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1989 Bubble and Crash... who remembers what?
yspsales
Posts: 2,295 ✭✭✭✭✭
Was cleaning out a warehouse and found some old Greysheet price lists from 1989. It has rekindled my interest in the Bubble and Crash of 1989.
Looking to build a framework for future research.
When did the run up start?
When was the Long Beach Show that the collapse commenced?
Who were the Wall Street firms rumored to be involved?
Who remembers what?
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I remember insane prices for MS63-65 common slabbed Morgans but I didn't follow the certified market back then.
I started setting up at coin shows in 1990 after the 89 crash. Many people burned in the crash - Bankruptcy, Credit Card Default, Divorce. I liked being able buy stuff at the cheaper post market crash prices in building inventory. Quickly moved to 100 slabs enough to fill a show display case. Another case had raw collector coins and currency. Bulked up on world gold too, so much cheaper than US. Really banked when gold went up. Did a few gun shows. Bought some guns lol. Sold coins to the gun people.
Developed inventory procurement contacts - a vest pocket trader, a specialist in World Gold, Coin club friend who did nothing but world coins, a major local dealer in US slabbed coins, Teletrade.
Those who were close to the market after the 1989 crash in prices understands how illiquid the market could get. Generics weren’t needed at any price (obviously “reasonable” prices and not “free”). However, recent times have shown how illiquid a market could get in some “modern” issues—so the danger is still there.
It was at the 1989 ANA Convention in Pittsburgh. I remember because in the runup to the convention, as the market was going crazy, I advised my father-in-law that this would be a good time for him to sell his collection of classic commemoratives, which he had gotten buried in back around 1980 during the Hunt Brothers Bubble. (I married his daughter in 1986).
He agreed, so I put everything in Kointains and fresh flips and made an inventory with my grades of them (I had been Senior Authenticator and Grader at ANACS up until 1984, so I thought that my opinion still carried some weight) and the most recent Greysheet numbers. Then, on the flight from Chicago to Pittsburgh, I ended up sitting next to a dealer I knew. We chatted, and he asked if I had anything to sell. I told him about the commem collection, and he asked to see it. I took the box and list out of my briefcase and gave them to him. He took out his glass, looked at the coins, looked at the list and made me an offer just under $40K. It seemed reasonable so we shook hands on the deal and he put it in his briefcase. The next morning at setup he came by the table I was working at and gave me a check made out to my father-in-law. Either the next day or the day after that the market crashed.
A couple of years later I came across a copy of the list. I looked at a Greysheet and calculated that I could buy everything back for somewhere between $11-12K.
Thanks for sharing. Thanks
Yup, almost everything fell on average about 75% which is the drop you indicate, Captain.
I have some articles from a few years after the 1989 Coin Bubble which gives prices during and after the fall. What I find interesting is if the coins were able to stage a comeback in the last 30 years.
Some coins -- like Saints -- have recovered somewhat if only because the underlying metal (gold) has gone up 6-fold. The PREMIUM has certainly shrunk on the coins, but you're actually up from the early-1990's lows though still down from the Bubble Peak.
Here's a few coins with their May 1989 Bubble Peak, their lows a few years later (~1993 or 1994), and the current approximate price in May 2024 (today). If my current prices are off on any of the series, please feel free to correct me:
1880-S Morgan MS-65.........................$550 peak......$75 low.....today about $175.
1881-S Morgan MS-66 and MS-67.....$1,400 and $3,900 peaks......$200 and $700 lows.....today $300 and $750.
No-Motto Liberty seated Half MS-66......$39,000 peak.....$14,000 low.....today I see the MS-66's more or less about $6,000 (?).
No-Motto 1858 Liberty Seated Half MS-65….$15,000 peak........$7,000 low.......today about $4,500 (and might have CAC).
Generic Saint-Gaudens MS-65 (NGC).....$4,000 peak......$1,200 low (gold flattish over that period)......today $2,600 (with gold at $2,350/oz.)
1890 $2.50 Quarter Eagle Liberty (PCGS) MS-65.....$18,000 peak....$2,500 low.....$7,000 today (with gold up 6-fold).
