear to be changing any time soon.

2. Stack’s Rarities: In the fall of 2005, Stack’s and American Numismatic Rarities merged. I am basing my ratings for this new firm primarily on ANR as I’ve had many positive experiences with this firm in the past unlike Stack’s who I have not.

Catalogs: ANR, hands down, had the best catalogs in the numismatic auction business. No one does a better job of cataloging coins that ANR, especially rare and esoteric items like tokens, medals and colonials. With the exception of colonials, I thought Stack’s cataloging was inconsistent, at best. Stack’s color photography was exceptional while ANR’s wasn’t as good. Assuming these firms can combine the best of each world, their new catalogs should remain the best in the industry.

Website: Stack’s website was very poor for many years but in the last two or three years it improved considerably. ANR’s was decent but could have stood to have been updated and given a technological makeover. The new combined website is good to very good but it still is long ways away from comparing to Heritage’s.

Customer Service: I always thought ANR had excellent customer service while Stack’s was poor. It will be interesting to see whether the new firm is friendly and “small townish” like ANR or rude and “New Yorkish” like Stack’s. My two “go to” people at ANR have always been John Pack and Cynthia LaCarbonera and I think very highly of both of them.

Prices Realized: ANR and Stack’s were both capable of realizing extremely strong prices for fresh, original collections. Their prices for the more mundane meat-n-potatoes items which constitute the bulk of most sales were never as strong as Heritage’s due to the fact that neither firm had an active online bidding presence.

Strengths and Weaknesses: It will be interesting to see how the combination of Stack’s and ANR works. There is a tremendous amount of talent present at the two firms although this talent tends to be more academic while Heritage’s is, in my opinion, more market-savvy. I would expect that the new Stack’s Rarities firm will never replace Heritage as the top dog in the numismatic auction world but it will continue to at least keep Heritage from getting too complacent.

3. Bowers and Merena: The last few years have been a roller coaster ride for Bowers and Merena. As recently as the early part of this decade, Bowers and Merena was one of the major forces in the coin auction business. A disastrous stretch during the middle part of the decade almost destroyed this firm’s reputation but the last year or two have seen considerable improvement.

Catalogs: The graphics and design of a B+M catalog are good but the overall quality of the cataloging and the images could stand improving. However, I have noted a marked change for the better in the past year. B+M still needs to hire photographers who can make coins not look like lumps of coal.

Website: The B+M website is attractively designed but it does not have many interesting features. Bidding online is easy and secure. I would rate their website as good but it could certainly stand to be improved.

Customer Service: I have had a few problems in the past with B+M but they have always been resolved to my satisfaction. The biggest problem that this firm has had in recent years is considerable turnover which makes it difficult to establish a relationship with a capable person. I would personally recommend dealing with Debbie McDonald as I have found her to be very competent and honest.

Prices Realized: In the past year or two, Bowers and Merena has begun to create a niche as a company who is able to get strong prices in the various 20th century series. Their ability to get collections which are strong in 18th and 19th century material is not yet as well developed.

Strengths and Weaknesses: After a rough few years, Bowers and Merena has established itself as a strong #3 in the coin auction business. But in order to become more competitive, they will have to show they are capable to doing something that distinguishes themselves from their competitors.

4. Goldbergs: As someone who runs a niche business himself, I admire the fact that Ira and Larry Goldberg have a clearly defined goal as a company. They do not want to be as big as Heritage and they want their sales to be small, manageable and held in their own backyard of Beverly Hills. They have created a well-run, solid company that consistently offers good coins.

Catalogs: I think the Goldberg catalogs are very nicely designed with excellent graphics. Their cataloging is weak and their images appear to be enhanced. I would not personally feel comfortable bidding on a coin in one of their sales based on the image in the catalog.

Website: The Goldbergs website is solid if unspectacular. It is sometimes hard to find a specific coin due to an unsophisticated search feature. I do not personally care for their online images although I think they look more realistic and accurate than the ones in their catalogs.

