@ricko said:
Another variable would be whether you are a collector, dealer or investor.... I am a collector, therefore, I buy what appeals to me. An investor or dealer would be looking more at the financial side (i.e. resale, potential for value increase etc.). I enjoy the hobby. Cheers, RickO
I don't think the dealer really cares either. Dealers aren't trying to hold on waiting for appreciation. A dealer needs to understand the market as it is now.
LMAO, All dealers are holding and waiting for appreciation. Arent you? If not why not?
You laughed at a post that made a great deal of sense and then replied with something that wasn’t the least bit accurate.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
@ricko said:
Another variable would be whether you are a collector, dealer or investor.... I am a collector, therefore, I buy what appeals to me. An investor or dealer would be looking more at the financial side (i.e. resale, potential for value increase etc.). I enjoy the hobby. Cheers, RickO
I don't think the dealer really cares either. Dealers aren't trying to hold on waiting for appreciation. A dealer needs to understand the market as it is now.
LMAO, All dealers are holding and waiting for appreciation. Arent you? If not why not?
If you are holding for appreciation, you are a speculator. Dealers make their money on the bid/ask spread not the "appreciation" while it was in inventory.
Retail is about turnover. I can make much more money turning over a small inventory 10x per year than you can turning over a larger inventory once per year (or longer).
That made far more sense than your previous post.😉
Are you aware that it’s possible to disagree with someone, without clicking on “LOL”?
Well ya. Dealers hold (waiting) inventory hoping to make a profit (appreciation).
I use LOL for disagreement and funny stuff which are quite opposite. Up to you to figure out how I use it
Dealers typically make their profits by being able to achieve a higher sell price than buy price. The profit isn’t usually due to appreciation, however. It looks as if you might be using “profit” and “appreciation” synonymously, but they aren’t one and the same when it comes to dealing.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
@ricko said:
Another variable would be whether you are a collector, dealer or investor.... I am a collector, therefore, I buy what appeals to me. An investor or dealer would be looking more at the financial side (i.e. resale, potential for value increase etc.). I enjoy the hobby. Cheers, RickO
I don't think the dealer really cares either. Dealers aren't trying to hold on waiting for appreciation. A dealer needs to understand the market as it is now.
LMAO, All dealers are holding and waiting for appreciation. Arent you? If not why not?
Dealer aren't speculators. They want to turn inventory quickly for a reasonable profit. They certainly prefer appreciation to the alternative while holding inventory that isn't moving, but that definitely is not the intent.
@ricko said:
Another variable would be whether you are a collector, dealer or investor.... I am a collector, therefore, I buy what appeals to me. An investor or dealer would be looking more at the financial side (i.e. resale, potential for value increase etc.). I enjoy the hobby. Cheers, RickO
I don't think the dealer really cares either. Dealers aren't trying to hold on waiting for appreciation. A dealer needs to understand the market as it is now.
LMAO, All dealers are holding and waiting for appreciation. Arent you? If not why not?
Dealer aren't speculators. They want to turn inventory quickly for a reasonable profit. They certainly prefer appreciation to the alternative while holding inventory that isn't moving, but that definitely is not the intent.
If the meaning was missed, perhaps it was because ErrorsOnCoins wrote “LMAO, All dealers are holding and waiting for appreciation. Arent you? If not why not?”.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Dealers have inventories because they need something to sell. Dealers do not pack their inventories with things that they need price appreciation to sell UNLESS they are using it for promotion. If you buy a Brasher Doubloon, you probably don't think you can flip it tomorrow (usually) for a profit. So you use it as advertising until you are ready to sell.
Dealers - as opposed to collector/dealers which you might be - are trying to turn inventory not accumulate it.
That made far more sense than your previous post.😉
Are you aware that it’s possible to disagree with someone, without clicking on “LOL”?
Well ya. Dealers hold (waiting) inventory hoping to make a profit (appreciation).
I use LOL for disagreement and funny stuff which are quite opposite. Up to you to figure out how I use it
It looks as if you might be using “profit” and “appreciation” synonymously, but they aren’t one and the same when it comes to dealing.
...........
....
Two things can be true at the same time
I have bought many coins for the profit that also have appreciated, thus raising the profit.
