buying the "big ones"?
Wealthy collectors, investors
seek high rarities By Mark Ferguson
- Coin Values Market Analyst
Coin World Monday, July 16, 2007
Image courtesy of HeritageAuctions.com
RARE COINS trade
daily at prices that not too many years ago would have
generated much excitement and news coverage, but that
now seem routine. This MS-64 1921 Saint-Gaudens double
eagle sold for $402,500 May 31 with little attention.
Many average collectors have a tough time imagining
what coin trading is like on the high-end of the price
scale. The transactions heard about often exceed the
values of most people's homes and net worth.
Such transactions may seem rare, as we read about them
only when big news is made. Actually, though, very high-priced
coins are trading daily.
Not only are such coins trading daily, they've increased
in value by roughly 10 times during the past 10 to 15
years. Many of the coins selling for multimillion dollar
price tags today were available for several hundred
thousand dollars each during the mid-1990s, when the
market was much slower. In addition, these days dozens,
maybe even hundreds of coin issues routinely trade for
prices in the six-figure levels. Most of these transactions
are not publicly announced or, if they occur in a public
auction, receive little news coverage.
For example, Heritage Numismatic Auctions
May 31 sold at auction a 1921 Saint-Gaudens gold $20 double
eagle (a rare and highly desirable coin) graded Mint State
64 by the Professional Coin Grading Service. The rare coin
brought $402,5000 but the price generated little news coverage.
Most collectors who are buying and collecting coins at these
price levels prefer to remain anonymous - for several reasons.
Of course, security is a big reason many collectors prefer
Also, buying strategies are often enhanced by remaining in
the background, working through dealer agents and bidding
by Internet or telephone at major auctions rather than being
there in person. More often, dealers are the people who want
to be seen buying the "big ones" - high-priced coins
- at auction, because this visibility often attracts more
business. However, some dealers also remain out of sight for
strategic and competitive reasons.
Several active dealers recently discussed the market for high-priced
coins. Steve Contursi, president of Rare Coin Wholesalers
and specialist in high-end rarities, remarked: "It's
the smart money buying big coins. The coins sell themselves."
He stated that today's big buyers usually collected coins
as kids, they are age 55 and older, their kids are out of
college, their houses are paid for and they are retiring or
selling businesses. These buyers want better coins than they
could afford as kids.
Todd Imhof, who, among other things, directs the Heritage
Auction Galleries' Legacy program, which recognizes and provides
special benefits to the world's wealthiest collectors, remarked:
"Clearly, the common denominator for most of today's
biggest buyers is Wall Street. Partners in private equity
firms and managers of hedge funds have emerged as the new
'rock stars' of this decade. CEOs of publicly traded companies
... are enjoying loads of discretionary income, as are founders
and major stockholders of privately held companies. ..."
He adds: "Generally speaking, wealthy and successful
people are very savvy buyers who want quality, rarity and
value - and know how to do their own research. ... Spending
hundreds of thousands, or even millions of dollars on an item,
is barely noticed on their balance sheets."
He concluded: "They still require an item that really
interests them and fits their collecting goals. And they want
a good deal on it, to boot."