Nat King Cole had a great song about summer. For most people, summer can still be a lazy time to enjoy outdoor barbecues, baseball and other pastimes. For numismatics, on the other hand, it is full speed ahead.
What were my readers doing over the July 4 weekend and the day immediately prior? At least some of them were e-mailing me that they had gotten delivery of the American Buffalo gold bullion coin approximately two weeks ahead of the Mint?s schedule.
My thanks go out to my readers for keeping me posted when I am sure there were other activities on their minds for themselves and their families. I know I was heading off for the wedding of my niece.
My congratulations go to the U.S. Mint for its so-far well done introduction of the new 24-karat bullion coin. All problems reported so far have been from eager buyers who couldn?t wait to get their hands on the new coins. I can understand their frustration. I hope early delivery helps soothe any frayed nerves that resulted during the early hours of Mint order-taking.
Eagerness is something that coin marketers have been taking advantage of. I have already received one phone call from a buyer of the new American Buffalo bullion coin. He actually bought two. They were both graded MS-70. The price of each was nearly $1,000. He wanted to know if he had done a good thing.
Well, I don?t give investment advice relating to specific purchases. So I am sure my response was maddening to the caller. I told him if he was a collector and liked the design, he had some new coins to keep and to treasure. If the purpose of his purchase was to jump into something that might make him money, I had no opinion. Clearly, it was the latter motivation that was at work.
He said he had been told by the seller that there were only 15,000 out there. I don?t know if that means 15,000 MS-70 coins or 15,000 Buffaloes. The caller wasn?t clear, but what was clear was his disappointment when I told him that 85,000 uncirculated Buffaloes had been shipped to the Mint?s Authorized Purchasers in the first few days of availability. More would be struck and shipped as buyer demand warranted through the end of the year.
I asked the caller why he had not bought the coins from the Mint. He said he wanted the uncirculated pieces rather than the proofs. There was no confusion in his mind as to who had what. However it was sinking in that he had paid a rather high premium to get his uncirculated coin purchase. I did not say it, but by my calculation, he paid on the order of a 65-percent mark-up from bullion value.
He asked me if such a high price was usual. I replied that whenever something completely new enters the marketplace, there are buyers who will pay a premium to be the first to own it. He understood, but that didn?t seem all that appealing to him. It was clear to me that buyer?s remorse was setting in. He remembered the Buffalo silver dollar of 2001 and hoped the excitement and profit would be repeated. As we conversed, that possibility perhaps seemed to disappear to him.
What I did not ask him about was whether he had seen an ad somewhere and responded to it or if he had been called by a telephone marketer. Since I have seen ads in the financial press for the new bullion coins, I am assuming that he had initiated the contact. Whether this buyer will get his money back, I probably will never know.
I wish the caller well. I know there are others who will find themselves in the same boat. The rising price of bullion might bail him out. The collector pride of ownership might take away some of the sting of perhaps overpaying. After all, he could take them to the local coin club meeting, if he is a member, and very likely will be the first to have the uncirculateds.
Thanks to all readers who shared their excitement with me. The process isn?t over. Keep sending me your thoughts by e-mail. I am at firstname.lastname@example.org.