Pandemic, trillions of added liquidity, inflation, asset value explosions, now interest rate hikes and that's just in over a couple years.
There is no playbook for what we have experienced.
I think you just have to consume the data and make decisions based on a longer term. A shorter term successful prognostication will amount to a good guess. There may be two more years of volatility in many markets yet.
$300,000 for one coin, as an investment, which represents 30% or so of an investable portfolio...is, well, asking for trouble. Moreso when you give yourself an arbitrary timeline of seven years. How will you sell a high value coin that is thinly traded and most definitely will require a broker or auction house to market it? That would sort of be like buying a mutual fund with a 15-20% back end load.
Secondly, there is no one-size-fits-all-investment advice. What is your age? What are your goals? what is your risk tolerance? Are you looking for dividends (income generation) or capital appreciation?
I want income / dividends. With 300K I would buy a best of class BDC, REIT or CEF (closed end fund). During the Covid lows, I picked up about 700K worth of the same. I am almost 55 and I want income generating assets. Many of these types of funds can be capital killers, so you do have to pick wisely and be careful.
Obviously, in this environment, all of us are worried about how to protect our capital and how to make the right investments. I do wish you success.
Coins don’t pay interest or dividends plus have potential slide big time in this economy aka 89 crash. If coin investor you need to churn your material. Many coins can go bad in the holder due to reaction to the atmosphere.
Pandemic, trillions of added liquidity, inflation, asset value explosions, now interest rate hikes and that's just in over a couple years.
There is no playbook for what we have experienced.
I think you just have to consume the data and make decisions based on a longer term. A shorter term successful prognostication will amount to a good guess. There may be two more years of volatility in many markets yet.
I thought it would be interesting to do an end of year review of how the investment choices are doing so far.
SPY last traded in 2022 at 382.43; down from the 440 when this thread was started. That's a loss of 13% ex dividends. From the first trading day of 2022 until the last trading day of 2022, SPY is down 20% ex dividends.
Gold is trading at $1,832.50; down 2.1% from $1,872 when this thead was started. For the year, gold is essentially flat (up 1.3%).
Bitcoin is trading at about $16,600; down from $42,500 when this thread was started. That a 61% loss. From the beginning of 2022 to the end, Bitcoin is down 65%.
From a posting by @dhikewhitney later in this thread, it seems that the price of the quarter eagle is anywhere from about flat ($300,000) to 3.2% higher ($309,600) from when this thread was started. I suspect these prices are what one can expect if the coin were sold in an auction and the transactional fees are not trivial
The winner so far seems to be the 1796 quarter eagle although I personally think gold bullion is the true winner because of its more certain price and higher liquidity. Otherwise, gold bullion is doing kind of what it's supposed to do: protect purchasing power. The bubbly S&P 500 has fallen 13% and the ridiculously bubbly Bitcoin has crashed 61%.
Over the coming year, I expect the S&P 500 will fall another double digits percentage-wise (the S&P 500 at 3,839.50 is not even close to being reasonably priced nevermind inexpensive), gold will likely be flat to slightly up, and I expect Bitcoin to fall further. As for the quarter eagle, it's a relatively illiquid asset and my guess would be that its price falls as there is less easy money sloshing around.
All of my guesses above are predicated on the Federal Reserve continuing its relatively tight (har har) monetary policy. If it actually continues to truly tighten monetary policy, I would expect all four assets to fall double digit percentages with Bitcoin and the S&P 500 the worst.
--
2023-01-02
I have fully replaced the text of bullet point #4 and made an edit to the following paragraph to reflect a correction to an error I originally made in the current price of the quarter eagle. The original text is below:
I don't know how to check what a price is for the coin. It seems the price is up, perhaps by 33% or so. I also don't know what percentage of the price is lost due to fees when selling.
The winner so far, by a longshot, is the 1796 quarter eagle.
Pandemic, trillions of added liquidity, inflation, asset value explosions, now interest rate hikes and that's just in over a couple years.
There is no playbook for what we have experienced.
I think you just have to consume the data and make decisions based on a longer term. A shorter term successful prognostication will amount to a good guess. There may be two more years of volatility in many markets yet.
I see stagflation that will last until bonds are fairly priced. That could be years and years down the road. I don't see too much of anything performing really well. Land, gold, and much of Africa should do OK. A lot of select world modern will be great but guess what? Taking a position in them will prove virtually impossible. The only place you can "invest" in modern world coins is China and this carries great political risks. Don't figure on staying in cash because this will perform nearly as poorly as bonds.
The old Chinese curse is "may you live in interesting times". We have this and it will get worse before it gets better. Whodda thought that cutting taxes and raising spending for half a century would have long term consequences? We thought we could kick the can down the road forever but we've done run outta road.
All of my guesses above are predicated on the Federal Reserve continuing its relatively tight (har har) monetary policy. If it actually continues to truly tighten monetary policy, I would expect all four assets to fall double digit percentages with Bitcoin and the S&P 500 the worst.