1872 3 Cent MS-62 (PCGS)......................$800 peak.....$125 low......$175 today
I remember the absurdly high prices (in retrospect) of the fairly generic or common coins in high grade. I don’t think anyone who “invested” widely in those coins will live long enough to recover, particularly if adjusting for inflation. However, does anyone know how well the less flashy, truly rare or scarce coins have done since those heady days? Take, for example, an XF chain cent.
PS wasn’t the Dow something like 1k at that time? Now 40.
Immediately after the prices crashed, the coin dealer/jeweler in Scottsdale where I worked/lived at the time dropped the prices so much that I loaded up on all the PCGS gen 1.2 rattlers that he had from gold to commems to a 1909-SVDB and everything in between. I recall if fondly just like the 87 stock crash since I didn't have any of either until after the crash, ah the good old days. Coming up, I would expect softness especially in the more common stuff as the economy softens. The high end seems pretty stable, I can attest to the strength in the prices at the 12 Caesars auction recently.
I just left the CONUS for my first overseas assignment in 1989.
BST transactions: dbldie55, jayPem, 78saen, UltraHighRelief, nibanny, liefgold, FallGuy, lkeigwin, mbogoman, Sandman70gt, keets, joeykoins, ianrussell (@GC), EagleEye, ThePennyLady, GRANDAM, Ilikecolor, Gluggo, okiedude, Voyageur, LJenkins11, fastfreddie, ms70, pursuitofliberty, ZoidMeister,Coin Finder, GotTheBug, edwardjulio, Coinnmore...
Wow! Those are some insane prices back in 1989 for those coins and to think the dollar went way farther back then too.
USAF (Ret.) 1985 - 2005. E-4B Aircraft Maintenance Crew Chief and Contracting Officer.
My current Registry sets:
✓ Everyman Mint State Carson City Morgan Dollars (1878 – 1893)
✓ Everyman Mint State Lincoln Cents (1909 – 1958)
✓ Morgan Dollar GSA Hoard (1878 – 1891)
Edited
About 2500 to 3000
I had moved to Ca. in 1984 for a fresh start. My girlfriend followed me in 1985. I sold my collection in 1986 to fund the purchase of my condo. In 1989 I got married and started collecting once again. Althrough I missed the highs of the market when I sold I feel I was lucky to have missed the crash.
Mike
My Indians
Danco Set
The DJIA was about 2,500 depending on if it was rising or falling and also in that Iraq-Kuwait 1990 Bear Market that dropped it 20% in a few months.
I remember back then buying a small deal of MS64 $20 Libs (1904) at $3500 each.
Gold spot in 1989 averaged about $350,
so call it 10 x melt.
Today? Those same coins retail at about 10% over melt.
30+ years coin shop experience (ret.) Coins, bullion, currency, scrap & interesting folks. Loved every minute!
Yup, the MS-63 to MS-65's were the sweet spot for the Saint and Liberty DEs. The premiums in hindsight look positively ridiculous but at the time you believed there might be a steady buyer for hundreds or thousands of these coins day after day after day.
People remembered gold going up 20-fold in the 1970's and thought the same thing could happen to plain old quasi-bullion coins. Even a 10-fold rise would have meant a price close to $10,000 for a common Saint or Liberty Head DE.
I remember in the late 1980's wall street got involved in buying rare expensive coins. Several rare coin investment mutual funds emerged and investors provided them with millions of dollars to invest in rare coins. Of course, this energized the entire rare coin market and prices went up. After a while these funds decided to liquidate their holdings and they dumped their coins on the coin market which helped precipitate the collapse of the coin market in 1989. This is my best recollection of events so feel free to correct me or add more information.
Worry is the interest you pay on a debt you may not owe.
"Giddy" pricing precedes crashes.
As I recall the situation, only one investment firm was talking about starting a fund to invest in certified coins, which caused the bubble to hyperinflate, but it never happened. At the ANA convention it was announced that they had decided not to and the bubble popped.
The 1989-90 “crash” was more of a slow moving train wreck than a crash. Yes, you can probably pinpoint the top of the market in 89 for generics, but rare coins didn’t really tank until late 90. Hugely different than the crash of April 17, 1980, when the market for pretty much all rare coins tanked maybe 30% in a day, and then continued steadily lower for another couple of years.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
What caused the April 17th crash?
