A Rare Coin Journal

California Numismatic Investments

Better Investment Ideas In Precious Metals & PCGS Rare Coins

1-800-225-7531

With Richard Schwary

     Welcome to a look at what makes the coin business an interesting experience. One in which profit or loss is part of everyday trading. Which side of this equation you are on will depend on how informed you are, and to some degree how good you become at choosing the right coins. But don't overlook the historical importance coins offer you and your family. Coins are pictures of the world which relate the stories of their time. That is why we at California Numismatic Investments work at answering questions. As usual all comments, good or bad, are welcome so Email (RSchwary@aol.com) with your thoughts.

Jan 2 - March 28, 2008

So Where Is Gold Going In 2008?

     1. So where is gold going in 2008? Ah, the perennial question and I’m afraid my answer is the same as always. Gold is moving higher but before we get into some factors that are not so obvious, let's look at what gold and silver have done over the last few years:

The Rising Tide In Metals Extends Itself Again In 2007                 

                        2001                             GOLD SPOT   $278.70

                        2002                             $347.60             24.7% GAIN FOR 2002                

                        2003                             $415.00             19.3% GAIN FOR 2003

                        2004                             $437.00            5.3%  GAIN FOR 2004 

                        2005                             $517.00            18.3% GAIN FOR 2005

                        2006                             $635.00            22.8% GAIN FOR 2006

                        2007                             $835.00            31.4% GAIN FOR 2007

Overall  Advance Of Gold Over 6 Years Is 199%

                        2001     Silver Spot      $ 4.58

                        2002                            $ 4.81                 5.6% GAIN FOR 2002

                        2003                            $ 5.45                22.9% GAIN FOR 2003

                        2004                            $ 6.81                14.4%  GAIN FOR 2004

                        2005                            $ 8.82                 29.5%  GAIN FOR 2005

                        2006                            $12.91                46.3%  GAIN FOR 2006

                        2007                            $14.84               14.9%  GAIN FOR 2007

Overall  Advance Of Silver Over 6 Years Is 224%

     Just looking at the trends above should convince most that the precious metals over the long term have been a good bet and may continue higher given today’s weaker currencies. The point I want to make however is that in each of those 6 years the public was suspect and believed gold was "too high". What did they expect? A correction that would provide a better deal if they waited. The trends which have caused these higher prices are obvious and there are plenty of online sources which detail dollar weakness, inflation, social unrest, and higher oil. But there are forces at work here that are not so obvious, very powerful, and could very well push gold into the $2000 to $3000 area as the general public is waiting for a better deal. I would have laughed at such talk just 5 years ago, but today this scenario seems more and more likely. Consider the following as you decide how much money you want to invest and more important what level you consider a good deal:

1. The general public is still not in on this bull market because of my previous comments. Believe it or not the average guy has not turned into an aggressive buyer of precious metals. Now what it would take to get him interested is hard to say given this person is not worried about the steady decrease in his everyday buying power. This myth of the infallible dollar remains in the mind of the average citizen because the US has never defaulted on its currency and the living standard has been decreased slowly over the years through currency debasement. Because this process is not readily apparent the problem remains under the radar, but like all government relocation of wealth, it becomes apparent at some point and gold becomes the common choice. My point being that when this organized robbery of the middle class is finally recognized the rush to gold will be dramatic. This has not happened yet and could take years to fully develop. So there is still time to look carefully at your net worth and relocate a reasonable portion to gold.
2. The unfortunate situation in the terror department becomes progressively worse and could, one day be the most important cause of higher prices as folks rush to the complete safety of gold. Not to bash the US…God knows that we have moved quickly and spent plenty of money trying to make everyone more safe and secure. But the Department of Homeland Security just spent 29 million on an experimental program that arms passenger jets with a heat seeking device that could send shoulder fired rockets off course. This, while not surprising is concerning in that our entire culture is now being made more aware each year that the super crises is a consideration of modern life. The real problem is that as we become more adept at thwarting terrorists in general, they must become more desperate. And as proliferation of bigger weapons becomes common the terrorist simply muster greater fire power and civilized people around the world are in more danger. Now before I get a dozen emails for fear mongering let me say I hope I’m wrong. But I doubt it and the potential for a massive strike against American interests leads me to place the threat of hyper terrorism in the number two spot on my list for under the radar reasons gold could skyrocket in the blink of an eye. 
3. Believe it or not more than one country could stop accepting the US dollar and precipitate a huge rise in the price of gold. Think this is impossible? I’m wondering why it has not happened on a larger scare since the advent of the Euro. Just because the US dollar has been the world engine of progress and safety all of my life does not mean the continued and increasing relocation of international wealth will be in dollars. Some developing countries are now in unheard of growth phases of say 10% or more annually and they may not be US friendly. It is simple logic that some of this new found wealth will be placed in gold reserves. A few percentage points more than expected could send the metal much higher before anyone can react. At that point everyone waiting on the sidelines will say "I can't believe I did not see that coming".
4. Because of the powerful financial forces already unleashed, you can expect more violent and unpredictable swings in all markets. But don’t be fooled into selling your precious metals or certified rare coins. Look at any weakness as just another opportunity to increase your positions. According to the Aden Sisters (widely read since the 1970’s and probably the best technicians in the business) we are in for a progressively bullish market that could last for more than a decade. Under such analysis the price of gold and silver could be ten times what it is today. And if that sounds silly let me say that I would have agreed with you years ago but today I really wonder. Could the world blow itself apart in the process of trying to make everyone happy?
5. The advent of paper traded gold is more prevalent today than in the mad rush days of the 1970’s boom. The positive side of this developing process is that it is more convenient. The negative side are two fold: First, this convenience will most assuredly lead to a larger but more chaotic market meaning the easy in and easy out aspect cuts both ways. The second negative is that you don’t have the actual metal in your hands, which can be a giant disadvantage if currency debasement gets out of hand. Consider the possibilities when a click of a mouse will bring millions of new action to the market overnight.

     This question of how high gold will go has been with us for the last 30 years and it is always difficult to figure. Just for fun however I went back and looked at what I have done at various levels in this developing market.

     I purchased less gold bullion when the prices moved below $300 per ounce and bought more $20 Saint Gaudens and Liberties when the price crossed over $400 per ounce. Which reminds me of a recent email in which an intelligent customer laments his purchase of $20’s over traditional bullion. He was right in that for the short term we both would have made more money buying gold Eagles over twenties. I suggested that he might consider rebalancing his position but would never do such a thing myself. I believe everyone should diversify their gold bullion position especially if they are concerned with the confiscation issue. For regular readers you already know that I place little stock in the notion that the government may confiscate gold, but it's like spilled salt with me, I don’t want to take any changes. At any rate, I purchased virtually no gold bullion in the $500 to $600 range, not because I stopped liking the market but because my daughter was getting married. I began buying bullion again as this market moved past $700 and am comfortable in today’s range. Was I right all the time? Of course not but I always had an increasing position over the years and can say the added financial insurance made me feel comfortable. That is what gold has always represented to me, and why daily up or down moves are not of any concern. Gold ownership is not necessarily a quick way to get rich, although that might eventually be an added benefit. It is instead a kind of absolute insurance policy, which like your other insurance policies is there if you really need the help.

     2. O.K. for all you book fans out there I have finished two new books that were definitely worth the time and energy: The first is a must read if you are interested in extremely rare gold pieces with killer stories to boot. This book was written by Alison Frankel and is called Double Eagle, The Epic Story of the World’s Most Valuable Coin (2006). It is the in depth story of the 1933 $20 Saint Gaudens which for years was fabled to exist but never traded hands because US sanctions kept it off the market. A great read with insider quotes which does a wonderful job at creating just what happened and why. The second book is completely different from anything I have read but for some reason seems to attract folks in the precious metals business. It is written by J.J. Luna and is called How To Be Invisible, The Essential Guide to Protecting Your Personal Privacy, Your Assets, and Your Life (2004). This would not be a book that would ordinarily attract someone like me but when I began reading it I was hard pressed to lay it down. The writing may seem a bit paranoid for the average fellow but then I’m sure it does not go far enough for those with a bunker mentality. At any rate, I'm always asked what I'm reading these days, so take a look if stuff like this appeals to you and email me with your comments.      

