why do coin dealers say buy the best you can afford?

t3rr0r1sm

"why do coin dealers say buy the best you can afford?"

Is this not a conflict of interest?
Of course a dealer in rare coins wants you to spend as much as possible.

Common coins, to them, just waste space.
They want you to buy one or three super expensive coins instead of collecting many cheaper ones.

i was reading the articles at pinnacle and the majority of them really turned me off.
this person just happened to write them in a way, that was so blatantly open, it
helped summarize how i feel about them.

It is like they show you a common buffalo nickel to get you started.
then they mention they have better stuff.
soon they have you going after $1000+ coins.

bah. There are 100+ coins in the series I like, and I highly doubt I will
use the "pinnacle" strategy. Would I rather buy a $400 1840 coin
in AU, or a coin from 1839 in AU shape for $2000? I think my enjoyment
will be the same. Filling in a blank spot in my set.

I am really interested in hearing from people who DO NOT SELL COINS.
They bought them to keep, not to "flip" 1 year later.

Do the collectors totally disagree with my opinion?

Would you rather have 2-5 $1,500 dollar coins
or
30 $200-500 coins
in the same series.

thanks for advice/opinions.

CoinResource

Depends on your goals. The advice is to help your investment pay off over the long run. Sounds like building sets is your goal, so you are on the right track.

RYK

I am consistent in disagreeing with you, but I will say that I do see your point a view.

I totally agree with the "buy the best you can afford". What is the alternative? The worst you can afford? The cheapest for the date that you can find?

My core collection is, and will always be, fewer than 100 coins. The more I learn about collecting, the more I appreciate that quality trumps quantity and that a few nice coins are more desirable than a hoard of mediocre ones.

t3rr0r1sm

thanks coinresource and ryk for responding.

Well, if my goal was to make money, I already lost 200-300. So it is not that.

Ryk, are those gold coins?

I never heard anyone say a horde of gold was not an impressive sight.
But if you are talking about moderns, i am worried.
If you are talking about coins before 1800 that catch your eye, I understand your opinion.

Are either of you set collectors? If you only have 100 coins, many sets
must automagically be eliminated from your purchases.

stman

I buy the best that I, myself like. This could mean a high grade Bust half, or a very low grade Bust half.
Expensive or cheap it's the "Look" that I look for.

D

Terror, if you're primarily interested in making money, the more expensive, rare/key date coins are the ones to collect and flip for profit.

-Daniel

ttown

The alternative would be buy low grade MS coins or XF+ coins and have fun. Many of the gold coins can be had for near spot with little down side as well as the modern gold. If you would have brought higher grade common stuff in the early / mid 80's you'd still be holding a loser. Dealers make money by promoting coins and I've yet to see too many folks that aren't dealers make money on a regular basis on coins unless spot metal goes up. It reminds me of buying a car, if your buying it's worth a fortune, if selling it's crap.............JMO

Coins are fun and a hobby not an investment............

kranky

The direction you choose is right for you, but maybe not for everyone. One reason you hear "buy the best you can afford" is that many collectors started out buying quantity instead of quality, and when they wanted to upgrade their coins they were very disappointed in what their earlier purchases were worth. Higher quality coins will probably sell for a higher percentage of the original purchase price than lesser quality coins will. I bought quite a few coins when I was just starting out that, over 20 years later, are not worth much more than what I paid because they are crappy coins. Had I been more selective, I would be in much better shape.

Actually, you probably do buy the best you can afford but in a different way. In your series (half eagles), you could buy a dinged-up and ugly VG 1881-S for around $120, or you could get a nice AU for around $180. Would you choose the ugly VG coin? You might not want to spend $800 for a MS63, though. Now down the road you might want to upgrade your 1881-S. If you have a dinged-up ugly VG coin, you might be offered barely more than melt. But the AU will be much more attractive to a dealer on a trade or outright sale.

So "buy the best you can afford" has to be put into perspective by each collector. It might mean buying two or three coins a month instead of a hundred. It shouldn't mean buying one coin a year, because that's going to make it nearly impossible to really enjoy your hobby.

