It looks like the price break from MS 63 to MS 64 gets steep. Looking to hold long term and pass on. Is a MS 62 or 63 worth the extra amount over a raw unslabbed AU? Is anything below MS 64 even worth the hassle if your goal is more than bullion investing?
Say a $5 gold piece. Not a key date. If looking for a certified coin is it smart to buy online site unseen or is this best to buy at a coin shop or show.
I'll tell you a little secret, although it's controversial, strictly my opinion, and a lot of CT-er's will probably disagree. When the crunch, the BIG crunch comes, most of that premium paid for MS62-63-64 gold is going to disappear overnight. An ounce of gold will simply be an ounce of gold, and most of the people with stuff (that are willing to trade USEFUL stuff--think food and ammo--for gold) will laugh at any request for a premium price based on a slabbed grade. Regarding the "other" PM, good luck convincing some guy that a bar or round he's never heard of -- is 0.999 silver. Junk silver he might acid-test (why bother?) but premiums there, too, will evaporate like summer rain on a blacktop driveway. That is my firm opinion. That is not to say the rare coin market will disappear, but there's likely to be some radical adjustments. In addition, honest tax-paying sellers will be paying a heck of a lot of income or capital gains tax on their "theoretical" but illusory profits. If the price of your coin goes up 4X, and the price of milk, bread, and hamburger go up 5X, are you gaining or losing?
Just imagine what the premiums on numismatic pieces will be after this "bug crunch" and society gets back to a new normal. And I am talking distant future. Like if the crunch happened in 5 years, and it took us 35 to get back to a civilized, "normal" society, just think what a PF67-CC-Morgan would be worth. Most, youre right, would be cracked out of GSA holders, and sold for 3 bullets. The surviving, high grade PM coins 40+ years from now would be worth silly money, sillier than now money; for surviving high grade pieces. obviously high grades will always be worth more. but i doubt that people who spend $10k, $50k, $1M on a single coin will be breaking them out of a slab to trade for water. Those people most likely have their stuff together and will weather the storm just fine.
Well it's a case of been there and done that. The series I like is the 2.5 dollar Indians. My very first purchase years ago was 2 coins, both $2.50 gold Indians. One turned out to be fake. I did get my money back. There were a couple of other raw gold buys that were questionable but I was able to sell and trade them away. So buying slabbed is just safer for me.
Of course, if and when that happens, the same might be true of a whole lot of stuff - like anything that requires electricity to operate, you're old mercedes benz and that 1964 mustang in your garage. Even your 1945 Martin Guitar. So, what the heck! The "money" you used to buy the stuff won't be worth anything either, so what do you have to lose? At least the antique silver and gold in the holder might be worth something - but even that's pretty speculative. Hand tools and farm implements might be a better investment. duk
I have bought raw coins (but not raw gold), and mostly I've made out well enough by finding gradable coins that weren't certified. But I don't do it anymore. It just seems like raw gold coins, being as pricey as they are now - most people who have raw coins for sale must have already discovered they're not gradable. I suppose for large coins, common dates post 1880, maybe that isn't the case since the premium for certification is lower for them. It depends on whether you're mostly looking to buy gold or coins that have collector value, i.e. numismatic significance of some kind (or you're expert enough to pick out the winners - I'm not, I just got lucky a few times). It's pretty different. If I was looking to buy gold coins just to hold gold, I wouldn't mind buying raw pieces at all. I might buy them in bulk even, from a reputable dealer - cleaned gold coins are cheap and don't have much if any collector value, but their gold value is intact and comes pre-measured.
But duk, you're missing the point, sort of. Here is an area where a Buyer can reduce risk; tools, autos, whatever, are a whole different situation. You reduce your risk by not paying outlandish premiums for common bullion coins that happen to be extra nice. Worst case, you...will...lose...that...premium at the other end. Tools, cars, etc., have a fundamental utilitarian value; bullion coins don't. The collector is either a numismatist or a stacker, one or the other. The two flavors are somewhat incompatible. The numismatist weighs the decision between MS63 and MS65, for instance. The stacker buys the cheapest gold or silver he can find, especially in a convenient and recognizable form. Nothing a stacker buys is ever graded or slabbed. As soon as the numismatist decides to avoid bullion-ish coins, then grading comes into play. Buta couple years after hyperinflation sets in (if it does), then the rare coin market shrinks drastically. The average person like you and me can't affrd to "buy coins" -- there are too many other necessities to buy first. No one will be buying AU Mercs to upgrade their set. No one will be buying proof sets to sit and gaze at. If these things come along in the course of ordinary commerce, you might keep them for nostalgia, unless the kids need shoes or the family's tired of macaroni and powdered government cheese.
I think we're saying the same thing, 444. There is no premium on generic gold coins. Their value will likely always be related to the price of gold which can go up or down (like corn or real estate, for that matter). My comment about nothing to lose was in relation to a doomsday scenario - nothing else (i.e., if you money is worthless, what difference does it make if you didn't spend it?). However, that said, whether or not hyper inflation would have a positive or negative effect on collectible/numismatic value pieces - I don't know. Checking out the long term sales prices of coins with numismatic value, they seem to keep up with inflation pretty well- although some more and some less than others. It may depend on what one means by "hyper-inflation" - and what segment of the coin market. Me, I like mid-19th century gold coins in XF or AU condition, where there is a pretty even balance between gold content value and numismatic premium. Less to lose I suppose? Me, I'm always looking at the down side risk. Duk
I would agree, your 19th Century gold is a good compromise between numismatic enjoyment and bullion protection. But the guy that pays a $$$ premium for a MS64 (gold) eagle over a MS 62, he's out of luck down the line. Personally, I have concentrated on silver, as I believe 5 years from now, silver will have appreciated substantially more than gold, percentage-wise, as we revert to the mean in the gold-silver ratio.
Yeah. I've heard pretty consistently from long time dealers that the MS market has been suffering from grade inflation which has to have an effect on long-term value. Without super expertise it seems like a difficult place to place bets. XF, and AU maybe a bit less so, are supposedly being graded in the same way they were years ago. I find it a lot easier to see the difference between an XF and a VF coin than the subtleties of MS 63 vs MS 65, etc. BTW, I don't know what the mean is, but in 1878 the gold to silver ratio was 20 to 1 (double eagle to Morgan dollar). Today it's about 65 to 1.
For Dougmeister, best way is to find a straightforward chart. Here's one: http://www.gold-eagle.com/article/gold-and-silver-ratio (see both charts)
