@DelawareDoons said:
This is why I invested in indexes. I realized pretty early on in my investing window that picking individual stocks and keeping up with their performance was too time consuming and stressful.
VTSAX all the way.
If you like VTSAX you should love VTI. It’s 25% cheaper.
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
@tommy44 said:
.....and I'm into my Apple at $26.97 per share and my 2003 clad proof sets at $10.95 each.
You paid too much for AAPL, our original shares were purchased at a share price of ~$9 HST, today it was at $317 so $27 or $9 is like six on one hand, have a dozen on the other........
If only all of my investments did that good, certainly NOT coins where I am happy if I net -10%.
Best, SH
Was actually into Apple pre-split at $2.00 in the 1990s so what's that, like $0.28 per share? Sold it at around $4.00, bought it again in the $80 range and sold it in the mid $90s. My current holdings were purchased in 2009, I sold about 25% after the split in 2014 and got all of my original investment back so in my head I'm playing with the houses money even though my basis for tax purposes is $26.97. Next post I might tell you about some of my losers.
it's crackers to slip a rozzer the dropsy in snide
"Coin collectors do not realize how well they have it. Say you have a coin that you paid $20,000.00 for. Today the best we can pay is $14,000.00. That is a 30% loss"
So, correct me if I'm wrong but is she saying that is a typical example of coins they have sold and what they would pay for that example now? If so, then is a $50,000 coin now worth $35,000 and a $100,000 coin is now worth $70,000?
I don't know anything of that market so I will take her word for it but I do know a little about the internet market and eBay and I know that widgets are selling like crazy. Biggest problem I hear from on-line and eBay dealers is that they are having record months but with shows not happening, they are running out of inventory.
@Cougar1978 said:
We don’t know what the true fallout will be from the pandemic or how long it will last. While online has done well I see some slowing plus summer doldrums coming. As far as the wealthy that is a specialty market segment like luxury cars. A $20 k coin may be peanuts to somebody who owns a $1.1 m condo or $6m yacht.
I have noticed this is a reoccuring theme in multiple threads-- high priced coins always have buyers despite the overall economy since wealthy collectors are immune to the ups and downs of the economy. I am not commentng on whether this is accurate but if you really think that then it would also make you think buying rare high priced coins would make good investments since they are always in demand.
I don't think you can say that. People who have bought condition rarities are routinely taken to the cleaners, if not worse. Exceptions are pre 1835 coins, and how many people can afford them?
@Labelman87 said:
There is no gain or loss until you sell.
According to two of my accountants in a row, you can’t take losses on coins. You can’t even offset the losses on coins against the gains. The IRS treats gamblers better than that. I have heard this opinion twice despite the fact that I bought and sold many coins as a business for over 14 years. You have to be buying and selling coins constantly to be allowed to offset the gains and losses.
That alone makes coins a less attractive “investment.”
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
@Cougar1978 said:
We don’t know what the true fallout will be from the pandemic or how long it will last. While online has done well I see some slowing plus summer doldrums coming. As far as the wealthy that is a specialty market segment like luxury cars. A $20 k coin may be peanuts to somebody who owns a $1.1 m condo or $6m yacht.
I have noticed this is a reoccuring theme in multiple threads-- high priced coins always have buyers despite the overall economy since wealthy collectors are immune to the ups and downs of the economy. I am not commentng on whether this is accurate but if you really think that then it would also make you think buying rare high priced coins would make good investments since they are always in demand.
I don't think you can say that. People who have bought condition rarities are routinely taken to the cleaners, if not worse. Exceptions are pre 1835 coins, and how many people can afford them?
I have a large number of pre 1835 coins, and I think most here would agree that they are not “junk.” They have not done well at all financially over the last decade. They include the “blue chips” like pre-1834 gold and prime type coins from the 1790s and early 1800s. The coin market has not been good for years.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of > @Elcontador1 said:
@Cougar1978 said:
We don’t know what the true fallout will be from the pandemic or how long it will last. While online has done well I see some slowing plus summer doldrums coming. As far as the wealthy that is a specialty market segment like luxury cars. A $20 k coin may be peanuts to somebody who owns a $1.1 m condo or $6m yacht.
I have noticed this is a reoccuring theme in multiple threads-- high priced coins always have buyers despite the overall economy since wealthy collectors are immune to the ups and downs of the economy. I am not commentng on whether this is accurate but if you really think that then it would also make you think buying rare high priced coins would make good investments since they are always in demand.
I don't think you can say that. People who have bought condition rarities are routinely taken to the cleaners, if not worse. Exceptions are pre 1835 coins, and how many people can afford them?
I am not saying that is the case. Just pointing out that a few people who posts will say consistently how poor the coin market does but when confronted with record prices for some high priced coins rationalize it that wealthy collectors are immune and will keep spending. I always found this an odd statement since these people are usually saying dont spend big money on coins and then say "but high priced coins" always have a market. My point was the contradiction of their position not that top pop or high priced coins always do well.
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
@Cougar1978 said:
We don’t know what the true fallout will be from the pandemic or how long it will last. While online has done well I see some slowing plus summer doldrums coming. As far as the wealthy that is a specialty market segment like luxury cars. A $20 k coin may be peanuts to somebody who owns a $1.1 m condo or $6m yacht.
I have noticed this is a reoccuring theme in multiple threads-- high priced coins always have buyers despite the overall economy since wealthy collectors are immune to the ups and downs of the economy. I am not commentng on whether this is accurate but if you really think that then it would also make you think buying rare high priced coins would make good investments since they are always in demand.
I don't think you can say that. People who have bought condition rarities are routinely taken to the cleaners, if not worse. Exceptions are pre 1835 coins, and how many people can afford them?
I have a large number of pre 1835 coins, and I think most here would agree that they are not “junk.” They have not done well at all financially over the last decade. They include the “blue chips” like pre-1834 gold and prime type coins from the 1790s and early 1800s. The coin market has not been good for years.
I have read many posts from you stating that you constantly get outbid on coins that you put in strong bids on but in your last post you state the coins that you did purchase have performed poorly financially. This would indicate that coins you want but have been unsuccessful at auction have done well economically but the coins you have actually purchased have not. I am curious if you have thoughts on why this dynamic seems to play out ? Thanks
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
You wouldn’t be able to track that personally selected, smaller group of high end coins.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
BS - the PCGS 3000 shows how the overall coin market is doing, that is why they have it after all. Sure coins will vary from the index individually but it still shows the state of the market, which is lousy since around 2009. No one says they mimic the index in buying but nevertheless the collective prices are down for just about anything in numismatics.
I have read many posts from you stating that you constantly get outbid on coins that you put in strong bids on but in your last post you state the coins that you did purchase have performed poorly financially. This would indicate that coins you want but have been unsuccessful at auction have done well economically but the coins you have actually purchased have not. I am curious if you have thoughts on why this dynamic seems to play out ? Thanks
Strong bids are different from record prices, only sometimes are they equal.
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
You wouldn’t be able to track that personally selected, smaller group of high end coins.
I understand that. My point is that stocks are different from coins. It has been proven that most mutual find managers fail to beat the s & p 500 index. I would think coins are the opposite---most savy collectors should do better than the pcgs 3000. Therefore, i think its a red herring to pit the pcgs 3000 against other investments.
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
It's the only index we have. Any other method is just simply cherry-picking your data.
The $500,000 tax free gain on real estate is a no brainer. Utility stocks are a long term way to build wealth.
Coins are a hobby. An Expensive one at that.
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
You wouldn’t be able to track that personally selected, smaller group of high end coins.
I understand that. My point is that stocks are different from coins. It has been proven that most mutual find managers fail to beat the s & p 500 index. I would think coins are the opposite---most savy collectors should do better than the pcgs 3000. Therefore, i think its a red herring to pit the pcgs 3000 against other investments.
I'm not sure you can conclude that most "savvy collectors" will beat the PCGS 3000. The 3000, like any index, really only has one virtue, broad representation. As a result, it can give some general direction for the market as a whole.
The problem with the "savvy collector" is that your definition of "savvy" is going to end up being "lucky". There are plenty of sophisticated collectors, even on this forum, who have bought premium quality coins that have not kept up with the S&P 500. It's not their fault that the sector they chose to collect was a laggard. Someone else might well have bought a sector that got hot. That is not necessarily "savvy" so much as "lucky".
