Coin Show Musings
 

Went to the opening day of a small regional coin show yesterday afternoon, and was surprised to find a grand total of FOUR (4) Krugerrands in the whole house. Where are all the Krugerrands disappearing to ? Several dealers that I normally deal with also have noticed Krugerrands evaporating from the market.

At the show yesterday, I talked to a couple of my regulars who knew I was carrying a good deal of cash and a ready buyer of bullion as usual. As I started to leave the show, another dealer just about hurt himself trying to catch me at the door, and immediately started hawking $20 St. Gaudens as a "much better investment" than bullion "because they are over 100 years old and only $XXX more than Krugerrands". So I let him jump through the usual hoops and explain his position. He didn't do much convincing needless to say. After his hype session, I told him of a recent trade I had done with Krugerrands, selling a 100 pc. lot just under the last peak and buying back the same 100 coins plus 10 more on the last big dip into the $412 range using the same money. By the time we were through, he was getting pretty interested in my 50/50 program and giving a discusted glance at his $20 S.G.s In any event, he won't be trying to sell me any more numismatics.

Talked with one dealer who had a good quantity of one ounce gold eagles also at $10 over spot, making that a good play on a $2 spread between buy and sell to buyers like Tulving. Probably the tightest spread possibility I have ever seen on G.E.s

As usual, there was alot of silver on many different tables......90%, 40%, small ingots, rounds, etc. Very few dealers had any bullion gold though, most of what was available being concentrated with two or three dealers. May have been due to the current high price levels in general, but many stated that they just hadn't had any offered to them for sale recently.

From a numismatic standpoint, very, very little was trading hands, and one of my regular dealers said he hadn't been to a show since early last fall due to a lack of buying interest from dealers and public alike. He was having a hard time even justifying a $50 table fee at several regionals. "I've started leaning heavier on the bullion side and trying to liquidate the numismatics, but not having much luck because everybody else seems to be doing the same thing" he told me. "The bullion is liquid, but I may sit on the numismatic stuff for months without a buyer".

These coin shows are always a good indicator of the coin/bullion markets in general, and a great place to gain a little head-to-head trading experience. But keep your wallet in your front pocket....... :stickyman

Re: Coin Show Musings
 

Fascinating snippet of what Joe & Jill Sixpack are interested in.

Silver and gold are a tangible device and exemplification of wealth. I just re-inventoried my stores and have more than I thought. Nothing EXTREME, but satisfactory considering the silver I have amassed at 4.00 to 7.00 and the gold at 300.00 to 424.00. Haven't bought any for at least 8 years, but am looking at silver right now. I might pickup 60 ounces soon... and will finish off a couple of partial rolls of 90% to bring my face to 250.00.

Interesting times ahead, I think.

Re: Coin Show Musings
 

AuNuggets

Always glad to hear of someone�s experiences at a coin show, I haven�t been to one in years and don�t plan on attending one anytime soon. But I sure appreciate the heads up on how slowly the dealers are moving numismatics.

Re: Coin Show Musings
 

DAY TWO - SATURDAY

Back to the show on Saturday, I made a point of watching the individual table action (inaction?) between dealers and public to see if my original thoughts held true. For the most part, they did. While more material was trading hands, it seemed to be at extreme ends of the scale where the numismatics were concerned......well worn low grade type coins being bought by the casual collector on the low end, and some nice high grade early gold on the upper end. The usual staples of the trade, BU Morgan and Peace Dollars, 20th century material, and high premium semi-numismatic gold went begging with very little being moved. The show was literally packed at around noon on Saturday, showing alot of interest in general, at least to those curious and "just looking" folks. Knowing where the gold was concentrated around the floor made for an interesting observation a couple of times during the day. Looking out across the room, you could see an obvious concentration of people gathered in front of the cases containing alot of gold. At tables where there was little or no gold, there were far less lookers. "GOLD" still manages to catch the eye of the general public it seems.

Re: Coin Show Musings
 

Yeah, that's what I noticed. I saw only (2) Two Krugerrands at my last show and about (5) Five Maples. Plenty of St. Gaudens though with a few $20 Liberty coins here & there.

