Will the Estate of Jack Lee have the balls to let the coins fly without any reserve?
DMWJR
Posts: 6,044 ✭✭✭✭✭
We've got quite a few top grade Lincolns coming to market in the next few months.
With the current economic climate, will top copper collectors spend as much in December/January? Will they have enough cash to meet expectations?
Personally, I think it is going to be iffy.
With the current economic climate, will top copper collectors spend as much in December/January? Will they have enough cash to meet expectations?
Personally, I think it is going to be iffy.
Doug
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<< <i>We've got quite a few top grade Lincolns coming to market in the next few months.
With the current economic climate, will top copper collectors spend as much in December/January? Will they have enough cash to meet expectations?
Personally, I think it is going to be iffy. >>
If the coins are nice, I think it is going to be off the charts.
<< <i>
<< <i>We've got quite a few top grade Lincolns coming to market in the next few months.
With the current economic climate, will top copper collectors spend as much in December/January? Will they have enough cash to meet expectations?
Personally, I think it is going to be iffy. >>
If the coins are nice, I think it is going to be off the charts. >>
Define "nice."
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<< <i>
<< <i>We've got quite a few top grade Lincolns coming to market in the next few months.
With the current economic climate, will top copper collectors spend as much in December/January? Will they have enough cash to meet expectations?
Personally, I think it is going to be iffy. >>
If the coins are nice, I think it is going to be off the charts. >>
Define "nice." >>
Fresh, unconserved, solid for the grade, etc.
They are thinking that people don't have money.
They have been brainwashed......................
<< <i>
<< <i>
<< <i>
<< <i>We've got quite a few top grade Lincolns coming to market in the next few months.
With the current economic climate, will top copper collectors spend as much in December/January? Will they have enough cash to meet expectations?
Personally, I think it is going to be iffy. >>
If the coins are nice, I think it is going to be off the charts. >>
Define "nice." >>
Fresh, unconserved, solid for the grade, etc. >>
Sounds like the type of coin this collection would have. If I were the consignor I would insist that the coins be listed by themselves and be designated as part of the Jack Lee collection. If there is no reserve I would insist that this be made clear from the outset in order to distance the collection from the mass of dealer and collector consignments with high reserves that seem to clutter auctions these days.
In talking to my local dealer yesterday, he confirmed that "nice" material still has a strong market, but that very little of it is coming in. He said that second and third rate material continues to be offered, but essentially nobody wants it.
<< <i>I think many people on this board are making one great huge mistake.
They are thinking that people don't have money.
They have been brainwashed...................... >>
I don't think that at all. Having cash and having money are two different things. Anyone with either right now is also re-prioritizing.
<< <i>Anyone with either right now is also re-prioritizing. >>
Quite a heroic assumption here. Not that the price of "nice" coins is bullet-proof but I know someone with both "cash" and "money" and he is in no way re-prioritizing his collecting plan.
Who is John Galt?
If you where in their place would you? If it was me I would rather have a no sale than an undervalued sale.
<< <i>
<< <i>Anyone with either right now is also re-prioritizing. >>
Quite a heroic assumption here. Not that the price of "nice" coins is bullet-proof but I know someone with both "cash" and "money" and he is in no way re-prioritizing his collecting plan. >>
I don't think I was being flamboyant or heroic with that statement. Not everyone who has been building Lincoln sets is in that position. I'll bet dollars to donuts you or your friend have gone through your holdings with a fine tooth comb over the last few months and considered doing different things with either lifestyle, investments, or collecting habits. Maybe there were no significant changes at the present time. To do otherwise would be burying your head in the sand. Personally, I think there are some great buying opportunities in the stock market, and they are competing with my coin collection for discretionary funds, more so than they were six months ago. I'm not alone in this thinking.
The market is thin for pop 5 or less Lincolns to start with. Then we have registry plastic players who have been drifting in and out of the Lincoln Cent market, riding the ever rising tide of red Lincoln prices. The general rule of selling top graded Lincolns is to never sell for less than what you paid. Someone will eventually step up. Over the last 5-6 years, some folks have dropped $50-$60k and more on dogs in the "right" holder, because there has always been someone else waiting to buy the plastic. My question is whether or not those collectors are going to be as loose with their cash (not money) as they have been over the last few years?
