Well, here is Heritages take on the state of the coin market

WaterSport

I am sure others got this, but I am still a sky will fall beliver.

WS

October 10, 2008

Dear Bob,

We've been fielding a high volume of calls lately from potential consignors and buyers wondering how a tumultuous world economy is affecting the auction business in general, our business in particular, and their investments specifically. So we felt it appropriate to take a few moments to explain to you, our valued clients, exactly how we at Heritage are experiencing the current economic climate.

People are panicked in many corners — and rightly so — but not here at Heritage. We have weathered economic upheavals before, and for years we have planned for days like these. We're now diversified across 26 categories. We've learned to see that uncertain economic times mean increased auction activity across the broad spectrum of our collectibles divisions by both buyers and sellers.

Collectibles, especially coins, remain extremely liquid. Over the last three months, as Wall Street has been reeling, our auction and private treaty sales have risen steadily. Every day people who are in businesses where capital is no longer readily available turn to us for liquidity. We offer cash advances to stem the tide of an emptying bank account, and a 30+ year record of paying every one of our 45,000 consignors in full and exactly on schedule. Never before have we had so many quality consignments in-house for upcoming auctions.

Conversely, our buyers continue to vie aggressively at auction for coins and collectibles they love, knowing that they are diversifying against inflation, and through that diversification, protecting their holdings of paper assets for the future. In fact, we cannot remember a time when our clientele has been more engaged, or when we've seen as many new and active buyers.

Our $35 million September 24-27 Long Beach Expo auction of coins and currency registered more bidders (over 14,000 of them!) than any auction in our history. Our Entertainment, Space Memorabilia, and Natural History auctions over the past 10 days were consistently strong events with above average sell-through and very happy consignors. And here are some hard and fast facts on Heritage weekly coin, currency, movie posters, comics and sports auctions for just the last quarter (i.e. the last 30 days versus the 30 day period starting four months ago):


*Our number of successful bidders is up by 11.5%.
*Our number of lots actually sold in each weekly auction is up 39.95%.
*Our average lot value is up 8.49%.
*Our total sales volume is up 43.34%

Heritage remains firmly rooted to a business model of transparency, honesty and fairness. We also believe in our consignors, our buyers and our expert staff. Economic struggles are like a Chinese finger trap: Panic and it tightens, but stay calm and it slips right off. Coins and currency may not garner the headlines, but our market has held steady, and risen in many areas, even throughout these difficult months. Coins in particular, and collectibles in general, are a wonderful hedge in a market like we're seeing now. This we know from experience and study of history.

Rare coin prices, along with many other collectibles, actually rose during the Great Depression, as well as during the recession and accompanying real estate and stock market collapse of 1974. During the oil crisis of 1979, we saw coin prices rise dramatically, rewarding owners at a time when their stocks and many other assets were plummeting. Many of our clients saved their houses or businesses with funds from prudent coin investments made with us that we sold for them at auction in early 1980. And the 2 years following the 1987 stock market collapse saw rare coin prices more than double, on average (source: PCGS 3000 Index).

Collectibles markets are often counter-cyclical to widespread turmoil, meaning owners can actually profit when they need money the most. At worst, these categories are generally only minimally affected, in the short-term, by Wall Street's wild fluctuations. And coins and collectibles have a steady record of bouncing back even if their value takes a hit.

If you wish to sell, Heritage will guide you through the process to achieve the best possible return on your investment, hard work and dedication. We can also work with you on 1031 exchanges to minimize taxes on your gains.

Fortunately, Heritage is prepared for whatever the future brings. We keep our focus and run our business not based on emotion but on sound business principles and our decades of experience in this industry. If you're taking this journey of collecting, then rest assured, we're right here with you. There's nowhere else we'd rather be.

19Lyds

I got this one as well but what would you expect them to say? "The Sky is Falling so don;t bother consigining with us!"

I read the same thing from Stock Market folks who say, don't sell, don't sell! Well, I'm sorry but if I could I would since I'd rather have my funds in hand than to sit here and watch them slip into oblivion!

Believe it or not, I heard an ad on the Radio just yesterday encouraging folks to refinance for the equity in their homes! That one got a "Where have you been?" chuckle!

