Featured 100 Lessons for Building and Selling a Collection of Rare Coins

Discussion in 'US Coins Forum' started by kaparthy, May 11, 2019.

  1. kaparthy

    kaparthy Well-Known Member

    Pleasure & Profit (Second Edition): 100 Lessons for Building and Selling a Collection of Rare Coins by Robert W. Shippee, Whitman, 2019, 318 +x pages, $19.95.
    Shippee Cover.jpeg
    Robert W. Shippee found no profits and significant losses in his acquisitions of high-grade certified modern coins. A Deep Cameo Proof 69 Silver 1999-S Connecticut Quarter is just not rare; and it simply never excited him. He bought the coin (and four more similar Mint States and Proof, silver and clad 1965, 1976, 1999) and he lost half of his $370 investment at sale. He bought them only to complete a PCGS Registry set. He built the set only to sell it. He made a lot of money on the truly collectible and objectively rare coins from the 18th, 19th, and 20th centuries, and he did it under ten years. This is his story.


    He weaves numismatics with his other passion, golf. My complete disinterest in golf did not detract from the book. And I am not an investor. As a numismatist, I write history. Whether I (or you) could afford any of these coins is also putative, but well worth considering. Shippee was an international banker. He could well afford to golf at the finest courses. So, to pay $3220 for an 1869 DDO Proof 66 Cameo Nickel 5-Cent coin was not beyond his budget. (He sold it two-and-a-half years later for $4140, a gain of 29%.)

    But if you stop and think about it, it might not be beyond ours, either. I mean, how much do we all spend on low grade and midrange stuff every week, whether online or at the coin store? What if you bought only one or two coins a year? What would you have at the end of ten or 20 years? Would you sell for a loss over the counter at a coin store or would your inventory be given a name in a catalog?

    For each entry, Shippee details the financials: cost; sale price; gain or loss; and holding period. But the book offers far more than mere gloating over the wins and polite coughs over the losses. The history of each coin also is given in a couple of paragraphs or a couple of pages, often with the nice textual details paralleling the visual appeal of the subject.


    “The Draped Bust, Large (or Heraldic) Eagle half dime, designed by Robert Scot, was minted in five years from 1800 to 1805, with a break in production in 1804. Fewer than 125,00 coins of this design were produced, so all dates are scarce today. In 1803, mintage was a puny 3,060 pieces, making this date a classic rarity. Only about 15 examples reside in major grading service holders, and none of these grade better than AU-50. On the rare occasion when one comes up for auction, you should not be surprised to see a six-figure price. Counterfeit examples of the 1802 dime exist, and both the Smithsonian and American Numismatic Association have one of these in their institutional collections. Of the other four dates, the 1800 is clearly the best struck and the most readily available, while the remaining three dates are all about equally scarce.”
    Cost: $10,000; Sale Price $18,400; Gain 84%; Holding Period 3.2 years.


    Whether you have an extra ten grand or not, if you want to invest in rare American coins the principles explained here are valid across the range. And, in fact, I submit that they apply not only to ancient coins as well, but to any collectible: buy what other people want; buy the best you can afford; buy rarities; buy what you care about. The last point should not be overlooked.

    Just take refrigerators, for example. You could save your money and buy an outstanding machine that begs to be in someone else’s home. But if you have no passion for household appliances, you are not likely to find another buyer who is on fire for an icebox. Before the sale of his “Waccabuc Collection” Shippee knew other collectors and was known. He was a regular at ANA conventions. He visited dealers when he traveled. He corresponded. He bid and bought. He participated in our hobby. His passion for the game was the key to his success.
     
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  3. baseball21

    baseball21 Well-Known Member

    In all honesty his bank account was his biggest key. It's much easier to make money on 6 figure rarities than it is on a the $100 Morgan which is what the majority of collectors have a budget for. He was playing at a completely different level and if you take that approach to low value coins which is all most people can afford you're almost certainly going to eat it at sale time which is what makes these money grab books so dangerous to the average collector
     
  4. kaparthy

    kaparthy Well-Known Member

    I disagree and I said so up top: "... how much do we all spend on low grade and midrange stuff every week ...What if you bought only one or two coins a year?"

    You buy 10 or 20 $100 Morgans and whatever else over the course of a year and then complain that you cannot afford better coins. I do agree 100% that most people in general including most people here are not at Shippee's level of involvement. But it is a matter of choice, not destiny. "The fault, dear Brutus, lies not with our stars..."

    As for those $100 Morgans, that is just one area of collecting where knowing the coins and being disciplined can pay dividends over a short time. The key there is knowing the true rarities among the varieties of the type and having the discipline to wait for the right coin at the right price. But, again, you can buy 20 of those, or something worth owning for $2000. The choice is yours.
     
