Annual Market Review

As 2016 nears its historic conclusion, we in the numismatic world have also enjoyed another incredible season full of inspired collecting opportunities. Having spent five decades traversing small and large bourse floors, studying and further educating myself about various series and fine-tuning market trends, it is apparent to me that my fascination and joy with this subject is still as fresh and exciting as ever. Each new coin I view or purchase is a prize. The search and hunt rummaging through dealers' inventories in showcases, 2 x 2 storage boxes or bargain bins is so much fun. While the coin I may be searching for is alike in type or variety to a host of others, each is unique in appearance. Finding the “right” coin is such a triumph.

This ritual reminds me of the excitement in my youth waiting for that elusive toy premium, lodged within the contents of a box of my favorite cereal, to drop into my breakfast bowl. Yes, at our breakfast table my brothers and I were not allowed to paw into the box and pull out the toy. By parental mandate it was to be a matter of gravity and luck as to which sibling would have provenance on their side as they poured out a portion in their bowls.

As another birthday and the beginning of another decade are on the horizon for me next month, I know that I will never amass a stellar marquee collection in my lifetime. That, in truth, was never my goal. Yet what I have personally selected was and is the best I could find within my budget and tastes. Some coins I bought nearly 50 years ago are still with me. As I pull them from the storage box they each seem to possess another glittering dimension, coming to life and sparking recollections of when and where they were acquired. Thoughts and memories of those that got away and others you wish never made it. As this article posts, we are nearing the eve of the great Christmas holiday. So parents, there’s still time to acquire a Red Book or sign up someone for a membership in the ANA or at NGC. As has been the case in this column, I have consulted with experts from all fields of our great hobby to comment on the state of the coin market and share this platform with them for some prognostication for 2017.

John Brush, President, David Lawrence Rare Coin Galleries

What are good values for novice collectors (on a budget or not)?

“I think that there are still a lot of good values in the coin market across the spectrum. On the higher end, rarities have taken a bit of an adjustment in values, especially in auction. But lost in the action is the fact that many of these coins are not replaceable in a lifetime. Based upon that, I think that there are a number of famous rarities that are very good values for those with the means to pursue them. Coins such as the 1804 $1, 1894-S Dime, 1913 Nickel and the like seem like great value to us.”

On the lighter side, for the more set-oriented collector according to Brush, “I love the values that are offered in the business strike Barber series. Several major collectors have sold their holdings over the last 5 years or so and there are many underrated pieces that are very difficult to find that can be had for very reasonable prices now. In particular, I like the quarter and half dollar series. Another long-popular series that seems to be a good value is the Buffalo nickel. We’ve seen many opportunities present themselves there this year on dates and grades that were previously not available.”

"Lastly, we still really like some of the better date gold pieces with extremely low mintages. There are a lot of values to be found here, especially in the smaller denominations as the mintages are often minuscule and there are many dates that simply don’t come available often."

"I would advise collectors to stay away from mass-produced modern items. The premiums on these are still higher than I’m comfortable with and I think that the overall best values and rarity, especially when the time comes to sell, remains in rare coins and not modern issues.

How or if will the presidential election results impact the market?"

"We are hopeful that the recession that we’ve experienced over the last decade or so is declining as the economy slowly strengthens itself. I think that a pro-business president that wants to help the economy is always a positive for the coin market as it gives each of us a bit more confidence in our financial situations."

Any concerns for you, the dealer, about the hobby?

“As a dealer and collector, my concerns will remain the same. We must continue to bring young blood into the hobby and we must continue to educate customers. An educated customer is always the best one and the more information that we can share and the more assistance in developing their collection that we can offer, the better the long term prognosis.”

What is your mild or bold prognostication for 2017?

“We’ll continue to see contractions amongst dealers and businesses surrounding our hobby, but not in an unhealthy manner as even some medium to larger companies join forces to offer more services to collectors."

"A few major rarities will trade hands in 2017 and by the end of the year, we’ll be seeing a few less dealers and far more optimism in the hobby.”

Mark Feld, Senior Numismatist, Heritage Auctions

What are good values for novice collectors (on a budget or not)?

“I realize this isn’t really what you asked here, but...the best value I see for novice collectors is to better arm themselves with grading knowledge/ability and market information. I recommend that they view as many professionally graded coins as is practical in their area(s) of interest. Coin shows and auction lot viewing are two good options for this. And if the collector is fortunate enough to have a knowledgeable collector friend or trustworthy dealer who can review coins with him, so much the better. I also recommend that novice collectors make much better use of the vast amount of information (including rare coin valuations) that can be found online these days.”

