Two types of collectors ...

There's an interesting discussion on the latest (#9) episode of Aaron Berk's podcast on "the two types" of collectors and buying coins with an eye to at least getting your money back when you sell. Nothing earth shattering, but still interesting to hear this discussed since many of us don't discuss coins with anyone other than on forums like this.



The two types of collectors identified by Aaron, and echoed by his co-host Mike, are those who are "in it for the fun" and those who are "in it for the investment".

One aspect of this is, that I think we're all aware of, is that for best chance of price appreciation, or at least getting your money back out in a reasonable time frame, you need to buy top quality coins.

A second aspect, less discussed, is that if you are buying coins as an investment, then you really need to be an opportunist and buy whatever is priced right, rather than have your heart set on collecting a series. So, I guess we can add this as a characteristic of these two types of collectors:

1) In it for the fun: May have specialized interests, have a want list, be looking to complete series.

2) In it for the investment: Buys opportunistically based on price rather than a specialized focus.

Aaron perhaps seems slightly dismissive of type 1) collectors, saying "there's nothing wrong with collecting a series, and that's entertaining (and numismatically rewarding)", although to be fair he's only saying this in context of supporting the need to be opportunistic (vs focused) if your goal is an investment return.

It was interesting to me to see nerdy "series collecting" (what I do!) discussed in this way, although hard to argue. The willingness to pay up for a rarity to complete a series is obviously often at odds with it being a good investment, other than on the rare occasion where the quality is high enough that it might be. I think the best one can do as a "series collector" is to be patient and buy top quality for the less rare types, and to realize you are spending money (not investing it) when you pay up for those ho-hum quality rarities to complete a series.

Another interesting subject in this episode is the value, or not, of pre-1970's provenance. Aaron's take seems to be that it's really irrelevant from an investment perspective, and in fact this type of focus is disadvantageous since (edit) there's a broader market without old provenance. Presumably he doesn't see much risk of this becoming a future sale issue.

I've watched a few episodes of this podcast, and quite enjoy it. The style is a bit rambling, but Aaron comes across as very likeable, as well as providing a very experienced view of the coin market.

 

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Love it, sounds like a very interesting episode definitely will be listening- thanks for sharing

 

I'm more of a series collector but one who likes to buy interesting reverse types as well. I don't really think of it as an investment, though I suppose if I sell the collection at some point in the future I will get a reasonable return, nothing remarkable though.

 

I guess I'm the Type 1 collector. I do it for the love of history, the art of the coin, and the fun. Not at all worried about investment. That won't be my problem when it times to liquidate the collection anyways...that's for the IVNs. Hopefully, they will keep it all and continue to build and pass it on to their kids.

 

Speaking as someone who was drawn into US coinage as a child -- part of the culture in our little corner of the world was the notion of "finding a coin that's WORTH SOMETHING", and the "fun" was finding a coin for $ that was "worth" $$$.

It's not something I'm proud of, and I like to think I've grown past it as a collector, but it's still often there in the back of my mind. I won't dignify it as "investment", but more as "child-like greed".

Having said that, though, I feel bad for anyone who doesn't have fun in this field, whatever your "goals" are. If you don't, there are surely better places to spend your time, money, and attention, aren't there?

 

Absolutely fantastic podcast- i am definitely type 2 collector, and really glad Aaron focused on this part - investing in quality, and being opportunistic, regardless of your focus area!! Loved it!

 

I didn't listen to the podcast (sorry!) but just wanted to say that it's possible, in a way, to combine the two if your interests are broad enough. As a history-based collector interested in everything pre-1500, my "specialization" is so broad that there are always tons of coins on offer that I'm interested in. That allows me to buy like a type-2 and primarily add bargains to my collection, while keeping the for-fun attitude of a type 1. (That said, I do have a few subsets I'm building where I'm more fully type 1.)

