Is numismatics going the way of philately?

I think counterfeiting and the prospect of a cashless economy pose a greater long term risk to our hobby than the practices of the U.S. Mint.

As for...

...so what? The U.S. Mint doesn't define our collections, we do. Why feel compelled to buy these manufactured collectibles? The silver proofs are essentially bullion, and the circulating commemoratives are nothing more than cupronickel Beanie Babies. Some day after we're all long gone, they'll perhaps be of modest value to collectors, the way IHCs and wheat cents are to us, but that's about all.

I admit I fell for it at first, and started adding state quarters to my U.S. type set, despite the fact that they were generally unattractive and poorly manufactured. But when it became clear where the Mint was heading, I said "enough!" and dumped everything after the SBA dollar (yeah, I know, it's ugly too, but it served as a convenient end point).

So now, my U.S. type set has become my 19th & 20th century U.S. type set (can't afford the coins before and don't want the coins after) and I'm very happy with that. Because the U.S. Mint doesn't define my collection. I do.

 

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It is difficult staying even and making a profit in coins or stamps. Here are some rules I always used to continually make BIG PROFIT margins ...

1. Stay away from Modern Types - Non-Silver Proof Sets, U.S. Mint Issues, etc. Modern stuff generally KILLS YOU. There are some gains in slabbing MS69/70 type coins for the generalist. Its a crazy world we live in ...
2. Buy the book before the coin. Buy historical coins but be careful in buying coins which have MAXED OUT. U.S. Large Cents or U.S. Colonials at Condition Census Levels - High Profile Collections - unless you agree there is no other way to obtain this specimen and realize you will lose money or break even due to auction frenzy and high auction (17.5% commissions).
3. Check coin catalogs of major collections. What went hot - what went soft. Each series or Country has GO TO coins.
4. Buy Foreign - most areas are still virgin and not infested with greed, slabbing and MS grading games if not losing money or you feel you are now stuck in a buy high/sell high scenario - be honest.
5. Are you into coins simply for its social ramifications? Yes? If so - Then don't spend much.
6. Are you into coins for both social and retirement considerations?
7. What are the dealers buying for their own collections that you also specialize in?
8. What are they selling to put food on the table?
9. Always work your collections. I meet and know people that just buy. Any idiot can just buy. When you sell and try to make a profit or break even it makes you a more rounded collector. Few understand this principle.
10. Research or write papers of your coin collecting area of interest. It helps promote your area and makes you more of a solid collector. Know the inner circle of the top dealers in your niche. Know them - VERY WELL. A dealer once told me from California if I was to buy my merchandise strictly from the two big auction houses today I would be out of buisness in a year. Buy raw - slab UP in grade - there is your profit margin - destroy the pedigrees from the 1800's - I see this all the time. Some things are horrible. But these few IDIOTS do need to make a living. Its the signs of the times. Many of my pedigree U.S. Colonials are now in generic slabs with grades 1-3 X higher.
11. There is always another collection - there is no Santa Claus in numismatics - and the average collector spends 20 mintes/week with his coins which explains alot of your inquires.

Coin Collecting is around to stay for awhile - but tens of thousand $$$ are flushed down the toliet each week. Its a TOUGH hobby. No doubt.

John Lorenzo
Numismatist
United States

 

Back in the old days (the 1970s and 1980s), they used to make Mint Sets and proof sets. None of these fancy coins like they do today. People bought them because that's all that was available. But those Mint Sets are worth less today.

Back then, kids would fill books with all the same coins (just different dates). They must have been bored or pushed into it by their parents.

Personally, I like some of the modern stuff that you consider garbage (like the 5oz Silver ATB quarters). And frankly, if they stopped producing them, I wouldn't be buying any US coins.

 

As one of those younger collectors (22) it is hard to get people to join into it. I'm at college and keep most of my collection at home but I keep a handful of old silver and currency to show my friends. People are always interested by it, I mean when you pull out an indian head penny and people realise that there was different design before the Lincoln cent it just blows their mind.
However people from my age group see it as an expensive hobby. All they know about coin collecting is the coins that sell for millions of dollars. So I pull out an old roman coin from 400 AD and point out to them that I probably only paid $1 for this it starts to change their mind. But I always lose. I try to convince them to try it out but they would rather spend money on food, games, cars. haha I never eat out and take the money that I would spend on that and put it into coins.
I've been looking for years to find a fellow collector at my school and have yet to find one

 

I came into this hobby in my late twenties...about five years ago. I currently collect only U.S. military trade tokens and I'm very comfortable with the idea that my collection really only holds value to me. I don't think what the government mints are doing will destroy the hobby but I am also open to the idea that we're in a bubble right now. Hopefully it bursts and lots of great coins that are outside of my current budget become affordable!