Myqqy

I think you should buy the best you can afford, because quality coins will make you happier than marginal coins- and the collector in you will eventually insist on upgrading to improve the quality of your collection.....

t3rr0r1sm

my newest purcashe

i am just following my philosophy.
this is a nice coin for me. So old!

340,000 minted.

pharmer

Some buy quality coins, others buy rickshaws

t3rr0r1sm

Well it appears I am in the minority.
I repesct your opinions and I understand why you choose them.

It just doesn't seem to work for me.

I want gold. check
I want to complete a series. (well, most of it. key dates are rare). check
I want a large set that will take time. check
I want nice specimens for reasonable money. check
I am having fun and doing something besides IT/programming/telecommunications. check

:-)

RYK

Ryk, are those gold coins?

I collect gold coins. I buy the best I can afford. Sometimes it is the best VF I can afford, sometimes it is the best AU/low MS. I learned early that buying a bunch of mediocre coins was easy and unsatisfying. As you advance in your area of interest, it is natural to not want to settle for ho-hum.

I think you should buy the best you can afford, because quality coins will make you happier than marginal coins- and the collector in you will eventually insist on upgrading to improve the quality of your collection.....

Very true.

I think Mr. Eureka once said something to the effect: the easier it is for you to acquire a coin, the less demand there will be for it when you try to sell or trade it.

BTW, when I sell or trade coins, it is only to buy more.

BAJJERFAN

If you buy a low grade coin sooner or later you may regret it; esp after you have seen some nicer examples. You may or may not recover your investment in the lower grade coins. It really makes sense to buy right the first time tho I will say I have not always done that.

t3rr0r1sm

kranky, i think you have me pegged.

On the rarer dates I will be very happy with a XF.
On the more common dates, AU and up of course.

It is when you hit MS63 things go crazy. I am not going to get swept
up in that madness.

ryk, i see your point of view. totally.
And everyone who agrees with you.
You like all coins and want to pick some super nice specimens.

I studied/examined the gold coins the US minted and picked
the 5 liberty set to complete purposely. That is my goal.

I now understand why we agree to disagree so consistently.

t3rr0r1sm

Myqqy,

when you say the best you like, do you mean eye appeal
or the grade on the slab?

After all, some people have a hard time telling the difference
between MS63 and up.

It is that grey area that bothers me. The whole mint state obsession.
It just isn't for me.

ttown

It really depends on the series and your goals. I was wanting to hold gold for a hedge so the XF to MS60 fills my needs fine. I've been collecting since the 70's and grading ALWAYS changes, it's funny IMO if you need a loop to tell the difference on a coin your a perfectionist and it can always be challenged. The way to make money in coins is have some bucks and buy collections, sell most of them and cherry pick a few to keep trying to get your money back. That works in all hobbies but you have to know how to bid, the market, have contacts in the hobby and have funds to play with.

Out of all the coins I have I enjoy my complete albums the most.

jdimmick

It may appear to some that a dealer will push buying the best they can afford to maximize thier profits and in some cases this may be true. However, I truly believe that most dealers even though they are in it for profit, want to assist collectors in building a nice collection and they know based on experience that over time the nicer coins out perform the latter. Not to mention easier to re-sale when the time comes.

jim

jleland

<< <i>I am consistent in disagreeing with you, but I will say that I do see your point a view.

I totally agree with the "buy the best you can afford". What is the alternative? The worst you can afford? The cheapest for the date that you can find?

My core collection is, and will always be, fewer than 100 coins. The more I learn about collecting, the more I appreciate that quality trumps quantity and that a few nice coins are more desirable than a hoard of mediocre ones. >>



Definitely.

I do, on occasion purchase a coin in say; MS-65, then see a coin either in 65 that has better eye appeal or actually higher grade, purchase it and flip the extra 65. Sometimes I will hoard the lower end coins and dump 'em later.

