Volume 56, Number 4, April 2019
Market forces IN THIS month’s magazine we include an interview with Richard Lobel of Coincraft. The interview was originally supposed to concentrate on Richard’s 60+ years in business, however, as is often the case with these things, the topic strayed a little onto to subject of the secondary market for new issues. Now there can be no doubt that the new issues boom is creating a new generation of collector, people who are once again searching through their pockets and purses to find the latest Beatrix Potter 50p or “Alphabet” 10p. There are hundreds, if not thousands of new collectors out there all eager to find the one Olympic coin they are missing or perhaps strike it rich with the Kew Gardens 50p or the dateless 20p. Our new book Spend it? Save it? which has sold over 10,000 copies through supermarkets and newsagents, is testament to just how popular the decimal series is with the public. On the back of this, numerous marketing companies are now selling new issue thematic coins featuring a wide variety of subjects from flora and fauna through to politicians and Royal events; coin collecting is mainstream once again. Now this is all well and good as long as the people collecting these coins are enjoying themselves. If they are having fun forming a collection of new issues, or themed coins, or anything else then who are we to argue that they are wrong? We “traditional” collectors collect a huge array of things and I personally don’t see the appeal of some of them, but others do and that’s OK. The trouble, however, starts when the people who have collected these newer coins come to sell them as there simply isn’t the secondary market for new issues that there is for, say, Athenian owls or Gothic crowns, and, as many of them are base metal, they don’t have an intrinsic value either. Thus you may have someone who has spent thousands of pounds on a collection only to find when he comes to sell he is offered far less than he spent. Dealers then worry that because they are offering so “little” they will get a bad rap. And at times the collector will indeed, unfairly, blame the dealer and the hobby in general and this, ultimately, could turn them away from collecting for good. Obviously dealers and auction houses can’t artificially create a secondary market—if they can’t sell a 1987 year set in 2019 they aren’t going to offer large sums for one, but that doesn’t stop some collectors from feeling put out. Should, perhaps, the companies that sell the coins in the first place buy them back? There is an argument that they can create, or at least sustain, a secondary market but then we have to ask: why should they? If I bought, say, an ornament, in John Lewis Ltd and in a couple of years’ time decided I didn’t want it any more, then going back to the shop and asking them to buy it back would be pointless; and I certainly wouldn’t expect them to do it with an item that was made and marketed for a specific occasion that has now passed. So what do I do? Well, my only option is to go to sell my ornament to someone who sells such things, but he recognises this piece is mass produced, was made for a specific occasion that has no relevance today and whilst it is still in great condition it isn’t the kind of thing that usually sells well secondhand. He therefore offers me far less for it than I paid—of course he does, and neither you nor I would expect anything different, so why people expect a different outcome when it comes to coins is a mystery. The fact is that standard new issue coins are a quality manufactured commodity just like ornaments, like jewellery, like watches, like anything you could buy in any high end department store. Certainly the precious metal strikes will always have an intrinsic metal worth and that worth may well increase as the price of those metals goes up, but ordinary BU coins should be looked at purely as fun things to collect and nothing more. The problem comes, of course, when people buy coins, or indeed anything, as an investment—we try to steer well clear of the “I” word in COIN NEWS and never recommend any collector buys with an eye to turning a profit. Sadly all too often people ignore our advice and hope that the item they are purchasing will make them some serious cash in the future. Sometimes it can happen, certain modern coins do indeed go up in value but we shouldn’t assume they will do so automatically and nor should we assume they will do so quickly. Think about watches, think about handbags, think about jewellery, all of these things command a premium when sold new and make less money when sold on the secondary market, yes, proper “vintage” items will then start going up in price but that takes a while and of course it is only ever certain models/versions that fetch the big bucks and sadly we never know what these will be until years down the line. Richard’s interview shines a light on his view of the secondary market; our view is that it is often the perception that coins are unlike any other item and thus should automatically make money regardless that is the potentially damaging thing. What’s your view? We’d be delighted to hear from you.
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