The Market Today, The Market Twenty Years Ago
Posted on July 20th, 2010 by Q. David Bowers in Dave's Market Report

A beautiful 1915-S Panama-Pacific commemorative half dollar. Most coins in the commemorative series are less expensive today than they were 20 years ago in 1990! Ditto for Peace silver dollars. Ditto for some other things you can search for.

Time was when the summer season was slow in numismatics. In the days before air conditioning, dealers often closed up shop and headed for the lakes and mountains. The pace slowed, and about the only two major events were the yearly release of the Guide Book of United States Coins, usually in July, and the American Numismatic Association’s annual convention, also in July or early August. Other than that, not much was going on, a few auctions were held, and thoughts of numismatics were replaced by other things.

Today in 2010 that is not at all true, and the pace continues nonstop, including here at Stack’s. We have all been as busy as can be recently, especially on the auction front, putting together our spectacular sale of the Johnson-Blue Collection, to be sold in Boston on Sunday, August 8th, just prior to the ANA Convention, and our very large sale to be held at the end of September in conjunction with the Whitman Coin & Collectibles Philadelphia Expo. This will have many treasures, with paper money being especially important.

We are also accepting consignments for our 75th Anniversary Sale in November. No rare coin auctioneer has ever held a 75th anniversary sale before! B. Max Mehl in 1950 did hold a Golden Anniversary (50th) Sale, but that is about as close as anyone has ever come.

Thinking of selling? The market is strong and Stack’s expertise and record of handling collections is unequaled. Just call our lead consignment director, Dr. Richard (“Rick”) Bagg at 800-566-2580, or just get in touch with any Stack’s representative. It may be the best financial decision you’ve ever made!

Returning to our upcoming Johnson-Blue Collection Sale, consider being a smart—really smart—buyer! Here is one way to do it:

Do some productive reading by studying the market of today as compared to the market of 20 years ago. A good place to start is to take the just-released 2012 edition of the Guide Book of United States Coins and compare it to an edition of 1990 or 1991. For many items the market then was much higher than it is today. It might be inspiring to learn that today a certain silver dollar, commemorative, or other coin valued at $300 cost twice that price a generation ago. Seems amazing, but it is true!

Might this be an indication that today’s price offers extra value?

Market study is always worthwhile. Many years ago financier Bernard Baruch stated that he made his money by purchasing bargains in the stock market when other people were ignoring issues, and when everyone was madly scrambling to pay record prices for stocks, selling out. Buy low, sell high, as the saying goes. In numismatics a lot of people do this. Do a bit of reading, and you can start getting more value for your money than ever before. What a great way to start a new specialty!

And, apart from that, you’ll find a large panorama of coins in series that have had evergreen popularity, more or less, with few ups and downs. Copper coins, most early “type” coins in all metals, and other specialties beckon. On balance, most series have appreciated in value since 1990, reinforcing the philosophy that a carefully formed collection can be a great store of value. And, of course, gold coins have more buyers than ever before. No matter what your inclination may be, studying market prices in history will be worthwhile exercise!

When you receive our Johnson-Blue Collection catalogue, curl up with it in your favorite armchair. Check out the offerings in series you already collect, then cast your net wider and see if you can find some other coins of interest. Along the way, enjoy your experience.
 

Fed 25/10 - As a dealer who has spent over $100 million on rare coins, what are some of the “tricks” that I have learned that can help you when you are buying coins? Read on to see some of the ones that I think you will benefit most from.

When I buy a coin I am looking to sell it immediately for a profit. This makes my needs as a buyer slightly different than yours as a collector. But your ultimate goal, I would hope, is to sell your coins for a profit. What are a few of the most obvious but most important parameters to consider each and every time you buy a coin?

1. Buy Coins That Are Pretty

Numismatics has always been a highly visual hobby. But the advent of the Internet has made the visual aspects of numismatics more significant than ever before. When I look at coins now one of the first questions I ask myself is: will it image well on my website? Coins that are pretty are very easy to sell.

The term “pretty” is somewhat semantic. I tend to like gold coins that are dark and dirty and find these to be aesthetically appealing. Not everyone agrees me. Some people like gold coins that have bright, dazzling luster while others prefer coins that two-tone contrast between the devices and the fields. But I think most people can agree that a certain percentage of coins are, for lack of a better term, “special.” This does not necessarily mean “expensive.” I have seen circulated $100 Bust dimes that I thought were really pretty. The bottom line is that you should try and have as many pretty coins as possible in your collection.

