Coin Investing via Coin Talk

Perhaps I'm wrong about this, and don't see it as often as I'm thinking I do. Also I certainly don't mean to upset anyone, just posting my thoughts on something.

It seems a lot of the newer members are trying to turn Coin Talk members into coin investment counselors. Members with no experience (or very little) posting threads outright concerning what coins to buy for investments, how much money can be made, how long requiring to be held, and etc.

The "regulars" here basically fall into these categories: coin collectors, coin dealers, coin collectors/dealers, and coin dealer wannabes. The majority of the people here that sell coins here do this also as part of their hobby, not full time dealers.

In my opinion collectively there is no place to go where there is more knowledge regarding this hobby than Coin Talk. Along with that many are the nicest people one could come to know. This is not to say there are nor disagreements that often get heated, but at the end everyone moves on and hopefully knowledge is shared and learned.

After saying all this maybe we have given some new members the wrong impression. You can't simply join this site, post a thread about what coins to buy, and retire rich on the coin investments.

First, no member here wants to purchase a coin and see their purchase go down in value. Everyone including myself expects their coins to increase some in value over time. At the same time the majority of the coins people purchase they do so because they want to have as part of their collection, not as an investment. Simply put they like the coin.

If all the knowledge about the collection of coins could be translated into being a coin investor I can assure you their would be many very wealthy people here, but I don't think that is the case. Very knowldgeable people will give their opinions on these type of questions, and often disagree with poster just before them. These are opinions in a discussion, not investment advice.

When "sleepers" or "overlooked series" threads come up, again these are opinions and not investment advice. Again these opinions vary a lot from one person to another. Usually they are coins the poster is collecting, and may feel strongly about it while the next poster totally disagrees and lists something else. I doubt very seriously any poster expects anyone to make investment decisions regarding their posts.

The year 2009 may partially be to blame for part of this also. In the first half of the year there was a tremendous amount of discussion about all the money being made on the '09 Lincoln Cent, dime, and nickel. Okay so a member made two or three hundred dollars off some of the '09 cents or dimes it sounds great, and maybe the impreesion was taken as we are all a bunch of buyers and sellers. If you read these closely the sellers that were selling a few rolls or dimes were just as amazed as anyone else what some people would pay to own these items immediatley.

Can a person make money investing in coins? Certainly, but I think it is usually with very high end rare coins that cost thousands to begin with, or some short term fad that comes along once in awhile. I don't think the short term fad to "flip" quickly falls into the investment category in the first place.

I'll sum this up with some of the comments I have learned here from many people I have come to enjoy, respect and admire:

1. Buy the book before the coin. What this boils down to is take the time to learn. This should be an enjoyable part of the hobby.

2. Only buy a coin you like because you may have to keep for several years. Also here would be very knowledgeable members postiing many times making money in coins is very difficult.

3. Buy the coin, not the slab. But, if you have no knowledge yourself then you will have to depend on the TPG companies. Also in this category that not all coins in the same grade are created equal. To sum this one up if you just depend on TPG companies you will lose.

4. "IMO" or IMHO". That is what they are intended by the poster, nothing more or less. Certainly not to be taken as investment advice.

Again, my intention is not to upset anyone whether they be a new member or old. It is just something I think needs to be mentioned about the hobby and Coin Talk itself. I'm a little hesitant to even post this, but here goes.

 

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In the stock market, people are always asking the "experts" what stocks to buy/sell. Anyone listening to them usually understands that there are no sure deals and factor that in when making a decision. I would like to think that it is similar here on CoinTalk with the types of questions that I see asked. But the difference is that one can get into coin collecting/investing with a lot less money than the stock market and so I suspect that a lot of posters have a lot less investing experience than someone in the stock market. So, I don't know, I guess I agree with a lot of your post.

 

Nicely said. Now if something like this could just work it's way into the CT Rules section for new members to be required to read and agree with rather than bypassing the details of how the forum works and immediately running to Coin Talk members as coin investment counselors.

 

Well said, young man.

 

investing

I basically agree with you Coin Lover.

Now there's other ways to make money than the traditional investing route. One of those is the "crack-out" game where one can resubmit coins to the grading services for upgrades. But that could be a high risk gamble and usually not for novices. Takes good grading skills to get that done.

There's also the "arbitrage" game, where one can cherrypick a high end coin in a holder of one of the "other" grading service, such as ANACS, where it went at a lower price due to public opinion in the marketplace. Submit a ANACS coin to PCGS, ie, and even if it's the same grade, you can get a higher price. Not always, but I've seen this happen with uncirculated Morgans.

One of the major drawbacks to making money on coins that I think a novice under-estimates is the bid-ask spread of the dealer. The first time a novice tries to sell his average, common coins to a dealer, I think there's a real surprise at the offer, typically well below bid, if an offer is made at all. So the trick is to buy above average coins and also as many semi-rare coins as possible to increase the odds of making money when it is time to sell.

 

What a lot of people tend to forget is that investing doesn't always, or even most of the time, mean making money. It's been a fact since the invention of money and traded goods that only about 20% of investors realize a gain, and very little more break even. It can be said for stocks, commodities and coins. Investing is gambling, plain and simple, not a savings plan, and most deffinately not a quick and easy way to reach easy street.
Guy~

 

Thank-you. I don't get called that much anymore.

 

I have gotten what I think are a few really great buys on some coins from ANACS and PCI. I didn't buy them for any other reason to add to my collection. But, I certainly felt and still do I was very fortunate in these purchases. Definitely cheaper than NGC or PGCS, and a couple of times cheaper than "high grade" raw.

