Hot Topics

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!

Use Dealers to Represent You

I CAN’T BELIEVE WHAT I AM SEEING AND HEARING

This is not a new subject. I’ve written about it before. Why don’t collectors understand buying out of auction on your own is highly risky? I was shattered the past two weeks with what I heard and saw. So many collectors are so foolish. It does NOT matter how much you spend either. 

For all the boo birds who think they are so smart and don’t need dealers, good luck. And to all the chat room geniuses, yeah call this article self serving too. Already saw one article where a collectors thinks they are a better “expert” then most dealers-NOT! You don’t know reality. Too many “do it yourself” get burned. Not everyone can be a quick study and know everything about coins and the coin market. The scene is too inviting for trouble. 

Right before Pouge I talked to two long time intelligent collectors. BOTH simply put “blind” bids in on coins they wanted. Neither had seen the coins. They both said due to rarity they felt taking the flyer was fine-after all look at the collection the coins were in. I couldn’t have scolded them more. BOTH coins were miserable FLUNKED CAC and one was clearly messed with. It was another bad case of auction fever. There is no way I would have let either buy the coins period. But BOTH collectors had strong urges to “play” in auction. If these coins had been offered by any dealer privately, I know neither collector would have bought them (but then if another collector had offered them at least one would have jumped on it). Fortunately, both got out bid. 

WHY SHOULD I USE A DEALER? THEY JUST BUY OUT OF AUCTION TOO

I sat there in total disbelief I was actually hearing that. Sadly, the collector who said that, spent about $1 million dollars on coins from a major auction house that I’ll call grossly substandard. He now clearly sees the difference and regrets his actions. He was looking to save some money and instead would lose big if he sold today.  

Yes, many dealers do buy from auctions. However, most of us know which coins to buy and which coins not to buy even if super cheap. We also know which coins to step up on and pay more for. Had this collector worked with a dealer, he would not have a low end collection that he can’t get out of for many years. By paying a dealer 5% (or what ever fee you can agree on) to guide him when he makes a purchase is nothing compared to the free advice he gets when a dealer says do NOT buy a coin. That is where great collections are made. 

For good dealer representatives its really not as simple as just showing up, looking at the coin and bidding. Dealers have many tools and references not available to collectors to research the coins. A dealers experience also matters. Plus, certain coins can also be “famous” for certain good/bad reasons within the dealer world. Hard to believe, but sometimes the grading services do miss things. Plus, a good dealer can be invaluable in what they can teach you. Yet so many collectors just don’t trust or want to pay dealers. 

AN UNADVISED AUCTION BUY

We had another long time collector who had bought a nice coin for too much money out of an auction a few years ago, Knowing what he likes, we never would have let him buy it. Since his initial purchase the market has retreated some. So when we had a coin that was better by a + and costed less, he was horrified that at first we offered him a HUGE cash LOSS and then basically told we did not want the coin. He could not understand it. The clear point here-there is NO safety net when buying out of auction. Its not my problem he had to have the other coin. I was not a fan of the coin so why should I stretch when I knew it would be hard sell? Even if he put it back in auction, ouch! He’d lose some money. It was a purchase that never should have been made. But then to save that potential 5% it was justified by the collector. 

Don’t get me wrong, there are times when you can out on your own buy, but there are far more times when you should not. I have seen too many times when after a bidding war erupts and the buyer needs out in a short period of time, the under bidder is long gone. There is no safety net in auctions. When you work one on one with a dealer, there is relationship and some degree of security. Even if you think you are being a smart bargain hunter (bargain hunters in coins eventually end up in trouble-there are so few top coins they never are cheap) USE A DEALER WHEN BIDDING. 

STOP THE AUCTION BUYING MADNESS! REALLY! 

Here is a paragraph from a previous Hot Topics:
 

I’M READY TO JUMP OUT OF MY SKIN! 


Why will people pay crazy money in auction-when I can sell them the same coin for less? Its something that has bothered me so bad that I saw no way to change it-I started my own auction company. I see who I registers to bid. I shake my head in amazement how they won’t buy from dealers, but they will chase a coin at any price almost in auction. 

At auction, the price you pay typically is higher then normal. People forget, auction is a competition to see who can buy a coin for the highest price. I have seen so many times some pay $5,000.00 for a coin they can buy at any major show for $4,500.00. Plus, how can you buy from the internet only auctions where there are no descriptions and no qualified numismatists? Have coins really just become a plastic widget commodity? The majority of bad auction purchases are from Internet sale, then phone book size huge auctions. 

All I am saying here, is collectors should work more with dealers. They will save themselves a bunch of money and a good dealer will be a safety net down the road when it comes time to dispose of their collection. Remember, at auction you immediately LOSE 17.5% off the top from the buyers fees (like the 20% you loose driving a car out of the showroom). 

The right time to really uncork and pay a lot in auction-is for a fresh rarity or a wild coin. Even then seeking advice is suggested. Widgets should not be bought out of auctions! Collectors, start using some common sense! 

Also, by using a dealer to represent you, could knock them out of costing you money vs them being your competition. 

THE MORAL OF THIS HOT TOPICS

USE A DEALER. Use a dealer when bidding in auction and use a dealer to assist you in building your collection. Not all dealers are bad. Every dealer I saw at Pogue representing people were all top of the litter. I do not know of one single MAJOR collector who who does not use a top dealer for guidance or representation. Sadly, the average collector seems to go out of their way to avoid dealers all together (especially proven by chat-room attitudes). Give them an auction (especially internet) and a chat-room (sometimes blind leading the blind as so called “experts”) and they think they are ahead of the game-NOT! 

Sure its hard to find a capable and competent good dealer, but they are out there. The biggest collectors EVER (Norweb, Bass, Simpson, Pogue,etc) ALL used the BEST dealers of their day as their trusted advisers/experts. I have worked with a huge number of the top collectors today as well as many smaller single coin buyers. The fees they pay are made up in money they do NOT lose. If smart money does this, shouldn’t you too? 

I’m throwing my hat in the ring and reminding people I am available (of course my regular customers have first dibs). Stop throwing good money after bad. I can be reached at: lsperber1@hotmail.com. I just spent $8,800,000.00 in Pogue representing some of the smartest collectors around today, I am not trolling for more biz-however I see a huge need for ALL collectors to be better advised and I know I am one of the top in the biz at it. In fact here is a hint, go to the next Pogue sale and see who all the dealers are who are ripping people-they will rank among the VERY best. Pick one. What I saw and heard in the past two weeks really stunned me. I saw a lot of money down the tubes that should not have been. 

If you have any comments, please feel free to email me direct: lsperber1@hotmail.com

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