"Hence it is foolish economy to buy coins in inferior condition"

Here is an excerpt from "How to Build a Coin Collection" written by Fred Reinfeld. I have the 1968 revised edition and it was found among my late mother-in-law's things upon her death (sadly, no great coins lurking nearby). Do you find his comments still relevant/appropriate for today's beginning collector?

"We have an instinctive reaction to the appearance of a coin, regardless of what its value may be. If it is bright and shiny and looks as if it has just come form the mint, we are instinctively pleased with its fresh appearance and its clear outline of design and lettering".

"By the same token, a worn, faded coin repels us. It has had its day and we find it hard to be interested".

"These emotional reactions play a big part in determining coin values. Condition is a much more important factor in coin valuations than the beginner is apt to realize. A coin is a coin, he may think, and one specimen of it is as good as another."

"Nothing could be farther from the truth. A coin selling for 25 cents in "fair" condition, for example, may sell for a hundred times that price in flawless condition. So we can conclude that collectors set enormous store by condition. In acquiring coins we must try to obtain them in the best possible condition we can afford. From the investment point of view, bear in mind that a coin in splendid condition, if it has other desirable features, tends to rise substantially in value over the years; whereas the same coin in poor condition will have a price that will rise sluggishly if at all. Hence it is foolish economy to buy coins in inferior condition".

 

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I guess it's true if all you care about is the value of your collection. Some of us put no stock into such things. As for the better the coin's condition the more a collector enjoys it, that too is subjective. I'd take a circulated bust half over an MS example every time because it has more character and carries a story. To be honest, nobody has ever written a "how to" in regards to coin collecting that has been relevant to anyone other than the writer, because it would be impossible to accomplish one that was.
Guy~

 

Here's the part that bugs me :

One problematic part is "bright and shiny".

I love older silver (especially pre-Seated stuff). There are almost no "bright and shiny" ones with original surfaces; almost all "shiny" ones have been dipped, cleaned, burnished, brushed, or similarly abused.

Appreciating original surfaces means learning about the subtleties of original mint luster underneath the patina. I get all jazzed up about a coin with subtle toning over original cartwheel. I love it. I really do.

The original article needs to make the distinction between "worn" and "faded". There's a huge difference.

 

The OP article is right about one thing : the very, very best coins always do well. I'm talking about the top 0.1%. The hard fact is they are doing well right now, in the worst economic conditions in 70 years.

Most coin prices are down, but not all coin prices.

 

"Foolish economy"...maybe in one man's opinion. There are people, myself included who like the look of a traveled coin, and whether or not it's foolish economy depends entirely on what you pay for it.

Case in point...I bought a collection for XXX dollars and recovered all but 60 dollars by selling off what I wasn't interested in. So....was it foolish economy to end up with a roll of silver dollars, a roll of silver halves and a roll of mercs for 60 bucks?......I hardly think so.

Nightowl

 

Interesting analysis, and I believe accurate, as far as it goes. No mention was made, or maybe even considered, of rarity. Lack of supply, as we all know, can have a significant impact on value. My first thought is of the early large cents. Condition on most of the available coins would not meet the authors condition requirements. A quick check of prices confirm the value of the limited supply.

 

It lists a 1793 Chain Ameri cent in Fine condition is worth $850. In today's dollars, that would equate to $5,280. In looking at Heritage archives, a NGC F15 went for $22,000 in 2007. I had to go back that far to find one that wasn't details graded. Kind of fun to look back at values given 40 years ago!

 

And I ask myself why didn't I buy back then? Didn't have that kind of coin money then either

 

Relevant - yes. Buyers still do pay more for the higher quality coin. So it is relevant in that regard. Meaningful to me- nope. Sorry, but I agree with coleguy - I like the old bust coinage with some wear on them. I stick to large cents just like that 1822. Some company arrived today.

 

As usual something written by someone that is not the average or one of the greater coin collectors. By that I mean in the USA there is over 300,000,000 people. Probably a good 10% have or are still collecting coins to some degree or other. Many, many, many are kids that have really don't care about having that perfect, high graded, expensive coin. This coin collecting stuff is a hobby and anyone that uses it for investing is part of the minority. Many of us really old people have stopped thinking about how valuable a coin will be in 20 years since we probably won't be there to see it so what difference does that make. Back to those possibly 3,000,000 coin collectors. Imagine if all of them want a MS-66 1909S VDB Lincoln Cent. Not to likely since I've heard they stopped making them some time ago.
To buy or not to buy in any condition for what ever reason we do is because this is a hobby and it's fun to just have a complete anything before the end.
At my age I sure could care less about the future value of any of my coins. I don't even care about the present value.

 

Well, I knew I'd get a reaction from this posted excerpt. I think it is interesting that we all look at things a little differently, none of which is necessarily wrong. The often heard comment, "buy the best you can afford", is also echoed in the writer's comments. I don't think that is always true, but I think it is generally true to pay off if you want to sell your coin later. Understandably, Just Carl (for example) has no interest in this aspect, but I do.

Here's another quote from the book regarding investing that will probably prompt more agreement than the last:

"Any collector who contemplates investing in coins should realize before he starts that he will have to deal with a great many complex variables: the amount he will have available for investment; the length of time he can sit back and wait for a substantial profit; the general trend of financial, economic and business conditions; the profit that might be realized from alternative investments; changes in fashion among coin collectors; the possibility that certain coins might be subject to speculative manipulation".

"Considering all these problems, the small collector might come to the conclusion that he would do better to stick to numismatics as an enjoyable, absorbing hobby..."

This wise guidance hasn't changed in 40 years and is applicable today as it was back then!

 

Everything this article is attempting to get across we have seen posted here many times by many different people. As always there are disagreements because collectors have different goals and outlooks on coin collecting as a whole. To me it is always interesting to read these older articles because we usually hear the same things repeated today. Thanks for posting it Dan.

 

How one builds their collection may just depend a bit on their station in life. My collection MUST pay for itself. I buy material that I have no intention of keeping...if it serves my greater long term goal.

I am working on a type set of US coins in higher grades. That's my "collection"....the "rest of it" is how I afford my collection. I'd love to be able to keep everything I buy, but that's not going to be in the cards for me unless I hit the lotto....oh wait...I don't play the lotto.

The writer must be assuming that once you buy a coin...you'll never sell it. I know there are folks like that, and for those types, I think buying only the best you can afford is good advice.

Nightowl

 

Maybe he used this forum for his research lol

 

I consider myself an eclectic coin collector. My taste in collection tends to change by the day and sometimes the hour. I have a varied selection of coins in different conditions. If it's an older coin, I don't mind a VG8 or F12 coin. If it is a newer coin, I would prefer it in MS condition. I buy coins direct from the mint, at auctions, at shows, from ebay, and from friends that I know that are selling their coins. I like coins from the US but I also have coins from numerous other countries. As such, I'm not an expert in any specific coin but an intermediate in many different types of coins.

 

And that is how I treat it - an enjoyable hobby.

 

I was taught this same principal in 1985...
I live by it's exclusivity and embrace it's simplicity.

RickieB

 

While searching for the highest condition coins in the nicest condition is nice, sometimes the costs are too much for the average collector. Buying nice coins that you can afford and look nice to you even if they are "inferior" is something that most collectors engage in, but few investors. We would all like our collections to be worth hundreds of thousands of dollars but the simple fact is that most of us collect for the plpeasure of collecting.

 

I think as long as one is collecting commonly found coins, the the author quoted by the OP makes a lot of sense. Once one ventures into more rare coins, then "inferior" condition isn't such a bad thing.