calling all investment gurus!
Gazes
Posts: 2,315 ✭✭✭✭✭
I think one of the most used cliches on these forums---don't invest in coins, just collect as a hobby. Honestly, I would agree this makes sense for alot of collectors but not everyone. Tradedollarnut seems to have done pretty well buying and selling coins. I think Dr. Duckor too has put together sets and sold for some nice profits. Many others have too. My main gripe with people state not to invest in coins is they always point to the S & P 500. The problem is that it is easy to look back and find something better. By using the S & P 500 they avoid the pitfall of people who thought Enron, Sears, Poloroid, Kodak, etc were the blue chip stocks to buy back in the day. And of course they avoid those who swore about the @home, cmgi, and other internet stocks that are left behind. I am sure these same people would have said invest in the Dogs of the Dow and do nothing else back when it was the rage. Further, they use the numbers reflecting the very best avgs over the last 10 or 20 years and then choose to measure coins by the PCGS 3000. Sorry, but I think anyone on this forum if given a lump sum of money would do better selecting coins than mimicking the PCGS 3000. Ive always wanted to ask all the gurus that point to the S & P 500 record over the last 20 years do you have 100% of your money in the it? How about do you have 75% of your money in the S & P 500 for the last 10 or even 5 years? The point is it is easy to tell people dont invest in coins because you should buy the S & P 500 but is that what those same people are doing (if so they are very heavily weighted towards about 5 or 6 technology stocks)?
So lets not look back. Lets look at today and go on record. Lets not be able to cheat and look back----lets pick now going forward. You have a liquid assets of $1,000,000. Of that amount $300,000 is cash that just hit your account from the sale of real property that you need to invest. You won't need the money for 7 years. You can use that cash to:
1) Buy SPY at $440 per share (the ETF that mimics the S and P 500)
2) Buy Gold at $1872 per ounce
3) Buy Bitcoin at $42,500 per coin
4) Buy a 1796 No Stars Quarter Eagle PCGS AU 58 CAC for $300,000 (CAC price guide lists retail at $300,000 and the PCGS guide lists it at $250,000)
Obviously if this were "real" you have many options. However, here I would think most of you would automatically by the SPY given past posts and these choices. I have no doubt that many people on here can derail this post quickly with all sorts of subterfuge (i.e what are the other assets invested in, how do I know I can buy the coin at said price, I want to buy mutual funds and multiple index funds, I need to see the coin first, etc) However, I ask you simply to take away the safety net of back proving your advice and choose the option you believe is best. The main point is even when someone makes a good profit, we are then bombarded with other options that would have made them more money. Ok, lets look forward and pick. I will start and purchase the 1796 No Stars quarter eagle. Thanks
Comments
SPY for me.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
If you had bought SPY puts when the market opened today, you could have gained 20 years worth of holding shares by the time this afternoon rolled around. The market is nuts right now. To get to your question, I'd 100% buy SPY before any of that other stuff.
Early American Copper, Bust and Seated.
A PCGS AU58 CAC 1796 No Stars at 300k would be a bargain in this market. I would buy at $400k!
I guess I’m not old enough to have any real life experience with this but I’ll throw in my opinion anyways. Make of it what you will. I’ve always viewed gold and coins as somewhat of a safeguard compared to stocks. Gold generally does not make huge swings but steadily rises for inflation and other factors. The same seems to be true of coins. If you want to make money with your investment, the SPY or Bitcoin would be the best option. Generally, the S and P yields a pretty steady increase with the money, and I really just don’t get a lot of the premise behind Bitcoin so I don’t know what that will do in the future. It just depends what you want your money to do. I’ll take the SPY with my figurative 300k, I do like the thread idea though.
Young Numismatist, Coin Photographer.
Today is your lucky day--you got it for $300,000!
It doesn't have to all be in one place. Personally I have have about 60% of investable assets in an S&P fund, 30% in growth, and 10% in speculative/crypto.
I don't count hobbies as investments. If my hobby collectibles increase in value that's fantastic, but I really am not overly concerned. My hobbies are not businesses and I don't partake for the purpose of making $.
Historically, gold has been an awful performer. (Unless you cherry-pick periods of appreciation which of course you can do with any asset class).
If I had to pick one asset class for everything I would absolutely pick the S&P.
I think your reasoning is a bit flawed. Most of us are not willing or able to buy upper 5 figure and higher coins that have multiple levels of demand for like-minded folks with alot of money to spend on single coins. This is where you can make some money as an investment, anything less it will be very hard work and more of a risk (again as an investment). So I would choose SPY and many other ETFs, individual stocks, and mutual funds in the tax deferred accounts, where one can make far more money with these over the long term than one could ever do with numismatics at any level lower than the big coins that go for big money, as an investment product. Even the big coins that go for big money can be losers if not sold at the right time, where stock based products pretty much are inert to that mostly if one holds for decades. I bet the majority of the big players in numismatics that buy the big coins have alot more money in stock investments or they could not probably afford them big coins.