RYK

I am slightly amused and also befuddled that you were unimpressed, if not turned off, by the articles on the Pinnacle website. Pinnacle is one of the favored dealers by members of this forum (I buy a majority of my coins from Doug Winter, who is now a partner at Pinnacle, and most of the articles that you might have read (including all of the articles on gold coins) were written by Doug Winter. I would challenge you to find someone who was not extremely satisfied by the advice and quality of coins provided by Doug.

DaveG

The reason that dealers say "Buy the best you can afford" is that they know that many collectors will, at one point, sell some coins (mostly in order to buy other coins). They know that when a collector tries to sell some common coins, he may very well be disappointed by the price the dealer can offer - frequently he can't offer a premium price for the coin because he already has several in stock and all of his customers already own one. On the other hand, if you have a coin that is nicer/rarer than usual, he can offer a premium price because he knows that he has several customers waiting for such a coin.

Also, consider a set of Lincoln cents or Mercury dimes: usually, 90% of the value of the set is represented by two or three of the 60 or 70 (roughly) coins. Few people get a thrill out of looking at a run of 1941-1945 cents, but everyone enjoys looking at the 1909-S VDB

Another coin dealer, Q. David Bowers (American Numismatic Rarities - check out their website), says: "Buy the best you can understand.", by which he means: "Don't chase after (pay a big premium for) an MS-68 coin if you can't tell the difference between an MS-66 and an MS-67.

The reason many collectors will stretch for a nicer coin is pride of ownership: after you've been collecting for a few years, you'll be able to see the (relatively) poor quality of a coin you bought as a beginning collector. Many collectors will sell the poor coin (at a loss) and buy a nicer coin at a higher price. If they do that, they would have been better off to have bought the nicer coin in the first place.

Also, many collectors, when assembling a set, will attempt to have the coins look relatively the same, that is, they'll want them in the same grade or at least a narrow range. In your case, they wouldn't want the post-1879 half eagles in MS-63 and the pre-1861 coin in VF - it just wouldn't look "right" to them.

In my case, I decided not to collect the common post-1878 half eagles - I didn't have the money to buy them at MS-63 and it's hard to find them slabbed below, say, AU-55. (My friend's friend, who is putting together a set, is building a set of raw coins that he's putting into a Dansco album. This solves the space problem, but then, he's also an expert grader, so he's not afraid to buy raw coins.)

Also, many collectors enjoy the "thrill of the hunt" - it's a lot of fun for them to show off a coin they spent a year looking for. It's less fun to show off a bunch of coins that all they had to do to get them is to write a check.

When you're at the beginning of a big project like yours, it's very useful to buy four or five coins and then examine them closely. Not all slabbed coins are equal - they all have their pluses and minuses - strike vs. bagmarks vs. luster, for example. Also, you'll want to examine your coins to see if you like how they look - do they have 'original surfaces' or have they been 'dipped' or otherwise been 'enhanced'? Do you agree with the grade? Did you buy 'high-end for the grade' or 'low end for the grade' coins?

t3rr0r1sm

Ryk,

Allow me to try and explain!

The articles I thought I was going to read were ones like this:
cool research on gold coins

The rest was just advice. Alot of it basically saying in a round about way,
I, the author, could be your dealer!

but keep in mind, i started at the top.

General collecting articles and advice for collectors.

So maybe these top articles are slightly biased.

Now that you challenged my opinion I see many others articles below that
that i ignored due to reading 10 boring ones.

obviously the author knows their coins. I am just tired of
reading 10 "investing in coins" articles to get to the one good article.

Baley

I am primarily a type set collector, although I am actively working on half a dozen series by date/mm too.

I buy the best I can reasonably afford, and then upgrade as opportunities present themselves; I then sell off the lesser coins.

This strategy works for me, and over the past 30 or so years, I have built a pretty nice collection.

