Toned Morgans as investments?
RYK
Posts: 35,797 ✭✭✭✭✭
There is a forum member who has an ebay store with his name and "Investments" as the name of the store. I do not want to embarrass him, so I will leave his name off this thread.
I am concerned about this and have two questions:
1. Is buying a toned 1881-S MS-63 Morgan for $1250 really an investment (no matter what the toning looks like)?
2. Can one run afoul of the law by selling toned Morgans at high prices with the word "Investment" in the name of the ebay store?
I do not know the answer to these questions, but my opinion on question #1 is "No" and my gut feeling on #2 is "Yes", but I have an open mind and am interested in reading the opinions of others.
Edited to add: It is somewhat ironic, but I gave the seller a free pass by not identifying him here. If it were a random ebay bozo, I would not have shown this courtesy.
I am concerned about this and have two questions:
1. Is buying a toned 1881-S MS-63 Morgan for $1250 really an investment (no matter what the toning looks like)?
2. Can one run afoul of the law by selling toned Morgans at high prices with the word "Investment" in the name of the ebay store?
I do not know the answer to these questions, but my opinion on question #1 is "No" and my gut feeling on #2 is "Yes", but I have an open mind and am interested in reading the opinions of others.
Edited to add: It is somewhat ironic, but I gave the seller a free pass by not identifying him here. If it were a random ebay bozo, I would not have shown this courtesy.
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Comments
Cameron Kiefer
And I do think its problematic legally to describe coins as "investments." While I am not familiar with SEC rules, ect., I wonder why a simple name like _____________ Rare Coins wouldn't be a better choice. Anytime you describe something as an investment, it cannotes the possibility that what you are purchasing is in someway a vehicle to realize profit, whether short term or long.
I personally don't see the investment potential for coins. Granted over the long haul, it is more than likely if you do your homework and purchase the right coins for the right amount, you will be rewarded with profit, if you sell, but that shouldn't be a primary concern.
Michael
I clicked on one of the auctions and couldn't find anywhere where the seller claimed the item as an "investment".
Yes, The name of the store does include the word "investment", but i think it can be read in the understanding that these items were bought as the sellers "investment", not implying a buyer would monitarily benefit from a purchase.
Bottom line is that they may be even a more volatile and risky investment than traditional coins would be.
Stuart
Collect 18th & 19th Century US Type Coins, Silver Dollars, $20 Gold Double Eagles and World Crowns & Talers with High Eye Appeal
"Luck is what happens when Preparation meets Opportunity"
is this guy related to the snake?
Stuart
Collect 18th & 19th Century US Type Coins, Silver Dollars, $20 Gold Double Eagles and World Crowns & Talers with High Eye Appeal
"Luck is what happens when Preparation meets Opportunity"
Absolutely not.
2. Can one run afoul of the law by selling toned Morgans at high prices with the word "Investment" in the name of the ebay store?
Possibly. Depends on who might take issue with this. My opinion is that the use of the word "investment" should be avoided by a coin seller.
Great spirits have always encountered violent opposition from mediocre minds.-Albert Einstein
A lot of dealers and crooks got into big trouble calling certain coins "investment quality" in the 1970s and '80s. Just don't do it.
for the love of god....
Considering the large buy/sell spreads, the possible non-liquidity issues, and many other factors, I would NEVER consider coins as a traditional investment. They should be purchased with discretionary funds only, and as a hobby / collectable and nothing more IMO.
Great spirits have always encountered violent opposition from mediocre minds.-Albert Einstein
Of course, not.
The issue is whether or not to put "Investment" in the title of the coin selling company...
and to sell toned coins as investments.
And the only reason I bring up the word "Investment" in the name is that the seller may be subject to laws for selling securities by doing so.
The fact is, if you want to play the investment game with toned Morgan dollars, a good strategy is to put a lower bound on grade at MS64 -- and then only for a superb specimen with outstanding color that you can acquire in the range of $300-500. But, unless you're really sophisticated, you should stay with MS65 and better in this arena. In fact, the best returns are likely in the MS66 grade for the common dates. And, reverse toned dollars are for collectors only.
Now, if you're really serious about making this area of numismatics an investment, you probably should nd focus prominently on the scarcer issues. The really tough dates are not such a good idea, in my view, because those who buy them tend to want original white coins for the most part. Therefore, I would say the scarcer pieces worth focusing on are, for the most part, the p-mints excluding 1885, 1886, and 1887, the cc's, anything prior to 1880 except 1879-s, and any o-mints excluding 1883-o, 1884-o, and 1885-o. (The 1898-o and 1904-o are scarcer with nice tone.) Anything in the 1890's is extremely difficult to acquire with attractive colors, including the common dates. They should be seriously considered when available.
After you have acquired some degree of proficiency in identifying NT and market acceptable toned PCGS and NGC dollars, you can expand your horizon to ANACS, ICG, and PCI. There are some great coins to be found occasionally at terrific prices in these off brand holders. You just have to be knowledgeable enough to know which ones are NT and will cross at the same grade, or no less than one grade lower. There are many overgraded toned coins in Anacs holders, and overgraded AT coins in ICG and PCI holders. You need to be able to separate the good from the bad yourself to play the off-brand game, but it can be especially rewarding. On average, I've found about one or two such coins a year; but, the reward is that these coins in the right holders are worth multiples of what I paid for them.