 

I can not agree with either Aaron Berk or Heliodromus on this one. I do not expect to sell my core collection and will leave that to whoever gets them next and does not want them. The only way to reap a profit on coins is to sell them and doing that means they are no longer yours. That makes me unhappy. However I do not collect by a list and have no idea if, when or what will be my next coin. I know it won't be something Aaron Berk would find interesting but that means nothing since he would be among the last people who would find interest in my under 4 digit trash. It is quite possible to collect opportunistically based not on price but on feeling lucky to find something interesting even if I had no idea it even existed. It troubles me seeing so many people willing to pay ridiculous prices (as Aaron so regularly shows with his podcast features on those who bought unwisely) but what I see is not people buying a $300 coin for $3000 but more often paying high prices for things I would feel guilty giving to a kid. I apologize to any kids (some are old now) to whom I have given coins that would not pass muster.

 

I'm a millennial - most of my friends' hobbies include building gaming PCs (which are sold at a huge loss, if not just plain recycled, when they become obsolete), cars, music, etc. I mostly consider myself to be in this for the fun--I will massively over-spend on Indo Sassanian if I see something I "need" to gain a better understanding of a series, and have been drawn into bidding wars over particularly rare Roman personas.

That said, it is comforting to know that this is a "have your cake and eat it too" hobby - when the day comes that I decide that I no longer want a dozen binders filled with a couple thousand coins, it is comforting to know that I (or my kids) can sell it all, hopefully for close to what I paid for it!

 

Sorry, but I'm just not getting buying ancient coins purely as an investment.

• Auction houses add ~20% to the purchase price, which must be recovered if selling for a profit. In addition, my understanding is many houses charge the seller 10%.
• A new hoard can drastically change the value of some coins.
• The most desirable coins change as a fashion. It can be difficult predicting which issues will be all the rage a few years from now.
• We all have stories of coins we purchased for similar values or less than they were 20 or so years ago.

This all adds up to the fact that it's extraordinarily difficult to make money investing in ancient coins. What isn't difficult, though, is enjoying their history and having fun collecting pieces of it.

As an aside, I'm very much a type 1 (for the fun) collector. I'm a type 2 collector for real estate. There, it's possible to make a 400% return in a year and you have a lot more control over things than with coins.

I guess I should be glad that people invest in ancient coins (and coins in general), because it leaves fewer competitors in the areas that actually make money.

 

This is where I'm at exactly.

 

Agree completely with @dougsmit here.

I'm 100% type 1 when it comes to my collection. Every coin I purchase, it's with the idea of remaining in my collection for the long run. Occasionally, I'll find a nice upgrade and then I'll part with the coin it replaces, but I'm more likely to give the coin away than I am to sell it. When I do sell, it's with the knowledge that I'll lose money on the deal.

Coin collecting is for fun. If you aren't having fun, it's a chore, not a hobby. I have all sorts of subcollections that I'm always working on and if I see a coin at a price that isn't outrageous that I want for my collection, I'll buy it without thinking of it as an investment.

 

So it seems, no surprise, that we have mostly "type 1" (non-investment) collectors here, although of course the lines may be a bit blurred.

I'm curious how many "type 1" collectors will nonetheless occasionally opportunistically buy something specifically to flip for profit? I hardly ever do it myself (maybe less than half a dozen times over the course of almost 20 years), mostly due to laziness. There have been a couple of times I've really kicked myself for not doing it though, such as the time (2009) I passed up buying this coin for a fixed price of EUR 1000 .. then saw it sell a few months later for $5400 I'd like to think that if a similar opportunity came up that next time I'll do it!

 

If you had bought it, of course it would have only hammered for $750

I'm in the same boat, but I tend to get a case of the Baggins...


Quinctilius Varus - Bought poorly attributed for $500; probably worth $3,000+, but if I sell it, I will never again own a Varus portrait coin again because finding it for under $1,000 was literally a once in a lifetime occurrence

Bought this Athens tet from one of the first Zeus or Ares auctions, back when people didn't bid crazy on nice coins from new auction houses. I think it was less than $400 and as a transitional type between Starr V and early Mass, is probably worth a lot more. I intended to flip it, but now it's in a display case on my desk - the owl was too cute.


