Question about US Gold coin collecting

Yes... 'trading', since the level gold trades at directly influences the price of generic/common Liberty Half Eagles, which the Op would be collecting in order to put together a full set. Additionally, it might come as a surprise to you that, while not all, many collectors do consider coins as an "investment." I'm not going to assume the OP is a professional in finance or any other field, therefore my opinion that it's more of a prestige hobby.

 

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The vast majority of them will rise and fall with the price of gold, at least in the common grades. Higher (rarer) grades will have a premium less affected by the price of gold, but they can be far more volatile based on the economy, demand, and number graded.

For common dates, AU-50 to MS-63 have very little premium over melt. Like 3% for AU and 10% for MS. Some dates are prohibitively expensive in MS, so it may be only feasible to go with AU or even down to XF/VF.

I am going to give some contrary advice. Stick to the common coins first. Learn the series. Learn how to grade and what the coins should look like in a particular grade. Pay attention to eye appealing coins and ugly coins, and note what makes them fall into each category. That way if you make any mistakes or regretful purchases, they are relatively cheap and easy to offload with a minimal loss. This will also aid in authentication when you come across raw coins, but I would highly recommend taking an authentication course or studying fake half eagles to get a firm foundation.

If you buy the expensive coins first, and you find yourself regretting their purchase because you know how ugly they are as you become more experienced, they will be much harder to sell, and the potential loss is much greater.

The coins in Pogue’s collection were in a completely different tier than anything else. Each coin was significant to its type/date/variety in some way or another. That garnered much attention that manifested in the auction room. No offense, but the coins you will be pursuing will be “regular class” coins that won’t be significant on the market, unless you will be pursuing MS-67 or “top pop” coins.

Because it is in an MS holder doesn’t mean it is a nice coin. The collections that do the best are the ones comprised of attractive coins that are high quality for the grade. You need to learn how to expertly evaluate coins to do this. Depending on the number on the slab won’t do you any favors in this regard.

 

Here is an example of this. These are both the same date, both MS, both are the same variety. The first is graded MS-62 BN by NGC, the second MS-63 BN by PCGS. The second one should be worth more, right? WRONG!

The 63 has very unattractive carbon spots on both sides, environmental damage above the head, and fairly dull luster.

The 62 has some spots, but they don’t detract heavily from the eye appeal. There is no environmental damage, and the luster is booming. The surfaces are colorfully toned as well.

The 62 would be an easy sell at $750, which is 63 money. The 63 is having issues selling at low 63 money, and would probably sell for close to high 62 money. The lower graded coin is simply the nicer coin, even though the holder doesn’t say so. The more experienced you become, you will start noticing this more and more. The collectors whose collections do the best upon reselling are the ones who recognize this. Those who seek the lowest price for a certain grade (or just pick/price a coin because of the grade on the label) are the ones who lose money.

 

Glad you agree with me :

and I saw the "dude needs help" , prior to edit (by SOMEone).

That's a personal attack - tells lots about you.

Mods / Admin I'm certain welcome intellectual / civil debate . I KNOW that they draw the line @ personal attack , and that you were admonished therefor

 

I see no "...by a moderator" on the edit note.

It's kind of bad form to back-quote someone after they've thought better of what they said, IMHO.

 

Yes - I'll give him a modicum of credit therefor.

I will even 'think' a personal attack. But you will WON'T see it.

 

Sometimes you get lucky, and sometimes you go bust. Values of decent-quality early-date large cents have doubled in the Past 20 years. Commems have halved. $3 gold has remained stagnant.

Many Chinese coins have doubled in value in just the past year. That has done wonders to my net worth. I collect them to enjoy, but it is nice to accidentally have a nice investment vehicle as well

 

You sound very knowledgeable and you are among some of the finest CT has to offer. Nice write up welcome to CT Happy hunting be safe.

 

I agree. I have an original H1 spade as well as many early pieces, (maybe 100 large Ban Liangs or more). I specialized mainly in early Chinese and esoteric pieces like Yuan pieces, so stuff I bought from Frank Robinson and others 20 years ago is doing well.

You want to see crazy inflation, look at early Thai. I am glad I started 12 years ago, but wish I started 25 years ago.

OTOH, you have US classic Commems and many other US series, as well as Russian that fell out of bed a decade ago. Always hit or miss.

Even then no one in coin collecting count TVM in their "profit" calculation. Even large cents doubling in 10 years. Let's say $500 coin is now $1000. Well, the $500 coin at auction cost at least $600, (plus shipping) when commissions figured in. When selling, you get $800. So that coin that went from $500 value to $1000 value nets a collector $200. I show that is a compounded 3.3% return, and you had to take the risk of loss all of those years. That is if you "get lucky" and find the coins that will "double".

So, want to make money in coin collecting? Be a dealer or TPG slabber. That is your best bet. A "trick" I use is to "collect" gold coins. I get enjoyment out of owning them, but I pay very little premium and use the gold as a hedge to my main investments. I could just be lying to myself, but its what I use to justify buying gold.

 

I was talking with a dealer on Monday, while he was chatting with another customer about coins as an investment vehicle. He talked about a collector who had a $3 million collection. Many of the coins were in the mid-5-figure range. He’s also a savvy investor. One day he decided to offload his entire collection and bought a bunch of common double eagles, and he held onto them. They were worth $500 each at the time.

Several of the coins he sold are now worth 25-50% less of what he sold them for, while his double eagles are sitting high and mighty at $1900 each.

Collectible coins are not a dependable investment vehicle, especially high-grade post-1850 coins. Their values took a massive hit after 2008 and have been steadily deflating. Investment-grade collectible coins are those that had fewer than 1000 made or are similar to what was in the Pogue collection. Very little else beats inflation, if it gains at all.

 

Nice example!

 

How did you find out they had putty on them ?

How much would the grade have been lowered if that was caught ?

Did you go to PCGS and ask for their guarantee to kick-in ?

 

Great post and great charts, GDJMSP.

I would note...that if you buy what you like and don't care about annual or even decade returns....and allow the VOLATILITY to work FOR YOU instead of AGAINST YOU....employing a variant of "dollar-cost averaging" by buying more or similar coins every few years if not annually.....you do alot better, maybe eake out some low-single digit returns.

You often hear people say that the DJIA didn't come back from the 1929 Crash until 1956 or 27 years later. But if you bought the HIGH of each year you were even by 1941. And if you reinvested dividends (can't do that with gold), you were even by 1936.

 

Can you tell us specifically which coin types ?

Which types in the Pogue collection are you referring to here ?

Are you talking 1,000 MADE or SURVIVED to today ? For instance, early-1930's Saints have way fewer than 1,000 survivors.

 

Pretty much all of them.

The AU/MS Federal/Bust coinage

Made, not surviving.

 

Here are a few gold coins that have been puttied ... some in a PCGS holder.

 

Wow, that's very clear to see, thanks GD and JM.

What recourse do you have when that happens ?

 

Go after PCGS to make it right. There was a lady who bought a $15,000, better date $20 St. Gaudens gold that "went bad" like this. She tried to deal with PCGS privately and they balked. Then she went public and got some action.

If you buy a raw coin, it's between you and the dealer.