Sept 3 - Dec 31, 2007

     1. So where are we after the recent Long Beach Show and the first real sell off in gold since the new challenge to the $700 level? And then we see gold reverse itself and move into the $750 area so now everyone is really confused. The coin dealers at the show which were able to fill a portion of their want lists were happy because this type of wholesale buying turns into an instant sale when they get back home. “Want Lists” are a powerful price mover in the rare coin business. Other dealers commented that the show did not seem to have the “punch” given the recent surge in gold. For old timers in this business this is the usual Catch-22, in that if gold pre-show was weaker, their expectation would not have risen and when asked about the Long Beach Show they would have been more than satisfied considering the weakness. In other words they had little expectation of a good show and therefore a flat outcome seemed like a good deal. Still other dealers are complaining that there is not enough really nice material to go around and would be willing to “pay more” for the right stuff. This latter group is looking for “fresh” material, meaning it has not been in dealer’s inventory for long. They are willing to push prices higher to get those “special” coins because there is plenty of "cash" sitting on the sidelines waiting for the right coin to come along. 

     The show was optimistic if the dealer was optimistic and cautious for those thinking prices may pull back if gold does not follow through. So are the results of such a large show as Long Beach just arbitrary? Actually no, but you can see that pricing structure can get complex. Especially when you have a market within a market as is so common with gold.

     It is true that gold is in the process of making all time new highs. But as I have said before this process will be long and drawn out regardless of dollar weakness. In the next 10 years you could have a totally new world market in currency which considers the dollar just another piece to the puzzle. In other words the past dominance the dollar has enjoyed in international trade may well be a thing of the past. This, of course, will be providential for gold and could very well mean we are looking at $2000 even $3000 an ounce. I know that sounds crazy and 10 years ago I would be first in line to say so, but today, with a world which has truly lost its way I may be conservative. The point being that if you have been watching and believe you missed the boat you are wrong. This is not the end to a bull move but the beginning of fundamental shift in the price of gold.

     But let me make an important point when you are deciding where to place your extra investment money: I have Krugerrands I purchased in 1980 at the height of the old gold market. They are still part of my investment strategy but if you singled out that investment it looks pretty bad relative to what I could have done with the money. I also have gold sets, commemoratives, and silver dollars, all of which have surged and fallen back in price many times in my career. My type collection and early gold coins have done well but I have held them for more than 20 years.

     So what can we learn from this type of information? If you are the type of person who looks at precious metals and rare coins relative to the amount of interest you could have gotten in the same time period you will be happy or you will be sad depending on the short term direction of the market. After all it is difficult to compete with compound interest and frankly some people should not because their temperament is not right for a hard asset market which moves up and down relative to interest rates, the price of oil, dollar weakness and a host of other complex financial pressures. I on the other hand look at the precious metals and rare coins which I personally own as a great insurance policy against a world which is increasingly difficult to figure and could come crashing down on everyone’s plans. Do I think this melt-down scenario will really happen? Probably not, but at my age I don’t want to bet the farm on any politician, Democrat or Republican. So I incorporate an armageddon investment plan and hope I will never need it. The core of this approach buys precious metals and certified rare coins over the long term and places them in a safe place. Will this treasure increase in value? Probably so and I certainly hope it does but even if this type of hard asset does move higher, my probability of selling is not good because I don’t want to loose my anchor. Maybe I will sell when I retire, but then maybe I will give my children something that is really valuable. 

     2. I see that the extremely high end market continues to show strength even though some experts believe a rest may be in order. According to the October 22, 2007 Coin World a Proof 1804 $10 sells for a record $5 million. The proof 1838 Coronet Eagle sells for $1.7 million in the same deal! These type of rare coins are, of course, not your normal fair and obviously not for everyone. There is however a growing number of well healed investors which choose very expensive rare coins because they can and because they represent an elite group of people parking extra money in an area they consider cheap. Those with years of experience certainly would not make the case that this area is cheap, but relative to say the art market a solid case could be made. These "super coins" are usually well documented and have what is known in the trade as "providence", meaning they carry a long history of being included in the world's most famous collections. Like I said there is an ocean of money floating around and as that ocean becomes deeper look for further world records.  

     3. The Holiday Season is fast approaching, so here is the CNI schedule: For Thanksgiving which falls, of course, on a Thursday, we will close Nov 22-Thursday and Nov 23- Friday. Christmas falls on a Tuesday, so we will close Dec 24-Monday, Dec 25-Tuesday and Dec 26-Wednesday. For the New Year we will close Dec 31-Monday, Jan 1-Tuesday, and Jan 2-Wednesday. As we consider 2008, let me wish you all the best of God's blessings.

July 2 - Aug 31, 2007

     1. "Hey Richard, how come there aren't any new articles re: the coin biz lately? Surely there must've been something to have been learned from the Central show perhaps? What's your take, by the way, on the depreciating dollar - will the continuing trend in more interest in foreign currencies ultimately have a ripple effect and ultimately hurt the value of US rare coins, as well?"

     2. This just in from our friend's at ICTA (The Industry Council for Tangible Assets): COINS IN IRAs BILL INTRODUCED S.1533, "The Options for Investors through United States Certified Coins Act of 2007" was introduced by Senator David Vitter (R-LA) on May 25. This is the bill that would restore certified coins (subject to certain restrictions) as qualified investments for IRAs and other self-directed retirement accounts. The project's lobbyists will now work to get as many cosponsors as possible for this bill, identify legislation to which they can attach S. 1533, and move to the House of Representatives to seek the introduction of companion legislation. For a copy of the bill, go to www.thomas.loc.gov/ and enter the bill number."

     3. Just finished reading the July 27, 2007 edition of the Certified Coin Dealer Newsletter. Also known in the trade as the Blue Sheet this is an old industry pricing source which tends to show the lower range of prices for certified rare coins. I say lower range because the prices listed are "sight-unseen" meaning the posting dealer will pay the money regardless of what the coin looks like, so prices tend to be defensive. The price a dealer pays for a coin he really likes is called the "sight-seen" market and will always be higher because he must compete for material with nice eye appeal.

April 2 - Jun 29, 2007

1. Not long ago I looked at old time collection which was not certified. I recommended that the owner not invest the extra money for certification because the coins were circulated and of lower grades. The thought here is that it does not make sense to spend several hundred dollars in certification costs when the total value of the collection was less than $1000.00. This "screening process" before submitting coins for certification can save you money and most professional dealers are glad to offer an opinion at no cost. If you are uncertain as to whether you are getting the straight story, just shop around and get another opinion. If that still does not satisfy your curiosity consider sending a few select coins to PCGS and "testing" the dealer's ability to grade the collection and give you an honest opinion about its value. Remember that just because your collection is not "high grade" it can still be valuable because there are thousands of collectors who specialize in early collector coins. Selling such a collection is never a problem for top Gray Sheet bid because of the wide collector base.

2. Talking about old collections I have a suggestion for you "old-time" collectors. Actually I mention this a regular basis because these tips seems to be forgotten over time. Storage of rare coins is not difficult but it does require some knowledge. First, don't use any tape to seal up holders. This is commonly done on collections which walk into the store on a weekly basis. Tape contains a number of chemicals which over time can cause your treasure to deteriorate. It can take a perfectly good coin, worth sending to PCGS for certification and turn it into a "body bag". This is coin lingo for a coin sent to PCGS for grading but found to be have "environmental damage" or other problems which keeps the coin from being encapsulated. The coin comes back to the owner in a small plastic bag with the grader's opinion as to why to did not make it into a sealed PCGS holder. Second, if your coins are still in older soft plastic holders have them looked at by a professional, even if you do not plan to sell anything. In the 1970's the generally used plastic holder was made "softer" by adding PVC (Polyvinyl chloride) to the manufacturing mix. At the time everyone thought this was a great idea because it made the holder easier to handle. Over time, however, some coins began to chemically react to this additive resulting in damage to coins. PVC is still used in many holders today and the short term use of such holders is fine. But if you plan to store coins for a number of years you should avoid holders containing polyvinyl chloride. The hard plastic holders used to house graded PCGS coins contain no PVC and are the best on the market for long term storage. If you have questions about long term coin storage email me (RSchwary@aol.com) with the situation and I will give you an opinion.

