A Look at the People Composition of the U.S. Coin Market



We are all seeing growing numbers of our clients collecting coins by “type” – buying just one exceptional coin from us to represent an entire series, rather than acquiring one example for every date and mint within the series.

Collectors, like coins, come in types. And the better we understand the differences in these types, the more we will appreciate what makes the coin market tick. That, in turn, will enhance our ability to nurture, grow and expand our marketplace.

How many people collect U.S. coins? There’s no way of knowing for sure, but the answer clearly depends on how you define “collect” – and “collector.”

The United States Mint has estimated that 120 million Americans are looking for, and setting aside, the 50 States Quarters – the special Washington quarters with reverse designs honoring the 50 states of the Union. Are all of these people collectors? Certainly not. They can’t be dismissed as irrelevant, though, for many of them are purchasing peripheral hobby items in connection with the quarters – and some of them have gone on (or will go on) to be avid, full-fledged collectors of coins beyond this series.

Indeed, this huge pool of potential recruits is all but sure to expand our hobby’s ranks in years to come, just from a statistical standpoint: Even if only one-half of 1 percent end up collecting coins on a regular basis, that translates into more than half a million dedicated hobbyists we probably wouldn’t have had without the statehood quarters. Best of all, many of them are youngsters – and in their case, the benefits will last for generations.

Just who are the people who buy and sell coins? What are the components of our marketplace?

It’s difficult to compartmentalize the buyers and sellers in our industry. Buyers and sellers of coins, like coins themselves, resemble snowflakes: Each one is different. Some general observations can be made on the subject, however.

I talk to thousands of people every year and get – and read – hundreds of e-mails, and based on my contacts with the public, I would divide most buyers and sellers of coins into four primary categories: mass-market accumulators, casual collectors, mainstream collectors and serious collectors.

Let’s examine these groups one by one.

Mass-market accumulators – all 120 million of them – come from all walks of life and socioeconomic levels. They collect America’s state quarters and they write e-mails asking about their two-headed nickels (doctored coins with “heads” on both sides). They’re intrigued by the possibility of finding 1943 “copper” cents in their pocket change. They buy mass-market books, but they don’t buy albums or specialized, sophisticated books – the kind you’re likely to find only in a coin dealer’s shop.

Some dealers have little patience with mass-market accumulators, disdaining them as “tire-kickers” – browsers, not customers – when they turn up at coin shows from time to time. But this is a misguided attitude. As an industry, we need to reach out to this group. This avenue is not just a one-way street. On the contrary, it’s Main Street U.S.A.

I feel a personal bond with Main Street collectors, for over the years many thousands of my books have been sold to mass-market accumulators. And though I agree that the vast majority never advance beyond the entry foyer of the coin market, I can attest from firsthand experience that some walk in and make themselves right at home. Precisely because these accumulators do come from all walks of life, and all socioeconomic levels, a fair number do become casual collectors – and every now and then, one of them becomes a mainstream collector or even a serious collector spending millions of dollars on coins.

We need to encourage these numismatic novices, rather than drive them away through indifference or downright hostility. True, we may spend lots of time answering their questions and then see them spend little or no money buying our coins. But it would be wrong to conclude on this basis that these people are just more trouble than they’re worth. On the contrary, we should look at this as a chance to plant seeds for future growth. Not every seed will take root, but the more seeds we plant, the bigger the harvest will be. And if we don’t act now, while the statehood quarter program is giving us such fertile ground in which to plant those seeds, we may find ourselves later with a disappointing crop and much more barren soil.

Casual collectors are fewer and farther between than mass-market accumulators, but they are hardly rare – or even very scarce. I estimate there are several million casual collectors in the United States. Many of them buy proof sets and other numismatic products each year from the United States Mint. Some pick up a copy of COINage magazine at the newsstand whenever it catches their eye. On occasion, they may even drop in at a coin shop, if there is one near where they live.

