Collecting advice needed...

I'm relatively new to the hobby and have a couple of questions for the more experienced out there...

1. If you were buying a rare coin from a dealer, would you expect to pay the RED BOOK price on that coin? Is there a percentage that one would expect to pay below red book?

2. Is there a grade that collector/investors are wise to concentrate their efforts on?

3. What is the best source for high grade coins at good prices right now?

I collect because I love coins, but I want to make the kinds of decisions in my collecting to benefit in the future. I want to make smart purchases.

Any advice?

Thanks for your responses in advance.

 

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Hi Carterofmars...
You asked so here is my opinion ONLY...

#1. The RedBook is not an accurate price guide..most dealers work off of the Grey Sheet..always try to neog with a dealer, but remember he may or may not have the coin you want and he is in business to make a living as well. Be sensitive to that and develop a relationship and you never know what might come your way!

#2 Myself..I consider as both a collector and investor...my investment grade coins are all PCGS or NGC and I go for the MS or Proof 69 grades. The next highest is Grade 70 and the $$$$$$$ are bigtime expensive.

#3 You will find many sources for coins..investigate them be wary of some E-Bay scams, internet scams and Home Shopping Network! Find a dealer or Auction house you trust and study, prepare, and then decide what you want, how much you are willing to pay and then go for it..have fun, educate your self and ask questions...this fourm has some incredible folks with a broad range of knowledge..become active in it and support it..

Happy Holidays!

RickieB

 

Rick:
So is the grey sheet like what the dealers pay for coins; what a dealer would buy a coin for off a collector? Kinda like: find out what a car dealer pays for an automoblie then try to negotiate to that price as best you could without ****ing the dealer off.

Where can I aquire Grey Sheet prices? Are they availible to the public?

 

Hey Carter..the Grey sheet is what a coin's selling price is at that specific time point..remember that it is published weekly (I think) and is not up to the min pricing..a rule of thumb is ~ 15-20% both ways buying and selling from a dealer..thats why it is important to be able to know what you have, its worth or value, and it's potential demand for resale or colletibility..

Goggle search for Grey Sheet.. will take you to the site..it is a subscription base information site..when buying or selling to dealers..if you pull out the grey sheet..it automatically gives them the indication that you are up on current events.
I am sure GDJ (Doug) will come by shortly and provide you with some additional info. He and others here can offer up top shelf knowledge on this area and many others!

RickieB

 

Hey thanks!
This has been some great advice. How about Coin Values mag from CoinWorld? Are those prices good to go by? Maybe not as good as Grey sheet but any opinion on that?

So just to rehash a moment... rule of thumb is look to pay 15-20% of grey sheet when buying?

 

Nope---neither is CoinValues...the best price guide is Ended Online Auctions and after that Gray Sheet

Collectors don't go for 1 grade most of the time...it takes study to find the right grade...I mean with the 1909-S VDB cent the high grade coin is going to be rare...but with the 1931-S cent....its rare but I would almost say its harder to find a lower grade one then a higher grade one.

Anywhere.....look...look...read....read....and search

Buy the book before you BUY or SELL the coin...and read as much as you can about 2 topics.
Grading
And how to spot cleaned and damaged coins.

Speedy

 

Speedy:

Thanks for the tips. I'm reading alot and thought the forums would be the best source for information.

I do think that ended online auctions are prob the best indicator of current value.

Question:
What do you think of e-bay ended auctions vs. Heritage in assessing currect value?

I tend to think that e-bay may be attracting a different caliber of collector/investor. Is this a correct assumption? Can one expect lower prices from e-bay?

 

I think to get a total right one both should be used...sometimes its alright just to use one but you are right...Ebay has tons of "newbe" that don't search out the coins and bid high and silly prices (sorry to any newbes)....

Speedy

 

Word of advice...

Save for the keys and buy whatever keys you can afford first. I promise you, these coins will not come down (mostly) and will always increase in price. Commons will always be commons. Collect and buy these later.

It's not easy. You can pick up 50 commons for the price you may pay for just one coin. You look at your collection and see one coin "slot" filled instead of 50 and those open slots will drive you crazy. So be patient. Buy quality over quantity. It is advice I ignored years ago, but I wish I hadn't.

Rarity, grade and market demand...the less scarce, the higher the grade, the higher the demand are all good things for your purchase/investment for years to come.

 

Not to be a pain, but I'm not sure I understood this. Do you mean, Always look for Hight grade, scarce key dates, and market demand to improve the chances for an investment that will appreciate in value over the years?

Another question Midas (and any other long time collector/investors): is it your experience that since you started collecting years ago that the keydates (low mintages) are the ones that really appreciated in value over the years?