Pittman and Eliasberg bought a bunch of stuff that didn't keep up with the S&P 500. People focus on the headline items and forget the compounding effect of stock market returns over 40 or 50 years.
The huge runups in value in the Pittman and Eliasberg collections are really rooted in the time period. I know that you hate that fact. They largely bought their key coins before 1970 and sold them after 1990. Does that make them "savvy" or "lucky" or a little bit of both? They bought quality, certainly. But they also benefited from a market movement that they could not have foreseen nor did they do anything to create.
That doesn't lessen their eye for coins. But I think it is a mistake to consider them financially savvy as they were pursuing a passion not building an investment portfolio. In fact, if they were pursuing an investment portfolio, they would not have pursued completeness. Pittman, for sure, did not consider the investment potential of his collection. He pursued them passionately because he loved them.
Can anyone think of a great collection bought post-1980 that has beaten the S&P 500 over the last 30 years?
@Cougar1978 said:
We don’t know what the true fallout will be from the pandemic or how long it will last. While online has done well I see some slowing plus summer doldrums coming. As far as the wealthy that is a specialty market segment like luxury cars. A $20 k coin may be peanuts to somebody who owns a $1.1 m condo or $6m yacht.
I have noticed this is a reoccuring theme in multiple threads-- high priced coins always have buyers despite the overall economy since wealthy collectors are immune to the ups and downs of the economy. I am not commentng on whether this is accurate but if you really think that then it would also make you think buying rare high priced coins would make good investments since they are always in demand.
I don't think you can say that. People who have bought condition rarities are routinely taken to the cleaners, if not worse. Exceptions are pre 1835 coins, and how many people can afford them?
I have a large number of pre 1835 coins, and I think most here would agree that they are not “junk.” They have not done well at all financially over the last decade. They include the “blue chips” like pre-1834 gold and prime type coins from the 1790s and early 1800s. The coin market has not been good for years.
I have read many posts from you stating that you constantly get outbid on coins that you put in strong bids on but in your last post you state the coins that you did purchase have performed poorly financially. This would indicate that coins you want but have been unsuccessful at auction have done well economically but the coins you have actually purchased have not. I am curious if you have thoughts on why this dynamic seems to play out ? Thanks
Actually, your logic is flawed here. We have no idea how the coins he failed to win have performed. For all we know, the coins he was outbid on have performed worse than the coins he owns. You would need to know what those coins are and what they have re-sold for later.
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
You wouldn’t be able to track that personally selected, smaller group of high end coins.
I understand that. My point is that stocks are different from coins. It has been proven that most mutual find managers fail to beat the s & p 500 index. I would think coins are the opposite---most savy collectors should do better than the pcgs 3000. Therefore, i think its a red herring to pit the pcgs 3000 against other investments.
I'm not sure you can conclude that most "savvy collectors" will beat the PCGS 3000. The 3000, like any index, really only has one virtue, broad representation. As a result, it can give some general direction for the market as a whole.
The problem with the "savvy collector" is that your definition of "savvy" is going to end up being "lucky". There are plenty of sophisticated collectors, even on this forum, who have bought premium quality coins that have not kept up with the S&P 500. It's not their fault that the sector they chose to collect was a laggard. Someone else might well have bought a sector that got hot. That is not necessarily "savvy" so much as "lucky".
Pittman and Eliasberg bought a bunch of stuff that didn't keep up with the S&P 500. People focus on the headline items and forget the compounding effect of stock market returns over 40 or 50 years.
The huge runups in value in the Pittman and Eliasberg collections are really rooted in the time period. I know that you hate that fact. They largely bought their key coins before 1970 and sold them after 1990. Does that make them "savvy" or "lucky" or a little bit of both? They bought quality, certainly. But they also benefited from a market movement that they could not have foreseen nor did they do anything to create.
That doesn't lessen their eye for coins. But I think it is a mistake to consider them financially savvy as they were pursuing a passion not building an investment portfolio. In fact, if they were pursuing an investment portfolio, they would not have pursued completeness. Pittman, for sure, did not consider the investment potential of his collection. He pursued them passionately because he loved them.
Can anyone think of a great collection bought post-1980 that has beaten the S&P 500 over the last 30 years?
I understand you have a bias against rare coins. You have previously posted that you have always wanted to find a way to "short sell" coins. Unlike you i love coins. I have never entertained a thought on short selling coins but instead focus on building collections that give me great enjoyment and also i hope appreciates in value.
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
You wouldn’t be able to track that personally selected, smaller group of high end coins.
I understand that. My point is that stocks are different from coins. It has been proven that most mutual find managers fail to beat the s & p 500 index. I would think coins are the opposite---most savy collectors should do better than the pcgs 3000. Therefore, i think its a red herring to pit the pcgs 3000 against other investments.
I'm not sure you can conclude that most "savvy collectors" will beat the PCGS 3000. The 3000, like any index, really only has one virtue, broad representation. As a result, it can give some general direction for the market as a whole.
The problem with the "savvy collector" is that your definition of "savvy" is going to end up being "lucky". There are plenty of sophisticated collectors, even on this forum, who have bought premium quality coins that have not kept up with the S&P 500. It's not their fault that the sector they chose to collect was a laggard. Someone else might well have bought a sector that got hot. That is not necessarily "savvy" so much as "lucky".
Pittman and Eliasberg bought a bunch of stuff that didn't keep up with the S&P 500. People focus on the headline items and forget the compounding effect of stock market returns over 40 or 50 years.
The huge runups in value in the Pittman and Eliasberg collections are really rooted in the time period. I know that you hate that fact. They largely bought their key coins before 1970 and sold them after 1990. Does that make them "savvy" or "lucky" or a little bit of both? They bought quality, certainly. But they also benefited from a market movement that they could not have foreseen nor did they do anything to create.
That doesn't lessen their eye for coins. But I think it is a mistake to consider them financially savvy as they were pursuing a passion not building an investment portfolio. In fact, if they were pursuing an investment portfolio, they would not have pursued completeness. Pittman, for sure, did not consider the investment potential of his collection. He pursued them passionately because he loved them.
Can anyone think of a great collection bought post-1980 that has beaten the S&P 500 over the last 30 years?
You assume if pittman had not purchased coins he would have put it all in the s and p 500---a big assumption. How many people actually did that at that time? He had a singular focus with coins. If he had not bought coins some of that money would probably not be invested at all. Further, what if he had bought kodac stock? Thats where he worked and if he held it and never sold---i think its worth around $2 or $3 a share. Hindsight is 20-20 for you to say he could have bought the 500 index. Pittman didnt have the benefit of hindsight and did ok building a 30 million dollar collection.
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
You wouldn’t be able to track that personally selected, smaller group of high end coins.
I understand that. My point is that stocks are different from coins. It has been proven that most mutual find managers fail to beat the s & p 500 index. I would think coins are the opposite---most savy collectors should do better than the pcgs 3000. Therefore, i think its a red herring to pit the pcgs 3000 against other investments.
I'm not sure you can conclude that most "savvy collectors" will beat the PCGS 3000. The 3000, like any index, really only has one virtue, broad representation. As a result, it can give some general direction for the market as a whole.
The problem with the "savvy collector" is that your definition of "savvy" is going to end up being "lucky". There are plenty of sophisticated collectors, even on this forum, who have bought premium quality coins that have not kept up with the S&P 500. It's not their fault that the sector they chose to collect was a laggard. Someone else might well have bought a sector that got hot. That is not necessarily "savvy" so much as "lucky".
Pittman and Eliasberg bought a bunch of stuff that didn't keep up with the S&P 500. People focus on the headline items and forget the compounding effect of stock market returns over 40 or 50 years.
The huge runups in value in the Pittman and Eliasberg collections are really rooted in the time period. I know that you hate that fact. They largely bought their key coins before 1970 and sold them after 1990. Does that make them "savvy" or "lucky" or a little bit of both? They bought quality, certainly. But they also benefited from a market movement that they could not have foreseen nor did they do anything to create.
