Becoming a coin speculator.

topstuf

About 4 years ago, when I had already decided to close the shop and was looking for something to do in retirement, I took a look around the shop and saw what I....didn't....have.

AND....what NEVER came in. AND......flew away in a day or so if I....did....get one.

So I began buying and ratholing:

ALL cc dollars.
ALL bust dollars
ALL cc gold
AND
1893s dollar
Chain cent
Hi relief
1877 Indian
1914d Lincoln
ALL seated dollars
ALL draped bust coins
ALL territorial gold

And it has become my new "collection."

There are a few dealers who ....control.... a great deal of the market. When I first called the main one, I asked what he had in bust dollars. After a chat, he decided he was gonna "run" the series. He did.

But....IF....you are buying coins for future sale, all you have to do is buy the coins you never see.

If you are a speculator or "investor" you will not care if there are 114 coins in a series. There are ONLY the key dates.

I can tell you from experience that dealers can tell MOST people what is NOT in their album the minute they walk in the door.

THOSE are the coins to buy.

I have nothing against collecting coins by date or series and started that way myself. But once you are on the other side of the coin counter, you know EXACTLY what will sit and what will ...fly.... in ANY market.

There is nothing in numismatics prettier than a complete matched set of coins.

SPEEDracer

Very well said.

cladking

Indeed!

mgoodm3

Well said.



<< <i>So I began buying and ratholing >>



By the way what is "ratholing" and how can I do it too?

kranky

<< <i>all you have to do is buy the coins you never see. >>


So you advocate buying sight-unseen? (just kidding)

Can't disagree with a thing you've said. And the most interesting thing is that you never said a word about grades. You are talking absolute rarity, not grade rarity.

On a side note, do people know when a group of dealers is running something up? Is that common knowledge, is it known only to a select few, or doesn't anyone know who isn't directly involved?

mgoodm3

Maybe you meant rat-holing?

au58

The point is well made, but the record will show that the coins listed here have demonstrated steady gains over long periods while holding their value even in down markets. This is smart and informed buying, rather than speculation.

291fifth

Wouldn't you rather have a garage full of circ. wheat cents?

coinlieutenant

Good post...

jeffnpcb

Kind of like the Russ Kennedy hoard! Notice he is also putting together a rather nice 2 cent shield collection!

ohbaby

Interesting perspective. I don't disagree but I suspect why you didn't have these coins in the shop and most dealers don't have them either is that these coins are very liquid. They can easily be sold without waiting months for a buyer.

The following can easily be had at any major auction and even Heritage Bullets or Internet only auctions:

1893s dollar
Hi relief
1877 Indian
1914d Lincoln

Another theory as people break up sets they are more likely to hang on to the "rare" coins. Overall, these coins are less likely to be halved in price in a down market unlike the modern pop tops fetching moon.

cladking

<< <i>Interesting perspective. I don't disagree but I suspect why you didn't have these coins in the shop and most dealers don't have them either is that these coins are very liquid. They can easily be sold without waiting months for a buyer.

The following can easily be had at any major auction and even Heritage Bullets or Internet only auctions:

1893s dollar
Hi relief
1877 Indian
1914d Lincoln

Another theory as people break up sets they are more likely to hang on to the "rare" coins. Overall, these coins are less likely to be halved in price in a down market unlike the modern pop tops fetching moon. >>



You might take into account that there are collections of all the classic rare coins. Sure the
rarities aren't in all these simply because they are rare. They will never be less rare than
they are today because they are no longer being made.

It is equally true though that there are no more of the old moderns being made today and
that the only thing rarer than some of the old classics is any old collection of moderns.

Speculation in coins is not about classics or moderns. It is about predicting what will be in
shorter supply than the demand in the future. Whatever you think of moderns or high grade,
the fact remains that all coins make lousy investments and moderns have certainly made for
some interesting speculation to date.

topstuf

ohbaby....The reason they were not in the shop is because MOST collectors don't have them. You can EASILY find (check that...."diligently" find) Stellas and almost ALL .....rare.....coins at shows because show dealers cherry pick LOCAL dealers and the number of coins you see at a major show are not at all indicative of the distribution of those coins within the numismatic community.

They do not come in local shops except on VERY VERY rare occasions. I would buy 100 sets of Morgans between sets that included the 89cc and the 93s.

I kept track of just BULK silver dollar purchases since we opened in 1979. When we opened, the AVERAGE quantity of silver dollars was 200 coins per purchase.

At the end .... 2001-2003....we could go days without seeing ANY. The average LOT was running ...oh..about 8-25.

So, while ALL coins are staying put more or less, the KEYS and RARITIES are just not out there and the capital to acquire them is no more than for a MODEST stock account.

And then there are "problem" coins. Those circulate like the AIDS virus. Look on eBay for ANACS, NGC, or PCGS 1877 cents. Not many. Lots of "Hey L@@K 1877 RARE" to be found, but when you DO ...l@@k.. you find the porosity, dings, cuts, bullet holes, etc.

A show is no indication of what is at the shops.

ARCO

Very well stated. It is speculating to some degree, but it is also smart collecting IMHO. A person who is not a knowledgeable collector usually can not be a savvy speculator. It takes grading skills, and knowledge of the hobby for the speculator/collector to even buy the right coins at the right price in the first place, otherwise they will take a bath down the road if done in ignorance.

I agree all the way.

Tyler

topstuf

cladking....Not all coins are lousy specs.

I can recall having UPS bust their backs hauling 1999 proof quarter boxes to my shop when they were $17 per in the boxes of (what was it?) 10? 20?

I bet I sold about 25 sets to collectors and then popped the rest at near the peak to a major wholesaler.

But ..... I would agree that coins are not really investments. INTEREST is the only "investment." After I added the pawn license, I found that out in a hurry.

And today, my retirement is almost entirely in low value mortgages and bonds and REITS.

NOTHING beats ...interest.... over time.

My foible is holding gold as currency insurance. Or paranoia relief. Or stubbornness.

Gold at the following interest rates should be: (counting from $130 in Oct 1975)
2% $232
3% $306
4% $405
5% $535
6% $704
8% $1211
10% $2062

But.....I like to have some assets that are ....... PRIVATE.