You might take a business course. 99.9% of profit for a business is not due to inventory appreciation. In fact, inventory is often viewed negatively - hence just-in-time manufacturing - because it involves unrecovered costs, requires storage space/costs, and risks depreciation.
@Tom147 said:
Hadn't thought of it that way. Just can't seem to pull the trigger on my last empty space in my Kennedy set. The 2014 gold. If I'd bought it when I started the set it was $600 cheaper.
Look at the adrenalin rush you'll get when you do "pull the trigger".
We both know that you will but there is no clock ticking so wait for the perfect time.
Wayne
@ricko said:
Another variable would be whether you are a collector, dealer or investor.... I am a collector, therefore, I buy what appeals to me. An investor or dealer would be looking more at the financial side (i.e. resale, potential for value increase etc.). I enjoy the hobby. Cheers, RickO
I don't think the dealer really cares either. Dealers aren't trying to hold on waiting for appreciation. A dealer needs to understand the market as it is now.
LMAO, All dealers are holding and waiting for appreciation. Arent you? If not why not?
Dealer aren't speculators. They want to turn inventory quickly for a reasonable profit. They certainly prefer appreciation to the alternative while holding inventory that isn't moving, but that definitely is not the intent.
That is not what he said. His exact words are "All dealers are holding and waiting...." ALL the dealers I know would gladly flip 99% of their inventory immediately.
In fact, get ready for more LOLs from @Errorsoncoins, the vast majority of dealers would rather flip a coin for a LOSS now than hold it until an indeterminate future hoping for appreciation. Dealers tend to sell their mistakes, they don't hold them forever until the market catches up with them. We aren't infinitely capitalized.
I should make this a separate post so @ErrorsOnCoins can leave two LOLs. I have sometimes sold a coin at a loss mere days after buying it because I realized that I overpaid or because I missed a scratch or something when I bought it. I'd prefer to get some of my money back now than wait for years to get it all back. While I'm waiting, I could have turned over that same money 10x or 20x and more than made up what I lost.
I only ever knew one dealer ($40+ million net worth) who would hold for appreciation. In one famous case, they overpaid for a Proof Trade dollar and held onto it for 18 years until the market came back and they "made' $200 on the coin ($2500 coin). In fact, they essentially lost money on the coin because of the 18 year hold and resulting opportunity costs & inflation. But they refused to ever take a loss, mostly because they didn't have capital limitations.
@ErrorsOnCoins said:
JM, I am certainly not the business wizard you claim to be.
I do know one thing.
Just about a year ago pre Covid, you and I had a long debate about me wanting to build inventory vs you insisting on flipping inventory.
Covid hit, shows closed, everything went online.
I made out OK
So did I. I happily have half the inventory I had last year even though I spent about 80% of what I spent in 2019 on acquisitions. Uncle Samantha is salivating at the thought of getting my 1040.
But making a profit is not the same as maximizing your profit. If I made $20,000 with an average inventory of $100,000 and you made $50,000 with an average inventory of $1 million, I actually outperformed you significantly.
I'm curious. What is your time mark before you decide to sell a coin at a loss. For me in the past it was always a minimum of a year because that was how long it took for all my customers to see it. There was a time when I used to do almost 50 shows a year.
@ricko said:
Another variable would be whether you are a collector, dealer or investor.... I am a collector, therefore, I buy what appeals to me. An investor or dealer would be looking more at the financial side (i.e. resale, potential for value increase etc.). I enjoy the hobby. Cheers, RickO
I don't think the dealer really cares either. Dealers aren't trying to hold on waiting for appreciation. A dealer needs to understand the market as it is now.
LMAO, All dealers are holding and waiting for appreciation. Arent you? If not why not?
Dealer aren't speculators. They want to turn inventory quickly for a reasonable profit. They certainly prefer appreciation to the alternative while holding inventory that isn't moving, but that definitely is not the intent.
That is not what he said. His exact words are "All dealers are holding and waiting...." ALL the dealers I know would gladly flip 99% of their inventory immediately.
In fact, get ready for more LOLs from @Errorsoncoins, the vast majority of dealers would rather flip a coin for a LOSS now than hold it until an indeterminate future hoping for appreciation. Dealers tend to sell their mistakes, they don't hold them forever until the market catches up with them. We aren't infinitely capitalized.
