Bulk Lots Also a Collector Opportunity?|
January 21, 2014
In recent columns I’ve expressed the opinion that price drops for common material was related to the economy. I recently noted similar thoughts from Don Olmstead in his Trends column for Canadian Coin News which added more insight to my observations. Don indicates that prices for some Canadian notes are weaker, but prices for the Devil’s Head issues of 1954 and the Bank of Canada issues of 1935 and 1937 remain solid due to their scarcity and popularity among collectors.
Don also indicates that he believes the softening of prices for more common Canadian material coincides with the rising death rate among earlier collectors, which is having an impact, along with economic issues, on supply and demand. Don is an astute Canadian dealer and I think he has put his finger on the problem.
The question seems to be, what can we do about this development? I would submit that the answer is beating the drums for our hobby. We need to share our knowledge at local club meetings and recruit collectors to carry on in the paper money field. I read a while back that people who were collectors as youngsters make up a sizable share of today’s collectors. Do you know someone who dropped out of the hobby? Are they a bit older now and more secure in their job and economic status? Invite them to a coin club or paper money club meeting, or ask them to attend a show with you. If we rekindle enough old sparks perhaps things will catch fire.
In the meantime, prices seemed mixed at the recent Professional Currency Dealers Association show in Chicago.
Buyers there certainly were showing a preference for third-party graded material. Prices for raw notes just didn’t hold up to notes slabbed by respected grading companies. Large-size type prices seemed mixed, but a bit more down than up. Small-size notes were also a bit more down than up.
I noted a lot of bundled small-size material that sold much below catalog prices if long division was employed. Perhaps a good club project would be buying up some of these bulk lots with other club members and enjoying dividing up these bargains rather than let them all sell as dealer-sized lots.
I did note an interesting price at the PCDA auction, as a $100 Series 2006 Federal Reserve New York star note sold for $200 in 67 grade with buyer’s premium included in the price. It appears that high- grade modern issues in the currency field do not sell as well as TV-hyped modern coin issues on TV. I believe this is a good thing. I think it is smart to put away high-grade modern notes for long-term growth based on scarcity, in this case a high denomination star replacement note. Although as a bit of advice, let me say don’t pay too much for well publicized rarities that all get put away at the time of issue. These well publicized notes will probably replicate the history of the 1950-D Jefferson nickel. After the first few years, people realized that all the collectors have one and they will sell, much like many modern mint products, well below their initial price.
In other areas of the market, Fractional Currency Collectors Board president Rob Kravitz related that he had a good show down in Springfield, Ill., with some newcomers chasing Fractional Currency. These notes are historic and I think they are bargains in the extra fine/almost uncirculated range. The time to buy is before they get hot.
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