State of the Mayhem -- oops, I mean Market

It's been a while since my last posting but I've been doing my best to observe the external markets to pass on some worthwhile perspective on how the financial crisis is affecting the coin hobby/industry/investment market.

For starters, it does feel as though we've been relatively insulated from the major vicissitudes of the market swings. Coin values have remained steady throughout the past month or so (and they were quite healthy before) but I do expect that there will be some downward pressures on prices of certain coins. There simply has to be. There's not as much confidence among ALL consumers right now, whether you are a car buyer, grocery buyer, house buyer, art buyer, or coin buyer. I still feel that the latter is the best place to be (more on that later) but it seems to us that everyone is being cautious right now with their spending. And rightfully so!

That said, we're still seeing good activity across the board, but the amount of volume is down for us about 10-20%. We're still not seeing many fresh collections come in, which would be nice, but that means collectors are not dumping their coin collections. And I've heard that from many of my contemporaries. Big-ticket coins ($10,000+) are harder to sell right now so there should be some good deals in this end of the market if you are feeling flush.

Why Are Coins Insulated?
A good question, and I admit my bias up front. However, I love certified coins as my primary investment (my entire inventory!) because the certified rare coin market is the most efficient of all collectibles and therefore, affords sellers the most liquidity. Every US coins has a value and we'll make you a cash offer on just about anything!

There are many reasons for this, but the principal reason is that collectors and dealers really respect the major grading services (PCGS and NGC) and their coins are highly respected and sellable. Sure, we may squabble about whether a coin is high end or low end for the grade, has good eye appeal, etc but we will NOT debate authenticity or the grade (in most cases). NGC and PCGS have made huge strides for the industry to give us all confidence. When a problem is brought to their attention, they fix it. So we(as dealers and market makers) are comfortable supporting the coins in their holders. Dealer confidence translates to collector confidence, and so on.

Another reason for numismatic liquidity is the fact that coins are so easy to transport. It's a snap ship a $50,000 coin across the country via Fedex. Try that will a large landscape painting... or better yet, 50 of them!

Coins are also intrinsically tied to the emotions of the gold market. Right now (and for the foreseeable future) gold feels like a good play. Sure, it goes up and down, but many of us see gold in the $1500 range at some point. That will be an incredible boon for all US coins -- gold, and non-gold alike.

Let's Trade
I mentioned earlier that folks are being careful with both their buying and selling. But trading (non-cash transaction) is a GREAT thing to do in this market. Drop me a line and let's make a big trade!