Liquidity or Coin Collection?
chesterb
Posts: 961 ✭✭✭✭✭
It's April 4, 2020 and, in many ways, I am lucky that I still have my job with a record 6.6M filing unemployment last week but I am fearful of the economy and impact unemployment (and general consumer sentiment) will have on many industries. No one really knows the long term effects over the next few years. I have some options to sell some of the more valuable coins in my collection to free up cash and to either save the money or pay down debt. It's amazing how quickly my financial outlook changed from overall exuberance to thoughts on this potentially being a Great Depression 2.0.
I love my collection but I am leaning towards selling just because I don't want to be in a worse position later on down the road. I'm sure others feel the same way and, if so, you're not alone!
Nothing more to say on this topic other than I'm scared right now!
Comments
It’s alright to be scared. It’s alright to have a plan.
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Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Good post. You said what a lot of people are thinking.
I agree with both of these things if kept separate. You don't really want to make a plan that is too strongly influenced by fear.
Yep
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
No one asked my advice, but here it is: If what you are considering selling falls in the "widget" category, sell it now. As I define widget, it isn't a price issue it's an availability issue. An S-VDB in any grade including lower MS are widgets. If you really want one, you can get one today. A $100 so-called Half dollar or token isn't necessarily a widget if it has limited availability.
Cash is always king. Widgets can easily be replaced.
In the end, I would do whatever makes you sleep better at night.
Few U. S. coins in the marketplace are rare. If you feel you should sell, then follow your gut. Years down the road, what you have and care about now can likely be replaced.
I have jumped in and out of actively collecting coins for more than 50 years. Most of the time, I buy something, and then put it into a safety deposit box, never really looking at it again. On several occasions, I sold my entire collection to free up money and box space so that I could buy other coins. So don't be concerned about selling, even all of your collection. Besides, collectors should sell a coin or two every now and then, just to maintain a feel for where the coin market is.
However, you will still need to find a way to maintain your interest in coins when you are not actively buying anything. This is one reason why having a numismatic book collection is helpful. You can always continue to participate as a Forum member too (a number of members no longer buy coins).
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
If you feel the price is fair and you can live without the items I see no reason not to sell. Whether or not you will feel different in the future is an unknown.
Where can I buy a 1909 s vdb at a great discount cause it’s a widget ? 😄
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I think the answer depends upon your individual assets and debts. Most Americans only had enough savings to last 1-2 months at most. My advice to them would be different than to someone who had 12+ months of savings (in cash) saved.
Only you know where your comfort level is and your asset/debt ratio. If you have enough assets and can anticipate keeping your employment for a while and your overall debt isn’t burdensome, I’d say hold pat and not overreact.
TurtleCat Gold Dollars
Widgets don't necessarily come at a great discount, but jmlanzaf's point about availability is very much on point. They're always replaceable.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
@TurtleCat said: "I think the answer depends upon your individual assets and debts. Most Americans only had enough savings to last 1-2 months at most. My advice to them would be different than to someone who had 12+ months of savings (in cash) saved.
Only you know where your comfort level is and your asset/debt ratio. If you have enough assets and can anticipate keeping your employment for a while and your overall debt isn’t burdensome, I’d say hold pat and not overreact."
Who could disagree with this well thought out and mature response? Nice to see that some immature attention hound has not posted: "Sell, sell, the sky is falling! Oops.
PS I'm working on two big boxes of C/F's - one US and one foreign. Taking hundreds of images to post this coming week.
What are C/F’s ?
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I just posted. US from colonials to gold. I'd like to own a bunch of them. Hand cut dies, casts, electros, no deceptive T$. A bunch of neat Capped Bust fakes, shield nickels, and 3c. A few Hennings and micro O's. I Just started the foreign. So far a bunch of contemporary 8 Rls.
Just came upon this:
Baldwin & Sons envelope: 1832 Go,MJ 28.4 gms (false) 26/1/93 L 3- How much was that in '93? Worth at least $100 today.
Let's move this to when I post images.
Sorry for thread hijack! Very sorry!
Just my Opinion. If I were considering selling, I would sell right now, don't hesitate. This may go on for a while, and the longer it goes, there will be more thinking along your lines. Get the money while auctions and prices are still seemingly strong You could use Great collections, Legends or similar with faster turnaround time.
