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Interesting Harvey Stack article about modern mint issues...
Longacre
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Here is an article by Harvey Stack on the Stack's website regarding modern mint issues. Do you agree with his analysis?
****************
2006 Same As 1993
By Harvey G. Stack
A Problem Recognized
When one thinks back to 1993 when reading about the cost of each year’s current Mint products, one wonders how history repeats itself.
The Mint is unquestionably the largest coin dealer in the world. They are different from a professional coin dealer as they make the product (coins), distribute it at their retail price without competition, and do not ever buy back or re-purchase their products. It’s a one way street, with collectors and other customers paying for the Mint’s very profitable products. Don’t all of us wish we could have such a deal!
In the years 1983 to 1993 the Mint made numerous special issues, Proof sets and mint sets, and touted them as a “piece of American history” and as an “investment in the future.” By 1993 the market was flooded with these commemoratives, Proofs, and other products. By over production of many of the issues completely saturated not only the then current market, but also the secondary market (the market normally involved with ongoing buying and selling). The result was that few if any of the issues from 1983 to 1993 were profitable to the buyer. Most depreciated in resale value by 1993 to 50% or less than their original cost.
As a leader in the rare coin market, Stack’s had constant contact with collectors, old-timers as well as newcomers. Many of the latter told me of their problems with modern Mint products. Let me give you an extreme example, hardly unique, as similar happenings occurred nationwide. A nice grandmother came into our offices in New York in late 1993 or early 1994. She had purchased for her grandson one each of the various Mint issues from 1983 to 1993 directly from the Mint, with the hopes of using money from anticipated profits to provide a college education for her grandson.
I reviewed the coins, which were all well preserved, and learned from the charming lady that she paid some $5,300 directly to the Mint to acquire them. When I checked the current market bids in the buy sheets, the most I could offer was $2,200, and even that was generous considering the poor state of the resale market for these. Although the market value was not my “fault,” I was disappointed that the offer could not have been higher. Nor could she have obtained more elsewhere. When she heard the figure she told me that I was “profiteering.” She left the office disappointed.
A Problem Addressed
At that point I decided to join the campaign to do something to help the public to be aware and also try to help correct the direction of certain of these Mint programs.
As a past president of the Professional Numismatists Guild I joined with other dealers and collectors of the time, as well as enlightened numismatic editors, and helped mount a strong protest to the Mint. So telling was the outcry that Representative Michael Castle of Delaware, as chairman of the House Committee of Banking and Finance, convened a Congressional hearing in July 12, 1995 to discuss the problems.
Various members of the industry and the Mint attended and testified. Those from the world of rare coin collecting and dealing all protested the current situation. Representative Castle responded and asked what could be done make the situation better for all concerned.
The Statehood Quarters
Various ideas came forward, all good but not conclusive. My contribution was to have the Mint start a circulating state quarter commemorative program. The committee, following that suggestion, caused legislation to be passed which established the Statehood Quarter Program. Since the first issue in 1999 till the present day it has been heralded as a program for everyone. Citizens can build fine collections for face value. Those who desire to acquire special strikings in silver or with Proof finish can do so, but not for excessive prices, as no “surcharges” are built in (as they have been for commemorative programs). The program has contributed to a vast number of collectors, some 140 million by Mint estimate, and it is possible to complete from a review of daily change!
An Unfavorable Trend Resumed
The Mint since has increased the cost each year of its various special issues from a 1996 cost of $5,300 for one each, to the cost in 2006 to some $14,804! Many of those collectors have now left the field because of the high cost! Not many buyers can afford to keep their collections current and complete by acquiring one each of the new issues and varieties.
Let me ask this: Is the Mint more interested in making big profits than it is in the collectors who buy their products?
After reviewing the above statistics, I cannot hope that the new circulating Presidential Dollar Program, modeled after the circulating Statehood Quarters Program will bring back all the collectors that the Mint’s special “Premium Coin” programs lost!
****************
2006 Same As 1993
By Harvey G. Stack
A Problem Recognized
When one thinks back to 1993 when reading about the cost of each year’s current Mint products, one wonders how history repeats itself.
