As far as coin price increases, bear in mind there are tens of millions of investors with investable funds. I see no reason why numismatics shouldn't receive more and more attention. The hobby is active, liquid and interesting.
Only a low proportion of coins are actually liquid, certainly not compared to publicly traded markets.
Coins are very liquid as a collectable. Much more than say art. When I have wanted to sell a coin or coins I have always had options to have the money in a few days. There are also auctions that can get you money relatively quickly and even quicker if you want to go the advance route. If you want money quicker it may bring less money but it is liquid. Saying "only a low proportion of coins are actually liquid" seems clearly wrong in my opinion.
As far as coin price increases, bear in mind there are tens of millions of investors with investable funds. I see no reason why numismatics shouldn't receive more and more attention. The hobby is active, liquid and interesting.
Only a low proportion of coins are actually liquid, certainly not compared to publicly traded markets.
Coins are very liquid as a collectable. Much more than say art. When I have wanted to sell a coin or coins I have always had options to have the money in a few days. There are also auctions that can get you money relatively quickly and even quicker if you want to go the advance route. If you want money quicker it may bring less money but it is liquid. Saying "only a low proportion of coins are actually liquid" seems clearly wrong in my opinion.
I agree, especially if you consider the bulk material that makes up a large percentage of the volume of the coin business.
Extremely rare coins are a little less liquid if you are trying to maximize price. But you could easily sell an 1804 dollar in an hour, for example.
But silver dollars, 90% silver, commemoratives, wheat cents, Indian cents, virtually all slabbed classic material can be sold in minutes with a phone call.
U.S. coins are almost undoubtedly the most liquid collectible because most of the material has posted bid/ asks and known market makers.
As far as coin price increases, bear in mind there are tens of millions of investors with investable funds. I see no reason why numismatics shouldn't receive more and more attention. The hobby is active, liquid and interesting.
Only a low proportion of coins are actually liquid, certainly not compared to publicly traded markets.
Coins are very liquid as a collectable. Much more than say art. When I have wanted to sell a coin or coins I have always had options to have the money in a few days. There are also auctions that can get you money relatively quickly and even quicker if you want to go the advance route. If you want money quicker it may bring less money but it is liquid. Saying "only a low proportion of coins are actually liquid" seems clearly wrong in my opinion.
You have a different definition of liquidity than I do. Measuring liquidity in the context of collectibles isn't the correct standard. It certainly isn't in the context of "investment" for non-collectors which is the context of the post to which I replied. I'd never consider any asset that doesn't even have a predictable market value to be liquid especially when combined with much higher price spreads than any asset in tradeable markets. Anything is "liquid" if the price is lowered enough.
I don't consider silver or gold bullion liquid either with current spreads. Silver's liquidity is terrible right now. An immediate 20% to 25% "paper" loss after it's bought.
As far as coin price increases, bear in mind there are tens of millions of investors with investable funds. I see no reason why numismatics shouldn't receive more and more attention. The hobby is active, liquid and interesting.
Only a low proportion of coins are actually liquid, certainly not compared to publicly traded markets.
Coins are very liquid as a collectable. Much more than say art. When I have wanted to sell a coin or coins I have always had options to have the money in a few days. There are also auctions that can get you money relatively quickly and even quicker if you want to go the advance route. If you want money quicker it may bring less money but it is liquid. Saying "only a low proportion of coins are actually liquid" seems clearly wrong in my opinion.
I agree, especially if you consider the bulk material that makes up a large percentage of the volume of the coin business.
Extremely rare coins are a little less liquid if you are trying to maximize price. But you could easily sell an 1804 dollar in an hour, for example.
But silver dollars, 90% silver, commemoratives, wheat cents, Indian cents, virtually all slabbed classic material can be sold in minutes with a phone call.
U.S. coins are almost undoubtedly the most liquid collectible because most of the material has posted bid/ asks and known market makers.
You can read my prior reply. I agree US coins are more liquid than others and I also agree the coins you listed are more liquid than most. My difference of opinion is due to the buy-sell spread.
Edit: I'm also referring to liquidity for collectors or the end buyer, not a dealer. Dealers I agree are totally different.
As far as coin price increases, bear in mind there are tens of millions of investors with investable funds. I see no reason why numismatics shouldn't receive more and more attention. The hobby is active, liquid and interesting.
Only a low proportion of coins are actually liquid, certainly not compared to publicly traded markets.
Coins are very liquid as a collectable. Much more than say art. When I have wanted to sell a coin or coins I have always had options to have the money in a few days. There are also auctions that can get you money relatively quickly and even quicker if you want to go the advance route. If you want money quicker it may bring less money but it is liquid. Saying "only a low proportion of coins are actually liquid" seems clearly wrong in my opinion.
I agree, especially if you consider the bulk material that makes up a large percentage of the volume of the coin business.
Extremely rare coins are a little less liquid if you are trying to maximize price. But you could easily sell an 1804 dollar in an hour, for example.
But silver dollars, 90% silver, commemoratives, wheat cents, Indian cents, virtually all slabbed classic material can be sold in minutes with a phone call.
U.S. coins are almost undoubtedly the most liquid collectible because most of the material has posted bid/ asks and known market makers.
You can read my prior reply. I agree US coins are more liquid than others and I also agree the coins you listed are more liquid than most. My difference of opinion is due to the buy-sell spread.
Edit: I'm also referring to liquidity for collectors or the end buyer, not a dealer. Dealers I agree are totally different.
@trueblood said:
I want the best of all world's.
I want coin collecting to be an excellent hobby as well as an excellent investment. Heck if it is a great investment for a dealer, why can't it be a the same for a buyer/collector? So I buy less coins due to upward price movements but I get more appreciation with each addition. I hope sports memorabilia and world coins move up to, its been a long drought.