How or if will the presidential election results impact the market?

"My guess is that the economy will improve and that more people will be more optimistic. I also expect that inflation will have an uptick. As a result, I wouldn’t be surprised if the overall coin market improved in the second half of 2017."

Any concerns for you, the dealer, about the hobby?

“I am deeply concerned regarding what looks to be even more/worse/accelerating gradeflation. During the past year, I have seen some disturbing grades that appeared to ignore serious, fairly obvious flaws on high grade coins. And among other areas, I have also seen a proliferation of liberal grading of uncirculated mid-to-late twentieth century coins.”

What is your mild or bold prognostication for 2017?

"Due to economic factors, my guess is that, overall, the rare coin market will improve in the second half of the year. However, I expect that prices for more common, super-high grade certified coins will continue to decline, in many instances, dramatically.”

Dave Wnuck, Dave Wnuck Numismatics LLC

Per Dave, 2016 is winding down to be a rather lackluster year in the coin market. “There were neither spectacular highs nor frightening lows in 2016. It mainly consisted of most coin prices drifting slightly lower, despite strong performances overall from gold and silver bullion. Having called the presidential election completely wrong in 2016, I am not likely to give anyone confidence in my forecasting abilities. But that never stopped me before, nor will it now.”

How or if will the presidential election results impact the market?

“Any market hates uncertainty, so now that the results are known, this is good for all markets—coins included. The economy was already performing robustly if unevenly and I expect the good economic times to continue. When disposable income rises, it bodes well for coin collecting. So overall, the end of this divisive political campaign and a continued healthy economy are big positives for us here in numismatics.”

What is your mild or bold prognostication for 2017?

“Over the past few years there have been several spectacular collections dispersed at auction. These consisted of the sale of hundreds of millions of dollars in rare coins where the proceeds were not reinvested back into rare coins. While it has been great to have the opportunity to purchase such coins—many of which have been off the market for decades—it is a bit of a relief to see these sales all but over. The coin market isn’t very big by most economic standards and I, for one, have been impressed with its ability to absorb all of these “new” coins with only very modest price declines overall. Now that those coins have been absorbed, the typical scarcity of rarity and quality that has driven market forces can resume. I don’t expect this to result in an explosion of upward price momentum, but by the end of 2017 some modest price gains would not be unexpected.”

Ian Russell, President, Great Collections

What are good values for novice collectors (on a budget or not)?

“I love the value in Seated and Barber coinage. Prices have come down over the past 2 to 3 years to levels that I think are just too cheap. Even CAC-approved examples are great value at the moment. Seated and Barber coins can be bought in many different price ranges from $50 to $500 to $5000+. Stick to certified coins by the major companies. In the modern arena, coins like the 2009 Ultra High Relief have retreated over the past few months to levels that I consider them to be a "buy." Gold Buffalos in Proof 70 DPL are also good buys.”

How or if will the presidential election results impact the market?

“Although the election has already affected the gold price (and bullion coins), I don't think the election has directly impacted the rare coin market. Longer term, if the stock market continues to increase, there will be people with extra money to spend on coins and that will help the overall market. I've heard people say the opposite as well. It's a difficult aspect to predict.”

Steve Roach, Editor-at-Large, Coin World

What are good values for novice collectors (on a budget or not)?

“Gorgeous Type Proof Seated Liberty and Barber silver coins in Proof 65, 66 and 67 seem to be great values at current levels assuming you're able to select nice examples. They're gorgeous, scarce and seem to have a lot of room for value increases if the coin market moves up. In modern issues I like some of the lower-mintage First Spouse gold coins that trade just over bullion value as long-term holdings. Though there's no guarantee that this series will ever be widely collected, they trade at such modest premiums over more traditional bullion coins that there seems to be little risk if you're going to buy physical gold anyway.”

Any concerns for you, the dealer, about the hobby?

“I remain concerned that even though the demographics of the United States are shifting towards becoming more diverse, the US Mint's customer base and the hobby generally are older, white and male. As young people don't handle coins daily—nor have parents or grandparents to introduce them to coins—where is the entry point for new collectors? The typical scenario is that a person is introduced to coin collecting at a young age, perhaps 7 or 8, and then might return to it later in life when he/she has disposable income. In the absence of this first spark, how will people find coin collecting? I remain concerned about our hobby's viability in the next few decades as collecting in general seems to be in decline and coins are replaced by emerging technologies, removing coins from one's daily life.”