Customer Service: The level of customer service in this firm is very good and when problems arise it is easy to deal directly with one of the owners. I personally recommend dealing with Glenn Onishi who I have known for many years and who I think is extremely trustworthy.

Prices Realized: Like any coin auction firm, the Goldbergs can get great prices for fresh, original deals. They tend to have recycled dealer consignments in their auctions and these coins typically bring exactly what they are worth. My one complaint with their sales is that some coins are too aggressively reserved by consignors.

Strengths and Weaknesses: If you live on the West Coast, this firm is a good resource. I’m not certain that I would travel all the way from the East Coast just to attend a Goldberg sale but the fact that they are typically held in conjunction with the Long Beach shows makes them convenient for dealers. The best compliment I can give this firm is that if I were creating an auction company, it would have many of the same basic goals as the Goldbergs do.

5. Superior: This is another firm that appears to have seen better days. Back in the 1980’s and 1990’s, Superior sales were massive and featured extremely interesting coins. In the last few years, the volume and quality of their sales appears to have shrunken considerably although they still get the odd interesting fresh deal every now and then.

Catalogs: Superior’s catalogs are unimpressive from a visual standpoint. Their cataloging is underwhelming and their images are poor. To remain competitive in the marketplace, they will have to improve in these areas.

Website: Not to pick on Superior, but their website is by far the worst of the five firms discussed in this report. It is confusing, sloppy and difficult to navigate. This is another area that will require a comprehensive overhaul by the powers that be at Superior if they are going to remain relevant in this increasingly web-driven business.

Customer Service: I’ve found customer service at Superior to be well-intentioned but erratic. One person at Superior who is very competent and knowledgeable is Larry Abbott. I have also had good experiences with Paul Song.

Prices Realized: Prices at the last few Superior auctions have ranged from very strong to indifferent. These sales are generally not well-attended and have little retail participation.

Strengths and Weaknesses: The numismatic auction business is very competitive and Superior finds itself (currently) lagging. The future of this firm depends on whether or not they can retain their key personnel. I’d guess that if Superior’s next two or three sales are not successful then the signs are ominous for their future.

Factors That Determine a Good Coin Show

I hate to think how much time I’ve spent at coin shows. As an example, I’ve been going to Long Beach for 24 years now. Long Beach shows are held three times a year (that’s 72 Long Beach shows) and I’m there an average of three nights. Which adds up to a total of at least 216 days spent at Long Beach shows or, gulp, nearly three-quarters of a year. There are clearly good coins shows and bad coin shows. What are some of the factors that make a coin show good and why do some thrive while others languish or die?

1. Location: I live in the far upper left corner of the United States so every location is tough for me to get to. But I can endure endless plane flights to Orlando for the FUN show or to Baltimore (two or three times a year) because these are first-rate shows where I do a lot of business. A good coin show needs to be in a heavily populated area and in an area that is regarded as being “good” for coins. It is hard to explain why a wealthy, vibrant city like San Francisco is not a good coin town but it is pretty easy to venture a guess that St. Louis (a site of numerous conventions) is a really bad coin town. New York would seem to be a great location for coin shows but the price of putting on a good show in Manhattan makes it prohibitive for most promoters. I’ve often wondered why there aren’t more shows in Chicago—it’s in the center of the country and home to many collectors but for whatever reason there hasn’t been a major show in downtown Chicago for years.

