Buy the Best You Can Afford
DisneyFan
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Jeff Garrett recently wrote a column along the lines of “Buy the best you can afford.” and went on to say history has shown that over time, the highest-quality coins have performed best in terms of price appreciation. This has been especially true in recent years with the insatiable demand for coins as part of set-registry programs.
Then he mentioned Q. David Bowers would espouse the wisdom of buying the “spread coins” for each series. Those are the ones that skyrocket from one grade to the next. Why pay $25,000 for a MS 65 1925-S Peace Dollar when a MS 64 is only $500, and you can barely tell the difference?
Are these two viewpoints incompatible?
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I think they are compatible. For many people, buying coins above the Q. David Bowers spread is risky, and therefore beyond the level they can afford. In the example given, the upside may be lower for the MS64 coin, but so is the downside risk. Given my personal risk profile, I might reasonably consider the MS64 coin the best I can afford, even if I could technically shell out for the higher grade.
It depends on your goals.
I generally wouldn’t recommend buying the best you can afford. I might recommend buying the best you understand.
I think they are compatible. For one thing, if I’m in the market for a $500 coin, the advice is that I should buy the spread coin. If I’m in the market for a $25k coin, that particular one might not be the best bang for my buck. Maybe look for one that jumps from $25k at 65 to $100k at 66 (or something along those lines).
If the only coin you need is the 1925-S Peace, then you’ve just got to figure out what works for you based on those and other factors.
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Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Agree. I like to buy at the highest grade before there's a big jump in price at the next higher grade. There was a thread here about an MS65 coin that sold for $20K where it was valued $4K in MS64.. I would look for a nice MS64 example which I consider to be the best value.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Consider buying quality for the grade- exceptional coins for the grade speak volumes over lesser quality in a higher grade. This is especially true for those series where the surviving population includes lesser quality examples. Think of Seated Dollars for a moment or even Barbers (Barbers included here mainly because there seems to be a following on the forum for nice circulated examples and it easily illustrates my point) that really survive in a quality grade dripping with originality as to those that are just marginal? These are the coins worth pursuing... not a coin that is marginal.
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I’ve never agreed with “Buy the best you can afford”. Practically speaking, how does that even apply to assembling a collection? If, for example, you have a collecting budget of X per year, you can “afford” to buy one coin for X or two for 1/2X. But what if you’d rather buy more than one or two coins per year? If you want to, you should.
How about “Buy what you’re happy with (but hopefully on an informed basis)” ? 😉
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
That makes sense. But I would also add that there is a second limit: the price you can tolerate. I can afford $10k coins. I would not be comfortable, however, with that much money tied up in a single coin.
It is important to understand the coins that interest you.... It is important to understand one's financial limitations. One should also decide if they are going to be a 'dealer', 'collector', 'market dabbler' or 'hopeful investor'. Finally, one should buy the coins that appeal to their aesthetic senses. It is ok to be a collector, it is ok not to worry about value appreciation of one's possessions. Most cars just lose value, but most people have one. I enjoy collecting coins and never really expect to see any real return on my collection. Perhaps my heirs will - for them it will be found treasure no matter what they realize in cash received. Now, if one is a dealer or investor, your perspective will be very different. Cheers, RickO
Never play for money a game you don't understand. Widespread misunderstanding about the games people play is why I pick up discarded lottery scratch tickets when I see them on the ground.
Great spirits have always encountered violent opposition from mediocre minds.-Albert Einstein
Op question: I go with Bowers view.
In addition I will not buy something so big ticket uncomfortable with from risk tying up funds pov.
A nice good Barber Half fills the hole IMO. One should have a sane budget.
I try to buy the best I can find. I have noticed that really attractive coins with more than one thing going for them are usually available because they are priced just out of the range of comfort zone for frugal buyers or north of what’s a printed spread sheet or auction archives history. These price points kinda protects them in the open waiting for me to notice them.
I really don’t care what the up front cost of my collection is or the number of pieces, so long as what I’m holding is high end for the grade. I have found that crying once is actually the cheapest way to buy coins (and most things in life) over selling and upgrading or holding dupes. That and I don’t like to buy stuff that my family couldn’t simply consign to an auction and be done with it.
Collecting became more enjoyable when I removed the barrier of a cap to spend. Many new areas came into play when there was not a set limit to spend.
Successful BST with BustDMs , Pnies20, lkeigwin, pursuitofliberty, Bullsitter, felinfoel, SPalladino (CBH's - 37 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
Buy whatever is going to make you most happy. If you’re buying “expensive” coins and losing sleep at night turn it down a notch.
Buy unique coins because they are unique.
But what if there are two of them?
