Coin Investment Club [was make money fast]

Discussion in 'Bullion Investing' started by mrbrklyn, Jul 25, 2007.

  1. mrbrklyn

    mrbrklyn New Member


    A Cointalk investment club would serve a few purposes.

    First, it will give us a real chance to learn about the real economics of investment in rare coins. That should make quite a few more experts to discuss with authenticity about the real economic opportunities and realities that are involved in coins. It will also strengthen the community, and give us an ability to invest in coins which most of us would normal not be able to afford.

    I was sort of aiming for something like this when I started this thread. If we get 10 people with just $50.00 initial investment, then we could get a good head start.

    Ruben
     
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  3. Magman

    Magman U.S. Money Collector

    I like the idea, as stated in the other thread.

    Here i the link by the way, for those who havent seen it Link!
     
  4. zaneman

    zaneman Former Moderator

    I think it sounds like an interesting idea, but unfortunately I cannot partake.

    edited to add: There would be many other things to consider, such as grading fees, the fact that not everyone would agree with the strategies employed, the issues with accounting and reporting things to the IRS, turnaround times in grading, shipping costs, security etc.

    Edited to remove part of post.
     
  5. clembo

    clembo A closed mind is no mind

    Geez Ruben!

    Suddenly we're on the same page.

    As I stated earlier there are a lot of variables to consider. The person in charge must be trustworthy and knowledgeable first and foremost.
    Said person should also get a cut for their time involved in the project as well as any return.

    Ironing out details could take a long time and I doubt anyone will get rich. On the other hand it would be an interesting experiment. Hey, if I tossed in $50 and made $10 in a few months it would be worth it for the experience alone.

    Not going to ramble but would be interested to hear other views.

    clembo
     
  6. Magman

    Magman U.S. Money Collector


    I think it would depend on the profit.
    once the profit is figured out, then we can determine their extra share.

    anyways, I'd definitely be up for it.
     
  7. GDJMSP

    GDJMSP Numismatist Moderator

    Hmmm - let's see. You guys think you could make something work that the largest financial institutions in the world could not make work. :goof:

    And of course you would also have to deal with all of the same legal problems that they had to deal with as well. And the lawsuits - and the criminal charges. Do you really want me to go on ?
     
  8. Shortgapbob

    Shortgapbob Emerging Numismatist

    Lol...and the bubble has been burst! :D Very good points Doug. It's an interesting concept, but certainly much tougher than it would seem.
     
  9. zaneman

    zaneman Former Moderator

    Doug, are you referring to when major firms like Merril Lynch started doing this many years ago? I heard they failed miserably, and later took major losses on what they purchased, but am not really sure of the specifics.
     
  10. huntsman53

    huntsman53 Supporter**

    I would be simplier to get 50 folks together to invest $20 a Month and purchase Powerball tickets!


    Frank
     
  11. mrbrklyn

    mrbrklyn New Member


    Well, the first issue is only if your planning on making any real money. For me, its a matter of learning and fun. the attempt to make money is the important thing. To make it is another.

    As for any criminal activity, there is nothing illegal about a few friends pulling their money together to buy some coins or a lottery ticket. If we actually made a lot of money we'd need to formalize things.


    Ruben
     
  12. Danr

    Danr Numismatist

    the taxes on that would hinder proper buying and selling for max profit. Taxes would be the killer and I would not participate if the tax part were not none properly.
     
  13. GDJMSP

    GDJMSP Numismatist Moderator

    The legal part comes in as soon as you say it your intent to make money and then take money from others - only licensed investment advisers are allowed to do that. Even suggesting that a person should buy a given coin because you or somebody else thinks it would be a good investment - is illegal. Ask David Hall if ya don't believe me. He and quite a few others were charged and sued for just that. It cost them a fortune.

    I'm not trying to argue with you Ruben, you can believe whatever you want and you undoubtedly will regardless of what I say. But I am relating facts - things that have actually happened. So you take it how you will and let it go at that.
     
  14. zaneman

    zaneman Former Moderator

    Wow! I had no idea about any of that.
     
  15. GDJMSP

    GDJMSP Numismatist Moderator

    Yes, they tried to put it together again just a couple years ago. Congress stopped 'em that time. Even talking to somebody about "investing" in coins is a BIG no-no !
     
  16. mrbrklyn

    mrbrklyn New Member

    Your making a number of mistakes with regard to taxes. Taxes are YOUR problem. We're not making a business or a corperation. I already checked this with my accountant. Investment clubs are all over the US and there is no taxes until something is sold and then you have to pay taxes on your part of the profit (or loss)

    Ruben
     
  17. GDJMSP

    GDJMSP Numismatist Moderator


    Want a copy of the suit papers ? I'll email them to you ;)
     
  18. zaneman

    zaneman Former Moderator


    I'd definitely like to read them. :eek: :eating:
     
  19. mrbrklyn

    mrbrklyn New Member

    heh - sounds like copyright.