That doesn't lessen their eye for coins. But I think it is a mistake to consider them financially savvy as they were pursuing a passion not building an investment portfolio. In fact, if they were pursuing an investment portfolio, they would not have pursued completeness. Pittman, for sure, did not consider the investment potential of his collection. He pursued them passionately because he loved them.
Can anyone think of a great collection bought post-1980 that has beaten the S&P 500 over the last 30 years?
You assume if pittman had not purchased coins he would have put it all in the s and p 500---a big assumption. How many people actually did that at that time? He had a singular focus with coins. If he had not bought coins some of that money would probably not be invested at all. Further, what if he had bought kodac stock? Thats where he worked and if he held it and never sold---i think its worth around $2 or $3 a share. Hindsight is 20-20 for you to say he could have bought the 500 index. Pittman didnt have the benefit of hindsight and did ok building a 30 million dollar collection.
In looking apples to apples, if Pittman had put every dollar he used to purchase coins into an index fund he would have died a MUCH more wealthy man. Kudos to him for getting a nice return and having a blast, but arguing that numismatic coins are a better investment is just not a winnable argument. $1000 spent at the Farouk sale would be worth around 1M today if invested in an index fund.
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
You wouldn’t be able to track that personally selected, smaller group of high end coins.
I understand that. My point is that stocks are different from coins. It has been proven that most mutual find managers fail to beat the s & p 500 index. I would think coins are the opposite---most savy collectors should do better than the pcgs 3000. Therefore, i think its a red herring to pit the pcgs 3000 against other investments.
I'm not sure you can conclude that most "savvy collectors" will beat the PCGS 3000. The 3000, like any index, really only has one virtue, broad representation. As a result, it can give some general direction for the market as a whole.
The problem with the "savvy collector" is that your definition of "savvy" is going to end up being "lucky". There are plenty of sophisticated collectors, even on this forum, who have bought premium quality coins that have not kept up with the S&P 500. It's not their fault that the sector they chose to collect was a laggard. Someone else might well have bought a sector that got hot. That is not necessarily "savvy" so much as "lucky".
Pittman and Eliasberg bought a bunch of stuff that didn't keep up with the S&P 500. People focus on the headline items and forget the compounding effect of stock market returns over 40 or 50 years.
The huge runups in value in the Pittman and Eliasberg collections are really rooted in the time period. I know that you hate that fact. They largely bought their key coins before 1970 and sold them after 1990. Does that make them "savvy" or "lucky" or a little bit of both? They bought quality, certainly. But they also benefited from a market movement that they could not have foreseen nor did they do anything to create.
That doesn't lessen their eye for coins. But I think it is a mistake to consider them financially savvy as they were pursuing a passion not building an investment portfolio. In fact, if they were pursuing an investment portfolio, they would not have pursued completeness. Pittman, for sure, did not consider the investment potential of his collection. He pursued them passionately because he loved them.
Can anyone think of a great collection bought post-1980 that has beaten the S&P 500 over the last 30 years?
You assume if pittman had not purchased coins he would have put it all in the s and p 500---a big assumption. How many people actually did that at that time? He had a singular focus with coins. If he had not bought coins some of that money would probably not be invested at all. Further, what if he had bought kodac stock? Thats where he worked and if he held it and never sold---i think its worth around $2 or $3 a share. Hindsight is 20-20 for you to say he could have bought the 500 index. Pittman didnt have the benefit of hindsight and did ok building a 30 million dollar collection.
In looking apples to apples, if Pittman had put every dollar he used to purchase coins into an index fund he would have died a MUCH more wealthy man. Kudos to him for getting a nice return and having a blast, but arguing that numismatic coins are a better investment is just not a winnable argument. $1000 spent at the Farouk sale would be worth around 1M today if invested in an index fund.
And if he had put it all in Berkshire Hathaway he would have been a billionaire. Again, hindsight is 20/20. He did ok By the way, how many people on this forum have put away every extra nickel in the 500 index fund for the last 20 years? Wow, this is a tough crowd. Pittman leaves a 30 million dollar estate (back in the 1970s) and he is chastised for not investing in the stock market!
@Labelman87 said:
There is no gain or loss until you sell.
According to two of my accountants in a row, you can’t take losses on coins. You can’t even offset the losses on coins against the gains. The IRS treats gamblers better than that. I have heard this opinion twice despite the fact that I bought and sold many coins as a business for over 14 years. You have to be buying and selling coins constantly to be allowed to offset the gains and losses.
That alone makes coins a less attractive “investment.”
Not so.
As a non-dealer, if you show a dedicated profit/investment motive for your coin pursuits (ie it's primarily for investment and not just a hobby for fun or filling holes) you can deduct your costs to acquire coins and offset losses. And if you're dumping lots of money into coins (5 figures and up) you sure as heck ought to be thinking about the investment side of your purchasing.....I'm sure Hansen does. Since coin profits/losses are either schedule C or schedule D items, they can be used to offset the other side. Capital gains or losses are what apply. It would be the same for gold and silver bullion transactions, which are also treated as "collectibles," and obviously losses can offset the gains. Same for coins if you pursue them as an "investment." I'm sure there is no shortage of accountants who want the easy way out and advise people accordingly. Doesn't make it right. I'd like to hear Oreville's view on this....but I'm pretty sure I know where he stands as a long time practicing accountant.
If your coins pretty much only go back and forth into a safety deposit box, that's not much "personal" or "hobby" use from them. If you display them at shows, compete in Registry sets, that might complicate things. Nothing says you can't do all of this with a "collector's eye" for quality and value.
_Losses from selling collectible assets are deductible capital losses that enter the netting process described above provided that the taxpayer held the collectible for investment purposes rather than personal purposes. If the taxpayer was holding the collectible for personal purposes, the loss realized on a sale of the collectible is a nondeductible personal loss. Whether the taxpayer was holding the collectible as an investment asset or as a personal asset depends on the taxpayer's intent for holding the asset. A taxpayer is considered to be an investor when the taxpayer acquires and holds a collectible asset with the primary expectation of selling it at a profit. In contrast, a taxpayer is not considered to be an investor when the taxpayer acquires the collectible primarily for personal use and enjoyment without consideration of whether the asset will appreciate in value.1 _
In looking apples to apples, if Pittman had put every dollar he used to purchase coins into an index fund he would have died a MUCH more wealthy man. Kudos to him for getting a nice return and having a blast, but arguing that numismatic coins are a better investment is just not a winnable argument. $1000 spent at the Farouk sale would be worth around 1M today if invested in an index fund.__
In looking at 1954 to 1996 (Farouk Sale to Pittman Collection sale) the Dow advanced from approx 330 to 5500, or about 16.6X. Big whoop. This doesn't take into account which "index" funds you choose and the fact that the dogs of the indexes routinely get tossed out....making the perceived gain of these indexes rather bogus. The first index fund didn't even exist until Dec 1975. Pittman didn't even have access to that for the first 20 yrs. The only way you could have done that was to buy individual stocks which would have caused your acquisition costs to soar. My Dad and Grandfather were heavy into stocks in the 50's to 80's, mostly in selected energy and insurance companies, no indexes. You either picked right or picked wrong....just like coins....or like Pittman. It's interesting that so many focus on stocks from 1982 to Jan 2020. The best run ever. Like that's the "norm"....essentially the 5th and final wave of a 100-120 yr economic boom cycle. Yet completely forgotten is 1929-1954 and 1966-1982 and 2000-2010.... where stocks basically gained 0%. Like that "can't even happen ever again." Recency Bias at its best.
Pick specific intermediate term windows of 10-20 yrs and yes, coins did much better than stocks, sometimes absurdly so. 1970-1990 was one such window. And you could even extend that from 1966 to Oct 2007 - a 40 yr collectible boom brought to you courtesy of the Baby Boomers.....where quality rare coins easily beat out stock indexes of the Dow, S&P500/2000. Stocks went from Dow 969 to 13,895.....a 14.3X gain....over 40 yrs. Toss in dividends (if you even got them) and you still lost. The best rare coins went up 15X alone from 1975 to 1980. I'd imagine most quality rare coins from 1966 to 2007 were up 50-100X. If you had an affinity for superb gem material even higher. The PCGS 3000 was up >40X from 1970-1980, up 181X from 1970-1989, and up 70X from 1970-2008. Such horrible results. No doubt 2009-2020 has been no picnic. But there have been opportunities. And there will be more. And maybe that boom collectibles period never comes back. And maybe stocks (and real estate) from 1982-2019 doesn't come back either for quite some time..........
