A Review on the Coin Industry Thus Far.. by BNB

I'm feeling VERY creative right now.

In this objective report, I will discuss everything I know so far and have learned so far while being a very active participant in the coin industry.

I have met people like Illini, Charmy, Mr Organic, many dealers, and the world of Coin Talk.

Since this report will be objective, I will not over glossify anyone/anything just for my own validation purposes.

Ok, let's start. Grab my hand, and let's take a wonderful imaginative stroll through the world of coins...




What we're looking at is a world filled with the ebb and flows of buying and selling. Greed, personal gain, loss, trust, betrayal, and more!


When I first started in this industry, I clearly made it known to everyone that I was an investor coming from a very strong background(over 5 years) in the financial markets. Many didn't like the new guy in town because he represented something very different than most, but eventually, acceptance came when I started understanding you, the coin enthusiast.

As weeks/months went by , I started attending shows, buying coins, selling a few duds, and spent most my time occupied talking with Illini over the phone about coins or picking the brains of dealers at shows..

I just lived and breathed coins as my life support for months.

Eventually, I got every coin (well except for a 3 leg buffalo off heritatge the other night) that I locked my eyes on before getting involved here. A lot of coins were thrown at me and after doing limited research on them, I took the bite.

Now, I am here with some very beautiful key date/semi key date coins that a lot of people wish they could have. I feel great, or do I?

In coins, just like in marketing and sales, there will always ALWAYS be the next big thing. It's a recurring process that never ever stops. This year was a UHR gold eagle, next year it'll be something else. It hooks us. We are like dogs in a way salivating at the mouth for the next coin. Well, most of us are anyway.

Coins can be a world of great if you look hard enough for the gems. They exist, everyone told me I couldn't buy for bid and get nice coins, well, I did and I have living proof of it! So that's possible, not common, but possible.

Now, don't get me wrong, coins are great, they're dealers out there(many) that are nice and fair, but.. there is a dark side to the industry to.

At this point of the post, I respectfully ask Illini420 to come to the thread and share some of the dark sides of the industry so this report can be fair and balanced.

Illini, share with us what experiences you've had with dealers, buyers, fakes, or whatever that you'd like to share.

This is going to be a wiki style report. I'd like people to add their stories and experiences to this thread so we can create a well rounded perspective on the coin industry thus far.

It can be a great industry filled with infinite reward given the money situation, but also a very deceptive/greed filled one. Let's see where this goes.

Thanks and continue from here....

BNB

 

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Interesting - I can see some just using this thread to complain(dealers,ebay, etc.). Some people don't like dealers making a living at selling, some dealers what to buy everything cheap - good, bad, etc. Me, I just collect cause I enjoy it. Will be interesting to see where this thread goes.

 

Well hopefully the dealers aren't focused on as the main point to this thread. I'm looking at the coin industry as a whole and how it effects us as people, society, and life.

 

The buying and selling of coins regarding the bright side and dark side is no different than the bright and dark side of used car buying. It is part of the way things are in this society.

 

Curious thread. I think the way to go is to really, really like, or love, the specific coins. Coins as investments is a route I would not consider: that's walking down an alley at midnight on Halloween!

 

INTRODUCTION
​

I don't think I am informed enough to give an accurate assessment on the coin industry as a whole. Most of you will probably not believe this, but I don't know even one coin dealer. I have built my entire collection by purchasing sight unseen from online auctions and dealers. Likewise, I don't know any coin collectors either. Everyone I know from the numismatic world exists only in the virtual world.

COLLECTOR REPORT
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The internet world has not changed IMO. The chat rooms are filled with the same type of collectors that have always existed. There are newbies that discuss coins they found in pocket change. Big money investors that throw money around with reckless abandon. Bargain hunters who seek to purchase every coin for below greysheet. Registry drones who know little of coins and basically buy high priced plastic. Toning enthusiasts who love eye appeal more than money. Blast white collectors that prefer their coins look exactly the same as the day they left the mint. Bullion investors who watch the prices of silver and gold as if they were their children. Error and Variety collectors who search thousands of coins with a loupe in search of the next great discovery. Plastic haters who think the TPG's have ruined the coin industry. Kool-aid drinkers who believe only in TPG snobbery and superiority. There are modern collectors who love mint and proof sets and the like. Darkside collectors who live happily in the shadow of the US coin collectors.