And herein lies the real problem. We can't service all that debt at real interest rates so they have no choice but to let inflation run. A lot of good minds are saying they can raise rates but I believe much higher will stop the economy dead in its tracks.
Inflation wrecks healthy economies. God only knows what it will do to ours.
Of course efficiency is so poor that even nominal improvements will provide massive percentage gains so, as usual, the future is hard to predict.
@MWK said:
I thought it would be interesting to do an end of year review of how the investment choices are doing so far.
SPY last traded in 2022 at 382.43; down from the 440 when this thread was started. That's a loss of 13% ex dividends. From the first trading day of 2022 until the last trading day of 2022, SPY is down 20% ex dividends.
Gold is trading at $1,832.50; down 2.1% from $1,872 when this thead was started. For the year, gold is essentially flat (up 1.3%).
Bitcoin is trading at about $16,600; down from $42,500 when this thread was started. That a 61% loss. From the beginning of 2022 to the end, Bitcoin is down 65%.
I don't know how to check what a price is for the coin. It seems the price is up, perhaps by 33% or so. I also don't know what percentage of the price is lost due to fees when selling.
The winner so far, by a longshot, is the 1796 quarter eagle. Gold bullion is doing kind of what it's supposed to do: protect purchasing power. The bubbly S&P 500 has fallen 13% and the ridiculously bubbly Bitcoin has crashed 61%.
Over the coming year, I expect the S&P 500 will fall another double digits percentage-wise (the S&P 500 at 3,839.50 is not even close to being reasonably priced nevermind inexpensive), gold will likely be flat to slightly up, and I expect Bitcoin to fall further. As for the quarter eagle, it's a relatively illiquid asset and my guess would be that its price falls as there is less easy money sloshing around.
All of my guesses above are predicated on the Federal Reserve continuing its relatively tight (har har) monetary policy. If it actually continues to truly tighten monetary policy, I would expect all four assets to fall double digit percentages with Bitcoin and the S&P 500 the worst.
How do you figure the "the price is up, perhaps by 33% or so."
The OP originally wrote:
"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)"
@dhikewhitney said:
How do you figure the "the price is up, perhaps by 33% or so."
The OP originally wrote:
"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)"
It seems to me the price is flat (and not much depth to the market).
Thank you for the correction. I didn't know where to find the most recently transacted price and I must have misread a price look-up. With your correction, then, gold bullion and the quarter eagle have performed roughly equivalently in 2022 although I would give the edge to gold bullion because of its liquidity.
The value of stocks is based upon the future value of them. Many tech stocks have great potential upside, but pay no dividends. Coins are like tech stocks, they pay no dividends........but may be less volatile than tech stocks. Stocks that pay dividends are companies that are making money, they are profitable today. But their value is based upon their current profitability and not their future potential. Coins do not have any real current profitability. Confusing??
A solid portfolio has a substantial position in income producing assets and a variable position in future growth. The key is diversity across not only growth assets (tech stocks and coins) but high yield assets as well.
The OP is positing a somewhat stupid question that does not factor diversity into the portfolio.
Those who bought Spy at 440 it is now 404
Those who bought Gold at $1872 it is now at 1842
Those who bought Bitcoin at $42,500 it is now at $22,350
Those who bougth 1796 NO Star QE PCGS AU 58 CAC at $300,000 the current CAC price guide is at $390,000.
The overwhelming response to the OP was to buy SPY. Maybe that in itself was a signal that SPY was over priced at the time?
Those who bought Spy at 440 it is now 404
Those who bought Gold at $1872 it is now at 1842
Those who bought Bitcoin at $42,500 it is now at $22,350
Those who bougth 1796 NO Star QE PCGS AU 58 CAC at $300,000 the current CAC price guide is at $390,000.
The overwhelming response to the OP was to buy SPY. Maybe that in itself was a signal that SPY was over priced at the time?
The bear market in the the S&P 500 and other equities is not over by a long shot. This super bubble, as Jeremy Grantham calls it, is likely going to take two or three years to grind down to its bottom. As it is, the S&P 500 is down less than 20% from its all-time high. 20% down from a super bubble doesn't even come close to putting this stock market in mere bubble range much less slightly overpriced or fairly priced.
If your original posting were made today, I would still put most of the money into U.S. Treasury bills (currently yielding about 5% at the 6-month and 12-month maturations) with maybe 30% of it in gold (monetary catastrophe hedge) as I wait for the washout in the Everything Bubble.
I'm also fairly confident that as the easy money dries up, the rampant speculation that is necessary for Bitcoin and the cryptocurrencies to maintain their price levels will disappear resulting in much lower prices. While I don't know much about the collectibles market, I suspect that the 1796 coin will either fall in price or see zero transactions as the economy turns down.
