Volume 8 Issue 5 Liberty Coin Service’s Monthly Review of Precious Metals and Numismatics May 1, 2002 U.S. Rare Coins Prices Sprint Upward! Many Bargains Still Available—For Now! Gold Hits 26 Month Peak, May Keep Going! Although the price of gold hit a 26 Type Coins, Key-Date Coins, U.S. 2002 Year-To-Date month high last week, the most impor- Copper Coinage, Colonial issues, and Change In Value tant developments in the past month early 20th Century Coins. December 31,2001-April 30, 2002 were some major advances in U.S. rare In many instances, quoted prices were 10-20% higher than they were a month Precious Metals coin prices and an outlook for even more Gold +10.8% appreciation in the coming months. earlier. A surprising number of coins Platinum +9.8% For the past few years, I have advised traded hands at these levels! Silver -1.1% Allan and Tom both witnessed dealers Palladium -19.9% you that supplies of desirable collector coins on the market were thin. The only buying coins at prices higher than Numismatic Coins reason that prices have been fairly stag- Trends, which is supposedly a fairly up- 1937 Buffalo Nickel, PR-66 +40.4% nant is that tight-fisted collectors have to-date guide for retail selling prices! 1936 Walking Half, PR-65 +34.3% Expensive “trophy” coins, those that 1899 Morgan Dollar, MS-64 +33.8% been cautious and patient. They were 1936 Mercury Dime, PR-65 +13.7% willing to wait for another opportunity to sell for more than a few thousand dol- acquire nice coins at today’s low prices lars, had been in the doldrums for the US Dollar vs Foreign Currencies past year. There had been some real British Pound -0.1% rather than bidding up prices by being Japan Yen -0.2% too eager. bargains available while demand was Euro -1.0% For months, our sales at national and slack. But one major wholesaler who Canada Dollar -1.5% specializes in such coins told Allan yes- Swiss Franc -2.5% local shows have been unusually strong while bargain-hunting has been espe- terday that they are again selling read- US And World Stock Indices cially difficult. Other dealers told us ily. Nikkei 225 +9.0% much the same story. They were looking Rather than selling coins for what DJ World (excluding U.S.) +2.2% Dow Jones Industrial Average -0.8% for lots of inventory for waiting custom- might have been a reasonable price a month earlier, many dealers almost London FTSE 100 -1.0% ers, but had trouble finding material. Frankfurt Xetra DAX -2.3% The time of stagnant prices appears to seem to be afraid to sell their coins too S&P 500 -6.2% be over. In the past month, several ma- cheap. They want prices today where NASDAQ -13.4% jor buyers have increased the prices they they estimate the market might get to a are willing to pay to obtain the inventory month from now. If they cannot get the past few weeks has several similarities. they want. At a major coin show in that higher price, they would prefer to It seems that we are in the early stages of Santa Clara, California in mid-April, keep them in inventory. the next great bull market in rare coins. buyers were trying to scoop up all the at- The table at the right gives you some Even though many prices are up from a tractive Classic Silver Commemoratives, idea of how much some prices have few months ago, the bulk of price increases almost no matter the price. jumped since the beginning of the year. are still in the future. LCS Chief Numismatist Allan Beegle Even these few examples are conserva- This emerging bull market in rare coins and Senior Numismatist Tom Coulson tive because they compare information has some significant and surprising differ- attended the huge Central States Numis- from published price guides, which are ences from past booms. These differences matic Society (CSNS) show in Colum- low in today’s market. provide some opportunities to get in on the bus, Ohio this past weekend. They re- In the huge bull markets of 1979-80 and 1989, we saw U.S. rare coin prices ground floor of the current boom. ported that the aggressive buying activity expanded to other areas. Better-Date U. steadily advancing almost on a weekly (Continued on page 2) S. Gold and Better-Date Morgan and basis by 5-10%. The action we saw in Peace Dollars led the way. Numismatic Portfolio Recommendations page 2 In response, dealers quoted strong Inside this issue: prices on a wide range of U.S. coins in- Philadelphia Mint Reopened April 18 page 4 No Circulating 2002 Sacagawea Dollars page 4 cluding 19th Century Nickel and Silver This Time It’s Different! neric, U.S. coins such as common-date “weak hands” buyers of the past who U.S. Gold, Mint