Retaining Long Term Value on Coins

My head is spinning with all this math. :rolling:

 

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Just who are you selling your coins to? Dealers I know will only pay you half to one third of what they would sell it for. Maybe more if its an ultra rarity, or something they can sell quickly. I never sell to dealers.

 

Dealers, like any other retailer, understand, have their margins they have to operate on.

 

You need to change what you are collecting or you need to find new dealer to sell to. When I buy coins I try to make 5-25% depending on how much work is involved, how long I will have to own the coins before I can sell them, and what type of material it is.

 

I can't resist asking... Which coins are the easiest for you to resell and, therefore, are likely to be the best for the average collector to collect if eventual resale to someone like you is a goal? In other words, which coins are you hoping to be offered?

 

My margin on generic gold is less than 10% so if someone is interested in having something that is easily sold to numerous dealers at very small margins that is the way to go. The risk in that is that the value of the coins is not collector driven, it is driven by the spot price of gold and the needs of the major telemarketers. If they are pushing something, its price rises as they quickly deplete the market of the available inventory; but as soon as they move to a new program the price of that particular item returns to its "real" price (read as "it's un-hyped price"). It is a difficult market to master, especially for a non-dealer simply because unless you are selling to the telemarketers directly (or selling to the dealers that do) you will always be one step behind the curve.

Another thing that I am agressive on is the common key dates (the 20th century coins that are heavily collected but quite common like the 09-SVDB and 14-d cents, 16-D dime, 1916 quarter, 1921 peace, 1921 halves, Morgan dollar keys, etc.) because they will always have a ready buyer at the current value.

Finally nice, eye-appealing type coins in 64-67. I'm talking about seated, bust, and Barber coins with above average eye-appeal (not overly messed with pieces).

The exact opposite is modern mint "stuff" where I offer 70-85% of greysheet bid depending on how good the rest of the collection is because it is super common and I will just have to wholesale it out to someone else at very little profit. Another is MS/PF 70/69 coins, they simply don't have a strong enough market for them for me to be aggressive when purchasing them. I have yet to be offered any of these and been able to make the person a profit. There is just not a broad enough base of people collecting them for them to do anything but go down in price as more and more of them are "made".

Does that help?

 

What I should have mentioned is that the type of material I listed above as desirable is difficult for collectors to buy at wholesale simply because there are so many other willing buyers, so even though you will receive a stronger price upon resale it is frequently quite difficult to find bargains when buying, and even if you do find a bargain, be cautious because there is almost certainly a good reason for the coin to be under-priced.

 

listen to this one or you will be sorry

 

Thanks, that's helpful. I'm not really surprised by anything you wrote.

 

That's good, it means you are aware of the current state of the market. You then can choose to collect what you like fully aware of how the current market would respond to your coins being sold back into it, but also aware that the future coin market may respond differently. It gives you an advantage when you buy because it elimiates some of the potential mistakes that one can make if they aren't aware of it.

Unfortunately past experience does not always correctly indicate future trends in the coin market.

 

Some very good advise to be found here folks.........

 

looks like you wont be interested in any of my coins i will go tear those free certificates now

 

There is still hope. starts to put together the torn certificates

 

Before I say anything I want to say for a majority of collectors/ collections your theory isn't worth disputing because it is most likely correct. I do not disagree with you at all. The same is true for "day traders", and much for the same reason(s). It has a lot to do with money and how much you have. Obviously this changes the horizon, and your opportunities. That goes without saying.

I will continue to argue that coins can still be a good investment albiet not for everyone. You don't have to have millions of dollars on hand for this to be true. Just like the stock market you can make money with less than 5k, but your profits are much smaller.

I would also have to say that if you make money selling a coin collection, and it is less than $100,000 the reason no body hears about it is because nobody cares. It is not enough money for people to get excited about considering single coins sell for much more money.

If I make $300 selling a single coin WHO CARES? Just like nobody cares if I make $1,000 selling 103 shares of my gold ETF last Friday. Who is going to report that?

I'm sorry but it is completey ridiculous to make blanket comments about not being able to make money on coins unless you are a millionaire. I know people in my area who buy and sell coins constantly. They don't have coins shops.... They might be dealers, but I garuntee they are not millionaires. I did see a couple of the guys set up a coin show in the local area.

