investing and collecting

What do I "INVEST" in? PCGS and NGC graded Morgans, slabbed Franklin halves, and slabbed Kennedy halves.
What do I "COLLECT"? UN-slabbed Walking-liberty halves to fill my Whitman album.

 

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What do I "INVEST" in? Nothing, in terms of coins. I'm not a coin-gambler.
What do I "COLLECT"? Everything else.

 

HA-HA... i luv it =) and i agree!

 

The stock market is gambling, if you buy crap!! if you buy quality stocks, its investing. coins are a hard asset. hard assets appreciate over time. Hard assets keep up with inflation. quality coins are like money in a piggy bank. you can never really loose your investment, unless you over pay by a ridiculous amount. People invest in paintings. Its just canvas and wood and oil if you buy crap. if you buy good stuff, its an investment.

 

coin is investing, no matter if it one or many, you will never loose at it, they will always gose up in price over a period of time. you may find one that jumps in price cause it a error, or it stay the same no matter what condition it is, what ever it is still fun.

 

i dont agree with that. i have seen lots of coins drop considerably in price .. and never recover (as of yet) you always run that risk on any coin/set you buy. Look at the poor souls who bought all those mint sets years upon decades ago. Alot of them still sell for less than issue price.

To each their own on whether they collect or invest, but to say you will always win is not totaly correct

 

Well I prefer to call it speculating. To me investing is $5,000 in a 7 month Certificate of Deposit at the bank that pays 5.3%. It is a sure thing and has to pay off. Speculating in coins means American Gold Eagles and Silver eagles too. They are known the world round and easily liquidated. Collecting to me means my Mercury dimes and Walking Libertys, the FBL Franklins and my complete sets of Kennedy halfs, Roosevelts and early Jeffersons.

 

well, i 'collect' ASE's every year in proof, unc bulion and now unc. It matters not to me (as i am sure lot of other collectors) if they go up in value or not .. i doubt i would ever sell. i collect them because i like the design, and i treasure them in my collection.

 

Yup they are nice. I've got several and one proof ASE. I have two that were given out by Chrysler Corp.
at the first showing of the rear wheel drive HEMI Chrysler 300. If you went to the Premiere night they gave you a nice silver eagle in a box with a COA. I bought the second one. That, I think of as an investment.
However the obverse is just a spin off of the Walking Liberty Half. So I collect the real thing.
There is nothing like a nice Walking Liberty!

 

What could be said after that except it is worth a re-read by one and by all.

 

GDJMSP, excellent post!

How do you define what is the "good stuff? Why it is what gave you a good return when you look back at it twenty or thirty years after you buy it. Those thing that gave you poor returns were not the good stuff. Of course since you will only know it a couple decades after it is too late that definition isn't going to help very much.

And on that graph, ignore the part before Feb 1986. The idea of a PCGS 3000 before there was a PCGS is a bit meaningless because there is no way of judging the grade of the coins before that time since there is no way of knowing who graded the coins, what standards they used etc. So taking the Feb 1986 as the baseline, if you bought the PCGS 3000 then at $60,000, now twenty years later they would be up 10% to about $66,000. (If you use the governments CPI index for the rate of inflation it fails miserably. Just to keep up with inflation it would have to be $108,000.) If you had put the money in CD's at 5%, today it would be worth $159,198. And I'm sure the PCGS 3000 was selected with an eye towards showing how coins appreciate which means they tried to select the "Good Stuff" when they created the index. Also note that in the past 13 years it has only been above the original baseline for the past three years. I look at that graph and it tells me that coins are NOT a good investment.