I think we can pretty much assume that the estate beneficiaries don't need the money, so this is not a forced sale. So, with a voluntary sale during a financial crisis, would you have the balls to put this collection up without reserve? If they truly do not put some sort of reserve in place .... I'm not saying it is right/wrong .... just ballsy!
The market is thin for pop 5 or less Lincolns to start with. Then we have registry plastic players who have been drifting in and out of the Lincoln Cent market, riding the ever rising tide of red Lincoln prices. The general rule of selling top graded Lincolns is to never sell for less than what you paid. Someone will eventually step up. Over the last 5-6 years, some folks have dropped $50-$60k and more on dogs in the "right" holder, because there has always been someone else waiting to buy the plastic. My question is whether or not those collectors are going to be as loose with their cash (not money) as they have been over the last few years?
I think we can pretty much assume that the estate beneficiaries don't need the money, so this is not a forced sale. So, with a voluntary sale during a financial crisis, would you have the balls to put this collection up without reserve? If they truly do not put some sort of reserve in place .... I'm not saying it is right/wrong .... just ballsy!
DW,
as usual, your reflection, thinking and wisdom compliment your knowledge.
what you are saying...
By "money" I'm not using a term of art, but rather using it to represent overall wealth of a person. When I say "cash," I'm referring to free cash - what you can grab today without penalty. I'm purposefully avoiding the term fungible because to me a fungible asset is one that is easily traded for things of like or similar value, and ideas about the fungible nature of stocks may vary. (Look at trading triggers that tripped on Friday!)
Let's take Joe Millionaire (not Joe the Plumber, since he's not buying coins in the realm of Jack Lee)
Joe Millionaire has a net worth of $5 million.
Joe believes in keeping cash reserves on hand (CD's, Money Market) of $200k in case he needs to do something quick. He wants the rest of his money to work for him, since he doesn't need it to live on, and he has a "free cash" reserve of $200k. Joe has $2 million in stocks/mutual funds that he has built up over the years, and $2.8 million in hard assets such as his home, maybe an office building/apartments/second home on time share/ etc...
Over the past years, the stock/mutual fund market has been pretty strong and pretty safe. Maybe Joe kept more cash on hand in 2000 because he didn't trust the market, but he's gradually put more into stocks/MF's. Joe has been able to cash out some stocks here and there when he wanted to make a major purchase, and the penalties/losses were either not there or were relatively insignificant. The stock/MF market has been pretty fungible, and fairly close to "free cash." So in the past, he has been willing to sell off some shares of Microsoft or Wal-Mart and buy that PQ or "investment" coin (as he tells himself), or dip a little heavier into his free cash reserve.
Fast forward to December 2008 -
Joe still has $200k in cash, and the same stock/mf portfolio that he did a year ago. But now, stocks can't be sold without realizing a loss of 20% or more, and Joe really wants the market to come back before he cashes anything out. He still has his hard assets too, but maybe he has a mortgage that is maturing within the next two years, credit is tight, and if he sells a hard asset right now he will have some cap gains tax to pay.
Now Joe is a die hard Lincoln collector, and has felt that he could sell his Lincolns (if pressed) over say a six month period and at least get his money back out of it. So he hasn't minded buying the occasional $25k Lincoln, and he has really gotten a lot of pleasure from building his collection (registry or not). Joe has been using $25k of his free cash in the past to build his collection, replacing the "coin fund" over time.
The Jack Lee sale is now fast approaching. Joe still has the $25k that he would normally be willing to use to buy coins for his collection. However, he has been eyeballing some solid companies trading at 50% of their previous values (less than a year ago) and thinks there are some great buying opportunities out there to increase his wealth.
So, what's Joe going to do with the upcoming sale?
- Put the usual $25k he keeps for his "coin fund" into play and buy a 1939 MS68RD for $10k, and a couple of common date coins in the next-to-top grade (staying away from the coins over $25k)?
- Put $15k into lower priced, average Jack Lee late date wheats and memorial Lincolns and $10k into the stock market?