I should make this a separate post so @ErrorsOnCoins can leave two LOLs. I have sometimes sold a coin at a loss mere days after buying it because I realized that I overpaid or because I missed a scratch or something when I bought it. I'd prefer to get some of my money back now than wait for years to get it all back. While I'm waiting, I could have turned over that same money 10x or 20x and more than made up what I lost.
I only ever knew one dealer ($40+ million net worth) who would hold for appreciation. In one famous case, they overpaid for a Proof Trade dollar and held onto it for 18 years until the market came back and they "made' $200 on the coin ($2500 coin). In fact, they essentially lost money on the coin because of the 18 year hold and resulting opportunity costs & inflation. But they refused to ever take a loss, mostly because they didn't have capital limitations.
@amwldcoin said:
I'm curious. What is your time mark before you decide to sell a coin at a loss. For me in the past it was always a minimum of a year because that was how long it took for all my customers to see it. There was a time when I used to do almost 50 shows a year.
@ricko said:
Another variable would be whether you are a collector, dealer or investor.... I am a collector, therefore, I buy what appeals to me. An investor or dealer would be looking more at the financial side (i.e. resale, potential for value increase etc.). I enjoy the hobby. Cheers, RickO
I don't think the dealer really cares either. Dealers aren't trying to hold on waiting for appreciation. A dealer needs to understand the market as it is now.
LMAO, All dealers are holding and waiting for appreciation. Arent you? If not why not?
Dealer aren't speculators. They want to turn inventory quickly for a reasonable profit. They certainly prefer appreciation to the alternative while holding inventory that isn't moving, but that definitely is not the intent.
That is not what he said. His exact words are "All dealers are holding and waiting...." ALL the dealers I know would gladly flip 99% of their inventory immediately.
In fact, get ready for more LOLs from @Errorsoncoins, the vast majority of dealers would rather flip a coin for a LOSS now than hold it until an indeterminate future hoping for appreciation. Dealers tend to sell their mistakes, they don't hold them forever until the market catches up with them. We aren't infinitely capitalized.
I should make this a separate post so @ErrorsOnCoins can leave two LOLs. I have sometimes sold a coin at a loss mere days after buying it because I realized that I overpaid or because I missed a scratch or something when I bought it. I'd prefer to get some of my money back now than wait for years to get it all back. While I'm waiting, I could have turned over that same money 10x or 20x and more than made up what I lost.
I only ever knew one dealer ($40+ million net worth) who would hold for appreciation. In one famous case, they overpaid for a Proof Trade dollar and held onto it for 18 years until the market came back and they "made' $200 on the coin ($2500 coin). In fact, they essentially lost money on the coin because of the 18 year hold and resulting opportunity costs & inflation. But they refused to ever take a loss, mostly because they didn't have capital limitations.
Honestly, it depends.
As I said, if I realize I made a mistake I move it as quickly as possible.
If it is just sitting but I'm convinced the price is market price, I will generally wait a year or more if it is relatively inexpensive. I can hold on to a number of $100 coins. I really wouldn't risk holding on to a bunch of $1000+ coins.
And, if I'm being honest, since I'm really only a part-time dealer, there are coins I like that I've been holding for 10 or more years. Sometimes it isn't because I couldn't sell them for a profit, LOL, but it's because the small profit doesn't matter to me as much as the coin. But that's the collector side of me, not the dealer.
I think the hold time depends on a lot of factors: total inventory costs, cash-on-hand, general market conditions, "splashiness" of the item. Sometimes it's nice to have something flashy in the case. It attracts eyes and sometimes will attract both buys and sells.
I do think a lot of "amateur" dealers - no offense meant by that - are doing it for fun and so the business side of it isn't that important. I've seen people run around with $250k+ in inventory and only do a few hundred at a show and be happy. It's as much hobby as anything for them. If you aren't NETTING $40-$50k pre-tax on a $250k inventory, it's really more of a hobby. $250k in a diversified portfolio should throw off $25k without the self-employment tax and less risk and effort.
No one likes to think about it this way, cuz we are all hoarders at heart, but if you had $250k in inventory, work 10 hours per week and make $40,000 (pre-tax) per year, that's $20,000 net after-tax (self-employment) and your net income is $40 per hour. Now, you might say, $40 per hour! But...