@nags said:
Historically this one is an absolute no-brainer. If given the option of putting a sum of money in an S&P index fund or in a basket of coins for 20 years there is no question which will net more in the end.
That wouldn't have worked all that well for you from 1970 to 1990. Investment grade rare coins would have won by a mile. Coins have their strong 5-12 yr runs. It's a matter of being there for the start and hanging on. Massive runs from 1975-1980, 1984-1990, 1996-2008, (2009-2015....not massive....but pretty good). How about the Pittman coins from the 1950's to 1996? I suspect over that 40 yr run he killed the S&P......no doubt the same for many others who were sharp like him. As far as Pittman buying up distressed coins from the Great Depression? He was only in his early 20's then. His real buying began in the mid-1940's, and flourished in the 1950's and later. His peers included Louis Eliasberg, James A. Stack, Harold Bareford, Edwin Newman, John Ford, Bass, and other heavy weights. Give them all a lot more credit than "depression buying."
Well-informed investors, collectors and dealers tend to know what and when to buy and how much to pay. Many or most of them buy near net wholesale levels, even when buying at auction. The general public is usually very uninformed on the real value of real quality coins. Your goal can be to buy for profit or to buy for a collection to matter the cost.....your choice. I remember Jim Halperin's Rare Coin Investment Fund from 1977 to 1980. Only 3 years. And he killed it. He chose about 500 top coins which on average (iirc) went up 5X or more in that period (during a dead stock market). Let's not forget that it took 25 yrs for the Stock Market to return to the highs of 1929 (by 1954). There's another one of those times coming at us.
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
You wouldn’t be able to track that personally selected, smaller group of high end coins.
I understand that. My point is that stocks are different from coins. It has been proven that most mutual find managers fail to beat the s & p 500 index. I would think coins are the opposite---most savy collectors should do better than the pcgs 3000. Therefore, i think its a red herring to pit the pcgs 3000 against other investments.
I'm not sure you can conclude that most "savvy collectors" will beat the PCGS 3000. The 3000, like any index, really only has one virtue, broad representation. As a result, it can give some general direction for the market as a whole.
The problem with the "savvy collector" is that your definition of "savvy" is going to end up being "lucky". There are plenty of sophisticated collectors, even on this forum, who have bought premium quality coins that have not kept up with the S&P 500. It's not their fault that the sector they chose to collect was a laggard. Someone else might well have bought a sector that got hot. That is not necessarily "savvy" so much as "lucky".
Pittman and Eliasberg bought a bunch of stuff that didn't keep up with the S&P 500. People focus on the headline items and forget the compounding effect of stock market returns over 40 or 50 years.
The huge runups in value in the Pittman and Eliasberg collections are really rooted in the time period. I know that you hate that fact. They largely bought their key coins before 1970 and sold them after 1990. Does that make them "savvy" or "lucky" or a little bit of both? They bought quality, certainly. But they also benefited from a market movement that they could not have foreseen nor did they do anything to create.
That doesn't lessen their eye for coins. But I think it is a mistake to consider them financially savvy as they were pursuing a passion not building an investment portfolio. In fact, if they were pursuing an investment portfolio, they would not have pursued completeness. Pittman, for sure, did not consider the investment potential of his collection. He pursued them passionately because he loved them.
Can anyone think of a great collection bought post-1980 that has beaten the S&P 500 over the last 30 years?
I understand you have a bias against rare coins. You have previously posted that you have always wanted to find a way to "short sell" coins. Unlike you i love coins. I have never entertained a thought on short selling coins but instead focus on building collections that give me great enjoyment and also i hope appreciates in value.
More lies.
I have no bias against rare coins. The statement is silly.
I love coins as much or more than you. You would be shocked at how much stuff I have socked away. My collection is world wide and largely raw
Short selling coins is not because I hate them. This misunderstands the whole purpose of short selling. The point is to mitigate risk not to try express hatred of coins.
I have no issue with you loving coins. I take no issue with you're HOPING they appreciate. I do think it is irresponsible, however, to promote coins as investments. [Not that you are doing that here]
@roadrunner said: In looking apples to apples, if Pittman had put every dollar he used to purchase coins into an index fund he would have died a MUCH more wealthy man. Kudos to him for getting a nice return and having a blast, but arguing that numismatic coins are a better investment is just not a winnable argument. $1000 spent at the Farouk sale would be worth around 1M today if invested in an index fund.__
In looking at 1954 to 1996 (Farouk Sale to Pittman Collection sale) the Dow advanced from approx 330 to 5500, or about 16.6X. Big whoop. This doesn't take into account which "index" funds you choose and the fact that the dogs of the indexes routinely get tossed out....making the perceived gain of these indexes rather bogus. The first index fund didn't even exist until Dec 1975. Pittman didn't even have access to that for the first 20 yrs. The only way you could have done that was to buy individual stocks which would have caused your acquisition costs to soar. My Dad and Grandfather were heavy into stocks in the 50's to 80's, mostly in selected energy and insurance companies, no indexes. You either picked right or picked wrong....just like coins....or like Pittman. It's interesting that so many focus on stocks from 1982 to Jan 2020. The best run ever. Like that's the "norm"....essentially the 5th and final wave of a 100-120 yr economic boom cycle. Yet completely forgotten is 1929-1954 and 1966-1982 and 2000-2010.... where stocks basically gained 0%. Like that "can't even happen ever again." Recency Bias at its best.
Pick specific intermediate term windows of 10-20 yrs and yes, coins did much better than stocks, sometimes absurdly so. 1970-1990 was one such window. And you could even extend that from 1966 to Oct 2007 - a 40 yr collectible boom brought to you courtesy of the Baby Boomers.....where quality rare coins easily beat out stock indexes of the Dow, S&P500/2000. Stocks went from Dow 969 to 13,895.....a 14.3X gain....over 40 yrs. Toss in dividends (if you even got them) and you still lost. The best rare coins went up 15X alone from 1975 to 1980. I'd imagine most quality rare coins from 1966 to 2007 were up 50-100X. If you had an affinity for superb gem material even higher. The PCGS 3000 was up >40X from 1970-1980, up 181X from 1970-1989, and up 70X from 1970-2008. Such horrible results. No doubt 2009-2020 has been no picnic. But there have been opportunities. And there will be more. And maybe that boom collectibles period never comes back. And maybe stocks (and real estate) from 1982-2019 doesn't come back either for quite some time..........
You are not looking at the total return. Here, play with this calculator:
Total return from 1954 to 1996 is 2200% nominal but it is 10,575% with dividends reinvested. So, $1000 at the Farouk sale would be over $100,000 in 1996 in the S&P (dividends reinvested)
Similarly 1929-1954 gives only an 11% yield but 359% with dividends reinvested.
1966-1982 give a 34% nominal yield but 154% with dividends reinvested.
2000 to 2010 is pretty much a loss decade.
Of course, you're also cherry picking those years. You are also assuming a buy and hold at the beginning of the period rather than a continuous investment throughout that period. But, that's enough math for one day.
You also make statements about coins that aren't based on any real data. 1966 to 2007 gives a total return of 6254%. Did some coins do better than 66x their value. Sure. Did ALL coins cumulatively? And even if all coins cumulatively did, how do you build an index fund of coins? You end up trying to pick winners, and sometimes you lose.
That is one of the most idiotic things I’ve ever read.
It’s easy to nitpick random stocks that are way down. The whole market just crashed a month and a half ago!
I can do the same thing but with stocks that went up.
MY Aurora (ACB) is up 100% in the last two weeks. I DONT KNOW ANY COIN THAT IS UP 100%!!
She is such an arrogant person. She lives in a cloud of her own rose scented turd gas.
I can’t believe anyone reads her crap and can respect any of it.
All she does is trash everything that’s not Legend and touts legend as the almighty authority on everything.
@FranklinHalfAddict said:
That is one of the most idiotic things I’ve ever read.
It’s easy to nitpick random stocks that are way down. The whole market just crashed a month and a half ago!