- Sell $150k of stocks/MFs at a 20% loss and put that money into ultra-grade pop 5-0 Jack Lee Lincolns?
- Sell some hard assets and put that into ultra-grade pop 5-0 Jack Lee Lincolns?
- Freeze his position and not do anything?
- Call Heritage and put his own collection in the FUN show???
I really can't tell you what Joe Millionaire is going to do, but betting that Joe is going to be there and pay for the big coins without putting a reserve is .... (well, you know)
I don't even want to think about what is going through Joe Coin Dealer's head right now...
<< <i>- Call Heritage and put his own collection in the FUN show??? >>
That is funny.
Collector of Early 20th Century U.S. Coinage.
ANA Member R-3147111
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
Doug - don't forget that one of the beneficiaries may be the Treasury Department, via the estate tax. Anyone's estate with the kind of assets that Jack Lee had may have pressure to raise cash to pay Uncle Sam - who, unfortunately, doesn't take coins at more than their face value!
Jack was a fine man, and I hope his collection, especially the Lincoln part, does well.
<< <i>I think many people on this board are making one great huge mistake.
They are thinking that people don't have money.
They have been brainwashed...................... >>
The high end collectors have more money than ever since the average guys are bailing them out of their bad investments.
I would be shocked if the tax man was at the door in this scenario. It's in poor taste to talk about people's personal life on the web, so let's use a hypothetical. (I'm sure Longacre would approve!)
Let's say "Joe Coin Dealer" was a very unassuming coin dealer on the outside, and preferred to talk mostly about coins and other things he thought were fun or interesting -- like say riding horses when he was a kid. Most people would assume that he was just a coin dealer, albeit a very successful one. People would see the astonishing sets he built, collections he bought, coins he owned, and speculate how much he was leveraging to get there. (They always do!) But, what if Joe made his money in another business that was a very large privately held company? What if Joe was very familiar with how to use lawyers and accountants? Based on Joe's other career, could you imagine a scenario where Joe wouldn't have done any estate or succession planning over the years?
Also, let's assume Joe was married at the time of his death. With very little effort, Joe has a full 100% exemption for federal estate taxes using the marital deduction. (We don't even need to go into the $2mm exclusion, generation skipping tax, gift tax alternatives, various trusts, or other tools used legitimately to minimize the tax burden.) The estate tax problem would not arise until his spouse's death -- unless he planned to not use the marital deduction. It would be very hard to believe that someone would have the desire, knowledge, and foresight to opt NOT to use the marital deduction, and then NOT have a plan to deal with the certainty of an immediate estate tax issue.
Further, in Mississippi, the estate probate process can be very short if estate planning documents are properly drafted, and if there are no objections from heirs or potential heirs within the statutory noticing period. Someone asked about this in another thread some time ago, but I avoided it since I covet my "inactive" status with the Mississippi Bar Association (I've been in another line of work for a long time.) Please insert standard attorney disclaimer statement here and get your own lawyer if you need one!
See why I don't think it was a forced sale to cover a tax bill? My guess is the family just wants to clean up the details, and no one else wants to continue the coin business.
** By the way MOC, a loss = a loss every time. I hate to throw a turd in your punchbowl, but there's just no way to make it smell like a rose. LOL.
I think people are going to go ape**** over these coins, if they are as top drawer as you claim (I don't collect either Lincolns or Morgans, so I'm out of the loop on specifics here). Fact of the matter is that top drawer PCGS Lincolns are hot now and are bringing strong money.
My observations re the coin market are that the popular expensive coins which are high end and popularly graded are as strong as ever. Ie., the 1885 & 1912 S Nickels, and I imagine the same applies re the 09 S VDB, etc. MPLs are the flavor of the month. High end Lincolns are very popular now, if they're RD & in PCGS plastic. We're not talking about an 1883 CC Morgan in MS 63 here, folks.
Most of the really well to do coin collectors - the people who buy the above material - aren't materially affected by the economic downturn. I expect very strong prices re the Jack Lee material. Under these circumstances, I don't see why they couldn't go to auction with no reserve.
"Seu cabra da peste,
"Sou Mangueira......."