By Laura Sperber – Legend Numismatics …..
FUN WAS MYSTERIOUS
First we must commend the FUN people for running a great show. Having it in Tampa certainly did seem to draw a bit larger crowd.
Mysterious is the best positive label we can attach to the show. The coin market is clearly as “choppy” as ever. Yet, MANY dealers we spoke to had VERY good shows. Legend had its best show since 2008. However do not be fooled. If we had to make a guess, OVERALL prices came down at the show 10%. How can this be?
We think the reality of the last six months of 2015 has finally sunk in to everyone. It was a brutal time. Many dealer bids were pulled, cash flows were bad, and no one wanted to pay strong for anything except trophy coins.
Seems everyone was desperate for 2016 to start off good. So at the pre-show dealer rooms (lobby leaching before a show) the attitudes were clearly positive, everyone accepted the lower prices and did biz. The two days before FUN even started, these rooms were packed and a lot of business was transacted. No one was complaining about anything. Everyone was holding their breath the FUN Show would be as active.
Legend did really strong SELLING before the show, including getting top dollar for several old friends”. . Buying was so hard, we only bought coins from ONE dealer before the show. Also, our stealth seller informed us they were having a great show already-better then the Nov Baltimore Show.
When the doors opened for set up Wed, we were shocked that dealer to dealer activity remained hyper strong (at least for us). Typically it dies as everyone spreads out. Within the first two hours of set up we sold FOUR five figure coins! One coin (value OVER $50,000.00) was the last coin we ever thought we’d be able to sell at the show, let alone sell it for a profit, and for immediate money.
We were stunned at that point. However by the end of the day we realized there were practically NO coins of any real quality (especially PCGS CAC) to buy. Not only did we sell a ton at set up, we sold the coins at our FULL asking prices with NO terms. WOW!
THEN THINGS SHIFTED-THE FUN SALE
During set up the Heritage Auction started. We had been following it in total disbelief that bidding had been so small overall (for what Legend buys). We figured there would be a throng of last minute bidders. Not only did that NOT happen-but in the first session, MANY (and we mean MANY) coins sold for cents on the dollar.
We had hoped this would happen and we spent like crazy just value buying. It’s NOT Heritages fault; the market just did not show up (you can lead a horse to water but…). So while things were going strong on the bourse floor, this was a rare time you could actually buy coins cheaper in auction.
Thursday activity on the floor only got stronger with a a very decent crowd of collectors showing up. We were more surprised at how many retail sales we made Thursday. During the day, the auction had started to realize slightly stronger prices.
Very interesting that the auctions results had changed dramatically by Thursday evening. Platinum Night was successful–totally the opposite of the first session. We can’t say many records were made, but many coins did sell very strong.
Kudos to Heritage for selling the finest 10C 1894S PCGS PR66 for $1,997,500.00 and being on the front page of every major news internet site in the US.
Earlier in the day the commoner MS65-66 Shireman MS Barber Halves sold weak. Yet at night the MS66-67 coins sold strong. A great example was a major dealer and an internet buyer slugging it out on the 50C 1907 PCGS MS67+ CAC. That sold for $50,300.00 to the dealer who told us he was stocking it.
Our favorite coin-the 50C 1906S PCGS MS68 CAC sold for a whopping $82,250.00 (in jealousy we send a raspberry coconut out to a collector friend of ours who beat us out on it)! In Platinum Night nothing fell through the cracks or brought less then market.
WHATS REALLY GOING ON?
The market is different than what it is was a year ago. Now, many collectors only participate when there is a huge collection to excite them. Or if an outside factor-like sharply rising gold (which happened this week) occurs. Other wise, activity is lethargic.
Add to that the overall monumental severe lack of supply and you have a negative on the market. This is why it is has been and will continue to be so choppy for the next few months. We can’t stress enough that right no GREAT coins (when they do appear) are really on sale thanks to the market.
Even though there was strong activity at the show, the over all poor quality of the coins available forced them to trade for less-much less. Hence for the first time that we have seen, it forced ALL prices down (this time even better coins were affected).
Here are two great examples: we were able to “steal” a 3CS 1859 NGC PR66. We paid an insane $1,500.00! The coin is REALLY pretty and is REALLY nice! We think it should cross in a heartbeat. In a PCGS holder the coin is easily worth $3,500.00+. And if it should CAC – WOW!
Also, we bought a $1 1874 PCGS MS67+ CAC for $3,750.00. This is a pop 2 coin. An MS67 (no +) last traded for $5,100.00 in 08/2015. Does this coin not represent a MONSTER opportunity for everyone?
The principals of Legend Numismatics truly believe we are finally at or near a real market bottom. We base this one our activity with collectors and what we see happening at auctions and on the bourse floors of shows we attend.
As more people see how many overall really great deals there are, the market will regain strength. We’re not talking about even making all the dreck that litters shows and auctions go away, we’re talking about the better coins with real quality.
We can’t scream loud enough as to what incredible deals can currently be had if you search around. Even if prices were to rise 25% in the next 2 months, many coins are still cheap! We see HUGE potential opportunity-if the nice coins appear.
Another thing that is happening and may change our markets direction-the extreme volatility of the stock market. Many people may start flocking into hard assets soon. We observed several people who came with substantial collector friends they knew to “check out” the coin market and look into possibly collecting. These people did not seem like speculator types at all. They just wanted another place to put their money with out being beat up. To them, coins were cool. It also shows that the collectors know the market is ripe for gains.
The current cycle of major collections being sold is nearing an end. Gardner and Newman are history. Pogue is now half way done. Even the FUN Sale auction had only the Barber Half Collection and a few smaller sets, no other earth moving collections were sold.
Its critical to know there are NO Pogue coins lingering on the market and there is no large collections of coins coming out anytime soon. So what is left for collectors to buy?
Sadly, at FUN, we’d estimate the dealers tables had 75% dreck and retreads vs. exciting fresh and great looking new coins (we like to call these coins table scraps). You had to have great connections to get at the fresh cool coins hiding in dealers boxes. With so little visible on the floor and not too much in the auction (which was the smallest FUN Auction in years), that made selling for us, easy. By Friday though, we had little left to offer-and we locked up our NEWPS.
Lastly, we must continue to stress that you buy ONLY the VERY BEST quality and eye appeal for the grade. Do NOT be afraid to pay a premium. You’re not doing yourself any favors thinking that buying slightly off coins on the cheap is a good deal. The dealers motto of “cheap is never cheap enough” is so true when it comes to buying dreck.
The reason why you can get a coin so cheap-is because no one really wants it. So when the market gets weaker (like it is now) the prices of dreck basically fall off the earth. And when prices recover, dreck is always last to enjoy any return to where it had originally been priced.
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