Courtesy of Heritage Galleries & Auctioneers, Dallas, Texas.

By Jim Halperin

The coin world is poised once again for another roller coaster ride in the marketplace. As soon as the word was out that major Wall Street institutions would soon be entering the market, buyers began snapping up coins and driving up prices. Even as I write these words, I can watch the ANE listings ticking upward. Already, we dealers are calling our friends and relatives and telling them to get in on the biggest boom in numismatic history!
"Don't worry about which coins to buy," we say. "Everthing's going up! Just get in now, before the prices really take off!"

Whether the boom is just a boomlet or lasts for several years, we can be sure of one thing. It will eventually reach its peak, and when it does, the mad scramble to dump coins will begin. Many investors will lose money, and we won't be the investment darlings we once were.

The boom/bust pattern is certainly not unique to the world of rare coins. The psychology of it is firmly rooted in human nature. So, I'm afraid there is very little we dealers can do to prevent its periodic appearance. But we are lucky. After the market cools off, our faithful collector/hobbyists, will still accept us back.

We should not forget that rare coin investors enter the market for one purpose only: to make a profit. If they succeed, they may return. If not, they are unlikely to try again. So far, relatively few investors have fallen in love with rare coins enough to remain collectors.

Collectors, on the other hand, are the reason our market exists in the first place. They decide for themselves which coins are the most desirable according to their personal taste and knowledge. They are here to build, not merely to profit. When their collection is finally sold, they may be pleased if there is a nice profit. But that is not the only reason why they started their collections, or even why most decide to liquidate collections.

So, as we stand at the brink of another boom/bust cycle, let us not forget who makes our market possible. As dealers, we are in a position to help set the tone of the hobby. I urge that we begin to place more emphasis on long-term collecting, instead of short-term profiteering. In fact, these periodic invasions by outside investors are ideal opportunities to attract some of them as permanent residents in the world of numismatics.

This can be accomplished by reemphasizing the hobby element in our marketing and customer relations efforts. I make this recommendation not at the expense of the investor or of those who sell coins only as an investment. On the contrary, dealers who now deal only with investors have the greatest opportunity to cultivate them as long- term collectors.

If you are skeptical that investment- only dealers could ever become champions of the hobby and their customers converted to lifelong collectors, I offer one dramatic example of an investment-only dealer who has done exactly that. David Hall, the founder of PCGS, is a visionary in the truest sense. He always seems to be one or two steps ahead of the rest of us. I have known him for twenty years, and during that time, I have seen him almost singlehandedly effect profound changes in the hobby and the market.

His newsletter The Inside View, for example, no longer simply reports the profit potential in rare coins. Now, he also provides his investment-oriented readers with background information about the rare coins they are buying. He tells them why certain coins are so highly prized for their uncommon beauty or extraordinary historical significance. And he is very convincing. He really helps his readers understand why rare coins are so exciting and fun to own.

Why has he made this change in the editorial content of his newsletter? He tells me that now most of his customers are not buying just for investment any more. They buy coins they really like and enjoy owning. Many of them are forming real collections, not just portfolios. And David Hall's business is terrific!

A perfect example of a dealer who has supported and promoted the hobby over the years is Q. DavidBowers. It is almost impossible to read one of his many books or the latest issue of his company's catalog, The Rare Coin Review, without becoming excited about the history and romance of rare coins. I doubt that anyone alive has done more to attract new collectors to our hobby than Dave Bowers. His efforts on behalf of the hobby are a model for what we can all accomplish. Every dealer should make it a habit to read and attempt to emulate Dave Bowers' work.

By emphasizing the hobby of numismatics, instead of simply promoting the profit potential of rare coins, we dealers can actually invest in the future stability of our market. A broader base of collectors means a stronger foundation that protects the market from the wild swings of boom/bust cycles. Investors who become collectors are not going to desert the market when prices begin to drop. On the contrary, many will regard market corrections as an opportunity to acquire coins they couldn't previously afford. And a market solidly established on a firm and expanding collector base is the best market for all of us.

I hope we have learned from the past as we approach the next whirlwind of rising prices and heady profits. The hobby is and will remain our raison d'etre. And by emphasizing and promoting the hobby, we are assuring our own future with a stable market and satisfied customers.

Jim Halperin (ANA lifetime member #1306), is author of U.S. Coin Values and the N.C.I. Grading Guide and publisher of LEGACY Magazine. For over ten years, h e has been a contributor to the Red Book, Blue Book, and the Standard Catalog of World Coins, and a consultant to ANACS and PCGS. He is founder of the Numismatic Certification Institute and has been a full-time dealer and collector of rare coins for over t wen ty years. Today, h e is widely recognized as one of the foremost experts on U.S. coinage. He is currently a candidate for theANA Board of Governors.