Feeding Frenzy Comes Before Decline
April 03, 2009
Will we see packed highways and crowds of collectors at the May 14 formal introduction of the second 2009 Lincoln cent?
The odds are good because of the online feeding frenzy surrounding the first design of the year. It is hard to believe it can still be going on with a mintage of over half a billion coins, but it is.
Too many people seem to believe that if the new cents cannot appear effortlessly and instantaneously all over the country, they must be rare.
That is a financially dangerous assumption, but as long as the bubble of online enthusiasm lasts, it can go on for a while.
The Rail Splitter design will make its appearance May 14 at the Lincoln Amphitheatre in Lincoln City, Ind.
That's a ways off the beaten path, so collectors who want to obtain early supplies for face value will have to grab a truck and drive.
How many cents will the Mint have on hand that day? I don't know, but I hope the staff is planning for more than at the first launch.
There were no shortages on that ceremonial first day Feb. 12 in Kentucky, but some collectors who afterwards jealously watched the prices those early supplies brought online will hope lightning will strike twice.
This phenomenon itself argues against a repeat of the high prices, but perhaps only by degree. Second issues of anything often see much higher initial demand. However, this increased demand is from buyers whose only goal is to dump them as fast as they can for as much as they can get.
Only when the market later gets a sufficient sense of how much greater this early demand contributed to existing supplies does the correction set in.
Markets generally are not kind to the prices of second issues, but another feeding frenzy will likely occur before that happens.
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