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Market conditions react to money in jeans

Numismatic News editor expresses optimism about hobby.

Are you as optimistic about the hobby as I am? I am an optimist by nature. Sure, as an editor, I can also be cynical, but sooner or later my native optimism wins.

Economic optimism seems ready to pop out all over. I hear employment ads on local radio stations. I watch employment ads on local television. As I drive around Iola and surrounding communities, I see help wanted signs in windows.

I haven?t seen anything like it in my part of Wisconsin since the late 1990s. If now is the time for economic optimism, it is time to dust off the hobby economic theory of retired Coin Market editor Bob Wilhite. He offered his ?money in the jeans? theory of hobby development more than once in his career here, which spanned 1976-1999.

Basically, his contention was that if collectors and people who share the collector impulse have money in their jeans, they will spend it. They will buy the coins of their choice and that will add pep and growth to the commercial sector of numismatics. It could eventually lead to higher prices.

Wilhite knew that the hobby was not solely comprised of $8.5 million King of Siam sets. These great rarities can be like canaries in the coal mine, early warning that something is up that will soon affect us all.

In recent weeks, I am seeing very strong auction results. I am seeing very high interest in new Mint issues and a commensurate number of complaints when collector experiences with the Mint don?t quite match what they think they should be.

A case in point is the recent Franklin commemorative silver dollar sellout. I have had a number of complaints that the Mint set the order limits too high at 100. This kind of complaint doesn?t come my way in a slow market.

If you are a regular reader of the Letters section, you might have noticed a recent comment that a writer was expecting prices to rise on the new Mint issues that he was buying and that this would help him in his retirement.

I don?t advocate speculation in new Mint issues as a way of financing retirement, but I fully recognize that the speculative impulse in new issues is a function of the overall state of health of the hobby. The more people are willing to take this kind of flier, the healthier the hobby economy usually is.

I find myself taking the occasional flier. I recognized this impulse the first time I ordered proof sets directly from the Mint in 1969. I ordered two. I should have ordered the maximum of five but did not. I sent a second order in after the first, but the six-day sellout kicked my second order back. I was disappointed. But that is life as a small-time new issue speculator.

In some ways, I am still where I was in 1969 (Technically, the order period began Nov. 1, 1968). I ordered two of each of the available Franklin commemoratives in January. As a collector, I really only need one of each, but I kept to my traditional habits and ordered two. In the 1970s my number was five sets.

As regular collectors know, you win some and lose some. The Buffalo dollars popped up very nicely. Some of the modern proof issues, both silver and clad, have popped up very nicely, too.

In the case of American Eagles, the two 1994 silver American Eagles I ordered at what then was a very pessimistic time in the hobby have done very well. Others, like the proof silver Eagle issues since 2000, just sit there retailing for a bit over issue price.

Back in 1995, the conventional wisdom said don?t ever buy a new issue. Wait until the price has fallen on the secondary market before buying. Over decades this has been very good advice. It may be less true at the moment. That is a sign of a healthy hobby even if it may not be the best investment advice.

So while I am citing people I have worked with, I will invoke the advice of former editor Arnold Jeffcoat. Don?t bet the rent money. Buying new issues from the Mint is exciting. There is an element of lottery to it. If you choose to participate, enjoy it, but don?t let it distract you from your basic collecting goals. Putting sets together is our goal, not speculation.