I can do the same thing but with stocks that went up.
MY Aurora (ACB) is up 100% in the last two weeks. I DONT KNOW ANY COIN THAT IS UP 100%!!
She is such an arrogant person. She lives in a cloud of her own rose scented turd gas.
I can’t believe anyone reads her crap and can respect any of it.
All she does is trash everything that’s not Legend and touts legend as the almighty authority on everything.
I have never purchased anything from Legend or Laura so I am not biased. But I will say it again that the whole article was taken out of context. Sometimes you can't take one paragraph and make it into the entire story that's trying to be told.
As a non-dealer, if you show a dedicated profit/investment motive for your coin pursuits (ie it's primarily for investment and not just a hobby for fun or filling holes) you can deduct your costs to acquire coins and offset losses. And if you're dumping lots of money into coins (5 figures and up) you sure as heck ought to be thinking about the investment side of your purchasing.....I'm sure Hansen does. Since coin profits/losses are either schedule C or schedule D items, they can be used to offset the other side. Capital gains or losses are what apply. It would be the same for gold and silver bullion transactions, which are also treated as "collectibles," and obviously losses can offset the gains. Same for coins if you pursue them as an "investment." I'm sure there is no shortage of accountants who want the easy way out and advise people accordingly. Doesn't make it right. I'd like to hear Oreville's view on this....but I'm pretty sure I know where he stands as a long time practicing accountant.
I need to find your accountant because I have stonewalled on this issue time after time. According them, you have to be buying and selling all the time. The only way you can do that, and not lose your shirt is to be a dealer who sets up at the major shows, become a big time eBay seller or consign many lots of material to the major auctions.
If you take coins to a show to try to sell them, the dealers will do nothing but low ball you. It was one of the reasons I was seldom able to buy any good coins from the public at the shows. I would have happily paid strong prices for good coins at the shows, but few people brought them around. The dealers had this unfortunate attitude that they paid fair money among themselves and paid as little as possible to the “dreaded public.”
It drove me crazy. If you have chance to buy a good coin and can make fair money on it, why can’t you be willing to pay a fair price to “the public?”
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
@Cougar1978 said:
We don’t know what the true fallout will be from the pandemic or how long it will last. While online has done well I see some slowing plus summer doldrums coming. As far as the wealthy that is a specialty market segment like luxury cars. A $20 k coin may be peanuts to somebody who owns a $1.1 m condo or $6m yacht.
I have noticed this is a reoccuring theme in multiple threads-- high priced coins always have buyers despite the overall economy since wealthy collectors are immune to the ups and downs of the economy. I am not commentng on whether this is accurate but if you really think that then it would also make you think buying rare high priced coins would make good investments since they are always in demand.
I don't think you can say that. People who have bought condition rarities are routinely taken to the cleaners, if not worse. Exceptions are pre 1835 coins, and how many people can afford them?
I have a large number of pre 1835 coins, and I think most here would agree that they are not “junk.” They have not done well at all financially over the last decade. They include the “blue chips” like pre-1834 gold and prime type coins from the 1790s and early 1800s. The coin market has not been good for years.
Bill, just curious. I'm talking about things like an original Bust dollar in MS 63 or MS 64 or a Strawberry Leaf Large Cent in the same grade. Things I never could afford in the first place.
If you take coins to a show to try to sell them, the dealers will do nothing but low ball you. It was one of the reasons I was seldom able to buy any good coins from the public at the shows. I would have happily paid strong prices for good coins at the shows, but few people brought them around. The dealers had this unfortunate attitude that they paid fair money among themselves and paid as little as possible to the “dreaded public.”
You must have been finding the "wrong" dealers. And I have no doubt the majority of them at a local or regional show would probably err well to the "low ball" side. I've always had a half dozen of "go to" dealers who would pay very fair....in the upper 95% of all buyers. Last time I was actively selling those included David Carr with DVRC and often stomping around the Northeast shows (now deceased), Bruce Kutcher, Brian Yutzy when he was with Lone Star Coin, Kenny Duncan (US Coins), just to name a few. Most of these guys were dealer's dealers who were superb graders - and knew their markets cold. No games, which is why I liked them. I'm sure the general public would have a tough time finding guys like this. Their best bet might be to go to major auction, GC, or similar source.
One of my favorite stories is taking $350,000 in double row boxes of mostly slabbed ch/gem type coins around the 2003 ANA show. It was a mistake to start with 2 of the dealers but I felt they might want to get first shots as I sometimes bought from them on the "retail" level. What they did was cherry pick only 2 coins out of about a hundred. The Multi-Million Dollar dealer could only find a single "toner" MS64 Pilgrim at $120 to pick out....lol. It was laughable. The 2nd dealer cherry picked a single 1879 PCGS MS66 seated half for $4K. I think he bought that because he had a far inferior NGC 66 of that date in his case for $6K. Lesson learned. I took the coins next to US Coins and Lone Star and they bought over $150K between them in about 10 minutes of dealing. That was my goal for the show. Don't even know why I wasted my time with the first two PNG dealers who of course always claimed to be the highest buyers for good stuff....lol. The "real" highest buyers don't need to advertise that fact. My experiences are from over a decade ago. And a lot of seats have shifted since then. A dealer that low balls me the first time I offer them stuff....never gets a second chance at any future coins from me. Why waste the time?
My first time responding to a "highest prices paid anywhere" ad in Coin World was 1983. I thought it should be true or you couldn't say it. So I sent off a $1600 or so group of coins to that dealer....who promptly offered me $333 for them. They were shipped back. Then I tried one of the leading coin dealers on the west coast is well known to EVERYONE here. That offer was 50c on the dollar or around $800. They were sent back again. Then I tried Ron Iskowitz of Renrob who I had dealt with a bit in the 1970's. They offered 50% more than the west coast guy at $1200. Ron was also quite nice in pointing out which coins I had under-priced and which ones were over-priced...but he bought the whole deal....noting that one coin alone was worth $800. That struck up a nice relationship over the next few decades....and it was Ron who I chose to be my NGC coin dealer submitter for a number of years. The other guys? I never went back.
I had the same problem buying as Bill Jones when I was dealing coins full time. The general public would never come to me. They preferred to be paid less for their coins from major dealers and well known "names" in their area. I think it was a "comfort" thing. They were comfortable selling to these bigger and well known names, been around for decades, fancy ads, and manning the prime tables at regional/major shows. Funny thing is, those same coins would often come back to me (at a markup) from those so-called higher buyers. I didn't really care as long as I paid what I felt was reasonable for me. If you know what your coins are really worth.....you can....and will get fair value if you are persistent. If you don't know what they are reasonably worth....why are buying coins in the first place? About the only exception to that are coins so rarely seen that price records are non-existent....where 20 yrs might lapse between sales.
Thank you for the leads so far as dealers who are willing pay fair prices are concerned.
I probably don't know a lot of my coins are worth because I've owned some them for 20 to 40 years. They were all certified, if I owned them raw, over 20 years ago. You can go by the auction results, but some those numbers are nutty high. I know because I've bid in some of those auctions. And then there is the Grey Sheet.
I knew a lot more about values 10 years ago when I was dealer, but I have retired and not been in that area of the market.
Getting back to the tax issue, when I was young man with an accounting degree, just out of college, the law was all assets were treated as capital assets. If you reported something like coins as a source of income, you were allowed to offset losses and against gains with no problem.
Then along comes a Congressman from Massachusetts, named Jim Shannon. He got the law changed to the unfair system we have today. I knew a dealer, who belonged to his political party, who read the riot act out to him for doing that, but the damage was done. Later Mr. Shannon gave up his seat, tried to run for governor and got his political head handed to him.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
@3stars said:
I made a 1000% return on one coin in about a day last year, haven’t found a stock to do that with yet
I bought a shot glass for a nickel at a yard sale and sold it on eBay 5 days later for $5.00 or a 9,900% profit.
You forget to take out the $4.00+ or so shipping costs, Ebay listing and commission fees (10-15%), and your time and effort to locate the item, post an ad, package it up, drive it to the post office. Assuming you don't work for free, you probably lost considerable money on this transaction. Sometimes even FREE isn't cheap enough....lol.
