Why do auctions like Heritage’s second sale of Eric P. Newman’s
At times it may seem like coverage of the rare coin market can
draw too heavily on auction results. However, auctions provide a
useful, relatively transparent lens to view the market through. The
key thing that make auctions a useful and relevant gauge of the rare
coin market is that the prices paid are documented.
Auctions like Newman II can be dissected into three stages.
First, in the initial stage, dealers and collectors view the coins
and expectations are set. News coverage is generally contained within
the coin collecting realm.
The second stage is the actual auction, where the coins are sold
and, as in the case of the Newman auction, expectations are generally exceeded.
Typically, the primary mainstream news coverage happens after the
sale when high prices realized can provide a useful angle for
reporters. For Newman II, the mainstream story was that a collection
assembled more than 50 years ago for $7,500 brought $23 million. It’s
a short, easy message.
The hope is that stories like this attract people to coins as a
collectible investment and that people will start learning about coins
and wanting to buy them.
In the third stage, the coins enter private collections or dealer
inventories. Either way, eventually they enter the marketplace; some
may just take longer to get there.
The market velocity (the speed at which these coins return to
market) has been slow for Newman’s coins.
Only a handful have shown up on eBay and few are seen in dealer
price lists. That means that most were likely purchased by collectors,
which puts pressure on the prices for the few really great Newman
coins available now on the secondary market.
The Newman Collection has another interesting angle:
accessibility. With more than 400 lots selling for less than $500,
including some at less than $100, this was an auction that nearly all
collectors could participate in.
A typical collector coin from Newman II, an 1894-S Morgan dollar
graded About Uncirculated 58 with a green Certified Acceptance Corp.
sticker, once in the Col. E.H.R. Green Collection, sold in a Dec. 2
eBay auction for $635. At the Newman auction Nov. 16, it brought
$528.75, which was consistent with comparable non-Newman examples. ■