Is There a Right Way to Collect?

After reading lots of stuff online and talking to a number of people, I have to ask the question; Is there a right way to collect coins? I would think that the only "Right" way to collect coins is the way that makes the individual happy.

You may be wondering why I'm asking this. If so, read on.

Personally, I have decided that for me, I get the most pleasure out of buying a few graded/slabbed coins that I can afford. I'm trying to buy mostly U.S. gold coins, but there may be a few others thrown in too. I'd like to put together a bit of a type set with gold Liberties, but other than that, I sometimes buy a coin with no bigger purpose intended than "Because I like it and find it interesting."

I know that many of you don't like graded coins, grading companies, etc. However, I like the assurance that the coin I am buying is authentic. I also like that they give it a grade. I know that the grading companies aren't always consistent and don't always get the grades correct, but I figure that they get it pretty close (at least if they're one of the Big 4). And I DO examine the coin first before I buy it and try to grade it myself. I'm trying to learn about grading, but I appreciate this service from the TPG.

I bought an 1880 S $5 Liberty graded by NGC as an AU58. I know that this is small potatoes to many of you. I also realize that I could have probably paid $20 less for an ungraded coin, but to me, the service and quality level that I got from NGC for that purchase was worth it. I bought the coin on that purchase, but I suppose I bought the slab a bit too...so sue me.

I went to a local coin dealer in town who seems to sell a lot of gold. I asked him if he had any graded $10 or $20 Liberties in the AU58 - MS60 range. He completely looked down his nose at me and said that he doesn't carry any slabbed coins with grades that low. He only carries slabbed coins that are an MS63 or higher. I suppose that it's his choice to carry what he wants to, but he gave me a bunch of attitude too and essentially indicated to me that what I was looking for was worthless to him. Well, I can tell you this much...he just lost a potential customer with his attitude.

Also, like I said, what's wrong with buying a coin if I just want that one coin? Why does it matter that I'm not trying to put together a whole complete set of Roosevelt dimes or something like that? Lots of others like to do things like that. I don't. What's wrong with either of our coin collecting methods?

At any rate, I've had a couple of bad experiences like that and I have to wonder; Is my way the wrong way?

Thanks for letting me vent a bit. I thought this hobby would be relaxing.

 

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sounds to me like you are collecting just the way you like it - which makes it the ideal way to collect. You aren't alone in sticking to slabbed coins. A lot of collectors like slabs for that very same reason, because they rest assured that they aren't getting problems coins that they are too inexperienced to detect. Beyond that, you said you inspect the coins in the slabs, which means you are taking it a step further than a lot of people who fall into the trap of buying the slab and not the coin.

I disagree with your comment that you bought the slab. What you did was pay a small premium for a system that made you comfortable, and I don't think that is the same as what people mean by 'buy the slab, not the coin.' Generally, I think people mean that to say: make sure you are comfortable with the grade of the coin inside the plastic, not the label above it.

I also think you are exactly right in your take on your local dealer. What he carries is his own business, and if he won't purchase slabs that you want to buy, then he's missing out on revenue... and that's his decision.

Sounds to me like you are selective and careful, you purchase what you want, and you don't buy impulsive - I can't see a possible thing wrong with that.

 

The real question is....is there a WRONG way to collect...and to that...NO...collect the way YOU want and don't let anyone tell you how or what to collect.

Speedy

 

tcore - My experience was basically the same as yours. I was interested in buying slabbed but circulated [or low mint state] gold Liberty coins, but all three local dealers explained how this was a mistake and they didn't/wouldn't carry the coins or recommend their purchase. The knee-jerk reaction of the dealer is to pull out their inevitable slabbed MS64 St Gaudens and go into the rehearsed speech about how that is a superior coin to buy. So I moved on to other things I like to collect. I don't understand why this idea isn't considered something coin dealers want to market or support. An XF $20 Liberty will still generate more revenue for the dealer than a common date MS64 Morgan dollar, for example. There is a stigma against slabbed circulated coins that extends even to 100 year old gold. There are many "blind spots" in this hobby, and you stumbled on one of them that bugs me. People will rush to slab their $150 Morgan dollar, and at the same time won't even think to slab their $500 gold Liberty because it is "circulated." But knowing that the coin is authentic and the approximate grade is a great benefit to someone like me because I'm not particularly confident about my grading skills, but I love the old gold coins. And I'd rather buy two $20 circulated Liberties instead of one really nice MS St Gaudens. That is my personal preference, but the hobby doesn't make it easy to pursue. It is also disturbing to have people with more experience and knowledge about numismatics to explain how I'm making a mistake with a fairly sizeable dollar purchase, so it sort of killed my enthusiasm for the whole idea.

