By Laura Sperber - Rare Coin Market Report
THE POTENTIAL OF RARE COINS
Our expectations of 2011 were for it to be good. Not only has it been good, we are way ahead of last years record numbers. For the first half of 2011, Legend Numismatics SOLD TO COLLECTORS (not WHOLESALED, not including auction representation, etc) $25,000,000.00! While in the coin world that number is huge, in the real world, it is not. In fact it does not even equate to one really good Warhol painting!
We compare our business to other areas because we are trying to show how much room this hobby still has to grow. There are more people out there who can afford an item worth $100,000.00 or more then you realize. In the US alone, there are now something like 5 million millionaires. Just look at how many billions (yes BILLIONS) of art and whatever that get sold just between Sothebys and Christies. Even Gosigan Galleries (a major art dealer in NYC+LA) sells ONE BILLION worth of paintings a year!
While the rare coin market is 1000x smaller than the art market, no question rare coins blow any other collectable away by being the most liquid. As more people realize this, the rare coin market will continue to show remarkable growth. Hard to believe, but you can actually sell a $5 million dollar 5C 1913 Liberty Nickel faster and easier than selling a house of the same value (assuming the house is not overvalued).
A SPECIAL NOTE: a Unique photo of Billy the Kid just SOLD for a remarkable price of $2,300,000.00! Thats a photo! The one million dollar barrier is now what $100,000.00 was 20 years ago. In coins, we now have 4 items (the 1794 $ PCGS 66, our 1804 PR $10 NGC PR65, the 1913 5 PR66, and the 1933 $20) that have sold for $5,000,000.00 or more! We can think of at least five more items that if sold today would break $5,000,000.00 as well. Next up: $10,000,000.00 for a coin!
PCGS has been tracking million dollar plus coins and now has over 250. Unless we are missing something, just about ALL of them are in very strong hands. Thats why when anything comes to auction (especially a rarity that has been away for awhile) it will sell for a record price. We saw this years ago in the upper tiers of the market-there are far more buyers than sellers. Prices HAVE and are going up-there can be no accurate price guides since these coins trade so infrequently. As we mentioned when it got sold a year ago, the Contursi Cardnial 1794 $1 PCGS MS66 at $7.8 million down the road will be a bargin. Remember the $10 1920S PCGS MS67+ we paid $1,725,000.00 for 3 years ago? The original owner was laughed at for paying around $75,000.00 for the coin in the late 1970's.
Even in lesser dollar valued coins, there are many "no brainers" to buy today. You can buy many coins that have pops of LESS than 10, have high grades, few auction appearances, for UNDER $25,000.00. Even scarier are the coins you can buy for $5,000.00-$15,000.00 or so. Look at PR Barber coins in PR66 and higher. MOST are UNDER $10,000.00. We have been fans of them for years. You have mintages of LESS then 1000 pieces on most, pops of LESS then 10, yet you CAN complete the sets (this is just ONE example and it is of our opinion).
We know collectors are aggressively seeking BETTER coins right now. Whether some people want to hear it or not, they want CAC coins (or really high end non cac) in top condition. We have not seen a trend develop of bargain hunting for dreck at cents on the dollar. Legends problem has NOT been selling, its been finding enough of the "right" coins to buy for our starved customer base. It is NOT exaggerating when we tell people our Want List exceeds $20 million dollars and grows every day. Even some of the simpler and "staples" types of coins we can NOT buy. And ts certainly NOT for lack of us not paying enough.
The world loves gold. This year we have sold more better (and rarer) gold coins then ever. We see new people building collections ranging from Type sets to $10 Indians in GEM. We quietly sold a 27D PCGS MS66 this year. Its their "new" way of buying gold. We especially need high grade $5+$10 Indians right now (MUST BE CAC). There are probably MORE sets of those being built vs the availablity of coins that could be placed in them. So prices eventually will have to go up strong. When all the dreck is nearly gone, we predict you will see a price spike of epic proportions in these areas.
THE FIRST HALF OF 2011
We had a phenomenal first half. We had not projected to sell what we did. A few BIG deals came to us (the Deal of the Decade worth $6 million was one). Even though in the paragraphs before this we were saying how small the coin hobby really is, for anyone to sell $25,000,000.00 worth of RARE coins in 6 months to collectors is still huge! We calculated that was an average of 3500 coins (27 red double row boxes). That total DOES include approximately 2000 McCLaren coins valued at $500.00 or less.
During the first half of the year we picked up 120 new customers. We'd guess about 20 of them were totally new to coins (which we find amazing). These are NOT investors as we are now exclusively helping several build world class collections. This is hard factual proof that the demand for coins-especially real rare coins is there. Only three years ago our market was crazy and investors buying stupid. Since then, the majority of them are gone-but due to real demand (smart money sat out until these guys were gone), prices have NOT suffered on better coins at all.
If you have any question as to how strong the market is, research every auction archive of every fresh collection that came up for sale in the first half of the year. Here are two examples: Heritage FUN, the small group of coins that yielded the 1907 $10 NGC PR67 we paid $2,150,000.00 (fact: there were 3 bidders at $1.5 million), or the B+M Malibu Collection sales (where an 50C 1884 PCGS MS67 CAC sold for $48,000.00). These were NOT crazy numbers. Its what had to be paid to buy the coin. On the 1793 Ameri Chain Specimen PCGS SP 65 from our Deal of the Decade, we were offered $2,500,000.00 the day we bought it-and have had other similar offers since. If you notice, these coins mentioned were all rare, high end quality, and sold for record money.
Our assessment on the first half of 2011-it was strong (this is based upon OUR results). There is chop-on the lesser drecky material only. We believe the market will continue to expand for better material for the rest of 2011. For us, it could end up bad-if we do not get the coins! Heck, we can't even find ONE PCGS MS66 CAC Saint (non 1908)-and we are paying $3,450.00! We'd put out a Want List, but we are going to close our offices July 1-10th.
We WILL be attending the Summer FUN Show Wed-Thursday ONLY. Our next NEWPS (which will be serious kick butt) will be July 10th in the evening we will start to post them.