The Legend Market Report by Laura Sperber – Legend Numismatics

BALTIMORE IS THE BEST COMMERICAL COIN SHOW THAT EXISTS!

There are NO challengers (on a major coin show level). Even in its hey day, Long Beach never came close to how well run this show is. Mary Counts, Dave Crenshaw, and crew do an unbelievable job. And most important, they are ALWAYS looking to make the better!

If this show is not hard for you to get to-then go to it! Most major dealers are there (its not unusual to see Dave Bowers roaming the isles). Whitman has a tremendous area offering all their products. There is a huge supply dealer. The food is expensive but tastey. B+M runs a great auction. And of course Legend is set up at atable #555 (had to say that)!

PRE SHOW-THE STACKS SALE

Usually these pre show auctions are not the strongest. Much to our surprise, the Stacks sale did very well. It always helps when there is a terrific group of “fresh” coins that come out for the first time in years. They had an exceptional run of GEM twentith century coins.

The obvious note: there was clear separation of pricing between the dreck, dealer retreads, and the fresh coins. The “crackout” players went nuts especially over the copper and the Buffalo Nickels.

We did not see many coins that fell through the “cracks” at the sale. It was a refreshing way to start the week.

PRE SHOW-LOBBY LEACHING

This is a very critical time of any major show. Every one is scrambling to be #1 to get the fresh deals or to make sales for large premiums. Since there is now an added hotel (the new Hiton) most dealers were spread out. At any given time on Wednesday you would see dealers scurrying back and forth multiple times.

We were extremely relieved that the first five dealers we showed coins to all bought over five figures each. We sold genrics to rarties. Even more surprising, some “crackout” dealers have clearly altered their programs and are trying to buy for stock. There wasn’t much resistance to looking and possibly buying. The attitudes seemed upbeat and no one we know came to the show with any major expectations.

Of course if you had gold, you were practically mugged at the door of each hotel. Gold clearly was the hottest commodity through the entire show.

THE SHOW

Set up was a wonderful 8 AM Thursday. Dealers all crowded in and did business. There almost was a slight “buzz” on the floor early on. Of course dealers all wanted to know was there anyone new in financial crisis, how was retail doing, and had anyone gotten anything back from the services?

Typically once Lobby Leaching ends and the show opens, activity tends to die. It did NOT happen here. We know we did some very serious business. Our stealth sellers did excellent the first few hours. We were actually wondering if things had begun to turn around.

The public was allowed in at 2 PM. Another pure genuis move by the shows owners. We were shocked at how many serious big money players showed up Thursday. We learned long ago, when collectors want to buy coins, playing hooky from work is no issue at all. As with FUN and the last Long Beach, we saw several players who we had not seen in ages. Its pretty amazing, when the “investors” exit, the savvy collectors really do re-appear. Those savvy collectors look around, ask questions, and then start buying again. Over HALF of our retail sales were done Thursday. Others we spoke to had good sales as well.

On Friday and Saturday a good crowd showed up as well. For us activity slowed. Saturday we basically did errands and paperwork.

THE MARKET

One of the things on everyones minds is the state of the market.

Remember back at the end of last year when we specifically said something to the effect “the coin market is in a correction, only people do not realize it”? . Well now its clearly visible. The interesting issue, is now that we all feel it, many think we’ve already bottomed out.

As we predicted many ‘wannabe” dealers have flamed out and are gone (although one or two of the pests still hang on). Both PCGS and NGC have tightend their standards dramatically. The investors who thought they were so smart buying anything in a holder-are now putting their over priced, overgraded dreck back into the auctions and loosing 40-60% or more! There is no mass WHOLESALE dumping by dealers or the public. No major dealer has flamed out, and there have been only a few minor personel changes. Yes, cash flows are tight-but go to any business anywhere and you will see that or worse. although we sorely miss being able to go to multiple buyers with anything neat and selling it immediately for top dollar (now you get chisles and have to hold checks).

