How much stock should one put in historical behavior?

I read in one of those coin investing books that historically any gold coin with a mintage of 10,000 or less was a good buy as far as keeping long term value.

Is looking at this kind of historical data worth anything? Because looking at it from an outsiders view point learning to farm has been historically more useful than lets say learning how to read, on a long enough timeline that is. But obviously this is no longer true. Does that comparison make since? Sort of to rephrase, is what was true then still true now?

More to the point, I believe the First Spouse coins have the lowest mintage's for gold coins. Have they been good sellers when the mintage is relatively low?

 

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It's great to pull a couple sentences or a concept out of a book and quote it as a blanket statement but you lose the context. What was the chapter or paragraphs before and after your quote about? Was it about pre Civil War gold? Was it about Moderns?

If it was about pre Civil War gold ...it was true then and true now. Show me any gold coin from before 1861 that has depreciated.

If it was about moderns (first spouse, commems and bullion) in some instances it was true then but definately not true now with 99% of modern issues.

The only modern coin that has a mintage of 10,000 or less that was a good buy and is worth keeping for long term value is the AGE Reverse Proof that was issued in 2006. At issue it sold for $870.00 (1/3 of a 3 coin set that sold for $2610) and now it's in the $2500-$3000 range and I expect it to hold that if not increase in the future.

 

There are many modern gold world coins with mintages under 10,000 that were originally sold for high premiums over their gold content that today are worth little or no premium over melt. You only come up ahead if the melt value now is higher than the original price paid. And if gold goes down the value of those coins will go right down with it. So it becomes not a matter of low mintage coins holding there value, it becomes "what is bullion doing?"

 

It sounds like you're mostly interested in whether or not the First Spouse series is worth an investment...given the low mintage figures. I'm a First Spouse collector and this is my take on the issue. I'll start out with what sounds like pretty basic stuff...but I get to a point eventually, I promise.

Most any coin (on its own merit) is only worth the going rate of its bullion...or in the case of fiat currency, one's confidence in the "promise" that backs it up. With that said, there is a community of collector's that value coins for a number of reason other those just stated.

For instance, factors such as a coin's design, condition, subject matter, or place in history play a large role in determining value to a collector. Each of these factors define a particular coin's "Collector Base". It's the Collector Base...relative to a coin's potential and actual availability that determines its value...what someone is willing to pay.

Widely distributed coins hold their value better than the same number of coins concentrated in fewer hands. The beginning of the First Spouse series saw a great deal of the coins sold to dealers. The actual Collector Base for the First Spouse series never materialized and many coins were sold off at near spot prices.

Rising gold prices coupled with the Mints 25% premium continues to suppress the serie's collector base. It would take an act of Congress to end the series early so the Mint continues producing them. I think it's the subject matter that collectors find uninspiring. Personally, I like many of the designs and am reading my history books all over again as I collect them.

At the present time, the collector base is nearly nonexistant. However, I believe that once we get up to the Elenor Roosevelt and the Jackie Kennedy coins, interest in this series will explode. New collectors will be looking for the best specimens to build a collection and there just won't be many of the early issues (the 2009 issues) available...and that should push prices up.

This theory is based on a "guess" that the Collector Base will expand sometime in the future...maybe it will, maybe it won't. That's why coin collecting is a hobby and not an investment. Worse case scenario, I'll end up with some really nice artwork pressed into pure gold by the US Government...that's gotta be worth something.

 

First Principles

It is a principle of (Austrian) economics that the past is irrelevant.

Recently, there was a debate in The New Individualist on whether entrepreneurs earn their profits from risk or from the unknown. Risk is calculable. Peter Bernstein in Against the Gods says that the capitalist era was born when Pascal and Fermat created the arithmetic of risk. On the other hand, if entrepreneurial profit were a matter of mere risk, then anyone could do the arithmetic and (a) no business would ever fail and (b) all businesses would earn approximately the same profit. So, it is argued that profit comes from an unquantifiable, primary opportunity to correctly guess the unpredictable future.

Be that as it may, the sun has always come up in the East. Therefore the sun will come up in the East tomorrow. Gold is stable. Gold has been stable. Gold will be stable.

On the other hand, a batting average of .343 says nothing about whether the batter will hit the next pitch.

All of which is to say: there are no easy answers.