Long Beach report in detail. Tales of woe. Doom and Gloom justified.

[truthteller]

Wednesday:

 

 

I arrived about 3PM. Most dealers who had tables had set up. I came to do a little business yet gain an insight to the market. My checkbook was firmly closed. The first thing I noticed was several of the major "retail" dealers eagerly walking the floor selling coins. Usually, retail dealers buy on Wednesday for their customers, not so much today. I gathered news tidbits from several smaller dealers. They say their retail customer base is good to fair, with a minor slowdown. However, these same dealers report that their SHOW sales are down substantially. One dealer reported that he lost money at the Denver ANA after expenses. We talked about the demise of the large coin show, with smaller local shows eventually replacing them. I tend to agree that this may very well be the future. I perused the floor for nice commems. A dealer told me that the pre show auctions were below par and that the reserves were often not met or coins sold a tad below market. Of course, the rarities sold for strong money. This dealer did not buy much since he was uncomfortable with the conditions of the market. It was generally agreed that gold prices on US coins are in an unusual situation. The larger dealers who are holding US gold cannot sell for a loss, tying up funds, and neither can buy since those same funds are in current inventory. Those who hold on expecting a rebound may be in an OK position for a short period of time( 60 days), but any longer than that and many dealers will have to "cut loose" US gold inventory at a loss or sell a portion of their US rare coins at lower levels to maintain cash flow. Since expenses do not stop, the likelihood of gold rebounding may be wishful thinking. In addition, I was told many, many dealers will have invoices coming due, from the ANA auctions, in mid October(60 days). If dealers cannot pay or if they are not able to renegotiate terms, expect expensive coins to be "buyable" in October. Of course, a few dealers maintained that this scenario has happened before and were optimistic, however, with several major coin shows consistently poor, I believe the optimism to misplaced. I did stop by several foreign dealers looking for better mexico, and spent a few hundred bucks. It was just OK. I left some better US currency on consignment with a dealer who ALWAYS sells it for me. After about 3 hours at the show, I left about 6PM.

 

 

Friday.

 

 

Today I came in about 12:30pm. I stopped by the dealer who ALWAYS sells my currency on Thursday. NOT TODAY. None of the notes sold. All were priced a tad below retail. Not good news. So, I took the notes and shopped them to several dealers who ALWAYS buy my currency. NOT TODAY. Most perused the notes, but few bought them. In past shows, I priced my currency to sell, however, I really had to hustle and had to stop by about 10 currency dealers before all the notes were sold. I had to discount a bit. This adventure told me a lot. Many of the dealers were not buying, unless the items were discounted. Many of the dealers were very, very picky and examined each note very, very carefully, even though they were priced at $100 or less. Many dealers were overstocked with inventory. In past shows, the dealers were not as selective nor picky to quality. In addition, Heritage had a MAJOR currency auction, most assuredly tying up more dealer funds. By 4PM, I was done and left.

 

 

Observations.

 

From my experience, the smaller dealers were more anxious to buy than the larger dealers, both coins and currency. In fact, 90% of what I sold were to dealers I do business with at the smaller club shows. The larger, out of town dealers usually were less anxious to look, much less buy inventory. There was little optimism. However, the fiscally sound dealers who had cash in the bank were more likely to pick and choose, mostly from dealers who were in near panic situations. One major dealer told me he was there to sell, sell, sell, and would only buy certain coins with a "fresh" look, else no deal. I was told many very rare and collectible coins were selling at VERY reasonable levels. Those who sold with a small profit in mind probably came out OK, those who tried to sell to make money found it difficult.

 

Conclusion.

 

If the US coin market and/or gold levels do not increase in the near term, expect many choice coins available at very reasonable levels. It would behoove those with good funds to wait until November to begin buying. If the gold market does not recover soon, a domino effect will occur whereby more coins hit the market at the same time, creating available money, but not enough to encourage dealers to aggressively buy more. Eventually, there will be an equalization point, but I don't see it happening for quite a while. By Baltimore coin show and Santa Clara coin show time, you will have a good perspective if the downturn will continue into next year.

 

I fully expect Braddick to give me a one star on this post.

 

 

TRUTH

[WhiteTornado]

Interesting observations, especially from the dealer's point of view. Thanks for sharing. Good thing I'm saving up for the Baltimore show in November.