JupitarCoins

To much to read

Dog97

Some friends & I were sitting in a beerjoint this morning looking out the window watching cars go by. Traffic was very heavy with cars bumper & sitting still where they are usually zipping along headed south. Mostly SUV’s pulling boats and big family type cars. They’re having a festival at the beach this weekend and 300,000 people are expected to attend to buy $6 beers & $2 shrimps.
Everybody kept saying “Look at all that bad economy headed south!”
I don’t see nice solid collector coins taking a beating but I bet if you had 1804 Dollars, 1913 Lib Nics and a bag full of PCGS MS 65 1881-S Morgan dollars you would have a hard time selling them at Heritage’s auctions.

Frankcoins

Coins and other collectibles survived the Great Depression pretty well.

At least coins are a physical asset.

How much leverage can you create when the reserve requirement is zero?

http://www.federalreserve.gov/monetarypolicy/reservereq.htm

MisterBungle

To much to read
-----

My sentiments exactly!!



~

Longacre

I got that email as well. It was well written and provided some good facts. They also tugged at Longacre's heartstrings by mentioning Sec. 1031 exchanges.

291fifth

They need to define just what a "rare coin" is.

FullStrike

Now if they could start an auction for pallets of Beans, Rice, Beer, and maybe Beef Jerkey, I think business would REALLY boom for them. Or how about blazing a totally new trail and offer food for Gold Eagles. Or has UPS shipping gone up too much lately?

Coxe

If you don't have to sell and have either nice coins or stock is fundamentally solid companies, why worry?

My observations on the auction market though. Quality's brief appearance seems to have faded. Most companies have reduced offerings of second rate or worse material. Seems nearly all of the great stuff is flowing toward Heritage, and there isn't an abundance of that there too. At least there isn't relative to some other times. Seeing way more NCS and ANACS Details coins in credible auctions now than ever before in the last decade. Great coins appear to be in strong hands. An interesting thing too is that if the average collectors are getting economically pounded, where are all of their coins on eBay and elsewhere? I think we will see some of that, with some cause/effect latency.

MrEureka

I feel better now.

Unknown

This content has been removed.

jhdfla

<< <i>I feel better now. >>



So do I. I thought everyone got a "Dear John" email like me...

john

Runningfox58

Heritage seems to have conveniently left out the fact that in the early 80's and first half of the 90's, the coin market plummeted and took several years to recover. Stocks, bonds and real estate have had their ups and downs, but so have coins.

Julian

Deadhorse

<< <i>Heritage seems to have conveniently left out the fact that in the early 80's and first half of the 90's, the coin market plummeted and took several years to recover. Stocks, bonds and real estate have had their ups and downs, but so have coins.

Julian >>




Very true.

I remember those days quite well.

Fortunately, the only thing I sold back in 1980 was melt siver coins at an astounding return.

Barry

Self-serving?

Bear

It sounds a little like whistling past the graveyard.

They may be looking beyond the immediate, to the

possible ramifications of the economic collapse ,

upon the hereto healthy coin market.

PerryHall

<< <i>Self-serving? >>


Yup. Why else would they issue this letter? Public service announcement?

coolest

<< <i>I kind of chuckle when I read these promotive feel good statements. So lets see if I got the jest of it. In terrible times rare coins have done very well and so therefore did Heritage; does that mean in great times one can assume they also did equally well, I don't know they seem to make the point that rare coins go the opposite way. But if you just take them from the surface it seems that rare coins have always done well and so has rare coins, woo I say I thought coins have had some major dips in the recent past but what do I know. To me the sounds like wishful thinking, I don't want to count on heritage writing history books, they should stick to writing catalogs, which they do pretty darn well. >>



Actually, yes. They do well when times are good and when times are bad. They always get their 20% rain or shine.

Pistareen

Perhaps it erred on the side of optimism and overgeneralized that all numismatic items are inflation-proof, but I actually agree with most of what was therein.

What's better, it was the first reference to Chinese fingercuffs I remember seeing since the movie "Clerks."

Torrero

I thought it was informative and helpful. Heritage is the only ones (other than the bank and Wall Street firms I deal with) that have send me this sort of letter. It was also well-written which is something you don't see much of in this hobby!

Jay

bestday

<< <i>Heritage seems to have conveniently left out the fact that in the early 80's and first half of the 90's, the coin market plummeted and took several years to recover. Stocks, bonds and real estate have had their ups and downs, but so have coins.

Julian >>



Folks the economy is in for rough sledding at least thru 2010....house prices are down stock market is creamed..the last shoe is a jump in unemployment....looks like the Dems will have their hands full . Can coin prices hold ??..

RyGuy

<< <i>To much to read >>

PerryHall

<< <i>

<< <i>To much to read >>



>>



To summarize: "Don't worry. Be happy."