By Dan Duncan - Pinnacle Rarities
Few cities can rival Baltimore in its ability to provide the perfect venue for a coin show. The close proximity to a number of major metropolitan areas and the variety of after show entertainment makes Baltimore a great town for conventions. Last week, the Whitman crew did an outstanding job, covering all the bases for dealers and collectors alike.
We usually expect good things from this show and last week didn't disappoint. We have recently purchased several larger collections and the fresh material kept us busy with both wholesale and retail sales through Saturday. While finding "pinnacle" quality material remains a challenge, we were able to ferret a small stash now available online. And getting face time with the collectors we speak with regularly is always the added bonus.
On Saturday I was lucky enough to enjoy an in depth conversation with a long time friend and advanced collector - Gregg Bingham. Our conversation centered on the state of the economy, and of course the rare coin business. It was his observation that the overall coin buying public has become way more selective. Gregg went on to explain that despite the recent positive employment news, the Fed continues to print money and inflation is beginning to rear its ugly head. He concludes that tangible investments are again becoming attractive as stores of value. As the down economy has sucked the investment capital from the pockets of many collectors, the result is more cautious buyers. The people who attended the show weren't feverishly buying up all that shines, instead they worked harder to cherry pick the quality rare coins from the Stacks-Bowers sale and from dealers lucky enough to have some fresh material. The downturn in the economy has caused the more casual price buyer to re-examine their spending habits. Gone are the uneducated speculators who at the beginning of this century rushed into the market with little planning other than buy coins and make money. (If it were only that easy!) Gregg believes that while other markets struggle to regain momentum, the quality (emphasis on quality) coins purchased in this economy will show excellent gains while our currency devalues. I tend to agree.
There are two tiers to our market. The premium quality examples and uber-rare specimens always command premiums. Even in the worst economy in 75 years they continue to outperform, while the lower quality material is now virtually unsalable. This market divide has widened and a line in the sand has been drawn. Quality material continues to bring strong prices, and the low end material has begun to pile up in the corners of show cases or as unsold lots in the never ending parade of auctions. The speculating buyers have learned that the over graded, doctored, and more common swill becomes little more than glorified paper weights in tougher times. This is a lesson the seasoned collector has traditionally avoided as they always seek only quality material to fill their cabinets.
But even the knowledgeable collector base has been run through the sieve of tough economics. What remains is a leaner, meaner and better prepared overall buying public. It seems the quality of collector has improved while the overall numbers have decreased. The tough economy has either pushed people out of the market, or forced them to become more informed (a caveat we always encourage). The majority of clients I had the pleasure of dealing with were very well prepared with want lists and price guides. Their purchasing was more selective, but in some ways easier. The public that made it to Baltimore came to buy. Absent were the many lookie-loos and the time stealers who have one of "those" at home. The lack of the coin show tourists gave dealers more time to spend with real collectors. The people in attendance had specific desires and the dealers came with orders to fill. Nice coins continue to be tough to find and the buyers recognize that.
So combine a great convention town, with high quality show promoters, and the results are usually positive. Add a confluence of market forces and a better informed public, the result is a picture of last week's Whitman Rare Coin Expo. With less quality material available, our inventory outshines most. And while the sheer volume of public is down, the quality of buyers has drastically improved, proving sometimes less is more. This in mind, we are very pleased with the underlying strength to the market. And for the record, last week's Baltimore show was one of our most active shows in recent memory.