Those who bought Spy at 440 it is now 404
Those who bought Gold at $1872 it is now at 1842
Those who bought Bitcoin at $42,500 it is now at $22,350
Those who bougth 1796 NO Star QE PCGS AU 58 CAC at $300,000 the current CAC price guide is at $390,000.
The overwhelming response to the OP was to buy SPY. Maybe that in itself was a signal that SPY was over priced at the time?
Those who bought Spy at 440 it is now 404
Those who bought Gold at $1872 it is now at 1842
Those who bought Bitcoin at $42,500 it is now at $22,350
Those who bougth 1796 NO Star QE PCGS AU 58 CAC at $300,000 the current CAC price guide is at $390,000.
The overwhelming response to the OP was to buy SPY. Maybe that in itself was a signal that SPY was over priced at the time?
Has it been 7 years already?
You need to pay more attention to the OP. It simply said you would not need the money for 7 years. There is no requirement to hold the investment for 7 years. For those that bought the coin they can take the 30% profit after one year and buy the SPY you liked a year ago for a 20% discount.
The main point of this thread a year ago was many people are big shots talking about what should be done buying coins or stocks or whatever by giving past examples. This thread put people in the realistic position that decisions are usually made with much uncertainty. Some people have made statements that I thought were ridiculous that you should never invest in rare coins. This thread shows an intelligent person knows there is no one size fits all answer. In this instance, after a year, the 1796 QE is the clear winner.
Those who bought Spy at 440 it is now 404
Those who bought Gold at $1872 it is now at 1842
Those who bought Bitcoin at $42,500 it is now at $22,350
Those who bougth 1796 NO Star QE PCGS AU 58 CAC at $300,000 the current CAC price guide is at $390,000.
The overwhelming response to the OP was to buy SPY. Maybe that in itself was a signal that SPY was over priced at the time?
Has it been 7 years already?
You need to pay more attention to the OP. It simply said you would not need the money for 7 years. There is no requirement to hold the investment for 7 years. For those that bought the coin they can take the 30% profit after one year and buy the SPY you liked a year ago for a 20% discount.
The main point of this thread a year ago was many people are big shots talking about what should be done buying coins or stocks or whatever by giving past examples. This thread put people in the realistic position that decisions are usually made with much uncertainty. Some people have made statements that I thought were ridiculous that you should never invest in rare coins. This thread shows an intelligent person knows there is no one size fits all answer. In this instance, after a year, the 1796 QE is the clear winner.
The set up is ridiculous. If you can start and stop the clock whenever you want, I can find periods of time within the last year when BTC was the clear winner.
You should never invest in coins if by "invest" you mean hold for periods of time. If the question was flipping coins, as you've now made it, the answer is different. In fact, I flipped a coin recently that makes your 1796 QE a big percentage loser. But that's a different game.
It is also not clear that the 1796 is a winner at all based on a price guide. Do you have a recent sale to point to?
@earlyAurum said:
The 1796 QE in 58 CAC is a very desirable coin especially at $300k.
It is liquid and I viewed the downside risk as minimal.
They are somewhat liquid, but the least liquid of the options. If you needed the money today, you are not going to get full market value, unlike the other options.
@earlyAurum said:
The 1796 QE in 58 CAC is a very desirable coin especially at $300k.
It is liquid and I viewed the downside risk as minimal.
They are somewhat liquid, but the least liquid of the options. If you needed the money today, you are not going to get full market value, unlike the other options.
@earlyAurum said:
The 1796 QE in 58 CAC is a very desirable coin especially at $300k.
It is liquid and I viewed the downside risk as minimal.
They are somewhat liquid, but the least liquid of the options. If you needed the money today, you are not going to get full market value, unlike the other options.
I started collecting coins when I was five. By the time I was 10, I was pretty serious about it. By the time I was 12, I was fascinated by the investment angle. By the time I was 20, I was teaching a class on investing in rare coins. 10 years later, the market tanked and I quit selling coins as an investment, but I was still a believer. By the time I was 50, I had learned that coins were a stupid place to invest for the long term. Not because coins were a bad investment, but because there were so many better places to invest. And by 60, I came to the realization that I didn't care so much about the investment angle, and I didn't need to die as rich as I possibly could. I just wanted to buy more coins. But you know what? All that thinking didn't change anything. I just kept buying more and more coins all along. Sometimes, I guess, you just know before you actually know.
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
(1) The S&P 500 represents blue-chip companies with certain qualifications. The PCGS 3000 is arbitrary and contains far more than 500 coins I believe, and a helter-skelter composition.
(2) Rolling time periods must be used to eliminate timing biases when measuring how various investments do over time. Otherwise, it's easy to cherry-pick time periods.
(3) Coins are NOT an investment because even spectacular coins have difficulty generating double-digit returns over any long period of time. It's the exception, not the rule when looking at Trophy Coins from whatever coin type: they usually max out at 5-7% returns over long periods of time (post-1973). Conversely, you can find dozens if not hundreds of stocks in the S&P 500 or Russell 3000 that generate returns matching or exceeding that threshold.
