By Laura Sperber – Legend Numismatics Market Report

January typically isn’t the strongest month for the rare coin market. Every year, there is a little bounce from the FUN Show and then the market settles into a slumber for about 30 days or until the Long Beach Show comes around.

This year started out the same only with a little deeper of a slumber. As we all know, the market is off about 10% on the better coins (some not at all) and as much as 60% on the junk. Coin buyers aren’t throwing money around in an euphoric way like they did only a year ago. However, we have noticed what could possibly be the beginning of a rebound. Keep in mind, this correction really started back in September, but many did not really feel it or see it until the FUN show.

We are now seeing the return of long time collectors one by one. They have started to call again dropping the “wait and see” attitudes. The only thing that has changed about their buying patterns, is they now demand as much as they can get for their money. QUALITY is a must. The dollar value of the coin does NOT matter. We sold coins from $1,700.00 to $57,500.00 last week to collectors who had been sitting on the sidelines. They told us they now feel good about coming back. A major CC Collection that was consigned to us is selling very well (the average piece is about $30,000.00). We’re discussing two six figure sales from our regular inventory as we write this. The activity level of collectors from our point of view clearly is increasing.

Recently, we have picked up a few new substantial collectors who told us point blank: ” I do not want to put my money in the stock market”. This is something we are now starting to hear more and more every day. We went to the recent NYC Antiques show at the Armory (Jan 23-25) a major show in the world of antiques to check it out. Besides standing right next to Jon Bon Jovi and not realizing it (at that show he was small change-even though he has a reported net worth of $200-$300 million), we over heard SEVERAL conversations that said the same thing: “I do not want to put my money in the stock market”. The show was packed even though it costs $20 for admission. At that show we saw a lot of high end, high value items that had been sold the first day (ranging form a gorgeous $200,000.00 Tiffany lamp to a six figure painting, to a $1 million dollar gun). The dealers all told us that they too can sell the QUALITY “better” items pretty easy and that less rare, lesser quality objects languish. (more…)

Hot Topics from Laura Sperber at Legend Numismatics

For years we have stressed buy “the best quality you can afford”. Some people think we are wrong or crazy. Most people simply do not understand that statement.

“Buying the best quality you can afford” does NOT mean you have to go out and blow your wad on a MS/PR 68 coin. Our exact intent for that sentence is: if you seek an MS64 piece, do not just settle for allow end or so/so coin. Wait until you find the “right” coin that is the best for the grade. The optimum piece will have terrific eye appeal and technical qualities reaching almost the next grade level.

Over the past several years we have purchased many collections from educated collectors. Some were great, but many were near misses. These near misses did not yield substantial returns (some actually were in the loss category). In fact the majority of these collections could have had much better coins in terms of both quality and eye appeal if the collector had chosen to spend about 5-15% more.

Quality reigns supreme, especially in today’s softer market. When there was euphoria and uneducated collectors, the fine line between high and low end for the grade didn’t really much matter. Most people were just looking at numbers and believing they could get strong short term returns by buying a certain kind of coin. At times, the holder or the quality of the coin itself did not much matter. Today (especially as evidenced in the recent Heritage FUN sale), those “off” quality coins are selling for at least 20-40% less than they did only a year ago. Compare them to the “quality” oriented coins and you’ll see for the most part, those have held their values.

Do NOT be afraid to pay a premium for quality-it DOES very much matter and DOES come back in a positive way. Being a “price” or “sheet” buyer is rarely going to bring you the top quality coins. While its not practical to fully pay the next grade up, you should do some homework and look at auction archives and other current reports on the web to see what a possible comparable coin sold for. There is no scientific formula as what premium to pay for quality. (more…)

As I stated in my last Market Report (and you have no doubt read on many other numismatic websites) the 2009 FUN show promised to provide interesting insights into the State of the Coin Market in 2009. What happened and what numistidbits did I glean from my week in Orlando?

I decided to arrive a day and a half earlier than usual this year for two reasons. The first was to get out of the awful weather we’ve been having in the Northwest and to get a little Florida sunshine and the second was to give myself a bit more time to get prepared for the show. When I arrive the night before an East Coast show starts it’s hard to face the first day of trading when I’m still on West Coast time and have woken-up at the equivalent of 4 a.m.

I went to the pre-show for little more than a cameo appearance and found it extremely depressing. I hate the FUN and ANA pre-shows because I think they mentally drain dealers. I understand why they exist. Wholesale-oriented firms like these shows as it gives them an opportunity to engage in some serious dealer-to-dealer trading. The problem is that encourages dealers to leave the “real” show early. For one-person operations like myself, the thought of attending a two to three day pre-show and following this up with a four to five day regular show is a bit of Numismatic Hell that I’d rather not subject myself to.

I also made a cameo appearance at the Stack’s sale and noted what seemed to be an inordinate amount of buybacks (i.e., coins not meeting their reserves and going back to their owners). I don’t attribute this to a weakness in the market as much as I do the auction firm not vetting the reserves as well as they should have. There were some great coins in the sale but many of them had been in other auctions within the last year and were reserved for numbers higher (or even much higher) than their last sale. In this market, that dog ain’t gonna hunt…

The show opened to dealers and collectors with early admissions badges on Wednesday. These opening hours were an interesting buyer vs. seller dance. Most dealers seemed unwilling to pull the trigger on any interesting coins but, conversely, there didn’t seem to be much available to buy and the consensus seemed to be “let’s wait until the Heritage auction(s) occur to see exactly how bad the market is.” (more…)