@3stars said:
I made a 1000% return on one coin in about a day last year, haven’t found a stock to do that with yet
I bought a shot glass for a nickel at a yard sale and sold it on eBay 5 days later for $5.00 or a 9,900% profit.
You forget to take out the $4.00+ or so shipping costs, Ebay listing and commission fees (10-15%), and your time and effort to locate the item, post an ad, package it up, drive it to the post office. Assuming you don't work for free, you probably lost considerable money on this transaction. Sometimes even FREE isn't cheap enough....lol.
Unless he charged $5 for shipping, in which case he made even more.
Another perspective on the op coins vs stocks. I belonged to a golf club that was a top 50 club in the US. The course was owned by one man. He spared no expense (fazio designed) and used his vast wealth (he sold a business for hundreds of millions) to build it. It was his dream. He loved the course he buit pretty much in the middle of nowhere. He ran it is his way---not the way to make the mozt money. He died of a heart attack a few years later while playing golf in hawaii.
His family i heard wasnt thrilled about now owning a course that he poured 40 million into. That money would have done far better for the family if invested in almost anything other than a golf course (they have since sold the course).
The connection to coins? This man had plenty of money and he spent alot on a world class golf course. Some may say he was foolish because he could have made more but he left a legacy that can be enjoyed by so many and he fufilled his dream. I look at coins the same way. If your goal is to die with the most money in your account, then you should probably not have a hobby period. But if your goal is to live a full and happy life then having a hobby and investing makes sense. They are not mutually exclusive. We are fortunate that our hobby is one that can also enrich the saavy numismatist monetarily as well as intellectually. In my book, Pittman died richer than if he invested the money. He built something that still survives today in articles, books, and pedigree. The 30 million left to his heirs back in 70s aint bad either.
@edwardjulio said:
I watched a sales promotion on television yesterday for 1924 Saints in 65 priced at $2,995 each. If I could sell one of mine for that price, would be 90% gain, holding period less than a year.
Your talking about a boiler room operation on TV selling on huge hype and puffery. That has nothing to do with real coins or the real gold market. How about the people that bought those same MS65 Saints from legitimate numismatic sources and their local dealers for $1300-$1400 just 4-5 yrs ago? Doing pretty good now.
I saw this. I thought it was not as big a ripoff as the usual TV coin selling shows. Obviously not a bargain.
Comments
Oil is up 70% this month and XOM is up 5% plus the dividend.
If you like VTSAX you should love VTI. It’s 25% cheaper.
.
End Systemic Elitism - It Takes All Of Us
If Pittman bought an S&P index fund in 1950 for $100, it would have been worth about $25,000 in 1997. [Divident reinvestment] So...not necessarily.
1970 to 1990 was a rare run-up in coins. It is the only period like that in the history of coins, before or since. There was a time when tulip bulbs had a great run also. The exception is really not the best basis to make an analysis. Stocks, by the way were up 800% [S&P 500 Dividend reinvested] so even that period was actually a good investment window for stocks. It just paled relative to the tulips.
Look at the PCGS3000 from 2010 till today relative to the S&P 500.
[By the way, since I'm in a philatelic mood tonight, stamps also had a tremendous run-up into 1990. They've crashed just as hard over the last 20 years. I don't hear anyone arguing for the investment value of stamps.]
Was actually into Apple pre-split at $2.00 in the 1990s so what's that, like $0.28 per share? Sold it at around $4.00, bought it again in the $80 range and sold it in the mid $90s. My current holdings were purchased in 2009, I sold about 25% after the split in 2014 and got all of my original investment back so in my head I'm playing with the houses money even though my basis for tax purposes is $26.97. Next post I might tell you about some of my losers.
it's crackers to slip a rozzer the dropsy in snide
I haven’t read the article, but from the OP’s post the comparison sounds ludicrous.
There probably hasn’t been a single day since the inception of the market that it wasn't possible to find a few winners and a few losers.
From Legend's Hot Topics:
"Coin collectors do not realize how well they have it. Say you have a coin that you paid $20,000.00 for. Today the best we can pay is $14,000.00. That is a 30% loss"
So, correct me if I'm wrong but is she saying that is a typical example of coins they have sold and what they would pay for that example now? If so, then is a $50,000 coin now worth $35,000 and a $100,000 coin is now worth $70,000?
I don't know anything of that market so I will take her word for it but I do know a little about the internet market and eBay and I know that widgets are selling like crazy. Biggest problem I hear from on-line and eBay dealers is that they are having record months but with shows not happening, they are running out of inventory.
I made a 1000% return on one coin in about a day last year, haven’t found a stock to do that with yet
I don't think you can say that. People who have bought condition rarities are routinely taken to the cleaners, if not worse. Exceptions are pre 1835 coins, and how many people can afford them?
And how many times has that happened?
And that doesn’t sound like an investment, either.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
According to two of my accountants in a row, you can’t take losses on coins. You can’t even offset the losses on coins against the gains. The IRS treats gamblers better than that. I have heard this opinion twice despite the fact that I bought and sold many coins as a business for over 14 years. You have to be buying and selling coins constantly to be allowed to offset the gains and losses.
That alone makes coins a less attractive “investment.”
I have a large number of pre 1835 coins, and I think most here would agree that they are not “junk.” They have not done well at all financially over the last decade. They include the “blue chips” like pre-1834 gold and prime type coins from the 1790s and early 1800s. The coin market has not been good for years.
I am not saying that is the case. Just pointing out that a few people who posts will say consistently how poor the coin market does but when confronted with record prices for some high priced coins rationalize it that wealthy collectors are immune and will keep spending. I always found this an odd statement since these people are usually saying dont spend big money on coins and then say "but high priced coins" always have a market. My point was the contradiction of their position not that top pop or high priced coins always do well.
Your choice to use the pcgs 3000 as your benchmark is flawed. Coins are not stocks---indexes dont work for coins. Each coin is unique and cant be treated like a commodity for the best reaults. I dont know any sophisticated collector or investor who would mimic the pcgs 3000 and expect better returns than carefully selecting a smaller group of coins that they personally select as being high end for the grade.
I have read many posts from you stating that you constantly get outbid on coins that you put in strong bids on but in your last post you state the coins that you did purchase have performed poorly financially. This would indicate that coins you want but have been unsuccessful at auction have done well economically but the coins you have actually purchased have not. I am curious if you have thoughts on why this dynamic seems to play out ? Thanks
You wouldn’t be able to track that personally selected, smaller group of high end coins.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
BS - the PCGS 3000 shows how the overall coin market is doing, that is why they have it after all. Sure coins will vary from the index individually but it still shows the state of the market, which is lousy since around 2009. No one says they mimic the index in buying but nevertheless the collective prices are down for just about anything in numismatics.
Strong bids are different from record prices, only sometimes are they equal.
I understand that. My point is that stocks are different from coins. It has been proven that most mutual find managers fail to beat the s & p 500 index. I would think coins are the opposite---most savy collectors should do better than the pcgs 3000. Therefore, i think its a red herring to pit the pcgs 3000 against other investments.
I bought a shot glass for a nickel at a yard sale and sold it on eBay 5 days later for $5.00 or a 9,900% profit.
it's crackers to slip a rozzer the dropsy in snide
Happens every day in the financial market.
You can cherry pick coins and stocks, but as a general category this topic is not open to debate from an economic perspective.
Correction: It is extremely rare for a stock to yield a 1000% gain in a day, but reasonably common for an option.
It's the only index we have. Any other method is just simply cherry-picking your data.
The $500,000 tax free gain on real estate is a no brainer. Utility stocks are a long term way to build wealth.
Coins are a hobby. An Expensive one at that.
100% Positive BST transactions
I'm not sure you can conclude that most "savvy collectors" will beat the PCGS 3000. The 3000, like any index, really only has one virtue, broad representation. As a result, it can give some general direction for the market as a whole.
The problem with the "savvy collector" is that your definition of "savvy" is going to end up being "lucky". There are plenty of sophisticated collectors, even on this forum, who have bought premium quality coins that have not kept up with the S&P 500. It's not their fault that the sector they chose to collect was a laggard. Someone else might well have bought a sector that got hot. That is not necessarily "savvy" so much as "lucky".
