The
Economy, the Auction Market, and Heritage Coin Auction
By Heritage Auctions on Friday, October 10, 2008
Filed Under: Heritage Auction Galleries, Dealer News, Press
Releases
Dallas-based
coin (Heritage Auctions), collectible and fine art auctioneer
addresses the safety of its business, of the collectibles
market and the fluctuations of a wild economy.
DALLAS, TEXAS: In a letter sent via email
to clients on Friday, Oct. 10, Heritage Auction Galleries
reassured its consignors and buyers about the safety of the
company’s business, the liquidity of its assets and the steady
hand of its forward-thinking model.
As the world markets have reeled, the principals
of the company have been contacted by members of the press,
the public and clients alike for a statement on how the financial
sector problems are affecting the collectibles market. The
full text of the letter follows:
We’ve been fielding a high volume of calls
lately from potential consignors and buyers wondering how
a tumultuous world economy is affecting the auction business
in general, our business in particular, and their investments
specifically. So we felt it appropriate to take a few moments
to explain to you, our valued clients, exactly how we at Heritage
are experiencing the current economic climate.
People are panicked in many corners — and
rightly so — but not here at Heritage. We have weathered economic
upheavals before, and for years we have planned for days like
these. We’re now diversified across 26 categories. We’ve learned
to see that uncertain economic times mean increased auction
activity across the broad spectrum of our collectibles divisions
by both buyers and sellers.
Collectibles, especially coins, remain extremely liquid. Over
the last three months, as Wall Street has been reeling, our
auction and private treaty sales have risen steadily. Every
day people who are in businesses where capital is no longer
readily available turn to us for liquidity. We offer cash
advances to stem the tide of an emptying bank account, and
a 30+ year record of paying every one of our 45,000 consignors
in full and exactly on schedule. Never before have we had
so many quality consignments in-house for upcoming auctions.
Conversely, our buyers continue to vie aggressively
at auction for coins and collectibles they love, knowing that
they are diversifying against inflation, and through that
diversification, protecting their holdings of paper assets
for the future. In fact, we cannot remember a time when our
clientele has been more engaged, or when we’ve seen as many
new and active buyers.
Our $35 million September 24-27 Long Beach
Expo auction of coins and currency registered more bidders
(over 14,000 of them!) than any auction in our history. Our
Entertainment, Space Memorabilia, and Natural History auctions
over the past 10 days were consistently strong events with
above average sell-through and very happy consignors. And
here are some hard and fast facts on Heritage weekly coin,
currency, movie posters, comics and sports auctions for just
the last quarter (i.e. the last 30 days versus the 30 day
period starting four months ago):
*Our number of successful bidders is up by
11.5%.
*Our number of lots actually sold in each weekly auction is
up 39.95%.
*Our average lot value is up 8.49%.
*Our total sales volume is up 43.34%
Heritage remains firmly rooted to a business
model of transparency, honesty and fairness. We also believe
in our consignors, our buyers and our expert staff. Economic
struggles are like a Chinese finger trap: Panic and it tightens,
but stay calm and it slips right off. Coins and currency may
not garner the headlines, but our market has held steady,
and risen in many areas, even throughout these difficult months.
Coins in particular, and collectibles in general, are a wonderful
hedge in a market like we’re seeing now. This we know from
experience and study of history.
Rare coin prices, along with many other collectibles,
actually rose during the Great Depression, as well as during
the recession and accompanying real estate and stock market
collapse of 1974. During the oil crisis of 1979, we saw coin
prices rise dramatically, rewarding owners at a time when
their stocks and many other assets were plummeting. Many of
our clients saved their houses or businesses with funds from
prudent coin investments made with us that we sold for them
at auction in early 1980. And the 2 years following the 1987
stock market collapse saw rare coin prices more than double,
on average (source: PCGS 3000 Index).
Collectibles markets are often counter-cyclical
to widespread turmoil, meaning owners can actually profit
when they need money the most. At worst, these categories
are generally only minimally affected, in the short-term,
by Wall Street’s wild fluctuations. And coins and collectibles
have a steady record of bouncing back even if their value
takes a hit.
If you wish to sell, Heritage will guide you
through the process to achieve the best possible return on
your investment, hard work and dedication. We can also work
with you on 1031 exchanges to minimize taxes on your gains.
Fortunately, Heritage is prepared for whatever
the future brings. We keep our focus and run our business
not based on emotion but on sound business principles and
our decades of experience in this industry. If you’re taking
this journey of collecting, then rest assured, we’re right
here with you. There’s nowhere else we’d rather be.