  5. -jeffB

    -jeffB Greshams LEO Supporter

    Okay, that's not an analogy I was expecting to see here.

    Then again, I've never checked out a refrigerator auction. Which TPG is best for finding a slabbed example that will appreciate over time? :troll:
     
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  6. baseball21

    baseball21 Well-Known Member

    Most collectors have a monthly coin budget of about a $150 or less. Even if you buy 1 coin a year you still aren't even close to an investment level coin. Actual investment level coins are essentially all 5 figures or more.

    Building a set for the sole purpose of selling for profit in a short period of time is something that the overwhelming majority of collectors do not have the finances for. It's even harder to do today because word gets out or people realize the trend and they run you up on the coins left that you need.

    Great sets will generally sell for a profit overtime, but to do it quickly and expect a profit you better have a huge bank account for the right coins.

    While there may be good points on can learn from in books like these, you have to know how to weed through all the fluff. In the end the main person helped by these get rich/make money with coin books is the author and the publisher making money off the sales, the people that have found an avenue for consistent success aren't writing about it they're just doing it

    I don't own any 6 figure coins and that is hardly a matter of choice. Financials aren't a choice unless you just stop paying all your bills to maximize hobby money which would be insane.
     
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  7. TheFinn

    TheFinn Well-Known Member

    You can still find valuable Morgan Dollars in the $100 range if you know what you're looking for. Every series has bargains if you put forth the effort and are truly interested in them. People have found coins worth thousands of dollars for only a few. Ever found a tough VAM Morgan for no premium?
     
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  8. C-B-D

    C-B-D U.S. Type Coins or death!

    Knowledge can make you money in coins. Take the Cherrypickers Guide, for example. Variety picking is just about the only surefire way to do it on a low budget.
     
  9. baseball21

    baseball21 Well-Known Member

    True, but cherry picking is completely different just like crossovers to PCGS, CAC, regrading under graded coins etc all completely different than just set building to resell
     
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  10. Paul M.

    Paul M. Well-Known Member

    I've read this book, and, honestly, I think the value in it for the average collector is the lesson to "buy quality" and a bunch of pretty pictures. What this man who can afford to buy high grade, 18th century gold has to tell me about how I collect isn't even anything I can do anything with beyond just buying the best I can afford.

    If you buy 2 coins a year for 20 years, you have 40 coins. That doesn't really get your name in a catalog, IMO, and even if it does, so what? Buy 40 coins or 400 coins, but enjoy the journey.

    See, here's the thing: almost nobody should be investing in coins at all. Investors don't like tying up cash in illiquid assets that don't generate any cash flow, and coins have both of these properties. Until you get into the ranks of at least 5 and probably 6 figure coins, it's not even certain that they'll appreciate at all over inflation. And, even then, you need a combination of rarity and desirability (which essentially means there needs to be a market for the coin) to achieve that.

    I totally agree with this. Read this book for the pretty pictures and maybe the stories. Disregard the numbers.

    If you rely on market appreciation to tell you what to own, you probably shouldn't own any coins, because nothing has consistently appreciated over time, after inflation, except pie in the sky rarities that only 5 people in the world can own.
     
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  11. Gallienus

    Gallienus Well-Known Member

    My interest in coins is to illustrate history and I like coins which can show or were made from interesting eras. While we all like something that increases in value I'm not sure that even Shippee could duplicate his sucesses today. The US market seems to have been oversold with investors and is presently making a correction. It could also be a demographic trend as all the old monied babyboomers who collected these things are dying off.

    I'm not too fond of investors as they mainly drive up prices on coins that I'd need for my collection. So much to the point that I find US coins to be completely unaffordable. Also I don't even know how to buy them as US coin dealers won't even talk to me with my more modest spending. World and Ancients dealers are much nicer.

    Who would even buy a DCPF 66 1869 Shield Nickel without having a collection of other nickels or perhaps a 19th century proof type collection? Sounds a bit risky to me as could be an expensive item but also demand could dry up also very quickly.

    With Ancient coins I dread & enjoy giving presentations to high school kids who are one their Ancient History section in the 6th grade. The ancients span a period of 630/650? BC until 476 AD. While 476 is a hard date to acquire (yes I did bid on the Romulus Augustus tremissis sold this past January at Heritage), a coin of 474/475 AD with Julius Nepos is much cheaper and possible to acquire.

    High schools have never shown an interest in medieval history thru coins and that period is much harder to illustrate with coins. Medieval is their next subject. I do have one class that had pictures of medieval coins and medals on the wall tho. I promised them a picture of a medieval French Louis d'or (ms-62) I have, made in Jan 1348: the year of the Black Death. However I may give then a photo of my 1486 guildiner (silver dollar) as that's a much more iconic coin: tho technically 1485 was the end of the Medieval Era.