 

Nah.

It won't happen in my lifetime nor my childrens lifetimes. As long as coins are being used there will be people collecting them.

And no, I do not believe that this will become a "cashless" society anytime soon since the general public is not so easily swayed into giving up "their money" despite what some would have you believe.

 

I share the pain of all stamp collectors. I too have a large collection but stopped new issues with the Elvis stamp. The hype around it sickened me. I still collect and occasionally fill a space with a classic late 1800's or early 1900's piece. Todays stamps are almost non collectable because so many are self stick and the P.O. wont "carefully" cut one stamp out of a sheet for fear of wrecking the stamp next to it. Not to mention the deterioration of the gum on these stamps as time passes. Coin collecting is here for the time being as far as current issues go but this can change if we become a digital money world. There will always be, in my opinion, a collector for issues gone by the way.

 

I think that's what some of the older collectors, including me, haven't learned. Your generation, yourself excluded, have different values than us in our 60's. I think for some, unknown to me, reason coin collecting is viewed differently by your generation.

Our generation was like our fathers generation, work hard, and play comes last. I was surprised to read on another forum, filled with people your age, chastising another young poster who said he looked forward to overtime work. The other young people said he was crazy, that he shouldn't spend his free time working OT, he should be out enjoying himself. Speaking for my peers, when we were in our 20's, we worked as much OT as we could get. Many people were like Green 18 spending 30 years in one job. Your generation see nothing wrong with switching jobs every few years. Your generation is not the same as our generation, nor are you like previous generations. Enjoying life comes first, work is secondary for your generation. Seems like options for a hobby are much broader now, yet I don't think hobbies are what your generation is looking for.

I believe the generations before us, the average of a collector was 53 or so. I think the high sales figures are true. But I think they are being bought by us older folks with more disposable income now.

I read other forums where most of the young people are buying to flip, not collect. That wasn't so for our generation, we were mostly collectors.

I think rooman9 post exemplifies where coin collecting is headed.

 

Let us not forget that young men will always be more interested in things like having fun and chasing girls than coins. I know I was!

 

Coin collecting is alive and well on the internet. Those who are not computer savvy don’t see it and only judge by what they see at shows and B&M dealers. With today’s technology, guarantees, and variety online, the internet is the preferred way to purchase coins. One can peruse many more offerings than a show or B&M offers, sans the input from shyster dealers and their high pressure sales tactics and be guaranteed they like what they receive or their money will be refunded.

Has the U.S. Mint gone too far? Possibly, yet, we are all free to limit our purchases. Yes, it is a turnoff to not be able to afford all they produce, so some collectors may choose to leave the hobby. Yet, this fact creates some true rarities when compared to historical production figures (mintages).

Do B&M and show dealers like the Mint? Heck no! Why? There’s only so much money spent on coins and look at the millions spent at the Mint – the Mint is the largest coin dealer. So, what do dealers say, they claim you’ll loose on Mint products by comparing today’s low mintage products to past high mintage products – they’re comparing apples & oranges.

I spent very little at the last show I went to because I’m saving for the next Mint product - once I triple my money on that purchase, I may buy some classic coins with some of the profit, but the majority will be spent on the next Mint product.

If the Mint is ever reined in by Congress, as it was with the commemorative program after 1996, the fewer products offered will cause higher sales for each product, and we’ll look back at this period as the “Golden Age” of Mint products.

 

Spot on. I started collecting when I was 8 or 9 years old. Stored the collection away during high school, college, and the early years of building a career and starting a family. Didn't start up again until my mid-30s.

 

I for one would like to see any "true rarity" coming out of the mint. Even if mintage is "only" 10,000, those 10,000 will be pristine forever. 10,000 mintage for most of the world, and for most coins ever struck, is a huge figure. Only compared versus other US coins, and assuming the same extraordinary demand, could anyone ever say this is a scarce coin, let alone a "true rarity".