As with many investments it boils down a lot to luck and timing. Luck in picking the item that later makes a major move and timing in picking it right before it does and then selling while it is still on the move up. A good case in point are the GSA Morgans. Not too long ago someone mentioned to me that he wished he had bought up a bunch of the GSA coins back when the government sold them in the early 70's. I told him to be glad he didn't. GSA morgans made a big jump up around 2002 or 2003 from the $70 level to about $250. If you bought them in 2001 and sold in 2003 you would have made a killing. A 100% per annum rate of return. If you bought them in 1972 when the government sold them and then sold them in 2003 you made between 3 and 5% compounded annually. If you missed the big jump and sold early in 2002 you made a 1% rate of return. If you bought in 2001 and are still holding you are still doing well, but you are down to a 20% per annum rate of return instead of 100%, and falling.

 

Great chart. But it appears that people who put collections together in the 70s probably made out okay investment-wise. Buying into a mania, whether it is stocks, real estate, or coins is never profitable. Buying something of quality when it is unpopular can be profitable, but comes with no guarantees. Prices today are probably reasonable, but a few years ago when I started collecting again, many things looked down right cheap, which is one reason I became interested again. For example, many silver coins sold for about the same price they did in the 1970s. What else can you buy today for the same price you paid 30 years ago? Coins don't produce a cash flow, so I have no problem calling them speculations instead of investments. But sometimes they can be good speculations.

 

All of this is excellent reading. My enjoyment comes the moment I place the last coin in a folder to complete a series. For example yesterday I went to a coin show and picked up a nice 1950D Jefferson nickle for ten bucks. My folder goes from 1938 to 1964 and stops. The only hole left was the 1950D.
Having spent ten dollars already for the 1939D, what's another ten? So now that folder is done.
Investment? Well probably it is now that it's complete. Incomplete sets do not sell as quickly.
But can I make a profit? Probably not.

 

$1500 in the last bull market? I would have to ask WHICH morgans? high grade ms68? ms67? CC? Ill be honest with you. I dont insist on trying to convince you its an investment. you keep trying to convince me its not, that now I feel like dumping all my morgans, and staying out of the coin hobby.

 

I try to collect stuff worthy of collecting...

 

The middle ground between jumping in and getting out would be to sell one or two morgans and see if you turn a profit. That will let you know whether you are really investing or not. Personally, I think coins with high numismatic premiums are very speculative. The lowly silver eagle is probably a better investment because it moves dollar for dollar with the price of silver and can be sold for close to the asking price.

 

If the silver eagles are supposed to move with the price of bullion, whats the point of the mint making them? whats the point of buying them? I could just buy silver troy-ounce bars!! ....I still say coins are investing, if you buy quality, and not crap, and not buying crap, is buying top-tier slabs, so theres no risk of some old-timer's over-grading. rule of investing: dont invest too much in one thing. ...Ive heard for years how the stamp market is in the crap pile!! but if you look on ebay, the rarer stamps still get some big prices. not book prices. but if a stamp is in the book for $1500, on ebay it will still get $500 to $800. I would think the big risk is the big jumps to $1500 or more, from a couple of hundred bucks, like the 1880-o morgan. $300 in MS-63. $1500 or more in MS-65. Will the MS65 hold its value? will the MS60 hold its value at $50? Will the MS62 hold its value at $125? I would say more likely than the outrageously expensive ones.

 

The point is that there is a chance for the silver eagle coin to develop numismatic value. The bar probably never will. The 2006-w uncirculated is a good example of how this can happen. So at a minimum the coin will probably return as much as a silver investment, and occasionally more. That's why I prefer silver eagle coins to silver in other forms. If making money is the goal, I think this is a much more reliable approach than buying slabbed coins with substantial numismatic premiums over the intrinsic bullion value. I'm sure there are folks who make money with them, but they are exceptional.

 

OK, this kind of reminds me of a joke, so here goes...

There's this coin investor, and, every 5 years or so, for 50 years straight, he has a losing season. One season, he loses $10,000; the next, he loses $25,000; the next, he loses $15,000...etc., etc., etc., etc. So, one day, a well-meaning friend of his asks him, "Look, did you ever think of trying something different...like baseball card investing, say?" And the guy goes, "What the heck do I know about baseball card investing?"