    [​IMG]
    Actually I couldn't imagine a coin further away from a PF-66 1869 Shield Nickel.
     
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  12. bsowa1029

    bsowa1029 Franklin Half Addict

    I’ve read that book. The way it’s written is very pompous and arrogant.
    That guy did nothing special.
    Anyone with his worth could build the same exact set, maybe even something better.
     
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  13. kaparthy

    kaparthy Well-Known Member

    Your argument went from five figures to six, and the story does include coins priced $10,000 and above to $50,000, but even his Arabic Numerals 1907 Saint was a bullion purchase at $1000. Also listed among many others in the same ranges:

    1809 Classic Head Half Cent MS-63 Brown Paid $1495 Sold for $1610
    1881 Nickel 3-Cent Piece Proof 67 Cameo Paid $1208 Sold for $1495
    1875-CC 20 Cent Piece MS-64 Paid $2227 Sold for $7475
    1853 Half Dime Arrows at Date MS-64 Paid $518 Sold for $552
    1900 Five-Cent Nickel Proof 66 Paid $633 Sold for $863

    It is not all about big bucks. I granted fully at the beginning that if your budget is limited to $100 and you like Morgan Dollars, it remains that you should buy the best quality you can afford. How many of us here will buy a coin that is VF Net Graded for damage but with XF Details coin? It is a problem coin, not an Extremely Fine coin; and it cannot be sold later as an XF. Save your money; be patient.
     
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  14. kaparthy

    kaparthy Well-Known Member

    See my comments listing just some of the coins priced at a few thousand or a few hundred.

    As you said, and I do agree, the best advice for anyone from this book is to buy quality.

    As for those world-famous coins, I have written articles for The Numismatist about famous collections and the owners would have made more money sticking to the day jobs that afforded them the coins in the first place. But even for coins with names, it is not about the money. It is the collector's passion.

    I found a lot of that in this book. Shippee was a collector long before he took on this challenge. He had completed the US Type Set in 2007 and then made up his mind to pursue a collection that could be sold for a profit in under ten years.

    Shippee's passion is not my own, but I appreciate his. When I read this, I thought about what it would take to build a resaleable array at our level of income. I believe that it can be done. I just have no interest in it. The thought of looking at coin after coin, hour after hour, day after day, weekends... nights... It left me feeling tired. But people here do just that. It is how they participate in the hobby.
     
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  15. kaparthy

    kaparthy Well-Known Member


    I agree completely. It is my own primary interest, as I said. And this book does have interesting historical details in support of the overall narrative. But it is not about the Black Death, or even the death of Abraham Lincoln. Still, I found enough here to keep my interest as I read.


    Well, it is a pretty coin from an interesting era, regardless of the putative "risk" in owning one.
    In 1869:
    January 1 – Sigma Nu, the first anti-hazing honor/social fraternity, is founded, at Virginia Military Institute.
    January 20 – Elizabeth Cady Stanton is the first woman to testify before the United States Congress.
    April 6 – The American Museum of Natural History is founded in New York City.
    May 6 – Purdue University is founded in West Lafayette, Indiana.
    May 10 – The "golden spike" is driven marking the completion of the First Transcontinental Railroad in Promontory, Utah.
    June 1 – The Cincinnati Red Stockings open the baseball season as the first fully professional baseball team. Thomas Edison is granted his first patent for the Electric Vote Recorder.
    September 24 – Black Friday: The Fisk-Gould Scandal causes a financial panic in the United States.
    November 6 – The first intercollegiate game of American football is played: Rutgers University defeats Princeton University 6–4 in a college football game.
    December 10 The Wyoming territorial legislature gives women the right to vote, one of the first such laws in the world.
    https://en.wikipedia.org/wiki/1869_in_the_United_States


    Nice coin. In many ways, very similar to a Proof Shield Nickel... different time, different place, same idea for them, same passions for us.
     
  16. baseball21

    baseball21 Well-Known Member

    Actually never mind. If people want to promote this not my problem. The facts have been stated.
     
    Last edited: May 13, 2019
  17. Seattlite86

    Seattlite86 Outspoken Member

    :troll:
     
  18. fiddlehead

    fiddlehead Well-Known Member

    I found what he did and wrote about very interesting. Certainly an unusual approach to investing a million dollars or so. A lot more interesting than investing in suburban house or ETF's. He did have the advantage of excellent timing. Kind of like investing in the Boston real estate market in 1980. Almost impossible to lose money. But he did - on several coins. I often find it interesting how much money people lose on rare coins - just looking up some of the auction results. Clearly they don't always go up. So he had good advice, good timing and wrote a really interesting/entertaining book - and he did lose some serious money on a few.
     
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