 

What factors do you think are leading to the demise of the large show? And, how does the smaller, local show gain as a result? Just curious, as I had not heard that before.

[WinstonWare]

Thanks for this update!

[zrlevin]

Great report, Truth!

[IGWT]

Rated 5 stars.

[gmarguli]

I could only give it 2 stars since it only covered half of the show.

[CarolinaCollector]

Thanks for the report.

[braddick]

Great report. I thought Currency was going to be the next big thing.

[TomB]

Thanks for the report. Now I'm wondering if I should give you a "sympathy star".

[truthteller]

 

What factors do you think are leading to the demise of the large show? And, how does the smaller, local show gain as a result? Just curious, as I had not heard that before.

 

 

Expenses, expenses, expenses. Dealers can spend only so much travelling the nation to major shows to buy and sell. When the market is hot, there is money to be made at a national show. When the market is fair to poor, why travel when no one will buy your expensive coins, why travel when you can ship the coins to your client, why travel when you can send your coins to PCGS or NGC in the mail? The only reason to travel is to attend the major auctions, however, the auctions suck out so much money from the coin show bourse, why attend the show at all? One collector I know flew into Long Beach, JUST FOR THE PRE -AUCTIONS, then left promptly without attending the show. The expense for travelling was justified, but the expenses for attending the show for 4 days was not.

 

Smaller shows, such as club coins shows or regional shows often have FRESH material from local coin shops, much of which has not been "maxed out" by the grading services. In addition, you don't have the "crack out guys" scowering the bourse for upgrades. The small shows have a good, often loyal following. And most club shows have no entrance fees and free parking. For most collectors $20 to get the family in the door for a coin show is too much. Free is always an attraction, because you can walk away without spending a dime and have a good time.

 

 

TRUTH

[Mozin]

Thanks for the show report. I enjoyed reading it.

[jom]

Expenses, expenses, expenses. Dealers can spend only so much travelling the nation to major shows to buy and sell. When the market is hot, there is money to be made at a national show. When the market is fair to poor, why travel when no one will buy your expensive coins, why travel when you can ship the coins to your client, why travel when you can send your coins to PCGS or NGC in the mail? The only reason to travel is to attend the major auctions, however, the auctions suck out so much money from the coin show bourse, why attend the show at all?

 

The vast majority of time I've been in this market it has sucked. Why didn't the big major shows go under when the market was in bad times through most of the 90s? Why is now any different?

 

jom

[JamminJ]

Why didn't the big major shows go under when the market was in bad times through most of the 90s? Why is now any different?

 

jom

 

$6 hot dogs keep the shows afloat?

[michael]

i could use a couple of hots right now extra charcoal broiled with onions and an icey cold diet coke

[MarkFeld]

A few comments on the Long Beach show and the rare coin "market", along with suggestions about collecting:

 

If anyone tries to tell you that overall, things are as they were a month or longer ago, they are probably in their own private coin world or are not being truthful.

 

Yes, a number of especially appealing coins brought extremely strong money in the auctions and on the bourse floor. However, the general tone and level of interest (among some major dealers, at least) in looking at and/or buying coins has declined noticeably.

 

A number of dealers are being more conservative and/or particular in their buying, while others are more concerned about selling and raising cash and/or paying bills, than buying. That said, there was a dearth of special coins for sale.

 

Some dealers quickly adjust to new levels for coins which have seen significant price drops (such as various generic gold coin types) and continue to buy and sell, as usual. Others hold on, hoping for a quick rebound - they have trouble doing much business, as a result.

 

If you are a collector for the long haul, use this market weakness to your advantage. Be picky/selective and don't pay through the nose for a coin unless it is truly irreplaceable, or virtually so. Most coins do not fall into that category, even though it might feel as if they do when you have them in your hands.

 

A number of people have asked how to go about finding out what the new levels are for coins which have dropped in price. There is no guaranteed quick and easy answer. However, the best way is probably to talk to other collectors and dealers who know what's going on and are willing to share that information. Check out auction results. Consult various pricing publications, which might reflect price changes, etc. Be patient and cautious and remember, this is a HOBBY to be enjoyed.

 

Where will we go from here? I wish I knew, but my gut tells me that things will get weaker before they get stronger.

[EZ_E]

Actually, since I am now in a "buyer's market", this is good news for me.

