Billionaire Coin Collectors Competing for “Best of Breed” Coin Sets

Demand from High-Net-Worth Collectors is Impressive

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1794 dollar
$10 million was the price tag when Bruce Morelan purchased this 1794 Specimen Flowing Hair dollar at auction. (Photo courtesy PCGS.)

By Mike Fuljenz

Mike Fuljenz

An old adage is that coin collecting is “The Hobby of Kings,” since only kings could afford or have the power to seize the top quality rare coins made of precious metals. Today, that slogan has changed to become “The Collector is King,” with the serious collector of rare coins driving up prices. 

In more recent times, celebrities such as Wayne Gretzky, Buddy Ebsen (1908-2003), Penny Marshall and Jerry Buss (1933-2013) have collected rare coins, but collectors such as the American financier Louis Eliasberg (1896-1976) have set the standard for a lifetime devoted to serious collecting of the best-known specimens of U.S. coins.

With the rapid growth of global wealth since the end of the Cold War, the annual Forbes census of global billionaires has grown from 140 in 1987 to 2,208 in March 2018. Out of 2,208 billionaires, it stands to reason that at least 1% of them would become fascinated by “The Hobby of Kings.” And so I bring it to your attention that four billionaires, including real estate guru Dell Loy Hansen, are currently competing for high-quality rare coins in the coin market. Hansen earlier this year bought the “Hall of Fame Collection,” the famed Liberty Seated dollar set that had been carefully put together by Bruce Morelan, who himself was the subject of much fanfare when he purchased the phenomenal 1794 Specimen Flowing Hair Dollar at auction for over $10 million ($10,106,875 to be exact). It included coins previously residing in famous collections, including those of Amon Carter and the Garrett family.

These ultra-high-net-worth business owners didn’t get to where they are by being passive. They are well-informed, highly competitive, goal-oriented collector-investors. At least two of them are trying to do what Eliasberg did and build complete sets of every coin from the U.S. Mint in as high a grade as possible. 

This competition for high-end coins will fuel a resurgence in demand for all coins that trade from about $25,000 and up. Besides these few billionaires bidding for best of breed coins, other prominent collectors are building registry sets with either PCGS or NGC coins for “top of pop”– the highest graded coins according to the lists generated by PCGS and NGC of coins they certified. 

Many of these collectors want their coins to be verified by the Certified Acceptance Corporation (CAC) as well. CAC is a verification service that affixes green holographic stickers on the grading service holders of PCGS- and NGC-certified coins that meet its standard for “solid for the grade.” Certified coins that “exceed” CAC’s standard receive a gold CAC holographic sticker. The service was founded by John Albanese, who is its chief verifier. Albanese founded NGC and was one of the original PCGS partners.

We have already seen examples of how mid-range rarities have been actively bid up by multiples of their expected price at auction. Recent auctions have seen coins such as a Booker T. Washington (BTW) commemorative half dollar in MS-67+ bring substantially more than what experts expected the coin to realize, due to there being only a few existing in that grade and none finer. One example was a CAC 1951-S BTW half dollar graded by PCGS as MS-67+. The coin was listed at $2,600 in PCGS’s price guide, but it brought nearly five times as much, $12,500, in a Great Collections Auction in which 48 bidders participated. It had a graded population of only three, with none finer. Also bringing higher-than-expected auction prices are beautifully toned commemoratives and Morgan dollars. But be careful. One collector’s beautiful toning is another collector’s “nice, but not worth the premium” coin. There is a more subjective element to value with toned coins.

Some Billionaires are Also Buying Gold Bullion
Gold is up 1.5% through May 4, while the Dow stocks are down 1.85%. So gold is still beating stocks in 2018, and many stock market investors are getting nervous, as the historically “best” month of April was flat, and the historically worst six months for stocks (May to October) are just beginning. 

With the stock market flat and in danger of falling below its key 200-day moving average, and with interest rates rising (and bond prices falling), and currencies in flux, international billionaires are looking to the time-tested value of gold for wealth preservation. Last week, Naguib Sawiris, the second richest man in Egypt (second only to his brother), the chairman of Orascom Telecom Media and Technology Holding S.A.E, told Bloomberg that he sees gold heading for $1,800 per ounce, while the “overvalued” stock market will likely collapse. Sawiris said he is putting half of his $5.7 billion net worth into gold. 

Other billionaire investors are concerned about the market and are moving to gold. Jeffrey Gundlach, founder of DoubleLine Capital, sees the “explosive, potential energy” of a massively bullish $1,000 gain for gold to the $2,300 region, based on a technical base-building platform. “Gold is maintaining an upward pattern above its rising 200-day moving average, which is extremely good,” said this guru nicknamed the “Bond King.” “I’m not predicting it … I’m letting the market prove itself.” 

Mike Fuljenz, president of Universal Coin & Bullion in Beaumont, Texas, is a leading coin expert and market analyst whose insightful writing and consumer advocacy have earned major honors from the ANA, PNG, NLG, and the Press Club of Southeast Texas. His website is www.universalcoin.com.

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