Crowd Psychology and How it Alters the Course of the Coin Market

Thursday, October 28, 1998

        It never ceases to amaze me how much market psychology influences coin purchases. There have been many cycles over the last 30 years and every one of them had buying or selling opportunities. The only problem is that most of us realize the direction of these cycles after they have run their course. It is difficult to be a contrarian and go against the market in anticipation of change because nobody likes to be wrong. It is much easier to go along with the crowd and buy coins when the market moves higher.

        The current market has actually been strengthening for the last two years. However, it took much of the first year for most numismatists to gain back confidence in the coin market as many dealers and collectors saw their inventories and collections dwindle in value over the previous 6-8 years. It appears that the current "crop" of buyers is a combination of collectors and investors. In the last two years, collectors had been searching for the right coin at a reasonable price. Now that the market is acknowledged as moving upward, they are trying to fill specific needs before prices move out of their price range. The investors who are currently buying are taking money from their stock market positions and diversifying into coins for flexibility and the potential that may lie ahead. The "domino theory" is progressing quite well. As more coins are being purchased, prices rise and more interest is created. In addition, the number of coin sales which occur on the Internet, serve to generate more collector interest, even if it is initially for lower priced coins.

        The next major show to take place is the Suburban Baltimore/Washington Convention, scheduled for November 12-15. This has been one of the most popular new shows to come along in the last five years or so. They attract a very large array of dealers from all over the country and attendance is always very strong. The show promoters make special attempts to cater to new collectors, especially the kids. Also attracting a strong presence will be the auctions conducted by Bowers and Merena. Not only is Auctions by Bowers and Merena, Inc. conducting one of their famous collector sales (made up of cabinets of well-known collectors), there is a specialty sale in conjunction with Hanks and Associates, Inc. This small sale may be short in length, but it is long in breadth of quality and rarity. It is made up of nearly all gold (except for the 1795 PCGS MS66 Half Dime) and should attract some very aggressive bidding activity. We have listed a few of the upcoming highlights in these two sales.

DENOMINATION	GRADE
1877 Twenty Cent	NGC PR66
1804 Bust Quarter	NGC62
1831 Bust Quarter	PCGS PR64
1898 Barber Quarter	NGC PR69
1899 Barber Half	NGC PR69
1883 S Morgan Dollar	NGC65
1887/6 Morgan Dollar	PCGS65
1887 S Morgan Dollar	PCGS66
1891 O Morgan Dollar	PCGS65
1893 S Morgan Dollar	NGC65
1895 Morgan Dollar	NGC PR68
1915 S Pan-Pac $50 Gold Rd.	PCGS64
1856 S $2 1/2 Gold	PCGS64
1896 $2 1/2 Gold	PCGS PR65
1879 $4 Stella FH	PCGS PR64
1909 S $10 Gold	PCGS67
1916 S $10 Gold	PCGS67
1933 $10 Gold	PCGS64
1925 S $20 St Gaudens	PCGS66