I have some nice pieces, but I enjoy mine. So I am keeping those. I already parred down long before this hit, and am now glad that I did.
Im ok with cash on hand , so I don't have too fortunately, but if I wasn't I would have considered doing the same
If I had any debt I would have no coins. I believe it is better to be debt free before seriously pursuing a hobby.
I am retired from the Corporate world, but have my own business, and my wife works. In 11 years of retired, have not touched a cent of the retirement money, 401K, savings, etc. and have postponed SS until 70 because, looking at it with a morbid sense, my wife is much younger so the actuarial tables say she will be a widow a long time, so it is better for me to delay so she gets a larger check.
That being said, we have structured our investments that NOTHING needs to be sold for at least 5 years. While seeing the market go down is not fun, it is not a kill shot as none of it needs to be sold to keep things going.
The coins, the classic cars, etc. are just big toys in the toy box, so cost or value etc. is not a factor.
The shorter the horizon until funds run out, IMHO, the more concerned about liquidity I would be.
If you got out when the Dow was below 20k, you lost money you wouldn't get back if you stayed in.
I myself have decided to sell extras and some more common material. Mostly on ebay, a bit here on the forum in the near future. With the current situation I'd rather have more liquid assets over coins. Even then some modern Rolex's in the 10K range are more liquid than a 1909 S VDB in MS66RD. Same "value", very different audiences. For my watch buyers I can make a few calls and have a deal done in hours, not always the case with coins.
As others have said, get rid of the "ordinary" coins (the widgets) but keep any that are true rarities. There is no recent precedent for this type of economic situation. Will it drag out for many months or will it end rather quickly as did the 1918 "Spanish Flu" pandemic? Once it does end, just how much economic damage will have been done?
I don't know what you will encounter if you try and sell into this market. It may be a very unpleasant experience.
Cash is king. Lenders may be somewhat sympathetic early in this crisis but that may change if they find themselves getting into financial trouble a few months down the road.
You do what ever needs to be done to survive.
Obviously, sell if you need the money.
Otherwise, if you’re considering selling, ask yourself why you own it in the first place, considering all of the other things you could have done with the money.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Having a large stack of cash right now is very prudent, just not sure I would liquidate any collectables to add to it.
That said, I predict in 12-24 months we’ll look back at this period of time as one of the best stock market entry points of all time.
Dave
but what if you get back in when the DOW is below 10k?
What is in your coin collection? that would determine what I did with it.
Do whatever you feel is best.
This too, shall pass...
As I said, widget status has nothing to do with price, it's about availability.
There has not been one day in the last 50 years where you couldn't get a VDB with a phone call.
An MS64 Saint is a widget. It costs more than a circ SVDB. still a widget.
I have a friend in the mortgage industry. He said that he had a dozen home purchases get canceled a few weeks ago and they are looking to tighten up standards for new loans. I dont think banks will be lenient in coming months. My outlook is bleak for those who are financially unprepared, sadly many were already just living pay check to paycheck. Some their fault, some blame to be placed on no one teaching to to save. 2008-09 I nearly lost it all, back then I had no knowledge of saving, budgeting, or investing.
I have spent decades asking myself that very question, and I still haven't found the answer (other than incurable addiction).
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
If selling some coins would make you sleep better tonight do it. You can always keep your very special coins to rebuild with when the time is right.
The best time to sell is when you don't have to. Chances are that you'll get chances to buy them back cheaper as more and more folks in your situation may be forced to sell.
MY COINS FOR SALE AT https://www.pcgs.com/setregistry/collectors-showcase/other/bajjerfans-coins-sale/3876
Evaluate your financial status... debts, assets, obligations, resources. Once you have totally tabulated those figures, look at the situation as worst case and plan accordingly. Cheers, RickO
The shorter the horizon until funds run out, IMHO, the more concerned about liquidity I would be.
This.
I knew it would happen.
"Sell down to the sleeping level."
Sell only if you NEED to, in order to keep yourself afloat.
Otherwise, I'd batten down the hatches and wait for calmer seas, before making any rash decisions. JMHO.