Lately from some of the posts here I certainly see how SGS stays in business.

Now there is one rule that is okay about telling someone what a great investment a coin is. That is telling your spouse this or that coin should be purchased because it is a great investment. Don't overuse it though, that is subrule one of rule one

 

Very well thought out post.

My first reply on one of those investment requests is usually along the lines that you just outlined.

It takes a lot of time and study to undersand what a nice coin is verses a generic coin. It takes even longer to understand the coin market to see which coins are more desireble than others and when to pay a premium vs. not.

 

..hmmm...I've tried that. Somehow my wife seems to have a 6th sense about coins. She seems to know exactly when I've made a major coin purchase (or maybe its because of that credit card statement at the end of the month)....


Seriously now, the OP's word and advice are well thought, out and newbies would do well to listen: Only the VERY WELL versed can hope to consistently make a profit when buying coins for investment. Most of the rest of use will probably see some losses, at least in the short term due to the various fees and commisions when selling.

I myself have always followed Q. David Bowers' advice on this since the very beginning:

- Collect coins for the fun and passion, not for hopes of financial gain.
- Collect what you like and what appeals to you. Not what
somebody 'advices' you should.
- Learn as much as you can about those areas of the hobby which
interest you.
- If you happen to realize a nice return along the way, that is fine and
will just add to the fun and passion of collecting.

This advice has served me very well over the years.

 

Two posts above suggest their authors understand the difference between collecting and investing. It is sad that the question most often asked is 'how much is it worth'. A dealer I respect once said 'Love your coins for what they are and not for what they are worth.' If the market completely tanked and prices were 1% of current levels, some of us would be happy to be able to buy 100 times as many coins. Others would be jumping off the nearest high building. Mr. Bowers' set of rules (especially the last) is the difference between the two groups. If investors suddenly left the coin market, 1% might be a realistic number in some sectors of the market (or have I missed all you true collectors out there?).

 

lol, many a coin dealer has sold a coin for too much because the buyer was convinced (as often as not by themselves) that it was a good investment.

 

I certainly agree with the premise that collecting and investing draws different groups of people originally, but after a while in whichever area, they usually drift into the other area also. I think Mr. Coin lover has summarized it very well.

But lately in some of the threads described, it reminds me of the scene in "AIRPLANE" where everyone lines up to take their turn beating the passenger.

If the OP asks which coins does one recommend buying for investment,

That is different from them asking why should/shouldn't they invest money in coins.

Either the original question was too general, or something, as the majority of the posts questioned the OP intentions, knowledge, willingness to study, ability with money , and even their appearance on videos.

I realize most think they have to warn the OP of what could happen, but not that many. I also felt the urge to do so, as is natural, but I think it went to extremes. IMO.

Jim

 

I find this thread to be in poor taste. While I agree with just about the entire post, I feel that it is directed at one specific new CT member. Although he maybe young, he isn't stupid and if he reads this, he will know it is about him.

I respect your feelings on the matter Mr. Coin Lover but you even acknowledged hesitation before posting because you were aware that it had the potential to offend him and maybe others. I believe your decision to post this was an error in judgement and is completely understandable. However, I find it much more difficult to understand how this thread could be nominated for TOTW. The information presented is valuable, but is presented at the expense of one of CT newest members. Is this the type of forum that we want to be. I am of the opinion that every member is valuable to this forum and anything done to drive a member away from this site is inherently bad for Cointalk and numismatics as a whole.

At this point, I would like to ask the members that voted for this thread as TOTW to withdrawal your nomination if you agree that this thread is offensive to the new member in question.

 

Lehigh makes some good points. When I first read this thread, I didn't realize it was directed at a single member... but now that I have read the other threads here and re-read the OP, it's pretty obvious.

Still some good info in the OP for a beginner, but it does seem to be directed straight at the new member.

And I actually think it's great that people come here for their investment advice first before just going out and trying to do it blind on their own. When I met up with family this summer I found out that my grandmother has a safe deposit box w/ high grade 75-100 year old+ gold coins!!!! When I talked to her about them and found out what they were I found that an investment manager recommended them to her 5+ years ago and that she knew little about them... was cool to see MS66 Liberty Quarter Eagles and MS66 Saints, but when I found out what she paid for them, I quickly realized she's still underwater on them... Ouch!!! Too bad she didn't come to the fourm and ask for advice first... sure she still might have listened and invested anyways, but at least she would have had a fighting chance to know what a fair price was.

 

There is great info on this forum. I can understand how some might be a little turned off by how some approach asking for advice. Reality is some people will read way more into an approach, just like body language than what is there. I also do not really believe that it is totally directed at one new member, lets face it, some people just rub others the wrong way and I don't think anybody is excluded. Heck, for all I know the OP could be directed at me.

 

Many of the problems can/could be avoided if posters stay on topic. Those OP's just want a short list of coins to buy. If you have problems with that, move to the next thread. As GD said, those threads are not going away anytime soon.

The responses do get tiring. For example if I were to start a thread on the history of Susie B. Anthony dollars, there will be all of the following (guaranteed) that have nothing to do with the history of the SBA
- Several posts about how the coin is ugly and that it sucks.
- At least one post about how modern coins are ugly and suck
- Several posts that don't say anything all or ramble just because some people have to post in every thread

And if you search in between them all, you might learn something about the history of the SBA!

And finally, there are days when you get up on the wrong side of the bed!

 

I really don't think it was aimed at a new member - just because we went through a thread like this a few days ago the topic is fresh in everyones mind. That brings about new threads on how we can fix/help this issue down the road.

Speedy