No matter what group you fall into, I have found a common theme. Each group is diametrically opposed to another group. When members of these opposing groups meet, conflict starts. For example, this site has it's fair share of collectors who prefer to collect un-certified circulated coins and fill albums. When they run into the big money investors, they become critical by saying that the investor doesn't really love coins because they cant hold them if they are permanently entombed. Personally, I wish we could get to the point where collectors would respect each other's preferences no matter what group they belong to.

TONED COIN MARKET REPORT
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Each month prior to the Heritage Signature Sale, I search the auction for coins that I find extremely eye appealing and track them. I don't usually bid on many of the coins, but I like to see how they perform. It gives me an idea of the how the toned coin market is doing. Here is what I found this month. Monster color coins remain very strong indeed. However, the premiums for more subtle toning seems to be softening somewhat. I will list some of the coins I tracked below and give my comments.

1917 Standing Liberty Quarter NGC MS66 FH

Price Realized: $6,325
Wholesale: $1,425



http://coins.ha.com/common/view_item.php?Sale_No=1130&Lot_No=576

Description

1917 25C Type One MS66 Full Head NGC. CAC. This stunning Premium Gem has magnificent multi-colored rainbow toning over frosty silver luster on both sides. The strike is second to none with every detail boldly and completely defined. Although NGC has certified 317 of these in MS66 and another 58 in MS67, only eight of those coins have been assigned the designation, including five MS66 and two MS67 (9/09).(Registry values: N1793) (#5707)

This coin is phenomenally toned for a series that is almost impossible to locate with attractive rainbow toning. I consider this one of the top ten 1917 SLQ's in existence with regards to eye appeal. My bid on this coin was close to 2X wholesale. The coin sold for almost 4.5X wholesale. I guess the other collectors shared my opinion about this coin.



1924-S Peace Dollar NGC MS64 CAC

Price Realized: $1,092
Wholesale: $1,050



http://coins.ha.com/common/view_item.php?Sale_No=1130&Lot_No=1126

Description 1924-S $1 MS64 NGC. CAC. Both sides show a broad diagonal stripe of peach and dots of peripheral tan-olive, with light silver-gray color present elsewhere. Pleasingly detailed for the issue with few overt abrasions.(Registry values: N991) (#7364)

This coin does not have monster toning. A subtle yet pleasing patina gives the coin character and originality on this conditionally rare issue. Even with a CAC sticker, this coin barely broke the wholesale price barrier. I expected this coin to exceed Numismedia Retail value easily.



1936-D 50C Cincinnati MS66 PCGS. CAC

Price Realized: $862
Wholesale: $1,100
Auction Archive: $713



http://coins.ha.com/common/view_item.php?Sale_No=1130&Lot_No=1149


Description 1936-D 50C Cincinnati MS66 PCGS. CAC. Lovely lemon-gold drapes this lustrous Premium Gem. Hints of aqua-blue and cherry-red grace the margins. Essentially devoid of post-strike abrasions, though the highpoints of the harpist retain the texture of the planchet.(Registry values: N1793) (#9284)

Another example of a coin with pretty but not monster toning that underperformed IMO. Although the stated guide price for this coin is definitely way too high @ $1,100, the fact that this coin with this toning only achieved $150 over the average auction archive price is disappointing.



1938 50C New Rochelle MS66 NGC. CAC.

Price Realized: $1,725
Wholesale: $580



http://coins.ha.com/common/view_item.php?Sale_No=1130&Lot_No=9093



Description 1938 50C New Rochelle MS66 NGC. CAC. NGC Census: (481/103). PCGS Population (800/146). Mintage: 15,266. Numismedia Wsl. Price for NGC/PCGS coin in MS66: $600. (#9335)(Registry values: N991) (#9335)

A monster toned example for sure that sold for 3X wholesale. The New Rochelle is one of the easiest commems to find with monster toning and every time one hits the market, they seem to do very, very well. This coin was no exception.

CONCLUSION
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My overall opinion is that collectors are becoming more discriminating in the current economic environment. If the coin is not spectacular, it most likely will not see a premium that it saw in years past. For the toned coin collector this can be an opportunity. We can take solace in the fact that the monster toned market seems untouched by the economy and use the softening of nicely toned examples as a buying opportunity to pick up eye appealing coins for much smaller premiums.

 

I'm not a part of the "coin industry", I'm just a collector enjoying himself.
Guy

 

Lehigh....that is a report!

 

Lehigh that was brilliant! Thank you for sharing this insightful and in depth reflection and study. Very very impressive.

