By Jim Bisognani for Numismatic Guaranty Corporation….
A Pogue In The Hand Is Worth?; Difficulty Accurately Pricing Rarities; Hop To It; Try Chasing A Kangaroo
It seems like in a wink of an eye winter in New England turned to spring and before I knew it summer is upon us. Memorial Day signals the unofficial beginning of the summer season (a sizzling 90° day as I write this confirms it!) and with that holiday, numismatists can count on the annual pre-Long Beach sale by the Goldberg’s in downtown Los Angeles (May 31-June 2) guiding the numismatic procession to the summer edition of the Long Beach Expo running June 4-6. Dealer participation and collector attendance is expected to be heavy in this SoCal venue. While not on the bourse, many will be taking in the host Signature auction by Heritage scheduled June 2-8. In total these two auction houses will feature a little over 8,000 lots for collectors and dealers to view, analyze, scrutinize and set price thresholds for bidding while trying to acquire coins for collections as well as for inventory.
Yet as a longtime dealer friend of mine recently stated, “There are so many auctions and yet so few coins”—perhaps a bit confusing, yet this is true. My dealer friend was referring to the unrelenting avalanche of certified coins which appear at auction live and online, yet so many of them have appeared with more frequency than a favorite rerun television episode in syndication.
Tens of millions of coins have already been graded and encapsulated by grading services giant NGC according to the NGC Census report for dealers and collectors to see. Along with an updated price guide and auction results, the market for US and world coins has never been as transparent and liquid as it is now.
As we roll into summer, a California dealer advised me that he views the current market as a great opportunity. “Prices are softer than they have been, and the flood of coins onto the market surely won’t continue. It would be prudent to buy now and ride it out. The transparency level of auction records makes coins even harder to sell, so we’ve had to make new policies when it comes to buying instantly accessible auction record coins online. No longer can we rip a coin or can one simply fall thru the cracks. Everyone immediately knows what you paid for it.”
My learned colleague believes last year was a challenge with all the coins that were hitting the market at once, auction after auction. This year seems to be almost the opposite. “Very few truly great coins are coming out thus far, but we are still just trying to absorb everything that hit the market in 2014. Now everyone has Pogue on the mind, which certainly hurts.” According to this Golden State dealer, much of their client base isn’t looking for Pogue related coins so that shouldn’t hurt them too much. “It’s just more money taken out of the market when we’re already so thinly capitalized as it is. So a Pogue in the hand is worth?”
When these higher echelon coins sell there comes the tricky market pricing equation. There have been so many high profile auctions recently where records have been established. I applaud the record-setting iconic gems of yesteryear. The notoriety, the excitement and the publicity introduces new hobbyists to this great field. For data geeks like me it just becomes very hard to establish accurate price parameters!
While there are buyers for all coins and at all price points, rarities, true rarities are a different animal.
Usually with a numismatic rarity if there are only a handful or perhaps one or two coins known to be available outside of let’s say the Smithsonian, there will only be a limited amount of viable action at auction for these high value and iconic coins. So if a majestic gold coin sells for half million dollars at auction and establishes a new record price for a coin in that grade, it doesn’t necessarily warrant that a wholesale dealer price valuation is immediately elevated to that half million dollar level.
The reason for this, in my book, is that the coin sold at auction is truly a retail setting. Beyond the coin’s own merits there is often pre-auction hype, excitement on the auction floor and many emotional considerations, all of which can lead a coin to achieve a record price. Perhaps it was to complete or add points to a Registry Set. Then once the coin has sold at auction, what is the true market value?
For one it depends where the under bidder is on that particular coin. If the collector or dealer that bought a half million dollar coin puts the coin back in the market at public auction then that cosigner is no longer in active pursuit for that coin.
So if that exact coin appears on the market a year or so later and only brings say $350,000…you see it becomes very difficult to accurately gauge the true market value. There are numerous dealers that will say “of course I would pay X amount of dollars for a particular coin” but the truth is most of the time those verbal bids are not anywhere for the public or even other dealers to see. That is why for the average collector it is a lot easier to gauge auction results and secure a premium coin at an accurate price point. If you are chasing a specific coin and there is a sufficient population, auction appearances and retail sales prices will not vary by much.
For seasoned collectors or new hobbyists perhaps a change of pace is warranted this summer. Give some foreign coins a chance and perhaps recharge; the fun and excitement of the hunt awaits. British Commonwealth countries have always been a favorite of mine, so many attractive and topical designs to entice us.
Try chasing a kangaroo featured on the Australian Halfpenny and Penny. Has there ever been an animal more immediately identified with the country than the kangaroo? Certainly a modern yet popular issue, the coins from the reigns of George VI and Elizabeth II are available to collectors of all budgets. Many of the coins can be purchased for a few dollars and later date (1957-64) Mint State coins are plentiful. A full red example of both monarchs is a great start to a very popular series.
For the advanced aficionado there are many key dates in the 1940s and Proof coins from the ’50s and ’60s are really quite rare and have come into their own over the last decade, but in my opinion, the series is still considerably undervalued. In many instances several hundred to just 1,000 or so coins had been struck for collectors.
Pull up the NGC World Coin Price Guide and get acquainted with this topical and attractive series. Although many modern issues may boast low worldwide mintages and claim instant rarity and collectability, there has to be more than initial proclamation by the issuing country. There must be a secondary market and demand must be sustained for the price of that particular series or coin to remain stable and foster a healthy secondary market. In the case of these coins, an enthusiastic worldwide market exists.
Until next time, happy collecting!
Jim Bisognani has written extensively on US coin market trends and values and was the market analyst and writer for a major pricing guide for many years. He frequently attends major coin shows and auctions.