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Journal entries from the founder of Legend Numismatics, Laura Sperber, help you stay current with the real happenings of numismatics. A former ANA Board Member, Laura has handled close to $1 billion worth of rare coins to date and has assembled many of the greatest collections ever. Her views and opinions are as "inside" as you can get. Warning: ALL her Hot Topics articles are pretty blunt!
Posted: September 4, 2016 09:36 PM EDT| 0 Replies
If you think this Hot Topics sounds like a broken record-yes, it does. I can never say these issues enough!
HOW LONG DOES IT TAKE FOR A COIN TO BE FRESH?
This is where many collectors make big mistakes. A coin purchased in 2013 is NOT fresh. Most likely people remember it. A coin from 2005 IS now fresh. There is no specific rule as to what is “fresh”. We like to think anything 10+ years or longer off the market completely is fresh. recently I had a collector say to me, I have been buying since 2012, why can’t I make money? THREE reasons here #1 the coins are not fresh, #2 the coins are not of true quality, and #3 we are NOT in a bull market. Its a mystery to me why so many people think building a Registry set, holding the coins for 2 years guarantees them profits. NOT!
To make real money in rare coins, you need to be a LONG TERM buyer. Yes, there are exceptions, BUT bull markets are cyclical. Not every time will the crack out guys aggressively buy a coin they saw with in a year or two. Those guys are so crazy, if they want something, they just pay insanity and submit the coin immediately.
A great example of how short term does not work: the Late Gene Gardner. He bought fabulous coins. he had a good advisor. But in sales like Newman where we made him pay $188,000.00 for the 1861 25C proof in 2013, we were able to by it at his sale in 2015 for $129,250.00. Now, our customer plans to hold that coin for at least a decade or more. While being “golds gift” to all No Motto Pr 25C in the end, the coin was not fresh. And in the 2 years since he bought it, the other buyers found other places to spend their money.
I am a broken record on this. BUY THE BEST QUALITY YOU CAN AFFORD. You don’t always have to buy MS68’s. Back in 1992, we bought the most outrageous toned Morgan (the $1 1882S NGC MS66 CAC -now in our Sept 29th Regency Sale) for a whopping $700.00. Even the dealer laughed hard when we told him we flipped it to great customer for $750.00. Today, that coin already has a very real bid (and more are expected) for $17,625.00 (all in)! I can tell you many more stories of so many other coins from PR Barber Dimes to RARE gold. One of the most famous stories: the Duckor $10 1920S PCGS MS67+ CAC Simpson. We paid $1,760,000.00. Dr Duckor paid $75,000.00 back in the early 70’s.
Buying a marginal PR66 Barber Half with lackluster color and slightly hazy mirrors today is NOT a coin you can sell in 2 years for a decent profit or really any profit-unless you buy it seriously BELOW market or something happens to create a huge boom. Yet so many collectors try to that and only lose money and get frustrated. No one ever said coins maintain 100% of their purchase price. They are like any car (even a top of the line Bentley) you take it home, the value drops 20%.
I have helped collectors buy coins today and have them immediately in a profit position-but that does not happen often. It NEVER happens with retreads-no matter how cheaply they can be bought. Never ever be afraid to pay a strong premium for a gorgeous fresh coin. In fact, to build any kind of HIGH END great collection you pretty much have to over pay.
WORKING WITH RIGHT DEALER
Be a do it yourselfer and see what happens. Unless you hold LONG TERM and buy the VERY BEST, you won’t make great returns. I never understood why collectors just do not want to pay dealers 5% for auction representation yet they will go out and overpay for a fully dreck calibre coin at a sale.
To make money in coins, having the “right” dealer by your side DOES make a difference. They are your eyes and ears 24/7 as well as your collecting partner. Go buy from auctions, 90% of the time the under bidder goers MIA right after the sale. A good dealer who sells good coins will stand by them and your not left empty.
One huge example of how a dealer makes a difference: Pogue. Yes Pogue. The late David Akers era saw the very best coins acquired. I know they had their BEST returns from the coins purchased via Akers and of course they held. We all know how poorly they did with EVERY coin purchased recently-especially the Missouri Cabinet Half Cents (which were of great quality). Not all post Akers coins were nice, many cost too much, and the prices realized reflected that. Poor judgement can happen on all levels. And not all dealers who think they are really great-are. You really have to do your homework when picking a dealer-but it DOES make a HUGE difference.
I spent my entire career building great collections or just placing the best coins. Because of it-someone like a Phil Flanngan (back to the 1882S MS66) will now enjoy nearly a 20% per annum return! Although I must confirm we did turn down $2,000.00 for the coin 30 days after we sold it to Phil. It has also allowed me to start Legend Auctions and go from ZERO to $12,000,000.00 in only 3 years. No question it has become a show case for some of the finest coins ever.
Prices today for marginal and dreck coins are almost at melt. We dealers have a saying about coins like those: “cheap is not cheap enough”. Earlier this year, I saw a collector who spent well over $1 million buying better PCGS gold cheap out of auctions the last 2-3 years. He wanted bargins. 90% of what he owns is grossly underwater and is only getting cheaper because about 2/3 of the coins have issues. Don’t think you can beat the system! Sure, these days there are coins that “fall through the cracks”. BUT its not many that really do. Most people simply do NOT buy right.
This HOT TOPICs is not about “deal w/me”. Its pointing out what collectors need to think about when buying and especially selling. The days of flipping coins 2006-2009 are over. We’re now in much more selective buyers market. buying anything cheap will NOT make you money-especially within the next 2-3 years.
I see more opportunities being squandered then ever today. Coin prices overall are too cheap. Yet collectors insist on buying cheap thinking they can resell in a short period of time. They do not look at the coins quality either. They simply blame everyone else when they fail. If they buy right, I see the potential for a ton of money to be made within the next 5-10 years. Always remember, QUALITY, RARITY, GET A GOOD DEALER, AND HOLD LONG TERM. That simple. Coins are NOT stocks. Unless you are in coins full time, you do NOT know everything and your grading skills are NOT as good as you think (I stand by that comment). Sadly, these days we can not just rely on what grade the holder says.
If you have any questions or comments, please email me at: firstname.lastname@example.org
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