By Laura Sperber – Legend Numismatics

Like many dealers we did not come to this show with many expectations. In fact, we were less sure of what would transpire there vs. how we felt going into this years FUN Show. As nearly always the case, this Long Beach was better than expected for us (and many other dealers too). In fact, we rank this show as probably the best of the major shows we have attended since the ANA back in July. Collectors are alive and are checking out the market.

WHOLESALE

Dealers across the board were having a tough time. Many were either overstocked at higher prices or had no cash. Trading (vs. out right selling for a check) was common. We know of one dealer who said he did $900,000.00 in business-but only took in $50,000.00 in checks. The smart dealers knew not to sit on coins and vowed to be creative to make them move. We’d guess a very large % of dealer to dealer business was via trades. Sure there was complaining and worry, but everyone we saw tried to do business.

There are several things happening on the wholesale level that hurt dealers and even the over all market. They are:

*The grading services have tightened up and killed off several coin doctors and seriouly wounded the crack out game. The crack-out dealers typically are the strongest buyers at a show.

*Wholesalers always slow down long after retail dealers. They simply do not have as many orders to fill thus they cut back buying.

*Bad cash management. A few dealers have had their credit lines pulled. Or, they are in denial and refuse to sell inventory at the new levels.

*Two major “bottom feeder” dealers are having financial problems and can’t serve as a clearing house for low end material. For expensive “puke” as we all like to call it, there is no more easy outs at a profit. in fact even at a steep discount there is no where to go in dealer land with puke. That costs everyone money.

Not every dealer did bad at the show. A good friend of ours did incredible wholesale biz-something he is normally not set up to do. Our wholesale biz was better than expected. We too did a few trades and took big hits. However it was interesting that as we were moaning about how much we were losing, the dealers working with us on trades were selling us their coins with the same complaints! Overall, on a wholesale level, unless you were stubborn, coins did trade-at the “new” levels.

RETAIL

This was by far the biggest surprise. For the past several Long Beach shows we had been ragging on how badly it was declining. Not this one! Thursday for the first time in ages, there was a very decent crowd. We saw many old friends and we did a little business. It seemed to us that if collectors weren’t shopping for specific coins, they attended the show to feel the climate of the market. There were several substantial players we spoke too who would love to make some serious acquisitions at today levels. No one discussed selling and no collector seemed unhappy with prices being less than they were at ANA.

We strongly believe two things are leading the way to bringing the collecting public back: the price of gold certainly has everyone’s attention. And people are just sick of the stock market. We truly believe the “real” collectors never left coins. Those who still had money either stepped aside waiting for better prices or continued to keep buying-but couldn’t find a lot of what they wanted.

An FYI: everyone wants to know if there are celebrities who collect coins. Billy Gibbons of ZZ Top was at the show buying RARE coins. He does do business with a major a dealer (not us-bummer)! We were introduced to him. He is a VERY nice fellow. The PR people are saying Kareem Abudul Jabar was there too. Didn’t get a glimpse of him.

THE MARKET

From our point of view, we do very much see some life. We aren’t getting tons of orders or breaking any records, but activity has been slowly building. The big telemarketers are surviving on huge generic orders (we noticed very few Saints in MS65-66 available). Slowly but surely you can expect those people to be converted into buying a rare coin or two. The stock market has made a lot of people believe in hard assets.

Prices are clearly off 10-20% across the board since ANA. We don’t mean to sound like a broken record but, inferior or low end coins have taken the worst of the brunt. Those pieces are off so strong (some as much as 60-75%) that we even saw several pieces being shopped that no one would buy at any price. It will take a long time for those coins to be absorbed.

THE HERITAGE AUCTION

Darn those guys are awesome! The day before the sale we were convinced there would be bargains and coins would go cheap. NOT! As the sale began, the Jack Lee Lincolns unexpectedly sold crazy (a 1913 PCGS PR66RD for $27,600.00). A major collector we know who is famously aggressive flew out to bid on those coins and bought NONE! By the end of the first session, the majority of our bids were underwater. We were totally surprised. Of course the Gold sessions were the strongest. We were the under-bidders on the fabulous $3 1878 PCGS MS67 which SOLD for $69,000.00. Unlike other areas of collectibles, the Heritage Auctions tremendously help the coin market by providing a sorely needed liquidation platform while also proving to the world good coins are still doing well.

REMEMBER THIS!

Even though the dealers have some cash flow issues and the market isn’t roaring, it is certainly NOT flooded with coins. Great coins absolutely positivity are not out there. They are not even appearing at the major auctions (Heritage sale was a bit boring). A lot of coins are in an awful lot of strong hands. And those strong hands are starting to buy again because of the better prices and lack of irresponsible investors to compete with.

We firmly believe you will not see the coin market start to turn around for another few months. There is probably another 10% downside (if even) on the good coins-but its the JUNK that is severely restricting business and is affecting the values of the nice pieces. Those coins can’t go to zero, but they also have are heading towards total unmarketability. No one has a real answer for this problem (we have seen several dealers start to downgrade coins and even change the services the coins are encapsulated in). So if you buy today, and pay a premium, its still not at the levels coins traded for at ANA time. There is strong opportunity if you know where to look. The key is to buy the BEST quality you can afford and hold for the long term.

WHATS HOT

ANYTHING and everything GOLD. Look around, no one has any quantity of MS65-66 Saints. GEM Bust material. Where are all the PR 64-67 Barber coins? DMPL Morgans and any WHITE GEM that was below $5,000.00 was selling strong. Lincoln cents are having a small spurt.

WHATS NOT

Buffalo Nickels seem to be out of favor for now. Expensive crazy graded “investor” oriented Type MS/PR68. Of course no one wants any junk (any over-graded or low end stuff).

Related posts:

1. THE 2009 SUMMER LONG BEACH SHOW – Legend Market Report
2. Legend Market Report – Sept. 08 Long Beach Show
3. Legend Market Report – THE CSNS SHOW 2009
4. Legend Market Report: The 2009 Los Angeles ANA Coin Show
5. THE BALTIMORE SUMMER SHOW – Legend Market Report
6. Legend Numismatics Baltimore Coin Show Market Report
7. Legend Numismatics Baltimore Spring Show 2008 Market Report
8. THE SPRING CSNS SHOW – Legend Numismatics Market report
9. THE FUN SHOW 2008 – Legend Numismatic Market Report
10. Market Report – The Long Beach Show