By Louis Golino for CoinWeek
F. Scott Fitzgerald famously said: “"The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function."
That quote came to mind over the past week as I was thinking about the forthcoming release next Tuesday of the single most-anticipated U.S. coin of the year, the dual dated, 1964-2014 50th anniversary of the Kennedy half dollar gold coin, and the U.S. Mint’s plans for selling the coin. I think Fitzgerald’s quote is relevant in this context because so many people are rushing to the conclusion, as I did in my previous article, that the coin’s unlimited mintage will probably doom its aftermarket potential. In fact, the more I thought about it, learned about the Mint's plans and discussed the issue with industry insiders, the more I came to realize that perhaps the opposite view is equally, and perhaps more, valid.
As Ian Russell, President of Great Collections, said: “Although the Mint is producing an ‘unlimited’ number of Kennedy coins, the key aspect is the household limit of five coins. This will ensure that the coins are spread around - and there will be a secondary market instantly. If the Mint lifts this limit, then the coins will be freely available and the secondary market will be affected. I personally like the coin (the design is iconic) and expect demand worldwide. Already we have clients wanting 100 coins each, similar to the Reverse Proof Buffalos last year.”
Remember that the 2009 Ultra High Relief Double Eagle gold coin also had an unlimited mintage and reached a mintage of 114,427. But probably the key reason the market for that coin has remained healthy is that buyers’ were limited to one coin per household for the first few months. That made it more challenging for dealers to acquire the inventory they needed for their clients, so at coin shows during the year when the Mint sold the coin on-site such as at the Long Beach show that summer, they continued to offer a premium to those who bought coins on their behalf.
Of course, only time will tell how it actually works out this time, but if the five per household limit is kept in place at least for some time, and the coin is not sold for too long a period, it is quite likely that demand will eventually exceed supply, and the coins will do fine. The fact that so many people jumped to the same conclusion that the coin will be a failure in terms of appreciation makes me suspicious, as the herd (which I admit to initially being part of) is typically wrong, especially when it comes to financial matters. That is precisely why most people buy high and sell low and lose money investing. And the most important factor for collectors is that these coins are terrific, as can be seen in pictures that have shown up online taken by media representatives who went to the West Point Mint, where the coins were made.
A lot of people poo-poohing the Gold Kennedy Coins have not yet seen them.
As far as the launch of the coins and the Mint’s special plans and procedures, which have been covered here at CoinWeek and elsewhere, they should help to some degree. I think the Mint's website will work better than it did when the baseball coins were sold, and that was certainly the case when almost 70,000 orders were received in the first 24 hours that the clad, two-coin set was available. I managed to get right through the waiting room, got my order in within about two minutes, and my order is listed as in stock and reserved, which means it will ship soon. That in itself is a big improvement.
At the ANA show, however, I am concerned that the use of tickets, side doors and so forth is not going to do much to reduce the pandemonium that is likely to ensue in Chicago. And there are going to be a great deal more than 250 people each day of the show who want those tickets for the 500 coins to be sold each day. Hopefully, the per person limit will be lowered to one, which is what I would have preferred to see for all sales venues, which will allow more people to get a coin at the show.
For some reason a certain amount of confusion continues to surround the profile of President Kennedy that will appear on the special tribute coins being issued this year. All seven (2 clad, 1 gold, and 4 silver) will use the profile that appeared on the 1964 coins that has a higher relief in the profile’s sculpt and more subdued hair. In subsequent years that sculpt was lowered, and the hair was given more definition. So the coins will not be high relief, as NGC is indicating on their special labels for the coins, and as Charles Morgan and Hubert Walker explained last week, they are also not accented hair, which was a special variety of the 1964 proof coin.
A final issue is demand, which is admittedly not easy to predict, and how soon the coins are shipped. I am pleased to know the Mint has produced 40,000 coins in advance of the start of sales. I expect that supply to go quite quickly, probably during the first week the coins are available, and those who order during the first day or couple days will hopefully receive their coins much sooner than was the case with previous minted to demand coins. That will make a big difference, as even buyers who could care less about first strike and early release labels don’t want to wait months for their coins.
All in all, next week is going to be an exciting time for American numismatics, and an important test of whether minted to demand coupled with household limits and a substantial initial inventory can strike the right balance between leveling (to some degree) the playing field for buyers, while not leading to an excess of supply over demand.
And the silver sets coming this fall may be the most anticipated of all the special JFK coins for 2014. I sincerely hope the Mint is able to stick to its plan to have the new order management system in place for the launch of those coins because they are going to be huge, certainly the biggest sellers of this program. I can't wait, especially after seeing the pics.
Copyright © CoinWeek – June 2014
Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His article, “Proposed Design Change Takes Flight,” which deals with the CCAC’s recommendation for a new reverse for the American silver eagle, appears in the July issue of the Numismatist. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA,PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.