State rolls of common- responded to well-crafted sales promo- Past rare coin market booms have often date Morgan and Peace Silver Dollars, or tions, only to often dump their hold- been driven by promoters who took advan- high-grade individual common-date ings too soon, invariably at a poor tage of other supporting factors. Morgan and Peace Dollars. As prices time. The 1979-80 boom was supported by rose for these common coins, they The boom is also different in that it high inflation and strong gold and silver tended to carry the better-date and is being led by coins that are in tight markets and strong markets in other col- scarcer type coins right along with them. supply and will never be plentiful. lectibles. Rare coin prices peaked two There has been less telemarketing of That makes it much easier for a rising months after gold and silver reached their rare coins in the past few years compared market to continue for a long time and all-time highs. to the 1980s and early 1990s. Prices for to increase more than might otherwise In the middle to late 1980s several tele- common-date U.S. Gold Coins, Mint happen. marketers promoted pre-1933 U.S. gold State Morgan and Peace Dollar rolls, and Another difference this time is that coins with the false claim that they were high-grade common-date Morgan and the boom coincides with one of the the only way to keep your privacy when Peace Dollars have been very reasonable, largest ever increases in coin collect- buying gold. After a few years, when the with many at their lowest levels in at ing interest in the U.S., spurred by the outrageous claims never came to pass, the least 15 years! States Of The Union Quarter series. promoters went on to other activities. With fewer campaigns to market such By the way, this developing boom is Prices fell dramatically. coins to the numismatically uninformed, being led by the very categories of rare The 1989 boom was fueled by the crea- there are ready supplies available on the coins that we have been recommend- tion of a handful of Wall Street funds to in- market. Instead of leading the develop- ing for the past several years. vest in rare coins. Everyone was promot- ing rare coin boom, they are now the lag- In sum, the current strength in the ing the opportunity to get into rare coins gards. rare coin market is for all the right before the “flood of Wall Street money” Today’s boom is different. It is being long-term reasons, not shaky transient pushed prices through the stratosphere. driven by collectors looking for the bet- ones. It will likely yield nice profits in When outside investor interest turned out ter values instead of coins that can be ac- the categories we have recommended to be less than expected (one $50 million quired in mass quantities. On average, in the past. fund only had $15 million subscribed, for today’s buyer is more likely to be example), the market fell. “strong hands” who will hold the coins Our Recommended Numis- Invariably, the promoters and telemar- until prices rise sharply. This is a defi- matic Portfolio keters would offer the blue chip, or ge- nite contrast to the often uninformed The purchase of rare coins is not for Today’s U.S. Numismatic Bargains Compared To Past Peak—Some Examples The last major peak in the U.S. rare coin market was almost 13 years ago, at the beginning of June 1989. Even though a number of prices are higher today than they were a few months ago, there are thousands of U.S. coins that are real bargains compared to lev- els back then. Here are some examples of coins that compare favorably in price today to June 1989. Although many of these coins represent excellent values today, remember that some price declines are partly due to factors other than the general market cycle. For instance, there may be significant increases in supply of a particular coin. Past results are no guarantee of future performance. Although numismatic coins can enjoy greater appreciation than gold and silver bullion, they are less liquid and riskier. Selling Prices U.S. Morgan Dollars Elgin MS-65 $2,075 $235 6/89 Today 1878 8TF MS-64 $1,375 $295 Hug-Walloon MS-65 $4,550 $470 U.S. Gold Type Coins 1878-S MS-65 $1,100 $220 Maryland MS-65 $2,250 $325 $1.00 Liberty MS-63 $4,800 $ 900 1879 MS-64 $ 690 $125 Rhode Island MS-65 $2,200 $215 $1.00 Indian MS-63 $3,550 $ 825 1880 MS-65 $7,750 $750 Robinson-Ark MS-65 $2,400 $315 $2.50 Liberty MS-63 $2,550 $ 690 1882 MS-64 $ 315 $ 60 1935-S San Diego MS-66 $3,150 $200 $2.50 Indian MS-63 $2,400 $ 725 1883 MS-65 $1,030 $145 Wisconsin MS-65 $1,450 $240 $5.00 Liberty MS-63 $3,550 $ 575 1884 MS-65 $1,475 $255 U.S.