The Latest Coin Collecting Craze

The following remarks are complete editorial and opinion. This is my point of view. You may feel free to disagree, discuss, or comment, but these views are mine and should be accepted as such. Facts are facts, these are not. They are opinions!

In the 1950s the collecting craze was roll collecting. Looking back, there is almost without exception a coin that is scarce in high grade. The hoarding of the rolls of coins cause the eventual death of the market because as soon as people stopped collecting rolls, there were approximately 40 or 50 nice uncirculated examples to choose from thus flooding the market.

In the late 1990s, the Statehood Quarters became the "flavor of the month". People were collecting them (and still do) in choice uncirculated conditions but others foresaw a potential profit and stashed them away by the roll as they were released with the intention of selling the singles later. This was also doomed because so many people were doing it that mintages actually increased due to hoarding. Today they can be had for little over face in choice condition. The latest recession caused even more of these choice uncirculated coins to enter regular channels.

Registry sets have also followed this trend of popularity. Currently they have a definite place in the hobby, make sense as a pursuit, and could eventually become a very mainstream way to collect coins.

But the one that gets me going, the one that puzzles me the most, the one that makes me scratch my head is the collecting of certified bullion coins. I just don't get it...

Let me say at the outset that this has nothing to do with registry sets. It has to do with certifying a coin that was minted to be traded as bullion. They come in giant boxes from the Mint and all of the coins are MS-67 or better.

Let's do the math:

MS-67, MS-68, MS-69, and MS-70. That's 4 potential grades. Your odds are almost certain of a choice gem BU coin unless it's been mishandled along the way.

So, that makes the "range of grades" a mere 4 grades. Almost any other coin has a range of at least XF to MS-70, making the supply of high-end coins much less common.

My point is this:

If the supply of these coins is all relatively close to MS-70, then they become nearly all valueless as coins. No rarity whatsoever. This is quite contrary to the sales pitches of the sellers that espouse the "rarity" of these certified versions. The only reason that the numbers are low is because there is no good reason to certify them!!!

Don't get caught up in this latest craze. The fact is that when you go to sell these, dealers will buy them readily... but at melt value. They won't pay ANY premium at all for these because the market perceives these coins as bullion. Which is funny, because that's what the government says that they are. In fact, the only people whom I can remember referring to them as "coins" are the people who sell them.

If you want to invest in coins, DON'T!!! If you want to buy bullion, buy bullion!!! Buying certified bullion is just a bad idea!!!

sorry for the long rant... we now return you to regular programming already in progress...

 

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What did PT Barnum say.....?

There's a sucker born every minute.

 

I can understand your point of view, the line between coins and bullion should be easier to figure out. But don't forget the rising bullion values of pre-82's and nickels! Would you consider those bullion or a collectible investment in say 50 years?

 

PT Barnum actually didn't say that... coinmaster1 will be along shortly to expand on the story of the man who did and why history seems to attribute this phrase to PT instead.

 

pre-82s are not an investment either because they are illegal to melt thereby making it nearly impossible to claim the copper that they contain

 

Mike: You make many good and valid points however, this discussion is quite common and one I happen to consider far from being just a 'latest craze' but rather one with opposing long term vs. short term perspectives about bullion coins. It currently seems to persist amongst other things debatable for the, to slab or not to slab topic perhaps due to the limited parameters currently placed on bullion coins. Valuation cannot be rationally explained between unique collectors so I don't even delve far into that aspect apart from citing the informed vs un-informed buyer. Government issued bullion are: coins, bullion and can be collectible and indeed are collected. Bullion coins from private mints are just that and carry with them their own collector bases, investors, and so on.

Counterpoint:

As I've stated on CT in the past, particularly in bullion threads, one day the minting of any particular bullion coin presently available and perhaps abundant will cease being minted. I know I am in a minority on what I am about to state and don't need a lecture about the futility of potential that lies beyond my lifetime. I understand the near term thinking but also see the long term potential several generations out.

Why do I offer a counterpoint? For instance, I believe that the Eagle program WILL one day end or a notable change will occur demarcating the past program from the future-present program. The design or some other factor about what we currently now know Eagle coins to be will cease or change and that is when numismatic minds will begin to shift to collecting that group of bullion coins, amongst them those which have been certified/graded.

I am not talking about current values, nor the rationality of grading anything let alone something not currently widely collected or what a dealer NOW will pay you for a certified bullion coin. It is my belief, that many, many years down the road, bullion coins that have been graded have the same potential numismatic value and a market for collectibility as do any other coins. I know compared to classic silver and gold coins, Eagles have not (technically) circulated as money. There is plenty of room to expand on the uses of these coins as money but not here.

The entire market for certified bullion is to be determined later, probably not by us, unless such bullion coins cease production sooner rather than later, at any rate when it occurs a limited supply becomes evident. Yes, technically, even 30 Million plus bullion coins minted from of a single year is a limited supply. Not all will survive and while many may be available in upper grades there will continue to be collectors and a market for them. It may not be for the everyman collector alive today, but for generations ahead for their own likes and reasons. There were after all hordes of Morgans and others that have shared the same past and slow slow future potential. I am aware of this side of the debate.