We may sound like a broken record, but the real losers in todays market place are people who bought inferior coins. Even the shows newsletter made mention of people coming in and wanting to sell only to find out their coins are low end or have problems. We cannot be more clearer about this subject. If your coin is not 100% ALL THERE, you will NOT get any strong offers for it. To get top dollar, a coin MUST have: EYE APPEAL, BE ALL THERE FOR THE TECHINCAL GRADE, AND MUST NOT HAVE BEEN MESSSED WITH IN ANY WAY. A lot of people are finding out the hard way about their dealers and/or their ablities. Collectors forget, in the better the market they shared the euphoria and many times did what their dealers suggested and in reality ended up buying plastic.

When money gets tight, people actually really look at the coins they are buying. The comfort of the holder evaporates. Thus, collectors will not step up and pay top dollar for thumbed Morgans, greased up gold, or recolored widgets. Today, its is clearly a buyers market. And the buyers are as demanding as ever.

We do predict April will be a strong month for the coin market. New collectors are now starting to buy while established ones revel in the lower prices. Watch out for all the zillions of people who have bought gold lately to start buying coins. It won’t be a mad rush, but these are perpetual hard asset people who will look you in the eye and swear they will never buy a stock again. Hopefully, they will have good advisors and buy coins for the long term.

Our retail sales were steady in March. Each week we did sell a couple of five figure coins direct off the web site. We definately did not break any records wholesaling either. The bouse floor was not loaded with great coins-a way to guage if people really are dumping and how broke dealers really are. We do know there will be some unbeliveable big ticket coins coming back on the market in the CSNS auctions. That should definately wake many people up, stimulate overall numismatic excitement, and prove just how strong the market has remained for high quality rarities. For us, (and other dealers like us) it creates serious opportunities. After FUN, save for the fabulous Naftzger Collection of Larget Cents, the bourse floors have been dry. At auction you could find a neat coin here and there, but there was NO frequency or quantity. The lack of coins and lack of a heavy level if dumping to us does indeed back up other dealers thoughts about the market stabilizing.

AN IMPORTANT WORD ABOUT GOLD

Gold bugs are having the times of their lives. God only knows how many back yard bunkers are filled to capacity with gold, canned goods, and weaponry (we are not saying that to insult anyone). Gold bugs always have had the fear or economy will crumble and our world will end up in complete chaois. We’d say that the period we are in now probably is the closest they will ever come to having their fears realized.

If you have tried to order any quantity of bullion or buy any large amount of genric gold (especially $20 Saints) in the past 4-5 months you will have found there are NO physical quantities available. You can “lock in” prices, but it may take a few months for delivery. No dealer we know remembers anything like this. In 1980, people were SELLING all their gold. True to their nature, when gold hit $1,000.00, the gold bugs only bought more! Hardly anyone sold or is selling now. Dealers are scrambling to fill older orders for generics now that prices have drifted down slightly. Several larger dealers we know actually LOST some money back in October because they shorted the coins they needed and gold shot up. This time around, they did not take the risks of shorting.

At the Baltimore Show, there was very little gold available for sale. We saw no more than a handful of MS66 Saints. Even high grade $10 Indians and $1 Gold pieces were being bought up at the current MARKET LEVELS. People have gotten to the point where if they can’t get Saints or $20 Libs, they will go down a denomenation, or even a grade or two. The current coin pricing rags of course are not anyhwere near accurate since prices change on a daily basis-so if you are doing anything with gold-ALWAYS call for a current price.

The key thing to note: ALL GOLD COINS ARE TRADING AT CURRENT MARKET LEVELS. The premiums of the past 4-5 months are slowly thinning and disappearing. So if WHOLESALE BID for an MS65 Saint is $2,200.00-expect to be offered 2-3% LESS vs. the 5-10% over the BIDS you could have gotten. Orders are slowly being filled and the demand is slowly shifting to rarer coins (do not misunderstand, the world is still buying gold like mad).

We STRONGLY suggest if you have things like MS 64-65 Saints, SELL THEM NOW! The prices just seem hard to justify-unless you are convinced gold will hit $1,500-$2,000.00. The best place to put money is in the rarer gold coins. We do not say that because we do not handle generics. We say that because many of the rarer coins premiums have NOT gone up at all in the past few months. Opportunities exist all over in areas like GEM $2.5 and $5 Indians (when is the last time you remember seeing a a CAC MS66 of either offered?). High grade Gold Dollars and ANY GEM $3 except 1878 represent great potential. If things go the way we suspect, in a year todys prices of rare gold coins will be dirt cheap (nothing is gauranteed though). Remember, all these new massive bullion buyers can’t get gold right now. So they will be steered into coins one by one, or they will simply ask on their own as they will probably be bombarded with information from their bullion dealer seeking to make more than 1-2%.