2. Buy Coins That Are Popular

There are many coins that no matter how many examples I have purchased over the years, I have never lost money on them. As an example, I have probably owned twenty 1838-D half eagles in the past decade, ranging in grade from VF25 to MS62. Every time I’ve owned one, it has sold quickly to a happy collector and I’ve made a decent amount of money on each transaction. It’s obvious to me why this date sells quickly: it’s a first-year-of-issue, it’s a one-year type, it has a neat design, it’s a Dahlonega coin and it is relatively affordable.

In the last few years, key date coins in virtually every series have shown dramatic increases in value. There is a good reason for this: they are very popular and this creates a constant level of demand for these issues. In some cases (like 1901-S quarters or 1907 High Reliefs) prices are now probably too high and these key issues are currently overvalued. But I would personally rather have a collection (or inventory) that was full of popular coins than ones that were too esoteric and hard to sell.

3. Buy Coins That Are Problem-Free

I’m pretty staggered at how unappealing most coins are that I see these days. As I look through other dealer’s inventories at coin shows or at auction lots, nearly every coin I pull out has some sort of problem. It has been dipped. It has funky color. It has hairlines from an old cleaning. That’s why when I see something that I really like, I try and aggressively pursue it.

In certain 18th and 19th century series, it is likely that 90-95% of all the coins currently on the market have some sort of problem. If you can patiently and carefully assemble a collection that focuses on the remaining 5-10% of the coins that are what I would call high end and choice, you will have a truly significant coin collection.

4. Buy Coins That Pre-Sell Themselves

Every time I’ve made a big mistake purchasing a coin for inventory, it’s been a coin that I had to give myself a hard sell on. I’ve found that my first impression regarding a coin is inevitably correct. If I see a coin and it makes me gasp because it’s so pretty or it’s so above-average an issue that usually comes with bad eye appeal, I’m inevitably going to buy this coin no matter what. If my first reaction is “I don’t really like this” or “It’s OK except that spot in the right obverse field sort of bothers me” that doesn’t strike me as the sort of coin that is going to go flying out of my inventory when it is imaged and described on my website. As a rule, if you don’t like a coin the first time you see it, don’t buy it.

5. Buy Coins That Have Been Pre-Screened

Never, never, never buy expensive coins sight-unseen or based solely on a mediocre quality image with no return privilege. It’s one thing if someone is trying to sell you a generic MS63 St. Gaudens double eagle sight-unseen; even if the coin is low-end it is essentially a commodity and what it looks like is not especially important. But I can’t tell you how many times I’ve had clients send me expensive coins that they have purchased sight-unseen out of an auction and how many times I’ve had to politely tell them that it is very low-end. If your dealer insists you buy coins sight-unseen, find another dealer. If you think you can buy nice coins sight-unseen out of auctions, swallow your pride and hire a trusted representative to view the coins in person for you.

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Feb/23/10 - Seer’s forecasts for 2010 continue tradition by David L. Ganz

Once a year for the past 40 years, or so, I have let my hair down, ceased being objective and gave an unvarnished look at the coin market and some other things. I call it my “Seer” column.

Once a year for the past 40 years, or so, I have let my hair down, ceased being objective and gave an unvarnished look at the coin market and some other things. I call it my “Seer” column – like the Oracle at Delphi, except this one’s on the eastern seaboard, either in New York City where my law office is located, or in nearby Bergen County, N.J., where I’ve lived for the past quarter century or so.

For a long time, I’ve kept a series of binders designed to hold “Under the Glass” clips, and in looking through these clips, the first reference I can find to this prognostication business is an article that I wrote on these pages in May 1971, entitled, “The unmasking of a seer.”

It was never a regular feature of this column, though I did it from time to time, but starting around 1980, I regularly did a feature once each year for another periodical. It may have started as a crystal ball in jest, but I always recall that my dad was an amateur magician for more than 70 years, and that gazing globe was part of his act. In a word, I took it sort of seriously.

