Cash gets you lower prices

Pat Heller
November 12, 2015

Buyers with cash are gaining the  upper hand in significant areas of the market.

I walked the floor at the Baltimore Winter Expo last week.  The activity there was about the lightest I have seen over the years of attending this show.

This observation does not come from my personal experience. I took less than the usual amount of inventory to show dealers who had tables as my company had enjoyed good numismatic sales for a number of months. Consequently, I had a lot less excess inventory to offer.  Similarly, my company has been fortunate to recently purchase several deals in our store from the public and other dealers, so my want list this time was shorter than usual.

The sales I made for my company were the lowest ever at this show. Although I took advantage of a softer market, my purchases were also well below typical.

Part of the value in attending major coin shows is to learn market information and reinforce business relationships. While I picked up a lot of market information, a much higher than normal percentage of dealers with booths at the show told me they were not doing much business, either in absolute terms or compared to their expectations and hopes.  This is the information on how I evaluate the overall show.

(As an aside, no matter what coin show there will be some who do exceptionally well – as I encountered in Baltimore – and others who have horrible results.  By asking a variety of dealers over time at many shows, I am able to get an overall market sense.)

In discussing why dealers had a slower than normal show at Baltimore, there were three main factors that were mentioned multiple times:

  1. There has been a sizeable dollar value of numismatic material crossing the auction blocks, using up collector budgets and leaving dealers with more inventory and less cash.
  2. Some collectors are becoming more cautious in their buying, as I discussed last week.
  3. With slower sales, dealers are having more cash flow problems than usual.

I talked with some dealers who specialize in purchasing inventory from other dealers that need to raise quick cash flow.  Generally I was told that they are being offered more material than typical in the past couple months and that they are able to purchase the inventory at lower prices than they previously paid. This tells me that the numismatic market has several sectors where the buyers have the upper hand.

This could be boon for collectors.  While I don’t have a comprehensive rundown of all the numismatic niches for what’s hot and what’s not, here are some where collectors may find lower costs to purchase right now.

  • Common- and Better-Date pre-1934 U.S. gold coins
  • Mint State Peace dollar rolls
  • Almost any kind of coin that has problems
  • Classic U.S. gold and silver commemoratives
  • Many key-date U.S. coins in grades popular with collectors, especially those that saw significant appreciation from 10 years ago
  • Commonly available U.S. paper money
  • Numismatic Chinese coins

If you are sitting on cash that is available for discretionary spending, you just might be able to pick up some of your favorite items today at prices that will have you smiling years from now.

This article originally published at Numismaster.com.

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