Coin promotions: Let's discuss

RYK

In another thread, someone mentioned that the current promotion of Indian $10's is coming to a close. I was very surprised to hear this. As an active collector of US gold coins, I had no idea that these were being promoted. I have a few of questions about this:

Who are "the promoters"?

To whom are the coins being promoted?

What happens to these coins after the promotions?

Other than the promoters, does anyone else benefit from promotions?

How does one know when a promotion is on?

Do promotions ever fail?

BlindedByEgo

Odd, but when I read that thread I had many of the same questions. Obviously I don't know the answers, else I would be answering you here

I think my problem is that I'm not in the Circle of Trust™

robertpr

When someone talks about a coin's current promotion coming to an end, what I do is roll my eyes and say "yeah, he wants to sound like he knows something."

In all truth, it's hot air.

DaveG

When dealers have spoken to me about "promotions" and "telemarketers", they're usually talking about firms like Blanchard (assuming there are, in fact, other shops that are actually in Blanchard's market segment).

My impression, also from those dealer conversations, is that Blanchard doesn't call the kind of savvy collectors who frequent these boards, but, instead, "big fish" (doctors, dentists, lawyers, real estate developers, business owners, etc.) who are not that savvy about coins, are susceptible to a fast-talking sales pitch and will write checks for five-figure sums.

After the promotion, I would presume that the coins live in safe deposit boxes until the aforementioned big fish discover that they've been "hosed", in which event, the smarter ones will take their losses by selling the coins and the rest will put the coins back into the safe deposit boxes until they need the cash for some other fast-talking sales pitch.

Other than the promoters, I would presume that the folks (big wholesalers, most likely) who sell coins to the promoters benefit.

Presumably, one knows that a promotion is on by the increase in bids by Blanchard, et. al., for a particular coin or coin series. (I presume that a good-sized wholesaler would know this because he would get calls from Blanchard and see the bids on CCX or some other electronic system.)

I dunno if promotions ever fail. I presume that if you have enough capital, you can buy enough coins to force an increase in prices and then wait for the fish to bite, which reinforces the upward move.

291fifth

The promoters are usually a large dealer or group of dealers who have pooled their funds to buy, at what they consider to be bargain prices, coins of a certain type, often from an accumulation or hoard. The coins are then
hyped and placed with "investors" (speculators is probably a better term.) It is not unusual for this to be done without much outside advertising, especially if the accumulation or hoard is of reasonable size. Once the coins are dispersed, the promoters move on to something else and the market for these coins softens.

Sometimes, when very large numbers of coins are involved, a considerable amount of "hype" will be developed which will spill over into the market of people who are wealthy but not really coin collectors.

roadrunner

The promoters make real money (like stock brokers) by "creating" demand once they have accumulated a position, then dumping later on.

I know I mentioned the $10's under promotion because they were.
When it ends is anyone's guess. A major PNG dealer told me about 12-18 months ago that $3 gold pieces were coming under heavy promotion. Of course we know that didn't happen.

The only question is what series has already been quietly accumulated and will be next. This is a near sure fire way for major dealers (like Heritage, Blanchard, etc) to make money all the time.
They don't need "real" demand from collectors & investors but can rather steer that demand for their own benefit. Same type of promotions occured with MS65/66 Morgans a year to two years ago.
Commems will certainly follow, but it seems like they are very long overdue.

roadrunner