When does stacking become collecting?

Back from a long break at cointalk and was reading through the bullion forum. I am amazed at the products people are buying with 20% plus premiums and calling it stacking...

Most investors would be happy with a 10% ROI yearly and it seems most people start in a huge hole investment wise buying numismatic coins or bars disguised as bullion.

So, here are my questions.

1. Are people betting that long term they will recoup their crazy premium plus make some money or retain purchasing power?
2. Are they trying to hedge their bullion position with numismatic support?
3. Are they unknowingly collecting coins and posting in the wrong section?
4. When does stacking become collecting?

Seems to me that with all the new collectors (stackers), the people who are making money are the mints.

 

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Some people who hoard silver rounds would probably call themselves stackers. Technically, these rounds are medals. I'm a collector who happens to have 500+ silver medals ranging in weight from 1-4.5 ounces, but I would never consider myself a stacker. It doesn't matter what you call yourself as long as you enjoy what you are doing.

Chris

 

I personally would have considered what I was doing as stacking because I was just buying 90% US silver. Then I stated getting a little picky and wanted even though in some of the grades I have, I was buying Peace and Morgan dollars and Walker and Barber halves. Then I started buying some Seated Liberty coins. So my stacking kind of turned into collecting. I don't like bullion coins I like ones that were or are actually currency because I enjoy the history of the coins involved.

 

I'm not saying anyone is right or wrong. I bought some kooks and silver proof sets early on and have since traded them off for more bullion type items with low premiums because I wanted to have 10% or less premium on anything I bought for stacking.
Seems like ever since silver and gold became popular again in the investment community, there are now a spawn of new collectors that are a hybrid between bullion and numismatic.

 

I would guess that hybrid bullion/numismatic has always been the norm, and that true absolutes (on both sides) are the exception, especially in a forum like this where people like to discuss their buying/investing/collecting activities.

 

I have stopped buying Canadian maple leafs and ASE's because of their $4-6 dollar) premium being so high that you will never recover from. I now collect the Scottsdale 100 gram bars usually in the $65-67 range. they are mostly for looks and a very long term savings plan. I went to the local coin shop today and found 2 very small silver bullion coins in 1/10th and even a smaller coin I think it's 1/20th not sure. I forgot to ask the prices on those. lol the premium to make smaller coins is crazy. I understand the logic of a big coin costing less money to make than making 10 little ones of the same weight. if you are buying silver or gold you might be a stacker. I only have 500 grams so far. hoping to add to that every other paycheck that is not rent check. not sure how many oz's you must have to be called a stacker ? that dude that recently posted 4 kilo bars...he's a stacker. lol

 

I also wanted to add that... I have seen Utube videos of silver bar stackers collecting all the different bars out there. some of those older bars bring crazy money way over the spot price of silver. they could be considered collectors.

 

1-4... No, none of these.

They've fallen victim to bullion dealers and mint marketing programs.

Having become accustomed to regular buying and establishing preferred dealers or venues in which to buy, they've fallen for hype spun over grade or condition and rarity by the same dealers they went to for merely bullion purchases at reasonable prices. It has snarred them with incentives to 'buy more to save', to obtain 'free shipping' especially IF one buys X-amount, or pre-orders before coins are released, etc. But then comes the limited series concept and where they are convinced they are stacking and buying when others are not, they have that which not everyone else has in their possession. So it is an easy step to convince them to believe in limited mintage series or to buy TPG graded bullion with lowish populations of certified bullion compared to overall mintage. Effectively, the mints cranking these out based on the demand from the hyped bull market target these "stackers", and the TPGs certify bullion at a time when 'coin collectors' do not regard them as collectible, thus making this an area some investor/stackers are susceptible of after a while.

While it is true in some instances that rarity exists, such as with many modern Mexican bullion coin dates, it cannot be said to be the same with what comes out from world mints issuing huge mintages (US, Austria, China, UK, et al), or others repeatedly issuing new series of minimum mintage without much of a market for them, such as Perth or RCM.

 

Yes, certain bars are no longer minted and could be considered rare, but they are not like those which sell in auctions from major auction firms like Heritage that came out of the California gold rush era, for example. While that is an extreme example, some are keen to find areas of collectables that may be wiser, investments of their moneys, despite being a poor investment given spot price when purchasing.

 

what I do not understand is why people buy slabbed TPG bullion ??? if it's a proof ok I get that, but a so called business strike ? waste of money period.

 

with shipwreck gold bars you are buying the history not the gold weight. have you seen the prices of large gold nuggets ? it's no longer the weight of the gold but the size of the nugget.

 

Perhaps, but one day Silver Eagles (for example) will not be made and quality examples will be potentially as attractive to future collectors as are fine examples of Morgan dollars that sat unwanted for so many decades, all business strikes and now all collected but for those considered junk.

 

Yes, but in concept, buying a 20 year old JM bar that is no longer produced that way, or something that was handpoured but now is not, go by the same reasoning.

 

it's funny how I used to like the perfect silver bars and now I prefer the hand poured ones.

 

It amazes me when people bid 10-15% more for a bar on ebay than the sellers are asking on their store websites.

 

People sure do love over paying for anything on eBay.

 

Except for my auctions (JK)

 

1. I don't pay crazy premiums because I'm not betting on being able to recoup them. Premiums are beneficial in a downward market because they help cushion your losses, but in an upward environment the spot price will eat into them on a percentage basis. My goal is to acquire semi-numismatic coins for a buck or two over the price of a silver eagle because it's a small price to pay for some of the protection on the way down in conjunction with the prospect of premiums actually increasing in an upward market as they move toward a more numismatic play.

2. Sort of, indirectly I think. It's more so a hedge against a down market where the bullion would take more of a hit. However, gold will provide similar protection, and rather than overpay for silver, I prefer to simply buy fractional gold for this same protection without the high premiums.

3. Numismatic coins are still made out of the same metal. The major differences are mintage, design, manufacturer, and whether they're in a slab. To an outside observer with no knowledge of the market they could very easily be categorized the same, but it seems more likely that people just like to talk about their coins and aren't as concerned with the forum category.

4. When you start paying more than a few bucks over spot, or roughly 10-15% over spot. Obviously the percentages will vary due to market conditions, and eagles have been $8 over spot during some rare periods, but that doesn't make them a numismatic play just because they were priced high temporarily.

 

4. If I hit your blob of gold or silver with a hammer and you don't care, you're a stacker. Otherwise, you're a collector.

 

I do not mind over paying if you see a coin grade that has not been on the market for say 15-20 years. but for paying for items that are common and everywhere. no.