Insofar as collectors pay retail and sell at wholesale, with dealers and auction houses taking that first cut on each transaction, the dealer will always make the first buck on a coin's appreciation. Any collector's gains have to come on top of that tax (let's not go overboard on BST or other private-party transactions).
I am a part-time "dealer" at best and I turn over my inventory value 6-8 times a year.
I still tuck away 10-20 pieces minimum every year, and that eats most of my profits. As I like to say, keep the best, sell the rest. I would guess I keep one in every 20 or so coins I buy, if you exempt bullion/junk/wholesale material. The plan is to go to a major show when I'm ready to sell out altogether, price aggressively, and see what moves. With my eye for quality coins at affordable levels, I bet I will clear most of my inventory in a day or two, even priced strongly.
"It's like God, Family, Country, except Sticker, Plastic, Coin."
There's an analogy to real estate, where people become realtors or brokers both to save on commissions and for access to the best properties, which they or theirs can buy for investment purposes.
Given that the less eye-appealing 43 68+ went for $120k, I now have no hope of ever owning what I consider to be the "holy grail" 68+ which sold for a now-bargain $35k in 2018:
@trueblood said:
I want the best of all world's.
I want coin collecting to be an excellent hobby as well as an excellent investment. Heck if it is a great investment for a dealer, why can't it be a the same for a buyer/collector? So I buy less coins due to upward price movements but I get more appreciation with each addition. I hope sports memorabilia and world coins move up to, its been a long drought.
Dealers don't invest in coins. They buy and sell them.
Dealers buy coins to make a profit that is equivalent to investing imo
Why should collectors be expected to ( ie its not unexpected to) lose money the minute they walk out of a dealership?
It is truly not the same thing. There's a huge difference between profiting on the bid/ask spread vs profiting from price appreciation.
And yet…the result is profit…
I would think a successful dealer with funds to invest would invest at least some of those funds in the sector he/she has the most knowledge . . . .
A dealer could invest. Some will buy a trophy coin or hold inventory that is priced above current market. Anyone could "invest" but it decreases efficiency.
If I'm dealing, I can easily do 100% annual return on inventory costs. If I'm investing, I'd be lucky to do 10%. That's why turnover is a measure of business efficiency.
@ranshdow said:
There's an analogy to real estate, where people become realtors or brokers both to save on commissions and for access to the best properties, which they or theirs can buy for investment purposes.
Funny most real estate agents I have encounter own no real estate. All they do is represent buyers & sellers and that is about it
I do agree with you that becoming an agent should be profitable since you would be getting an early looksy and could possibly take advantage of that
I was told by one dealer a few years ago with a multi million dollar inventory that they routinely by coins to hold 5-10 years before selling. Wasnt sure if he was the only one or if this was more common than I realized.
@ranshdow said:
There's an analogy to real estate, where people become realtors or brokers both to save on commissions and for access to the best properties, which they or theirs can buy for investment purposes.
Funny most real estate agents I have encounter own no real estate. All they do is represent buyers & sellers and that is about it
I do agree with you that becoming an agent should be profitable since you would be getting an early looksy and could possibly take advantage of that
The one(s) I know own portfolios of properties, often rentals, or represent families that do.
@Gazes said:
I was told by one dealer a few years ago with a multi million dollar inventory that they routinely by coins to hold 5-10 years before selling. Wasnt sure if he was the only one or if this was more common than I realized.
Rare Coin Wholesalers should be sitting pretty good right about now, wouldn't you say?
They have the finest of the finest and a lot of them, good for them, they took the risk and now it will reward them handsomely
@trueblood said:
I want the best of all world's.
I want coin collecting to be an excellent hobby as well as an excellent investment. Heck if it is a great investment for a dealer, why can't it be a the same for a buyer/collector? So I buy less coins due to upward price movements but I get more appreciation with each addition. I hope sports memorabilia and world coins move up to, its been a long drought.
Dealers don't invest in coins. They buy and sell them.
Dealers buy coins to make a profit that is equivalent to investing imo
Why should collectors be expected to ( ie its not unexpected to) lose money the minute they walk out of a dealership?
It is truly not the same thing. There's a huge difference between profiting on the bid/ask spread vs profiting from price appreciation.
And yet…the result is profit…
I would think a successful dealer with funds to invest would invest at least some of those funds in the sector he/she has the most knowledge . . . .
A dealer could invest. Some will buy a trophy coin or hold inventory that is priced above current market. Anyone could "invest" but it decreases efficiency.
If I'm dealing, I can easily do 100% annual return on inventory costs. If I'm investing, I'd be lucky to do 10%. That's why turnover is a measure of business efficiency.
@ranshdow said:
There's an analogy to real estate, where people become realtors or brokers both to save on commissions and for access to the best properties, which they or theirs can buy for investment purposes.
Funny most real estate agents I have encounter own no real estate. All they do is represent buyers & sellers and that is about it
I do agree with you that becoming an agent should be profitable since you would be getting an early looksy and could possibly take advantage of that
The one(s) I know own portfolios of properties, often rentals, or represent families that do.
Rentals are a whole different issue. They generate income.
@Gazes said:
I was told by one dealer a few years ago with a multi million dollar inventory that they routinely by coins to hold 5-10 years before selling. Wasnt sure if he was the only one or if this was more common than I realized.
That's a great idea when the market is on the upswing.
@trueblood said:
I want the best of all world's.
I want coin collecting to be an excellent hobby as well as an excellent investment. Heck if it is a great investment for a dealer, why can't it be a the same for a buyer/collector? So I buy less coins due to upward price movements but I get more appreciation with each addition. I hope sports memorabilia and world coins move up to, its been a long drought.
