Kathleen Duncan of Pinnacle Rarities was once again asked by The Rosen Numismatic Advisory to participate in the 38th annual Crystal Ball Survey. Kathleen and several other notable industry leaders responded to questions about the state of the U.S. coin market, challenges faced by rare coin collectors and investors, and outlooks about the near future of the rare coin market. The Crystal Ball Survey is published in two parts, here are excerpts from Part 1.
KATHLEEN: Yes absolutely. The economy has forced many collectors to either cut back on their purchases or sell their collections, so it’s definitely a buyer’s market.
ROSEN: What are the main concerns of your retail clients about A)the hobby and B)the market?
KATHLEEN: A) Gradeflation is a major concern with the hobby. When the grading changes for certain series, as it recently has for Walking Liberty halves and Washington quarters, the populations explode driving down prices. This is only good for the grading services which get more submissions, as dealers and collectors will resubmit hoping for upgrades. B) Clients of certain segments of their market have seen dramatic price drops: those buying Classic Commems for example. Although price drops usually signal opportunity for buyers, it’s not always easy to buy into these areas.
ROSEN: What are the best coinage areas for an investor to concentrate? Why pick those areas? What potential do you see for them?
KATHLEEN: Two areas that offer particularly good value are high-grade Mint State and Proof Seated and Barber coinage. They’ve not seen any price increases in two decades, although very few new coins have been graded over that time period compared to 20th century series. Also, there are other areas at historic lows as well: MS66 better-date 3-cent nickels, Shield and Liberty Nickels.
ROSEN: I just published a report on 1892-1928 silver commems. Am I beating a dead horse here or are commems in general (silver and gold) great values? Do you have any favorites?
KATHLEEN: I’ve liked the value of these coins for the last five years, and surprisingly they have gotten even cheaper since then. This is one of the greatest areas of opportunity right now. 70 of the 144 issues have original mintages of under 10,000, yet remarkably many can be purchased in MS65-67 grade for under $500. My favorites: Gettysburg, Huguenot, Lexington, Lynchburg, Maryland, Robinson and 1936D San Diego in MS67. All have populations of under 100 and are at historical lows.
ROSEN: A) How are your clients responding to the CAC and PCGS-plus coins? B) Do such coins cast doubts on coins without those extra grading attributes?
KATHLEEN: We have clients on both sides of the fence. Many are advanced collectors who feel very comfortable with their own grading expertise along with that of PCGS and our opinions as dealers. They don’t care about CAC one way or the other. But we also have a minority of clients who feel the sticker gives them an additional layer of protection. For them, coins without a sticker are often questionable. Plus coins are, in general, bringing substantial premiums to non-plus coins, although premiums have diminished in the past year as more plus coins are graded. I haven’t found that plus grading casts doubts on non-plus coins. It simply is an “in-between” graded with an “in-between” price.
ROSEN: How do you view the market opportunities for six and seven-figure coins since the announcement of the Pogue Collection auction sales?
KATHLEEN: Until the August ANA auctions, the market for six and seven figure coins seemed to be going nowhere but up. There were quite a few bargains to be had in that area, however, in those late summer auctions. Quite a lot of high dollar rarities entered the market in 2014, out-pacing demand a bit. The fact that Stack’s Bowers is auctioning the Pogue collection over three years (2015-2017)will hopefully give demand time to catch up with supply.
The Rosen Numismatic Advisory examines issues and trends within the industry. The annual Crystal Ball Survey publishes the opinions and predictions from some of the industry’s most skillful and respected professionals. For copies of the full version of this report and subscription information about future issues and other reports, contact Numismatic Counseling, Inc. at [email protected] or call 516-433-5800.