selective purchasing for an older geezer

Howdy good people,

I'm to the point in my collecting that I want to complete a set or 12, AND invest in something that will hold its value for the heirs. I've been buying semi-key slabs for a few years to augment my base collection. In the cents, my indians are only missing the '71 and '69 overdate and they're all AU ('77 is AU-55 PCGS). That said, I've got all the lincolns less the 09sVDB and the 14-d. Lastly, I've completed the Liberty Nickels but only the late issues and keys are AU (includes slabbed AU '85 & '86). For about a grand, I can upgrade the remainder to AU. The buffs are complete less the 3leg but could be upgraded.

I've been watching the SVDBs for a while and it appears that the MS64 RB is the sweetspot IFF you can get a good coin. The 14d is a nasty little beggar in any of the higher grades.

Lastly, I am part way through completing a CC mint type set that I'd like to finish.

Let's say you've got 5K or so to spend total and want to do some very selective purchasing with the above in mind.

thanks much,

rono

 

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You know, that chart does an outstanding job of making a ~10% drop two years ago look like the death of a market.

 

Whoa now Doug,

That graph you posted is very misleading. The first thing is even though it looks spectacularly bad, it only represents about a 10% drop. The second thing is you only took a small 3 three year slice of the picture. Investments are measured over decades, not years. If you had chosen to display the 10 year, it would show a gain of of about 110 - 120%. This all happened over a period when the S&P 500 retuned 0 during the last 10 years. Not too shabby I would say.

Yes we all know there are many problems investing in coins, including the spread, overpaying, bad decisions and being cheated, just to name a few. We still need to show the whole story though, and that graph is only about 10 pixels of the entire picture.

Mike

 

I think the purpose of Doug's graph was only to make a point that I've read numerous times on CT over the past 3 1/2 years... that "coins are a lousy investment". However, if I read Rono correctly, he's basically a collector, not an investor, and looking for ideas for improving/completing sets, keeping in mind that at some point in time his heirs will have possession of same. And he does mention "hold their value" as opposed to "increase" their value. Of course, no one has a crystal ball that seems to work, so my recommendations would be worthless anyway.

 

I really hate to tell people not to buy coins, but as an investment, they really can have a very disappointing return, if you are lucky to get one. The best returns seem to be on high grade key dates, which most of us will only dream of collecting, but even those are a tremendous gamble. Doug speaks from much more experience than myself in this category.
I'm hoping to create a nice collection that one day my children (or grandchildren) might enjoy, or possibly continue. Collect because you enjoy it, and don't worry about the rest. That's my philosophy.

 

Well it has been covered that coins are a lousy investment. Now if you just want to gets some coins - finish the lincolns and get the best possible 09 svdb and 14-d you can. Still I would not invest in coins.

 

It's hard to time the stock-market. People will tell you that trying to time the market is the worst way to invest. It seems coins are the same way.

There seems to have been a pretty intense bull market from 1984-1988, but those that bought heavily got the horns from 1989-1994! Kind of like what we always hear. Buy low--sell high and what ever you do, don't buy the top. BUT, the long term outlook when you eliminate 84-94 looks pretty steady. Are there better investments? Sure. But coins look better than buying the grand kids a swimming pool expecting it to increase in value 30 years from now.

Quartertapper, I totally agree. Collect what you enjoy. With any luck there will be a grand kid or great grand kid that enjoys it too. Otherwise, the heirs will take the collection to the closest dealer where they will be lucky to get 60% of what you paid for it to begin with!

 

Sure, I was spot on with all my points, if you disagree, please re-read my post. NO WHERE does it say coins I think coins are a good investment or a bad investment at this point in time. The fact is I don't know.
The point of the post was, you told the original poster to put his $5000 else where and said what he was thinking about, you thought was a bad idea. You then showed what was a technically accurate graph, but because it was such a small slice of time, distorted the whole picture and I called BULL. This was your only piece of proof for your position. I am sure I could grab a three year slice from Apple's graph that would show that Apple was a bad investment, but that would not show the whole picture either. I also stated that there were many problems with coin investments. I am sure you have no issue with that. The point I made with the S&P was pure fact, Coins 110% gain S&P 0%. NO WHERE did I say that past performance = future performance. I really cannot see a single point where there should be any disagreement at all.