Latin American Collection
At the time, the consensus was that it was a combination of giant tax and auction bills coming due, and I’m sure those were the straws that broke the camel’s back. But mostly, the market was a giant bubble just waiting to burst.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I'll add the article below. Whether KB actually bought coins or just raised the $$$ and then closed up shop, I don't know. Their talk about tripling the investment to $120 MM almost certainly never got past the idea state; doubt they raised $$$, even less so that they bought anything.
Ditto Merrill Lynch (there it appears they definitely did NOT do any buying). Some of you probably know or knew some of the names mentioned in the article. A few are still alive, others have passed on.
Clearly...it was the FRONT-RUNNING ahead of the expected hundreds of millions of dollars they expected from other copy-cat Wall Street firms that led to the huge premiums, alongside the introduction of the TPGs.
Anyway, this article below is from April 1990. It was Kidder Peabody that had the $42 million fund for coins. This article seems to have hit up on the frenzy that would have hit in the NY area if heavy-hitters from Kidder and Merrill Lynch were talking up the coming $$$ that would enter the coin market. I'll bet alot of dealers and jewelers in the NYC-area jumped the gun to beat them to the punch -- that was the front-running.
Check out the "sample portfolios" from 3 well-respected numismatists at the end of the article.
April 1, 1990 MONEY Magazine – ''It's the greatest investment in the world . . . There's not much supply out there and demand is sky-high . . . Don't miss the huge price run-ups . . . Some of our clients doubled their money last year . . . $10,000 invested in 1970 is worth $2 million today . . . 1,000% appreciation in five years . . . We hear $500 million to $1 billion is coming into the market . . . It's set to rise to heights never before imagined . . . Wall Street is buying in . . . The Japanese are just waiting . . . With savings accounts and CDs, you're up the creek if there's a depression. You're gonna wind up in the soup lines. Coins very rarely dip in price. And it's only temporary . . . The chance of a lifetime . . .''
Talk about exciting times. If the fall of Communism, the reunification of Germany, the imminent decline of apartheid in South Africa and the junk bond Walpurgisnacht aren't enough, try the brave new world of rare coins. The italicized fusillade above represents just some of the hysteria-inducing remarks of coin dealer Michael PapaGiorgio on his paid-for hour every Saturday on WOR-AM in New York City. He, in turn, is just one of the dealers, telemarketers and stock brokers who are mounting what may be the biggest promotional blitz ever seen for investing in coins. Many individuals recently soured on stocks and bonds are attracted to the turned-up flame of rare coins. Are those glittering profits authentic? Is rare-coin investing as low risk as some of its boosters are claiming? Or is coinmania merely destined to become the tulipmania of the 1990s? For the answers, you need a short course in the byzantine world of rare coins.
Let's start with the news. Coins are going big time. Wall Street has indeed entered the market, heretofore a cozy backwater of collectors and a smaller contingent of investors -- plus the predictable array of crooks and shady dealers. The dawn of the new age came last April, when Kidder Peabody launched a $42 million private limited partnership in U.S. rare coins (minimum investment: $50,000). This move galvanized the rare-coin market. Dealers raced to buy investment- grade merchandise on margin in the belief that Kidder had started a Wall Street stampede. Result: a wild run-up in prices that spiked and then crashed $ in July when dealers, disappointed by Wall Street's silence on the subject, dumped inventory. Some coins fell as much as 40% over the summer. All last fall and early winter, however, one name was on the lips of dealers: Merrill Lynch.
The biggest brokerage house, the rumors went, was preparing a major move into coins. PapaGiorgio, who is president of First International Rarities Exchange, a Chicago coin dealership, told his WOR listeners repeatedly that Merrill Lynch might be entering the market through the purchase of as much as $200 million of rare coins. Finally, in February, the brokerage filed a public limited partnership prospectus with the Securities and Exchange Commission to sell $50 million to $75 million worth of coins to small investors. Each limited partner will have to put up a minimum of $5,000. (Merrill Lynch mounted two smaller partnerships in ancient coins in 1986 and 1988. Now closed to new investors, they produced 22.5% and 18.6% in coin appreciation and trading profits last year.)