Dealers don't invest in coins. They buy and sell them.
Dealers buy coins to make a profit that is equivalent to investing imo
Why should collectors be expected to ( ie its not unexpected to) lose money the minute they walk out of a dealership?
It is truly not the same thing. There's a huge difference between profiting on the bid/ask spread vs profiting from price appreciation.
And yet…the result is profit…
I would think a successful dealer with funds to invest would invest at least some of those funds in the sector he/she has the most knowledge . . . .
A dealer could invest. Some will buy a trophy coin or hold inventory that is priced above current market. Anyone could "invest" but it decreases efficiency.
If I'm dealing, I can easily do 100% annual return on inventory costs. If I'm investing, I'd be lucky to do 10%. That's why turnover is a measure of business efficiency.
@trueblood said:
I want the best of all world's.
I want coin collecting to be an excellent hobby as well as an excellent investment. Heck if it is a great investment for a dealer, why can't it be a the same for a buyer/collector? So I buy less coins due to upward price movements but I get more appreciation with each addition. I hope sports memorabilia and world coins move up to, its been a long drought.
Dealers don't invest in coins. They buy and sell them.
Dealers buy coins to make a profit that is equivalent to investing imo
Why should collectors be expected to ( ie its not unexpected to) lose money the minute they walk out of a dealership?
It is truly not the same thing. There's a huge difference between profiting on the bid/ask spread vs profiting from price appreciation.
And yet…the result is profit…
I would think a successful dealer with funds to invest would invest at least some of those funds in the sector he/she has the most knowledge . . . .
A dealer could invest. Some will buy a trophy coin or hold inventory that is priced above current market. Anyone could "invest" but it decreases efficiency.
If I'm dealing, I can easily do 100% annual return on inventory costs. If I'm investing, I'd be lucky to do 10%. That's why turnover is a measure of business efficiency.
Actually, it doesn't.
I referred to return on inventory not return on total equity.
It is hard to buy enough sometimes. Things don't show up on an even schedule what you do with working capital will really send this discussion off in a different direction.
I think the collector market is for coins under $1000. 5 figure and higher coins are for the more advanced collector/investor. As for liquidity if you buy the top 5% of coins for a particular item in terms of eye appeal and beauty and strictly graded you should do very well. Also in terms of reselling l, gorgeous coins will get you most of your money back or maybe even a profit. Be extremely picky and you will be rewarded.
@Rubicon said:
I think the collector market is for coins under $1000. 5 figure and higher coins are for the more advanced collector/investor. As for liquidity if you buy the top 5% of coins for a particular item in terms of eye appeal and beauty and strictly graded you should do very well. Also in terms of reselling l, gorgeous coins will get you most of your money back or maybe even a profit. Be extremely picky and you will be rewarded.
All of that can go out the window if you pay an unreasonably high price. And many people do that - some of them knowingly, but others, not.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
@Rubicon said:
I think the collector market is for coins under $1000. 5 figure and higher coins are for the more advanced collector/investor. As for liquidity if you buy the top 5% of coins for a particular item in terms of eye appeal and beauty and strictly graded you should do very well. Also in terms of reselling l, gorgeous coins will get you most of your money back or maybe even a profit. Be extremely picky and you will be rewarded.
The problem is that no one I know says "I'm not that picky...I'll take whatever". Almost everyone thinks they can pick out problem free coins with great eye appeal. The truth is that many of these people lack the expertise to do so and find out only when it comes time to sell.
@Rubicon said:
I think the collector market is for coins under $1000. 5 figure and higher coins are for the more advanced collector/investor. As for liquidity if you buy the top 5% of coins for a particular item in terms of eye appeal and beauty and strictly graded you should do very well. Also in terms of reselling l, gorgeous coins will get you most of your money back or maybe even a profit. Be extremely picky and you will be rewarded.
All of that can go out the window if you pay an unreasonably high price. And many people do that - some of them knowingly, but others, not.
They say in real estate you "make your money on the buy" and I've been feeling for a while now that's true in coins too.
@Rubicon said:
I think the collector market is for coins under $1000. 5 figure and higher coins are for the more advanced collector/investor. As for liquidity if you buy the top 5% of coins for a particular item in terms of eye appeal and beauty and strictly graded you should do very well. Also in terms of reselling l, gorgeous coins will get you most of your money back or maybe even a profit. Be extremely picky and you will be rewarded.
The problem is that no one I know says "I'm not that picky...I'll take whatever". Almost everyone thinks they can pick out problem free coins with great eye appeal. The truth is that many of these people lack the expertise to do so and find out only when it comes time to sell.
More than that, unless you are the only person with such an eye, you're going to have to outbid the competition.
@Rubicon said:
I think the collector market is for coins under $1000. 5 figure and higher coins are for the more advanced collector/investor. As for liquidity if you buy the top 5% of coins for a particular item in terms of eye appeal and beauty and strictly graded you should do very well. Also in terms of reselling l, gorgeous coins will get you most of your money back or maybe even a profit. Be extremely picky and you will be rewarded.
Wait a sec. I thought you were all about key dates and how the bourse dealers will snap them up and you disdained higher mintage coins. Now properly graded gorgeous common date coins are going to do very well?
Seated Half Society member #38 "Got a flaming heart, can't get my fill"
@Rubicon said:
I think the collector market is for coins under $1000. 5 figure and higher coins are for the more advanced collector/investor. As for liquidity if you buy the top 5% of coins for a particular item in terms of eye appeal and beauty and strictly graded you should do very well. Also in terms of reselling l, gorgeous coins will get you most of your money back or maybe even a profit. Be extremely picky and you will be rewarded.