 

I would suspect this is probably due to the fact that higher grades of MS cause exponential price increases, so a rip is more difficult to detect... not to make it sound negative against the dealers - but one sale of a high grade MS coin can earn a coin dealer more than the sales of ten AU coins put together (in terms of net profit). It's good business sense. On the other hand, I can't see any good business sense of turning down the latter because of the former.

 

He reminds me of the local dealer who answered my inquiry about world coins with "I don't carry that junk". (I've spent a lot of money on coins since then, but none of it was in his shop. )

It doesn't matter to the kind of folks who inhabit thisforum. Hang in there pal!

 

Cloudsweeper99
I'm not saying you are wrong in wanting to collect the low grade gold coins but let me try to show you why dealers don't want to sell them...

#1...what do you see more of in the market...MS coins or circulated gold coins??
#2...the fact is that there is only a small market for low grade gold coins and it makes a dealer take a loss when there is a small market because if he doesn't have anyone to sell it too then he must lower the price till someone will take it...dealers aren't trying to hold onto coins...they try to turn around as fast as they can and sell them.
#3...how many low grade gold coins are there....I mean how many low grade to how many higher grade...I would bet that there are few low grade gold coins...many people have either melted them because they aren't worth above melt or have put them into jewelry....
Its kindof like this...a G-4 1909 Cent is worth little....but a MS62 1909 Cent is worth much more....so there is little market for the G4 cent where as there is more of one for the MS62.

Dealers don't think of what one person wants...they have to think what the market says is HOT....

I think you have said in the past that you are more Invester than collector...well then I would think you would want higher grade coins...it is a fact that higher grades coins go up more and keep their value better....that is an investers cup of tea!

Speedy

 

Hey, thanks a lot guys! I really appreciate all of your comments.

I promise you that I'm not trying to look for some kind of sense of self worth, acceptance or something like that on an internet forum (well, maybe a little). But for what it's worth, you guys made me feel a lot better today. Alright, I'll stop getting all mushy on you.

You all make good points. I definitely understand that selling a $5 Liberty in MS64 grade for $2,500 vs. selling me an AU58 example for $200 makes the dealer a lot more profit. That does make good business sense. What does not make sense is that if he sold me a coin for $200, I may be back in there one day to spend that $2,500...the guy won't have a chance to find out now.

Oh well. It just seems like with a lot of hobbies, there are more people out there who think that their way is right, and that's it. I just don't get that. Most of you on Coin Talk are great! I like that everyone can express their ideas and there's lots of learning that occurs and everyone, for the most part, is genuine. Now, maybe that's because it's the internet. But one way or another, I think it's a good thing.

Oh, one more thing after reading Speedy's last comment. I guess that's why it's better for me to buy at shows or from somewhere like Teletrade. At shows, there's bound to be somebody with something I want. On Teletrade, they get such a large amount of coins to sell that I can find my coins on there too...along with all of the high grade stuff. Also, don't get me wrong...It's not that I have anything against people that collect high grade coins at all. It's just that for me, at this time, it makes more sense for me to collect a little bit lower grade coins and still be able to put together a nice little collection. I sure hope I can buy some high grade gold coins one day!

 

I could buy obnoxiously high grade coins, I guess... I choose not to, because I can by ten times that in high grades of circulation. To me, there is no difference. I can think about holding an MS68 example of some coin in one hand and an AU50 in another. I know which one I would want to own, because of the value - on the other hand, I know which one I don't want to own because of the pricetag to get it in my hand. All those things aside, to me they are the same value.

That's just me.

 

Speedy,

I agree with your assessment of how dealers think. However, in round numbers, I went to them with the idea of buying two $500 coins. They insisted in selling one $1,000 coin. So neither deal got done and I gave up on the idea. You are correct that I am more of an investor than collector, although I still fill Whitman folders with inexpensive coins with no investment value, just for the fun of it. For me, the comparison was between buying a one ounce gold bullion coin and a 100+ year old circulated $20 liberty. My brainstorm, for better or worse, was that if the price differential was small, the Liberty should be given preference because of its potential numismatic value in addition to the gold value. I quickly learned that coin collectors think differently.

