Registry Collectors Keep Market Strong
Posted by NumisMedia on 3/1/2005
Wow, what a strange cycle we are experiencing. Or are we? It appears that the balance of activity has shifted to modern issue coinage. But is that really the case? We have studied the market for decades and much of the activity we have seen over these many years has been at coin shows, auctions, dealer teletype, through printed media, and occasional dealer mailings of buys and sells. Several years ago, we added the Internet to this list of information gathering. Prior to the Internet, as important as it is, much of the information could be easily deciphered and one could determine the difference between truth and lies or exaggerations.
The Internet is an amazing concept. It tends to give all an equal voice, providing everyone with a system to express their points of view. However, it may not be accurate if a novice numismatist exposes others to inferior information or pretends that opinion is fact. This is where you have to determine the difference between fact and fiction. As a credible numismatist, you need to be expert enough to provide superior information that leads to the advancement of numismatics, not hearsay and innuendo. As a dealer or collector, you need to verify any and all information you feel has some hint of untruth.
The so-called talk on the Internet currently is about modern issue coinage. This gives the appearance that the coin market is interested only in modern issues. While this is a very active area of the current market, it is by no means a correct assumption. Over the last three months, dealers have been bombarded with inquiries about modern issues and the mint's release of bullion-related coins has caused quite a stir among today's numismatists. Hundreds of millions of dollars has been spent for these modern bullion coins. With all this interest in modern coins, old rarities (but common dates) have taken a back seat for the time being. Or have they? While modern bullion coins are receiving much of the visual attention, we are seeing many astute collectors purchasing traditional U.S. Gold from the past. Since the premiums are so low at this time, they are taking advantage of all the publicity afforded the modern issues. While the novice collector participates in modern issues, the classics are waiting in the wings for a future of potential interest.
In the past month, we have seen a rise in several of the U.S. Gold issues that had previously stumbled. Common $20 Saints in MS 63 are up $30 over last month's FMV — as is the MS 64 — but the MS 66 has jumped from an FMV of $2,660 to a higher $2,910. This indicates that demand has been restored because the FMV had drifted too low. Especially the MS 66 coins, where supplies are not readily available like they were a few weeks ago. Even the $5 Indians, which had plummeted over the last few months, seem to be solidifying at this time. MS 63s moved back to a higher FMV of $2,780 from the October level of $2,500. These are the kinds of trends that we look for to help analyze the overall market and the potential direction it may take. Obviously, astute collectors and dealers do the same thing as they buy and sell into this market.
It is understandable how the modern issues attract so many collectors because these coins look nearly perfect. In fact, the grading services have certified so many of these coins as 70s, it allows many collectors who are putting together Registry Sets to increase their overall performance rating. Registry Sets are a major reason that the coin business is so successful today. Collectors love the idea of competing for a collection of the highest graded coins within a specific series. There are thousands of collectors putting their money on the line as they try to overtake the collector ahead of them for a higher rating. This has become such a major undertaking that collectors will actually pay two or three times what they had anticipated in a major auction just because there is competition vying for the same high-grade coins.
While the modern issues are receiving much of the media attention, the idea of Registry Sets is not a new one. Registry Sets have been around for a long time; it is now that they have been given an official name. Look at any of the major collections from the past thirty years and you will find that they were the finest coins offered at the time. They may not have been called a Registry Set, but they certainly could have been. If you visit the NGC Web site, you will be able to locate a Registry Set for just about any method you wish to collect coins. Here you will see hundreds of potential sets that can include coins certified from NGC and PCGS as well. What makes this interesting is that potential collectors can follow an area and purchase coins to compete and not even place their coins on the site. This is where it gets even more interesting. There are hundreds, if not thousands of collectors who are non-visible participants in the Registry Set phenomena. We liken this to a game of pinball; the high score is right there for all to see and the next player knows what they need to become the highest in that category.
As we travel the country to coin shows and auctions, we are exposed to many collectors of classic coins, some expensive and some not. The current theme we find is there are hundreds of thousands of collectors absorbed in finding the right coins for their collections. The demand is so widespread that most dealers can sell just about any coin in their inventory for the current FMV. The only real problem is the proximity of the buyer and the seller. That is why wholesale dealers go to coin shows at a breakneck pace to gather coins for other dealers to sell to their local collector customers. The Internet also makes this an even easier proposition. So there is a constant flow of business even when the market appears to be slow. There may be areas of softness but we seem to have settled into a normal market. Some coins are strong, some are weak at current levels, and many others are somewhere in between. While some may disagree, we feel this is a very healthy market.
The good thing about the modern issues and the collectors of this material is that one day, they too will be considered in the same vein as classic coins.