(4) The Secret Sauce to stock investing is dividend yield (3-4% compounded which adds up) plus participation in the real economy and growth which is not the case for commodities/PM's at all times. A share of Microsoft or Google/Alphabet can grow over time; a gold mine or a gold coin can NOT.
(3) Coins are NOT an investment because even spectacular coins have difficulty generating double-digit returns over any long period of time. It's the exception, not the rule when looking at Trophy Coins from whatever coin type: they usually max out at 5-7% returns over long periods of time (post-1973). Conversely, you can find dozens if not hundreds of stocks in the S&P 500 or Russell 3000 that generate returns matching or exceeding that threshold.
(4) The Secret Sauce to stock investing is dividend yield (3-4% compounded which adds up) plus participation in the real economy and growth which is not the case for commodities/PM's at all times. A share of Microsoft or Google/Alphabet can grow over time; a gold mine or a gold coin can NOT.
That is a preposterous definition of "investment". Coins may be "not a GOOD investment" or "not something I'm willing to invest in", but despite the fact that you can find "dozens if not hundreds" of investments with better returns over a long, but recent, period of time doesn't make something with a poorer track record not an investment.
Why would you say a gold mine or gold coin can't grow over time? I guess I can see by some definitions of "grow" about the coin, but not the mine. In any event, a share of K-Mart could have grown over time, but is now worthless, and I'd bet on almost any coin (including parking lot finds on Etsy) over, say, Gamestop if I was required to hold for ten years (tax benefits notwithstanding).
(3) Coins are NOT an investment because even spectacular coins have difficulty generating double-digit returns over any long period of time. It's the exception, not the rule when looking at Trophy Coins from whatever coin type: they usually max out at 5-7% returns over long periods of time (post-1973). Conversely, you can find dozens if not hundreds of stocks in the S&P 500 or Russell 3000 that generate returns matching or exceeding that threshold.
(4) The Secret Sauce to stock investing is dividend yield (3-4% compounded which adds up) plus participation in the real economy and growth which is not the case for commodities/PM's at all times. A share of Microsoft or Google/Alphabet can grow over time; a gold mine or a gold coin can NOT.
That is a preposterous definition of "investment". Coins may be "not a GOOD investment" or "not something I'm willing to invest in", but despite the fact that you can find "dozens if not hundreds" of investments with better returns over a long, but recent, period of time doesn't make something with a poorer track record not an investment.
Why would you say a gold mine or gold coin can't grow over time? I guess I can see by some definitions of "grow" about the coin, but not the mine. In any event, a share of K-Mart could have grown over time, but is now worthless, and I'd bet on almost any coin (including parking lot finds on Etsy) over, say, Gamestop if I was required to hold for ten years (tax benefits notwithstanding).
I agree with this, coins are a bad investment but you can do call them an investment.
Gold can't "grow" because it doesn't pay a dividend. You could lease it if you are a major player, I suppose. I assume the stock growth he's referring to is dividend reinvestment, although I suppose he could also be talking about splits.
Those who bought Spy at 440 it is now 404
Those who bought Gold at $1872 it is now at 1842
Those who bought Bitcoin at $42,500 it is now at $22,350
Those who bougth 1796 NO Star QE PCGS AU 58 CAC at $300,000 the current CAC price guide is at $390,000.
The overwhelming response to the OP was to buy SPY. Maybe that in itself was a signal that SPY was over priced at the time?
I do appreciate this thread and I get the general point. But I question the fourth metric. The first three are realizable investments anyone can make, with very small transaction cost, very close to the reported valuations. The fourth appears to be simply someone's opinion. Looking at Heritage Auctions, which as far as I know is the auction house with the largest accessible database of real numismatic transactions, there has not been a single 1796 No Stars Quarter Eagle PCGS AU58 CAC sold in the history of the organization. In fact, in the past year there have been only two 1796 No Stars Quarter Eagle PCGS CAC examples sold in all grades. So the price guide numbers, both for the starting point and for the ending point, are educated guesses, and the actual return to the hypothetical investor could be dramatically different from $90,000.
Those who bought Spy at 440 it is now 404
Those who bought Gold at $1872 it is now at 1842
Those who bought Bitcoin at $42,500 it is now at $22,350
Those who bougth 1796 NO Star QE PCGS AU 58 CAC at $300,000 the current CAC price guide is at $390,000.
The overwhelming response to the OP was to buy SPY. Maybe that in itself was a signal that SPY was over priced at the time?
I do appreciate this thread and I get the general point. But I question the fourth metric. The first three are realizable investments anyone can make, with very small transaction cost, very close to the reported valuations. The fourth appears to be simply someone's opinion. Looking at Heritage Auctions, which as far as I know is the auction house with the largest accessible database of real numismatic transactions, there has not been a single 1796 No Stars Quarter Eagle PCGS AU58 CAC sold in the history of the organization. In fact, in the past year there have been only two 1796 No Stars Quarter Eagle PCGS CAC examples sold in all grades. So the price guide numbers, both for the starting point and for the ending point, are educated guesses, and the actual return to the hypothetical investor could be dramatically different from $90,000.