Wait a sec. I thought you were all about key dates and how the bourse dealers will snap them up and you disdained higher mintage coins. Now properly graded gorgeous common date coins are going to do very well?
I believe in key dates or rare type or gold in high condition for investment. I just can’t afford them personally. Otherwise I would invest in these items. Just saying buy what you can afford but be very picky and even popular common date type coins may hold most of their value. Even $500 coins may do okay if you buy the nicest and consign to an internet auction down the road. The speculative coins are uber common coins in uber uncommon condition that have the most downside
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. In that case it's molten lava liquid.
It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
@Justacommeman said:
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Well said my friend. My strategy is to buy coins with great luster, strike, minimal marks, clean surfaces and overall amazing eye appeal. Having done that I have accumulated a few nice coins. I have several candidates for pcgs regrade but as I don’t want to lose their old holder to the prong one, I might try for a gold bean first and see what happens
@tradedollarnut said:
Why stop at a 66 for $500? Why not be even more sensible and buy a 65 for $100 or less. How can you justify that extra $400 for one grade point?
A) you’re comfy with spending that much
B ) you can appreciate the difference in quality for the price
See what I did there?
Is it all about ego? I can afford it and someone has told me it is the grade it is.
@Connecticoin said:
Given that the less eye-appealing 43 68+ went for $120k, I now have no hope of ever owning what I consider to be the "holy grail" 68+ which sold for a now-bargain $35k in 2018:
I personally like the toning on this particular piece on the obverse not so much the reverse, but not all the toned coins in the collection. Some are not very attractive
@Justacommeman said:
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Well said my friend. My strategy is to buy coins with great luster, strike, minimal marks, clean surfaces and overall amazing eye appeal. Having done that I have accumulated a few nice coins. I have several candidates for pcgs regrade but as I don’t want to lose their old holder to the prong one, I might try for a gold bean first and see what happens
Can you post a few pics of the coins you bought with great luster, strike, etc.?
@trueblood said:
I want the best of all world's.
I want coin collecting to be an excellent hobby as well as an excellent investment. Heck if it is a great investment for a dealer, why can't it be a the same for a buyer/collector? So I buy less coins due to upward price movements but I get more appreciation with each addition. I hope sports memorabilia and world coins move up to, its been a long drought.
Dealers don't invest in coins. They buy and sell them.
Dealers buy coins to make a profit that is equivalent to investing imo
Why should collectors be expected to ( ie its not unexpected to) lose money the minute they walk out of a dealership?
It is truly not the same thing. There's a huge difference between profiting on the bid/ask spread vs profiting from price appreciation.
And yet…the result is profit…
I would think a successful dealer with funds to invest would invest at least some of those funds in the sector he/she has the most knowledge . . . .
A dealer could invest. Some will buy a trophy coin or hold inventory that is priced above current market. Anyone could "invest" but it decreases efficiency.
If I'm dealing, I can easily do 100% annual return on inventory costs. If I'm investing, I'd be lucky to do 10%. That's why turnover is a measure of business efficiency.
Actually, it doesn't.
I referred to return on inventory not return on total equity.
It is hard to buy enough sometimes. Things don't show up on an even schedule what you do with working capital will really send this discussion off in a different direction.
Wouldn't these struggles with maintaining inventory be another feather in the cap of the concept of holding inventory longer term to smooth over those dry spells?
"It's like God, Family, Country, except Sticker, Plastic, Coin."
MS-68 graded coins are not 'fairly worthless" but I have always been advised in the old days that MS-68 valuation should never exceed 3x the value of the MS-67 valuation.
Ok over the years I might have to be more aggressive as a buyer and ramp up my purchase price
@trueblood said:
I want the best of all world's.
I want coin collecting to be an excellent hobby as well as an excellent investment. Heck if it is a great investment for a dealer, why can't it be a the same for a buyer/collector? So I buy less coins due to upward price movements but I get more appreciation with each addition. I hope sports memorabilia and world coins move up to, its been a long drought.
Dealers don't invest in coins. They buy and sell them.
Dealers buy coins to make a profit that is equivalent to investing imo
Why should collectors be expected to ( ie its not unexpected to) lose money the minute they walk out of a dealership?
It is truly not the same thing. There's a huge difference between profiting on the bid/ask spread vs profiting from price appreciation.
And yet…the result is profit…
I would think a successful dealer with funds to invest would invest at least some of those funds in the sector he/she has the most knowledge . . . .
A dealer could invest. Some will buy a trophy coin or hold inventory that is priced above current market. Anyone could "invest" but it decreases efficiency.
If I'm dealing, I can easily do 100% annual return on inventory costs. If I'm investing, I'd be lucky to do 10%. That's why turnover is a measure of business efficiency.
Actually, it doesn't.
I referred to return on inventory not return on total equity.
It is hard to buy enough sometimes. Things don't show up on an even schedule what you do with working capital will really send this discussion off in a different direction.
Wouldn't these struggles with maintaining inventory be another feather in the cap of the concept of holding inventory longer term to smooth over those dry spells?
Not really. Holding inventory increases risks. Unless you are in a massive bull market, the decrease in turnover hurts your returns and doesn't help them. Part of this depends on where you working capital resides.
It also depends on what kind of operation you are running. If you are doing shows or internet only, there's no real advantage in having inventory for the sake of having inventory. If you have a B&M, there is some advantage in having inventory for customers to look through. Although having the same inventory for long periods of time can be seen negatively by your regulars.
There's no way to really run the numbers on this because they are all made up. But let's assume I have $100k in total capital of which, on average, 50% of it is inventory. Let's assume that coins are going up 1% per month. The sole advantage of holding my coin for an extra month to "smooth out dry spells" is to gain me an extra 1%. That putative 1% gain has to be balanced against the added risk of holding an asset that can drop as well as decreasing your working capital.