3. How about this for a curious situation? One that may prove a good bet for gold bullion investors. As of August 2007 the Australian Mint will stop production of the popular 1 ounce Lunar Series. Now keep in mind this limited production series produced 12 coins, each of which was limited to 30,000 coins or less. What is interesting is the "or less" part of the equation. Now the Dragon, Horse and Snake have production levels of 30,000 coins, all are sold out and carry a substantial premium. As of August the other nine coins will no longer be available and mintages could be substantially less than their more expensive animal cousins. While we don't know any specific information, the best bet seems to be to purchase the remaining 9 bullion coins which still trade for a small premium. After the cut-off date you could well find out that this small premium bullion coin now has a smaller mintage than the more expensive earlier gold coins which have sold out! No promises here but if you are a gold bullion player and want an extra kick without paying much extra freight this could be right up your alley. We will keep you informed as to final mintage numbers but it does seem you can get something for almost nothing if you act soon.

4. This comment is actually not closely related to rare coins but I get this type of email on a regular basis and thought the answer might be interesting to a larger audience. The writer is concerned with buying 90% silver bags and may have been approached from a dealer asking a premium for his bags because their condition are "better" in some way that may bring more money when sold in the future. This tactic is used on a regular basis to get more money out of the investor while providing little real value. Don't laugh, circulated Walking Liberty half dollar bags are regularly sold to first time investors for up to twice as much on the pretense that the investor is buying something better.

Jan 2 - Mar 30, 2007

1. The FUN Show (Florida United Numismatists) is over and reports coming in were positive. The Grey Sheet headline: AUCTIONS HAMMER $85 MILLION IN FLORIDA. The beginning paragraph reads: "Many dealers are still amazed at the total dollar amount sold at auction along with the volume of business that took place on the bourse last week in Florida. Some of them said that it was the best show that they've ever had while others were not as successful. Still, for those few dealers making such bold, positive statements is saying a lot because this market has already seen several extremely good years. Results of the FUN show often serve as an indicator as to how well the future market will perform and many have come away believing that 2007 could be an amazing year."

I could add a few more thoughts: First, many areas of the rare coin business are still under priced. I'm not including truly expensive coins which trade for say a few hundred thousand up to several million dollars. This area is difficult to figure but I can say that divining direction at these rarified levels is tough even for professionals. A million dollar rarity this year could just as easily be two million next year. Dealers call these extreme rarities "big boy coins" because their prices require a large bankroll and steady nerves. For the rest of us the coin business still abounds with issues which are historically interesting, rare, and affordable.

I think it is also important to note that the price of oil will dictate business activity to many dealers. If oil begins increasing again, gold will follow and general prices levels in rare coins will follow. The Middle East unfortunately is a powder keg but has been perplexing to historians for centuries. Just when you think you know what is going to happen, events once again become unpredictable. So what to do? My advice is to follow the same tried and true course which I have suggested the last 30 years. Buy and hold a combination of precious metals and PCGS rare coins. Choose those areas which you find interesting and do this with a discerning eye. Don't be in a hurry and use deliberation coupled with a sensible game plan.

This approach over the years has produced excellent results and I believe it will continue to do so. If the markets look flat don't be too concerned and the same advice goes for markets which look hot. Buy and hold for the long term with the certain knowledge that in the short term anything is possible but in the long term the dollar decline is inevitable. This dollar decline is the key to rising prices in all hard assets. Good luck in 2007 and if you have any specific questions email anytime (RSchwary@aol.com).

 2. The new dollar presidential series has begun with 2007 Washington Dollar. This idea still remains unproven in that similar dollars (the Susan B. Anthony) have been unpopular with the public. Still as other famous presidents make the cut (John Adams, Thomas Jefferson, James Madison) the publicity is good for everyone in the coin business. The Mint has devoted an entire page to these new dollars so check it out for all the details at http://www.usmint.gov/mint_programs/$1coin/. They are historical and interesting but as far as making money goes...here is the inside scoop: The majority of these coins will be worth their face value but there are some exceptions. The presidential dollars are different in that they have edge lettering (the mint mark, the date, In God We Trust, and E Pluribus Unum). In the minting process some of the Washington pieces got out of the mint with a plain edge. This, of course, is an error coin and as such will be valuable. The exact price is uncertain because no one really knows how many of the plain edge coins exist. So watch that pocket change for plain edge examples and call me if you get lucky.

Sept 1 - Dec 31, 2006

1. The latest Washington Wire has been mailed from our friends at ICTA (The Industry Council For Tangle Assets). As you may know ICTA is a trade organization formed to help dealers and investors alike sort out various government rules and regulations. We are founding members of this national voice for precious metals and rare coins and believe such representation is vital to this industry. Dealer membership in this type of organization is a good way to evaluate your current dealer. Membership in trade organizations is a good beginning indicator that your dealer has a stake in the precious metal and rare coin industry. And this commitment leads to better service and better ways to resolve problems should they arise. To learn more about ICTA check out their web site at http://www.ictaonline.org/.

2. As we approach this holiday season let me wish all of you good health and God's many blessings: CNI will close this Thanksgiving on November 23rd (Thursday) and November 24th (Friday). For Christmas we will close December 25th (Monday) and December 26th (Tuesday) and for the New Year we will close January 1st (Monday) and January 2nd (Tuesday).

3. So what's in store for the New Year? Ah, the great question and one that appears in a number of e-mails. I guess a hedged bet is not so good but in this case it will have to do. It really depends on what gold does. With oil above $60/barrel and inflation numbers finally beginning to move I think you will see gold challenge $1000 in 2007. And the press for gold has turned from ho-hum to positive once again. There are a number of great articles on the subject there is even a new book. Barron's featured, Commodities Rising, written by CPM Group's Jeffrey Christian, received the top recommendation for this year's holiday season Gifts for Readers. The book is subtitled The Reality Behind the Hype -- and How to Really Profit in the Commodities Market and is published by J. Wiley & Sons.

So what you say? This may be just another push at higher prices, which disappoints and falls back as the cost of living moves higher. We have seen a number of these in late 2006 as gold moved between the $540 and $600 range. And what about the recent highs in stocks, does that make any sense? Actually it does for were else is all that hot money going to go? In my mind the true excess of investment dollars makes the best case for the eventual long-term rise in gold. A fair amount of the hot money in stocks at this time will move into gold as it surpasses old recent highs ($721.50 - 5/11/06). The long-term big buyers of physical gold have already restarted their engines. Our physical sales in late December rose considerably and I'm talking about individual sales in the $50,000 to $1,000,000 range. So all other things being equal you should already have a bullion gold position and consider adding to it on any pull back in the market. Finally keep in mind that once gold moves into the mid $700 range all technical trading programs will signal a major buy and no professional trader will consider shorting this beginning to rage bull.

The upside is also difficult to figure but remember that when gold collapsed in the 1975, as legalized gold ownership in America failed to impress the average Joe, no one on earth would have figured gold would top $800 just 5 years later. A similar 6-fold increase on today's market would place gold at $3720! Sounds silly to consider such a move but in a market place with so much available cash funnier financial things have happened.

So what will happen with the certified rare coin market? If gold moves into new higher territory the certified market will continue the advances we have seen over the past few years. Rare coins are also getting good press from previously unfriendly venues. The recent Wall Street Journal article (Monday, December 18, 2006 - Where the Smart Money Is by Rebecca Buckman) is a good example. The important thing to remember about this market is that the number of quality PCGS certified rare coins is limited relative to the number of dollars available. This is not hype it is a fact that all seasoned dealer have known for years. That is why every major coin dealer I know invests his own money in areas of interest. This is not typically short-term money so over time this adds stability to an already active market. In the raging bull market in rare coins of the 1970's all dealers I traded with keep their excess cash in product. So how does this current rare coins market compare with those old days. Actually the advent of PCGS certified coins has simply made the total number of coins smaller by a large degree because independent grading provides the public with a level playing field. In other words anyone can compare services and grades and prices.

Now add the knowledgeable collector and you can see where today's short supply is going. This collector may spend an entire lifetime assembling a collection that may not be seen for generations. This supply factor is important to understand because it has long term consequences. This type of buyer tends to be highly intelligent, willing to wait for just the right coin, and most are well healed.

All of these factors bode well for PCGS certified rare coins. But the most important investment aspect of certified rare coins is that it has the same common denominator as the gold bullion market. Now don't misunderstand, bullion and rare coins are radically different and every person should have a little of both. But the notion that they share a common investment thread can put money in your pocket. That is simply the notion that most people in the United States have not even considered either gold bullion or PCGS certified rare coins as a diversification. That is an amazing statement when you consider relative prices in both areas indicate that there is plenty of upside relative to old highs. And what if government spending sends the dollar off the cliff? The event that even modest financial planners fear the most. Well then the profit potential in these areas will amaze even old players like me. This assessment should provide additional incentive to those wondering about 2007 and beyond.