Wow, $50 ?!? .....Tables here in the D/FW are range from $100-$175 !!!

Probably a little more activity than the show you went to, but the most popular coins to sell/buy/trade were by far the Morgan Silver Dollars.:rolleyes:

Re: Coin Show Musings
 

Not unusual at all for bullion to be scarce in a .... coin show.

Shows are usually on weekends and the dealers who are ....competitive.... can not reach wholesale sources on weekends to replace inventory.

Thus, most bullion at shows will be from small dealers who may use it to decorate a skimpy inventory or perhaps have just bought some over the table.

But I never took ....bullion..... to shows. Too easy to get shorted on trying to replace on Monday. Bullion belongs to "trading days."

Re: Coin Show Musings
 

Perhaps this is the main reason and to add to it, the "gold" coins I usually see at shows are the rarer numismatic specimens commanding 2x the gold content or more !

Re: Coin Show Musings
 

Aunuggets...is there a thread that explains your 50/50 plan? If not... can you explain Thanks

Re: Coin Show Musings
 

I've been attending coin shows since the 60s, on both sides of the tables, and invariably there will be a few dealers trading bullion. I think what really keeps most dealers from trading bullion items is the low premiums or spreads involved, moreso than any lack of being able to replace stock. There are several national dealers who are readily available via the internet with fixed prices through the weekend based on Friday close, i.e. a weekend trading market. That wasn't always the case, of course, but fear of "being stuck" in a downward market seems to be more a cause of lack of interest than not being able to replace the coins or bars.

Randman, the 50/50 system I use in my bullion investments basically consists of holding a 50% position in cash and a 50% position in PMs "most of the time". This allows you to follow a simple regimented system that adds to your metals and cash holdings over time, even if you don't infuse more cash into your system.

To start, I split my metals and cash holdings to equal portions. When gold increases, I sell off enough to bring the cash ratio back to 50/50 (timed sales or periodic sales based on market moves and/or anticipations). Doing so allows me to sell into the higher end of the market. When gold goes into a correction phase, it allows me to buy back at the lower end, bringing the gold side of the split back to the 50/50 ratio. This also keeps you in a strong cash position to take advantage of "over-corrections" on the down side where you can buy more metals and sell back into the next spike, adding to your holdings in the process. "Volitility" is the only prerequisite for trading such a system, but generally a 10% move or more is optimum for greatest benefits. You may make only one or two trades a year, sometimes more. You also need to keep a close watch on the dollar/gold relationship, watching for obvious uptics or downturns in the respective markets to time your trades. It's not perfect by any means, but a good way to profit from your holdings rather than just taking the "buy and hold" approach.

Within this system, you can also play on the gold:silver ratio, trading back and forth according to the relative markets if interested. In any case, there are some creative ways of adding to your holdings rather than just sitting and watching the grass grow under your investments.

Here is a recent example of an in&out trade I did on the last big correction on the gold side. When the market started showing signs of "topping" in the $450 range (inverse dollar rally), I sold off 100 ounces of AU and bought the same 100 ounces back a short time later at $414, which netted an addition of $3600 on the flip, or another 8 1/2 counces of gold to what othersize would have remained 100 ounces if I had just rode the market up and down and back up again (buy and hold strategy). Normally, I will turn whatever "profits" are realized right back into the metals rather than taking the cash, and never but NEVER spend any funds out of working capital. The 50/50 adjustments can be done at most any time, but I like to try timing them with spikes or corrections to give a little more "umph" to the process. And there is really nothing special about the 50/50 PM/Cash ratio other than it gives you a good cash position to take better advantage of big corrections and always keeps you in a PMs position at the same time. This could just as easily be done on a 20% or 30% cash position with a relative 70% or 80% PM position. I've found that just "keeping it simple" is the easiest way to go, and often provides for better returns by keeping things flexable on both sides.

Hope this is of some help to you.......

Re: Coin Show Musings
 

Thanks Au

Only a couple of questions
1 Do you still make money after the vig? or does it matter?
2 Can we do this with both silver and gold or is silver too volitile?
3 Do you suggest trying to negotiate a better spread from the dealer?