Best, SH
Successful transactions with-Boosibri,lkeigwin,TomB,Broadstruck,coinsarefun,Type2,jom,ProfLiz, UltraHighRelief,Barndog,EXOJUNKIE,ldhair,fivecents,paesan,Crusty...
For an investment vehicle it would be the SPY. Average rate of return at about 10% means it doubles every 7 years or so good old "Rule of 70" well really 69). For every superstar coin there are many that have not moved at all in the last 2-3 years.
Successful BST with BustDMs , Pnies20, lkeigwin, pursuitofliberty, Bullsitter, felinfoel, SPalladino (CBH's - 35 Die Marriage's)
$5 Type Set https://www.pcgs.com/setregistry/u-s-coins/type-sets/half-eagle-type-set-circulation-strikes-1795-1929/album/344192
CBH Set https://www.pcgs.com/setregistry/everyman-collections/everyman-half-dollars/everyman-capped-bust-half-dollars-1807-1839/album/345572
SNPE for me. Similar, but arguably better for the world.
If one had “invested” ~80 dollars each for some 2019 S reverse proof ASE’s when they were released from the mint you would have done quite well....
on the other hand, those flippers that purchased boxes of 2021 Morgan dollars hoping to get ~600 / coin... not so much.
So yes there are better investments but collectible coins can pay off if you get lucky 🍀- and it is almost March!
You've made one huge error. Using the S&P 500 is the exact opposite of cherry picking. Use the Wilshire 5000, if you wish. They are broad-based not cherry picking data to avoid Enron. In fact, you owned Enron and Kodak in the S&P500
As for cherry picking data, TDN owned 3 very select coins and held them for a short period of time. By this standard, I've made a fortune "investing" in a pile of damaged coins.
Is flipping "investing"?
Or the last 20 years...
It is an interesting question to ponder, though I agree with @spacehayduke that the question is flawed, as is using Tradedollarnut as an example. Though I don’t know him, I believe that Tradedollarnut is both a hobbyist and a professional. In a field like coins or art, professionals will have a big edge over even knowledgeable amateurs. Depending on your definition of professional, this is not true in finance, since almost no fund managers beat the major indices long term.
$300,000 worth of SPY would pay me like $4000 a year to buy coins
But, let me not only pick a winner, I’ll rank them as follows:
SPY
1796 qe
Gold
Bitcoin
Over a 30 period, I’d be very confident to forecast SPY > Gold > Bitcoin, but I’m not sure where the quarter eagle will fit in.
Great---but you didnt pick (btw cherry picking means picking a strategy that performed well---not the number of stocks in the index).
Can I buy a 1870-CC $5 in AU for $150,000 and put the other $150,000 in SPY? Not real comfortable with all my eggs in one basket.
it's crackers to slip a rozzer the dropsy in snide
That's not the normal usage.
SPY is my choice, but I would have thought that obvious.
I would put bitcoin last, by the way.
Sorry---cant in this hypo. But the good news is you have 700,000 liquid. Classy problem coin vs spy
I like these discussions a lot.
I would pick SPY, too.
There are some things to consider other than the market price of the coin in question, or coins, more generally that have not been considered. The SPY is virtually free to buy and own and trade with instant liquidity, five days per week, at your fingertips in your home or wherever you happen to be sitting in the world. You do not need insider access to acquire it for a fair price (or even acquire it at all). There is no cost for insurance or storage. There is virtually no risk of theft and definitely no risk of loss from fire or other disaster. You do not have to put it in the mail and pray that it makes it to the auction house when it is time to sell. If you pass unexpectedly, your family can sell it at market price from the same Schwab or Fidelity account. It does not require a professional contact to make the sale. There is no concern that they will take it to the wrong place and get 10 cents on the dollar (or less). You do not have to worry that your shares are counterfeit or that their appearance will change over time. There is no verification or certification required. You do not have to be concerned that a new verification service will come into vogue, and you will have to send your shares out for a new "sticker". It pays a dividend. You can buy insurance (put options) that your shares will not drop below a certain level. You can create an extra stream of income (covered calls) from your SPY shares. If you decided to purchase the wrong wrapper (SPY vs VOO vs IVV vs VV vs SCHB, mutual fund vs ETF, etc.) it does not matter because they are all virtually the same and are recognized as such by the marketplace. If your shares drop in value, you can sell them for a loss and buy a virtually identical investment and write off your loss (tax loss harvesting).