Wall Street's new passion for coins is just the cue some dealers have needed to try to stimulate demand. Although prices have not regained last summer's high, dealers insist that coins have entered a golden age of price increases. Exclaims a promotional flier for Fred Sweeney Rare Coins Inc., a Shawnee Mission, Kans. dealer: ''Tens of thousands of individual investors will come pouring into the market, trying to ride the coattails of the big money . . . Expect a price explosion of unheard proportions.'' Notes John Albanese, president of Numismatic Guaranty Corp. of America, a leading independent coin- grading service: ''Telemarketers have been making cold calls, telling people that if they don't get in right away, they'll miss the boat.''
The latest news from Wall Street is not exactly designed to contradict that statement: Hugh Sconyers, manager of Kidder's private partnership -- up 20% in value for its first 10 months -- says the partnership will more than triple its stake in coins to $142 million, perhaps this year. Sconyers says he wants to purchase major private coin collections for the partnership. Wall Street's sudden interest in coins is not hard to explain, given customer disenchantment with mainstream investments. ''Stockbrokers want new alternative investments they can sell to clients,'' says Keith Zaner, trends editor of Coin World, a leading collector and investor weekly. Coins, which once might have seemed an eccentric choice, have been taking on investment legitimacy by looking more and more like stocks and bonds. This so-called securitization began in 1986 with the introduction of a consistent coin-grading system.
Until the mid-'80s, buyers were at the mercy of one of the market's most sinister traditions: dealers graded their own merchandise and routinely inflated values. Even honest dealers disagreed about how to grade a given coin. ''It was total anarchy,'' recalls Joseph O'Connor, a dealer in Oak Forest, Ill. There are now many grading services, but only three enjoy wide investor confidence: the Numismatic Guaranty Corp. of America (NGC), the Professional Coin Grading Service (PCGS) and the American Numismatic Association Certification Service (ANACS). The services assign a grade to a coin submitted to them by dealers for a fee of about $26. The coin, along with a label stating its grade, is encased in a tamper-resistant plastic holder. Today more than 2.5 million individual coins have been ''slabbed''; of these maybe only 10%, or 250,000, have strong investment potential. Prices of these coins range from around $250 to $250,000, with some going for upwards of $1 million. The uncirculated, and rarest, coins are graded MS60 (MS stands for mint state) to a perfect MS70. Proof coins, struck by the U.S. mint for collectors but never meant for circulation, are graded PR60 to PR70. Coins that have been circulated -- and show dents, scratches and rubbing marks -- are assigned one of 19 grades, from 1 (for poor) to 58 (for ''about uncirculated''). Unless a coin is so rare that it exists only in poorer condition, MS65 -- free of any blemish detectable by the untrained eye -- is usually the minimum grade for investment.
Independent grading has enabled investors to buy and sell coins sight unseen. And this in turn has allowed the investor to shop for price: if a buyer doesn't like what one dealer is charging for a specific coin with a specific grade from one of the three main services, he can call around until he finds an identical coin at a better price. Grading has trimmed dealer markups, but they still range widely -- from 8% to a stiff 30%. It would take three years to overcome that 30% hit on a coin that appreciated 10% a year, not counting storage costs. Another move to make coins trade more like conventional securities: the introduction four years ago of an electronic market called the American Numismatic Exchange. It offers an alternative to the cumbersome buying and selling mediums of auctions, coin shows and telephone trading. This computer network allows 175 coin dealers to bid on PCGS- and NGC-certified coins. It also lets investors buy and sell more quickly and at less volatile prices. Says John Schneider, president of the exchange: ''Our network is patterned on the over-the-counter market and the New York Stock Exchange. Our goal is to have certified coins trade just like major financial products. Then numismatic expertise on the part of the investor will become less and less important.''