Historically, I’ve spent a lot of time in the “seer business” when it comes to market analysis. I never shrank from predicting the price of gold, silver or platinum with varied degrees of success. (When I have been wrong, it’s a doozy – or an inability to read through the gazing globe. This is particularly true of my famous annual predictions for the 1881-S silver dollar in MS-65 condition, something I view as a bellwether of the marketplace as a whole.

Perhaps my inaccuracy has something to do with the fact that grading remains, after all these years, a moving target.

I got started collecting coins in 1960 when I found a 1906 Indian Head cent in pocket change. The coin had three letters of the word “Liberty” visible and was a classic “very good” condition; probably worth a quarter (but that was 25 times my investment of face value).

That fondness leads annually for the fair recognition and representative pricing of all Indian Head cents. (OK, finding a 1906 Indian Head cent in pocket change in 1960 changed my life – and yours.

Longtime readers may recall that I’ve been involved in politics for virtually all of my adult life and have frequently interviewed members of Congress from both sides of the aisle on coinage matters. In the 1970s, and 1980s it was not uncommon to see interviews with Representatives Wright Patman, D-Texas, who chaired the House Banking and Currency Committee, Leonor K. Sullivan, D-Mo., Robert G. Stephens, D-Ga, and Walter Fauntroy, D-D.C., who chaired the House coinage subcommittee, and some others including Rep. Ron Paul, R-Texas, who was a 2008 presidential candidate and is now working to audit the Federal Reserve.

As my own life has changed and evolved, I became an elected official, serving first as mayor of my community (fourth-largest in New Jersey’s largest county, Bergen) for seven years, and subsequently during the past seven years as a county commissioner or supervisor known as a freeholder. My interest in politics went from local concerns to national predictions and some very close calls on presidential races (mostly accurate but finally off by only a couple of electoral votes).

So, for the 30th consecutive year, I’ve brought out the Ganz Crystal Ball to offer you a window to the future. For the next couple of minutes, you can check out my scorecard in the seer business from last year – a respectable .650 average – compare it with some whoppers from years past, and see what I believe the future holds.

When I quote my seer record – it usually is 50 percent or better – I am reminded that great baseball players like Ty Cobb (.367 lifetime batting average) couldn’t master his craft six times or more in 10 chances. Maybe being a seer isn’t so bad after all. Remember that even soothsayers are sometimes wrong.

As many readers know, in real life I am a lawyer, so please take a lawyer’s cautionary note: everything that I write should be viewed with a grain of salt. My track record in predicting precious metal prices is pretty dismal – though not this year. Almost any year but this past one, monkeys tossing darts could almost do better – but on some compelling hobby and other issues, my overall track record borders on the semi-skilled. Recently it has been better than in years past.

No one has suggested I give up my day job as a lawyer.

This seer business is actually tough and takes a lot of research, twice. The first is the datum necessary to read the tea leaves of the future; the other is checking on what happened in the past. Both are time consuming, but also a lot of fun. I hope you enjoy the swami’s musings as much as the seer enjoys writing them.

Let’s start with how the seer did with predictions for 2008, specifically:

2. Gold is on the way to $1,000 an ounce and will reach it in November 2007 and December 2008, a 13-month window.

3. Silver, now at $14.66, will rise to $16 or more in the next 13 months.

4. Watch for platinum to rise to over $1,600 an ounce in the next 13 months.

Of course, as you’ve already noticed, I’ve picked the right ones, only numbers 2 to 4, to show you for 2008. Let’s see whether 2009 was any better.

Selected 2009 predictions

1. Gold. Spot as of this writing is $802. My belief is that the compelling market realities will cause a shift of more than 17 percent in the next 12 months (by 12/09); that is, gold will rise above $938.
We saw. We conquered.

2. Silver. Silver is now $10.16, or half of what it was (more or less) in March. Silver has industrial and commercial uses, and my guess is that this inexpensive metal will have a run-up of at least 25 percent during the year. So that there is no misunderstanding, that means that silver will exceed $12.70 during the year.

Bingo!

3. Platinum. Today, spot price for platinum is $827; it has fallen $1,400 in the course of just a couple of months. I look at the debacle concerning Ford, Chrysler and GM and say platinum is going to stay depressed, but will move $50 an ounce to $877 or more this coming year.

Again! And, I foresaw the auto crisis!