Pittman and Eliasberg bought a bunch of stuff that didn't keep up with the S&P 500. People focus on the headline items and forget the compounding effect of stock market returns over 40 or 50 years.
The huge runups in value in the Pittman and Eliasberg collections are really rooted in the time period. I know that you hate that fact. They largely bought their key coins before 1970 and sold them after 1990. Does that make them "savvy" or "lucky" or a little bit of both? They bought quality, certainly. But they also benefited from a market movement that they could not have foreseen nor did they do anything to create.
That doesn't lessen their eye for coins. But I think it is a mistake to consider them financially savvy as they were pursuing a passion not building an investment portfolio. In fact, if they were pursuing an investment portfolio, they would not have pursued completeness. Pittman, for sure, did not consider the investment potential of his collection. He pursued them passionately because he loved them.
Can anyone think of a great collection bought post-1980 that has beaten the S&P 500 over the last 30 years?
Actually, your logic is flawed here. We have no idea how the coins he failed to win have performed. For all we know, the coins he was outbid on have performed worse than the coins he owns. You would need to know what those coins are and what they have re-sold for later.
100% correct, and what I was insinuating.
I understand you have a bias against rare coins. You have previously posted that you have always wanted to find a way to "short sell" coins. Unlike you i love coins. I have never entertained a thought on short selling coins but instead focus on building collections that give me great enjoyment and also i hope appreciates in value.
Is this something that could be done at scale. For example, is it possible to get a 1000% return investing say $100,000 in one or more coins?
Imagine if the PCGS 3000 was packed with coins like that?
You assume if pittman had not purchased coins he would have put it all in the s and p 500---a big assumption. How many people actually did that at that time? He had a singular focus with coins. If he had not bought coins some of that money would probably not be invested at all. Further, what if he had bought kodac stock? Thats where he worked and if he held it and never sold---i think its worth around $2 or $3 a share. Hindsight is 20-20 for you to say he could have bought the 500 index. Pittman didnt have the benefit of hindsight and did ok building a 30 million dollar collection.
In looking apples to apples, if Pittman had put every dollar he used to purchase coins into an index fund he would have died a MUCH more wealthy man. Kudos to him for getting a nice return and having a blast, but arguing that numismatic coins are a better investment is just not a winnable argument. $1000 spent at the Farouk sale would be worth around 1M today if invested in an index fund.
And if he had put it all in Berkshire Hathaway he would have been a billionaire. Again, hindsight is 20/20. He did ok
By the way, how many people on this forum have put away every extra nickel in the 500 index fund for the last 20 years? Wow, this is a tough crowd. Pittman leaves a 30 million dollar estate (back in the 1970s) and he is chastised for not investing in the stock market!
Not so.
As a non-dealer, if you show a dedicated profit/investment motive for your coin pursuits (ie it's primarily for investment and not just a hobby for fun or filling holes) you can deduct your costs to acquire coins and offset losses. And if you're dumping lots of money into coins (5 figures and up) you sure as heck ought to be thinking about the investment side of your purchasing.....I'm sure Hansen does. Since coin profits/losses are either schedule C or schedule D items, they can be used to offset the other side. Capital gains or losses are what apply. It would be the same for gold and silver bullion transactions, which are also treated as "collectibles," and obviously losses can offset the gains. Same for coins if you pursue them as an "investment." I'm sure there is no shortage of accountants who want the easy way out and advise people accordingly. Doesn't make it right. I'd like to hear Oreville's view on this....but I'm pretty sure I know where he stands as a long time practicing accountant.
rarecoinwholesalers.com/Content/pdf/tax-advan-of-rare-coins-by-armen-vartian.pdf
If your coins pretty much only go back and forth into a safety deposit box, that's not much "personal" or "hobby" use from them. If you display them at shows, compete in Registry sets, that might complicate things. Nothing says you can't do all of this with a "collector's eye" for quality and value.
_Losses from selling collectible assets are deductible capital losses that enter the netting process described above provided that the taxpayer held the collectible for investment purposes rather than personal purposes. If the taxpayer was holding the collectible for personal purposes, the loss realized on a sale of the collectible is a nondeductible personal loss. Whether the taxpayer was holding the collectible as an investment asset or as a personal asset depends on the taxpayer's intent for holding the asset. A taxpayer is considered to be an investor when the taxpayer acquires and holds a collectible asset with the primary expectation of selling it at a profit. In contrast, a taxpayer is not considered to be an investor when the taxpayer acquires the collectible primarily for personal use and enjoyment without consideration of whether the asset will appreciate in value.1 _
In looking apples to apples, if Pittman had put every dollar he used to purchase coins into an index fund he would have died a MUCH more wealthy man. Kudos to him for getting a nice return and having a blast, but arguing that numismatic coins are a better investment is just not a winnable argument. $1000 spent at the Farouk sale would be worth around 1M today if invested in an index fund.__
In looking at 1954 to 1996 (Farouk Sale to Pittman Collection sale) the Dow advanced from approx 330 to 5500, or about 16.6X. Big whoop. This doesn't take into account which "index" funds you choose and the fact that the dogs of the indexes routinely get tossed out....making the perceived gain of these indexes rather bogus. The first index fund didn't even exist until Dec 1975. Pittman didn't even have access to that for the first 20 yrs. The only way you could have done that was to buy individual stocks which would have caused your acquisition costs to soar. My Dad and Grandfather were heavy into stocks in the 50's to 80's, mostly in selected energy and insurance companies, no indexes. You either picked right or picked wrong....just like coins....or like Pittman. It's interesting that so many focus on stocks from 1982 to Jan 2020. The best run ever. Like that's the "norm"....essentially the 5th and final wave of a 100-120 yr economic boom cycle. Yet completely forgotten is 1929-1954 and 1966-1982 and 2000-2010.... where stocks basically gained 0%. Like that "can't even happen ever again." Recency Bias at its best.
Pick specific intermediate term windows of 10-20 yrs and yes, coins did much better than stocks, sometimes absurdly so. 1970-1990 was one such window. And you could even extend that from 1966 to Oct 2007 - a 40 yr collectible boom brought to you courtesy of the Baby Boomers.....where quality rare coins easily beat out stock indexes of the Dow, S&P500/2000. Stocks went from Dow 969 to 13,895.....a 14.3X gain....over 40 yrs. Toss in dividends (if you even got them) and you still lost. The best rare coins went up 15X alone from 1975 to 1980. I'd imagine most quality rare coins from 1966 to 2007 were up 50-100X. If you had an affinity for superb gem material even higher. The PCGS 3000 was up >40X from 1970-1980, up 181X from 1970-1989, and up 70X from 1970-2008. Such horrible results. No doubt 2009-2020 has been no picnic. But there have been opportunities. And there will be more. And maybe that boom collectibles period never comes back. And maybe stocks (and real estate) from 1982-2019 doesn't come back either for quite some time..........
More lies.
I have no bias against rare coins. The statement is silly.
I love coins as much or more than you. You would be shocked at how much stuff I have socked away. My collection is world wide and largely raw
Short selling coins is not because I hate them. This misunderstands the whole purpose of short selling. The point is to mitigate risk not to try express hatred of coins.
I have no issue with you loving coins. I take no issue with you're HOPING they appreciate. I do think it is irresponsible, however, to promote coins as investments. [Not that you are doing that here]
You are not looking at the total return. Here, play with this calculator:
https://dqydj.com/sp-500-return-calculator/
Total return from 1954 to 1996 is 2200% nominal but it is 10,575% with dividends reinvested. So, $1000 at the Farouk sale would be over $100,000 in 1996 in the S&P (dividends reinvested)
Similarly 1929-1954 gives only an 11% yield but 359% with dividends reinvested.
1966-1982 give a 34% nominal yield but 154% with dividends reinvested.
2000 to 2010 is pretty much a loss decade.
Of course, you're also cherry picking those years. You are also assuming a buy and hold at the beginning of the period rather than a continuous investment throughout that period. But, that's enough math for one day.
You also make statements about coins that aren't based on any real data. 1966 to 2007 gives a total return of 6254%. Did some coins do better than 66x their value. Sure. Did ALL coins cumulatively? And even if all coins cumulatively did, how do you build an index fund of coins? You end up trying to pick winners, and sometimes you lose.
