collecting coins for profit

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Ya know...this gets back to something I've said elsewhere...

It all depends on why you're doing this.

Probably safe to say every one of us here "loves coins"...or we wouldn't be here. But why?

Do you love them for their art work? Then you might be interested in this 1903 Winged Widget with Enhanced Rhomboids! But probably only if it's graded MS-Eleventy by the CGOWAILATAIMU.

On the other hand, maybe you like them for their value. In that case, you probably would prefer this 1924 Galactic Credit piece. It's a cull, but contains 1 full ounce of unobtanium.

Perhaps you like coins for their history. if that's the case, you'll find this 1776 "JustARock" 10 cent stone of interest. It's in great shape, primarily because nobody ever agreed to accept it in payment for anything.

Or maybe you're like me, and coins interest you because of the stories they could tell. If that's the case, then you want the most worn CC dollars you can find...because they're cheap, and you get to imagine Wyatt Earp once collected it in poker winnings.

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The point is, whether or not you "profit" on something is but one aspect of...well...ANY hobby. I buy cheap coins, and expensive model airplanes. Both "reward" me in their own way, but neither will lead me to riches.

In MY case, that's just fine. My path to "riches" doesn't lie in any of my hobbies...it lies in plying my trade to the highest bidder, living debt free within my means, and invest in long term steady growth investments.

Your mileage may, of course, vary.

 

I feel ya bro. I'm 28 and when I go to the only real coin shop in town they are very unfriendly and treat me like a young punk, which is kinda funny because when I go in there I'm usually their only customer in sight. Maybe they are not afraid of losing customers because they don't really have any competition in town, but I think they stereotype me (pierced and tattooed). If I showed them my NGC MS 63 1892 CC Morgan that I picked up for $19 they may think otherwise. Their prices are always on the high end and I've never found a very good deal there. That's why I stick to eBay.

 

by the way, does anybody know if i used the word "numismatic" in my original post correctly?
i wasnt too sure about that!

 

unobtainium ... that's funny ... that was in a movie recently
sounds 100% on the mark

 

Never thought about making money with my collections. Started collecting postage stamps in the 50's, then Green stamps which when you filled a book was worth $2.00. Then I took that $2.00 and bought another indian penny for my collection. From '73-'83 I bought higher grade Morgans and today when doing an audit for insurance purposes was surprised to find my coins are now worth 16X original purchase price!

 

I believe that the term "numismatic coins" is at least somewhat redundant. But I understand why you used it, and sometimes a bit of redundancy isn't a bad thing. If, for example, you wish to distinguish non-bullion coins from bullion ones, you can do it that way, instead.

 

I think you will be hard-pressed to get close to the " Sight Unseen " Blue sheet when selling to a Dealer, depending upon the series and their inventory. In other venues such as EBAY, after you add their fees onto the fees you originally paid ( if any ) , S & H charges ( doubled ) well good luck with that. Most times you have to cut your losses, which could be significant. Coins,in general are a Bad " Investment " apparatus .

 

acsf89 ... i totally hear you ...
actually i am 53 and i get disreguarded at my local coin dealership all the time
but they always have 10+ customers and seem really disorganized ...
they seem swamped with bullion buyers
most dealerships now seem almost annoyed if you want to see a rare coin.

i went up there to look at some rolls of UNC Morgans and after waiting 1/2 an hour to talk to someone
was told to come back in 2 hours ... i stay because that dealership has the biggest inventory in my area
and i dont want to drive an hour to another one

hang in there


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Mark Feld,
so i should have said "rare coins" instead?
"non-bullion coins" sounds sort of funny
but maybe that is the best term

 

It's up to you - use what you think sounds best and is more descriptive. I usually say "rare coin" vs. "bullion coin". But many so-called "rare coins" aren't really rare.

 

Good for you! That's fantastic. What is your most prized coin?

Isnt it amazing that you could get bags of Morgan Silver Dollars at face value from banks in 1961 and 1962.

