November 2017 Baltimore Show Report
By Warren Mills
It’s always a quick one hour flight to Baltimore which makes it a pleasure to get too! A major show so close is always wonderful to attend. I arrived a day early to see dealers that were showing their wares in hotel suites. It gives me an opportunity to see coins early on that I may miss if I wait for the start of the show and also allows me to get coins that are saved for me by dealers that appreciate our focus for original strictly graded coins. You have to pay for the privilege but it is well worth it in the long run. We never want to compromise our standards and this pays off when our clients go to sell their material. Pre-show, we spent about six figures, I'd call that a good start.
Thursday, November 9th, was the first day of the show. The weather was very cool and the show seemed a bit slow. I asked anyone that handled nice coins to show me anything of top quality. We were lucky to find a bunch of nice want list coins for our clients so our new purchase inventory may be a little sparse.
An interesting observation is that for most series of coins, CAC bids are much stronger than non-CAC bids. The prices for silver dollars are especially shocking. As an example, 1892-O Morgan dollars have a grey sheet bid of $3000 but a CAC bid of $6000! This reflects the commercialized grading of this series and the many over graded coins on the market. Many silver dollars have similar differences in the bid levels. An interesting note also is that a well struck true 1892-O in gem condition will sell for more than the $6000 CAC bid wholesale! If CAC holds the line on their standards, CAC should continue to lead the market. Gold coins that are scarcer also reflect a significant price differential. The underlying message here is that over grading or commercial grading is destroying the price structure of many series of coins. Look at the pricing of the silver commemorative series. Stripping and dipping became the rage and nice MS-63 coins started to get graded as MS-65. Over population ensues and bidders stop supporting the market, prices drop and then the series goes into free fall. Franklin halves and Walkers have also been destroyed due to over grading. Bulk submission gold and dollars have led to competition for grading fees and the services sometimes give the benefit of the doubt for a full point. Grading needs to tighten up or the market may never recover. Nice original commemoratives that are attractive still are desirable and real pretty toned coins are incredibly strong but buyers know to throw away the grey sheet when they find the truly superior coin. The overhang of marginally graded coins drags down everything.
CAC is also not immune to coins that have no business being stickered. For the most part I love the concept but every coin needs to be inspected with a jaundiced eye. I saw some CAC coins that I thought did not deserve a sticker. However, I’d rather have a poorly graded stickered coin than a non CAC coin if I’m a little unsure of my grading. The other advantage that CAC has over the other services is that if you bring a coin to their attention that does not deserve a sticker they will buy the coin and take the sticker off. Bottom line, they put their money where their mouth is.
I did spend a few hours reviewing coins for customers to help them with their grading. I’m always happy to give opinions and pick out any coins that should be sent to CAC, held onto as they are or sold for a better example if it becomes available. This critiquing is necessary for people to learn about the nuances of grading.
I also noticed that the people walking the floor are less educated about buying coins than they were 10 years ago. Baltimore was a mecca for older educated collectors that flocked to the show years ago. As that population aged, the knowledge was not handed down. That’s why I try to spend as much time with people as I can to impart any tidbits that my help them.
One dealer I greatly respect had cases of affordable coins that he lets collectors pick through with no pressure at all. When he was at the Long Beach coin show last month, he sold over $10,000 worth of these coins to knowledgeable buyers. His sales in Baltimore were $143 of the same types of coins. I asked him for his observation as to why there was such a divergence and he said the customers he spoke to in Baltimore have a fraction of the knowledge than the customers in California have. I was shocked and I have no explanation for this.
This show surprised me in the sense that it was easier to sell a six figure coin than a low four figure coin. Does this mean that big money which is normally smart money is picking off the classic rarities while prices are down? At some point, there should be a filtering down for attractive lower priced pieces. I don’t remember this phenomenon happening for a prolonged time period in the market before but it is happening now.
There is also one major buyer in the market place that has spent so much money in the past year that he is making some dealers careers. One dealer I spoke with told me a couple of years ago that he had no retirement plan and didn’t know if he would have to work until his dying day. Now he is making so much money he doesn’t know what to do with it. I’m happy for him but again, smart money usually jumps in ahead of the market. Let’s hope this is the beginning of something good for all of us.