If I have $100k in total capital and 50% in inventory, holding the inventory longer limits my liquidity to $50k. So, my 1% per month gain has to be weighed against either the lost opportunity on a $75k buy or the financing costs of taking on debt for the financing of the $75k buy.
There are reasons you might want inventory to have inventory but turnover beats holding pretty much every time, unless there is a raging bull market.
i once paid $175K for an MS-67 1875-S $20 Liberty Double Eagle but it was priced at 1.5x the value for the MS-65 for the entire Type II $20 Liberty. When I sold it in 2009 it had risen to 2x the value of the MS-65 type coin.
There was no MS-66 or MS-65 of the same date/mm so that that coin was an extreme grade rarity.
Yet when it re-sold in 2020 and 2021, it sold for less than what I sold it for 11 years earlier.
I like type collecting. I have no interest in paying more for a 1916-D than a 1916-P Merc. I don't see the value. HOWEVER, I would never call someone who did irrational.
That's a cost effective way to make your type set look good if your type set is in the Set Registry.
@Justacommeman said:
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Well said my friend. My strategy is to buy coins with great luster, strike, minimal marks, clean surfaces and overall amazing eye appeal. Having done that I have accumulated a few nice coins. I have several candidates for pcgs regrade but as I don’t want to lose their old holder to the prong one, I might try for a gold bean first and see what happens
Can you post a few pics of the coins you bought with great luster, strike, etc.?
@Justacommeman said:
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Well said my friend. My strategy is to buy coins with great luster, strike, minimal marks, clean surfaces and overall amazing eye appeal. Having done that I have accumulated a few nice coins. I have several candidates for pcgs regrade but as I don’t want to lose their old holder to the prong one, I might try for a gold bean first and see what happens
Can you post a few pics of the coins you bought with great luster, strike, etc.?
@Justacommeman said:
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Well said my friend. My strategy is to buy coins with great luster, strike, minimal marks, clean surfaces and overall amazing eye appeal. Having done that I have accumulated a few nice coins. I have several candidates for pcgs regrade but as I don’t want to lose their old holder to the prong one, I might try for a gold bean first and see what happens
Can you post a few pics of the coins you bought with great luster, strike, etc.?
@Justacommeman said:
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Well said my friend. My strategy is to buy coins with great luster, strike, minimal marks, clean surfaces and overall amazing eye appeal. Having done that I have accumulated a few nice coins. I have several candidates for pcgs regrade but as I don’t want to lose their old holder to the prong one, I might try for a gold bean first and see what happens
Can you post a few pics of the coins you bought with great luster, strike, etc.?
Ya know! My strategy is the opposite of yours and it has worked very well for me. But I don't just pursue any and every thing. The crap stuff I have to buy to get the good stuff goes out the door very quickly. The good stuff no. I weathered through this covid coin shortage very well and still have a respectable inventory that if push came to shove I could blow out at some kind of profit. Unless you are willing to take a risk, there are not many good places to park money these days. I feel very good and am very comfortable with the approach I have taken.
@trueblood said:
I want the best of all world's.
I want coin collecting to be an excellent hobby as well as an excellent investment. Heck if it is a great investment for a dealer, why can't it be a the same for a buyer/collector? So I buy less coins due to upward price movements but I get more appreciation with each addition. I hope sports memorabilia and world coins move up to, its been a long drought.
Dealers don't invest in coins. They buy and sell them.
Dealers buy coins to make a profit that is equivalent to investing imo
Why should collectors be expected to ( ie its not unexpected to) lose money the minute they walk out of a dealership?
It is truly not the same thing. There's a huge difference between profiting on the bid/ask spread vs profiting from price appreciation.
And yet…the result is profit…
I would think a successful dealer with funds to invest would invest at least some of those funds in the sector he/she has the most knowledge . . . .
A dealer could invest. Some will buy a trophy coin or hold inventory that is priced above current market. Anyone could "invest" but it decreases efficiency.
If I'm dealing, I can easily do 100% annual return on inventory costs. If I'm investing, I'd be lucky to do 10%. That's why turnover is a measure of business efficiency.
Actually, it doesn't.
I referred to return on inventory not return on total equity.
It is hard to buy enough sometimes. Things don't show up on an even schedule what you do with working capital will really send this discussion off in a different direction.
Wouldn't these struggles with maintaining inventory be another feather in the cap of the concept of holding inventory longer term to smooth over those dry spells?
Not really. Holding inventory increases risks. Unless you are in a massive bull market, the decrease in turnover hurts your returns and doesn't help them. Part of this depends on where you working capital resides.
It also depends on what kind of operation you are running. If you are doing shows or internet only, there's no real advantage in having inventory for the sake of having inventory. If you have a B&M, there is some advantage in having inventory for customers to look through. Although having the same inventory for long periods of time can be seen negatively by your regulars.
There's no way to really run the numbers on this because they are all made up. But let's assume I have $100k in total capital of which, on average, 50% of it is inventory. Let's assume that coins are going up 1% per month. The sole advantage of holding my coin for an extra month to "smooth out dry spells" is to gain me an extra 1%. That putative 1% gain has to be balanced against the added risk of holding an asset that can drop as well as decreasing your working capital.
If I have $100k in total capital and 50% in inventory, holding the inventory longer limits my liquidity to $50k. So, my 1% per month gain has to be weighed against either the lost opportunity on a $75k buy or the financing costs of taking on debt for the financing of the $75k buy.
There are reasons you might want inventory to have inventory but turnover beats holding pretty much every time, unless there is a raging bull market.