AN UGLY PROBLEM THAT STILL EXISTS AND WHY CAC IS SO IMPORTANT

We won’t be anymore specific. Recently we purchased a $100,000.00 coin and found we made a mistake when we got it back in our office. It was a gold coin that had the slightest bit of putty in the fields (we recently learned the boys also like to use hair spray).

This was the second time in less than 2 weeks we had made this mistake. We definately are NOT incompetent nor sloppy when we buy big coins. The doctors are so good that you really have to study a coin over and over to detect any trace of their work. The patches of putty were so slight they blended into the color of the coins. Once it is pointed out, it becomes obvious. We’d bet at least 75% of all dealers would have missed this little patch too.

First, we will defend the grading services about missing the putty in the first place. When its freshly applied and rushed into grading, it is virtually undetectable. Only after it sits in a holder for a few weeks or months will it turn. So by the time it hits an auction or is wholesaled, usually its the retail dealer who gets screwed. Or, you could be a collector who has held a coin for a long time only to take it out of your bank box to see a horrible blue haze of putty has corrupted the coin grossly changing its appearance and value.

This is one of the top reasons why the public should use and accept an opinion from CAC. Forget about the grading issue (doesn’t every collector feel they can grade to a degree?). Even the experts will miss things like this. And as time goes on, it will only show up more. You do NOT want to be the one holding the bag.

Sure any grading service will offer to dip the coin and reove the putty. But do you really believe grading services buy back these coins? We certainly have NEVER had one bought back. Always keep in mind, putty or grease is put on a coin to hide lines or something. If the putty was put in place and a coin got upgraded, you are really in for a huge loss down the road.

These days what is making us even madder is the fact the services feel dipping is the cure and other dealers will simply say “don’t buy the coin”. In our opinion, both are a band aid, but NEITHER are the right answer. CAC does indeed take the worry out of buying a puttied or doctored coin and it takes aim at the root of the problem. CAC has definately expedited the price fall of the messed with coins (as well as any that are overgraded) giving the docs less reason to play. Very few doctored coins have been able to get by CAC graders (they pointed out to us what we missed).

Legend is part of CAC ownership because as you all know we HATE seeing any coin be doctored. We never like seeing any collector buy a doctored coin. When the pops finally do come out, you WILL be startled. This is why so many collectors today do not understand why dealer x who told them the coin they bought was PQ, are now trying to save their butts as to why that coin is worth 40-60% less and won’t get a CAC sticker. Of course its been long proven now that CAC coins routinely bring top dollar (just check ANY major auction).

This is one of the main reasons Legend will ONLY offer CAC coins to the public. Unlike other dealers, we want to make sure our customers are getting the BEST coins on the market without being exposed to the negative side that just does not seem to be going away.

We will definately NOT be offering our mistake to the public. It will be sent back to its grading service.

WHATS HOT?

Still holding the #1 spot-anything gold. Bust Dollars in VF and higher seem to be awake again. ALL problem free early copper is red hot. PROPERLY GRADED Morgan Dollars valued $250-$7,500.00 are in demand as well as ANY ULTRA Cameoed DMPL. ALL GEM PR Seated and Barber coins grading PR64-66. There even seems to be a glimmer of activity in all C+D mint coins XF and higher. GEM Commems popped back up too.

WHAT IS NOT HOT?

Small copper is not as intensely sought as before. Lincolns are badly suffering with their own share of ‘gradeflation”. No one is excited over 3NS in MS. And of course ANY COIN THAT IS OVER GRADED, MESSED WITH, OR INFERIOR is dead, not soft-dead. Patterns are still slow.

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4. Legend Numismatics Baltimore Coin Show Market Report
5. Legend Numismatics Baltimore Spring Show 2008 Market Report
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