 

A recent example of a softening market:

 

Pat Braddick had a 1837 "No Stars" half dime on ebay. Original, eye-appealing, high-end 62. I had a max bid on it at $801.25. I was outbid by $10. If I didn't have my bid there then the coin would have sold in the $500 range. That would have been dirt cheap for this one year type coin. So, apparently, the market has gone soft. But, as I said, that's ok with me! I plan on holding on to my type collection for years to come and still have a ways to go to complete it. I would rather complete it at lower prices than not.

[James_OldeTowne]

I have what may be a dumb question, but please realize that I've never been to "Long Beach". Is this one show really so very important and broad-based that it reflects the entire coin market? Or does it pretty much reflect the high-end market (or some other segment) ?

[gmarguli]

Actually, since I am now in a "buyer's market", this is good news for me.

 

A recent example of a softening market:

 

Pat Braddick had a 1837 "No Stars" half dime on ebay. Original, eye-appealing, high-end 62. I had a max bid on it at $801.25. I was outbid by $10. If I didn't have my bid there then the coin would have sold in the $500 range. That would have been dirt cheap for this one year type coin. So, apparently, the market has gone soft.

 

Not necessarily. I may have had a snipe bid of $810 waiting to go, but it gets rejected by the system since another bidder beat me to the bid. You can't assume that no one else was going to bid between $500 & $810.

[MarkFeld]

I have what may be a dumb question, but please realize that I've never been to "Long Beach". Is this one show really so very important and broad-based that it reflects the entire coin market? Or does it pretty much reflect the high-end market (or some other segment) ?

James, in a word, no, Long Beach, on its own, is not "really so very important and broad-based that it reflects the entire coin market." Nor do I think any show necessarily does, as "the market" is comprised of many different areas and individual/smaller markets which don't necessarily receive attention and/or move in tandem. However, on the heels of a somewhat subdued ANA show in Denver, the continued reduced enthusiasm, among other clues, leads many to believe that the strong momentum has been broken and turned, at least for now.

[James_OldeTowne]

Ah, that's good to know. I'm doing three shows in October in rapid succession, so that may be a good barometer for me.

[Coin]

As a show buyer , the collector level enthusiast , I have been very turned-off to the behavior of many dealers on the bourse floors of the major shows I have attended this year , 2006 . Oh sure , there are exceptions , but the majority of the national coin show dealer types , versus the local guys that come in and set up a table , behaved like jerks to the buying public. No wonder there are some of them wailing doom and gloom when they have turned their backs on the collectors that buy at shows. This year I have witnessed several times where dealers were so pent up in dealing with each other and their lists , that they all but shunned the buyers at their tables wanting to see and maybe buy a coin or two.

At one table in particular , I waited patiently for over 11 minutes by my cell phone clock for a dealer that was glancing at me , but not acknowledging me while talking to the dealer at the table next to his. I figured they were in negotiations or something , so waited and waited , until I overheard part of what they we saying was about nothing to do with coins at all. I left and went down the row to another table. I could have been rude and interupted , but I should not have to.

Ok , that was only one example , but I could cite more , the point is that this was typical behavior . Nothing says to the show buyer that we aren't interested in selling than to ignore them. When a buyer gets this treatment enough , why is it a mystery when the buyers slow down showing up to buy at major shows? Time is better spent in some of the show events , like coin clinics. Buyers can always find coins online at websites and online auctions , so why bother to get beat up by dealers on the bourse that say all your coins are cleaned without even giving them a real look through? I had one guy light up like his pants were on fire when I offered a proof seated dime , then he commenced to trash talk it to death and then offered next to nothing for it. I mean come on , are coin collectors supposed to be total numbnuts to these guys?

My shoes were made for walkin , so I did a lot if it this year , so far .

 

Maybe things will get better for us 'collectors' and we will get ATTENTION from these too busy dealers and they will start trying to SELL some of their inventory instead of acting like stooges and then crying about slow sales at shows .

 

Thank-You for the report , I was thinking along the same level a few months back which is why I sent my modern commems off to Heritage so I could turn the small profit left in them before things started the down-trend....I did ok , and now I can buy most of the same coins back for much less from online sites I have been trending and watching on my own without the advice of news columns and mags .

 

I'm not saying the market is falling , not with the holiday pick-up in sales still due to come , but it is starting to look like the wallstreet hype has begun to be forgotten...by the investor clubs...of course we know that certain coins retain and increase in value despite the market turns.