Publishers Message (May 2021 Greysheet)

As we enter the fifth month of the year, we are also finally starting to see real progress in terms of vaccinations and, therefore, a legitimate ending to this pandemic that has strangled our ability to travel and visit one another for the past 14 months. The pandemic has been great for the coin business, with collectors coming back to their hobbies en masse, and numismatics has been no exception.

The strength of the rare coin market is clear on many levels. Dealers are searching high and low for coins and I am told by several major companies that they cannot reliably source material in the $100-$5,000 price range. “The market has dried up,” they tell me.

On the other hand we hear from readers who want to know why prices haven’t risen faster or higher in the Greysheet. Usually these inquires are from collectors, who don’t quite follow the wholesale market, so allow me to explain this phenomenon.

First, the rare coin market is highly imperfect. Unlike the stock market (which is closer to a “perfect market”) there is not a regular supply and demand for items. For example, if you wish to buy Apple (AAPL) stock, you can rely on the fact that you can go to the your stock trading app and offer a value at, or above current bid, and reliably execute an order. This is not the case in the rare coin business. Even for something common like PCGS/NGC MS65 common-date Morgan dollars, it’s not always possible to buy 100 coins at market bid. At Greysheet, we do our best to post wholesale values based on what we think a wholesale buyer should have to pay for such coins.

Rarcoa is currently offering $140 for these coins, so that is the current Greysheet Bid. In a down, or quiet market, coins often trade at levels below our bid because buyer’s can be fussy or uninterested. We don’t necessarily lower the sheet on these items, unless we learn of confirmed transactions. The converse is also true. Even though we are well aware that many coins are now trading at Greysheet, or even above, we don’t want to raise-levels willy-nilly, without market support. When we do raise levels in a rising market, all we do is force everyone to pay more than the current premium. So if buyers were able to obtain better-date Barber quarters in MS65 around 10% back of bid a year ago, they are now paying bid or bid +10%. If we raise the levels, they will still have to pay the premium, so we are careful to artificially raise levels. Another factor we are careful to watch is the “what goes up must come down” problem of collectible markets.

I’ve been a rare coin trader for over 35 years and I’ve seen strong markets and weak markets. There’s real danger in markets getting over-heated in a short spurt, and then crashing. This is a fear I have with the current sports card craze. Michael Jordan rookie cards are all over the place and there’s going to be a lot of pain when the music stops.

Fortunately rare coins are far more mature as a market than some of the more modern collectibles and I have been pleasantly surprised by the discipline of our market. Prices are definitely rising, steadily, but not dangerously. The Greysheet is following as closely as possible. As Patrick mentions in his Activity Across the Market report this month, we are starting to see a record number of active bids on CDN Exchange for popular series like Morgan dollars, but we’re also seeing dealers looking for everything from Colonials to Proof type coins.

This is also a good time for me to plug CDN Exchange. If you are a dealer in coins or paper money, you should join the CDNX. For just $150 per month you’ll get incredible access to pricing and market data with millions of auction records and a growing community of the biggest dealers in the industry. If you apply with coupon code: MAYGREYSHEET we’ll give you a free month to try it out (www.CDNexchange.com).

Sincerely,
John Feigenbaum
john@greysheet.com