RCNH Monthly Newsletter: February 2018 Issue
Over 200 Years Of Combined Numismatic Experience At Your Disposal.
A Newsletter By:
My Responses to The 2018/2019 Crystal Ball Survey
By Warren Mills
Welcome to the February issue of The Rare Coin Enthusiast. This month I have permission from Maurice Rosen to publish my answers to his probing questions about the coin market. His newsletter, The Rosen Numismatic Advisory, is an excellent read about the numismatic and bullion markets. Maurice picks a panel of numismatists every year that he feels has his or her finger on the pulse of the coin market. I am honored to have been selected to give my opinions for over 10 years. With all of the great numismatists in the country, it is a nice feeling to be regarded so highly. His subscription information follows this article. Also, if you have any answers that you would like me to elaborate on, feel free to call me or email me at your convenience.
The Rosen Numismatic Advisory
THE 2018/2019 CRYSTAL BALL SURVEY, Parts 1 & 2
WELCOME TO THE FORTY-FIRST CRYSTAL BALL SURVEY!
1. The long-term price performance record for many of the popular coin areas participated in by investors has been poor. What’s your take on this and how do you explain this to your collector/investor clients?
Mills: Over-grading has diluted the quality, resulting in an over-supply and eroding of market confidence. Also, due to aging and lack of interest in collectibles there are less people interested in coins.
2. Aging demographics is the uncomfortable reality affecting our hobby, market and business. A) Looking ahead 10-20 years when participation by many of our clients and fellow dealers will be greatly reduced or have passed, what realities will confront the industry? B) What needs to be done to preserve and grow the hobby and industry?
Mills: A) Oversupply and lack of buyers. B) A concerted effort of education and interest from historical, aesthetic and economic points of view needs to occur. If the industry doesn’t get in gear, we’ll go down the way of stamp collecting.
3. What is the future of coin shows? A) Take the ANA’s major Mid-Winter and Summer shows. Can you see them no longer taking place 20-years from now? B) How about the FUN Show? What makes it so successful?
Mills: A) Shows should dwindle down to very small shows and a few majors. People still need shows to experience coins in hand and learn about grading. The auctions alone with the vast amount of coins to see are an education in themselves as scans of coins are not enough to really get an accurate read on a coin. B) The FUN Show is a nice break from the winter, and is exceptionally well run. Dealers save their inventory to show at this show.
4. It seems we are moving towards a cashless society. How would that effect the coin market?
Mills: The coin market has an aging demographic. Many current customers are concerned and don’t trust Bitcoin and other crypto-currencies. They are also worried about compromised privacy. I feel a cashless society would negatively impact numismatics.
5. Assume that in the years ahead the price of gold is $5.000 to $10,000, and silver is well over $100. How do you see the coin market at such a time?
Mills: With proper customer education about rarity and desirability of numismatics, the market could be in a glory-day up cycle. If we fail to educate potential customers, bullion will be the rage and numismatics more of an afterthought than a legitimate alternative for diversification.
6. Staying with gold, premiums for generic U.S. gold coins have collapsed over the last couple years. A) Do you see premiums staying low for a long time or not? B) What are today’s best long-term values in this market?
Mills: A) Premiums will stay low until a major event dictates a hard asset run. Many current U.S. gold type coins are a half-point or more overgraded. Is it because the grading services want bulk submitters to submit all their coins to them? This creates over supply and inferior products. B) I like strictly graded gold type coins, the premiums are small. CAC MS64 $20 Saints could benefit for a lot of reasons.
7. I’ve asked these questions in many past Surveys but it’s the #1 topic among my subscribers and clients. A) How satisfied are you with the current coin grading system? B) Are there any changes you would want to see implemented?
Mills: I am disappointed. The allowances make for bulk gold submitters has put many coins into the market that are one-half to a full point overgraded. Circ. Silver type is atrociously graded. Most now are so cleaned and altered that an original coin looks out of place! Originality needs to be emphasized.
8. The Greysheet (CDN) has made many changes to its price reporting over the last year. A) How satisfied are you with their price reporting? B) What changes would you like to see?
Mills: The Greysheet is being used less and less. I’m not impressed, though I like and respect the people involved. I’d like to see changes to educate. New columns need to reflect original coins. Look at Bust Dollars. Many sell for almost one-half of bid, yet original CAC coins bring over bid in the same grades.
9. What are your Best Buys for Mint State and Proof U.S. Type Coins?
Mills: I like the Civil War issues, also there are many Philadelphia, New Orleans and San Francisco mint type coins that are underrated. Examine population reports and buy original coins only.
10. What are your Best Buys in the Morgan and Peace Dollar market?
Mills: Commercial grading is killing these series! If it’s dipped white, the services 64 or 65 it. That’s awful. Original white or attractively toned MS64, 65 and 66 pieces is the only way to go.
11. What are your Best Buys in the U.S. Commemorative series?
Mills: WOW, commercial grading murdered this series! Over-supply hurts, while monster toned pieces set records. Buy strictly graded pieces with nice color that don’t cost an arm and a leg.
12. What are your Best Buys in the U.S. Gold coin market?
Mills: 1) Look at the population reports and search for “P”, “O” and “S” issues. Many go under the radar and are rare and cheap. It’s a speculation but isn’t guaranteed. 2) Super gem and type gold should come back. 3) Nice CAC MS-64 $20 Saints are good deals.
13. What are your Best Buys in any other area of your choosing?
Mills: I like most Civil War issues. The historical interest alone should add to demand. Original only!
14. What one fairly low-priced coin is a very appealing put-away coin for collectors and investors to accumulate for the long-term? Why pick it?
