Buying a coin with future pricing in mind

I voted no and I'm too old to start collecting for the future. I buy what I like.

 

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I buy nice mid-grade circulated Type 2 Standing Liberty quarters as my main 'long-term hold' collection. I believe they will hold their value and increase well over time due to being scarce in the marketplace and seem to have a consistent demand.

But I do often like others have said in this thread - I will certainly buy coins with the intention of future profit (be that a day or week or month or year in the future) due to under-priced, under graded, etc factors. Then use those 'profits' to fund the purchase of long term hold coins.

 

I hope you're right, but I suspect with high end US moderns, you may have to wait 50+ years to see much of a profit.

I've been working on a modern Hungarian set lately (1946-present), and I've found the pricey coins to be the key dates, without much of a premium for condition. All of the mintage numbers are a drop in the bucket compared to US mintages, and I've been able to cheaply pick up raw MS64/65s from the 1940s, MS66/67s from the 1950s-70s, and MS67/68s from the 1980s and on without too much difficulty. There are a lot of rolls and mint sets out there.

 

Most people that are not 100% in the business and do not have to buy and sell continually to make a living, usually do worse over the long run, as even if their hoarded favorites, go up or go down , they won't sell them when their sell value changes. as they are sure it will recover. Things change. My set of US air mail Zepps , mint, xf centering, once close to $5000, now will be tough for 1500 . I have a collection of rare stones also, one I could not afford 10 years ago was grandidierite , not really pretty , but rare. Some suppliers had it close to 15,000 /carat cut. Today I bought one ( nearly 2 cts cut) for under $50. A new discovery in 3 different countries has flooded the supply. Stamps, gems, bullion, coins, etc. are always a risk if you have an internal interest yourself that hampers your buy/sell ability. Jim

 

This is a common belief but it's not true. The coins are "common" only because there is no demand.

Frankly I don't find the Hungarian aluminum all that common either. They do come nice though.

 

It's not a good idea to buy coins for profit. But this never stopped me and it never stopped profiting.

 

You make a very interesting point. It is relative. I find the Hungarian aluminum issues to be beautiful and very underappreciated.

Some of the supposedly common Hungarian aluminum and aluminum-bronze issues are impossible to find in high MS grades, especially select dates/types from 1948-1953. For example, I've been looking for years for a 1948BP 5 fillér (mintage of 24 million - listed as common) and have only found one fine details example. Whereas Krause lists the 1948BP 50 fillér as being exceptionally rare, with a list price that is four to five times what they sell for even slabbed, and yet they are everywhere.

I never considered this before, but I wonder if Krause just made a mistake in recording the rarity between the 1948BP 5 fillér and the 1948BP 50 fillér and it's never been corrected.

 

You forgot a rather important option for voting, "Yes, many times (actually many times, but in a 1 - 2 year span), but I won't do it again".

Unless you are a full time coin dealer, you are asking for trouble to buy coins for financial speculation. In particular I'd be VERY leery of buying top pop modern coins. I STRONGLY suspect you'll lose money on that coin. Please post back here in 10 years on how you did.

Oh, and don't forget to compare the coin's change in value with how much the S&P 500 or a 10 year Treasury changed over that time frame either.

 

+1 The market can be cruel!

 

I answered "yes", but I'm not sure it was accurate: I was purchasing for immediate only turn-around and profit. Let me explain:

Before I retired, I worked just two blocks from one of the only US Mint retail facilities in the US (in Wash. DC). One day, I noticed that rolls of $1 Harrison dollars, which had come out that day, were selling on eBay for around $180. (To this day I have absolutely no clue why). So, I went to the Mint store, and purchased every last one they had (they had around 15 left, at around $35 each I think) and sold them over the next two weeks on eBay, each for around $130 to $180. I couldn't believe my luck!

Also around that time, the Mint would sometimes sell limited items, on-line only, and everybody knew that the price would go up, and it was luck of the draw if you could actually connect on-line right at 12 noon Eastern Time. I think I did that twice. I don't remember the first time, but the second time was in November of 2011, I purchased the "American Eagle 25th Anniversary Silver Coin Set" (maximum was 5) at a cost of $300 each directly on-line from the Mint (I was lucky to connect), and then sold all five within a week on eBay for a bit above (on average) $700 each.

I also got rolls of each of the four variety of Lincoln cents that they sold at face value from this Mint store (not mint rolls but bank-rolls) on the day of issue, went to the post office and got a DC cancellation mark for that first-day, and sold them, too. Easy (but not a lot) of money. Actually, I still have a whole bunch (of all four varieties times two: P and D) sitting around somewhere. But, again, I was lucky that I could just walk to the store and pick them up.

