by Adam Crum
I have finally come down enough from the high of participating in the auctions at the 2005 Florida United Numismatic (FUN) Convention to take an objective approach to summing up what was an historic, week-long event.
After weeks of communicating, prodding and pumping information from colleagues, competitors and clients, we sat down and structured a plan of action we thought would provide value for our company and clients. Excited from a record year in 2004, and with the prospects for 2005 even greater, I was anxious put the plan into action and prepared to invest a sizable sum in acquisitions for inventory. With hundreds of thousands dollars already guaranteed by eager customers, I began calculating what I thought were prices aggressive enough to win most of the type of material we needed to satisfy our demand. I was confident and ready when the games began!
Then the “fun” started. It was Sunday evening, the first of five auctions got under way and the hammer began to fall. But not before a number of record prices were set and the first $1,000,000+ hammer price in what was expected to be a week of many. I was astonished when the coins I was ready to purchase went for as much as 100% more than I was prepared to pay. But I figured the week was young, and I decided to be patient and let the impatient, less-experienced bidders have the first pass, and so I walked away from the first round empty-handed. Not to worry, I told myself. After all, the week was young and the best was yet to come. I was sure I had figured the market correctly and my confidence remained high.
So there we were, round two, with the room tense and bidders excited about some historical coins coming up for sale for the first time in decades. I was sure this would be a night I would remember with fondness for the rest of my life. To remain anonymous, I decided to bid on the phone and maybe increase my potential of placing a few more winning bids. But after the first dozen or so lots went under the hammer, I realized once again that the prices were going to be more than I had counted on. Being a big fan of the History Channel’s “Mail Call” program, I thought of “Gunny” R. Lee Ermey and his words, “adapt and improvise” came to mind. I threw out my notes on the prices I wanted to pay and concluded that the market and liquidity were higher than I had counted on. So, with this new realization, I said under my breath, “bring it on,” and I was ready.
I said to my colleague sitting next to me, “we are going win one these doubloons even if we have to pay $2,000,000.” When the bidding started, we were excited. The first doubloon opened at $1,000,000 and we confidently jumped in. “1.1” we said, and with no hesitation, others yelled out “1.2”…“1.3”…and then, “1.4.” Before we knew it, we were yelling “$2,000,000,” and the crowd moaned. Then there was a little hesitation, and then someone else yelled “2.1,” and we sat there, stunned, with our mouths open. The conductor said, “2.1, going once.” We just looked at each other. “2.1, going twice.” Our mouths continued to hang and then, “SOLD, for $2.1 million dollars.” The room erupted in applause. Just so you know, the $2.1 million winner pays a 15% buyers fee, so the final price was $2,450,000 quite a sum for a coin that most of us experts figured would bring in the neighborhood of $1.5 million. Not to worry, we told ourselves, there was still one more to go. But that coin opened at $2.1 million and quickly rose to a final price of $2,990,000. Once again, we were shut out. But the night was still young and there was no time to pout. There were still coins to buy, and this night was going to be great.
After all was said and done, I was sure I would buy a number of much-needed Type I Double Eagles that were on the schedule. I looked at my colleague and said, “I think we’re going to have to be prepared to pay maybe 15% to 20% more than we initially thought.” He agreed, and once again, we were ready. The night was progressing quickly, and for one lot after another, we heard ourselves saying, “we’re out!” Prices this night were just too strong for my liking, and I thought to myself that many of our clients were going to love these results. As I was crawling into bed at 2:30 AM, shortly after the last hammer fell, it dawned on me that we had only spent $15,000…on a night that we were certain we’d spend $2,000,000.
Lying there, I remembered a night in 1988 that I’d witnessed a coin sell for $288,000 and said to my friends over dinner, “hey guys, one day we are going to see coins selling for a million dollars,” and we’d all laughed, only half-believing that would someday be true. But on this night, I laid there and reflected on the six yes six! coins I had just witnessed selling for more than a million dollars each, one of them at $2,450,000 and another at $2,990,000! My emotions were all over the board.
I said to myself, “We have two more nights of auctions with some great coins up for grabs, and after tonight, there are going to be some value plays. I have to be prepared.” Well, to make a long story short, we were a little more successful from that point on and were able to invest approximately $500,000 or so in some truly great coins. But on my flight home, I spent a lot of time reflecting on the week’s events. I wasn’t exactly sure what to make of it all, but one thing was very clear: The coin market today is exceptionally and phenomenally STRONG!