4. Next Mint director. My vote goes to Reed Hawn, the Texas collector and political activist. Ed Moy, current director, has a five-year statutory term, but it is likely that he will depart in the spring.
Not yet and wrong horse.

5. End of the cent. The economy, stupid! The powers that be are going to look at saving a few bucks and in the end are going to decide that in these economic times, symbols do matter, and the cent will be safe, again, for a little while at least.

Safe!

Oh, yes!

6. Mint will produce less. A large number of cents and other denominations aren’t in circulation. About $10.5 billion, or $93.75 per household, is sitting idle, according to Coinstar, which hosts coin-counting kiosks in grocery stores, banks and other locations. Bet those coins continue to get turned in at record rates; that inevitably means that the Mint will be producing fewer coins.

Wow, did I call this; everyone else seemed surprised.

7. ANA politics. Presidential contest this year is between Clifford Mishler and Patti Finner, both of Iola, Wis. It’s a small town – I lived there once (1973-1974). My prediction of the end result: Mishler, in a close race.

Politics is unpredictable. But at least I can say I played golf in 1973 with today’s American Numismatic Association president.

8. Coin Market: a prediction that it will hold its own against the national economic trend and change upward by more than five percent. Compare that to the Dow, Standard and Poors or even farmland.
And then some.

9. 1881-S bellwether silver dollar, priced now on Dennis Baker’s NumisMedia MS-65 at $185. Price will go over $200 this year. That’s a modest eight percent. How did the 1881-S do in prior years: (2006) $152. It’s simply time.

OK, NumisMedia’s Fair Market Value (January 2010 issue) lists the 1881-S (DMPL) in MS-65 at $780. And proof-like at $263. So it’s almost starting to look good. But the regular Morgan dollar listing shows it as $160 (increase). Not enough for full credit. Heck, I’ll take no credit because:

• My batting average is 7/9ths or .778, or twice the rating of Ty Cobb’s batting average.
• This seer average is great advertising for my new book for Krause due out this summer, Invest in Affordable Rare Coins.
• This isn’t even a matter of interpretation. Or fakery. I really did it. But, as seer, I must remain modest; in other words, I knew I would be right this year. Not!

Now comes my predictions for 2010.

Read the following imagining that the song “with a little bit of luck” is playing softly in the background. So, now that we’ve established the doctrine of the seer, here are the predictions (and shortened rationale as to why) for 2010:

Let’s start with points of reference. Platinum, gold and silver are priced as follows on Jan. 29, 2010: platinum, $1,501; gold, $1,080 and silver $16.81.

1. I’m a contrarian and say that platinum falls five percent sometimes during the next 11 months. No weasel words or imprecision: from $1,501 it will fall down to $1,426 an ounce (or less).

Some quick rationale: the recession has hit China, the greatest new market for platinum, particularly hard. That means that production goes to excess, and I predict it will be a sop of five percent over production – i.e., too much platinum chasing too few consumers. Classic economic reason to see the price go down.

2. Gold will increase at least five percent during the next 11 months. That is, by Dec. 31, 2010, gold will have popped through the $1,134-an-ounce mark, rising $54 an ounce. For those who measure declines, gold may go down to $925 sometime this year, but will rebound; make that a sub-prediction. Of course, it is the in the disjunctive.

A fine distinction: gold’s large market is the United States, where Chinese influence seems limited to their buying our Treasury bonds. That may force interest rates up, but gold is still strong as a coinage metal, as jewelry and increasingly for some modest but firm industrial uses. More ominously, China produced 300 metric tons of mined gold last year (leading the way for the third consecutive year).

Most of it is intended for long-term government use (platinum is a metal of the people).

3. Silver at $16.18 seems low by my interpretation of historic standards. I say silver rises 20 percent during the coming year (i.e., a rise of about $3.23 to $19.41 an ounce by year’s end. I set the down margin at $14.91; if it goes below that, it could go into free fall.

Silver remains popular as a jewelry item in Asia and there has been some profit taking of late. Nonetheless, U.S. commemorative coinage remains a good customer for years to come.

4. New U.S. Mint director to be named this year. My vote now is on a Michigan state legislator who is also a coin collector.

