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My first job with The Perth Mint was as an Administration Officer in
their now closed Sydney retail outlet. It was an exact copy of the Perth
shop, both in fitout (jarrah cabinets) and stock (jewellery, bullion and
numismatics). I sat downstairs in an office doing, well, administrative
things, but it also involved cashing up the till and stock control. The fact
that I spent each day counting cash and gold bars and coins might account for
why I'm still in this business 14 years later - maybe tiny specks of gold
rubbed off the thousands of bars and coins I handled and it has seeped into
my skin.
Anyway, the shop was lightly staffed and the job somewhat boring so any
chance I got I would run upstairs to cover lunch breaks and the like.
I’d worked in retail while at university but this was a completely
different ball game. For example, you didn’t give refunds at the
original selling price but did “buybacks” at current prices. This
was investing, of the pointy end style. People would hand over $5,000 cash,
get a lump of gold, and then come back later and exchange that lump for
$4,800 or $5,200 cash, as the case may be. Unlike virtual numbers in a stock
broking account that you could rationalise away, the results of your
investment decisions were very physical and thus very real. I loved it.
Behind the waist high jarrah trading counter were some price screens with buy
and sell prices of the various coin and bar sizes and the last and current
spot price. Only two types of people would come in – those with cash in
their pocket or a lump of gold – and without fail they would all ask
“So where is the gold price going” or “What’s the
gold price going to do” or some such variation. It was a natural enough
question considering they were investing, not buying a pair of shoes, but a
minefield for me on the other side of the desk. I couldn’t give or
imply any sort of advice, otherwise they might be back if I got it wrong
asking for a “refund” and I’d be in trouble with the boss.
I soon realised that “If I knew the answer to that question, do you
think I’d be behind this counter” was a response that
didn’t go down too well. You wanted to do business with everyone, so
you had to say something and if you had any integrity, you had to say the
same thing to both buyer and seller, which would likely mean getting one
person’s business but not the other’s. What to do?
Eventually I hit upon two foolproof answers:
“The price has been going up”
“The price has been going down”
or if I felt a bit more talkative:
“Yesterday the price was $380, today it’s $385”
“Yesterday the price was $385, today it’s $380”
The beautiful thing about it was that it was factual (not advice or a
prediction) and amazingly, the same answer worked with both buyers and
sellers!
I found that if the price had gone up, buyers felt that they better get in
before it went higher whereas sellers felt they should sell at the top before
it fell. If the price had dropped, buyers felt it was a great opportunity to
buy at the bottom before it went higher but sellers interpreted it as the
time to sell before the price dropped further.
I realised that the person walking into the shop with cash in their hand had
already made the decision to buy, the judgement that the price was going to
go up, and would interpret my factual statement to fit their preconceived
view. Similarly, the person with gold in their hand had already decided to
sell, no matter what I said.
It was a lesson in human behaviour and retail psychology. It was also a
personal lesson to look at new information afresh and always challenge/test
my current theory or view.
Bron Suchecki
Goldchat.blogspot.com
Bron Suchecki has worked in the precious metals markets since 1994,
when he joined the Perth Mint as an Administration Officer in their Sydney
retail outlet. In 1998 he moved to Perth to work in the then fledgling
Depository division. He has held a number of roles since then in the
treasury, risk and governance areas of the Mint.
All posts are Bron's personal opinion and not endorsed by the Perth Mint in
any way.
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