Do you think people wake up one day and just become coin dealers? No.. they enjoy it, and they have found a way to make money off of it. One of the most influential dealers in the country wrote a book about becoming a dealer. He is now a multi-millionaire, but he did not start out that way.

Please tell me I am a liar, that I don't make money on coins, or that I must be a millionaire if I do. I don't have a massive collection of key-date finest known coins either. I also don't have any statehood quarters. I learned my lesson on "mint collectibles". NOBODY WANTS THEM! They are very hard to resell even if they are slabbed. I consider modern commems junk silver, and that is how I purchase them if I do.

Anyways.... The point is there are plenty of regular people making money on coins. They are not all riduculously rich people in some "club of insiders" who buy cheap and sell for millions.

They are also not people who buy stuff at coin shops and then sell them to the general public. So if you think you are going to make money going to coin shops... You are wrong.... If you think you are going to go online and buy from APMEX, or Gainesville Coins, and then resale for a a profit you are wrong!

If you comb through auction sites, and local classified ads you can make money. If you build relationships with other people who buy and sell coins you can make money. If you are willing to be patient you can make money. If you can control yourself and do things deliberately... you can make money.

There are people on this forum who have been into coins for a long time, and I am beggining to wonder if they know what I am saying is true, but just do not want to proclaim it.

It is obvious to me if the millions of people selling coins on ebay are all losing money then that market should start to shrink. Personally I don't sell on E-Bay, but people do, and it must be related to making money.

My local dealer checks the prices on e-bay before he checks the grey-sheet prices, or at least for certain items. I guess I am supposed to believe that ebay is the "club of millionaires who make money on coins".

YOU CAN MAKE MONEY ON COINS, AND YOU CAN BE SUCCESSFUL WITHOUT MILLIONS OF DOLLARS!!!!! TO SAY OTHERWISE IS TO IGNORE REALITY!!!!

Respectfully,

Ryan

 

you're missing the point Ryan.

No one is saying that one can't make money in coins, what we are saying is that average people off the street with 50k to invest stand almost no chance of making money, which is what the OP was asking about.

You clearly don't fit into the "completely unkowlegable outsider who wants to invest in coins" category. In fact the long list above of things you do to make money in coins (combing through numerous auctions and classified ads, etc.) are exactly the things dealers do to make money, but newbies never do, they just aren't well enough seasoned to know when they are getting a good deal or not.

The point isn't that you can't make money, it is that there are so many expensive pitfalls that the uninitiated has almost no chance of success.

 

I don't mean to get a fired up but this subject really ignites my passion... Not to mention it comes up in so many of these threads.

I don't consider myself very knowledgeable. It is obvious to me there are some very smart people here, but sometimes I feel like the gospel is a little off.

Sure there is a fine line between investing/ selling/ dealing, but say for instance I ask for advice on doing a, b, or c for profit.... I don't want to be inundated with YOU CAN'T DO IT.

It has been a while since I read the start of this thread, but it was much of the same as the title implies "retaining long term value".

Now..... we all know that to be good at something you have to cultivate your abilities and your intuitions. Add to that some good advice, and some practice.... more good advice and a pile of books.

Point being most people are not going down that road. I know most people never will do that; however, you can retain value, you can make money... So why not tell him " hey guy if you want to get d, e, f, then you need to do a, b ,c?

Knowledge is Power. I need more. So do lots of other people. Maybe someone's objective is to make money. Maybe that person will be turned off buy negativity, and defeatist mentalities. Maybe a little encouragement will spark the heart of a great numismatist.

As for me.... like I said I'm one of the people seeking more knowledge, but I will tell it like I see it. I might be wrong. I often am. I want to make money, I am, and I will. I'm sure I will also add many more losses to the ones I already have. This forum is making me better off either way.

Bottom line if someone wants advice on something that can be done, the best is advice is not that it can't be done, or that it is too hard and most people can't do it.

I've accepted I can't be Tiger.... Now I want to be a coin dealer.... haha just a little humor, even if it is as dry as Fannie May's bank roll.