2. Facilities: I don’t even want to attempt to figure out how many days of my life have been in spent in convention centers across the United States. After a while, the convention center in Pittsburgh seems to blend into the facility in Kansas City which appears to look like the building in Denver. But I will say that a nice, convenient location sure beats spending a few days in the basement of some ratty motel. I can remember coin shows back in the 1980’s that were held in underground garages and others that I half expected my lunch to be carried off by vermin. Unfortunately, a nice facility does not guarantee a good show. The Palm Beach show which died a fast death last year was held in a beautiful new facility in a great city. The bad news was that the closest hotel to this facility was a long walk and just try to get a flight from Portland, Oregon to Palm Beach, Florida…

3. Timing/Conflicts: One of the reasons why everyone loves the FUN show is that it’s held in a (usually) sunny climate in a month that’s traditionally gloomy and awful if you live in much of the non-tropical parts of the country. If the FUN show were held in Boston in January, I don’t think it would quite as popular. Another important factor to consider about a show is its conflicts with the traditional coin circuit. If I were starting a brand new show I would make certain it isn’t competing against a major convention and I would also be sure that it wasn’t being held a week or two after a major show. I suffered from a major case of “show burnout” in 2005 and 2006 and the conventions that I decided not to attend were the ones held too soon after major shows.

4. Public Attendance: This is less of a factor for me today than it might have been in the past. Many of my clients do not attend coin shows and prefer to do business with me via private treaty. And with just a few exceptions, I look at coin shows as opportunities for me to buy and sell coins with dealers. The exceptions to this are the major shows like FUN, ANA, Central States and Baltimore. I typically meet a number of collectors at these shows and I tend to stay longer, in an attempt to be “retail friendly.” The bottom line is that a show with good retail attendance has a much better buzz than a show that seems like a morgue and this translates to a better overall atmosphere.

5. Major Auctions: Every major show has a major auction which is held in conjunction with it. You can have a major auction without a coin show attached to it but you certainly can not have a major show with an auction to bring in collectors. One of the problems that new shows face is the difficulty in getting an auction company to commit to holding a major auction. At this point, the only big show that does not have an auction which I consider first-rate is Baltimore but even this seems to be changing as Bowers and Merena is attracting more interesting and better consignments. At other shows, like FUN or ANA, the problem tends to be too many auctions and not enough time to get these auctions done.

6. Grading Services In Attendance: If PCGS and NGC aren’t at a coin show, no fresh coins get made and the show is a waste of time. This may not necessarily be the case for a collector but for a dealer it goes without saying that “if the coins aren’t being made than the dealers aren’t getting paid.” I can’t think of a single coin show that I’ve attended in the past few years that was worthwhile when one or both of the major services weren’t in attendance.

7. Miscellaneous Factors: I can think of a few other factors that separate the wheat from the chaff as far as shows go. If the best hotel option is a Motel Six, then I’m probably not going to be anxious to get a table at a show. The same goes for the ability to fly into a town. If I’m traveling with coins and I have to change flights three times or fly a tiny commuter plane, I’m either going to come without coins or, better yet, not go at all. Safety is always a factor with me. I do not like going to shows in downtown Detroit or St. Louis because, in all honesty, I don’t feel safe. By the same token, I’ve always thought that suburban venues were sterile and boring and it’s sad when your best dining option after a hard day’s work is Applebee’s.

In summary, I think there are too many coin shows and I, for one, have decided that I will not be attending as many of them in 2007 as I did in 2005 or 2006. I’m not certain if other dealers will do the same (everyone complains about there being too many but everyone is too greedy to not go to every major show) but I predict that whenever the market gets soft, some of the shows that seem healthy now will either contract or fade away altogether.

November Baltimore Show Review

Great crowds, a strong gold market, a daily ration of Lobster rolls from the nearby Legal Seafood Restaurant, amazing Spring-like weather…what more could you ask for at the third and final Baltimore show of the year? It was an excellent show and one of the few in some time that had me wondering if I wasn’t leaving too early when I boarded the plane at BWI airport late Friday evening. Baltimore has clearly become the #3 coin show, trailing only the FUN and ANA conventions and the Fall edition is, in my opinion, easily the best of the three held each year. Thursday was a day given over primarily to wholesale trading and it was one of the busier days I can remember having at a coin show all year. From the minute the show opened until it closed that day, I was busy buying and selling. In the course of one three hour burst in the middle of the day, I sold three six-figure coins including a Stella in PR66 and a very rare piece of Proof gold.