If I put $250k in a diversified portfolio, you would get $25,000 (pre tax), about $20,000 net after tax (or more depending on deferred income). And if you worked the 10 hours per week at $10 per hour, you'd make another $5000 gross (maybe $3000 net) and you actually have $23,000 total net with less risk. But, we're hoarders...LOL
If I'm being honest, the whole reason "dealing" works for me is that I keep my inventory under $50k and flip it 4 or 5 times per year for $15k ish pre-tax. It's still kind of crappy on an hourly basis (about $15-$20 per hour pre-tax), but it's fun and I'm my own boss.
@ErrorsOnCoins said:
I am actually trying to build inventory again over a year ago
Very hard to find what I am looking for.
My hard work has allowed me to build inventory and cash levels over last year
I know, and that's your right. But that is not how most businesses want to operate. There are reasons to have non-performing assets (flashy Doubloon, Junior!) but if error coins plateau or go down - it DOES happen to coins - then your inventory starts dropping in value not appreciating.
I'm sure you are convinced that error coins are still going up. And I hope you are right. But if you were holding inventory in MS65 Morgan $s over the last 10 to 15 years, you were killing yourself with inventory costs. And far more dealers are carrying a silver dollar inventory than an error inventory.
Comments
You laughed at a post that made a great deal of sense and then replied with something that wasn’t the least bit accurate.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
If you are holding for appreciation, you are a speculator. Dealers make their money on the bid/ask spread not the "appreciation" while it was in inventory.
Retail is about turnover. I can make much more money turning over a small inventory 10x per year than you can turning over a larger inventory once per year (or longer).
Dealers have inventories.
That made far more sense than your previous post.😉
Are you aware that it’s possible to disagree with someone, without clicking on “LOL”?
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Well ya. Dealers hold (waiting) inventory hoping to make a profit (appreciation).
I use LOL for disagreement and funny stuff which are quite opposite. Up to you to figure out how I use it
Dealers hold, awaiting a buyer. If they hold, awaiting appreciation, they are a speculator.
spec·u·late
/ˈspekyəˌlāt/
verb
2. invest in stocks, property, or other ventures in the hope of gain but with the risk of loss.
Dealers typically make their profits by being able to achieve a higher sell price than buy price. The profit isn’t usually due to appreciation, however. It looks as if you might be using “profit” and “appreciation” synonymously, but they aren’t one and the same when it comes to dealing.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
It looks as if you might be using “profit” and “appreciation” synonymously, but they aren’t one and the same when it comes to dealing.
...........
....
Two things can be true at the same time
I have bought many coins for the profit that also have appreciated, thus raising the profit.
I think you miss @ErrorsOnCoins meaning if he is like me. I'm not a dealer! I'm a collector/dealer!
If the meaning was missed, perhaps it was because ErrorsOnCoins wrote “LMAO, All dealers are holding and waiting for appreciation. Arent you? If not why not?”.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Dealers have inventories because they need something to sell. Dealers do not pack their inventories with things that they need price appreciation to sell UNLESS they are using it for promotion. If you buy a Brasher Doubloon, you probably don't think you can flip it tomorrow (usually) for a profit. So you use it as advertising until you are ready to sell.
Dealers - as opposed to collector/dealers which you might be - are trying to turn inventory not accumulate it.
LOL. That's interesting. From context it appeared to me that you used LOL to indicate that you didn't understand the point.
You might take a business course. 99.9% of profit for a business is not due to inventory appreciation. In fact, inventory is often viewed negatively - hence just-in-time manufacturing - because it involves unrecovered costs, requires storage space/costs, and risks depreciation.
Look at the adrenalin rush you'll get when you do "pull the trigger".
We both know that you will but there is no clock ticking so wait for the perfect time.
Wayne
Kennedys are my quest...
JM, I am certainly not the business wizard you claim to be.
I do know one thing.
Just about a year ago pre Covid, you and I had a long debate about me wanting to build inventory vs you insisting on flipping inventory.
Covid hit, shows closed, everything went online.
I made out OK
That is not what he said. His exact words are "All dealers are holding and waiting...." ALL the dealers I know would gladly flip 99% of their inventory immediately.
In fact, get ready for more LOLs from @Errorsoncoins, the vast majority of dealers would rather flip a coin for a LOSS now than hold it until an indeterminate future hoping for appreciation. Dealers tend to sell their mistakes, they don't hold them forever until the market catches up with them. We aren't infinitely capitalized.