5. New senator from Delaware: likely U.S. Rep. Michael Castle, R-Del., who is known to collectors from his involvement with state quarters and the Statue of Liberty design on the reverse of the dollar coin. Beau Biden, the popular attorney general and vice president Joe Biden’s son took a pass on a difficult race. Castle, a popular former two-term governor has the edge in my opinion.

6. Prediction for the 1881-S silver dollar in MS-65: $185, a gain, for a compounded return of 12.5 percent. My rationale: its simply time. Besides, as the recession starts to lighten up, discretionary spending will be on the rise, and this coin is the it girl of 2010.

7. The coin market went down last year as part of the overall national picture. My prediction for 2010 is a modest 7.5 percent overall increase. Dennis Baker’s NumisMedia on the extended Salomon index I maintain is the arbiter. This is the one on MS-63 coins. Next year, maybe we will have a mature database to do it in MS-65.

Some of you may think that the seer is disingenuous, or worse, inaccurate because of a claim that the market changed upward more than five percent, but also went down last year. Lightning bolts from Zeus strike you down! It did both. The extended and expanded Salomon index shows a decline, of about three percent, but the change in the price of gold was enough to tip the balance in the other direction for an overall market change. That the market for rare coins has been affected by the recession, well, duh! It has.

8. Next year a new ANA president. (August 2011). I’ll line up now and guess it will be Tom Hallenbeck, unopposed. I’d predict bourse rule changes, but they’ve already done that.

9. Mint production for circulating coinage will be down, Coinstar will be up. The Mint is a victim of past successes, and excesses.

10. I will be spending my 59th birthday cruising from Venice to Istanbul by way of Bulgaria, Yalta, Ukraine and the Black Sea. OK this is a gimme. We have made the reservations already. And for the following year, 2011, I predict a cruise from South Africa (Cape Town) to London via most of the west coast of Africa and Portugal. OK. Just made those reservations through Paul Whitnah’s M&M Travel. Guaranteed it will be a numismatic vacation of a lifetime.

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Jan 06/10 - Five Reasons Why You Should Own Silver Coins By: Dr. Jeffrey Lewis

There are a multitude of reasons the average investor should have at least some of their assets invested in silver.  Consider these five reasons that can help you grow your assets while preserving your wealth. 

Silver Has Intrinsic Value

Through thousands of years, silver has maintained its worth and its utility, providing a currency and a means of exchange through the rise and fall of great empires.  Silver has always retained intrinsic value; indeed, silver has never fallen to zero, and it has appreciated decade after decade and century after century.  One ounce of silver today would purchase just as much as it did thousands of years ago, without any significant risk.

You Can See Your Investment

Silver coins and bars make an excellent investment that you can hold in your hands.  Unlike stocks, which are controlled by a board of directors, you make the decisions on how you should use your metals.  In contrast to futures or other complicated silver derivatives, you can be assured that the silver you “own” is actually silver – and not printed paper backed by a shaky bank. 

Silver Offers Better Returns

Silver has always been more volatile, generating higher returns than that of gold and other precious metals.  This phenomenon comes from silver's rarity.  With so little silver exchanging hands around the world, the smallest of silver purchases can have a dramatic impact on the total silver market.  Silver is one of the few investments where volatility is a positive, as any look into the history of silver prices shows that the metal can escalate quickly, often 10% - 20% in a period of just a few weeks. 

Silver Has Industrial Use

You cannot use your stock certificates to create an anti-bacterial product.  You are unable to develop film with your bank balance, and you can't patch an electrical circuit with other commodities. 

In sharp contrast, silver has literally thousands of uses that help to limit the amount of silver in circulation and increase the value of silver in your own hand.  Chances are you already own silver by the process of owning a TV, a computer and any other electronic equipment.  Silver is also in your batteries, the bearings of your car, and it is likely used in the medical devices that performed your last operation.  Silver is also used in many industries that are developing right as you read this article, including solar energy and water purification.  As the world and technology develop, silver demand will only explode.

Silver's Resurgence in Monetary Utility

Gold and silver are again gaining a footing as a global currency.  World governments and central banks alike are searching for investments that can back their more speculative investments and add value to their paper currencies.  China and India have continued to purchase enormous swaths of metals to add to their foreign reserves, with India making the largest historical purchase of 200 tonnes of gold in 2009.