In Nov. 1961, a bank in Philly released about 1000 bags of unc 1903-O Morgans, which at that time was one of the rarest date/mints of the series.

I was born in '57 and didnt start collecting until 1967 ... so all i could do was pull silver 10,25,50 cent coins from circ.
If i was a few years older, i would have been bugging my parents about that Morgan Dollar scam.

That was a great time for collectors.

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I've sold stuff through craigslist. Silver doesn't go for jack there, but things with numismatic value usually fetch solid prices, maybe 5% off ebay, give or take a bit. Much better than paying all those fees.

 

The real problem with investing in ubobtanium is that it's so inexpensive, and never goes up.

 

I believe that any downward tick in rare coin prices is tied to the economy. If you've got only $1,000 in your pocket right now with no safety net, what are you going to spend your money on? A 1909-S VDB cent or groceries and the mortgage?

I'm very lucky I've been able to purchase a few pieces I have always wanted (1909-S VDB, 1922 Plain cent, and a nice Draped Bust dollar) because prices for those have flatlined. However, I KNOW once the economy recovers their values will be going up -- and I'll be glad I purchased these coins when I did.

I, however, don't buy my coins for investing. While it's nice to know what I own may increase in value, I don't foresee ever selling those three coins I mentioned above. I think many of us here straddle between being collectors and collector/investors. What's great about being in the latter column is that even if the value of what we own deflates, we still enjoy the inherent numismatic quality of our collections. And that's really what this is all about in the end anyway, right? :yes:

 

I've only made money on coins. It was precious little in the old days but many of my coins have appreciated rather remarkably in recent times. I do a lot of collecting but I also do some investing and speculating. If you go against the flow in this hobby you might not come out ahead but you won't come out way behind.

 

coinman1981 ... post of photo of your draped bust ... i've been wanting one of those too ... but havent sprung yet. how much did you pay?

 

Very well said. I tend to agree, it's easier to make money in bullion than in coins. It's also easier to lose money in coins than in bullion. After all, with bullion even if you buy at a spike, at the end of the day you still have a safe full of silver or gold. Hold onto it, until the price climbs again, history says that eventually it will.
I think the best way to stack the odds in your favor in collecting/buying coins is to buy key dates, in as high a condition/grade as you can afford. Buy them when the economy is bad, people have less disposable income, which will drive down prices on what is essentially a luxury/leisure item. Really it all boils down to buying low and selling high. Which brings me to my next point, if you are in it as a true investor, you have to be willing to sell to realize a profit.
The October issue of the Numismatist has a great article on this subject by Michael Shutty that rates coin collectors into four categories: the accumulator, the collector, the collector-investor, and the investor.
One of the author's more interesting points is that collecting and investing are two separate but related activities, they are intertwined but can never be completely reconciled with each other, since investing by nature requires you to sell at some point.
I would be willing to bet that most of us on this forum fall into the either the collector or the collector/investor category.

 

race and gb ... i totally agree

i would add that i think the vast majority of coin collectors are older ... and i just dont think there is a great wave of kids and young people coming up to take their place
so i think it's possible that as the many collectors die off in the next 30 years, demand for rare coins will continue to drop.

however i think that demand for bullion will continue to rise as more and more countries (and people) want to diversify away from paper currency

just my 2 cents

in the end ... i think most people buy rare coins for personal enjoyment ... and most people buy bullion to make money

so i think one interesting strategy for "coin collectors" ... is to buy some bullion to help fund their rare coin hobby
it has certainly worked out that way for me.

 

I hope your wrong Winged, about young people not getting involved in the hobby. I am 27 and work with about 50 people around my age and no one else collects coins....... kind of sucks not having anyone to talk to about it. It seems though that the mint is trying to get younger people hooked with all the quarter programs and such..... I would like to think this will get many more people involved...... I have definately got my kids somewhat interested with the state quarters, lincoln cents, and presidential dollars...... Hopefully this will carry on with them as they get older......... At least my oldest looks through spare change now for any suprises! lol