I should make this a separate post so @ErrorsOnCoins can leave two LOLs. I have sometimes sold a coin at a loss mere days after buying it because I realized that I overpaid or because I missed a scratch or something when I bought it. I'd prefer to get some of my money back now than wait for years to get it all back. While I'm waiting, I could have turned over that same money 10x or 20x and more than made up what I lost.
I only ever knew one dealer ($40+ million net worth) who would hold for appreciation. In one famous case, they overpaid for a Proof Trade dollar and held onto it for 18 years until the market came back and they "made' $200 on the coin ($2500 coin). In fact, they essentially lost money on the coin because of the 18 year hold and resulting opportunity costs & inflation. But they refused to ever take a loss, mostly because they didn't have capital limitations.
So did I. I happily have half the inventory I had last year even though I spent about 80% of what I spent in 2019 on acquisitions. Uncle Samantha is salivating at the thought of getting my 1040.
But making a profit is not the same as maximizing your profit. If I made $20,000 with an average inventory of $100,000 and you made $50,000 with an average inventory of $1 million, I actually outperformed you significantly.
Turnover is more important than inventory.
https://www.investopedia.com/terms/i/inventoryturnover.asp
https://www.thebalancesmb.com/why-keeping-more-inventory-is-a-bad-idea-4148303#:~:text=Inventory is what your company spends a good,and optimized supply chain is how that's done.
I'm curious. What is your time mark before you decide to sell a coin at a loss. For me in the past it was always a minimum of a year because that was how long it took for all my customers to see it. There was a time when I used to do almost 50 shows a year.
I am actually trying to build inventory again over a year ago
Very hard to find what I am looking for.
My hard work has allowed me to build inventory and cash levels over last year
Honestly, it depends.
As I said, if I realize I made a mistake I move it as quickly as possible.
If it is just sitting but I'm convinced the price is market price, I will generally wait a year or more if it is relatively inexpensive. I can hold on to a number of $100 coins. I really wouldn't risk holding on to a bunch of $1000+ coins.
And, if I'm being honest, since I'm really only a part-time dealer, there are coins I like that I've been holding for 10 or more years. Sometimes it isn't because I couldn't sell them for a profit, LOL, but it's because the small profit doesn't matter to me as much as the coin. But that's the collector side of me, not the dealer.
I think the hold time depends on a lot of factors: total inventory costs, cash-on-hand, general market conditions, "splashiness" of the item. Sometimes it's nice to have something flashy in the case. It attracts eyes and sometimes will attract both buys and sells.
I do think a lot of "amateur" dealers - no offense meant by that - are doing it for fun and so the business side of it isn't that important. I've seen people run around with $250k+ in inventory and only do a few hundred at a show and be happy. It's as much hobby as anything for them. If you aren't NETTING $40-$50k pre-tax on a $250k inventory, it's really more of a hobby. $250k in a diversified portfolio should throw off $25k without the self-employment tax and less risk and effort.
No one likes to think about it this way, cuz we are all hoarders at heart, but if you had $250k in inventory, work 10 hours per week and make $40,000 (pre-tax) per year, that's $20,000 net after-tax (self-employment) and your net income is $40 per hour. Now, you might say, $40 per hour! But...
If I put $250k in a diversified portfolio, you would get $25,000 (pre tax), about $20,000 net after tax (or more depending on deferred income). And if you worked the 10 hours per week at $10 per hour, you'd make another $5000 gross (maybe $3000 net) and you actually have $23,000 total net with less risk. But, we're hoarders...LOL
If I'm being honest, the whole reason "dealing" works for me is that I keep my inventory under $50k and flip it 4 or 5 times per year for $15k ish pre-tax. It's still kind of crappy on an hourly basis (about $15-$20 per hour pre-tax), but it's fun and I'm my own boss.
I know, and that's your right. But that is not how most businesses want to operate. There are reasons to have non-performing assets (flashy Doubloon, Junior!) but if error coins plateau or go down - it DOES happen to coins - then your inventory starts dropping in value not appreciating.
I'm sure you are convinced that error coins are still going up. And I hope you are right. But if you were holding inventory in MS65 Morgan $s over the last 10 to 15 years, you were killing yourself with inventory costs. And far more dealers are carrying a silver dollar inventory than an error inventory.