Finally let me pass on an old saying you have heard many times but was a favorite of my dear Mother: "All of the truly great things in life are free". Enjoy God's many blessings with your family and friends and as 2006 draws to an end let me wish you all the best of the holiday season and a wonderful New Year.

May 1 - Aug 31, 2006

Summertime is typically a slower time for the metals and rare coins, but with all of the problems in Middle East I figure things will heat up at anytime. This presents a great opportunity, especially with the recent pull back in gold. Look at it this way: You get a 10% break on the price! Generally, however the public likes a market which never goes down and their portfolio always appreciates. Most long-term investors realize this is never the case and so take advantage of pull backs. Believe me, when gold is $1500.00 an ounce you will look like a genius.

The new Buffalo gold bullion program is underway and for those that appreciate a pure gold coin this is a great choice. Be careful however that you get all the facts before buying. The Buffalo comes from the US Mint in two flavors. The first is a simple bullion coin, made in large quantities to compete on the world market with other pure gold coins like the Canadian Maple Leaf. Bullion coins like these are available from most large bullion dealers at about the same price of the US Gold Eagles. These coins will never be anything more than another great bullion coin produced by the US Mint.

The other flavor is the same coin in proof form. Keep in mind that the word "proof" indicates a method of manufacture not a grade description. The proof Buffalo is distinctly different from its bullion production brother. The proof fields are brilliant and mirror-like because the coin blank is polished before striking and is struck more than once and with greater pressure. The initial proof production can only be purchased directly from the mint (www.usmint.gov), but as investors begin to buy and sell on the secondary market gold dealers will also buy and sell proofs. The cost of a proof coin from the US Mint is higher because of the extra steps taken in its production. A proof coin is also limited in the number of coins produced and they make beautiful gifts for special occasions.

So what is a First Strike Buffalo? This is a regular bullion coin, not a proof, which has been sent to PCGS for grading within a small window of time. PCGS makes the determination of First Strike using the date slip included in all original boxes. In other words, PCGS will grade and identify the first bullion production coins and if submitted in time will designate them First Strikes.

So which is the better choice? Like so many other things in the coin business, it depends on what you are trying to do. If you want a gold Buffalo which moves up or down with the price of gold stick with regular production coins. The low premium make this choice attractive and it is the first choice of most bullion investors.

If you want a special gift consider the proof. It costs a bit more but the presentation is worth the price and it will always remain a treasure. I would not suggest you purchase a large number of these because recent issues tend to be volatile.

I'm afraid my last choice would be the First Strike issues. These are simply bullion coins in certified holders and the extra cost involved does not make any sense. All things considered if gold moves higher, you will make the least amount of money with First Strike coins.

I hope this will help you enjoy the new Buffalo series and good luck on your new pure gold coins.

2. More on what every dealer calls "the after-hours market" in gold. As I have said before, there is rarely an after-hours market, but there are exceptions. These exceptions happen when everyone gets nervous after the traditional domestic markets are closed. This happens as a result of some economic or political upheaval. A careless word by Bernanke or an act of war or terror which causes a flight to quality response. These type of problems cause traders to hedge their bets in the physical market because they can't in the traditional paper markets. So physical gold prices are adjusted after the domestic market is closed. This adjustment can be up or down according to the perceived level of threat. A few dollars to perhaps ten dollars will be added or subtracted to the price of all bullion coins. When exactly this will happen is difficult to say, but keep in mind that when a trader adds $10 to his selling price, he also adds $10 to his buying price. The same is true if he is heading in the opposite direction. If you are doing business with ethical people an after market is not something to fret over. It should not deter any action on your part relative to what is going to happen the following day. In my mind gold is heading much higher. The coming decade will produce new record prices as everyone begins to understand just how much money the government prints everyday. Along the way we will see pullbacks which should simply be used to add to your core holdings. The "after-hours market" is simply another indication that this well established bull market in metals is alive and well, and is working out a few kinks along the way.

3. Looking for a good rare coin investment? Forget about First Strike anything and look carefully at the decreasing premiums on $20 Saint Gaudens in PCGS MS 63, MS 64, and MS 65. Premiums on these coins are the lowest I have seen in years, relative to the price of gold. Now add the notion that summer time in the coin business is traditionally slow meaning the frenetic pace which pushes prices higher is replaced with figuring out what the family will do when visiting Yosemite. I have talked with a number of industry leaders who believe this market will simply redouble its efforts in September. Most also think this recent pull back was just strong enough to get all the short stops out of the market. All of this is encouraging for rising prices when the kids go back to school so consider adding a few Saints while prices are low relative to gold.

4. I always like to look at the "Red Book" (A Guide Book of United States Coins) by Richard Yeoman. And older editions are just as interesting as the most recent edition (2007) because the publisher (Whitman) adds new information. The 2007 edition, for example has the Top 250 Auction Prices which lists the most valuable 250 rare coins sold at public auction. Holding the first spot (Rank 1) coming in at $7,590.020.00 is the famous 1933 $20 Saint Gaudens which sold in July of 2002. Ranked Number 2 at $4,140,000.00 is the finest known (PCGS Proof 68) 1804 Class 1 silver dollar sold in August 1999. This list goes on but what is fascinating is that the first 22 spots are filled with rare coins which weigh in at a million or more! This list alone is worth getting the book, which is available from us or your local bookstore for about $15.00.

Dec 1 - April 28, 2006

1. It is easy to see a few changes on the site especially when it comes to ordering. The $2000.00 minimum on bullion orders made sense because of the rise in general prices and it allows us to maintain the free shipping policy. Kenny Edward's new 24 Hour recording on the site in MP3 form under Quote Line/Specials should make for interesting listening. He makes two recordings, one in the morning and one when the markets close. Keep in the mind then that prices quoted in the morning are subject to change as these markets will move up or down. The 2nd recording is done after the Comex close (11:00 AM PST) and prices usually remain unchanged until the business closes at 5:00 AM PST. Note that I say usually because there have been times when an after market has effected closing quotes. This was a common occurrence in the 1970's but is infrequent today. Just keep in mind that as today's markets make new highs and become more volatile an after market could well develop. In today's crazy world a nuclear threat or political disaster could cause an after market change in prices.

2. How important is eye-appeal in coin selection? With the advent of independent 3rd party grading (PCGS) some collectors and investors fall into what I call the classic price trap. The less experienced simply compare PCGS prices (always a good idea) but then fail to understand the all important factor of eye appeal. Unfortunately all PCGS MS 65 Saint Gaudens are not the same, and this holds true for all US series. Some, perhaps as much as 30% of the entire grade population simply looks nicer than what is left over. All experienced dealers know this and are willing to pay more for the better examples. The main point I'm trying to make is simple. Make sure your dealer is only delivering the "sight-seen" coins which fall into the top 1/3 of the grading selection. While this seems relatively unimportant in the accumulation phase of this rare coin bull market, it will be very important in your liquidation phase. Selling better looking examples is always an easy job.

3. I was looking through this week's Coin World and came across a book that while not for everyone will certainly end up in my numismatic library. The article begins "Better an ounce of luck than a pound of gold", states the Yiddish proverb at the start of Collecting Lucky Coins, Tokens and Medals, by Rita Laws ($14.95 from the House of Collectables). This book serves as an "instant expert" guide for those looking to expand their knowledge on this genre of lucky numismatics. There has always been small stories shared between dealers when talking about coins or paper money which are rumored to be good luck to the holder. This area of collecting is entertaining and historically interesting but I have never seen a book on the subject.

4. We are now approaching $100 million dollar in annual coin sales, which means we also purchase about $100 million dollars worth of PCGS certified rare coins and precious metals. Old time coin dealers used to add these two numbers together and claim $200 million in business, which is true but somehow seems like an inflated number used to impress rather than educate. At any rate we do a lot of business nationally and sometimes the packages we receive in the mail could use some improvement. Consider the following to insure your PCGS coins and bullion products arrive in good order:

a. Always make arrangements before shipping to the store. When you call you will receive a vendor purchase order number and we will be able to match that number with your package when it arrives.

b. Always include a packing slip which states who you are, our purchase order number, your mailing address and instructions as to how you would like to be paid. Your daytime telephone number is also important in case there are questions.

c. Wrap contents securely, and never send your coins loose. Coin tubes which contain bullion coins should be wrapped with nylon tape to prevent opening during transit, then cushion your coins with bubble wrap, and finally roll in plenty of newspaper. This package can then be safely placed in a secure, hard cardboard box with additional packing material. The same procedure should be used for PCGS graded coins, they must also be protected before shipping even though they are in their own plastic holders. Shake your completed package and if you hear anything rattling around you will need to add more cushioning. If your coins were originally mailed by us consider saving the original packaging for return shipment.

d. Insure all packages for their full value and make sure we are required to sign for the package at the CNI building.