@amwldcoin said:
Ya know! My strategy is the opposite of yours and it has worked very well for me. But I don't just pursue any and every thing. The crap stuff I have to buy to get the good stuff goes out the door very quickly. The good stuff no. I weathered through this covid coin shortage very well and still have a respectable inventory that if push came to shove I could blow out at some kind of profit. Unless you are willing to take a risk, there are not many good places to park money these days. I feel very good and am very comfortable with the approach I have taken.
@trueblood said:
I want the best of all world's.
I want coin collecting to be an excellent hobby as well as an excellent investment. Heck if it is a great investment for a dealer, why can't it be a the same for a buyer/collector? So I buy less coins due to upward price movements but I get more appreciation with each addition. I hope sports memorabilia and world coins move up to, its been a long drought.
Dealers don't invest in coins. They buy and sell them.
Dealers buy coins to make a profit that is equivalent to investing imo
Why should collectors be expected to ( ie its not unexpected to) lose money the minute they walk out of a dealership?
It is truly not the same thing. There's a huge difference between profiting on the bid/ask spread vs profiting from price appreciation.
And yet…the result is profit…
I would think a successful dealer with funds to invest would invest at least some of those funds in the sector he/she has the most knowledge . . . .
A dealer could invest. Some will buy a trophy coin or hold inventory that is priced above current market. Anyone could "invest" but it decreases efficiency.
If I'm dealing, I can easily do 100% annual return on inventory costs. If I'm investing, I'd be lucky to do 10%. That's why turnover is a measure of business efficiency.
Actually, it doesn't.
I referred to return on inventory not return on total equity.
It is hard to buy enough sometimes. Things don't show up on an even schedule what you do with working capital will really send this discussion off in a different direction.
Wouldn't these struggles with maintaining inventory be another feather in the cap of the concept of holding inventory longer term to smooth over those dry spells?
Not really. Holding inventory increases risks. Unless you are in a massive bull market, the decrease in turnover hurts your returns and doesn't help them. Part of this depends on where you working capital resides.
It also depends on what kind of operation you are running. If you are doing shows or internet only, there's no real advantage in having inventory for the sake of having inventory. If you have a B&M, there is some advantage in having inventory for customers to look through. Although having the same inventory for long periods of time can be seen negatively by your regulars.
There's no way to really run the numbers on this because they are all made up. But let's assume I have $100k in total capital of which, on average, 50% of it is inventory. Let's assume that coins are going up 1% per month. The sole advantage of holding my coin for an extra month to "smooth out dry spells" is to gain me an extra 1%. That putative 1% gain has to be balanced against the added risk of holding an asset that can drop as well as decreasing your working capital.
If I have $100k in total capital and 50% in inventory, holding the inventory longer limits my liquidity to $50k. So, my 1% per month gain has to be weighed against either the lost opportunity on a $75k buy or the financing costs of taking on debt for the financing of the $75k buy.
There are reasons you might want inventory to have inventory but turnover beats holding pretty much every time, unless there is a raging bull market.
I'm not telling anybody to do anything. But "turnover" is a measure of business efficiency. It just bugs me a bit when people want to ignore that fact.
The other thing that people [not necessarily you] fail to do is completely calculate the annualized returns against opportunity costs etc. If you buy a coin for $100 today and sell it for $200 in 10 years, that is really mediocre performance. Especially if you weigh it against the returns for selling that same $100 coin for $110, 4 times per year which is equivalent to selling the coin for $500.
Now, that doesn't mean you can't buy a coin for $100, hold it 10 years and sell it for $150 and be very happy with it. And I'm not going to tell you to not be happy. But we should at least be honest about the actual performance.
And, of course, you are right that you would need to look at the performance of your total working capital etc. If I've got $200k sitting in cash waiting for something to buy, that is also eating into my total ROE.
@Justacommeman said:
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Well said my friend. My strategy is to buy coins with great luster, strike, minimal marks, clean surfaces and overall amazing eye appeal. Having done that I have accumulated a few nice coins. I have several candidates for pcgs regrade but as I don’t want to lose their old holder to the prong one, I might try for a gold bean first and see what happens
Can you post a few pics of the coins you bought with great luster, strike, etc.?
@Justacommeman said:
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Well said my friend. My strategy is to buy coins with great luster, strike, minimal marks, clean surfaces and overall amazing eye appeal. Having done that I have accumulated a few nice coins. I have several candidates for pcgs regrade but as I don’t want to lose their old holder to the prong one, I might try for a gold bean first and see what happens
Can you post a few pics of the coins you bought with great luster, strike, etc.?
No offense, but are you holding 64 Peace dollars in order to make a fortune on the price increase?
Just enjoying it as a collector item only. I will keep it permanently unless I see a 65 I like better as an upgrade. Don’t care if it decreases as it is a cheap coin. I didn’t buy any coins for investment only for collector purposes as all my coins are under $300. But in an emergency I feel I will get most of my money out if have to sell
Peace dollars this nicely toned uncommon for the series
@Justacommeman said:
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Well said my friend. My strategy is to buy coins with great luster, strike, minimal marks, clean surfaces and overall amazing eye appeal. Having done that I have accumulated a few nice coins. I have several candidates for pcgs regrade but as I don’t want to lose their old holder to the prong one, I might try for a gold bean first and see what happens
Can you post a few pics of the coins you bought with great luster, strike, etc.?
@Justacommeman said:
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Well said my friend. My strategy is to buy coins with great luster, strike, minimal marks, clean surfaces and overall amazing eye appeal. Having done that I have accumulated a few nice coins. I have several candidates for pcgs regrade but as I don’t want to lose their old holder to the prong one, I might try for a gold bean first and see what happens
Can you post a few pics of the coins you bought with great luster, strike, etc.?