Certainly populations of lower grades amongst certified bullion are low at this point. Lower graded bullion coins than you pointed out do already exist. Bullion coins currently deemed by many to be too low to grade haven't yet been graded. Low populations of certain grades may fetch greater prices. There are many aspects for the potential numismatic category of collectible bullion and collecting certified bullion coins, although that potential is long term. Grading may entirely pass into the history books in 25 or 50+ years from now. Certified coins may be removed from holders for any number of reasons, let alone a future loss to the TPG foothold in numismatics or any one TPGs authority in the market should it be compromised our outmoded by another. The hobby changes as do perspectives within the hobby, so does change the target of each collectors enthusiasm.

In the near term one can readily find bullion being degraded from mishandling, melting, physically reworked into other forms, artificially toned and thus damaged... all things to deplete the current supply levels that have been minted and remove them from numismatic consideration.

Presently, bullion coins can be collected, bought and sold at a premium, for their beautiful natural toning. The willingness to pay more is one of personal preference or ignorance. The desire of what and why to collect is unique for each collector. They have varied reasons: in completing an album or creating a certified collection or for passing something on to a future generation.

Invest not in coins. Invest in bullion but not as a collectible.

Collect bullion not as an investment but because you like to or that it helps define something about you and your reasoning for collecting.

Due diligence will reward the most informed as to what to pay and not to pay for or what to seek and not to seek in resale if and when parting with a piece.

It is up to the informed collector to understand how the pieces they collect are perceived by the wider market but it is not reasonable for the community of collectors to insist those in the minority amongst them collecting against the trend should heed all advice for what to/not to collect.

It's only fair that those not willing to understand these things but who insist on (over?) paying do so because they lack the patience and skill to not over pay and may become upset if they feel low-balled selling. The informed collector will see through the current market that exploits prices of certified bullion which the uninformed may be blissfully ignorant of, that is, perhaps until a real life example awakens their folly when they attempt to sell something bought at higher levels.

 

They are illegal to melt NOW. In the late 1960's silver coins were illegal to melt. I suppose saving silver coins was probably not a good idea either.

 

Yep, it was actually said by David Hannum. Here is the real story:
http://www.historybuff.com/library/refbarnum.html

 

Shazam!

 

hmm, I've been buying BU rolls lately...I guess I'm stuck in the 50's...or, back in the 50's

 

Great story! Let me re-phrase my initial comment: "Buying bullion coins in MS70 slabs is kind of like buying tickets to see a fake giant."

 

Exceptions to every rule.

Back long ago in school I learned to answer a question which contained always or never with false. Most of the time, those two discriminators gave the question the lie: rarely are things ever absolutely true or absolutely false. I opine that buying some high grade bullion is worth it. Looking at only one series shores this point up- First Spouse. Some are seeing heady premiums because folks who bought at lower prices (and I imagine it was dealers with over twenty) sold their positions to MELT. Ouch. Some of the Numismatic News figures may be off by a margin of two to three thousand coins, according to chatter on boards. Even the most recent issues are dramatically underproduced. This makes the series, and each coin in it, a keeper. Having a PF 70 of these is very worthwhile. IMHO.

 

I agree. It's not worth the money to certify them.

 

More specifically November 12, 1955 right after you missed the lightning strike because you weren't in Hollywood.
Not to go off topic but I've always wondered if all those bills in Docs bag in Back to the Future II are real.

 

I agree completely Mike with your post. I too do not think these certified bullions will be worth premiums, especially what they are asking for 70's. However, I would ask your opinion on the OTHER great collecting craze going on right now, that of paying 8x-10x or more of a coins value for the toning.I am wondering how that compares and contrasts to paying premiums for graded bullion.

 

Sad but true

I have never been one to follow a craze.
I just buy what I like & trade or sell coins I have more than 1 of.

 

Bullion Definitions: A mass of precious metal.
A refined and stamped weight of precious metal
A practical and tradable way to handle precious metal.
The pure form of a precious metal from which coins, bars, plates, and ingots are made.

In my experience of being a CT'er I've never been told or reccomended to slab modern bullion anything. Just purchase it that way if desired. Very worthwhile advice.
But slabbing $1, $2 1/2, and $3 gold bullion coins from the 1850's is different because of the rarity and authenticity issues involved.
Commemoratives are ' technically ' bullion too, IMHO . But anyone slabbing one to preserve its condition is to be appreciated and respected, IMHO.
So aren't all coins made of preciuos metals bullion now i. e. Mercury dimes, War nickels, Walking Liberty halves,etc.?
They all are worth more than their face value because of their precious metal's intrinsic value.
So 'Bullion is Bullion ' has its exceptions. Bought in 2009 a $50 gold buffalo or $50 gold Mapleleaf is an investmest. So why not invest in bullion? Just don't slab it.
As can be seen from the above posts just take all the advice you can get and make the choice for youself. This is my humble opinion. zeke

 

i know theres been threads over this but it never sounded illegal. government is not even minting the coins. are you gonna tell me that all these "we buy gold (ect)" arent melting actual gold coins (not bullion) and theyre getting prosecuted for it? its not ethical but ill be waiting to see the guy arresting someone for melting HIS coins.