Thanks for following a few important rules and if you have any questions about packaging or shipping call Bill in shipping toll free at 1-800-225-7531.

5. This is a common e-mail theme and relates to both the price of gold and the price of certified rare coins: Do you think these markets are running out of gas? An interesting idea in that we have had a few good years of gains but my personal opinion is that this is only a good beginning. This is not as self serving as it might appear even though I'm considered a huge conservative in this trade. Both of these markets are demand driven and we have had a solid increase in demand. But the real gains in both gold and certified coins will be seen when inflation begins to creep into the national numbers. Like I said before, real estate has always been a good leading indicator and with the US debt ceiling raised to 9 trillion dollars I can't see anything but higher prices over the next decade. The idea of fiscal conservatism is a dead political issue and I'm a Republican. It is hard to believe but President Bush actually spent more money than President Clinton! With a nine trillion dollar US debt ($9,000,000,000,000.00) and no one willing to take the political heat generated by cut backs the price of everything is going up. Will this happen overnight? Of course, no one knows for sure, but my guess is that we will see a series of fits and starts. One day everyone will be optimistic and the next some will turn pessimistic. But in the long run I look for steadily gaining markets along with the expected confusion along the way. In my mind this is almost a certainty unless the government gets its house in order, which is something I don't expect anytime soon.

Alex Sanchez works for CNI and is accomplished at watching and interpreting charts. In trade parlance he is more driven from the technical side than someone like me who takes a fundamental approach. The majority of gold traders are driven by chart patterns and watch them carefully. Alex gave me an interesting magazine called SFO Stock, Futures and Options Magazine. I'm not a big fan of futures trading but there was a compelling article in the SFO March issue. It was written by John R. Hummel and is entitled Can The Present Dollar System Survive? In A Little History he explains clearly why the world functioned better on the gold standard. John Hummel foresees a dollar collapse and concludes that gold is likely the major beneficiary. He then compares the price of gold in 1980 ($850.00) with a comparable level today ($4,000.00 to $6,000.00) and believes that recent gains are just the beginning as the US dollar simply gets weaker. I found this article to be 100% believable and professional. Not an exaggerated piece designed to sell product. If you would like a copy of Mr. Hummel's work call Ken Slater or Alex Sanchez toll free at 1-800-225-7531. This current article makes an excellent case for owning gold today.

Sept 1 - Nov 30, 2005

1. So with the increase in gold the price of the 8-piece gold set has risen accordingly. Not surprisingly but as in all things relating to rare coins it does take patience. In fact, if gold establishes itself in the $500 to $600 range in 2006 the price of PCGS certified gold coins would simply be unstoppable. But that's not what I want to tell you about. Some time ago I recommended the $3 gold piece in PCGS MS 63 and MS 64 based on the fact that these coins are indeed much scarcer than is commonly believed. But I also wanted to give you a piece of inside information. A large and well-known dealer capable of diving prices higher because of the increased demand is promoting the $3 gold coin nationally. Well prices increased by 25% in the past 3 months. That's really just a good start but here is another piece of information you might find interesting. The same company is now promoting the $10 Indian in MS-63 and MS-64. So a word to the wise, as they say, should be sufficient. I expect the $10 Indian to move accordingly. You do have one already...don't you?

2. The holiday season is once again here so its time for our usual CNI Holiday Schedule. The business will be closed for Thanksgiving November 24 (Thursday) through November 27th (Sunday). And yes we all eat too much turkey. For Christmas and Hanukkah we will close December 23rd (Friday) through December 26th (Monday). And because the New Year falls on a weekend we will be closed the following January 2nd (Monday). All of us would like to wish you the best of the season and all of God's blessings for the New Year.

3.David Bowers has written a new book on rare coin investing. Entitled The Expert's Guide to Collecting & Investing In Rare Coins this hard bound 655 page book (29.95) is just what I would have expected from David. Published by Whitman (the Red Book Folks) and superbly written, Bowers explores the real world of rare coin investment from an expert's viewpoint. He not only studies the coins themselves, he provides historical pricing information, trends, important collections, and how all of these factors weave themselves into a successful approach to this fascinating world. Not to be missed including David's important message: "Along the way, have a good time".

July 1 - Aug 31, 2005

1. Did you know the US 20 cent piece has no reeding? Reeding, of course is the pattern placed around the edge of the coin. This process had a real purpose back in the days when real silver and gold coins were shaved as they moved from one person to another. The coin became smaller so its intended purpose was eventually destroyed. To stop this common practice, early coiners placed a design on the edge. If it were shaved the next person could tell at a glance. According to Walter Breen the 20 cent piece was given a plain edge to help the unsighted, this because the 20 cent piece was very close in size and weight to the more popular quarter. The unsighted story was around when I got interested in coins back in the dark ages, but the Walter Breen book was not. His masterpiece work The Complete Encyclopedia of U.S. and Colonial Coins is in a large format with over 700 pages. It contains a lifetime of work on Walter's part and is recognized today as an essential part of everyone's numismatic library. The original price of this classic was $135.00 in 1988. Walter Breen is no longer with us and his amazing book is out of print but we have a few new copies. Call Ken Slater toll free at 1-800-225-7531 for your copy. The cost is $125.00 delivered. A guaranteed bargain and a wonderful opportunity to learn, through Walter's original research, the many inside stories of how and why American coins were produced and what happened to them. This book is one of my all time favorites, my copy, around since 1988 is well used, I look at it for reference at least once a week.

May 2 – June 30, 2005

1. Ever been to a coin show? This is one of the great fun things to do if you are interested in rare coins. And they are usually placed in ideal locations all over the US in an effort to help people who collect coins. The cost of admission is small, usually under $10.00. With some work you should be able to find one close to you once or twice a year. Coin shows very in size from less than 100 dealers, usually considered a local event, to a show with 500 dealers or more, usually hailed as a national event. The larger shows are well established and attract dealers from all over the world. A dealer pays the promoter (either an individual or a club) a fee for a table on the bourse floor. This table ranges in price from a few hundred to a few thousand dollars depending on the size of the show and the location of the table. Dealers must register and agree to a number of rules in doing business. Most large dealers know each other and these shows are a good way to sell material they don't want and purchase material they may have on their "want lists". While the public is invited and many do attend, the majority of money changing hands is between dealers, which makes for a hectic and high-energy marketplace. That is why a few people believe dealers at larger shows can be rude and don't pay enough attention to the walk-in traffic. Actually dealers will spend time with you but keep in mind that they have only a day or two to accomplish many tasks. This leads to a hurried atmosphere. That being said going is fun and a learning experience. It will amaze most because there are millions of dollars in inventory on display. Prices, material and grading services vary considerably so you need a basic idea of what you are doing, but all in all I promise an exciting time for you and the family.

2. Interesting article in May 16th Coin World: Senate measure seeks tax law changes to allow IRAs to acquire certain coins Legislation is eighth attempt in 17 years to change tax code. This is actually a big deal because such legislation will allow individuals to place certified rare coins in retirement accounts. According to Coin World "The bill is to be cited as the Options for Investors through United States Certification Coins Act of 2005". This, of course, would have an immediate and possible dramatic effect on the price of certified coins trading on the Certified Coin Exchange. It has long been rumored that such legislation would "lock-up" large numbers of certified rare coins as investors diversified their retirement plans. This of course would drive prices higher and move certified coins once again closer to Wall Street. This was tried in the 1980's with the first Kidder Fund and was met with mixed reviews in the trade. Larger dealers loved the idea because it was great for business smaller dealers thought such wholesale moves toward the mainstream would price the collector out of the market. This would dramatically change the coin business. Time will tell on this new version of older legislation, but I can say one thing that makes sense: If this option is once again adopted the price of certified rare coins will benefit.