No offense, but are you holding 64 Peace dollars in order to make a fortune on the price increase?
Just enjoying it as a collector item only. I will keep it permanently unless I see a 65 I like better as an upgrade. Don’t care if it decreases as it is a cheap
No, that's fine. Coins should be fun. I'm a firm believer that collectors should buy what they like and expect to lose money on them. But you started this thread by saying that your "strategy is to buy coins with great luster, strike..." And you were contrasting that with people who bought top pop coins and trying to make money on them. I don't see buying nice widgets as a "strategy" to make money on coins.
Comments
Coins are very liquid as a collectable. Much more than say art. When I have wanted to sell a coin or coins I have always had options to have the money in a few days. There are also auctions that can get you money relatively quickly and even quicker if you want to go the advance route. If you want money quicker it may bring less money but it is liquid. Saying "only a low proportion of coins are actually liquid" seems clearly wrong in my opinion.
I agree, especially if you consider the bulk material that makes up a large percentage of the volume of the coin business.
Extremely rare coins are a little less liquid if you are trying to maximize price. But you could easily sell an 1804 dollar in an hour, for example.
But silver dollars, 90% silver, commemoratives, wheat cents, Indian cents, virtually all slabbed classic material can be sold in minutes with a phone call.
U.S. coins are almost undoubtedly the most liquid collectible because most of the material has posted bid/ asks and known market makers.
You have a different definition of liquidity than I do. Measuring liquidity in the context of collectibles isn't the correct standard. It certainly isn't in the context of "investment" for non-collectors which is the context of the post to which I replied. I'd never consider any asset that doesn't even have a predictable market value to be liquid especially when combined with much higher price spreads than any asset in tradeable markets. Anything is "liquid" if the price is lowered enough.
I don't consider silver or gold bullion liquid either with current spreads. Silver's liquidity is terrible right now. An immediate 20% to 25% "paper" loss after it's bought.
You can read my prior reply. I agree US coins are more liquid than others and I also agree the coins you listed are more liquid than most. My difference of opinion is due to the buy-sell spread.
Edit: I'm also referring to liquidity for collectors or the end buyer, not a dealer. Dealers I agree are totally different.
That's a different definition of "liquid".
Insofar as collectors pay retail and sell at wholesale, with dealers and auction houses taking that first cut on each transaction, the dealer will always make the first buck on a coin's appreciation. Any collector's gains have to come on top of that tax (let's not go overboard on BST or other private-party transactions).
I am a part-time "dealer" at best and I turn over my inventory value 6-8 times a year.
I still tuck away 10-20 pieces minimum every year, and that eats most of my profits. As I like to say, keep the best, sell the rest. I would guess I keep one in every 20 or so coins I buy, if you exempt bullion/junk/wholesale material. The plan is to go to a major show when I'm ready to sell out altogether, price aggressively, and see what moves. With my eye for quality coins at affordable levels, I bet I will clear most of my inventory in a day or two, even priced strongly.
"It's like God, Family, Country, except Sticker, Plastic, Coin."
There's an analogy to real estate, where people become realtors or brokers both to save on commissions and for access to the best properties, which they or theirs can buy for investment purposes.
Given that the less eye-appealing 43 68+ went for $120k, I now have no hope of ever owning what I consider to be the "holy grail" 68+ which sold for a now-bargain $35k in 2018:
That depends on how fat your checkbook is! More times than not I have money to burn with nothing I want to burn it on!
Funny most real estate agents I have encounter own no real estate. All they do is represent buyers & sellers and that is about it
I do agree with you that becoming an agent should be profitable since you would be getting an early looksy and could possibly take advantage of that
I was told by one dealer a few years ago with a multi million dollar inventory that they routinely by coins to hold 5-10 years before selling. Wasnt sure if he was the only one or if this was more common than I realized.
The one(s) I know own portfolios of properties, often rentals, or represent families that do.
Rare Coin Wholesalers should be sitting pretty good right about now, wouldn't you say?
They have the finest of the finest and a lot of them, good for them, they took the risk and now it will reward them handsomely
Actually, it doesn't.
Rentals are a whole different issue. They generate income.
Leverage is also important in rental portfolios.
That's a great idea when the market is on the upswing.
Let me know where they buy their crystal ball.
Well the way you are talking makes me think you struggle to have enough working capital.
I referred to return on inventory not return on total equity.
It is hard to buy enough sometimes. Things don't show up on an even schedule what you do with working capital will really send this discussion off in a different direction.
I think the collector market is for coins under $1000. 5 figure and higher coins are for the more advanced collector/investor. As for liquidity if you buy the top 5% of coins for a particular item in terms of eye appeal and beauty and strictly graded you should do very well. Also in terms of reselling l, gorgeous coins will get you most of your money back or maybe even a profit. Be extremely picky and you will be rewarded.
All of that can go out the window if you pay an unreasonably high price. And many people do that - some of them knowingly, but others, not.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
The problem is that no one I know says "I'm not that picky...I'll take whatever". Almost everyone thinks they can pick out problem free coins with great eye appeal. The truth is that many of these people lack the expertise to do so and find out only when it comes time to sell.
They say in real estate you "make your money on the buy" and I've been feeling for a while now that's true in coins too.
More than that, unless you are the only person with such an eye, you're going to have to outbid the competition.
Wait a sec. I thought you were all about key dates and how the bourse dealers will snap them up and you disdained higher mintage coins. Now properly graded gorgeous common date coins are going to do very well?