Yes, exactly. To that end, it might have been impossible to buy the coin at $300,000 originally and/or impossible to sell the coin at $390,000 now.
And, whatever the purchase price was, if you paid full market value a year ago, what are the odds that a forced sale now would yield the same or more? You can't get "full market value" on a coin other than a widget in an hour while you can transact the others in seconds at "full market value".
I think that a 1796 QE as further described above and priced at $300,000 could perhaps be considered a very good investment..........IF that coin is no more than 5% of you Numismatic Investment portfolio, which would be 6 million.
Those who bought Spy at 440 it is now 404
Those who bought Gold at $1872 it is now at 1842
Those who bought Bitcoin at $42,500 it is now at $22,350
Those who bougth 1796 NO Star QE PCGS AU 58 CAC at $300,000 the current CAC price guide is at $390,000.
The overwhelming response to the OP was to buy SPY. Maybe that in itself was a signal that SPY was over priced at the time?
I do appreciate this thread and I get the general point. But I question the fourth metric. The first three are realizable investments anyone can make, with very small transaction cost, very close to the reported valuations. The fourth appears to be simply someone's opinion. Looking at Heritage Auctions, which as far as I know is the auction house with the largest accessible database of real numismatic transactions, there has not been a single 1796 No Stars Quarter Eagle PCGS AU58 CAC sold in the history of the organization. In fact, in the past year there have been only two 1796 No Stars Quarter Eagle PCGS CAC examples sold in all grades. So the price guide numbers, both for the starting point and for the ending point, are educated guesses, and the actual return to the hypothetical investor could be dramatically different from $90,000.
Definitely a factor to take into consideration is your point about liquidity. I remember hearing Q David Bowers speak at an ANA convention and his point was that for a collectable, coins are remarkably liquid. With the internet, auctions choices, dealers, etc---much easier to sell a coin than say art work, etc. I picked the 1796 No Stars QE CAC because it is a coin that is always in demand and is rare. Given the market, I really don't think a buyer who got it at $300,000 would have any problem making a nice profit on it now. The CAC price is an objective guide rather than my opinion.
I have never thought that rare coins are the best investment or where a lion's share of my money should go but on the other hand, people who automatically without thought say coins are bad investments are just being intellectually lazy. Rare coins require alot of work, learning, networking, etc. Buying an index fund doesn't---that reason alone is why an index fund is almost always better for most people. However, those who do build a network, educate themselves, stay disciplined, etc can make good money in rare coins.
My OP put everyone on equal ground and asked what 4 options they would take. I have no problem with anyone who took SPY at that time---there was some merit behind it. But now more than a year later, a couple people just can't say ---"Yep, the 1796 did better than SPY last year." They seem to always want to argue and really add very little.
I do appreciate your post @savitale and agree in general with your point that coins are more difficult to value. However, sometimes that difficulty works to your advantage both buying and selling.
Comments
This is an interesting period.
Pandemic, trillions of added liquidity, inflation, asset value explosions, now interest rate hikes and that's just in over a couple years.
There is no playbook for what we have experienced.
I think you just have to consume the data and make decisions based on a longer term. A shorter term successful prognostication will amount to a good guess. There may be two more years of volatility in many markets yet.
I'll chime in here.
$300,000 for one coin, as an investment, which represents 30% or so of an investable portfolio...is, well, asking for trouble. Moreso when you give yourself an arbitrary timeline of seven years. How will you sell a high value coin that is thinly traded and most definitely will require a broker or auction house to market it? That would sort of be like buying a mutual fund with a 15-20% back end load.
Secondly, there is no one-size-fits-all-investment advice. What is your age? What are your goals? what is your risk tolerance? Are you looking for dividends (income generation) or capital appreciation?
I want income / dividends. With 300K I would buy a best of class BDC, REIT or CEF (closed end fund). During the Covid lows, I picked up about 700K worth of the same. I am almost 55 and I want income generating assets. Many of these types of funds can be capital killers, so you do have to pick wisely and be careful.
Obviously, in this environment, all of us are worried about how to protect our capital and how to make the right investments. I do wish you success.
You hold cash you lose eventually on inflation in this environment.
I own, stocks, gold and coins. ....by a 2 to one average I own stocks over coins....and I'm a relatively serious collector of coins.
Today I'm selling some coins to dollar cost average into stocks ........with my cash I'm placing into 6 month t bills and one year T notes.
3 -5-7 year return on stocks still very good and I would expect stocks to long term trounce coins as an investment
I give away money. I collect money.
I don’t love money . I do love the Lord God.
@bidask you should throw 10K into an I Bond.
