For what some people consider a quiet month, January sure was a big month for the numismatic community.
In particular, I am referring to two particular events – the FUN (Florida United Numismatists) show in Orlando and the NYInc (New York International) in Manhattan. Both shows are held in early January, are very popular with collectors, as well as being tied to big name auctions. The auctions alone account for tens of millions of dollars changing hands, and that isn’t counting the action on the two bourse floors.
Not that many years ago, back around 1990, the idea of a single coin worth a million dollars was a big deal. Of course, back then only a handful of coins belonged to that very exclusive club. When I think about it, back then a single auction grossing $1 million was a big deal.
In recent years we have become used to seeing some big numbers reported in the numismatic market. Even in Canada, $1 million sales have frequently occurred. Canada even has a $1 million coin of its own – the famous 1911 silver $1 pattern, which crossed over that mark, including fees and taxes, at the Belzberg sale in New York City in January 2010. But in the first few weeks of 2014, it wouldn’t be stretching things to say that the numismatic market in North America averaged more than $10 million per day. Compared to most big industries that’s not much money. The movie Iron Man 3 grossed that much in 14 days.
On top of all that, January also saw a number of other numismatic events, including the CAND show and sale held in Hamilton, Ont., and smaller shows across North America. For several years market observers, including myself, have been amazed at the ability of the coin market to sustain sale after sale. For a few years conventional wisdom said investors were turning to rare coins as safer investments, compared to traditional financial instruments, as the coins were offering more potential for appreciation than bullion.
At this point, I am no longer convinced that logic is valid. The era of big ticket auction sales has been going for several years, regardless of other economic events in the rest of the world. My theory is that there are collectors out there who have the money to buy what they want, the passion to be willing to pay large sums, and the determination to strike when the iron is hot rather than wait for another chance.
Back in the early 1990s, few collectors were prepared to pay top dollar for the big ticket items as they seemed quite confident that all they had to do was wait for a better chance. Another theory points out that baby boomers – a generation of spenders – are now starting to retire and are not only in possession of available income now that their mortgages are paid and their children are educated, but are also inheriting the life savings of their parents, which is arguably the greatest generation of savers. Both theories make sense.
Perhaps it is because we are all getting older, or perhaps it is because the current generation of baby boomers have been the beneficiaries through inheritance of the largest transfer of wealth in history. Either way, the market seems to be robust enough to pay top dollar, and smart enough not to overspend.