It was really easy to sell coins at this show, provided that the coins were interesting or fresh. Given the fact that I had a number of interesting, fresh coins in my inventory, it was clearly a great selling show. Buying was another story altogether. There were just not a lot of interesting coins at the show. I spent much of Friday pounding the pavement looking for interesting gold coins. I did find a few great items (all of which are listed on my website with descriptions and images) but would have liked to have purchased more.

If you collect Carson City gold coinage, I have a major announcement to make. I am working on acquiring two important collection of Carson City gold with an emphasis on eagles. I hope to have these available in a few weeks and when I do, you will have the opportunity to acquire numerous important coins including a few Finest Knowns and many Condition Census pieces. For more information, please feel free to email me.

The Stack’s/ANR sale held prior to the show did not contain much in the way of rare date gold coinage. It did contain some amazing Washingtonia from the fabled Norweb collection and prices were, in most cases, remarkable. Still think that a good pedigree doesn’t make a difference to buyers? Try explaining that to the room full of buyers at this sale.

One of the most remarkable items in the auction was a unique presentation medal awarded to Zachary Taylor and struck from the first gold found in California in the original Gold Rush days of 1848. It was massive (weighing a pound), it was gorgeous, it was fresh to the market (having been consigned by descendants of President Taylor) and it was accompanied by its original presentation box. It sold for $460,000 which is almost certainly a world-record price for a United States medal.

I did not participate in the Bowers and Merena auction held during the sale because it contained virtually no gold coins of interest to me. I was told that a number of Registry Set quality 20th century coins sold for very strong prices including a PCGS MS67 1941-S half dollar which brought an amazing $90,800 (!). Its probably not my place to comment here about this purchase and I’m certain that the new owner is happy with his coin but $90,800 is A LOT of money for a 1941-S half dollar, especially given the fact that a nice MS66 can be readily bought in the $2,000-3,000 range. This is an example where I think two bidders kept pushing and pushing in a display of who is more macho and the winner may well have been the loser. (But you have to think the consignor, at least, was thrilled…)

Gold jumped up quite a bit right before the show began which gave generic issues a nice little upward push. The generic market is still not exactly healthy but buyers were more active than at any show since ANA in this area and this translates to greater overall liquidity in the market with more money available for rare coins. It will be interesting to see what generics do in the next thirty days and if they continue to trend upward, I can’t help but think this will be a good thing for the coin market in general.

For me, the 2006 edition of the coin market is pretty much drawing to a close. I am not attending any more shows until FUN in January 2007 and plan on taking some much-needed vacation time in December. I do plan on going to Dallas in mid-December to look at FUN auction lots in what, rumor has it, could be the most valuable coin auction of all time.

Getting back to the Baltimore show for a second, I’d like to answer a question someone asked me the other day. Why has this show grown and prospered in the past few years while the Long Beach show seems to have lost some its luster? I think the Baltimore show is doing a great job of promoting itself and it has, at the very least, doubled in size in the past year or two. In addition, it is now for all intents and purposes the only show of any consequence on the East Coast. When I was growing up in New York, there were major shows in New York, Philadelphia and Boston every month or two. Today, all these shows have fallen by the wayside and the many thousands of serious Eastern collectors are left with Baltimore as their closest convention. One has to wonder if someone isn’t missing the boat not trying to put on a good another good show on the East Coast; perhaps in Philadelphia or a site close to Manhattan.

Which Coins Are the Best Investment?