 

Toned Jefferson

Another monster Toned: Sold for just short of $1,500.00

 

Coin collecting is a hobby, not an industry, detroit making cars is an industry.

 

Coincidentally or otherwise, I bid, sight-seen on all of the above except for the Peace Dollar.

I was blown out of the water in my bid for the 1917 Quarter above - I bid a bit over $2500 on it. I agree that it is one of the more eye-appealing examples in existence.

The Cincinnati was above average quality for the grade, with subtle, attractive (though not gorgeous) color. I bid $747 on it.

The MS66 New Rochelle is one of the prettiest I have ever seen, though that wouldn't be obvious in the images. I believe I was the under-bidder on it at $1610, a price that is higher than a number of MS67's have sold for.

In the classic coin segment of the market that I deal in, spectacular quality and/or especially eye-appealing coins seem to be about as strong as ever. Those which are less than that in either department, however, can sometimes be had for quite a bit less than anytime in the past few years. My comments are generalities and there will, of course, be exceptions.

 

Mark,

It would seem that if you are bidding on all of these coins, that your clientele is made up of collectors who are very much like me. Based on the final paragraph of your post, we seem to have the same take on the current toned coin market.

I am actually very upset with myself for not bidding on the Cincinnati. If find that creamy honey lemon color over lustrous surfaces irresistible as well as the final price. The Peace Dollar was on my list because I need 24-S for my collection. I agree with your point about the images of the New Rochelle. The coin deserved the large photos that really show the color better.

Your previous advice about buying coins sight seen from an earlier thread is sound and should be followed by collectors. However, I have gotten very good at judging toning/eye appeal quality from Heritage photos. I can see a photo and almost envision in my mind what the con actually looks like in hand. This skill has enabled me to build a very nice collection over the years. I just hope Heritage doesn't change their photographic method. Furthermore, I am going to start checking your inventory after major shows to see if I want a second chance on the auctions I lost.

 

Great Report Lehigh

Thanks for posting Lehigh and setting the standard for an excellent report!:smile

 

Thank you for posting that coin. It actually works well into the current topic of conversation.

Auction Name: 2009 February Long Beach, CA Signature US Coin Auction #1122 Lot: 7914

Price Realized: $1,495
Wholesale: $62
My Bid: $850

Description 1945-S 5C MS67 NGC. NGC Census: (1516/3). PCGS Population (77/1). Mintage: 58,939,000. Numismedia Wsl. Price for NGC/PCGS coin in MS67: $56. (#4027)(Registry values: N69) (#4027)



http://coins.ha.com/common/view_item.php?Sale_No=1122&Lot_No=7914#photo

The toning on this coin is very curious indeed. It bears resemblance in both color and pattern to the famed (or infamous) Appalachian toned Jefferson nickels but the certification number is not consistent. There are only a few possibilities. First the coin is from the Appalachian hoard and was cracked and resubmitted. This is highly unlikely given the risk involved in the coin getting body bagged for AT. Second is that the coin is a production of a copy cat coin doctor who got this coin past the graders at NGC. Third is that the coin is NT and storage conditions must have been similar to those of the Appalachians. Without getting to deep into the debate over the originality of the Appalachian Jeffersons and this coin, we can all agree the coin is very striking.

I bid $850 on this coin which is also the same amount that I paid for my 1945-S Appalachian Jefferson. In this case there is no doubt that the toning is monster rather the debate hinges upon the originality of the toning. These coins whether AT or not consistently sell for 10X wholesale price. I do not like to go much above that price. The buyer of this coin decided that was not a problem as he paid 24X wholesale. This auction was from 8 months ago showing that monster toning is always in style.

 

Paul, it's not so much the makeup of my clientele, as it is my preference regarding the type of coins I handle. And that's , even if I don't have a particular client in mind for them when I acquire them.

It is, indeed, a highly important skill to be able to evaluate on-line images and discern how the coins, themselves, might compare to the images. I am extremely impressed with the appearance of the coins you post from your collection - we seem to have very similar tastes, as well as thoughts on the current market conditions.

 

It's hardly just "this society"... but rather any society where people display human nature !

 

BTW what does the star after the grade mean?

 

This thread along with the link to NGC's site should answer that queston.

http://www.cointalk.com/t46534/

http://www.ngccoin.com/coingrading/stardesignation.asp

 

No, you can actually see it as an industry because it works like one. A smaller one than cars but still a thriving one. Anyone who buys a coin, buys into the coin industry...