We are already well into our third month of the year and the rare coin market is really cooking. Bullion prices are up, demand is up, bid levels are up, and sales are really climbing. Sounds good, right? Yes, I am pleased that prices are FINALLY starting to rise again, but ‘Where’s the BEEF’.
In the last several months the most common thought shared among dealers is ‘how much harder it is to buy nice coins THAN EVER BEFORE’. Let me ask again, where’s the BEEF?
As many of you know, we travel 200 days a year buying ‘fresh’ and interesting coins to fill our customer’s needs. We buy a lot of nice coins because we ‘beat the bushes’. I buy my coins the old fashioned way. I attend 35 shows a year, visit other dealers, as well as dozens of shops each month buying coins SIGHT SEEN. I don’t buy them on Certified Coin Exchange sight-unseen. I don’t buy them from photos on Ebay or the Internet. I buy them with my ‘glass’ in hand one coin at a time.
Yes, you can buy nice coins over the internet, BUT finding nice coins to buy for customers on a consistent basis means you have to put in the time looking for them. Realistically speaking, you as an individual don’t have the luxury of either the time or the connections I have cultivated as a dealer for decades. Buying nice coins is expensive too. I don’t mean expensive in regard to what the coin might cost. I am referring to the ‘cost’ of locating and buying the best coins.
Don’t get me wrong, I am not complaining. I know what discerning collectors and other dealers are looking for. On virtually all my purchases, I have to pay ‘bid’ plus a percentage over to buy NICE coins. I am more than willing to pay bid plus for nice coins. In fact, I often pay multiples of bid for incredible eye appeal or especially scarce or rare items. On a recent buying trip I spent roughly $80,000 on approximately 100 coins. I paid over bid on 75% of these coins and I was happy to be able to HANDPICK these NICE coins. REMEMBER the cream always rises to the top.
Many individuals see bids in the Greysheet (Coin Dealer Newsletter) or the prices auction lots have realized in a recent auction and think they can buy NICE coins at these levels. For example, they see an example of a date they are looking for that sold at a major auction company for 80% of the Greysheet/Coin Dealer Newsletter bid. What a bargain! Maybe the coin was a bargain, but most often the coin was a low end example. If you are looking for bargains go for it, but remember you get what you pay for.
At the end of the day, you may have purchased a couple of nice coins, but on average you are going to get AVERAGE or even low end coins. Do average or low end coins bring premiums when they sell? NO, they will bring bargain prices when they are sold by you in the future. REMEMBER the cream always rises to the top!
If you are buying generic or bullion items, you SHOULD price shop. They are common and the margins should be smaller. After all many of the bullion items are still being made! Generic coins exist in such large quantities, they are, by their very nature easy to find. Generic coins should trade at a small premium.
High end scarce and rare date or grade rarity coins DO NOT trade at small premiums. Yes, you can sneak up on a good deal once in awhile. I am always hunting for treasures. What most people overlook is the treasure itself. They are so focused on the PRICE they cannot get past the ‘bargain hunter’ phase of numismatics. Coin dealers often refer to the great coins they buy as RIPS!
Don’t miss the focus of my report. RIPS are rare coins that are great values because of scarcity and great eye appeal FIRST and then cost as compared to bid levels SECOND. Don’t miss the ‘forest for the trees’. Let me give you an example. When I set up as a dealer at my first show with another high school classmate in 1976 at the age of fifteen, I was SO focused on bid. I had a Greysheet and now I was a dealer. I bought a few RIPS, but I also bought a lot of bargains. You know the ‘funny’ part about this story is that this classmate (who is one of my best friends) realized first that QUALITY always sells while PRICE may or may not sell. What was that I said about the cream always rising to the top?
At that age I had an epiphany. IF, and this is a big IF, I REALLY liked a coin, because of unusual scarcity or eye appeal and I had to pay too much as compared to ‘bid’ the coin still sold. Go figure?
The coins I paid too much for because they were REALLY nice were always the coins other dealers wanted to look at first. Guess what? They sold first also and I almost always made money. Guess what happened with the bargains? I think you get my point. A RIP is a RIP, if and only if others agree that it is a RIP.
What I am trying to tell you as a numismatist is that finding nice coins is not easy. The lesson I have learned is somewhat counter intuitive. DON’T be afraid to pay a premium, within reason, for a REALLY nice or scarce coin. In the long run you will reap rewards, because THAT coin is the one everyone will want to buy. I have learned to politely tell individuals wanting to pay ‘back of bid’ or ‘bid’ for nice coins that I probably can’t help them. ‘Good Luck’, I tell them.
Am I running business away? Yes, in a sense, I am. I have learned that buying really nice coins is too hard to sell them too cheap. After all, I can’t replace them and most often I have paid more myself than they are willing to pay. REMEMBER THE CREAM ALWAYS RISES TO THE TOP!
Bozarth Numismatics, Inc. is a full service rare coin company. You can see our coins on our website Bozarthcoins.com, our Ebay store, or at most major and large regional shows. I also write Rare Coin Road Warrior each month and list all shows we are attending during the months following. If you are looking for high end, scarce and desirable coins with great eye appeal check us out. If you are looking for a rare or elusive item, we offer free want list services with full return privileges. Our listings are updated regularly on both our website and in our Ebay Store. We sell PCGS, NGC, and CAC certified coins. Thanks and Best Regards, Vic and Sherri Bozarth.