While the moves toward securitization have helped investors, coins are not stocks, and the market in them is nothing like the stock market. Coins are limited-edition art objects, so valuation of any issue is inherently subjective. ''Coins are collectibles,'' says Tom Kurtz of Numismatic Management, a coin company in Iselin, N.J. ''They have only one fundamental, supply and demand, while stocks go up and down on such basics as earnings outlook and new products.'' And demand is sometimes hard to gauge -- there may not be a bid on a coin every day -- particularly when the market is being primed so vigorously. What's more, trading remains completely unregulated by any major government agency. And coins are not a liquid asset, no matter what some dealers may tell you. While industry improvements have made it possible to sell some coins in a single day, an investor might wait weeks and, in some cases, months for the right price for a very rare and valuable coin.
Bottom line: coins are not the sure bet that their shrillest boosters claim. Meanwhile, the belief that coins are security-like investments is creating a dangerous situation. Madeline I. Noveck, a financial planner in New York City and an expert on antiquities, warns: ''Wall Street is popularizing coins as an investment, and that is drawing into the market many people who perhaps shouldn't be there, especially those with no coin knowledge.'' Why would any small investor want to put even a toe into such a murky market? To make money, of course. As the chart on page 157 shows, coins of high quality and reasonable rarity have done splendidly over the past five years.*
Before you buy, be sure to follow these guidelines: -- Learn about rare coins. Go to coin shows (listed in Coin World), talk to dealers and collectors and read every book and journal you can get your hands on before buying a single coin. The successful investor needs knowledge to identify and follow the 200 to 400 kinds of U.S. coins that have genuine investment potential. For example, all of the Saint-Gaudens MS65 $20 gold pieces -- minted between 1907 and 1933 and bearing a relief designed by the famous sculptor Augustus Saint-Gaudens -- are collectible, but the investor needs to know which years may be undervalued and therefore worth owning. Similarly, only some of the heavily hyped silver dollars designed by George Morgan are investment quality. Those of lower grades and from years when millions were minted will be shunned by the knowledgeable buyer.
Source books include the annual Coin World Guide to U.S. Coins, Prices & Value Trends (Amos Press, $4.95); A Guide Book of United States Coins (Western Publishing, $7.95), known as the ''red book''; and the Investor's Guide to Coin Trading by Scott A. Travers (John Wiley & Sons, $24.95). The American Numismatic Association and the Federal Trade Commission have jointly issued an excellent free guide, Consumer Alert: Investing in Rare Coins (ANA, 818 N. Cascade Ave., Colorado Springs, Colo. 80903).
Find a reputable, experienced dealer. Best bet: someone in business in the same area for at least 10 years who is a member of the Professional Numismatists Guild (P.O. Box 430, Van Nuys, Calif. 91408) or the Industry Council for Tangible Assets (25 E St. N.W., Washington, D.C. 20001). These groups have established stringent guidelines for ethical conduct and can give names of dealers. Ask for references from clients and from a bank. -- Do your own price homework. Deciding what you are willing to pay requires knowledge of the price history of a coin. ''Look for undervalued material -- what's selling well below market highs -- especially in a rising market,'' says Tom Kurtz. You can find wholesale prices in one of these publications: The Certified Coin Dealer Newsletter (weekly; P.O. Box 11099, Torrance, Calif. 90510; one year, $99), Coin World (weekly; P.O. Box 150, Sidney, Ohio, 45365; one year, $26) and Numismatic News (weekly; 700 E. State St., Iola, Wis. 54990; one year, $24.95). Always bear in mind the need to factor in your dealer's markup, which can sometimes change an undervalued coin into a pricey one. -- Avoid the esoteric. U.S. government mintages are the only reasonable coin investments for the beginner because they enjoy the broadest collector and investor market. Paper currency, foreign and ancient coins, and issues by such short-lived governments as the Confederate States do not have enough buyers ^ and sellers to support an active market. -- Store safely. Do not leave your coins with the dealer or even at home. You'll have to add rent -- $25 a year -- for a safe-deposit box to your coin costs, but it's worth it to avoid theft of one-of-a-kind coins. And how about those partnerships? While the Merrill Lynch deals are accessibly priced, professionally managed and diversified, you pay for all that with 15% sales fees and annual management fees, as well as markups. And at $50,000 apiece, the Kidder partnership is aimed at a fairly exalted market. Besides, coin partnerships are like gold stocks: you might feel more secure having the genuine article than a piece of paper -- especially when the real stuff is beautiful to boot.