The Mint is unquestionably the largest coin dealer in the world. They are different from a professional coin dealer as they make the product (coins), distribute it at their retail price without competition, and do not ever buy back or re-purchase their products. It’s a one way street, with collectors and other customers paying for the Mint’s very profitable products. Don’t all of us wish we could have such a deal!
In the years 1983 to 1993 the Mint made numerous special issues, Proof sets and mint sets, and touted them as a “piece of American history” and as an “investment in the future.” By 1993 the market was flooded with these commemoratives, Proofs, and other products. By over production of many of the issues completely saturated not only the then current market, but also the secondary market (the market normally involved with ongoing buying and selling). The result was that few if any of the issues from 1983 to 1993 were profitable to the buyer. Most depreciated in resale value by 1993 to 50% or less than their original cost.
As a leader in the rare coin market, Stack’s had constant contact with collectors, old-timers as well as newcomers. Many of the latter told me of their problems with modern Mint products. Let me give you an extreme example, hardly unique, as similar happenings occurred nationwide. A nice grandmother came into our offices in New York in late 1993 or early 1994. She had purchased for her grandson one each of the various Mint issues from 1983 to 1993 directly from the Mint, with the hopes of using money from anticipated profits to provide a college education for her grandson.
I reviewed the coins, which were all well preserved, and learned from the charming lady that she paid some $5,300 directly to the Mint to acquire them. When I checked the current market bids in the buy sheets, the most I could offer was $2,200, and even that was generous considering the poor state of the resale market for these. Although the market value was not my “fault,” I was disappointed that the offer could not have been higher. Nor could she have obtained more elsewhere. When she heard the figure she told me that I was “profiteering.” She left the office disappointed.
A Problem Addressed
At that point I decided to join the campaign to do something to help the public to be aware and also try to help correct the direction of certain of these Mint programs.
As a past president of the Professional Numismatists Guild I joined with other dealers and collectors of the time, as well as enlightened numismatic editors, and helped mount a strong protest to the Mint. So telling was the outcry that Representative Michael Castle of Delaware, as chairman of the House Committee of Banking and Finance, convened a Congressional hearing in July 12, 1995 to discuss the problems.
Various members of the industry and the Mint attended and testified. Those from the world of rare coin collecting and dealing all protested the current situation. Representative Castle responded and asked what could be done make the situation better for all concerned.
The Statehood Quarters
Various ideas came forward, all good but not conclusive. My contribution was to have the Mint start a circulating state quarter commemorative program. The committee, following that suggestion, caused legislation to be passed which established the Statehood Quarter Program. Since the first issue in 1999 till the present day it has been heralded as a program for everyone. Citizens can build fine collections for face value. Those who desire to acquire special strikings in silver or with Proof finish can do so, but not for excessive prices, as no “surcharges” are built in (as they have been for commemorative programs). The program has contributed to a vast number of collectors, some 140 million by Mint estimate, and it is possible to complete from a review of daily change!
An Unfavorable Trend Resumed
The Mint since has increased the cost each year of its various special issues from a 1996 cost of $5,300 for one each, to the cost in 2006 to some $14,804! Many of those collectors have now left the field because of the high cost! Not many buyers can afford to keep their collections current and complete by acquiring one each of the new issues and varieties.
Let me ask this: Is the Mint more interested in making big profits than it is in the collectors who buy their products?
After reviewing the above statistics, I cannot hope that the new circulating Presidential Dollar Program, modeled after the circulating Statehood Quarters Program will bring back all the collectors that the Mint’s special “Premium Coin” programs lost!
Always took candy from strangers
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
0
Comments
I agree with his analysis brother, but that's as far as I'll go. I don't feel like arguing with the modern flippers who are making a lot of money at this time.
I'm not convinced that the collectors left because they couldn't afford to buy one of each anymore. More likely, they left because they were not making the profits they anticipated.
These things move in cycles. Greedy collectors gorge at the Mint until the market is saturated. Then, they lose money. Mintages drop and new issues turn into winners. The greedy collectors come back in droves and the cycle repeats. Ob-La-Di, Ob-La-Da.
Anyway, I'm happy to see the Mint do whatever it takes to maximize its profits. Like all taxpayers, I benefit from the profits the Mint sends to the Treasury.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
You can lose money investing in lots of things (even classic US coinage) if you make poor choices.