"Got a flaming heart, can't get my fill"
Coins don’t pay interest or dividends plus have potential slide big time in this economy aka 89 crash. If coin investor you need to churn your material. Many coins can go bad in the holder due to reaction to the atmosphere.
.
concisely and well said.
I thought it would be interesting to do an end of year review of how the investment choices are doing so far.
SPY last traded in 2022 at 382.43; down from the 440 when this thread was started. That's a loss of 13% ex dividends. From the first trading day of 2022 until the last trading day of 2022, SPY is down 20% ex dividends.
Gold is trading at $1,832.50; down 2.1% from $1,872 when this thead was started. For the year, gold is essentially flat (up 1.3%).
Bitcoin is trading at about $16,600; down from $42,500 when this thread was started. That a 61% loss. From the beginning of 2022 to the end, Bitcoin is down 65%.
From a posting by @dhikewhitney later in this thread, it seems that the price of the quarter eagle is anywhere from about flat ($300,000) to 3.2% higher ($309,600) from when this thread was started. I suspect these prices are what one can expect if the coin were sold in an auction and the transactional fees are not trivial
The winner so far seems to be the 1796 quarter eagle although I personally think gold bullion is the true winner because of its more certain price and higher liquidity. Otherwise, gold bullion is doing kind of what it's supposed to do: protect purchasing power. The bubbly S&P 500 has fallen 13% and the ridiculously bubbly Bitcoin has crashed 61%.
Over the coming year, I expect the S&P 500 will fall another double digits percentage-wise (the S&P 500 at 3,839.50 is not even close to being reasonably priced nevermind inexpensive), gold will likely be flat to slightly up, and I expect Bitcoin to fall further. As for the quarter eagle, it's a relatively illiquid asset and my guess would be that its price falls as there is less easy money sloshing around.
All of my guesses above are predicated on the Federal Reserve continuing its relatively tight (har har) monetary policy. If it actually continues to truly tighten monetary policy, I would expect all four assets to fall double digit percentages with Bitcoin and the S&P 500 the worst.
--
2023-01-02
I have fully replaced the text of bullet point #4 and made an edit to the following paragraph to reflect a correction to an error I originally made in the current price of the quarter eagle. The original text is below:
The winner so far, by a longshot, is the 1796 quarter eagle.
2023
Invest more in coinage.
Swing trade the stock market using margin.
Buy zero crypto.
War is hell.
Invested in selected defense & aerospace companies.
NOC...up 43.5% (not including dividends) for the past year.
LMT...up 40.8% (not including dividends) for the past year.
Invested in selected energy companies.
LNG...up 47.7% for the year
CVX...up 55.9% for the past year
Avoid ETFs, pick the individual performers.
I see stagflation that will last until bonds are fairly priced. That could be years and years down the road. I don't see too much of anything performing really well. Land, gold, and much of Africa should do OK. A lot of select world modern will be great but guess what? Taking a position in them will prove virtually impossible. The only place you can "invest" in modern world coins is China and this carries great political risks. Don't figure on staying in cash because this will perform nearly as poorly as bonds.
The old Chinese curse is "may you live in interesting times". We have this and it will get worse before it gets better. Whodda thought that cutting taxes and raising spending for half a century would have long term consequences? We thought we could kick the can down the road forever but we've done run outta road.
Any questions?
Disclaimer: I'm not a dealer, trader, grader, investor or professional numismatist. I'm just a hobbyist. (To protect me but mostly you! 🤣 )
And herein lies the real problem. We can't service all that debt at real interest rates so they have no choice but to let inflation run. A lot of good minds are saying they can raise rates but I believe much higher will stop the economy dead in its tracks.
Inflation wrecks healthy economies. God only knows what it will do to ours.
Of course efficiency is so poor that even nominal improvements will provide massive percentage gains so, as usual, the future is hard to predict.
do you have good fire suppression?
I’m staying invested …
80% equities 20% 2 year t notes portfolio
Over the last 3 and 5 year period including 2022 I’m up about 6.89%😄
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Ask yourself about the mentality in the previous thread... then ask where is the safest place for 50-60% of my money that avoids this mentality
Experience the World through Numismatics...it's more than you can imagine.
I like I bonds as a set aside for cash and to contribute to it each year to build an emergency fund.
https://wealthofgeeks.com/investing-in-series-i-savings-bonds/
"Got a flaming heart, can't get my fill"
.
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Why do you keep toilet paper stored under the mattress?
Follow-up question:
Can you spare me a few squares?
"To Be Esteemed Be Useful" - 1792 Birch Cent --- "I personally think we developed language because of our deep need to complain." - Lily Tomlin
How do you figure the "the price is up, perhaps by 33% or so."