FOOTNOTE: *Our portfolio, compiled by Joseph O'Connor: 1942 Mercury 10 cents, PR65, up 10% over the past five years; 1930 Standing Liberty 25 cents, MS65, up 89%; 1878 CC Morgan $1, MS65, up 339%; 1922 Grant 50 cents, MS65, up 332%; 1936 Rhode Island 50 cents, MS65, up 162%.
BOX: STARTER COINS MONEY asked the three dealers below to recommend affordable coin portfolios for a beginning investor. The coins were selected for their strong demand and prospects for appreciation. All are currently trading below their recent market highs. The code that follows the name of each coin indicates the grade. Issues from different mints make up the sets. Prices do not include dealer markups -- which can add 8% to 30% overall.
Joseph O'Connor, O'Connor & Co., Oak Forest, Ill.
1907 Indian 1 cents, PR65RB $405 1927 Buffalo 5 cents, MS65 176 1935D Mercury 10 cents, MS65FB 395 1938 Washington 25 cents, PR65 265 1934 Boone Bicentennial 50 cents, MS65 425 1935 Walking Liberty 50 cents, MS65 360 1883O Morgan $1, MS65PL 800 1947 Booker T. Washington set, MS65 588 1952 Washington-Carver set, MS65 955 TOTAL $4,369
Gerald Bauman, MTB Banking Corp., New York, N.Y.
1913 Buffalo 5 cents, MS65 $200 1910 Barber 50 cents, PR63 1,100 1936S Oregon Trail 50 cents, MS65 800 1937 Roanoke Island 50 cents, MS65 700 1937 Texas Centennial set, MS65 1,200 TOTAL $4,000
Tom Kurtz, Numismatic Management Corp., Iselin, N.J.
1908 Liberty 5 cents, PR65 $1,250 1935 Boone Bicentennial 50 cents, MS65 465 1924 $20 Saint-Gaudens gold, MS65 2,800 TOTAL $4,515
Some rare coins have been giving investors a spiky but rewarding ride in the five years since independent grading brought a mea sure of credibility to pricing. The chart tracks a selected basket of five investment-quality coins that cost $2,820 in January 1985. This group, described on page 160, gained 24.9% annually, on average, and was valued at $8,560 at the end of 1989. The same amount of money invested in the Coin World Trends index of 1,325 high- grade (MS65) coins would have risen an average of 21.2% a year, to $7,381. If the original $2,800 were put into Standard & Poor's 500-stock index instead, it would have risen an average of 20.3% a year, to $7,112, with dividends reinvested.
Most markets that crash experience a dead-cat bounce. In this case, with some vets here pinpointing the end of the Bubble in 1989 at the Central States Show, it appears that new talk of Wall Street $$$ coming in (see article above) gave the crashed market new life in late-1989 or early-1990.
The Bear Market of 1990...the implosion of DBL and the junk-bond market....and the invasion of Kuwait with hardly any rise in gold....all finished off that dead-cat bounce.
Gold made its low for the year that month/week. The huge drop beyond what anybody forecast confirmed that the appointment of Paul Volcker would whip inflation and this would be a massive headwind for gold going forward.
https://sdbullion.com/gold-prices-1980
Wasn't there a Spanish investment group that created a fund?
In 1989, NUMISMATIC non-PM and some PM-related coins peaked. That's why I quoted above prices from May 1989 -- that was apparently the BROADEST peak in the 1989-90 Bubble. If the ANA or Central States Show coincided with a late-May/early-June peak, that would explain why some vets here told stories to that effect.
In 1990, and again it MAY have coincided with another major coin show in the Summer, the coin bubble popped with the definitive exit of the Numismatic/Coin Funds from Wall Street. The stock market was weak....junk bonds had imploded.....Drexel Burnham was kaput, other firms were bleeding cash.....and a bear market was about to begin thanks to Saddam Hussein invading Kuwait.