Charles Morgan, Editor, CoinWeek

What are good values for novice collectors (on a budget or not)?

“The best value for collectors right now are numismatic books and an open mind. It's much better for a collector to buy into wanting to collect a series and know why, than to buy into individual coins with no game plan. Building a coin collection is not a race, it's a self-enriching pursuit. There is no wrong time to buy coins if you keep this perspective in mind.”

How or if will the presidential election results impact the market?

“The presidential election was a distraction for the rare coin market. People were rightfully concerned and unsure about the outcome of the election and that may have slowed down the market. But I think the reality is that the market is doing fine right now. Great coins are finding homes and good coins are selling for fair prices. There's been a lot of doom and gloom in the industry for a while, but the unvarnished truth is dealers, who know what they are doing are selling coins and making money.”

Any concerns for you, the dealer, about the hobby?

“We are a publisher. Dealers need to embrace the 21st century and support the people supporting the industry. We have grown tremendously in the scope and quality of what we do and we are driving a number of people to the hobby. We need the Mints and the dealers to take advantage of our platform...and frankly, any platform that broadens the base of the market. Dealers also need to do a better job communicating what they do to their customers. This isn't a little guy vs. big guy thing. Some of the best coin marketers we know run coin shops.”

What is your mild or bold prognostication for 2017?

“The rare coin market will continue to produce new collectors. It would be nice to see some of these major collections come into the limelight and lead the way. Anonymity at the upper levels hurts the hobby and the market because it allows the false narrative that no one new is buying these big coins. There will also be more than a few tears shed when the final coin sells at Pogue V.”

Any personal memories, stories or anecdotal holiday memories pertaining to our great hobby?

“I will miss my friend Herb Hicks who passed away recently. Herb was a talented numismatist and a real help to me early in my career. We were members of the Ike Group together and the correspondence we had back and forth led to the creation of one of our first major articles, From the Herb Hicks Files: The Illegal Ban of Gold Certificates." Herb worked behind the scenes to get the status of these banned notes reversed so that collectors could openly trade them. He also discovered the Type 2 Eisenhower dollar and a number of hub changes in the Washington quarter series. Herb's loss reminds me that the most important aspect of the numismatic hobby is the relationship we have with our friends.”

Dave Bowers, Numismatist, Author and Co-Founder of Stack's Bowers

What are good values for novice collectors (on a budget or not)?

“The very best thing for a novice collector to do is to go s-l-o-w-l-y at the outset when buying coins. First, buy a copy of A Guide Book of United States Coins and read ALL of the front material, before the coin listings start. Then starting with Colonials read the narratives for each section and skim or browse the listings. Continue this to the end of the book, through to page 312, which is the end of classic commemoratives. From that point to the end of the book, skim lightly, stopping on any items of special interest.

Review listings of books for sale on the Internet on the Whitman, Wizard and Amos Media sites. I like Whitman’s The 100 Greatest United States Coins and The 100 Greatest United States Medals and Tokens of course!”

"Read the Guide Book and the two other books and spend a week doing it. Perhaps re-read the front section of the Guide Book."

"Do the above and you will be quite aware of the spectrum of American numismatics; sort of like taking a college course."

"Once that is done, select areas of interest and make some purchases. Study pricing to determine what grade offers the best value. Among Mint State coins there is often little visual difference among pieces graded say MS 64 and MS 65, although 65 may cost much more. Always—no exceptions here—buy coins with good eye appeal."

"Buy slowly and carefully so that your budget carries you through the first year of collecting.”

How or if will the presidential election results impact the market?

“I do not see this having a major impact. With America’s prosperity, diversity of citizens, resources and more it would be nice if we could have a Golden Age that emphasizes art, science, music, education, standard of living and infrastructure. This could be done by introducing efficiencies into what I mentioned above. However, it is unlikely that Congress or the new administration will make great changes. Meanwhile, the collecting and enjoyment of rare coins should continue nicely.”

Any concerns for you, the dealer, about the hobby?

"The hobby would benefit from the ANA and PNG taking action on misleading advertising and promotions. Many newcomers are dead at the starting gate if they buy from telemarketers or through popular media and then learn that in the aftermarket there is no resale at even close to the prices they paid. Ideally, dealers should describe and offer coins to the public in the same way they do to a relative or neighbor. I have tried to do this all my life. I am an idealist of course.”