Found this Seleukos I tet attributed as Alexander III, won it for $125. It's not worth crazy money with the scrapes on the reverse, but probably at least twice what I paid. Again, intended to flip it, and it stuck with me


This one turned up in a Leu lot after selling individually at Roma for something like $400 - it is unpublished and was unique, but now I think is the finest of 2 or 3 known. I didn't know what I had until it was in-hand. I intended to sell every coin in the lot to maximize my profit, but couldn't part with this one

 

That eagle with the incuse punch is definitely a keeper!

At least you're half way there ... buying, but just not selling!

 

I have not listened to that episode of the podcast yet, but I fall somewhere in between the 2 categories. For me, I buy what is attractive to me and for the focuses of my collection but I always bid or buy with the idea that if I had to sell for some unforseen reason or if I find an upgrade, I want to be able to at least break even or ideally make something. I've done this my entire collecting life and it's worked very well for me. I can probably count on 1 hand the number of times I've lost money (without factoring in inflation). It's not infallible, but this mindset has helped me significantly through building and paring my collection back over time.

That being said, I have bought a few coins I know darn well I will not get all of my money back from if I sell, but they are more unusual pieces so I was ok with that and plan to have those very long term anyways.

 

My take on this podcast -- especially Berk's off-the-cuff comments about collectors -- is that he's a bit undefined about exactly what he means by "collector." It appears to me as if the collectors who engage him for expert advice on purchases seem to be in the category of "I like ancient coins, I want to collect them, and I don't have a particular theme or focus on which I'm concentrating. Eventually I'll probably sell my collection before I die, rather than passing it on."

Assuming the accuracy of my observation -- yours may of course differ -- Berk wisely guides them to purchasing the best quality within their budget and not overpaying for any given coin. Part of that guidance involves Berk's judgment about whether the coin is likely to resell in the future for at least what the collector paid, or more hopefully for the collector, has increased in value.

While his comments also include collectors who are not attentive to a coin's value and/or will likely hold onto their collections until they die, I don't think he's really asserting this as a category, but rather separating them from (generally) the collectors who seek his expertise on their purchases.

I did note with interest two general comments he made early in the podcast about ancient coins:

1. Don't get into ancient coins as a speculative investment -- you'll probably lose.

2. Tooling of bronzes also includes removing metal from the fields surrounding letters and other devices in order to make those devices sharper, which is sometimes harder to detect.

 

I am definitely a type 1 collector.

This thread reminds me of two sentences which, even though I understand they're reductive, summarize the above

Sentence # 1 : seeing a coin, be it ancient or not, some will ask "what is it ?" and others "what is it worth ?"

Sentence #2 : money is a means, not a goal

Just my two cent(ences)
Q

 

Yes, he's evidentially using the label "collector" as applying to anyone buying coins, regardless of motivation (as opposed to, say, "investor/speculator" vs "collector"). I guess anyone who is willing to follow advice on what to buy - open to anything as long as it's a good deal - are by definition NOT the "I know what (series) I want to buy, and I'm taking it to the grave" group!

Well, he (Aaron) does make this "two types of collector" (fun vs investment) categorization (@ 29:20 in the podcast) and Mike seems to affirm his view as the same with his comments @ 34:00. Most of the discussion is of course about the service he offers to his (apparently) primarily opportunistic/return-sensitive clients.

He seems to want to have it both ways ... CYA by advising customers not to get into coins as an investment, and that returns can not be guaranteed, yet bragging about clients who are up by following his purchase advice, and opining that one CAN in fact invest in coins for profit... by behaving like a dealer in terms of what you choose to buy.

Of course a dealer doesn't make money by speculating or investing in coins - hoping to make a profit via market prices rising. They aim to make profit by taking advantage of market inefficiency and buying below market, then reselling ASAP.