The Mint since has increased the cost each year of its various special issues from a 1996 cost of $5,300 for one each, to the cost in 2006 to some $14,804! Many of those collectors have now left the field because of the high cost! Not many buyers can afford to keep their collections current and complete by acquiring one each of the new issues and varieties.
And lots of people can't afford to put together complete sets of many obsolete series, either, but nobody ever seems to claim that that chases people away from coin collecting.
Is the Mint more interested in making big profits than it is in the collectors who buy their products?
If reading the posts in some of the threads here is any indication, it's not just the mint looking to make big profits from their products.
<< <i>Let me ask this: Is the Mint more interested in making big profits than it is in the collectors who buy their products? >>
Is that a trick question?
Russ, NCNE
<< <i>I fail to see what the "problem" is that Mr. Stack recognized in the article. >>
The mint is taking business away from traditional dealers.
Russ, NCNE
<< <i>I fail to see what the "problem" is that Mr. Stack recognized in the article. >>
That's because he didn't actually state it. The problem is that all the dollars going towards the purchase of mint products are not going towards the purchace of classic rare coins. Or something like that.
edited to add... I guess I'm just a slow typist.
Why should we expect the Mint be any different than any other coin dealer?
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>Those who desire to acquire special strikings in silver or with Proof finish can do so, but not for excessive prices, as no “surcharges” are built in (as they have been for commemorative programs). >>
This one bugged me. The $10 surcharge on a silver dollar commem goes to benefit an organization or effort-- if you don't want to make a $10 donation to the sponsor of the coin, why in the world are you buying one of their commemorative coins?
San Diego, CA
<< <i>I once called stacks and offered to sell my PCGS 70 DCAM Buffalo and he offered me $850.00 over the telephone >>
Why would you even consider selling moderns to Stack's?
Russ, NCNE
Would the statement be any less true if we substituted "Stack's" for "The Mint"?
<< <i>Let me ask this: Is the Mint more interested in making big profits than it is in the collectors who buy their products?
Would the statement be any less true if we substituted "Stack's" for "The Mint"? >>
It's not a statement, it's a question. What you meant to ask is would the "inference" be any less true.
Hehe.
Russ, NCNE
<< <i>Just for fun, give Mr. Stack a call and offer him some of your best moders. i.e. 1995 w eagle, 2006 reverse proof, etc. He will criticize your coins, mock you, and offer you mint issue price for them. I think he's pissed that he's losing money due to all the mint product releases. In addition, thanks to Ebay, people don't need him anymore. Guys let me know the outcome when you call him. >>
I don't think Stack's cares about losing business on these coins.
There are market makers and niche dealers in particular areas of collecting for a reason.
Proud Participant in Operation "Stone Holey" August 7, 2008
<< <i>
<< <i>Let me ask this: Is the Mint more interested in making big profits than it is in the collectors who buy their products?
Would the statement be any less true if we substituted "Stack's" for "The Mint"? >>
It's not a statement, it's a question. What you meant to ask is would the "inference" be any less true.
Hehe.
Russ, NCNE >>
Actually, Andy made a statement. "Let me ask this...".
<< <i>Actually, Andy made a statement. "Let me ask this...". >>
Andy?
Russ, NCNE
I've noticed the same thing with the Royal Canadian Mint.
When my first daughter was born in 2000, I planned to buy one of each coin offered by the US Mint and RCM. When I saw the cost to do so I dropped that idea. I collect Canadian silver dollars, and I used to buy one of each major type and variety (i.e. one each of business strike, specimen, prooflike ["brilliant uncirculated"], and proof in each metal offered). When it began to cost more than I could afford, I decided to wait a while for prices to drop on the secondary market. I may not buy the 2006 coins until 2011 or so.
The proliferation of mint products has become comical. I even wrote an article for Numismatist last year (or was it the year before?) about how it has gotten out of hand. Now I have a love/hate relationship with Canadian dollar coins and watch the number of types and varieties climb as a spectator observes a car crash.
Obscurum per obscurius
<< <i>
<< <i>I fail to see what the "problem" is that Mr. Stack recognized in the article. >>
The mint is taking business away from traditional dealers.