“I may not believe in myself but I believe in what I’m doing” ~Jimmy Page~
My Full Walker Registry Set (1916-1947)
https://www.ngccoin.com/registry/competitive-sets/16292/
Only you know your circumstances. We are now squarely in the middle of the proverbial “rainy day.” If you are heavily leveraged and cash-poor, keeping collectibles seems foolish if there is a good way to convert them to cash. I echo the thought that spending money on coins should never happen if you’re carrying debt. Sadly, such discipline is probably not too common among us.
On the other hand, those who are well-prepared might find themselves in an excellent buying opportunity. Not only might prices drop, but new material could flood into the market. Judging from recent auction results, any such change might lag other economic indicators by a few months. As had been said, selling when you have to sell is generally a recipe for disaster.
Another random thought..... just because one thing has deeply disturbed the market there is no guarantee that an unforeseen second event couldn’t happen. That’s the only thing I’m a little wary of.
As for me, I currently have roughly 20 coins “out there” for sale. That deal started before any of this happened. Otherwise I’m mostly sitting on my hands, but I might bite if something juicy comes along.
... and wait for the caller who advises, "I'll be back."
If you have to sell, then don't worry about how much money you would lost but how much you would save. Having a $10,000 credit card debt is a lot worst than selling $20,000 coin collection at a discount.
Welcome to the Scared Club. Your not alone in this nightmare. Just don’t let fear set in and overcome you. Things will improve over time. They have to....,right? Find something to divert your thoughts. I’m building a highly detailed model of a Porsche 911. Airbrush paint job and all. It’s been good. Doing some yard work as well. Back to playing with jets on Monday. 🙁
If your having some financial pressures I would suggest parting with your collection if it will relieve some of that pressure. I wish you the best and remember your not alone. I hope you find some relief here.
Take care!
If you’ll have no regrets later, sell.
"I spent 50% of my money on alcohol, women, and gambling. The other half I wasted.
It looks like a good time to "make sauce" or "syrup", I can't remember the word saintguru used.
In other words, keep your best and sell the rest.
My Saint Set
It's always good advice to keep the best and sell the rest, but when I look at the little innocent things in their boxes and they start talking to me, it's hard to send them off into the dark unknown where I don't know if other people will treat them properly. Your coins talk to you, right? It's not just me?
Difficult decisions and one size does not fit all.
As things are now, I will not be parting with any of my collection for a few reasons.
It's mostly common and I would realize too much of a loss selling, both in money and psychologically.
Or, the small money gained would be too much offset by regret.
"If I say something in the woods and my wife isn't there to hear it.....am I still wrong?"
My Washington Quarter Registry set...in progress
Rule of diversification applies here. Always have plenty of cash reserves. Years worth is what my financial adviser recommends. Utility stocks with high dividends and of course PM's to sleep well at night. Oh, and plenty of toilet paper.
I recommend holding your collection if at all possible. You can enjoy it years from now.
100% Positive BST transactions
In good times or bad, don’t own a collection that has become either a financial or psychic burden. This is the best way to have a stress free hobby in my view.
There's a lot you can do in the hobby without any funds.
For example, iIt can be fun to collect a fantasy set of TrueView images and research the provenance and opinions of the coins, similar to what @Currin is doing to track the Hansen collection..
@MrEureka recently posted a thread on a doing a competitive fantasy registry set too.
You can collect with low funds too. For example, I've been liking raw, uncirculated Civil War tokens recently.
Another way to look at it, with all the people stuck at home maybe more people will be looking at auctions, GC, eBay? Of course this could be offset by those who have temporarily lost their jobs. Hmmm......
While I have a combo of bullion based (not a bad idea collect them) and numismatic coins I believe in liquidity. Especially now. Never let coins cause debt or threaten liquidity. Bullion based coins are the most liquid. Don’t gamble, incur debt (especially if material to your over all financial position) on coins going up, then it’s a gambling addiction which will eventually force you to go broke. Keep this in mind 1972-1989 coin market nowhere to go but up a well off dealer setup next to me said recently - but 1989 to now nowhere (except for minor blips) but down he then said. Bullion had its peaks and valleys.
Leave the coins beyond your budget or gut feel level of comfort for the wealthy.