Sean Reynolds
"Keep in mind that most of what passes as numismatic information is no more than tested opinion at best, and marketing blather at worst. However, I try to choose my words carefully, since I know that you guys are always watching." - Joe O'Connor
Let me generalize that a bit.
Buy extremely rare coins because there is no price guide.
That can work against you when it comes time to sell.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
I did get the better one
I think the two quotes are very similar if "within reason" is applied to Garrett's, and I think that is implied. There are two scenarios where I think this can be applied:
First, you have endless funds. Go ahead and buy the best that's out there. Conditional rarities do have more going for them in terms of growth/investment potential. Not a guarantee they'll all be winners, but there's a track record of good upside.
Second, you have a set budget. Technically you could afford grade X (for sake of example, let's call X MS66), but it's many multiples of the price of a 65, which is more comfortably in your budget. A 64 or 63 would be a relatively small discount to a 65. The 65 can get you a lot more quality for a small increase over the lower grades, and it's more likely to appreciate than the lower grades. A nice 65 may not quite be a 66, but it can be close and offer a great value, whereas buying a 64 or 63 would mean sacrificing a significant amount of quality when it's not necessary. I think this is the scenario where most people find themselves. Yes, I could sell my house or clear some accounts and get something really expensive, but that's not practical. Unless there's a really compelling reason to do otherwise, I look for a really nice example of a coin in the grade before the price jump. That offers me the best coin, the best upside, and in terms of not pushing the limits of my funds, the least risk in case the market turns or I find something else I'd like to acquire from the same overall pool of funds.
Then buy the cheaper one.
The "cheaper" less expensive one was the better one.
This, with an explanation. "Understanding" a coin means not just understanding both the grade and the price. With the caveat that "understanding the grade" requires more than seeing the grade assigned by a third party, and "understanding the price" often requires far more than pop and auction data.
On the other hand, the high end 64 may be nothing special, the low end 65 not much better than that and an awful value, and the high end 65 a true treasure and completely worth the money.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I agree with the "threshold strategy." But the coin that is just under the grade where the particular issue gets really expensive. Of course, if you can afford the better piece, within reason, go for it.
The trouble with the "top POP" and "finest know" material is that you are up against the registry crowd. Sometimes they are very rich and can bid things to the moon. Sometimes they are not that rich, but lose their judgement.
Remember that to get your money out of such items, you have to have access to the venues where you will get the best price. You also have pick a time when the big players are bidding and will compete against each other.
One more factor is the price level relative to collector interests and investor interests. There have been periods when investors have driven out the collectors and are mostly bidding against each other. Remember that the collector is ultimate consumer. When he or she is bid out of the market by high prices, the investor market can find itself in correction territory. When that happens, the loses can be huge. I have been through a couple of these cycles during my 60+ years as a collector.
I have always viewed the buy the best you can afford thing as seller promotion (big gun dealers wanting move their stuff) and one way to overpay (low end coin, etc.). In reality it all adds up. Buy what comfortably and sanely fits your budget / risk tolerance.
Additionally big ticket material can be volatile, buyers very fussy too, so a big downward hit in the sheet a terrible situation for owner. If need sell in emergency one could be looking at just getting bluesheet or lower. Your RCI strategy should consider that. Dan has an across the board strategy. Budget number of 60 slabs then divides his total budget plan by 60 to get an average of course some higher some lower.
The reason for the big jump in the 25-S Peace is because the strikes that year were terrible. 1925 was not a good year for quality at the San Francisco mint for any denomination - cents, nickels, dimes, all were generally struck very poorly. It's somewhat like the 45 Mercs in FB.
You can still look for the best coin you can afford - be picky and look for a 25-S Peace with the nicest strike you can find for the money.
"You can't get just one gun." "You can't get just one tattoo." "You can't get just one 1796 Draped Bust Large Cent."
Buy the one that is uniquer.
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THIS!!!
It's hard to have one foot in each canoe.
Some of the "friction" on the forums comes from people not realizing that some people belong to a different category than they do. Personally, I think the guy having the most fun is winning. Sometimes is an old guy hanging out at the club mashing circulation finds in to albums. Sometimes that guy is also a multi-millionaire. Sometimes collectors and dealers with really awesome coins are leveraged to the hilt and not sleeping all that well at night.
Agreed.
I enjoy observing how different dealers make a living. There are quite a few who deal in what some would call "dreck" but they know the market, and buy and sell with the right spread and enough volume to do quite well. All of those coins form the base of the large collecting pyramid. Others specialize in a small niche of high-end stuff. They too really need to know what they're doing. Both can loose their shorts and both can do well. It's not really any different for collectors.
I’ve done BOTH of these things. It pretty much sums up my purchasing strategy.