<< <i>I would say that anyone spending $1000 for a single coin is making an investment. >>
Not everyone. I've paid as much as $3,100 for a token simply because I wanted I to own it. Until a few years ago, tokens were the backwater of numismatics. When I paid from 1 to 3 thousand dollars for tokens I was definitely "in the swamp." But the pieces were rare, I wanted them.
BTW At the moment I'm starting to look like I was pretty smart,
I used the name Investments to describe that I had invested in these coins and invested in my hobby. Not a "pitch" to imply a guarantee of making money to another party. Perhaps I should change the name? I just may do that when I get a chance.
As far as price point goes, exceptional toned morgans bring far more than book value. How much above book really depends on what the highest payer will pay in the free market. This is true of all coin series, where great examples can bring great prices. If you don't like my coins or prices that's fine with me. I may not like yours either! :-)
As far as being an "Anaconda wannabe" that is not my intent, but I'll take it as a compliment. I admire his coins a great deal, but really I'm just happy being me.
My camera kicks butt and I'm happy it only cost $150 (plus a free memory card to boot). Can you do better for less without phtotography experience? I'm estatic with how it captures toning colors.
And I did not intend to single you out because others might do the same.
I used the name Investments to describe that I had invested in these coins and invested in my hobby.
I am most concerned with the notion of said coin being an investment. You may play coy with us using "Investments" in the name of your coin company and selling coins. The Feds and the State AG office, if they choose to investigate you, will not buy it. Other more established firms have been investigated and shut down for selling coins as investments. Right now, you are walking around with a target on your back and do not even know it.
any advanced numismatic skills. Having said that if you want to sell expensive toned Morgan's and people
are willing to buy them good luck. We live in America and we have a capitalistic society. Nobody is putting a gun to anyones head and forcing them to buy from you. Me personally, I think you have to be nuts to spend this type of money for a "toned" coin. The market is very poorly defined and a NT today may be an AT tomorrow. I perceive this as being a very volatile market and who knows for sure where peoples tastes will be tomorrow. As far as your store you except paypal and have a fair return policy so I give you credit for that. However your pictures really do suck. If I were selling coins for thousands of dollars I would buy a better camera or learn how to take better pictures. I don't think your photos are helping you attract new business.
Bruce
That was my point exactly.......... no established pricing criteria whatsoever, most are just worth whatever the seller prices the coin at, or whatever a buyer is willing to offer, a VERY SPECULATIVE market at best, and one that you should have a high degree of experience and knowledge before entering.
I'll give you a perfect example on trading in toned coins:
I had recently sold a nicely toned Morgan (an expensive one) to a dealer who posts here on the forum. I felt I priced it fairly and also made a small profit for myself. I then saw that coin advertised on his website 2 weeks later with a whopping markup (over 125%) and I believe it subsequently sold. So did I buy the coin too cheaply and sell it too cheaply, did the dealer WAY overprice the coin, will it's new owner ever be able to recoup his/her investment.......who knows...............that's the nature of buying and selling toned coins.
<< <i>I then saw that coin advertised on his website 2 weeks later with a whopping markup (over 125%) and I believe it subsequently sold. >>
I would have a hard time asking 125% over what I paid for ANY coin. Amazing markup.
play a role in a well balanced portfolio of investments. They are, however, more speculative
in their nature, due to the high initial mark up in the purchase price. Such coin investments
would have to be held for an appreciable period of time to register a gain. Toned coins are a
somewhat different matter. Because of the subjective and changing opinion on AT vrs NT
toning ,as well as the fairly unchartered waters of what constitutes a fair price, these are the most
speculative aspect of coin collecting. Low grade fairly common coins, regardless of the toning on them, would not seem
to fall within the realm of investments by most stretches of the imagination. They may be pretty, they may be fun,
but they do not seem to be investments of even speculative proportions.
Camelot
Byergo,
You changed the name. Why? Message board pressure? Felt that you were mis-leading? Re-considered the legal implication? Something else?
Just wondering... How do you feel about the toned Morgan market? Do you feel it is a true 2-way market? I actually am very ignorant about this niche, and have heard a wide range of opinions on this. I would greatly appreciate your sage comments.
Regards,
EVP
How does one get a hater to stop hating?
I can be reached at evillageprowler@gmail.com
<< <i>What happens if the toner market tanks and everyone decides they want white coins?? >>
it measn I would be buying a bunch of toners for my personal collection. the high end toner market will not "tank".
Next topic...
it's a name, for kripe sake, it's a name!!!! get off the lawyer kick, the Securities kick and any others. it's a name the guy chose.
al h.
That said, even if I found the most amazing toned 1881-S Morgan $1 MS-63, I personally would not buy it for $1250 as an investment, though I might buy just to have it if I really like it. BTW, that's my approach to collecting in general: I buy what I like, not what I think is going to make money for me in the future.
My sentiments exactly RYK, good post!
Also, I think collectors who buy coins they like usually do better in the long run than investors anyway because collectors normally buy nice coins that another collector will likely also want to buy in the future.
Bill: I truly hope that you do not stop collecting coins (if you still derive enjoyment from numismatics) in light of one bad experience. That is certainly your choice, however I would encourage you to learn from this difficult and painful experience, and use this new found knowledge to your collecting advantage in the future.
I agree that now is a good time to sell marginal quality coins for the grade, and duplicate coins.
I wish you the best in whatever you decide to do!
Stuart
Collect 18th & 19th Century US Type Coins, Silver Dollars, $20 Gold Double Eagles and World Crowns & Talers with High Eye Appeal
"Luck is what happens when Preparation meets Opportunity"