The "Buzz" Coin Blog with Dave Harper

Adult facts beat kid fiction
Posted by Dave

Romantic stories help sell coins. No, these aren’t of the Barbara Cartland type, but if the misty romantic past type when life was supposedly more adventurous or simply better.

I thought of this as I noticed that in the Stack’s 74th anniversary sale scheduled for Nov. 9-11 in Baltimore that there is a Confederate cent.

Now the Confederacy never issued cents. This is a pattern created by Robert Lovett Jr. for the Confederate government.

Nevertheless, this is one of those issues that yarns can be built around. These yarns were particularly compelling for me when I was a kid and we were marking the centennial of the Civil War.

Why a Confederate cent could have been given to the father of a friend’s granddad who was charged with getting it and other valuables out of a burning Richmond in 1865.

Wild fantasy? Of course. But it has kid appeal.

There is something fitting about this cent because it is belongs to Q. David Bowers. He knows the value of a good story. It has helped him sell coins for his entire career.

More importantly, his stories are meticulously researched history.

You know what? That history is even more exciting than the yarns of childhood.

Why?

Because as a responsible adult I know Bowers' stories are true and I find them just as exciting as the lies my friends and I swapped as kids.

Thursday, October 29, 2009 12:59:38 PM (GMT Standard Time, UTC+00:00)

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Wednesday, October 28, 2009

Inflation poor guide to future coin values
Posted by Dave

I received an e-newsletter that mentioned inflation and coin prices. Many people believe there is a connection. There really isn’t a direct connection, but to explain can seem more like a word game.

Most coin prices depend on average collector incomes and the willingness of these collectors to spend that income on certain coins.

Both factors fluctuate or change and inflation plays a role in what people are paid, but the link is not direct.

The prices of many coins that were hobby staples in the 1960s simply sat or declined during the 1970s even though active collectors had more money in the 1970s because of inflation. Some coins are still at or below 1960s levels.

The nature of collecting was changing. It always does. Attention was redirected to new areas. Morgan dollars really came into their own in the 1970s and built up quite a following right on through the market peak in 1989. Prices nowadays for many of those coins are lower than they were then despite 20 years of inflation.

On the other hand, key coins like 1804 dollars and 1913 nickels have actually outpaced inflation as the prestige factor of owning the great rarities helped incite buyers to want to own these numismatic masterpieces.

Online registry sets give certain coin prices a nice boost as certain collectors compete to buy the best. This creates a phenomenon where the prices of a couple of coins at the top end of the grading scale go through the roof while those pieces in the more affordable end of the uncirculated scale simply languish despite inflation.

A few Lincoln cents that any collector can buy for a dollar or two in BU or proof have brought tens of thousands of dollars because they happen to be the coins pronounced to be the best of the millions or billions that exist.

The problem with the great rarities and coins in the very top grades is that almost nobody gets to play in that park. Action in this park makes headlines and creates numismatic history, but it does not help the average coin buyer make any money.

Coin buyers who are not guided by their innate interest in collecting specific series or type sets must be able to pick out coins that will appeal to collectors at the future date they will wish to sell and in a grade those future collectors will wish to buy. That isn’t easy. Inflation won’t overcome mistakes.

The obvious area to point to today for success is that occupied by gold coins. The price of gold has risen dramatically from the government controlled $35 an ounce that prevailed 1934-1973. Prices for coins valued for their metallic content have soared beyond what inflation would have mandated, even if you go back to 1933.

The general price level is up about 12 times since 1934. That would put gold at $420 from its $35 starting point, but whatever number you pick, it seems that gold’s price has outpaced inflation at the moment.

So, while inflation is a factor in the eventual price of coins, it is not the only factor. To buy any coin simply on the basis of expected future inflation can easily lead to disappointment if the past is any guide.

It is far better to be a collector. Your odds of buying the right coins improve and you have fun doing it.

Wednesday, October 28, 2009 1:24:48 PM (GMT Standard Time, UTC+00:00)

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Tuesday, October 27, 2009

When 50 cents add up into a story
Posted by Dave

Serendipity plays a large role in every collector’s life.

The dictionary says the word means “the faculty of finding valuable or agreeable things not sought for.”

I don’t think I ever knew what the word meant until I went to work for Numismatic News.

One of its occasional writers, the late Dudley McClure, who was more well known in the pages of Coins Magazine, introduced me to the word after he had heart bypass surgery and thereafter maintained a walking exercise regimen around his home in Portland, Ore.
From time to time he would encounter various coins on the sidewalk or in the street. He decided to write a column about serendipitous coin finds.

It was well done and from time to time it was surprising what beyond the odd cent could be found lying in the streets of a city in the Pacific Northwest.

There was no gold, of course, and I do not recollect any silver, either.

I thought of Dudley yesterday when I received my change at the Crystal Cafe. In it were two quarters of the pre-state series design.

Receipt of either one separately would not raise an eyebrow, however getting them together made me wonder where they came from.

One was a 1982-P. The other was a 1982-D. They both had circulated for a long time, so it does not seem possible that they were ever in the hands of a collector.