"Got a flaming heart, can't get my fill"
I believe in key dates or rare type or gold in high condition for investment. I just can’t afford them personally. Otherwise I would invest in these items. Just saying buy what you can afford but be very picky and even popular common date type coins may hold most of their value. Even $500 coins may do okay if you buy the nicest and consign to an internet auction down the road. The speculative coins are uber common coins in uber uncommon condition that have the most downside
The rare coin market is fairly liquid but be prepared to take a beating if forced to sell quickly. In that case it's molten lava liquid.
It's certainly not fungible and therefore needs to be placed in a separate portfolio bucket.
m
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Well said my friend. My strategy is to buy coins with great luster, strike, minimal marks, clean surfaces and overall amazing eye appeal. Having done that I have accumulated a few nice coins. I have several candidates for pcgs regrade but as I don’t want to lose their old holder to the prong one, I might try for a gold bean first and see what happens
Is it all about ego? I can afford it and someone has told me it is the grade it is.
I personally like the toning on this particular piece on the obverse not so much the reverse, but not all the toned coins in the collection. Some are not very attractive
Can you post a few pics of the coins you bought with great luster, strike, etc.?
Wouldn't these struggles with maintaining inventory be another feather in the cap of the concept of holding inventory longer term to smooth over those dry spells?
"It's like God, Family, Country, except Sticker, Plastic, Coin."
MS-68 graded coins are not 'fairly worthless" but I have always been advised in the old days that MS-68 valuation should never exceed 3x the value of the MS-67 valuation.
Ok over the years I might have to be more aggressive as a buyer and ramp up my purchase price
Not really. Holding inventory increases risks. Unless you are in a massive bull market, the decrease in turnover hurts your returns and doesn't help them. Part of this depends on where you working capital resides.
It also depends on what kind of operation you are running. If you are doing shows or internet only, there's no real advantage in having inventory for the sake of having inventory. If you have a B&M, there is some advantage in having inventory for customers to look through. Although having the same inventory for long periods of time can be seen negatively by your regulars.
There's no way to really run the numbers on this because they are all made up. But let's assume I have $100k in total capital of which, on average, 50% of it is inventory. Let's assume that coins are going up 1% per month. The sole advantage of holding my coin for an extra month to "smooth out dry spells" is to gain me an extra 1%. That putative 1% gain has to be balanced against the added risk of holding an asset that can drop as well as decreasing your working capital.
If I have $100k in total capital and 50% in inventory, holding the inventory longer limits my liquidity to $50k. So, my 1% per month gain has to be weighed against either the lost opportunity on a $75k buy or the financing costs of taking on debt for the financing of the $75k buy.
There are reasons you might want inventory to have inventory but turnover beats holding pretty much every time, unless there is a raging bull market.
ramping up my purchases meaning up to 5x the value of the MS-67 value.
I never criticize others for wanting to pay much more but it is not for me.
i once paid $175K for an MS-67 1875-S $20 Liberty Double Eagle but it was priced at 1.5x the value for the MS-65 for the entire Type II $20 Liberty. When I sold it in 2009 it had risen to 2x the value of the MS-65 type coin.
There was no MS-66 or MS-65 of the same date/mm so that that coin was an extreme grade rarity.
Yet when it re-sold in 2020 and 2021, it sold for less than what I sold it for 11 years earlier.
That's a cost effective way to make your type set look good if your type set is in the Set Registry.
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.
No offense, but are you holding 64 Peace dollars in order to make a fortune on the price increase?
Ya know! My strategy is the opposite of yours and it has worked very well for me. But I don't just pursue any and every thing. The crap stuff I have to buy to get the good stuff goes out the door very quickly. The good stuff no. I weathered through this covid coin shortage very well and still have a respectable inventory that if push came to shove I could blow out at some kind of profit. Unless you are willing to take a risk, there are not many good places to park money these days. I feel very good and am very comfortable with the approach I have taken.
I liked the 1941 in the sale better than the 1943, even though it didn’t have a CAC sticker- and it sold for “only” $50,400
That 1941 is a very attractive coin.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
I'm not telling anybody to do anything. But "turnover" is a measure of business efficiency. It just bugs me a bit when people want to ignore that fact.
The other thing that people [not necessarily you] fail to do is completely calculate the annualized returns against opportunity costs etc. If you buy a coin for $100 today and sell it for $200 in 10 years, that is really mediocre performance. Especially if you weigh it against the returns for selling that same $100 coin for $110, 4 times per year which is equivalent to selling the coin for $500.
Now, that doesn't mean you can't buy a coin for $100, hold it 10 years and sell it for $150 and be very happy with it. And I'm not going to tell you to not be happy. But we should at least be honest about the actual performance.
And, of course, you are right that you would need to look at the performance of your total working capital etc. If I've got $200k sitting in cash waiting for something to buy, that is also eating into my total ROE.
For 1922, NGC has graded 93,514 pieces as MS64, with 18,073 higher, PCGS comes in with 54,554 in MS64 and 8,703 higher.
In case anybody is interested in the numbers.
Just enjoying it as a collector item only. I will keep it permanently unless I see a 65 I like better as an upgrade. Don’t care if it decreases as it is a cheap coin. I didn’t buy any coins for investment only for collector purposes as all my coins are under $300. But in an emergency I feel I will get most of my money out if have to sell
Peace dollars this nicely toned uncommon for the series
No, that's fine. Coins should be fun. I'm a firm believer that collectors should buy what they like and expect to lose money on them. But you started this thread by saying that your "strategy is to buy coins with great luster, strike..." And you were contrasting that with people who bought top pop coins and trying to make money on them. I don't see buying nice widgets as a "strategy" to make money on coins.
That’s amazing toning. Wish it was my coin. Would pay dearly but no more than 5-10x value, maybe a little more, but not 50-100x
What do you mean 5x value?
Did you see the coin in person. Incredible if it looks as good as the photo