Who’s buying the ‘big ones’?
Coin World
Mark Ferguson
COIN VALUES Market Analyst
Monday, July 16, 2007

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 anonymity.

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."

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.