Casual collectors may attend coin shows, and during their walks around the bourse floor they may spend a few hundred dollars on circulated coins to plug the holes in their Lincoln cent or “Mercury” dime or Washington quarter albums. They also may make purchases at online coin sites, and may even buy a certified coin or two. For the most part, however, casual collectors haven’t taken time to gain an in-depth education about coins, either through reading books or from practical experience, and this inhibits their growth within the hobby. They don’t really have a game plan and don’t possess the tools they need to get the most out of coins.

This is the breed of collector that keeps the U.S. Mint’s proof set program afloat. Like many dealers, I have had numerous visits from casual collectors lugging an accumulation of 20 or 30 years’ worth of proof and mint sets, possibly along with bags of “junk” numismatic silver. Inevitably, their expectations far exceed the actual value of their holdings.

A little knowledge is a dangerous thing, as Alexander Pope once observed, and casual collectors illustrate his point. They know how to buy coins, but not always what, when, where or why to buy, since their knowledge isn’t usually accompanied by wisdom. Still, they play a significant role in stimulating wider interest in the hobby – and broader activity in the marketplace – through their ongoing involvement and enthusiasm.

Mainstream collectors may have started out as casual collectors, but they have gone to school and graduated with honors to the next collecting level – and that next step is a big one. It’s the one that separates window-shoppers and browsers from serious buyers and sellers in our marketplace. Education is the master key that opens the door to this more exclusive inner sanctum.

There are perhaps several hundred thousand mainstream collectors. Some of them subscribe to Coin World or Numismatic News. Some surf the Internet, or get catalogs from mainstream auction companies such as Stack’s, Heritage and Auctions by Bowers and Merena. Some of them belong to the American Numismatic Association. Mainstream collectors may spend only a few thousand dollars a year, but they understand what they’re buying and make educated purchases. And this, combined with their formidable numbers, makes them a group to be reckoned with.

Coin World lists its current circulation at just over 89,000, while Numismatic News has its figure listed at 32,000. Those numbers consist in large measure of mainstream collectors. Their regular, ongoing purchases of coins from mail-order dealers go a long way toward making these weekly coin newspapers successful – and, for that matter, possible at all. COINage and Coins magazine, the leading monthly coin magazines, depend more heavily upon newsstand sales, so their readers include a higher proportion of casual collectors. Latest available circulation figures are 100,000 for COINage and 71,460 for Coins.

By comparison, Guns & Ammo, the No. 1 newsstand magazine for gun enthusiasts, reports a monthly circulation of 607,971, followed by Shooting Times at 285,059 and Handguns at 157,016. Both of those publications also are monthly magazines. Clearly, more Americans are interested in guns than in collectible coins – but given the frequent references to how “powerful” the gun lobby is, coin collectors constitute a force to be reckoned with, too, based upon the sales of their leading periodicals, which really don’t trail the gun magazines’ figures by an inordinate amount. And much of that power is wielded by mainstream collectors.

Gun owners’ clout is reflected much more dramatically in the membership of the National Rifle Association. Latest figures show that American Rifleman, the NRA’s official monthly journal, which goes to all members, has a circulation of 1,244,714. By contrast, Numismatist, official journal of the ANA, lists its monthly distribution at a drastically smaller 30,000.

(These circulation numbers are from Bacon’s 2001 Magazine Directory, and numismatic publicist Donn Pearlman, president of Chicago-based Minkus & Pearlman, assisted in analyzing them.)

Serious collectors stand out from mainstream collectors because of the money they spend and, in some cases, the intensity of their obsession with rare coins. There may be only a few thousand people in this group, but their impact on the marketplace is exponentially higher than their numbers might suggest.