I still don't buy the best I can possibly afford for any given coin, for the reason you state: I would rather fill a hole or two (and at this time, my holes are all 4 and 5 figure coins) or upgrade an existing coin by a grade or two, than buy a superlative specimen one grade point higher that costs 10x and looks about the same.

nwcs

They say it because it tends to be a better quality coin and thus more likely to appreciate and re-sell later. I know because I still have a box of old bulk coins I wish I could get rid of. Heck, I may just sell the whole box here for like $30 or something just to be rid of it all even though theoretically the retail value would be much more.

t3rr0r1sm

in some ways I am following that advice.
For example, I tend to buy slabbed PCGS coins.

I did not even want to waste my time with any other grading company.

Even though I admire anacs and ngc. some pretty coins in their slabs.

i will not buy raw. one mistake costs me quite a bit.
maybe down the road I will. yea, like a few years ;-/

I tried to buy some books on gold liberty's but failed at the local book stores.
I find the internet contains much more info that any old book.
I did want a specialty book on 5 libertys though.

interesting opinions! i appreciate you taking the time to type out a response
for a rookie.

FatMan

I think where I have a problem with this advice is with the word "Afford". I have never bought a coin based upon what I can "Afford". What I can afford has little to do with collecting coins. I think more in terms to "buy the best staying within my disposable coin funds".

EVillageProwler

why do coin dealers say buy the best you can afford?

Please forgive me if this thread has evolved beyond my comments, as I'm responding to the very first post of this likely very important thread...

Let's be aware that there is an important distinction between "buying the best you can afford" and "buying the most expensive you can afford". If you're a type collector, and you feel you can reasonably afford to complete your set in ChAU as opposed to ChMS, then ChAU is the best you can afford.

If you're chasing a complete MS TD set, and the best you can do is AU58, then so be it.

If you are, however, buying individual coins with the purpose of putting together a collection of cool coins, then you should focus, again, on buying each coin that is the best you can afford. For example, if you are dying for a 1796 25c, and your budget is not quite what you'd like, then you should buy a lower grade specimen that has enough quality to satisfy you. There is a board member who recently did just this. He's on a moderate budget, and he got the best darn 1796 25c within his budget - a lower grade circ with nice originality and eye appeal.

Why this advice? There are collectors at every budget level. And, these collectors predominantly want the best quality for their money. If you have a coin that is one of the best at the budget level, then you'll get the heaviest competition for your coin. Your supply versus their demand should hopefully equal more $$ in your pocket later.

Finally, I would like to point out that I used the word "quality" above without qualification. Define it how you will, but do not be so parochial and fixated in your mindset. In this context, it is best defined as a combination of eye appeal, rarity, grade and other special attributes. (E.g., the Eliasberg 1874-S TD is extremely PL.)

EVP

Shamika

The problem is, if you don't buy the best you can afford, you'll probably want to upgrade your collection later and then you'll wish you hadn't bothered buying the lower graded stuff.

Of course, there are those that are perfectly happy buying lower grade coins which is fine. You've just got to figure out what type of collector you really are.

mirabela

I've followed your posts the last day or two, as I think you are asking interesting questions. Before I say any more, I'll identify myself as a collector, not a dealer, and a guy working on a budget that is, on the one hand, modest compared to many around here, and on the other, quite generous in light of how practically useless rare coins really are.

I think "buy the best you can afford" is motivated by two common considerations:

1. Joy of possession. It is nicer to have nicer coins, whether that means rarities, "the look," or higher grade examples. Don't you have some coins you like more than some others? If so, you already understand this.

2. Sale. Whether you are selling next month or leaving the sale to your heirs, you'll have better return on stuff with more demand than supply.

That said, "best" and "afford" are terms wide open to all sorts of competing definitions. It sounds like you are on the way to working out what they mean to you.

I know you are buying to collect, not to resell, but you might consider selling something once in a while, just to know how you're doing. I think it is hard to be an astute buyer if you never sell anything. It's hard to be an astute buyer anyway, but selling a coin now and then helps a bit.

I wish you tons of luck with your half eagle project. You could wind up with a truly fantastic collection, should you go at it smartly for long enough, with enough cash behind you. Although if intrinsic value is part of your motivation, you'll buy your examples at lower multiples of spot in the $10 or $20 series. Just a thought. Anyhow, best wishes.