3. The Long Beach show is over and the results seem mixed. Many dealers said the show was much better than expected, some remarked that sales were lacking. The Eliasburg 1913 Nickel traded hands for over 4 million so there is good news in the air. I think the public now discounts the importance of a million dollar coin sale. They do so because it seems like major rarities usually bring amazing money. Never discount such sales. For a coin to trade for several million is always a big deal. Fifteen years ago the trade just talked about which coin would be the first to reach a million dollars. Today such a sale seems casual. This speaks volumes as to the depth and sophistication rare coin sales have attained. Attendance at the show was good and the spike in gold prices always makes for a positive backdrop. The notion that gold seems stuck in a narrow trading range should not carry as much weight as it does, but I can assure you that if gold breaks to the upside this market will once again be on fire. It's amazing that a 10% swing in the price of gold can carry so much weight. We are going into the summer months, a slower time of the year for most dealers, but there is a tension under the surface. This could lead to a renewed round of prices increases but more likely prices will hold steady as collectors and investors add to their holdings. Keep in mind that the main thing numismatics has going for it is simple. In many areas prices are still fundamentally cheap when compared to old highs or to investment alternatives. Remember that while investors hold sway over the market, the collector lays down the real base of operations. This is true because collectors are not as concerned with price. They are mostly quality driven and once decided hold rare coins for longer periods. Why? Because they really enjoy their coins. They are expert on the color, strike, history and definition. And they like to talk about what makes their example superior. The up or down price swings are not as important. This, of course, makes the collector market more stable but it also lends credibility to all other aspects of the rare coin market.

4. Is toning good or bad? Boy this question from an email reader has been discussed for as long as people have been buying coins. That being said, coins should only be cleaned by professionals and then only under special circumstances. An amateur cleaning could destroy the value of a coin. Back to the notion of toning within a certified PCGS holder. The answer is not simple but there are a few guidelines. Toning which enhances the coin appearance is good. In fact explosive or highly attractive toning increases the value of a coin to many dealers. A coin with original toning is a great indication of past history. Most of the time toning on extremely valuable coins is yet another indicator of an original past. I'm generally suspect of very early coins which do not have toning, they are not natural looking. The public on the other hand seems partial to coins, which are not dark. This is not a new thing, many early coin publications indicate that the public liked coins without toning just as much at the turn of the 19th Century as they do today. The term "blast white" is used today to indicate the coin in question is more suitable for a retail customer because it has no toning at all. So if such a coin is more salable, is it really worth more? As with most coin questions the answer is not clear. To new buyers the bright coin will be chosen more often. To seasoned buyers the toned coin is sometimes the only one which they will consider. As long as the toning is not ugly and does not detract from the overall eye appeal. So the final answer, as to the value of toning seems to rest with the next buyer and if that buyer sees the coin as attractive.

March 1 – April 28, 2005

1. General questions and answers in the coin business are fun. Most new people to this industry seem to preface them with the usual "I hope this doesn't sound stupid...but", when actually all questions are welcomed by professionals. The coin business can seem complicated at first but with a little homework it turns out to be a great adventure. One that can be profitable, especially in a rising gold market. If you progress past the first few questions about which silver coins are silver, I would recommend 3 beginner books. The first is the old standby A Guide Book of United States Coins by R.S. Yeoman (2005 editions are out), the second is Coin Clinic by Alan Herbert, 1,001 Frequently Asked Questions, and finally Alan Herbert's Coin Clinic 2, 1,001 More Frequently Asked Questions. All of these books are inexpensive and provide a wealth of information and fun.

2. According to David Ganz's Coin Insider's Report "Sales noted: A 1894-S dime, one of 24 known, in Proof-66 went for $1.322 million at a David Lawrence Rare Coin Auctions sale on March 7 in Baltimore. The price is a new world's record for the denomination and the coin". The Barber series has always been a favorite of mine but for some reason has not gotten the respect it deserves among other numismatists and the industry in general. While the famous 94-S is certainly an exception maybe things are changing. This also adds further evidence that the very high end rare coin market is still moving along very well.

Jan 3 – Feb 28, 2005

1. So welcome to the New Year as everyone heads for Florida and FUN (Florida United Numismatists), another one of those bellwether shows that are pacesetters for the upcoming year. Everyone I spoke to seems upbeat but with the slow down in gold it may take some edge off prices, which is a good thing for long term stability. I suspect auction prices will once again amaze many dealers as the anticipation of the first big show of the year creates its magic. Dealers attending have extensive want lists and there is plenty of buzz in the air. There are at least 6 auction coins which could fetch more than 1 million dollars each! So what does this have to do with most average investors and collectors? This type of action creates momentum which is good for everyone. Rare coin prices always related to one another. Kind of like real estate. When a particular coin makes a new high price, it makes the owners of all other similar coins feel like their coin is worth more. And in fact it is, most of the time. As auction records and discovery coins make rare coin headlines, it is good for prices in general.

2. I purchased an old collection not too long ago and it had some interesting books in the deal. When was the last time you saw a 1968 A.N.A. auction catalogue? Abe Kosoff and Numismatic Enterprises held the auction. Mr. Kosoff has been called the dean of numismatics and The Professional Numismatists Guild honors its founding president with an annual award in his name: The Abe Kosoff Founders Award. This honor is presented at the annual PNG Banquet and is presented to a PNG member who has made a "significant contribution" to the Guild or the numismatic community. Abe is no longer with us, but I had the pleasure of talking with him at one of the Garrett sales in 1980. Many old timers think current higher prices are "too much" most of the time. As such a conservative Abe also thought the Garrett prices were too high and commented he would not recommend these coins to his clients. I can imagine why when looking at the 1968 prices. In the 1968 sale there were 2250 lots most of which sold for between $75.00 and $600.00. There were a few exceptions but my point is that even at a landmark A.N.A. sale the price of rare coins in 1968 was cheap. But then in my years of watching coin prices I have never seen a year of increases which were accepted without comment. I suspect that the upcoming Florida FUN or summer A.N.A. auctions will produce prices which will also be seen as cheap when compared to what these auctions will bring in 2017. The notion that coin prices seem to make higher highs and higher lows turns out to be reasonable advice.

3. I was reading the Blue Sheet commentary after the Florida FUN show and most of the comments were positive. "Pre-show auctions have already demonstrated that Bidders are willing to pay "moon money" for quality material with original surfaces. Lackluster coins and those that are just average for the grade are beginning to sell for larger discounts." So what is "moon money"? This colorful descriptive term has been around for ever. It is mostly used by coin dealers and is used to describe the price of a truly exceptional coin. A price which exceeds everyone's expectation by a spectacular amount. So if everyone thought the coin was worth say, $1000.00, moon-money would be $2000.00 or even $3000.00. I make note of this not because coin dealers get carried away in the heat of a coin show (although sometimes they do), but because this demonstrates just how eager dealers are to purchase exceptional examples. In coin investing, a superior coin for the grade will always bring more money. If, to boot, the coin provides that something "extra" that makes it a standout among similar grades it sometimes fetches "moon money".

4. According to the January 21st edition of the Grey Sheet the auction results at FUN are amazing. I think most dealers expected prices to be strong but these numbers are really over the top: $74 Million Hammered In 7 Days - Healthy Market Crystallizes At Fun. So what does this actually mean for the rare coin business? First, it shows just how anxious dealers are for extreme rarities or coins which just are not seen that often. Second, these prices once again confirm the popularity of higher priced material.

5. The United States $3 Gold Pieces 1854-1889 by David Bowers and Douglas Winters is out and will prove to be yet another great read by these famous authors. This hardbound edition with 176 pages and plenty of historical background should be part of everyone's numismatic library. The $3 gold piece has always been a favorite coin of mine and a new book like this creates publicity, which is good for prices. But here is a secret: The $3 gold piece will soon be the number one recommendation of a large national rare coin firm which will promote them in MS-63, MS-64, and MS-65. Expect prices to rise accordingly.

Nov 1 – Dec 31, 2004

1. David Tripp's new book (hard cover, 361 pages, $16.95) Illegal Tender is out and what a read! The subtitle reads Gold, Greed, and the Mystery of the Lost 1933 Double Eagle. This book is of course the detailed story of the now famed 1933 Saint Gaudens. This coin recently sold for 7.5 million to an anonymous buyer, the highest price ever paid for any US rare coin. The inside cover begins this incredible tale: "Illegal to own and coveted all the more, it has been sought with passion by men of wealth and with steely persistence by the United States government for more than a half century". If you like coin intrigue, it simply does not get any better.