Dave then discussed the possibility of certified dealer / numismatic accreditation: “Some sort of official certification for a professional numismatist is long overdue; something like certification for accountants and dismissal for those who do not comply. Today anyone can have business cards printed and call himself/herself a professional numismatist and say whatever wild and misleading things they want to about coin investment."

"Grading of coins has been changing with gradeflation and the lack of consistency. It is troubling when someone pays a high price for, say one of only three coins known in a certain grade only to find a few years later that there are 10 or 20 known. Contra to this, if a coin is submitted 5 or 10 times to a grading service, it is more profitable to them than if certified just once."

"This brings me to this: While grading is important, the overall quality of the coin is more so; the strike, the visual appeal. An MS 63 coin that is well-struck and beautiful is much more desirable than an unattractive MS 65 at multiples of the price. Cherrypicking for quality is the key. Significantly, those who have been seriously involved in coins for a number of years have come to learn this.”

What is your mild or bold prognostication for 2017?

"The market will continue to be mixed; strong in many areas, less so in others. For Federal silver and gold coins from the mid-19th century to date the market will be sluggish for high grade coins with grading uncertainty being part of the reason. For circulated grades the market will remain solid. If either gold or silver bullion sees a sharp uptick, this will have a very positive effect on mint state and proof coins struck in those two metals."

"Many specialized areas will remain strong or increase in strength. Included will be Colonial and state coins, Hard Times tokens, Civil War tokens and medals, especially items priced below $1,000, but strong in more expensive areas as well. Circulated coins that make up the bulk of collections of members of the Colonial Coin Collectors Club, Early American Coppers, John Reich Collectors Society and the Liberty Seated Collectors Club will remain strong. Among thousands of examples I mention VF Vermont coppers of 1785 and 1786, Capped Bust silver from half dimes to half dollars, Liberty Seated coins of all eras and more. I like Morgan dollars 1878 to 1921 and Peace dollars 1921 to 1935 and suggest buying as many different as you can in grades from MS 63 to MS 65 is at once a pleasant pursuit and in today’s market offers a good value.”

For those on a more liberal budget, Bowers had a marvelous suggestion: “If you can afford it, try building a type set of the six different double eagles from 1850 to 1933. Beyond that, “story coins” are always fascinating to own. On the high end, how about an 1857-S $20 from the Central America treasure.”

Conversely, for the beginning hobbyist, “On the low end, such coins as the 1909 VDB and 1943 steel cents, the almost free four reverse designs of 2009 cents and the 1883 Liberty Head nickel without CENTS are very appealing and easily affordable. I have a complete collection of statehood and later quarters from 1999 to date—inexpensive and interesting. I am also a fan of Sacagawea dollars starting in 2000 and even have the famous (and not inexpensive) 2000-P “Cheerios” dollar of which fewer than 100 are known. Wait! There’s more! Along the way make friends with other collectors and dealers. Your life will be enriched by doing so.”

Ira Goldberg, Co-Owner, Goldberg Coins & Collectibles

Any personal memories, stories or anecdotal holiday memories pertaining to our great hobby?

“It was around Christmas time 1979 and I had been purchasing coins for Dr. Jerry Buss, who at the time owned the LA Lakers, the Kings and the Forum. He had been a client of mine for many years building a US coin collection since his days as a physics and mathematics professor at USC. His real estate business had allowed him to venture into the sports business and increase his spending in numismatics. He often invited me to the Forum for dinner and to watch his Lakers play basketball. This time it was a Lakers versus Boston Celtics game, always a huge event in Los Angeles as the Celtics have always been the Lakers' nemesis. During the game he asked me what were the three most important key US coins that he would need to complete his non-gold collection. I told him they were the 1913 Liberty Nickel, the 1894-S Liberty Dime and the 1804 Silver Dollar. He then asked me how much they would cost. I quickly figured in my head that they probably would cost in the vicinity of $1.5 million if I could locate all three. He told me to go get them. I was eating a hot dog with mustard at the time and had nothing but the napkin I was holding to write this all down. I scribbled on that mustard stained napkin our deal, he signed it and as they say, the rest was history."

Well there you have it my friends. Until next time Happy Collecting, Happy Holidays and Happy 2017!

Jim Bisognani is an NGC Price Guide Analyst having previously served for many years as an analyst and writer for another major price guide. He has written extensively on US coin market trends and values.