There is more to owning an investment than buying it at one price and selling it for a higher one later on.
OK then, SPY it is.
Hope everyone is still here in 7 years and we can congratulate the winners.
it's crackers to slip a rozzer the dropsy in snide
Do you need to use it all at once, or can you average in? If all at once, for a seven year timeframe I would:
80% SPY
10% Gold
10% BTC and ETH
Pretty much matches my typical allocation, excluding a very little bit of REITS, high-yield bond fund an emerging market funds.
I don't think there is one answer for everyone. Time horizon and lost tolerance are major factors. Your particular personality plays a role. Do you want to buy and hold something that doesn't have to be watched on a daily basis or do you want to play day trader buying the lows and selling the highs on a daily, weekly, monthly basis?
Purely as an investment, SPY.
But I'd rather have fun with the money so my first choice, if allowed, would be to buy coins that I actually collect.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I agree. I guess that is part of my pet peeve when people say you should never invest in coins.
Nicely summarized.
The SPY does not have to be watched on a daily basis, day traded, etc. You can just as easily buy it and walk away for seven years as you can for the coin. That said, there are some behavioral advantages to having investment assets that do not have minute-to-minute price fluctuations. Of course, on the other hand, the pricing information for the coin in question is probably not updated frequently enough for an investment. What if no similar coins trade for a few years and there are no updates in the price guide? Would you be nervous about it? Should you be?
This is a real negative with the coin as investment. Unless it's a widget, the price is often speculative.
When they asked RYK at 6 years old "what do you want to be when you grow up?" he said "a hedge fund manager."
Just kidding but you shared a lot of knowledge and wisdom in your post that was total void in my home growing up. I remember as a young boy hearing the term "DOW Jones Industrial Average" while my mother was listening to 1010 Wins radio. I had no clue what it was and there was never a discussion in my low income home of stocks, bonds, investing, shorts, puts, calls, etc., etc. And when you asked the typical child about a future occupation the answer was the typically policeman, fireman, nurse, doctor leaving out a huge area for potential wealth creation most in my generation and social sphere never thought about. That would also include investing in coins.
If all we are doing is predicting which one will do the best if held for the entire period, that’s one thing, but when presented with actually investing a large sum of money (and $300k is large to most people) liquidity and risk tolerance absolutely come into play. I can tell you I don’t plan to need the money for 7 years, but I also know I can’t predict medical emergencies and catastrophes, or other opportunities that may arise. For most of us, SPY comes with built in diversification and a level of management (though low) not available with the other options. If my wife gets sick or I lose my job, it’s quick and easy to get a portion of the money I need from the market. Selling my incredible coin or physical gold is a pain in a pinch (and likely will have higher costs/lower returns involved). If it’s all the money in only one of the options, gotta be the SPY.
(Apologies if I repeated others, I got interrupted a few times and didn’t get to read everyone).
First, I am assuming the $1.0M in liquid assets is cash and securities? Such a scenario really should account for Net Worth, so I will further assume if that is true, then Net Worth is in the $1.6 to 2.0M range.
For investment purposes, with no other choices than given, the obvious answer is SPY. This is for a true investment, as everything else is more speculative, less liquid, and would not be advised with a Net Worth of less than at least double the range I suggested. My opinion, of course.
Best ROI on the scenarios lasted is probably SPY > Quarter Eagle > Gold > Bitcoin, with ROI is as much Return OF as Return ON Investment.
Can I speculate further?
As a Numismatist and an Investor who is still working and has no debt, but who does not an exorbitant NW, if $300.K landed in my account today I would probably distribute the funds over a 12 to 15 month period as follows; $240.K into the SPY (or similar), then about $35. to 40.K in two to five premium Capped or Flowing Hair pieces (probably different denominations), and $20. to 25.K in generic gold (probably slight premium numismatic pieces).
“We are only their care-takers,” he posed, “if we take good care of them, then centuries from now they may still be here … ”
Todd - BHNC #242
Tag.
You have a liquid assets of $1,000,000. Of that amount $300,000 is cash that just hit your account from the sale of real property that you need to invest. You won't need the money for 7 years.
I will start and purchase the 1796 No Stars quarter eagle. Thanks
Would you do that and never buy another coin because you have reached the limit of your coin portfolio allocation?
Buy Silver,,,,,
I have proven to be incredibly bad at investing over the course of my entire adult life. Even my 401k has a losing track record somehow. I think I just always pull the trigger at precisely the wrong moment. So now I just buy coins. At least if the value goes down I still have some neat coins. But I am done with bullion. I have lost lots of $$ on gold and silver bullion.
