Vol 05 No. 03 March 1991

I received a telephone call this month from a collector who wanted to sell his entire collection of ancient coins and put the proceeds into "something more rewarding - like CD's", It was not a case of flagging interest, this collector is an ardent student of antiquity and has become very knowledgeable in his chosen specialty. The decision to quit collecting was prompted by this individual's negative feelings about the coin market in general and his experiences with coin dealers in particular.

Without going into particulars, the essence of this dissatisfaction seems to stem from the profit motive coming into conflict with the purism of collecting. This conflict is a condition which extends far beyond the experience of the collector mentioned above. It is perhaps not as acute with some as it has become in this case. but most collectors and most dealers are well aware of the conflict.

At virtually every coin show, dealers are approached by collectors who want to sell., trade or upgrade material. If the collector paid $ 100 for a particular coin, he or she might find that dealers are only willing to pay a fraction of that amount to buy it back. This, of course, causes some very real consternation and leads to claims of profiteering and gouging. In actuality, there are a multitude of conditions which enter into the equation.

First, is the difficulty of fixing a "true market value" on any particular coin of antiquity. It is not possible to measure and compare with the same exactitude as with modem coinage. The market price (value) of any particular ancient coin is precisely the amount that a knowledgeable buyer is willing to pay, and the owner is willing to accept. Prices do vary, for a variety of reasons.

A dealer specializing in coinage of a particular area or period, for example, might ask a significantly higher price for a rare variety in that specialization than another dealer who is more of a generalist. Likewise. that dealer is likely to offer more to buy the same variety. Obviously, if one buys from a specialist and sells to a generalist there will be a disparity in perceived value.

Another factor affecting price is the availability of a particular type at the moment (supply and demand). The appearance or dispersal of hoards, sale of large collections, and release of dealer stock ail affect price on an unpredictable basis. Likewise, the popularity of a series greatly influences its resale value. For instance, in the current market, resale value of 1st century Roman coins in better grades is relatively high. Resale value of Antoniniani of Gordian or late Byzantine gold, on the other hand. is low.

A dealer, in order to survive, must carry a fairly broad range of coinage. This will include some issues with fairly high mark-up potential as well as some with very little margin. When buying, the prudent (and successful) dealer will try to maximize the profit margin when possible as a hedge against those issues where profit is minimal. It is an indisputable fac t that overhead in the travelling coin dealer's budget is substantial. There are a number of dealers that fail to cover expenses at any given show. Simple arithmetic provides the rationale and justification for buy-sell spreads that might tum off the collector.

Buying ancient coins with the expectation, or hope, that one will profit financially is not the same as collecting ancient coins. One can choose either path, but seldom do the two mesh completely. If one really considers the purchase of ancient coins as an investment, then esoteric and low-grade rarities are not the most likely choice. On the other hand, if one really loves the challenge of discovery, interpretation, analysis and adding to man's knowledge of the past, there is a world of adventure that cannot be measured in profit and loss.

It is sad when a collector becomes disenchanted with the market, because the relationship is really symbiotic. Without the market and dealer assistance, private collecting would virtually cease. Without collectors, dealers would obviously perish. Ancient coins have in many cases generated a profit for prudent and thoughtful investors. More often, they generate a profit for those handling the sale-just as stockbrokers' profit from the sale of stocks. These profits are not unfair or unreasonable. they are a part of the world market and a necessary component of trading. Danger Iies in the notion that all ancient coins are good investments or valuable entities. What is important is that buyers and sellers are aware of their interdependence and that buying decisions arc based on a foundation of knowledge. Where knowledge is lacking Caveat Emptor!

Thanks for the flood of mail this month, it was nice to hear from so many of you. It would be great to see this kind of response on a regular basis. Why not take a moment to let us hear your point of view?