Had they been uncirculated, I would really have a story. Those uncirculated dates have significant value for a clad issue. There were no mint sets produced that year, so there is no stash of sets to raid if you need a nice coin.

The sets were abolished due to cost cutting throughout the federal government. That was the sacrifice the Mint chose to make to take the mandatory hit.

As a result, new collectors have to face the eternal question, why were there no mint sets produced in 1982 and 1983?

And this is why I always seem to especially notice coins from either year. If they come in pairs as they did yesterday, that is serendipity.

Tuesday, October 27, 2009 1:08:37 PM (GMT Standard Time, UTC+00:00)

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Monday, October 26, 2009

Chronicles set ships rapidly
Posted by Dave

Reports are beginning to reach me from my readers that they have received the Lincoln Coin and Chronicles set from the U.S. Mint.

Rob Birnbaum e-mailed me, “Received it by Saturday. I like it and it was worth the time I spent ordering it.”

Nothing will overcome the memory of the ordering delays of Oct. 15 faster than rapid delivery of the coins.

The standard posted delivery date for the early orders was Oct. 30, so collectors will be pleased to get the sets ahead of time.

It certainly won’t hurt that secondary market prices are far higher than issue price of $55.95.

Harv Laser has been looking at the secondary market and he e-mailed me his findings.

“Highest price I can find in eBay closed auctions is still $349.95 from 15 October, 2009. Second highest is $299.99 from yesterday (Oct. 21), he wrote.

“I haven’t seen any show up in dealer print ads yet, but I haven’t gotten your latest issue yet.”

Perhaps having a few problems ordering isn’t all bad. It enhances that sense of triumph among collectors after all is said and done.

Perhaps what the Braille Education Set needs are simulated order delays that would be noticed quickly by collectors.

Monday, October 26, 2009 1:04:32 PM (GMT Standard Time, UTC+00:00)

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Friday, October 23, 2009

What kind of shape are we in?
Posted by Dave

What condition is the numismatic hobby/industry in? Numismatic News staff is preparing a State of the Industry issue that will go into the mail in the middle of November.

It is important to obtain a wide variety of evaluations from the people on the ground: the collectors and dealers who make it all work.

I would like this blog to serve as a personal invitation to you to send me an e-mail with your assessment.

I have a list of questions you can choose from. You can answer any or all of them, or direct your comments to some issue that is not even mentioned.

In a way it is a free-for-all. Don’t hold back. The rest of us might discover that what’s on your mind should be our concern as well.

Here are the questions:

1.       What were your successes in 2009?
2.       Where do you expect to find your opportunities in 2010?
3.       How do you expect the overall 2010 market to compare to 2009?
4.       What would give you the biggest boost in 2010?
5.       What is your biggest concern for 2010?
6.       Has the hot bullion market helped or hurt you? Why?
7.       Will your clients be in a buying mood in 2010?
8.       What will your clients be most interested in buying in 2010?
9.       What are the effects of tight credit?
10.     What action can hobby papers take to give you a boost?

To personalize it, let us know how long you have been active in the hobby. E-mail a photo if you like. Photos always improve any presentation. If you only feel like writing a couple of lines, you can do that to.

E-mail me at david.harper@fwmedia.com. Or post your comments here on the blog.

Thank you.

Friday, October 23, 2009 2:07:13 PM (GMT Daylight Time, UTC+01:00)

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Thursday, October 22, 2009

Buffalo proofs without limit?
Posted by Dave

Order limits seem to be the theme of the day. The U.S. Mint has just announced that when the proof 2009 gold Buffalo one-ounce coins go on sale Oct. 29 there will be no limits on orders.

Is that wise I ask myself?

Will there be a flood of orders and another round of upset customers?

True, historically the Mint has made these to order and therefore had no need to place limits on them, but this year has been an unusual year to say the least. Events might not unfold as they might have in a standard year.

Will the Mint have enough planchets to meet demand? That is the question in the back of every collector’s mind. The uncertainty might induce enough of them to take a flier and thereby increase demand beyond what might be considered a normal level for collectors of the fourth year of issue for the series.

Also, because demand for the bullion versions has been so high for the issues of prior years, might there be an overflow of demand into the higher priced proofs just so they can be obtained and socked away in retirement accounts?

This is a hard question to answer and it bears watching.

Thursday, October 22, 2009 3:17:49 PM (GMT Daylight Time, UTC+01:00)

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Braille Education Set order limits removed
Posted by Dave

President Calvin Coolidge was nicknamed “Silent Cal.” He was not known for his eloquent conversation or animated personality.

When he died in 1933, one wag, whom if I remember my history correctly was writer Dorothy Parker, asked, “How can they tell?”

That sort of sums up my feelings about the news that the order limits for the Braille Education Set are being eliminated after being at the one per household level since the sets went on sale Oct. 1.

Though only 25,000 of these sets can be made, orders have not exactly been cascading into the U.S. Mint. In fact, the total is just 5,996 after almost three week’s of toting up the figures.

I expect there are some people like me who like to be unusual by occasionally reading or buying something others seem to avoid.

I happened to read Coolidge’s autobiography, and no, it was not a class assignment.