So I'd buy the QE.
But note that this means the QE will be worthless within a matter of days, as soon as I buy it. lol
My Gold Type Set
>
You have a flawed analysis. The SPY is ALWAYS evolving. The other 3 options are static . Currently you may have the top 5 or 6 technology stocks. In seven years you may not have any of these stocks with much market weighting. That’s the beauty of the SPY.
In the past 20 years there are only 4 stocks in the top 20 stocks in the current SPY that were in the top 20 stocks in the SPY in 2002…
Nothing flawed. I understand that SPY's weighting and composition changes. My point is currently you are heavily weighted towards 5 or 6 technology stock. The parenthetical really has very little to do with the OP. The point is lets pick going forward instead of backward---I noticed you did not pick?
I generally agree with most of your well thought out post. A couple comments just to think outside the box. You are correct that the price of SPY is very transparent. The price of the 1796 is less so. However, that could work in your favor if you obtain it for a favorable price (there were many opportunities for certain coins at favorable prices at the start of covid). I could not agree more with the your comments about the mail!! I hate sending my coins! As far as the comments if the owner dies---most can be resolved by some planning prior to death. The same could be said for a person who owns stocks but does not contact a professional for estate planning. Either way, an individual is well served with estate planning prior to death regardless if they own valuable coins or stocks. One thing that people have touched on as a "negative" is the fact the coins are unique and not nearly as liquid as SPY. The flip side is that it is unique and if collectors want that coin you are in the driver seat. If someone wants a 1796 quarter eagle no stars in AU 58 CAC----they will most likely have to go through you which gives you leverage that you do not have with SPY. Just some thoughts on your post. Thanks
What are the total holding costs, transaction costs, and risk of damage/loss on the numismatic item. For SPY it’s essentially zero.
Specifics aside, the buy/sell spread on the SPY would be a tiny fraction of the one for numismatic/non-bullion bullion coins.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Especially for a non-dealer/collector.
Successful BST with BustDMs , Pnies20, lkeigwin, pursuitofliberty, Bullsitter, felinfoel, SPalladino (CBH's - 35 Die Marriage's)
$5 Type Set https://www.pcgs.com/setregistry/u-s-coins/type-sets/half-eagle-type-set-circulation-strikes-1795-1929/album/344192
CBH Set https://www.pcgs.com/setregistry/everyman-collections/everyman-half-dollars/everyman-capped-bust-half-dollars-1807-1839/album/345572
It depends.
If $1M represented a significant portion of my net wealth I’d go with SPY. If $300k was a small percentage of my net wealth I’d go with the coin.
Gold and silver bullion can be good hedges against inflation, not the best.
Coins are like artwork. I would never advocate for the average investor to stake more than 5% of their net worth on art/coins/stamps etc.
However, if those collections begin to become a larger part of your net worth, I would start including your collections in your annual allocation review. Preferably quarterly.
SPY is ok, but intelligent purchase of individual companies, diversified across sectors, with a LITTLE research quarterly will get better returns. I would have left 10% on the table over the last 5 years if I had soley used etfs. That said, if you can't won't or don't know how to evaluate companies, ETFs or no or low cost index mutual are the way to go.
In the meantime, spend that 5% on coins! And reinvest your dividends!
My daughter just started working and will put 6k into a Roth IRA every year she stays at home.
We will ask the advice of our financial adviser wether to put her money into say SPY or individual stocks.
Altho we will take the advice of our advisor, I will ask if she should put 1 k into 6 different stocks and again next year, and so on.
I would like to see her buy something like ...
1k of AAPL
1K of COST
1K of BAC
1K of GOOG
1K of DIS
1K of AMD
@xbrenbrenx said: SPY is ok, but intelligent purchase of individual companies, diversified across sectors, with a LITTLE research quarterly will get better returns.
I have no opinion on SPY (the etf), but the folks at Vanguard and many academics might disagree with this.
That is a ridiculous statement. SPY year after year outperforms active management…
SPY if I had to. My actual choice is VTSAX, which is what I've done.
"Bongo hurtles along the rain soaked highway of life on underinflated bald retread tires."
~Wayne
IMHO SPY and QQQ would be more appropriate for your typical young investor. Contribute the maximum amount every year and you’re on auto pilot. No need to follow individual stocks or readjust your portfolio.
True and both of those should get her to at least 7% yearly which would be 100k for each 6 K she invests now upon retirement.
But she could also invest in the same of the best companies individuals stock and make her own portfolio. 6 new companies per year, she could be really diversified on her own in just a few years.
Anyway, the decision is out of our hands as that is why we pay a professional advisor.
riding the wave of the candles led me to this and it is apropos