Cash gets you lower prices

Buyers with cash are gaining the upper hand in significant areas of the market.

I walked the floor at the Baltimore Winter Expo last week. The activity there was about the lightest I have seen over the years of attending this show.

This observation does not come from my personal experience. I took less than the usual amount of inventory to show dealers who had tables as my company had enjoyed good numismatic sales for a number of months. Consequently, I had a lot less excess inventory to offer. Similarly, my company has been fortunate to recently purchase several deals in our store from the public and other dealers, so my want list this time was shorter than usual.

The sales I made for my company were the lowest ever at this show. Although I took advantage of a softer market, my purchases were also well below typical.

Part of the value in attending major coin shows is to learn market information and reinforce business relationships. While I picked up a lot of market information, a much higher than normal percentage of dealers with booths at the show told me they were not doing much business, either in absolute terms or compared to their expectations and hopes. This is the information on how I evaluate the overall show.

(As an aside, no matter what coin show there will be some who do exceptionally well – as I encountered in Baltimore – and others who have horrible results. By asking a variety of dealers over time at many shows, I am able to get an overall market sense.)

In discussing why dealers had a slower than normal show at Baltimore, there were three main factors that were mentioned multiple times:

1. There has been a sizeable dollar value of numismatic material crossing the auction blocks, using up collector budgets and leaving dealers with more inventory and less cash.

2. Some collectors are becoming more cautious in their buying, as I discussed last week.

3. With slower sales, dealers are having more cash flow problems than usual.

I talked with some dealers who specialize in purchasing inventory from other dealers that need to raise quick cash flow. Generally I was told that they are being offered more material than typical in the past couple months and that they are able to purchase the inventory at lower prices than they previously paid. This tells me that the numismatic market has several sectors where the buyers have the upper hand.

This could be boon for collectors. While I don’t have a comprehensive rundown of all the numismatic niches for what’s hot and what’s not, here are some where collectors may find lower costs to purchase right now.

• Common- and Better-Date pre-1934 U.S. gold coins

• Mint State Peace dollar rolls

• Almost any kind of coin that has problems

• Classic U.S. gold and silver commemoratives

• Many key-date U.S. coins in grades popular with collectors, especially those that saw significant appreciation from 10 years ago

• Commonly available U.S. paper money

• Numismatic Chinese coins

If you are sitting on cash that is available for discretionary spending, you just might be able to pick up some of your favorite items today at prices that will have you smiling years from now.

Patrick A. Heller was the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He is the owner emeritus and communications officer of Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Coin Week (http://www.coinweek.com). His radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com).

More Collecting Resources
• Come on down to the Chicago International Coin Fair in Rosemont, Ill. on April 14 to 17, 2016 to see impressive world coins, meet new collectors and participate in Heritage Auction’s fantastic coin auction.
• Are you a U.S. coin collector? Check out the 2016 U.S. Coin Digest for the most recent coin prices.