2. As another year closes in,let me wish all of you a great Thanksgiving, Christmas, and Hanukkah. As usual we will close for Thanksgiving Nov 25 (Thursday) and 26th (Friday). We will also close for Christmas Dec 24 (Friday) and Dec 27 (Monday) and for the New Year Dec 31 (Friday) and Jan 3 (Monday). As always my best for the New Year and God's blessings.

3. So what's in store for the rare coin market in 2005? I think another solid year of growth is expected by most professionals. The reasoning behind this optimism is not just "shop talk". I believe the next decade will be more commodities orientated and this coupled with excellent rare coin press should lead new buyers into an already hot market. Case in point is the positive article just released by the Wall Street Journal covering the positive aspects of investing in certified coins (call Brent toll free 1-800-225-7531 for your copy). I have not seen such positive main stream reporting since the 1970's market which was inflation driven. And remember today's market is much different than yesteryear because today's buyer benefits from independent third party grading. This is another way of saying there are fewer coins available in any given grade. Add to this stream of information the new quarter program, the ease of shopping using your computer, and a gold market which has everyone's attention. I think the stage is set for yet another round of higher prices. Now add the fact that no dealer, regardless of size, has a great deal of inventory to offer and you have all the ingredients necessary for profits. All the old investment rules apply. Stick with PCGS graded coins, stay within your budget, buy and hold for the long term, always buy sight seen coins with great eye appeal, and read a few books along the way. I believe prices will remain solid to higher in virtually all higher grade PCGS certified rare coins so don't fret too much over specific coins. If you have questions call us for a quick review. This continued move to the upside in rare coin prices could be just the beginning. There are many areas which still have not reached old highs, which is another way of saying there are plenty of bargains still out there. And keep this in mind. I have not mentioned the inflation word. If inflation comes back, as some believe is only a matter of time, certified rare coins could skyrocket in price.

Sept 1 – Oct 29, 2004

1.I was reading David L. Ganz's Coin Market Insider's Report (COINage Report) and came across this piece of information: Price history: Rusty Goe purchases the 1873-CC "no arrows" dime (MS-65) at the Bowers and Merena Baltimore auction for $891,250. ... Its earlier price history shows an ally-oop in the coin marketplace. William Woodin, later FDR's Treasury chief, sold it in 1915 for $170. In 1950, Louis Eliasberg acquired it for $4,000. In 1996, the Eliasberg specimen was sold for $550,000 and resold for $632,500 in 1999.

So what do we have here as far as making money in rare coin investment? Was this a Rumpelstiltskin story of the poor miller's daughter spinning straw into gold? Or just a fellow who is trying to take advantage of a rare coin market with momentum on its side?

Actually neither is true, but we can learn a great deal about how the rare coin market works with long-term data.

(1) The 1873 CC "no arrows" is so rare there is only one example known. Unique and famous is a difficult combination to beat in today's rare coin world. Actually the 1873 CC With Arrows is also quite rare but it is not unique. As rarity and popularity combine, the relative cost increases but this example is great because you can draw a few conclusions from a long term price history. First, extremely rare coins were not cheap even into the late 1950's. The $4,000 Eliasberg paid in 1950 seems cheap by today's standard but that sum of money was a fortune for its time.

(2) Mr. Goe,I believe is a specialist in seated coinage and therefore this particular choice made the price paid a secondary consideration. This is not often the case. Most rare coin buyers today carefully consider price relative to rarity and recent price activity. In other words it is possible in today's market to believe a particular rare coin price is "too much". Unless you are on a mission to assemble the finest known collection. This case of extreme pricing is seen more than the average person would believe. Especially with the recent advent of the "Registry Set" notion of recorded sets. I'm not trying to say Mr. Goe paid too much. When buyers come together and there is only one coin available the price is whatever it is...that is the nature of the auction business. I am saying that high prices for rare coins at auction need to be considered with a number of other factors. And some caution is necessary. In this case the high price was justified. If, however, two buyers get in a bidding war over a coin which is relatively common but has unbelievable color the picture is considerably more cloudy.

Also of note in the COINage Report is, according to Mike Gumpel, that two single retail buyers spent "well over $1 million early in the show" referring to The American Numismatic Association, just recently concluded in Pittsburgh. Actually a million dollar deal at a major show like the ANA is just a good start, granting that such purchases do produce a magnifying effect as dealers move to replace sold product. In today's business, any good auction will produce $10 to $30 million dollars in sales and major auctions happen on a regular basis. Add to this the gross sales of say 100 to 400 dealers per show ($50 to $300 million) and it is easy to see why the rare coin business is bigger now than at any other time in my 30 year career. This at a time when inflation is relatively calm and rare coin publicity is still tame. If even a small percentage of the general public considered a modest investment in certified rare coins, today's prices would seem like the ultimate bargain.

2. The new Q. David Bowers book is out and is his usual outstanding job. The Official RED BOOK - A Guide Book of DOUBLE EAGLE GOLD COINS - A Complete History and Price Guide. This book has something for everyone. Prices, stories, pictures, and in-depth commentary you will not find elsewhere. Thoroughly enjoyable reading for the beginner or advanced collector/investor. At 288 pages you can't go wrong (Whitman Publishing, $16.95).

July 1 – Aug 31, 2004

1.So what do the Castine Hoard of Early Silver Coins (discovered in the 1840s) which uncovered dozens of Massachusetts Pine Tree shillings, the Bank of New York Hoard (1856) which found a keg containing several thousand Fugio cents, the Nichols Find of Copper Cents (1859) which uncovered several thousand mint state 1796 and 1797 large cents, the Randall Hoard of Copper Cents (1860s), the Economite Treasure (1878), the Collins Find of 1828 Half Cents (1906), and the New Orleans Bank Find (1982) have in common?

With others, they are all listed under Other Famous Hoards in the new (2005) edition of A Guide Book of United States Coins by R.S. Yeoman. I have been a price contributor to the Red Book for years and applaud this difficult job. The publisher (Whitman) lists all US coins (from colonial to present time) by condition and price. They also tell a fine story of how and why these coins were produced and why they are noteworthy. I have carried a copy of the Red Book in one form or another since I began collecting coins in the 1950's (Richard Yeoman printed his first effort in 1947). While I did not know Mr. Yeoman personally I did have the pleasure of having dinner with him years ago at a banquet sponsored by The Professional Numismatists Guild. He was polite and quite the gentleman considering his Hall of Fame status.

The guide book is full of facts and figures relating to US coins and is usually the first addition to everyone's numismatic library. I use the cheaper loose leaf edition because it can be placed flat when reading. The latest effort carries improved pictures and expanded coverage making it first rate. At $12.95 for 382 pages you can't go wrong.

2. The ANA (The American Numismatic Association) is over and returning dealers claim anything from a great show to one that was rather flat. The particular recurring theme of not being able to fill customer want lists persists, but generally I think a quieter market is the result of traditional summer activity. Higher prices are good but such action should be tempered with moderate to slow price growth in quality rare coins if the market is to remain healthy. It is always good advice not to speculate on rare coin prices in the near term. You can get lucky once in awhile but over time most will lose money. Rare coins are not like stocks or bullion coins, they require more knowledge and patience. That being said I have been in this industry for almost 30 years and prefer rare coins over commodities because of their rich history. There has always been something fascinating about old coins and the stories they tell.

Talking about old stories, a very interesting one has surfaced during the ANA. It seems an old box of coins has yielded a 1792 Silver Centered Cent. Actually there a two types of this very rare early copper. The first is the most famous, one cent with a silver center (about 13 known according to the 2005 Red Book). The second type looks like the first but has no silver center (8 known). The discovery coin will make 9 examples now known. I was told this rarity was first looked at by Tony Terranova (a very capable New York PNG dealer), and is now on its way to PCGS for grading and authentication. It should grade VF or XF and will be auctioned off this year. Speculation as to its selling price is always difficult, but the owner was told $400,000 or more at the ANA. I bet this amazing discovery will bring more...much more especially in this market climate. Coin World will provide more details soon, so I will let you know how things proceed. This story is great because it assures everyone that there are still great rarities to be discovered in Aunt Hattie's old coin jar. Actually most of the telephone calls dealers receive today are for common coins which are old but not of particular value. That being said one never knows when someone will call me concerning one of the remaining undiscovered 1894 S dimes.

And who makes all the money when a great rarity is discovered? Contrary to modern myth the coin dealer is last one on the totem pole. Most professional dealers will broker a coin of great rarity for virtually nothing simply to get the publicity.

