superlative market report and a great lesson about easy to understand coins

[michael]

true true true all true in my opinion

 

from doug winters current april market report

 

show will be how the State of Ohio treats coin dealers after the still-roiling Coingate/Tom Noe fiasco which has made coin dealers only slightly less hated in Ohio than axe murderers. As long as we are not run out of Ohio on the proverbial rail, I think this should be a decent but not spectacular show. I was not crazy about the location even before Coingate. Columbus, while underrated as a city, isn’t exactly a primo numismatic destination. Personally, I’d like to see a Central States in downtown Chicago which seems to be way overdue for a show.

 

Heritage has yet another auction at Central States (do these guys ever sleep?) and it looks like it will contain a number of interesting coins. I will report more on it in the May 2006 DWN Newsletter.

 

 

THE EEEES THEORY OF COIN COLLECTING/INVESTING

The EEEES theory of coin collecting/investing has proven to be remarkably successful in the past five years. And what exactly does this acronym mean? It stands for “Easy Explanation Equals Easy Sales.” Yes, I know it sounds like something from a bad marketing seminar but it makes a lot of sense if you analyze its meaning.

 

In the past five years, we have seen an influx of new collectors into the hobby. Many of these collectors have immediately started purchasing expensive, high end coins. But unlike their counterparts from past generations of numismatists, they had very little background, other than what they read on a few websites. For them, ease of understanding was critical in the decision to buy a specific coin.

 

And this is exactly why coins like High Reliefs and Stellas and $50 Panama-Pacific Rounds/Octagonals have become so popular in the past five years and risen dramatically in price. In a nutshell, coins like this are easily understood by both new buyers and new sellers. Putting it another way, if a coin can be easily explained by the new breed of Internet coin dealer, it is easy to sell. Because of EBay and the success of Internet coin auctions, many purchases have become impulsive. An impulsive coin purchase is much more likely to involve a coin that requires little analysis than one that takes a page of pontificating to explain.

 

The EEEES theory shapes many of my purchasing decisions. I am much more likely to purchase an 1838-D half eagle than an 1849-D half eagle because the former has a great story (first-year-of-issue and one year type) while the latter has nothing especially remarkable about it.

 

I think that the market for certain “easily explained” coins has become a bit on the frothy side. As an example, prices for coins like 1911-D quarter eagles and 1909-O half eagles are hard to justify given the relative availability of these issues in most grades. But to the new generation of collectors, these are venerated key coins in popular series. To a collector who has only just become a serious buyer, the fact that a 1909-O half eagle in MS61 or MS62 has tripled in price in the past few years is not relevant as his point of reference about coins might only go back a few months.

 

I expect Easily Explained coins in all series to remain in the forefront of the market as long as it stays bullish. Some of today’s avid new buyers show no inclination to become well-read, complete numismatists and will, therefore, never be able to understand subtly rare coins. For better or worse, the demand for the 1838-D half eagle will continue to grow at a much stronger rate than for the 1849-D half eagle.

 

WHAT’S HOT AND WHAT’S NOT

Do you own any junk silver, low grade silver dollars or silver bars? With silver currently at its highest level since 1981, it might be a good idea to take advantage of this market and sell a portion of your holdings. Assuming you bought your silver in the $6.00 to $7.00 range, you can make a nice profit. I do not claim to be an expert when it comes to metals prices and, for all I know, silver could keep rising. But I’m bailing on my position and am more than happy to sell at the highest level since the days of Jimmy Carter.

 

Three Dollar gold pieces continue to show exceptional strength. I have noted a number of sales for MS64 common dates in the $15,000-17,000 range and common dates in MS65 are now approaching $30,000. I think the best value in this series is now the rarer dates like the 1858, 1865 and 1877 as well as the Proof-only 1875 and 1876 issues. It is somewhat ironic that, in the last year, the prices of the truly rare dates in this series have not quite kept pace with their more common counterparts.

 

Early gold remains extremely strong, especially issues produced before 1800. I recently saw a very knowledgeable pair of dealers pay over $140,000 for a 1796 eagle in PCGS MS61. This is close to double what similar examples were selling for 18 months ago. I thought 1795 half eagles and eagles were fully priced two years ago but that was when they were selling for 40-50% less than what they are routinely bringing today. The demand for early gold continues to be exceedingly strong and I do not see this segment of the market slowing up any time soon.

 

What’s not hot in U.S. gold coin market? At this point, almost nothing. High quality Philadelphia and San Francisco quarter eagles, half eagles and eagles are relatively slow sellers but even these traditional laggards will sell if they are properly priced or are very high quality.

[michael]

oh and here is his web site if you want to see more

 

past reports or check him out

 

 

www.raregoldcoins.com

 

and remember for many in debth articles about coins silver copper and gold with great market insider information check out this web sites free internet library of fantastic articles

 

www.pinnacle-rarities.com