The OP originally wrote:
"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)"
https://www.pcgs.com/prices/detail/draped-bust-2-5/1656/grades-25-60
shows
AU58 250,000
AU58+ 300,000
https://www.caccoin.com/pop/?issue=2.50 Gold&type=Draped+Bust&desg=&title=Quarter Eagles&subtitle=Draped Bust No Stars (1796)
CAC shows 3 approved 1796 quarter eagles no stars in AU58 for $309,600
It seems to me the price is flat (and not much depth to the market).
Best way to double your money is to fold it up and put it back in your pocket
You don't know how right you are. You better hope China doesn't become the dominant world reserve currency.........or we're all screwed!
Disclaimer: I'm not a dealer, trader, grader, investor or professional numismatist. I'm just a hobbyist. (To protect me but mostly you! 🤣 )
Thank you for the correction. I didn't know where to find the most recently transacted price and I must have misread a price look-up. With your correction, then, gold bullion and the quarter eagle have performed roughly equivalently in 2022 although I would give the edge to gold bullion because of its liquidity.
The value of stocks is based upon the future value of them. Many tech stocks have great potential upside, but pay no dividends. Coins are like tech stocks, they pay no dividends........but may be less volatile than tech stocks. Stocks that pay dividends are companies that are making money, they are profitable today. But their value is based upon their current profitability and not their future potential. Coins do not have any real current profitability. Confusing??
A solid portfolio has a substantial position in income producing assets and a variable position in future growth. The key is diversity across not only growth assets (tech stocks and coins) but high yield assets as well.
The OP is positing a somewhat stupid question that does not factor diversity into the portfolio.
OINK
Just an update on this:
Those who bought Spy at 440 it is now 404
Those who bought Gold at $1872 it is now at 1842
Those who bought Bitcoin at $42,500 it is now at $22,350
Those who bougth 1796 NO Star QE PCGS AU 58 CAC at $300,000 the current CAC price guide is at $390,000.
The overwhelming response to the OP was to buy SPY. Maybe that in itself was a signal that SPY was over priced at the time?
When the wounds are gaping, it's time to invest, apparently.
I don't know. Maybe a coal mine ?
The bear market in the the S&P 500 and other equities is not over by a long shot. This super bubble, as Jeremy Grantham calls it, is likely going to take two or three years to grind down to its bottom. As it is, the S&P 500 is down less than 20% from its all-time high. 20% down from a super bubble doesn't even come close to putting this stock market in mere bubble range much less slightly overpriced or fairly priced.
If your original posting were made today, I would still put most of the money into U.S. Treasury bills (currently yielding about 5% at the 6-month and 12-month maturations) with maybe 30% of it in gold (monetary catastrophe hedge) as I wait for the washout in the Everything Bubble.
I'm also fairly confident that as the easy money dries up, the rampant speculation that is necessary for Bitcoin and the cryptocurrencies to maintain their price levels will disappear resulting in much lower prices. While I don't know much about the collectibles market, I suspect that the 1796 coin will either fall in price or see zero transactions as the economy turns down.
Has it been 7 years already?
I am finally going to diversify into property.
You need to pay more attention to the OP. It simply said you would not need the money for 7 years. There is no requirement to hold the investment for 7 years. For those that bought the coin they can take the 30% profit after one year and buy the SPY you liked a year ago for a 20% discount.
The main point of this thread a year ago was many people are big shots talking about what should be done buying coins or stocks or whatever by giving past examples. This thread put people in the realistic position that decisions are usually made with much uncertainty. Some people have made statements that I thought were ridiculous that you should never invest in rare coins. This thread shows an intelligent person knows there is no one size fits all answer. In this instance, after a year, the 1796 QE is the clear winner.
The set up is ridiculous. If you can start and stop the clock whenever you want, I can find periods of time within the last year when BTC was the clear winner.
You should never invest in coins if by "invest" you mean hold for periods of time. If the question was flipping coins, as you've now made it, the answer is different. In fact, I flipped a coin recently that makes your 1796 QE a big percentage loser. But that's a different game.
It is also not clear that the 1796 is a winner at all based on a price guide. Do you have a recent sale to point to?
The 1796 QE in 58 CAC is a very desirable coin especially at $300k.
It is liquid and I viewed the downside risk as minimal.
They are somewhat liquid, but the least liquid of the options. If you needed the money today, you are not going to get full market value, unlike the other options.
Find me one today for 300k and I will buy it immediately.
That proves my point. Gazes has the price at $390k
I started collecting coins when I was five. By the time I was 10, I was pretty serious about it. By the time I was 12, I was fascinated by the investment angle. By the time I was 20, I was teaching a class on investing in rare coins. 10 years later, the market tanked and I quit selling coins as an investment, but I was still a believer. By the time I was 50, I had learned that coins were a stupid place to invest for the long term. Not because coins were a bad investment, but because there were so many better places to invest. And by 60, I came to the realization that I didn't care so much about the investment angle, and I didn't need to die as rich as I possibly could. I just wanted to buy more coins. But you know what? All that thinking didn't change anything. I just kept buying more and more coins all along. Sometimes, I guess, you just know before you actually know.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
With regards to investing......
