By Laura Sperber - Rare Coin Market Report
No, Legend is not having a clearance sale or anything like it. However, after reading some very interesting articles we have come to the conclusion (actually reminded ourselves) how cheap rare coins really are. They are so cheap relative to other "collectible" areas it seems like they are forever "on sale". What makes this even more baffling to us, is rare coins enjoy one of the largest collector bases of anything.
After reading Christies Great Estates magazine, we took a deep breath. They listed six "collectible" items they sold last year including:
Patek Phillipe Watch: $6,501,849.00
Andy Warhol painting: $18,330,000.00
Gustav Kumt Painting: $18,801,250.00
A bronze Statue: $43,185,000.00
Picasso painting: $106,482,500.00
14.23 Pink Diamond: $179,860,000.00
The fact any of those items sold for what they did is mind boggling to us. Further, reading the magazine you see a hundred pages of houses listed for $10,000,000.00 and higher. Granted, houses are not to be compared to coins and comparing the art market to coins is weak, but it should serve as a reminder how much money there is out there in the world. This is just one magazine!
Now comparing really rare coins to the items listed above, we'll discuss more two more valuable ones we know well: the $10 1907 Proof NGC PR67 we purchased in the 2011 Heritage FUN Sale for a stunning $2,185,000.00. Sure, for coins it brings a gasp. But when compared to these other areas, its a bargain. Like everything on the Christies list, this coin has sex appeal. It was minted by order of the Mint Director and kept in his family until last year. It is gold. It is a coin that universally agreed to have one of the most beautiful designs. It is unique. It is one of the FINEST $10 Indians that exists. So why did it sell for ONLY $2,185,000.00? Or, the 1C 1793 Ameri Chain Cent PCGS Specimen 65 our partner bought for $2,000,000.00 (and did turn down an immediate $2.5 million offer). Shouldn't one of the unquestioned FIRST strikes ever from the US Mint (certainly the first struck regular issue coin) be worth far more? We can see this coin being easily worth $15,000,000.00 in 10 years. If it were a watch (the Patek Phillipe we listed above was from 1943), it probably would have sold for that today. These two coins are just stupid cheap. Why? Because rare coins are on sale!
WHY ARE COINS STILL SO CHEAP
We are not sure why coins are so cheap. We do know the market for US Rare coins is definitely world wide and growing (thank you Internet). We do know there are now at least 150 coins worth OVER $1,000,000.00 that have actually traded hands or have ready buyers should they ever sell. Last week we sold a coin for $1,600,000.00-and we are not going to do any major announcement (we have sold SEVERAL coins OVER $1 million dollars in the past year with no fanfare). Third party certification has its moments, but it has been proven successful and is now in its 25th+ year. Rare coins have unparalleled liquidity. You can't take ANY antiquity, lamp, or even painting to a dealer and sell it for an immediate check-even if its just $10,000.00. We can keep adding to this list and still be scratching our heads at the end as to why the numismatic marketplace is so undervalued.
One last conspiracy theory we do have is that the lack of supply is so severe, new money thinks the coin market is too small for them to spend in. That is a HUGE possibility as we do admit Legend does millions of dollars per month in sales unless we cannot find coins. Any losses Legend has suffered in the past few years have ONLY been because of lack of supply. Demand in our eyes has only grown (we can prove that by how much we sell). The scary part, even if coins prices were to double, many coins are in the hands of real wealthy collectors who would simply continue to hold. This theory applies for coins valued as low as $500.00!!!
What this all could be leading up to is one wicked boom. Rare coins simply are NOT available like they were 10-15 years ago. There are no 1894S 10C for sale, no 1804 $1's (yes, dealers used to inventory them), or Ultra High Reliefs. The supply side has become so thin you can't even find GEM PR $20 Gold, better Morgan dollars in GEM, enough GEM PR 67 Lib Nickels to build more than one set, or MS66-67 Bust halves more than once a year (if even). Its not just the big rarities either that will OVER TIME benefit should the demand finally break the price resistance.
Holding your coins for 5 years just does not bring you hyper returns. Look at the greatest collections with the greatest returns. Especially Pittman. He was not a millionaire and struggled with every purchase. He had bought the BEST QUALITY and greatest RARITES he could and held his coins 20-35 years. His % return was not nominal-it was staggering, averaging in some cases 500-1000%! The rare coin market is definitely poised for this type of return. You will be able to take advantage of the ride assuming you buy the right coins.
SO DOES THIS HYPE AFFECT ME?
What we have written here is NOT hype. Its what we see. We deal with collectors ranging from billionares to ones who can only afford a MS65 Morgan. We see the other areas they inhabit as well. If you keep an open mind and work with a smart and capable dealer, you WILL find incredible deals in just about ALL areas of the market today.
We strongly suggest you not be so afraid of all the "buy rights" in front of you. Do not be whimpy and only buy out of an auction because you need the security of an under bidder. Right now coins like PR Seateds (all denominations+grades), PR Barbers (all denominations+ grades) are selling for a song. You can buy a GEM PR 65 1913 25C (mintage only 613) for just UNDER $2,000.00. Or, you can build an entire set of PR66 Barber Quarters for about $50,000.00. GEM PR Gold, any PR65 or higher with a mintage of LESS then 50 and a price of LESS than $50,000.00 sure sounds like a sale price to us. Try and find these coins, you can't. Of course when seeking tremendous bargains, always try and buy the highest grade you can afford and the rarest coin as well.
Even MS67 Morgans are a steal. Hand pick a dozen great looking pieces and put them away for 10 years. We can't see them at $800.00 forever (with these quality especially counts)!
All its going to take is $50,000,000-$100,000,000.00 of new money to come into coins in a matter of a few months to force the market to rise significantly. Even the notoriously wrong and slow to react CDN won't be able to hold back coin pricing. Prices at coin auctions will go thru the roof like we have never seen. The amounts we mentioned are NOT a ton of money. Watch every time a major "old time" collection hits the block from this point on-you ALWAYS get "moon money" record prices.
Sorry folks, we are taking a much needed breather from Long Beach. We have been on the road and have already made the ultimate status on air miles for the year! Legend will be set up at our regular table (555) in Baltimore.
We are working harder than ever to find fresh and high end rarities. Luckily we have purchased a small deal that includes some magnificent Superb GEM Bust Dimes and GEM Proof Two Cent pieces. We are also working on several other deals as we speak (we much prefer to see coins from collectors vs having to go through dealer retreads any day). Legend does not care for quantity, we look for serious quality.
If you have any questions about what this article means for you, feel free to email us (firstname.lastname@example.org) or call. No, we're not saying coins are going to explode tomorrow and you must buy, we're just pointing out the huge possibility we do see. It drives us nuts when collectors pass up coins because they think they are 20% too much-yet you'll never see the coin again for 5 -10 years.