The King of Coins & Collectibles - Van Simmons | #624
The Meb Faber Show - Better Investing Podcast Recap
Published:
Duration: 1 hr 11 min
Guests: Van Simmons
Summary
Van Simmons, president of David Hall Rare Coins, discusses the intricacies of the coin and collectibles markets, emphasizing the value of rare coins and collectibles as investments. Key takeaways include the importance of coin grading standards and the impact of market fluctuations on collectible...
What Happened
Van Simmons, co-founder of PCGS, explains the development of modern coin grading, highlighting the adoption of the Sheldon Scale which ranges from 1 to 70. This grading system became crucial for trading coins, standardizing the market and ensuring consistent valuation.
The episode delves into the bifurcation of the rare coin market, where high-end rare coins continue to see strong demand, while more common coins experience a market decline. Simmons emphasizes the importance of quality grading, as higher graded coins maintain their value despite increased supply of lower graded ones.
Simmons recounts finding a massive hoard of US gold coins, including every $5, $10, and $20 gold coin struck since 1850, illustrating the magnitude and historical significance of such discoveries in the collectibles market.
The discussion also covers the high liquidity of rare coins, with inventory turnover averaging every 11 days, indicating a robust market for these assets. Simmons considers rare coins undervalued and a sound investment for the future.
Simmons shares insights into other collectibles, such as Saint Gaudens $20 gold pieces and the Fugio cent, designed by Benjamin Franklin, which is regarded as the first American coin. He also touches on the popularity of vintage watches and the rising interest in sealed first-generation iPhones as collectibles.
Economic factors are considered, with Simmons noting that gold has been the best-performing asset over the past century, outperforming stocks and REITs. He recalls a conversation with Milton Friedman, who predicted that gold would eventually be worth a million dollars an ounce as currencies devalue over time.
The episode highlights the impact of AI technology on grading coins and collectibles, suggesting that advancements in AI can improve accuracy and efficiency in the industry. This could revolutionize the way collectibles are assessed and traded.
Simmons also discusses the role of major events like the Fun Show in Orlando and the American Numismatic Association's annual show in August, which are pivotal in the coin trading industry. These events provide platforms for showcasing and trading rare and valuable coins.
Key Insights
- The rare coin market is divided, with high-end coins maintaining strong demand while more common coins face market decline. This bifurcation underscores the importance of quality grading standards like the Sheldon Scale.
- Gold has outperformed other asset classes such as stocks and REITs over the past century, highlighting its enduring value as a hedge against currency devaluation. Milton Friedman predicted that gold could eventually reach a value of a million dollars an ounce.
- Advanced AI technology could transform the grading of coins and collectibles, offering more accurate and efficient assessments. This technological shift may significantly impact the trading and valuation of collectibles.
- Major coin events like the Fun Show in Orlando and the American Numismatic Association's annual show play a crucial role in the industry, facilitating trade and showcasing rare coins. These events are integral to maintaining market liquidity and interest.