(1) The S&P 500 represents blue-chip companies with certain qualifications. The PCGS 3000 is arbitrary and contains far more than 500 coins I believe, and a helter-skelter composition.
(2) Rolling time periods must be used to eliminate timing biases when measuring how various investments do over time. Otherwise, it's easy to cherry-pick time periods.
(3) Coins are NOT an investment because even spectacular coins have difficulty generating double-digit returns over any long period of time. It's the exception, not the rule when looking at Trophy Coins from whatever coin type: they usually max out at 5-7% returns over long periods of time (post-1973). Conversely, you can find dozens if not hundreds of stocks in the S&P 500 or Russell 3000 that generate returns matching or exceeding that threshold.
(4) The Secret Sauce to stock investing is dividend yield (3-4% compounded which adds up) plus participation in the real economy and growth which is not the case for commodities/PM's at all times. A share of Microsoft or Google/Alphabet can grow over time; a gold mine or a gold coin can NOT.
The S& P 500 contains companies with gigantic P/E ratio multiples way over historical norms, which says its overvalued.
I'm too tired to dissect the others but you get the point, inflation and the pandemic have thrown us a curve ball....
That is a preposterous definition of "investment". Coins may be "not a GOOD investment" or "not something I'm willing to invest in", but despite the fact that you can find "dozens if not hundreds" of investments with better returns over a long, but recent, period of time doesn't make something with a poorer track record not an investment.
Why would you say a gold mine or gold coin can't grow over time? I guess I can see by some definitions of "grow" about the coin, but not the mine. In any event, a share of K-Mart could have grown over time, but is now worthless, and I'd bet on almost any coin (including parking lot finds on Etsy) over, say, Gamestop if I was required to hold for ten years (tax benefits notwithstanding).
I agree with this, coins are a bad investment but you can do call them an investment.
Gold can't "grow" because it doesn't pay a dividend. You could lease it if you are a major player, I suppose. I assume the stock growth he's referring to is dividend reinvestment, although I suppose he could also be talking about splits.
I do appreciate this thread and I get the general point. But I question the fourth metric. The first three are realizable investments anyone can make, with very small transaction cost, very close to the reported valuations. The fourth appears to be simply someone's opinion. Looking at Heritage Auctions, which as far as I know is the auction house with the largest accessible database of real numismatic transactions, there has not been a single 1796 No Stars Quarter Eagle PCGS AU58 CAC sold in the history of the organization. In fact, in the past year there have been only two 1796 No Stars Quarter Eagle PCGS CAC examples sold in all grades. So the price guide numbers, both for the starting point and for the ending point, are educated guesses, and the actual return to the hypothetical investor could be dramatically different from $90,000.
LIBERTY SEATED DIMES WITH MAJOR VARIETIES CIRCULATION STRIKES (1837-1891) digital album
Coins can be a great investment.
The best investment in numismatics is spending time in understanding the coins themselves and the market in which they trade.
Past performance is no guarantee of future performance. This is probably applicable to coins, individual stocks, real estate, and sports betting.
Yes, exactly. To that end, it might have been impossible to buy the coin at $300,000 originally and/or impossible to sell the coin at $390,000 now.
And, whatever the purchase price was, if you paid full market value a year ago, what are the odds that a forced sale now would yield the same or more? You can't get "full market value" on a coin other than a widget in an hour while you can transact the others in seconds at "full market value".
I think that a 1796 QE as further described above and priced at $300,000 could perhaps be considered a very good investment..........IF that coin is no more than 5% of you Numismatic Investment portfolio, which would be 6 million.
OINK
Definitely a factor to take into consideration is your point about liquidity. I remember hearing Q David Bowers speak at an ANA convention and his point was that for a collectable, coins are remarkably liquid. With the internet, auctions choices, dealers, etc---much easier to sell a coin than say art work, etc. I picked the 1796 No Stars QE CAC because it is a coin that is always in demand and is rare. Given the market, I really don't think a buyer who got it at $300,000 would have any problem making a nice profit on it now. The CAC price is an objective guide rather than my opinion.
I have never thought that rare coins are the best investment or where a lion's share of my money should go but on the other hand, people who automatically without thought say coins are bad investments are just being intellectually lazy. Rare coins require alot of work, learning, networking, etc. Buying an index fund doesn't---that reason alone is why an index fund is almost always better for most people. However, those who do build a network, educate themselves, stay disciplined, etc can make good money in rare coins.
My OP put everyone on equal ground and asked what 4 options they would take. I have no problem with anyone who took SPY at that time---there was some merit behind it. But now more than a year later, a couple people just can't say ---"Yep, the 1796 did better than SPY last year." They seem to always want to argue and really add very little.
I do appreciate your post @savitale and agree in general with your point that coins are more difficult to value. However, sometimes that difficulty works to your advantage both buying and selling.