Thanks for your time

Re: Coin Show Musings
 

With this system, we are basically shifting our positions toward the undervalued and away from the overvalued on a dollar vs. PMs play. You are only actually "making money" once the markets turn back in the opposite direction of your last trade. In other words, if the dollar is up and gold is down, we shift more cash toward the gold side. Once the gold side makes an upward move, we then shift from gold back to dollars, playing on the volitility itself. While there is no immediate "profit" at the exact time of the trade, there is once the respective markets reverse and move in favor of your last trade.

This can easily be done with gold or silver, though premium spreads, shipping, and handling costs put silver at more of a disadvantage, requiring larger percentage moves to be "in the money" on a trade. In gold, with low spreads and low relative shipping and handling costs (greater liquidity), a 10% move results in a decent "flip", while 10% moves in silver would mostly be eaten up by higher spreads and shipping/handling. The volitility itself is what makes the advantageous trades possible, but it is a matter of percentages depending on whether you are trading on gold or silver. With gold (I trade primarily Krugerrands due to tight spreads), moving $50k around the country is relatively cheap and quick compared to lugging around an equal dollar value of silver, about 116 troy ounces gold vs. almost 7000 ounces of silver. Logistics can get very expensive with silver.

Dealer spreads "might" be a little flexable if you do alot of business and have a good working relationship with one of the larger dealers. Most are pretty tight and unforgiving on small trades, but if you can do some asking around to find a good buy/sell source with very low overhead and a good standing reputation, that would be the place to start. Personally, I use more than one source on both buy and sell sides of my trades, playing them against each other. As an example, I can often buy Krugerrands at $3-5 over spot from one source, and sell back at full spot-$2 over to another, depending on regional market conditions at the time. This results in some extremely tight spreads on one ounce gold coins that are nearly impossible on silver, even disregarding the relative shipping costs involved. These days I seldom pay spreads of more than $5 oz. on the Krands, and when the timing is right, as little as one dollar. If I happen to hit a dealer that needs to move alot of coins quickly (many such cases with regular suppliers at coin shows), I occasionally get lucky and get into a negative spread basis buying the coins at under spot market. My willingness to buy even at those prices obviously depends on current market conditions, and more importantly, recent market direction. If gold has dropped for several days straight with a strong and rising dollar into a weekend, I sure don't want to buy into a falling market if things are looking questionable for the Monday morning open. After awhile, you develop almost a "sixth-sense" in what to expect according to the DX and gold charts combined with other pertinent information on different aspects of the economy in general. Still, for the most part where dealers are concerned, I like to have a few good sources on the west coast, mid-west or mid-south, and east coast to cover regional market demand and availability. It's a little extra work keeping up with several sources, but worth the trouble in the long run.

Re: Coin Show Musings
 

Au Nuggets: "Went to the opening day of a small regional coin show yesterday afternoon, and was surprised to find a grand total of FOUR (4) Krugerrands in the whole house. Where are all the Krugerrands disappearing to ? Several dealers that I normally deal with also have noticed Krugerrands evaporating from the market."

I think this may simply reflect a 'getting the most gold for the least money' attitude at a time when gold is 'relatively' high in price and gaining more attention. Fact is, gold is flat out unaffordable by many, and not having to pay another $20-25 is always prudent on a tight budget if one MUST have some. Also, the Krugerrand benefited from wide marketing in the beginning and many people still associate it with the words 'gold coin'.

BTW, thank you for taking the time to explain your 50/50 method.http://www.goldismoney.info/forums/i...shakehands.gif I don't have the cash or inclination to risk in trading gold-paper or stocks; generally I buy what little metal I can afford once in a while and forget about it, being in this for the long term. But I had wondered if there was a way to do occasional small physical trading that would be worth the trouble, on the seasonal prices of Au and Ag , and you have shown that it can be done. Is it better to use a local coin shop or an online dealer?

I'll have to give that a try, maybe later in the year - at least, sell some into the autumn rise and buy around this time next year, or wait for a worthy spike.