Serious collectors have what longtime dealer and astute market observer Julian Leidman calls a “project mentality.” And since money plays such a major role in making them serious collectors, many of the people in this category may be famous, successful celebrities in other walks of life. Few of them seek renown, though, as collectors: Most are extremely circumspect about their coin endeavors, keeping them secret from all but the dealers with whom they conduct their business. One client of mine, a major motion-picture mogul in Beverly Hills, won’t even talk to me on his cell phone or cordless phone. He’s afraid he’ll be overheard.

Serious collectors often have exceptional mental capacity, extraordinary ability to concentrate and unparalleled drive to complete the task at hand, even if it takes decades. They may have used this drive to run for public office on the national scene or build a real estate empire or achieve a position of power in the financial world. Applying it to coins, they use the same drive to complete their collections.

In almost all cases, serious collectors assemble their collections on their own – flying solo, so to speak. They speak to dealers, of course, and they may attend shows and auctions. But in the final analysis, their collecting activities are theirs and theirs alone. There are a few husband-and-wife collecting teams, but these are exceptions. Typically, the serious collector hunts for rare coins as a lone wolf – with passion but with privacy, away from the spotlight that all too often intrudes upon him or her in other pursuits. Coin collecting is an intensely private activity for many otherwise very public people; indeed, it is a way for them to escape that intrusive spotlight.

Almost without exception, when serious collectors reach their hobby goal, they’re ready to set their coins aside and pursue another endeavor. The highest-quality U.S. type set I’ve ever seen or handled, the Morgan Supergrade Collection, was sold by my client, Dr. Craig Morgan, soon after he completed the set. Forming this collection was a labor of love for Dr. Morgan; it took him years and years to obtain the coins. You would think that after completing it, he would have kept it for a while and enjoyed it. It was a dream that came true. But not in Dr. Morgan’s eyes: Mission accomplished, end of dream. Dream come true, time for another dream.

My admiration for serious collectors doesn’t diminish my appreciation, on a different level, for mainstream collectors. They play a vital role in keeping the coin market healthy through the day-in, day-out transactions in which they buy and sell meat-and-potatoes collectibles. Realistically, however, most mainstream collectors can’t possibly compete for the rarest and costliest coins with wealthy buyers who complement great passion with deep pockets. You can’t afford gem proof Lib $20s on a shoestring.

Over the last quarter-century, some in our hobby have come to regard “investor” as a dirty word. In the late 1980s especially, numismatic purists deplored the entry of Wall Street money into the coin market, complaining that investors with little knowledge of coins were driving up prices unreasonably and, in the process, driving out true collectors with limited budgets.

The image of well-heeled “barbarians” invading the rare coin marketplace may have had a modicum of validity at one time, but it certainly doesn’t reflect the serious collectors – yes, I said collectors – with whom I have done business in recent years. These clients may have had limited knowledge of coins when they first began acquiring them, but they soon overcame any deficiencies by reading voraciously, consulting and working closely with numismatic experts, analyzing the marketplace and then pursuing goals based on knowledge that would be the envy of the most advanced collector.

It’s a gross misconception that just because someone spends a great deal of money on coins, that person must be an investor, not a collector. This simply isn’t true. The affluent clients with whom I deal today, and with whom I have dealt in the past, place low – or no – priority on profit appreciation. They have a project mentality; they’re goal-oriented. They do it for the history. They do it for the fun. And they really don’t care if they make or lose money in the process.

Unfortunately, there’s still a great deal of animosity between haves and have-nots in this field. A lot of the have-nots are running around calling the haves “investors” and implying that they should be ostracized for this supposed infraction. On the contrary, serious collectors – with serious budgets to match – are an indispensable part of the current coin marketplace, helping to invigorate the high end of the market while other collector types keep the foundation firm and the lower levels bustling with activity.

As the saying toes, it takes all types.

Statehood quarter enthusiasts … Lincoln cent collectors … Morgan dollar specialists … proof gold aficionados – all play essential parts in making the U.S. coin market the busy, diverse, exciting place it is. All of them are integral components of the marketplace’s mosaic.

How fortunate for our marketplace that its type set of collectors is complete!

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