A potential new client recently asked me a basic but interesting question: which gold coins are the best investments? As those of you who know me realize, I don’t really tout coins as an “investment.” But I want my customers to make money on the coins that they purchase from me and I try to steer them towards pieces that I think will appreciate in value over the course of time. In my opinion, there are a few factors that make specific coins a good investment and which should perform well. Some of these factors are as follows:

1. Liquidity: Does a specific type of coin sell very quickly when I list it on my website or does it tend to languish for an interminable period of time? I notice that certain coins are consistently good sellers. Generally speaking, they fall in the “sweet spot” pricing range of $2,500 to $7,500. They are usually coins with an interesting history and pieces with good aesthetic appeal. As a rule of thumb, the more expensive a coin is the less liquid it becomes (although, in the last three to five years, very expensive coins and ultra-rarities have been remarkably liquid). As I told the gentleman who inquired about coins as investments, the pieces that are the most liquid are the best to own.

The “quality of liquidity” is important as well. Will the person most likely to buy your coin(s) be a specialized collector or a dealer? I personally like coins that I can sell to end-users as opposed to dealers who will look at them primarily as commodities and be more conscious of price than quality.

2. Popularity: Popularity and liquidity are not the same thing. A coin can be liquid but be a part of a not especially popular series (an 1838-C half eagle is an example of coin that is very popular but it is from a series—Charlotte half eagles—that I would not describe as being immensely popular) while a popular coin can be relatively illiquid (an example of this would be an unappealing, lower grade High Relief which most collectors would probably pass on and spend a bit more money to acquire a nice piece). An excellent collection could be created out of nothing but very popular coins—pieces like 1861-D gold dollars, 1839-O quarter eagles, 1838-C and 1839-D half eagles, 1838-D and 1839-D half eagles, 1838 eagles, 1861-O double eagles, etc. I refer to issues like this as the “Krugerrands of Rare Date Gold” as they are coins that are almost like cash.

In the same vein, I am an advocate of “absolute rarity” as opposed to “condition rarity.” A coin like an 1841-O eagle is rare in all grades and I will buy any example I can find, unless it has been harshly cleaned or damaged. An 1843-O eagle is not a rare coin in lower grades and I will generally not purchase a piece unless it grades at least AU55. Give the choice of owning a nice EF40 1841-O eagle or an AU55 1843-O eagle, I would personally rather have the former.

3. Rarity: It would seem obvious that the rarer the coin, the better the investment it is. This is actually not always the case. If a coin is very rare but it is part of a series that is not popular and/or readily liquid, then it may not necessarily be a good investment. An 1846 eagle is a genuinely rare coin that is nearly impossible to find in any grade higher than EF45 to AU50. If I were offered a nice, original AU55 I would certainly purchase it. But this is a coin that I would not expect to sell quickly and it might actually take me a number of months to move it. The problem with this coin is that it is a member of a series (Liberty Head eagles) that does not have many specialists and it is a Philadelphia issue.

The perfect “investment quality” coin is one that is not only rare but which is popular and liquid. A coin that scores highly on all three of these fronts is one that should perform well.

4. Historic Price Performance: With the advances in price dissemination available to collectors, it is easier than ever to track how coins have performed over the past three to five years. We have been in the midst of what is ostensibly the greatest sustained bull market in numismatic history and if a specific coin hasn’t done well since the early 2000’s, than the chances are good it isn’t going to do very well when this market finally cools off.

By the same token, an investor wants to avoid a coin that is currently at an all-time high in price. If you look at the price levels for a coin like a 1911-D quarter eagle in Uncirculated, you can see that it was selling for considerably more money by the beginning of 2006 than it had at any time since the halcyon days of the late 1980’s. It didn’t take a rocket scientist to figure that the 1911-D had probably risen to the point where it was no longer a good value. And this is exactly what has happened, as the value of this issue has dropped 10-20% in the past few months.

If you are a bottom-line oriented coin buyer, avoid issues which appear to be at a market peak. Conversely, being a total contrarian might not be a great idea either. The perfect coins to buy are those that have shown some price increases in recent years but whose price levels still make sense, considering their rarity and grade.