Now the original poster is a long time collector, not some newbie. You have no idea what percent $5000 is of his total portfolio and whether his is risk tolerant with those 5 G's or not. He also knows the reality of the situation and said he is looking for something to hold its value, not to make a killing. For Pete's sake, he is just looking to buy some nice coins for his kids. It is hard to believe someone asks for advise on a Coin formum on what coins to buy, and you say he should buy something else.

So Doug, fire away, but this is my last post on this matter and I don't know about you but I am going to answer the OP's original question. If he says he has 5 G's to spend on coins, then that is what I am going to help with.

BTW the 40 year graph, does work for me. I would absolutely love those returns.

Mike

 

Best. Chart. Ever.

Seriously, it seems to make your point even better -- that coins can go up sharply, but they can drop just as sharply. It'd be interesting to superimpose a curve showing inflation, too.

Only thing I might change is to use a logarithmic Y-axis, so it doesn't look like you're starting from zero...

 

I would say to go for the Lincolns, The Lincoln Cent is the most popular series of all time and demand should remain strong for the keys. The Liberty nickels I don't think will ever get a good following since the Buffs are so beautiful and so well loved.

I never was too fond of the three legged Buff though. With over 5000 available it is just not a rare coin. The price is driven by pure demand. I prefer to buy coins that strike a balance with demand and rarity.

Mike

 

the big spike in that chart coincides with the grading companys taking off. prices got way out of hand with early graded coins because nobody knew how many high grade coins were out there. at 1 point in the early years 1881-1882s morgans got up to several hundred dollars, now we know they are 2 of the most common out there. that PCGS chart is misleading too.

 

Two quotes about statistics come to mind:
"There are three kinds of lies: lies, damn lies and statistics." - mark Twain
"Tell your statistics to shut up!" - Charlie Brown to Lucy, as she quoted the stats of his ill-fated baseball team.

 

I don't like the idea of buying coins for heirs. Most young people have little interest in coins and many will dump inherited treasures for a fraction of the real value at the local pawn shop. An "old geezer" might consider liquidating while he still has the health to do so, if money getting to the heirs is the primary concern. As far as coin investments, I always go back to the same concept. A person's grading skill, access to coins and market knowledge will tend to correlate with financial return. Folks with above average skills tend to do well financially, those with average skill do about break even, and those below average tend to lose money. That and dealers make the bulk of the money.

 

You spend a lifetime collecting coins... your passion in life, and then as you get older and start to realize you're not going to be here forever, you have to make decisions about the dispersion of your assets. As a collector, the thought of selling is painful; as an investor it's just another transaction. I assume Rono is a long time collector, less concerned about investment and more concerned about completing his sets and upgrading certain dates while maintaining value. Hopefully, he will school his heirs in the proper method of liquidating his collection, thus allowing him to enjoy the hobby. I agree that upgrading the Buffalos and Lincoln cents is a wise choice.

 

Hi Mark,

That was my thinking. As for investing, I'll cover that in a separate postie.

thx

peace,

rono

 

Hi Mike,

Thanks, good points. Have to admit the Libs are a sympathy thing because that's what my father had started being "V" and him being a WWII vet. The Lincolns are the fav along with indians. What next, the Morgans? The 3-leg? feh. It's still an error and where do you stop. God love the folks that love errors and varieties. I'm not that good. An option would be to get some more CC stuff. I could finish the set in slabbed AU for my $5K. Call customer service at Capitol and have them send me a black CC mint set holder and crack the lot and put them in the holder and put it on my desk. Alas and alack. I fear those days are gone.

take care,

peace,

rono

 

Howdy,

Nice post. When I say buying for my heirs, I really don't care what they do with the coins when I'm gone. I'm in the process of corrupting their little minds and turning them into collectors. The rats know every pokemon card ever made. This is not however to get them to want to keep the coins, but so that they'll be able to wisely do with it what they wish.

As for your point about being able to grade is crucial is spot on. I'm not an expert but have been collecting for 50 years so I'm not an idiot either. I've read all the books particularly about investing in coins. I was simply asking the groups opion.

thanks,

peace,

rono

 

I'm a teenager and I just inherited some coins that I find really neat and intend to keep

I think my Grandpa converted me