 

Key dates have gone up more so to speake than others...but then there are some like the 1950-D nickel that went down.
When starting a set of lets say Washinton Quarters from 1932-date...I would always suggest getting the keys first.

I don't think Midas meant only buy the keys and nothing else...becuase if I remember right he has a set of Cents and there are only a few keys the rest aren't....

Over the years Key dates have stayed up...with little going down times...
The market works many ways...but we are what many call in a Bull Market...that means the prices have been up for awhile now and are still going up...I think we are in year 2 or 3 of the Bull Market...most of the time a Bull Market last for 5 years.
Modern coins have alerady in one way fallen...a few years ago you could watch online auction selling the same coin for $$$ on week and for $ the next...the market for the high grade Modern fell.
That is why I suggest buying for the enjoyment and buying the coins that make you look again...

Speedy

 

As a coin-lover with an investment slant, here are a few of my thoughts:

Regarding Ebay - Coins seem to be frequently bid up to about the maximum price you will find, partly because there are a lot of people who seem to be buying with a RedBook in front of them and no other information source. So sometimes coins will be overpriced and sometimes underpriced and you need more information than they have to tell the difference.

Regarding Greysheet - The one dealer near me that operates a thoroughly professional operation openly buy any coin at current Greysheet price and sells coins at Greysheet plus 20%. I like this open and honest business approach. I don't expect a dealer to operate like a charity, but I don't like getting price-gouged either.

Regarding High Grade Coins - Be very careful about accepting the advice to buy the highest grade you can afford if you are an investor. This is very standard advice that is repeated endlessly and thoughtlessly to anyone who indicates they are partly in this for investment purposes. It's the stock market equivalent of telling people to buy the highest price stock they can afford, and is the numismatic equivalent of the "greater fool theory" of investing. Life just isn't that simple. Sometimes buying an MS65 coin is the right decision. Sometimes buying 5 MS63 coins with the same date and mintmark for the same price as one MS65 makes better sense.

Regarding Key Dates - This is another frequently repeated piece of advice that could get you financially killed. Key dates have outperformed in the past, and people automatically assume this will go on forever and will talk about sacrcity and other plausible factors to support the argument. This leads to the conclusion that no price is too high to buy a key date coin as long as it is listed in the Greysheet. But if a key date coins formerly sold for 10 times the price of a non-key, and subsequently sold for 20 times, and currently sells for 30 times, is it really wise to assume that in the future it is a very high probability event that it will sell for 40 times?

Anyway, those are my opinions. You will read a lot of others who disagree with them. Keep in mind at all times that they may be right and I may be wrong. There are many people here with better numismatic credentials than I have; but I think I might have the edge over most of them in spotting good investment opportunities.

 

There you go.... thinking that quanity is better than quality!!!

Speedy

 

I can't help it. Quantity has a quality all of its own. To me, quality is important up to a point, and once that point is exceeded, it diminishes in importance and value as the quality rises. For many coins that aren't particularly scarce, that point seems to kick in someplace around MS63-64, but it varies all over the place so a judgment has to be made on each purchase.

The collector's calculation seems to be "What's the best quality I can afford?" The investor's calculation is "What do I pay vs. what I get." I think it's easiest to see this in action with $20 gold coins because there is a high bullion value backing each coin, but it applies pretty much across the board.

 

Any opinions/advice on hunting undervalued coins?

 

Nobody knows for sure...they can only guess...
If I knew what coin was going to go up I would be buying everyone I could and not telling anyone.

One of my favorite coins is the Proof Franklin Half dollar!

Speedy

 

Speedy is right. His expertise on collecting Franklins is probably on track with finding an undervalued and underappreciated series to collect before the prices become unobtainably high. Cladking has pointed out countless times the virtues of buying selected modern clad coins that are likely to become highly prized in the future. So there is a lot of great advice in this forum for hunting undervalued coins. Unfortunately, the most popular series with the best reputations and the most recommendations from dealers and experts also tend to be the ones least likely to be bargain priced. I suppose almost everything will become popular sooner or later as fashions change in the hobby, so it might pay to look among the least popular series for undervaluation.

 

When I'm looking for a coin that I think is undervalued I also want one that isn't collected much....Proof Franklins are low mintage....pretty cheap (sometimes) and easy to find in nice grades.

Also dimes form 1946-date aren't collected much....Half Dimes aren't collected much and low mintages....some Large Cents aren't collected much it doesn't seem like....and older Proof coins....

Clad king I'm sure will be along to help with the Clad part of this question....

Speedy

 

After reading all the posts and the advice you have received from many sources, these are worth all the rest of them rolled into one. IMO
No more trustworthy advice could be offered than what GDJMSP has given.