Russ, NCNE >>
Perhaps, but it seems many would suggest the mint increased the pie for everyone (including "traditional" dealers) by getting more Americans introduced to coin collecting.
I sounds like he says the Mint OVER PRODUCED, back in the day.
Now, the problem has been corrected, with limited Mintages.
Problem solved. Have limits on ALL Mint products. That way grandma won't lose any money.
as to wht has transpired since then? Sure, the 1982-1994 issues have mostly dropped in value, but look what happened when
collectors got fed up and sales/mintages dropped! We now see Several hand fulls of appreciative, low mintage products that have held up and gone higher as collectors realize just how uncommon these coins are. Personally, I like the way things have gone since 1994!
<< <i>Sure, the 1982-1994 issues have mostly dropped in value, but look what happened when
collectors got fed up and sales/mintages dropped! >>
True. Had the "charming lady" in question kept up her buying, she could have recouped a lot of her losses by purchasing a Jackie Robinson $5 at issue price.
One has to wonder if we may see another "crash" like that if collectors again get disgusted at too many offerings and being shut out of too many of them by not being at their computer (assuming they have one) right as they go on sale.
and selling it at as high a price as possible then a crash will be
inevitable at the first sign of a decrease in collector interest.
This isn't to say they are doing it now but they certainly appear
to be headed in that direction.
Those who wish to view this as modern bashing should be aware
that once the coins are made and available to collectors it no lon-
ger matters if they are dated 2004 or 1804. Modern is in the eye
of the beholder.
<< <i>I've noticed the same thing with the Royal Canadian Mint.
When my first daughter was born in 2000, I planned to buy one of each coin offered by the US Mint and RCM. When I saw the cost to do so I dropped that idea. I collect Canadian silver dollars, and I used to buy one of each major type and variety (i.e. one each of business strike, specimen, prooflike ["brilliant uncirculated"], and proof in each metal offered). When it began to cost more than I could afford, I decided to wait a while for prices to drop on the secondary market. I may not buy the 2006 coins until 2011 or so. >>
I went through exactly that same process, except I jumped off the RCM carousel about 1995.
What's interesting to note is that, if the mint chases collectors away from their products due to an overabundance of new issues, it's very likely they'll find other avenues (collectors collect- it's what they do), some of which lead to... the very type of coins Mr. stack sells.
Yeah, business that they never had in the first place.
Frankly, if I think that a coin being offered by a traditional dealer is overpriced, I'll just fade back into the woodwork - no big deal. Problem is, most of the remaining "good" classic coins have been overpriced for a very long time, and the reasons for that have been stated repeatedly in this forum. Most collectors (myself included) try fairly hard to avoid buying other people's problem coins.
So - if I decide to spend money on Moderns, for whatever reason - the possibility of spending any of that money on Classics has already been eliminated of its own accord. The hyping of Moderns or overproduction of Mint issues had very little to do with it. It's just sour grapes all over again, and the same old criticisms of Moderns are getting pretty stale.
I knew it would happen.
<< <i> It's just sour grapes all over again, and the same old criticisms of Moderns are getting pretty stale. >>
Actually, most of the criticisms of some aspects of "moderns" have changed over the last year.
It used to center more around dislike of designs, or of people paying 20x more for an (X+1) over an X, and the lack of a two-way market. Those are the "traditional" so-called modern-bashing themes.
Now most of the criticism comes about things like marketing practices from the two most powerful entities in numismatics, the U.S. Mint and the major TPGs; most specifically, speculative low-mintage mania by the Mint and (IMO) meaningless designations from the TPGs about when the coin was shipped by the Mint. Not about the undesirability of the coins.
I think a lot of people want to dismiss someone's distaste for the Mint's practices with low mintages, quick sellouts and encouraging flipping as "modern bashing." It's not. It's not the coins that are being bashed as uncollectible. It's that I (and some others, no doubt) think the Mint is engaging in short-sighted policies that create a frenzy now but may ultimately backfire based on history of frothy speculative markets.
That says nothing negative about the coins themselves, or of the choice to collect them. And it doesn't even apply to most "moderns" (which I'd call current hypermoderns to distinguish them from somewhat older "moderns"), just a few excessively hyped by the Mint through low mintages. So I just don't see how this is "bashing." If anything I take the Mint to task for making them HARDER to collect for people who want to.