Some people will buy the Braille Education Set.

Now there are no encumbrances on their enthusiasm. I expect them to step up to the plate and buy, buy, buy – both of them.

Thursday, October 22, 2009 1:48:29 PM (GMT Daylight Time, UTC+01:00)

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Wednesday, October 21, 2009

Wednesday morning health check
Posted by Dave

The cold and flu season is never any fun. With the arrival of the swine flu it has engendered a workday morning health checkup.

Who made it into work? Who didn’t? How does the workload get split up today?

Even more important: who came to work ill and should be avoided?

I can’t say that Krause Publications has had any significant outbreaks of illness – or at least any more than in a typical year. It’s just that the subject seems to be on everybody’s mind this year because of all the public warnings about staying home when you are ill, washing hands and getting inoculated with a vaccine that is basically not yet available.

I haven’t seen anyone wearing surgical masks around here.

Krause has already had the seasonal flu shots, so that should at least keep the usual flu varieties to lower activity levels.

I imagine this situation is playing out in workplaces all across America.

What happens next, I cannot say, except it is time to find out who made it into the office today, get Numismatic News laid out and hope subscribers have it handy to read if they have to stay at home for awhile.

Wednesday, October 21, 2009 2:07:17 PM (GMT Daylight Time, UTC+01:00)

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Tuesday, October 20, 2009

Market can be more than new Buffalo gold
Posted by Dave

The one-ounce Buffalo gold bullion coin became available to the U.S. Mint’s authorized purchasers Oct. 15. By Oct. 19, they had taken 71,500 of the .9999 fine bullion coins.

The market will be crazy about them because gold bullion itself is moving along in record territory over the $1,000 mark and because 71,500 coins in the present environment will seem scarce and hard to get.

It seems to me that some gold buyers should take the time to try to ferret out 19th century American gold issues in circulated grades that have mintages far lower than the 2009 Buffalo coin and yet trade for not that much more than bullion coins.

Part of the reason for this is the price of gold has gone up so much in recent years that many of the small price differentials that used to distinguish one coin from another have been swept away.

Another part of the reason for this is dealers who handle large volumes of gold coins don’t really have time to sort them. There is little reward when the current high level of interest in bullion coins makes rapid turnover a sure thing for far less bother in time and effort.

Where are these coins? That’s a good question. It will take some effort to find them.

When found, the owners may not want to part with them. Then again, holding them simply ties up working capital that can earn a higher return in the rapid turnover bullion business. Any potential buyer might actually be doing the dealer a favor by freeing up more working capital.

By focusing on the circulated grades, collectors won’t be tripped up by any condition mania.

Another angle to this is in the world gold coin field where collectors can find many issues of the last two or three decades with tiny mintages. These can be located even more readily than low-mintage American coins.

What’s the reward?

The first reward is actually still being a collector in the present environment. If the price of gold bullion continues to rise, that will augment the value of the scarcer 19th century regular issues.

Someday, the market will stabilize and relative rarities will again begin to be made in the marketplace.

Is this the way to great speculative gains? Probably not.

But actively trying to collect amid such frothy speculative market conditions will help keep everything else in perspective.

Tuesday, October 20, 2009 2:18:46 PM (GMT Daylight Time, UTC+01:00)

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Monday, October 19, 2009

We will miss you, Jay
Posted by Dave

The road not taken is a question that occurs not only in a Robert Frost poem, but in the minds of everybody from time to time.

What would have happened had a decision gone differently, we all ask?

News of former Mint Director Jay Johnson’s death from a heart attack Saturday at the age of 66 at his suburban Washington home raises that question in my mind for the American Numismatic Association.

After his time as Mint director ended in 2001, Johnson wanted to be executive director of the ANA.

He would have put a warm and friendly face on an organization that has spent more than a decade in leadership turmoil since Bob Leuver left the executive director’s post in 1997.

It was not to be.

Instead over the years since 1997 the ANA board chose a six-week wonder, gone back to retired executive directors, and then most disastrously chose its legal counsel, Christopher Cipoletti, to hold that post and the executive director’s post simultaneously, thereby cutting the board off by its own action from any independent input.

The current legal counsel, Ron Sirna, reported to the current ANA board Oct. 13 that Cipoletti’s tenure cost the ANA $5 million to $8 million.

Johnson was elected to the House of Representatives from the congressional district that includes Iola for one term.

That made him a politician. It also made him suspect in the minds of some hobbyists as a result of that label.

But he just might have been the person who could have interpreted hobby needs to official Washington in a manner that the power brokers there understand. Perhaps then the hobby today would not be asking why the government does not seem to want to do anything about the imports of Chinese counterfeit coins.

To his credit, Johnson stuck with the hobby and did some work in marketing, most recently becoming a public face for buying gold.

What might have happened under an ANA Executive Director Johnson?

I can only wonder.

Note: The U.S. Mint has sold out the 50,000 available the Lincoln Coin and Chronicles sets, but it is still taking orders on standby just in case others are canceled.

Monday, October 19, 2009 2:06:23 PM (GMT Daylight Time, UTC+01:00)

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