And, my final example: I find that (at least, back when I was doing this, around 2009 to 2011) folks would pay a premium to get a proof coin right away. So I would purchase 5 or so proof sets on the first day they sold (again, in person, so I didn't have to pay postage), crack open the case, and sell the coins individually. My profit -- percentage-wise -- was pretty good, but, still, it was fairly small beans. But I was bored at the time, and it was fun handling the proofs (no, not with my actual hands!). I also sold a few sets. Back when eBay was cheap, I could actually *undersell* the US Mint because they charged higher shipping than I did. Say, e.g., the Mint was selling at $29.90 with $4.95 postage. That meant I could get them at $29.90 with no postage. Then I could start the bidding $29.90 with, say, $3 postage. So, I'd make a buck -- except, again, on the first day of release, I could advertise that I actually had them in hand and would ship within 12 hours, and folks would pay a premium for that. (They had to have it right away), so I made $5 or sometimes $8 or $10 per set on the first day of each proof set release.

So, do I purchase coins for long term investment and/or price appreciation? No. Never have and never will. I don't know enough about coins, or the coin-business, to compete with y'all who really know stuff.

On the other hand, as noted, I purchased some (and, who knows, perhaps some day in the future, depending upon how easy eBay is these days) for *immediate*, essentially guaranteed, profit.

(So how should I have answered the survey question?!)

 

I agree with this, as well as Doug's excellent post, (as usual). However, to posts like this, I would point out a major difference. The OP talked about simply buying a coin with belief it will go up. This is a LOT different than using vast, extensive knowledge to know where there are market inaccuracies.

If you know a lot more about a segment of the hobby, and have studied it in depths for years, then of COURSE you can buy using this knowledge and profit. This is a long standing tradition amongst numismatists, cherrypicking dealer because you know a lot more than they do about the coins they are selling. If I were going to buy a ducat, I want Doug next to me educating me. I might be useful in a few areas like Sogdian coinage or Hunnic. This is MUCH different that not knowing any more than what everyone else does, and hoping your hunch will pan out. For the latter, I will never say you cannot do it, but its much safer to do the former to me.

 

I don't think I've ever purchased a numismatic item in hopes of future fortune. The odds seem pretty slim on a big jackpot for anything clad. Come to think of it, the odds seem quite slim for just about any numismatic item that the average person could afford exploding in value.

On the other hand, I have purchased plenty of pure bullion coins with the hope that they would increase in value, or at the very least not lose value. That's the entire point of such purchases, really. These do include some numismatic items, but the purchase price on these hovered closer to melt than to collector's frenzy.

Apart from the major rarities that the upper out sight can afford, I don't see a lot of money to be made from coin speculation, especially from anything circulating now, regardless of condition. Of course I don't know the future, but I think interest in coins will wane over time for the many reasons that multiple people have discussed here before. I think the hobby will continue on, but in a somewhat diminished state. There will also likely always be someone around interested in real numismatics, but I doubt that we're in for any maniacal eruptions in coin values anytime soon. Still, as I said, I don't know the future. And I don't think that I know anyone that does.

 

Now that you mention it I think I have a couple of the '48 50 f.

I don't have a lot of the Hungarian post war coins but I got lucky many years ago and picked up one big accumulation of the coins dirt cheap. There were lots and lots of Gems. Since then I've been able to add very few coins to the collection. Look how cheaply the '66 and '67 cu/ ni issues go for. Despite the low mintage they can often be found for a few dollars. This seems to imply an exceedingly low demand.
There are "common" moderns coins I've sought for 40+ years to no avail yet they sell for less than $5. Many of these have exploded in price in the last ten years.

 

Can't touch this thread with a ten foot pole......

 

Since you were investing for the present and not the future, then I’d say you should answer “no” to the poll.

 

Sometimes, you’re just lucky. In my chosen specialization, ancient Chinese coins, I have noticed that the really scarce stuff (hollow-handle spades, pointed knives, etc.) as well as the extremely common stuff (wu zhus, Ban Liangs, Huo Quans) have really increased in value, and in come cases doubled. It’s good for my collection that I already have, but it makes adding types I still need more difficult. Some of the types that were once seen as scarce but are now seen as common (Bu Quans, both Wang Mang and Zhou, as well as Huo Bu spades and Ming knives) have decreased in value. Luckily I tend to buy things on the cheap side so that I won’t lose money in the long run. It’s nice that I will be making money on this collection, but it is not important.

The area that has really exploded in value are post-1100 AD cash coins. However, some of the most profitable types are the hardest to authenticate, and after buying 2 or 3 fakes I have abandoned this area. If making money was important to me, then I would be investing more time into learning how to authenticate coins in that area which I have otherwise little interest in.

 

As for US coins, I have found that the most stable investments have been XF/AU pre-Barber type (and VF+ for early type) coins that are original and problem-free. Keep in mind the fact that it was straight-graded by a TPG does not necessarily mean original and truly problem-free; be selective.

Some of the very early types (1792 half dismes, 1793 coppers, 1794-1798 silvers, 1795-1834) gold have done very well regardless of grade.

 

"No matter where you go there you are." Prof. Cory

 

I've done this more than once and I do not plan to do it again, but there's no option for that situation. My brother, a former financial planner said it would probably be a good idea to invest in PMs since I already enjoyed coins. I soon saw the folly in this, as the cost to warehouse all those ASEs in Bank boxes started getting expensive. I need to buy a safe because my wife wants the closet back. The way things are going, that $1 face value might be all they're worth.