    Anyway, this is not the case, however, of what will happen. This would be an investment club.

    http://sec.gov/investor/pubs/invclub.htm
    --------------------------------------------------------------------------------

    Investment Clubs and the SEC
    Investment clubs and questions about them have grown tremendously. This document answers some of the most common questions and directs you to sources of more information.

    What is an investment club?
    An investment club is a group of people who pool their money to make investments. Usually, investment clubs are organized as partnerships and, after the members study different investments, the group decides to buy or sell based on a majority vote of the members. Club meetings may be educational and each member may actively participate in investment decisions.

    Are investment clubs regulated by the SEC?
    Investment clubs usually do not have to register, or register the offer and sale of their own membership interests, with the SEC. But since each investment club is unique, each club should decide if it needs to register and comply with securities laws.

    We'll discuss two securities laws that might apply to investment clubs:

    Under the Securities Act of 1933, membership interests in the investment club may be securities. If so, the offer and sale of membership interests could be subject to Federal regulation.

    Under the Investment Company Act of 1940, an investment club may be an investment company, and regulated.
    When does an investment club have to register the offer and sale of its membership interests with the SEC under the Securities Act of 1933?
    Since the Securities Act requires the registration of the offer and sale of most securities, the investment club must first decide if its membership interests are "securities." Generally, a membership interest is a security if it is an "investment contract."

    Generally, a membership interest is an investment contract if members invest and expect to make a profit from the entrepreneurial and managerial efforts of others.

    If every member in an investment club actively participates in deciding what investments to make, the membership interests in the club would probably not be considered securities. If the club has any passive members, it may be issuing securities.

    Sometimes offers and sales of securities do not have to be registered because they are exempt under the law. For example, a non-public offering is exempt.

    When does an investment club have to register with the SEC as an investment company under the Investment Company Act of 1940?
    An investment club must register with the SEC as an investment company under the Investment Company Act of 1940 if all of the following three conditions apply:

    the club invests in securities,

    The club issues membership interests that are securities (see above), and

    The club is not able to rely on an exclusion from the definition of investment company.
    For example, a "private investment company" may not need to register with the SEC. To qualify, an investment club

    must not make, nor propose to make, a public offering of its securities, and

    must not have more than 100 members.
    How do you know if an investment club is making a public offering?
    An announcement that a club is looking for new members might be considered a public offering, but this is determined on a case-by-case basis. An attorney with experience in securities law can help the club determine if its membership interests are securities, and if the club is making a public offering of those securities.

    Do securities laws apply to a person who provides advice to an investment club?
    If the adviser is compensated for providing the advice regarding the club's investments, the adviser may need to register according to the Investment Advisers Act of 1940. Also, if one person selects investments for the club, that person may have to register as an investment adviser.

    In general, a person who has $25 million or more in assets under management is required to register with the SEC under the Investment Advisers Act of 1940.

    A person managing less than $25 million may be required to register under the securities laws of the state or states in which the adviser transacts business.

    Both the Investment Advisers Act of 1940 and many state laws do not require registration for advisers with a small number of clients.

    Do states regulate investment clubs?
    State securities laws may differ from federal securities laws. To learn more about the laws in your state, call your state securities regulator. To get the telephone number for your state, visit the North American Securities Administrators Association (NASAA) website.

    To learn more about investment clubs or investing, visit your local library. You may want to contact the National Association of Investors Corporation (NAIC) website. This membership organization provides education for individuals and members of investment clubs.

    For more information, read our publications, including: Invest Wisely: Advice From Your Securities Industry Regulators or Ask Questions.

    If you have a complaint, send us your complaint by using our online complaint form. If you have a question, check our Fast Answers. You can also reach us at:

    Securities and Exchange Commission
    Office of Investor Education and Assistance
    100 F Street, N.E.
    Washington, D.C. 20549-0213



    http://www.sec.gov/investor/pubs/invclub.htm

    --------------------------------------------------------------------------------------------------------------

    In addition, there are limits upon which the law can inhibit freedom of speech.
     
  20. Magman

    Magman U.S. Money Collector


    whats a small number?

    chances are if we did this we would have, probably at most, 10 people.
     
  21. mrbrklyn

    mrbrklyn New Member


    What exactly did they try to put together (which BTW is not what we're thinking of doing ;) ) Whatever it was, Merril Lynch was trying to charge a fee.

    Ruben
     
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