In an email newsletter to customers on December 8, 2022, dealer Harry Laibstain provided this great overview of recent hobby history, from grading service changes to the entry of the billionaire collectors. With permission, we're republishing it here with minor edits and format changes.
As yet another momentous year winds down, it seems each more historic than the last, we are left to wonder, can we top that? Looking back over the last two decades I can still recall how the bargain basement prices at the beginning of 2000 would very slowly pick up steam for the next several years until 2003. It was then that I realized the coin market had moved up several notches with growing participation and more money in the game than ever before. Innovations in grading including plus designations by PCGS and the growing popularity of registry collecting had spurred interest and growth in the industry.
The Bull market that begin in 2003 would roar until 2014. It would be briefly interrupted by the real estate debacle created by some overly creative financing and other questionable practices. Between 2008 and 2009 stuff really hit the fan. These events would overshadow the start of John Albanese's CAC service in 2007. However, it was this innovation in certified coin grading after the financial bedlam of 2009 that picked the market up by its bootstraps and propelled the second chapter of the Bull market that had begun in 2003.
From 2009-2014 CAC approval was so successful bringing new money in that the market went up a bit too fast. CAC pops were still low and supply was straining against the amount of money pouring in. After the 2014 Chicago ANA, it was clear the market would retreat. But CAC continued to gain momentum and bring in collectors of all stripes including the Billionaire class. This demographic was headed by one collector in particular. Dell Loy Hansen would enter the coin market during this period. His mark on the coin business would be historic. He initially set out to create an Eliasberg-like collection but it was soon clear that he would surpass even that lofty goal. His ambition knew no bounds. His deep pockets allowed him to purchase incredible assembled sets and many of the most iconic and storied trophy coins in Numismatics. 1804 bust dollars and 1885 trade dollars were piling up in his vaults. Online commentators struggled to keep pace with the collection. As the coin market waffled and waned in the early teens it would be Dell Loy's influence that would save the industry from a stagflation-style market.
I have no empirical data to support my theory and the timeline may be a tad fuzzy but I was there. As a national participant in the rare coin market for 42 years I saw and understood what happened. The incredible demand from one collector kept the market humming and attracted new participants. I was doing more business than I expected during a period when I thought the bottom might fall out. It would soon be clear the combination of Dell Loy's passion for coin collecting mixed with the successful innovation of CAC by John Albanese would be the catalyst for the market we have today.
CAC's power was the confidence it gave to new well-heeled collectors to invest in the product. Very similar to what took place in 1986 when PCGS started the revolution in certified coins. John and Dell Loy would understandably become acquainted and quite friendly. I do not fully understand the effect the pandemic has had on the coin market but its influence would
pile on top of the CAC/ Dell Loy connection and send us to unknown, unexpected, and unbelievable results. Thus the perfect storm in numismatics would be CAC, Dell Loy Hansen, and a worldwide pandemic.
In auction after auction for the last year and a half we have broken, and in many cases shattered, records. This year's Stacks Bowers ANA sale included an old time collection of Dahlonega gold coins that had been assembled by Georgia dealer and friend Al Adams for one of his best customers. I was familiar with the collection and had discussed it with Al in the past. Neither of us could ever have imagined how it would turn out. After over 50 years in the business Al experienced something he could not quite believe. None of us could. The 1854-D $3 MS62 CAC Al purchased for $188K in 2016 brought $528K in 2022. The 1856-D 2.5 Al purchased at Stacks for $47K in 2015 brought $144K in 2022. A testament to this market.
Another unbelievable example is the Stacks Bower's hoard of gold coins which they call the Fairmont collection. They have been selling portions in their sales for several years. Starting with a sale in Baltimore April 2022 the increases in better date Liberty gold went over the top. They sold an 1875 $5 liberty PCGS AU53 CAC for 480k. The only other CAC 1875 $5 was also a 53 that I sold twice. First for 230k in 2012 and most recently to a prominent dealer in 2018 for 225k after it languished on my list for months. Coins like that don't languish today.
We are in new territory. New records are being established, but not nearly enough coins have traded to establish the current levels across the board, and at this point it's guesswork. The Stacks Bowers collection did not include 2-1/2 Liberties for instance. So most dates have not been exposed to their real potential. While better date gold has been well publicized, better grades have not. Additionally, significant collections in many other series have yet to hit the auction block where maximum prices could be attained.
As an independent seller, I can only ask and get so much over old levels on coins that have not been traded publicly. Because of that, I don't think we are done here. Opportunity abounds in the current marketplace. Many issues are still bargains at premiums over their late teen APRs. High-quality 10k-150k coins that trade infrequently represent good value and I'm buying heavily in this price range.
Now that's a good story about the marketplace and it is fully the experience I have had, but something new and important is happening as we speak. Since the buyout of both major grading services, PCGS and NGC by corporate entities, John Albanese has decided to take CAC to the next step to a full-service grading company with their own holder. Although John assured me he will be stickering PCGS and NGC coins in New Jersey for some time to come. He is growing the (new) company located in Va Beach only thirty minutes from my office to compete head-on with PCGS and NGC.
In his own style of corporate building blocks, he has taken on over 100 partners from across the industry. It should come as no surprise the largest is Dell Loy Hansen in addition to many other well-known names in the business and collecting world of numismatics. It's not the least bit ironic that the two most innovative (but different) forces that have shaped the marketplace in the last ten years are joining those forces. With a large supporting cast, to further promote their interests and influence on the industry. I don't think there is a better time to create their vision of the future of numismatics.
To this end, they will be following the philosophy of John Albanese who has the longest resume in the industry for starting grading services and a lot more. John has always believed the collector comes first. He believes that if collectors prosper we all prosper. He has been a tireless advocate against grade inflation and has used the power of his stickers to push back against those forces. Ask him and he will tell you, this move is yet another attempt to protect the marketplace we all thrive in from behavior that would threaten it in the long run.
By invitation, I have invested with John as some of my associates and clients have done. The coin community is a small tight-knit group that all do business together. We will still submit, buy and sell PCGS and NGC coins. We have many friends and associates affiliated with these companies that are trading their products. We expect the market will continue to demand all types of holders and sort out the valuations of each based on the holder and the quality of the coin. That's how we do it now and it's how I suspect we will do it in the future.
The question at the beginning of this piece asked, how can we top 2022? You have the answer. Innovation in the coin business has always taken us higher. From David Hall's vision of PCGS in 1986 to John Albanese's NGC in 1987 to his CAC stickering in 2007 and now CAC as a full-fledged grading service in 2023 we have a good look into the future.
The latest estimate of coin grading to start in CAC's offices in Va Beach is toward the end of the first quarter. Rome wasn't built in a day. The way the supply chain works today I never expected this to happen as quickly as was first predicted. But it's going to happen. When it does HLRC will be eager to submit coins for grading or crossover to the New CAC for you. We will be sharing information in our newsletters as we get it so stay tuned. It's going to be another busy year in coins and I predict 2023 will be even more surprising than 2022.
Harry will be attending the January FUN show - stop by and say hello at Table 424.
To visit the Harry Laibstain Rare Coins website, see:
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BOWERS SERIES BOOK,
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