Sometimes, it’s better to be LUCKY than good. 🍀 🍺👍
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https://www.ngccoin.com/registry/competitive-sets/16292/
Thank you for all of your comments. I appreciate them.
What really caught my eye was Garrett's statement, "...the highest-quality coins have performed best in terms of price appreciation. This has been especially true in recent years with the insatiable demand for coins as part of set-registry programs."
In another discussion there was mention of a Walking Liberty half dollar collection, with the early Walkers basically in MS64, coming up for auction and one viewpoint was along the lines of "don't expect to see strong interest" in that grade range.
So far (in my renewed interest in coins after many years away), I've made peace with the idea that I need not worry about resale value. So far I'm buying inexpensive coins for albums. If I decide to really work on a more expensive 'box of 20', I hope to find good bang for the buck coins (in whatever grade) that I love to look at.
I buy what I like and what I know sums it, I like
A 64 or 63 would be a relatively small discount to a 65. The 65 can get you a lot more quality for a small increase over the lower grades,
I agree with your general reasoning. However , in many cases the price difference between a 64 and a 65 is significant whereas the difference in quality may be minor.
I may illustrate using other than the numerical grade. A FB Mercury dime vs. a non-FB Mercury. The qualitative difference is often minute in the extreme but the price difference can be huge. IMO the qualitative difference isn't worth the price difference regardless of the depth of one's pocket book.
That is only if you board the train at the right time. If you get on when it's at the top the hill, the ride down can be excruciating. Your only alternatives are to take your losses and or be young enough to hold on until the train goes back up. For many modern coins, there are no more raises. They are just dead in the water for the foreseeable future.
British Condor tokens were dead for years. Now they are hot. That works out great for those who bought them back in the 19th century and are now 250 years old.
But I understand that you cannot actually own property such as coins, while you are legally (and actually) dead. Not sure about that Vampire British Condor token collector...
On a related note, I've heard that the sun never sets on the British Vampire.
This has my vote. I buy what I like and can afford. That's all there is to it. If I had to worry about all the stuff that people tell me I should worry about, I'd find another hobby. I can't think of anything more soulcrushingly depressing than worrying about what you'll be able to sell a coin for somewhere down the line before you've even bought it.
But then, that's just me.
The exact grade will depend on the series. My want list is filled with coins where I've chosen the grade appropriate for that series just before the price spikes. I only used the numbers I did because it was easier than writing out grade X, then one point above grade X, and then one point or two points below grade X. But just as coins in two grades can be quite similar or night and say, so too with FB, FH, or the like. A just-miss may be a great coin with little premium. A coin that isn't close may have a significantly weak strike that isn't appealing.
I hate any focus on profit or investment. It just sucks the fun right out of the hobby.
Many of the posters here appear to disagree on where the focus belongs. And it's obvious from their posts that they're not happy even while they continue to participate in the "hobby".
What is that saying about doing the same thing over and over and continuing to expect different results?
Idk. A lot of them have fun. But it does sometimes seem that the fun is inversely proportional to the price paid.
"Spend as much money with me as your marriage will tolerate."
Sure. Just not the ones who are worried about what they can sell their coins for before they're even ready to sell them.
Can't argue with that.
edited to add... The people on this forum who seem to be having the most fun are the guys hunting bank rolls for varieties and stuff. And paying face value for their finds.
Here is my take. If I can get a 58 that is stunning for a substantially lower price than a 62, then no way I am going for the 62 unless the 62 bowls me over. The difference in wear is trivial, so look for the 58 with amazing surfaces and that is where quality and value are. Same goes for 45 versus, say a 53. I would rather have the uber pq 45 that will cost me less any day. Can I afford the 62 or the 53 in what I collect? Probably, but I collect, I am looking for the nicest coin I can find and the lower the grade, well, the better the value, IMO. So that mantra of buy the best you can afford has never sat well with me........
The guy having the most fun on this forum is obviously @JoeyCoins
One piece of advice for those who want to buy expensive coins----sell one. When you see that there are plenty of deep pockets out there and your coin is expensive for a reason you will sleep better with your other coins. This assumes you did some due diligence on the value and the condition before buying the coin.
I admit that top pop or near top PCGS coins have done very well, but I think the market is far more thinly capitalized than you think.
Depends on your price point. Million dollar coins---yes, there are small group of buyers. Mid five figure coins---there are many more buyers than you think.
I think it always makes sense to pay up for quality.
Paying ridiculous amounts for the "top pop" that could explode in population in the coming years (ie. 1995-W ASE in PR70)?
Not so much.
Dead Cat Waltz Exonumia
"Coin collecting for outcasts..."
Can you share with us your numismatic background?