May 3 – June 30, 2004

1. Well the Long Beach show is over and the rare coin market looks totally intact and continues to move higher, given you have coins which are above average for the grade. Notice I said above average, not superlative, because the cost of these really P.Q. examples will make you blush. The famous 1913 Nickel has traded hands for $3 million to a private investor. This example, I believe is the Spectrum/Sperber coin which was was also owned by Jerry Buss of Lakers fame. The price seems like a lot of money, but such is the trend. If you want the very famous, the 1913 Nickel is known world wide. And who is to say what such numismatic classics are really worth? Many in this trade believe the current bullish cycle in coin prices is just the beginning. All this to say that even during the traditionally slow summer months, the rare coin market is doing just fine.

If you don't have a copy of David Bower's latest effort you are missing a treat. I just finished The Official RED BOOK of Morgan Silver Dollars by Whitman. This beauty is a complete history and price guide effort by the finest numismatic writers of our time and promises to be another reason to own silver dollars. High grade Morgans are one of my favorite parts of the market and books like this explain in wonderful detail why these dollars are part of our heritage. Included in the book is a section on the minting process with pictures of presses, transfer lathes, dies and more. Well worth the price of admission $16.95. For your copy call Brent toll free 1-800-225-7531 and ask about special pricing on PCGS MS 65 Morgan dollars.

2. By the way, the latest rumor from the Long Beach show is that more than one national dealer will begin selling better date Morgan and Peace dollars in higher grades. This area of the market always creates attention, but with the addition of this book prices may once again be moving higher. As most of you know, there are 10 or 12 common dates in the Morgan series which trade for $145 at present. Once your collection has these look closely at the better dates in PCGS MS 65 which range from $200 to $2000. This part of the market is undervalued relative to the broader market and contains a few absolute sleepers. Be patient and stick with PCGS graded coins with nice eye appeal. You will create an adventure worth your time and money.

April 1 – April 30, 2004

1. Our friends from ICTA (Industry Council For Tangible Assets) offer more information about cash reporting requirements in the March issue of Washington Wire. As we all know cash transactions in excess of $10,000 are reported to Uncle Sam via Form 8300. But ICTA warns that "it's not just green cash that is considered to be cash". The term "cash" includes certain bearer instruments such as money orders, cashier's cheques and traveler's cheques."

2. According to the latest Blue Sheet (April 16th) Coin Market Solid Despite Gold & Silver Drop. "Generally, the precious metals markets react to many influences causing them to move up or down. Many believe that favorable economic news concerning retail sales had a negative impact on Gold and Silver. Retail sales figures for the month of March turned out to be much better than economists had expected and Consumer Price Index increased 0.5 percent. Inflationary concerns sparked by fears of rising interest rates resulted in strength for the US dollar (compared to the Euro and other foreign currencies) and a sharp drop in the metals. It was quite an impact too as Gold tumbled more than $20 an ounce and Silver an astonishing $0.96 from Monday's close. Several analysts also point to profit taking from major players creating an almost instantaneous snow ball effect on prices. Today, Gold settled at $397.70 per ounce in New York and Silver at the $7.07 mark. As bullion investors hit the exits, bullion coin collector/investors did not."

Additional thoughts about this recent drop in the metals, and positive longer range trends already in place.

(1) While there was volatility, the average bullion buyer continued to purchase coins. They did not exit the market. We booked one of the largest single order in our 25 year history as the markets were fading. Shipping is now working overtime hours to insure the deliveries do not become backlogged. So the "average" and "big hitter" bullion buyer simply see this pull back as another buying opportunity. Ultimately the dollar decline and inflation will drive all precious metals higher.

(2) The price of better certified rare coins has remained strong. In fact there are signs that the bull market in rare coins is posed to again move higher. No quality material is moving lower in price and while many issues show gains of late, there are many more which are still trading at discounts to old highs. The quality and number of coins sold at major auction today is amazing, and most material goes into the eager hands of dealers filling extensive want lists. Nice material consistently brings strong to higher prices and there seems to be no end to what this developing rare coin market can absorb.

(3) The now mature bull market in certified rare coins has been driven by collectors with significant funds to invest. Not by speculators who have entered the market in its later phase simply wishing to profit.

(4) The certified rare coin market has not reacted to the "inflation" word for more than 20 years. This statement is important because in my mind the real gain in rare coin prices will happen when the inflation genie is finally out of the bottle. It was inflation which drove rare coin prices to record levels in the 1970's. I believe the same forces will eventually return and once again make long term buyers money.

March 1 – March 30, 2004

1. The Baltimore show is over and reports from dealers attending are positive. This actually is curious to me, as I expected slower sales because of the recent weakness in gold. It would appear, in hindsight, that the drop in gold got everyone's attention, but was not big enough to slow the broader market to any great degree. The headline in the March 12 edition of The Coin Dealer Newsletter seems to agree with those attending the show: Heavy Buying Expected In Baltimore. .... "Still they are most interested in buying coins for their customers and for their much depleted inventories." All sectors of the rare coin market seem to represent solid demand as the never ending quest for fresh material continues. The Baltimore show is another bellweather event as most major dealers attend and there is always a big auction. Even the big-ticket auction coins ($40,000 to $300,000 range) seem to be selling at ever increasing prices. An example out of the Koshkarian Collection was an anonymous collector (according to CCD Newsletter) who spent $966,000 at auction for a superb 1796 Half Dollar (the Norweb example). This area of investment is not for the uninformed but represents a fascinating part of the numismatic business. When we see strong prices in high priced coins, this portends excellent health for the broader, if less expensive market. It would seem 2004 is going to be another good year.

Jan 2 – Feb 29, 2004

1. FUN is over and the reports are positive. FUN stands for Flordia United Numismatists and it is easily one of the biggest coin shows of the year. It is also famous because everyone uses the results to forecast rare coin direction because it is so well attended. I have heard from at least 3 dealers that it was the best show they have seen in a decade. Prices were higher and new material was lacking, but there was fresh material to fill Want Lists. Everyone seemed willing to pay a little more for the right coin and a few auction records were broken. So what was hot? Believe it or not, everything sold with enthusiasm and most dealers wished they could have come home with more material. The famous Long Beach show is also over and results were a little more mixed than FUN because gold succumbed to the infamous "Long Beach Curse". A now long standing belief that for some reason gold rains on everyone's parade during the Long Beach show, thus producing lower prices. I can tell you that generic high grade gold was weaker as gold moved toward and under the $400.00 level but sales were strong and most dealers I talked to said they had a good show. Perhaps not as intense as FUN but solid none the less.

2. So as gold retraces its big move above $400, what happens to the general market tone? The result continues to be mild. I would figure the market in general would become a little soft, especially after a number of years of increasing prices. But actually the buying public shook off the weakness in gold and continued its interest in what most professionals believe is just the natural ups and downs of a developing bull market. Rare coin sales are solid and while there is some chop in the very expensive market ($25,000 plus), I don't see anyone willing to substantially discount very expensive coins.

So what is everyone looking for in rare coins? Actually there are a number of hot spots: Proof gold, better dates, key dates, type, Walkers to name a few. But let me make an important point. No matter what is going up today or tomorrow there is always an underlying quality issue. One of the most basic assumptions in rare coin investing and collecting today is simple. Buy the highest grade you can afford. Quality is never cheap in this business, but it is also in constant demand. Quality is the great overriding consideration when deciding what you want to own. Look for it and buy it, avoid off quality...it just does not pay.

There is another sunken ship wreck salvage coming on the market (the SS.Republic) with a variety of gold coins. I have never been much of a fan of these new finds, most of the time these coins while intensely interesting, can be purchased for less over time. But there are many who will rush to buy. And there is always a great amount of publicity surrounding such finds. This is good for the rare coin market, brings in new buyers who in the past may not have considered coins and ultimately helps the more discerning investor.

Dec 1 – Dec 31, 2003

1. Our Christmas and New Year's schedule is pretty much the same each year (Ho! Ho! Ho!): CNI will be open Monday and Tuesday (Dec 22nd and 23rd) and closed for the Christmas holiday Wednesday, Thursday, and Friday (Dec 24, 25, and 26th). New Year's is similar in that we will be open Monday and Tuesday (Dec 29th and 30th), and closed Wednesday, Thursday, and Friday (Dec 31, Jan 1 and 2nd). All of us (Richard, Ken Edward