To summarize: I have nothing against collecting today's new releases; I collect some myself. What I don't like is how they are being marketed by the Mint and the TPGs. I think it's hype that's not good for the hobby long-term.
<< <i>Here is an article by Harvey Stack on the Stack's website regarding modern mint issues. Do you agree with his analysis?
****************
2006 Same As 1993
By Harvey G. Stack
. . . Let me give you an extreme example, hardly unique, as similar happenings occurred nationwide. A nice grandmother came into our offices in New York in late 1993 or early 1994. She had purchased for her grandson one each of the various Mint issues from 1983 to 1993 directly from the Mint, with the hopes of using money from anticipated profits to provide a college education for her grandson. >>
I guess she didn't buy any uncirculated clad 1983-P Quarter Rolls from the Mint.
If you believe the 6/12/07 issue of Numismatic News, 30 rolls is now worth over $45,000!
Another "Blown Opportunity" for less than $400 invested.
Just goes to show that not all issues are winners.
SoundPoint
Box of 20
Good point.
Collectors do lose interest if limited-issue products are snapped up by speculators and only available at multiples of issue price on the secondary market. Perhaps I just need therapy to keep me from wanting "one of each" major type and variety, and I still can't bring myself to buy a "Queen Mum" dollar for over $300 when the ugly things were issued for $80. Come to think of it, even if they were issued at $300 I still couldn't see buying one for that price. They certainly aren't "rare" because they are available to anyone who'll pay the price (leading me to believe most or many are still in speculators' hands).
Obscurum per obscurius
My criticism of the Mint began in 1996, when Phillip Diehl decided to screw everyone who had loyally bought Proof Silver Eagles from the inception, by sticking the 1996-W in with the Proof Gold AE Set and calling it a "reward." Then, he had the audacity to say that if you wanted the 1996-W Proof Silver Eagle bad enough, you could just buy the whole Gold AE set, sell the gold coins and keep the Silver Eagle. That was a clear signal to everyone that the Mint doesn't give a flip about collectors, ever. If you delude yourself into thinking that the Mint is supposed to be a collector outreach program of sorts, you are dead wrong. The only thing to do when dealing with the Mint is to learn how to identify sucker bait and then not participate in every program.
I think a lot of people want to dismiss someone's distaste for the Mint's practices with low mintages, quick sellouts and encouraging flipping as "modern bashing." It's not. It's not the coins that are being bashed as uncollectible. It's that I (and some others, no doubt) think the Mint is engaging in short-sighted policies that create a frenzy now but may ultimately backfire based on history of frothy speculative markets.
Mint mismanagement has created some attractive investment coins in the past, so why should the present be any different? If the current trend ultimately causes a market implosion in Moderns, wouldn't that be the normal market reaction to a period of excesses? One thing that Modern bashers seem to forget is that the Silver, Gold and Platinum Eagles don't need rarity to be worth the bullion price. The fact that they have become collectible is only a natural progression for coins that have now been produced for over 20 years running.
Even when (not if) the Modern market collapses, and things like State Quarters, proof Sacs or Presidents become "worthless", there will be someone to collect them. They won't be overpriced for many years to come. 20 years later, some enterprising young dealer will start seeking out the superb specimens and people will wonder why they are so hard to find. And that AU Morgan that was dipped into oblivion will now be a nice golden-looking XF, although maybe a bit mushy in the detail.
I knew it would happen.
arguing about the best bait to catch the suck,,,,,er, fish
yup thats the word, fish. Of course the fish is really the
coin collector. Anything that is detrimental to a dealers sales
must, of course, be a bad thing.
Camelot
<< <i>I fail to see what the "problem" is that Mr. Stack recognized in the article. >>
Part of the problem was the advertising the Mint did to foist the coins on an unsuspecting public, and little old ladies who thought the price of their mint sets would escalate. Does Caveat Emptor have a familar ring to it?
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Stacks has his focus on modern junk's shortcomings not the massive opportunities because that what he wants to see. He overlooks the objective problems with so called classics.
Ericj96