Coin collecting the opposite of hoarding|
August 09, 2017
I recently saw a CNBC story that said Amazon founder Jeff Bezos is on his way to becoming the richest man in the world.
His company is on its way to becoming worth $1 trillion.
It doesn’t all belong to him, but a couple of hundred billion dollars can have a serious impact wherever it might be deployed.
It reminded me of the movie Li’l Abner that I saw as a kid.
The General Bullmoose character had a simple dream of wanting all the money in the world.
Bezos does not have all the money in the world, but what he has is the next best thing.
His wealth is such that he could make a serious attempt to buy every coin ever minted by the U.S. government.
He could buy over half the U.S. government gold holdings of 261 million ounces at current prices.
Of course, nobody could ever hoard to such a degree. It is by definition impossible.
People need something to spend.
They also would refuse to part with what they had, expecting perhaps a yet higher price in the future.
That is the crux of the problem for every well-heeled coin buyer.
The hobby wants them to buy coins.
We want them to build important collections.
But as Chet Krause, founder of my firm, said, whenever he entered an auction room, he could feel the prices rising.
People knew he had money.
They knew he was a buyer from time to time.
The game was to make him pay more.
Big-time collectors push back.
They have agents.
They act through multiple dealers.
The left hand may not know what the right hand is doing to keep prices reasonable.
Even people with the wealth of Jeff Bezos at their disposal do not want to pay $1 million more than a rarity is worth just because they have a current fortune of $90 billion forecast soon to be $200 billion.
It is nice to know that even the big-time collectors think the same way as the rest of us.
Even if I had such a fortune and could buy all 484,000 1909-S VDB cents and even if I paid the $1,500 MS-60 price for all of them, it would cost $726 million.
That would be just one-third of one percent of the projected Bezos fortune, or eight tenths of one percent of the current one.
Long before I acquired the last 1909-S VDB, the joy of it would be gone.
There is a reason a collection is one of each coin made rather than all of one.
You don’t need all the money in the world to assemble an interesting coin collection.
General Bullmoose might not understand that, but the rest of us do.
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