MD

TommyType

Don't let anyone tell you how to collect....and just as important, don't hold it against them if they do.

For any coin you, I, or just about anyone else buys, there will be someone who will tell you, "for a few more bucks, you could have gotten a ____"

For the same coin, someone else will tell you, "Why the heck did you pay that much money on a COIN!!"

Nod and ignore them both.

(Same goes for hair style, choice of car, and the girl you took out last night....unless you're married.)

sellsatan

t3rr0r1sm, you may be in the minority, but you have some company. I am a series collector. I intend to upgrade my collections as the funds become available, but my first priority is simply completing them.

RNCHSN

I buy to resell, and I buy some to keep.

I have a web site, I set up at shows, and sometimes I walk the floor at shows doing business with other dealers.

I don't often buy coins I wouldn't want to keep for myself.

I'm as likely to buy a circulated coin with the right look as I am to buy uncirculated.

Many times I've chosen a nice F/VF circ. coin over an ugly EF/AU/BU coin!

buy what looks good to YOU! Forget what other people say! Only YOU need to be satisfied with your own collection!

My nephews collect sports cards. I personally think they'd made good tinder in the fireplace, but they make him happy!

My youngest sonlikes to collect rocks, and sticks that have artistic shapes and forms. I don't see it, but he gets great pleasure from them.

Do you see where I'm going with this.....?

t3rr0r1sm

tommytype, thanks for putting some humor into this discussion
that was getting too serious.

mirabela: oh yea, i did the math on the intrinsic value. I was very close
to choosing eagles or double eagles for that very reason. But then I read more about
the half eagle (working man's/woman's coin). It has a wonderful history.
So, very quickly, I forgot about the gold value. I realized that was a poor
way to enjoy coins.

I also thought the dollar, 2.50, and 3 dollar were too small.
I like big coins. This was a compromise.

coinlieutenant

It could be that some dealers really want you to suceed....that could be it.

LeeG

Some great questions and answers posted here! Made me stop and think for a bit. Which is always a good thing! Bottom line is: Find Joy in Your Collection!

RYK

I think where I have a problem with this advice is with the word "Afford". I have never bought a coin based upon what I can "Afford". What I can afford has little to do with collecting coins. I think more in terms to "buy the best staying within my disposable coin funds"

To me, "afford" means "afford with disposable income/capital", not "afford if I take a second mortgage on my house".

Couple other points:

One interpretation of "buy the best that you can afford" is to buy a nice coin for the grade. If you can "only" afford an XF 61-D $5, make sure it is one with nice eye appeal for the grade. It won't cost you considerably more than one that is middling, but you will probably appreciate it more, and eventually when the coin is traded or sold, buyers will be more interested.

When I first started collecting NO $10's, I felt pressured to acquire the coins and ended up purchasing several that were low-end for the grade. When I realized what I had done and that I did not like these coins, they were hard to get rid of.

A nice set will often have the most important coins with the highest possible grades. After all, when your set is complete, if a fellow collector or perspective buyer is sizing up your set, which coin will they look at first, the 70-CC or the 1901-S?

KlectorKid

<< <i>It could be that some dealers really want you to suceed....that could be it. >>



I agree. Sure dealers try to make money off of you but I cant see why they would want you to fail at your coin collecting goals. It doesnt help them if you fail, I started buying whatever I thought looked neat, didnt matter how nice it was. Now I regret wasting money on those things instead of saving and buying a few nice coins like I am doing now. Its been atleast a year since I have bought a coin, but when I buy my next one I will be sure that I wont regret buying it down the road.

MrEureka

Long before slabs, many people did not really know how to identify a top quality coin. As a result, gems were underappreciated and undervalued, so the advice to "buy the best" made a lot of sense. As the market became more sophisticated and gems increased in value, the advice became less useful. Today, in the world of slabs and 18 years of pop data, the advice may be useless, if not misguided. Relative to lesser coins, gems are now fully appreciated.

TOMCATTOM

WELL STATED.