Mills: I like Seated $0.25, $0.50, and $1s in VF and XF. The $0.25 and $0.50 pieces are very inexpensive with limited risk; the $1s have suffered some from so many cleaned ones being certified. Nice pieces of all these coins are a neat area of interest. History and eye-appeal and a good collector base are positive.
15. There is talk of new and/or added increased taxation on internet sales. What would be the result on coin sales if that became a reality?
Mills: Anytime an added expense is put on a coin, there will be some backlash. Keep in mind, it would be across the board on all products sold on the internet. I’d just expect more office or show business.
16. A) Do you see further coin dealer consolidation and fewer dealerships in the years ahead? B) What would that mean for the coin market?
Mills: Yes I do. As dealers get older and retire, there will be fewer around. Just like our client base, there is a dwindling effect. There are only a handful of sharp, young dealers. The big dealerships will get larger, and their innovations and large budgets will get the remaining collectors.
17. What’s the one coin you would love to own though it may now reside in a collection or museum? You would have clear title to the coin.
Mills: I’d pick a high grade, well-struck original 1794 Bust Dollar. The reason is mostly sentimental. When I started RCNH in 1990, I had one but had to sell it to help fund the company.
18. Your opportunity to free-wheel on any subject of your choice.
Mills: I wish the grading services would stop grading so many cleaned circulated coins. The price for all original coins will start to suffer because of the tidal wave of cleaned certified coins. Look at Bust Dollars (#8 here). This does nothing to educate people on the virtues of owning original, uncleaned coins.
EDITOR: MAURICE ROSEN
PUBLISHER: NUMISMATIC COUNSELING, INC.
MAIL: P.O. BOX 38, PLAINVIEW, NY 11803
OFFICE: 1120 OLD COUNTRY ROAD, SUITE 306
PLAINVIEW, NEW YORK 11803
516-433-5800 - FAX: 516-433-5801
SUBSCRIPTION: ONE YEAR $48
HALF YEAR $28
PER ISSUE $10
Partner and owner of Rare Coins of New Hampshire, Inc. since June, 1990 and a full time coin dealer since 1979. Warren is a full member of the Professional Numismatists Guild and a life member of the American Numismatic Association. He was selected by the Rosen Numismatic Advisory as one of the ten leading numismatists in the country for twelve consecutive years. He was selected by PCGS and written up in their newsletter as handling and submitting some of the nicest coins they have ever seen.
The Spirit of Giving
By Dave Carleton
I can’t believe that January is already in the rear view mirror. It seems like only yesterday we were gearing up for the FUN Show. I’m sure Warren has shared some interesting observations of the show as he was all over the place. I was stationed at our table and got to meet a lot of collectors and a few of our customers. It is always nice to finally meet someone face to face after speaking on the phone with them, in some cases for years. We had a great show and the convention center in Tampa was excellent.
One thing I’ve noticed as the New Year begins is the wave of calls seeking donations for just about everything. We’ve had to condense our giving to just a few organizations that we really trust. Regarding this theme of giving I’d like to share an interesting fact I learned this week. My wife and I had an anniversary earlier this week and we decided to go to the beach for a seafood dinner. I called Jonathan Danch, one of my associates who lives up at the beach, to give me a recommendation for a good restaurant. Jonathan is well connected and knows all of the great places along the New Hampshire coast, so he gave me an excellent tip.
The next day, Jonathan called me to see how our day went and if we were satisfied with his recommendation. I told him it was great choice and while we were conversing, I mentioned that we stopped along the way at a Lindt Chocolate Shop, where I bought my wife some chocolates. Jonathan said it was interesting that I had stopped at the Lindt Shop because he had an inspiring story to tell about them.
Jonathan Danch is among many other things, a Pease Greeter at the Pease Air National Guard Base in Portsmouth, New Hampshire and has been for years. Jonathan and a group of other volunteers have greeted service men and women who are either leaving the U.S. or returning from duty overseas. They give every service person a bag with assorted goodies that have been donated from a variety of groups and organizations. As it turns out, The Lindt Chocolate Company gives a bag of chocolates to every service person. Jonathan said that last year 269 flights came into The Pease Air Base with an average of 150 service men and women. Doing the math, that works out to be over 40,000 bags of chocolates that they give out every year! I think it is nice to hear a story about a group of people helping out others and not expecting or looking for any acknowledgement.
David Carleton, a New Hampshire native was introduced to coin collecting by his father and Grandfather in the 50’s. Gold bullion speculation dominated the 70’s culminating in 1980 when focus on Numismatics returned. He became a life member of the ANA , met Warren Mills (his coin Guru) and they cofounded RCNH in 1990.
Questions From Our Mail Bag
By Warren Mills
With so much counterfeiting going on, can counterfeit CAC labels be out there?
Dave told me at the show that a dealer said to him that CAC stickers could be bought over the internet! To me, this is a dealer that probably had such a horrid success rate of getting coins to CAC, that he is casting aspersions. It is an awful thought, but at some point, I would not be surprised to hear about counterfeit CAC stickers! Well, that leads to the next question…
How do you protect yourself if this comes to be?
The answer is simple, know your dealer. An ethical experienced dealer will always buy and sell the coin in the plastic. Find a dealer that is not just a label reader, but truly knows if the coin inside the holder deserves the grade. There are high and low end coins in PCGS, NGC and lesser 3rd party grading service holders. The same is true for CAC coins, there are coins that truly deserve the sticker and those that don’t. If you are not a great grader, align yourself with dealers that are. Also, don’t be so greedy that you put yourself in a bad position. By greedy I mean that if you are offered a CAC coin at an abnormally low price, a red flag should go up. You can always verify a true CAC coin by going to the website and typing in the coin number. If you’d rather do everything on your own, this could be the easiest and best protection of all.
Please keep those questions coming!