I received the latest issue of Canadian Coin News the other day and my mouth dropped after I read the first article. Titled “Chinese fakers up the ante with thick plating” the article outlined how a company based in China (should I be surprised?) that sells through Alibaba is advertising a line of gold plated tungsten based bullion products. This company brags about the fact that their products come with 60 microns of gold plating which is thick enough to pass the acid test, x-ray test and scratch test. We checked with Thermofisher, the company that makes the electronic gun that x-rays gold that most dealers use and were told that their gun goes to a depth of 10 microns and that is the best that can be done with current technology. This would confirm the Chinese company’s claim that their product would pass the x-ray test. They also advertise that their products correspond exactly to the originals’ weight, diameter and thickness specifications.
I’ve never been to the Michigan State Show so I decided it was time to take a trip out there and see how it was. I always heard this was a strong collector show but it is held on Thanksgiving weekend, which is probably why I’ve never attended! I had a good feeling about the show and anticipated a nice mix of coins. There were about 150 dealers with tables. Driving in from the Detroit airport, I was depressed at all of the dilapidated buildings that I could see while driving to the show. Unfortunately, this was a harbinger of things to come. There was a good amount of public attendance and I liked the fact that the show organizers required a government I.D. to enter the show. Once inside, I started looking at the tables and the lack of fresh material was a huge disappointment. The dealers I knew there said that it was a well below average Michigan State Show from the standpoint of the mix of coins and that I should try it again. There was also an impressive auction catalog of ungraded “raw” coins being sold by a local numismatic auction firm. The catalog gave the impression that the coins were mostly high grade and the pictures were beautiful. Once I started looking at the lots I realized why the coins were not graded, they were horrible! As one national dealer said to me, “You can really get hurt in this auction there are a ton of trap coins here.” Other dealers I spoke to about auction lots were also disappointed. This seems like a theme lately. The lack of fresh material is making it hard to keep a nice inventory. My advice, when you find the fresh coin for your collection, buy it and don’t look back. Another nice piece may not come around for a while.
Paul and I flew into Baltimore on the morning of October 29th, the day before the show opened. I didn’t anticipate strong sales because our inventory was lower than usual. I was hoping that I could find some nice inventory coins but as usual we were not willing to compromise and buy marginal material to offer to our clients. My observations are as follows:
Large size type and high grade CAC coins were virtually non-existent. The few coins in the market were priced at very high uncomfortable levels. I had a few dealers that hold coins for me to see and thankfully they held some nice coins that I was able to acquire. Attendance was very poor and the dropping metal prices were of concern to many dealers. Dealer liquidity appears to be a problem right now and my guess is that since there is not a catalyst to buy tangibles, people are allocating funds elsewhere. This means that dealer foot traffic in their offices or stores is much lower than normal. The best thing to do in most areas for good potential is to price average. If you bought high, think of buying low to average out costs. The auction was strong for accurately graded and P.Q. coins and weak on over graded pieces. We sold about 20% of our normal volume and acquired about 50% of what we normally buy. The Gardner Sale was very strong and many of the coins we sold to Gene did very well. This confirms that the market is strong for nice quality high grade pieces.
Our next major show is F.U.N. Please get your want list to us before we leave in early January. We want to wish you all a blessed Thanksgiving and Christmas. And as always, feel free to call or e-mail us anytime.
P.S. The grading services were busy with decent submission results. We sent in a very expensive coin to PCGS to cross a few weeks before the show that didn’t cross. I took it to the show and walked it through and it did cross. This shows that you have to believe in nice coins.
Our own Joe Presti, resident attorney and professional numismatist has been appointed by President of the New Hampshire Senate, Charles Morse to the Commission to Study Regulatory Requirements for Pawnbrokers and Secondhand Dealers.
Police departments across the country are attempting to pass pawnbroker and secondhand dealer laws meant to combat the trafficking of stolen merchandise but an unintended consequence in some cases is that it is making it cumbersome to do normal coin dealer business. New Hampshire has passed a state wide law that addresses these issues that towns normally deal with on an individual basis. The law has been sent to a study committee and the bill requires that an individual from the coin dealer industry be appointed to assist with the final version of this bill before being forwarded to the Governor for her signature.
Because of the commitment of consumer protection that RCNH has maintained and the experience Joe has in working on behalf of victims of fraud he was more qualified than anyone else in the state to be appointed to this committee.
We congratulate Joe and wish him well on the committee.
ANA Report – August 5-8, 2014
This year I decided to give up our corner table at the ANA. It was impossible to justify the $2,500 expense and we have more flexibility. Paul and I worked on the floor and Joe did the auctions.
We started right away with a snafu. We were held up at the airport for an hour beyond normal. We got to the show and security was closed so I had to bring our bags to the hotel and Paul went onto the ANA floor. I ended up losing another hour and when I finally got to the show I was not allowed to buy early bird badges. The early bird badges are a whopping $150 per badge. The ANA rep said they ran out of badges. I believe they gave them all to the bused in buyers a few dealers hired to stand in line for JFK mint products. So you had dealers that normally walk the floor all week and advanced collectors that stay most of the week that were denied doing hours of potential business. I know it’s hard for the ANA or the dealers that bused in people to judge the ramifications but this was poorly thought out in the pursuit of money. I will not be surprised if lawsuits arise from the auctions of a few dealers. I hope the ANA bills these dealers for any extra security costs too! The mint should use a lottery system to allocate new and popular mint issues. Doing it the way they currently are allows for too much short term price manipulation. I am also worried about future show security. Many of the people who were bused in were grouped up in clusters around the show all day, watching what was going on. I believe the potential for future security problems is great.