I tend to reject what passes for "common wisdom" in the coin world, that investors should automatically purchase high grade slabbed coins. To me, this view is similar to the viewpoint back at the beginning of 2000 that [for example] Cisco was a better investment than Exxon because Cisco had appreciated at a much faster rate in the past. Now collectors are saying that high grade coins and key date coins are better selections because they have appreciated at a much faster rate in the past. What people tend to forget is that they were better financial purchases precisely because the premium over more common coins was much smaller in the past than at the present time. The only way they can continue to be better is if the premium continues to expand at an accelerating rate, forever. If both appreciate at the same percentage rate, the higher grade coin may be less desirable to an investor because it is more speculative. But for me, investing is a hunt for value, and to me two VF graded Liberties are more valuable than one MS graded Liberty [assuming the prices are the same for both combinations and reflect current fair prices]. As a bonus, I get to collect more old coins!

Another mental block I have is that when I look at an old AU graded coin next to an MS graded coin, I tend to like them both equally from the standpoint of owning them as a collectible. I don't want extremely worn or damaged coins, but past a certain quality level, I'd rather own more coins than better coins as long as the coins have a nice appearance.

To anyone reading this, don't take anything I say as having any particular value for collectors or investors. It's just my personal opinion and preference and could as easily be 100% wrong as right. Maybe even more likely wrong than right.

 

Cloud
You aren't wrong...we just don't think the same!...I think that is great!

Speedy

 

I think I take this almost to the extreme. I collect circulated world coins. I will put any coin in my collection if I can identify it and I don't already have one. I havn't counted in a while, but I would guess I have well over 2500 world coins from over 100 countries. They are organized and cataloged in binders. Most of my coins are probably F, but I also have some that are AG.
I even have a few that even I would consider cull.

When I'm going through a bunch of coins, of course I will take the best example I can find, but I would rather have 10 unique Fine coins, than one UNC coin. I love to sit down and 'read' a notebook of coins.

I'm sure many would not even consider what I do collecting coins, but I enjoy it tremendously. I have also learned a tremendous amount about history, geography, cultures, etc.

So don't feel bad about not collecting MS 60 coins. Just be glad you don't collect cull.

 

The only wrong way to collect would be to steal for your collection.

I personally plan on slabbing all of my coins - even the cheapies. I don't plan on reselling them, and I like the way they look & feel in slabs a heck of a lot better than in 2x2 flips & holders.

 

cyclonus11, have you put any thought into what grading company you'd like to use?

GD, thanks for the comments. I'd like to forget about everybody else. I guess it just stinks that people look down on others at all for how they collect. If the person enjoys what they're doing their way, others should be happy for them. Oh, and I'd love to see more of your collection sometime (bib in hand ).

 

Another thing though is while there is nothing wrong trying to collect various things, one of the worst you could do is to improperly store them.

I was careless with a proof set of mine and now it is ruined, thanks to some unexpected chemical leakage

 

If people are looking down upon what you collect, you are probably just hanging out with the wrong people. I agree with the others here that there is no right way to collect except for that way which makes the collector happy.

 

No wrong way to collect anything

Not sure why such a question even comes up as to right or wrong ways to collect anything. It's just a matter of what each individual likes or dislikes. As for snotty dealers, they are everywhere. In the housing market, auto dealers, antique shows, etc. My irritating experiences are numerous. At one bank I went to open a savings account and was not dressed like a millionaire and the bank idiot right away said "you know we have minimums at this establishment". At a camera show I stopped at a table full of lenses and asked if any are for a Pentex. The dealer said "move along, your at the wrong show and your blocking the view of my talble". Most dealers at that show were heavy into Nikons as a minimum. Saw one lense for about $12,000. Gee, to bad not for any of my camers. I remeber back when I was looking for a house and the real estate nut asked what price I was interested in. When I mentioned my price range she said I should go home and save for a house worth her time to go inspect. I've been snubbed at auto dealers the same way many times. I think unless you go to some of these places dressed like your rich you'll always get lousey treatments. On the other hand at most coin shows I've noticed most of the dealers are just as interested in selling a kid a .25 or .50 coin as selling an adult a $1,000 coin. They probably are building a cliental for tomorrow.
As to a right way or wrong way to collect anything, just ain't no such thing. Always do as you want. Do as my son does and listen to everyone and then just go do whatever you want.

 

Thats right...There is only one dealer that didn't like me too much...but most go out of their way to either find what I want or to make a better price for me.
If the coin is $1 or $100 its always the same.

Speedy