There are probably more archived news articles or numismatic commentaries (anybody have old copies of CoinWeek or CoinWorld ?) that can more definitively line up specific incidents with the 2 peaks in coins.
But I think the general outline we have above is pretty accurate.
Some additional quotes, tidbits, etc:
"The soft market also has hurt the companies that-for a fee-grade and slab coins. PCGS-the country`s largest-evaluated 25,032 coins in November, compared with 78,192 in November 1989, according to a PCGS spokesperson." - Chicago Tribune, January 1991
Article with some quotes from contemporaries:
https://coinweek.com/the-coin-analyst-comparing-todays-booming-coin-market-with-the-1980s/
Merrill Lynch had a short-lived $50 million fund called NFA World Coin Fund Limited Partnership, which was managed by Bruce McNall and the Goldbergs. (I still have the prospectus in my library.) It was launched in 1990 and definitely bought coins, which I know from first hand experience. IIRC, it was liquidated some years later in a Stacks auction.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Agree with your general point on the NFA fund.
McNall later ran into problems and who knows what he did with any money he was given. Coin prices were clearly anticipating much larger sums coming into the market. $150 MM - $500 MM were the figures being thrown around at the time.
Even the $50 MM fund couldn't really move the market for the more popular/liquid items. If 10% went into Saints, for instance, you are talking about ~ 1,000 coins give-or-take. You need more persistent buying IMO or a larger 1-time grab to justify the move in gold/silver coins that we saw in 1988-90.
No way McNall and the Goldbergs were buying generic US for their fund. It was all fancy world and ancient coins. For example, I sold them a Spanish gold piece for something like 75K.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Makes sense, it was the NFA WORLD Fund in the name.
Spreads and markups and management fees probably much bigger on that stuff, too.
Wonder what that Spanish piece you sold them is worth today ?
Best guess is 125K. Not exactly a great long term investment.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Most Trophy Coins I have checked return LSD-MSD on a CAGR. Outside of the Bass Proof Liberty DE at about 12% very few are anywhere near the returns from stocks.
My attorney and I offered a rare coin fund in 1987-1988. We bought high-end U.S. proof and mint state gold coins.
.
.
.
How did it end up doing?
"To Be Esteemed Be Useful" - 1792 Birch Cent --- "I personally think we developed language because of our deep need to complain." - Lily Tomlin
I ran full page buying ads on the back page of CDN’s ‘blue sheet’. Sorry for the blurry image but it’s still readable.
It was liquidated prior to the crash of 1989.
Overall the returns were very rewarding.
A few coins like a Ty 2 gold dollar in MS 65 never appreciated. Matte proof gold, Liberty proof gold, early type gold in gem mint state and proof, Pan Pac $50’s and esoteric items exploded in price until the slowdown in 1989.
Wanted to sell some stuff, called the 24 hour beeper and got no response. Starting to have my doubts about this operation.
10-4,
My Instagram picturesErik
My registry sets
That was funny! I needed a laugh!
Anyways, that was 37 years ago.
Everyone knows I am located in Las Vegas, NV now…
YSP, I might have a few articles that I have referenced on this and other threads (i.e., Burton Blumert) -- if you don't have access to them and want them posted, let me know.
I supplied coins to a fund around this time that has not been mentioned here. Among them was a raw 1907 HR which slabbed at MS65 at the time and rare date and early gold. It wasn't huge but owned maybe several million dollars in coins.
The factor that hasn't been mentioned here is the population of certified coins being very small relative to the demand. PCGS had started in 1986 and NGC in 1987 and there just weren't many coins in holders, yet the demand was through the roof for certified coins as protection for the non-numismatist investor. Simple supply and demand. There just weren't nearly enough generic coins certified at the time to meet demand. And then when the demand went away, there were far too many.
Excellent point, Sell. Somewhat similar to what we saw with NFTs and sports cards in 2020-21....the demand was super-high but the backlog in grading at the TPGs was horrific.
Just curious...was the fund you supplied to attached to a well-known Wall Street name or was it an off-the-beaten-track firm or a couple of guys just trying to capitalize ? Also, it appears your fund counterparts dealt in raw gold -- or was the MCMVII HR the exception ?