Regarding the idea coin dealers are intentionally misleading about mint products profitability, maybe, maybe not. 40 years of history is giving a pretty definitive answer that buying directly from the mint will lose you money, especially stripping out any pm effects. That is the truth. MAYBE the last 5-10 years will be different, but I do not think its a lie to say, "the last 40 years has proven its cheaper to buy on the aftermarket than from the mint". We are assuming these people are not flippers trying to sell into hot markets directly after release, but rather long term collectors.

 

Most collectors start late normally 10 years after graduating from college. At this point they can begin to collect or throw money at some past time. Prior to this there is alot of distractions ... more so than when I was their age. But prices for most areas keep trending upward or stay the same. Some downward ... strictly speaking for historical coins and not modern US Mint pieces. Collecting based on my reading of why people collect and the psychology behind it - it gives people (mostly males) security and comfort.

JPL

 

Everyone's definition of rarity is different, so lets just say, recently there are a bunch of low mintage coins that sell for far above their issue price and their are very few that can be purchased for less than issue price. And, let's not further the apples & oranges mistake by comparing U.S. Coins to world coins.

40 years of history lumps the apples & oranges together - it fails to recognize the current low mintage coins. So yes, that analogy is very misleading.

 

There is 40 years of straight down history in mintages sir. Just because you believe current mintages are "low" does not mean they will be viewed that way in 10 years. Remember when certain Prestige proof sets where declared "rare" and Key in the early 1990's, only to crash and burn as further sets had even lower mintages later? To state for certain modern coins will hold their value, let alone be worth well above their issue price, 10 years from now is your opinion, not a fact. To say for 40 years a collector would have saved tens of thousands of dollars buying coins on the aftermarket versus the mint is a provable fact. MAYBE it will change, MAYBE its "different this time", but yours is speculation and opinion against provable historical facts.

 

True, I don’t have a crystal ball, no one knows what the future will hold. And, prestige proof sets are a poor example, as they were only low mintage packaging of high mintage coins.

Any analogy that includes the last 40 years is flawed. It includes the 1970’s & 1980’s when multi millions of each product were produced and yes, those products are big losers. However, it also includes the 1990’s forward which include many big winners. So, why do dealers choose the time frame of 40 years, which includes the high mintage losers, to analyze current low mintage issues? If history is an indicator of the future, today’s low mintage issues will be winners.

 

I guess you don't get it sir. I am saying the 1970's looked like "low mintages" compared to the 60's, the 80's looked like "low mintages" compared to the 70's, so on and so forth. So until you are ten years removed, you simply do not have any valid data to say today's mintages are "low" compared to the future. What if modern commemoratives have HALF the mintage of today's commems? All of the sudden today's commems look WAY overpriced and will crash and burn, like they have done for decades now. For long term holding, no one today knows if current mint products will end up as low, medium, or high mintages versus future issues.

By the way, have there been some short term winners? Of course, but there were short term winners back then to, but today have tanked. Will some of the short term winners turn into long term winners? Probably. However, I will STILL wager if you bought every offering from the mint this year you will be able to buy it cheaper in the aftermarket 10 years from now, factoring out pm effects. I am simply betting on the past repeating itself. Could a person SELECTIVELY pick a few items and do better than this? Sure its possible, however to fairly evaluate performance of mint products you need to include all of them since there is no way of knowing a person would only buy what YOU would buy, right?

 

Well, I wouldn't say mintages in the 80's looked lower than the 70's or the 70's lower than the 60's - all were in the multi millions. And, the 70's & 80's sucked, as there were no precious metals in most of the mint's offerings

10 years removed??? We have 25 years of data for the period 1990 to date, which produced many winners. There's no need to include 40 years in an analysis, unless your purpose is to tweak the numbers to look bad.

Modern commemoratives crash & burn??? I don't see it, you must be talking about foreign commems., the U.S. commems I speculated on did very well. There's no need to buy only the lowest mintage coins to profit, as given demand, many of the lower mintage issues within a series will appreciate.

Of course, even with today’s low mintages, there will be winners & losers. I wouldn't buy everything the mint offers - as with any endeavor knowledge is everything, so a knowledgeable collector should profit by choosing more winners than losers.

 

Shoot, if I as a collector have to worry about whether or not I'm gonna make a buck down the road, or whether or not I can pick up something in the aftermarket cheaper than the mint issue price, I may as well chuck collecting.

 

Yeah, I hear what you're saying. I collect some things for the love of them, knowing I'll never get a return from them. However, with coins, in most cases, I hate to over pay and love to make a profit because it is possible.