That is one of the most idiotic things I’ve ever read.
It’s easy to nitpick random stocks that are way down. The whole market just crashed a month and a half ago!
I can do the same thing but with stocks that went up.
MY Aurora (ACB) is up 100% in the last two weeks. I DONT KNOW ANY COIN THAT IS UP 100%!!
She is such an arrogant person. She lives in a cloud of her own rose scented turd gas.
I can’t believe anyone reads her crap and can respect any of it.
All she does is trash everything that’s not Legend and touts legend as the almighty authority on everything.
I have never purchased anything from Legend or Laura so I am not biased. But I will say it again that the whole article was taken out of context. Sometimes you can't take one paragraph and make it into the entire story that's trying to be told.
As a non-dealer, if you show a dedicated profit/investment motive for your coin pursuits (ie it's primarily for investment and not just a hobby for fun or filling holes) you can deduct your costs to acquire coins and offset losses. And if you're dumping lots of money into coins (5 figures and up) you sure as heck ought to be thinking about the investment side of your purchasing.....I'm sure Hansen does. Since coin profits/losses are either schedule C or schedule D items, they can be used to offset the other side. Capital gains or losses are what apply. It would be the same for gold and silver bullion transactions, which are also treated as "collectibles," and obviously losses can offset the gains. Same for coins if you pursue them as an "investment." I'm sure there is no shortage of accountants who want the easy way out and advise people accordingly. Doesn't make it right. I'd like to hear Oreville's view on this....but I'm pretty sure I know where he stands as a long time practicing accountant.
I need to find your accountant because I have stonewalled on this issue time after time. According them, you have to be buying and selling all the time. The only way you can do that, and not lose your shirt is to be a dealer who sets up at the major shows, become a big time eBay seller or consign many lots of material to the major auctions.
If you take coins to a show to try to sell them, the dealers will do nothing but low ball you. It was one of the reasons I was seldom able to buy any good coins from the public at the shows. I would have happily paid strong prices for good coins at the shows, but few people brought them around. The dealers had this unfortunate attitude that they paid fair money among themselves and paid as little as possible to the “dreaded public.”
It drove me crazy. If you have chance to buy a good coin and can make fair money on it, why can’t you be willing to pay a fair price to “the public?”
Bill, just curious. I'm talking about things like an original Bust dollar in MS 63 or MS 64 or a Strawberry Leaf Large Cent in the same grade. Things I never could afford in the first place.
You must have been finding the "wrong" dealers. And I have no doubt the majority of them at a local or regional show would probably err well to the "low ball" side. I've always had a half dozen of "go to" dealers who would pay very fair....in the upper 95% of all buyers. Last time I was actively selling those included David Carr with DVRC and often stomping around the Northeast shows (now deceased), Bruce Kutcher, Brian Yutzy when he was with Lone Star Coin, Kenny Duncan (US Coins), just to name a few. Most of these guys were dealer's dealers who were superb graders - and knew their markets cold. No games, which is why I liked them. I'm sure the general public would have a tough time finding guys like this. Their best bet might be to go to major auction, GC, or similar source.
One of my favorite stories is taking $350,000 in double row boxes of mostly slabbed ch/gem type coins around the 2003 ANA show. It was a mistake to start with 2 of the dealers but I felt they might want to get first shots as I sometimes bought from them on the "retail" level. What they did was cherry pick only 2 coins out of about a hundred. The Multi-Million Dollar dealer could only find a single "toner" MS64 Pilgrim at $120 to pick out....lol. It was laughable. The 2nd dealer cherry picked a single 1879 PCGS MS66 seated half for $4K. I think he bought that because he had a far inferior NGC 66 of that date in his case for $6K. Lesson learned. I took the coins next to US Coins and Lone Star and they bought over $150K between them in about 10 minutes of dealing. That was my goal for the show. Don't even know why I wasted my time with the first two PNG dealers who of course always claimed to be the highest buyers for good stuff....lol. The "real" highest buyers don't need to advertise that fact. My experiences are from over a decade ago. And a lot of seats have shifted since then. A dealer that low balls me the first time I offer them stuff....never gets a second chance at any future coins from me. Why waste the time?
My first time responding to a "highest prices paid anywhere" ad in Coin World was 1983. I thought it should be true or you couldn't say it. So I sent off a $1600 or so group of coins to that dealer....who promptly offered me $333 for them. They were shipped back. Then I tried one of the leading coin dealers on the west coast is well known to EVERYONE here. That offer was 50c on the dollar or around $800. They were sent back again. Then I tried Ron Iskowitz of Renrob who I had dealt with a bit in the 1970's. They offered 50% more than the west coast guy at $1200. Ron was also quite nice in pointing out which coins I had under-priced and which ones were over-priced...but he bought the whole deal....noting that one coin alone was worth $800. That struck up a nice relationship over the next few decades....and it was Ron who I chose to be my NGC coin dealer submitter for a number of years. The other guys? I never went back.
I had the same problem buying as Bill Jones when I was dealing coins full time. The general public would never come to me. They preferred to be paid less for their coins from major dealers and well known "names" in their area. I think it was a "comfort" thing. They were comfortable selling to these bigger and well known names, been around for decades, fancy ads, and manning the prime tables at regional/major shows. Funny thing is, those same coins would often come back to me (at a markup) from those so-called higher buyers. I didn't really care as long as I paid what I felt was reasonable for me. If you know what your coins are really worth.....you can....and will get fair value if you are persistent. If you don't know what they are reasonably worth....why are buying coins in the first place? About the only exception to that are coins so rarely seen that price records are non-existent....where 20 yrs might lapse between sales.
Thank you for the leads so far as dealers who are willing pay fair prices are concerned.
I probably don't know a lot of my coins are worth because I've owned some them for 20 to 40 years. They were all certified, if I owned them raw, over 20 years ago. You can go by the auction results, but some those numbers are nutty high. I know because I've bid in some of those auctions. And then there is the Grey Sheet.
I knew a lot more about values 10 years ago when I was dealer, but I have retired and not been in that area of the market.
Getting back to the tax issue, when I was young man with an accounting degree, just out of college, the law was all assets were treated as capital assets. If you reported something like coins as a source of income, you were allowed to offset losses and against gains with no problem.
Then along comes a Congressman from Massachusetts, named Jim Shannon. He got the law changed to the unfair system we have today. I knew a dealer, who belonged to his political party, who read the riot act out to him for doing that, but the damage was done. Later Mr. Shannon gave up his seat, tried to run for governor and got his political head handed to him.
I prefer dividend paying stocks and interest paying coins.
You forget to take out the $4.00+ or so shipping costs, Ebay listing and commission fees (10-15%), and your time and effort to locate the item, post an ad, package it up, drive it to the post office. Assuming you don't work for free, you probably lost considerable money on this transaction. Sometimes even FREE isn't cheap enough....lol.
Unless he charged $5 for shipping, in which case he made even more.
Another perspective on the op coins vs stocks. I belonged to a golf club that was a top 50 club in the US. The course was owned by one man. He spared no expense (fazio designed) and used his vast wealth (he sold a business for hundreds of millions) to build it. It was his dream. He loved the course he buit pretty much in the middle of nowhere. He ran it is his way---not the way to make the mozt money. He died of a heart attack a few years later while playing golf in hawaii.
His family i heard wasnt thrilled about now owning a course that he poured 40 million into. That money would have done far better for the family if invested in almost anything other than a golf course (they have since sold the course).
The connection to coins? This man had plenty of money and he spent alot on a world class golf course. Some may say he was foolish because he could have made more but he left a legacy that can be enjoyed by so many and he fufilled his dream. I look at coins the same way. If your goal is to die with the most money in your account, then you should probably not have a hobby period. But if your goal is to live a full and happy life then having a hobby and investing makes sense. They are not mutually exclusive. We are fortunate that our hobby is one that can also enrich the saavy numismatist monetarily as well as intellectually. In my book, Pittman died richer than if he invested the money. He built something that still survives today in articles, books, and pedigree. The 30 million left to his heirs back in 70s aint bad either.
I saw this. I thought it was not as big a ripoff as the usual TV coin selling shows. Obviously not a bargain.
Those coins spent a lot of time in Europe.