"Cash is king"-- for the coins that you've held during the bull market, are they essentia

Longacre

In another thread about the doldrums of the markets, the panic on Wall Street, and the uncertainty of whether investment bankers will be able to rake in seven figure fees with ease anytime soon, a very prominent collector on these boards made the following statement: "Cash is king."

I thought this was interesting. This board member was speaking about converting rare coins into cash. However, I have never really thought of rare coins as being essentially equivalent to cash. Suppose that you have a collection of truly rare coins, and bought them at the bottom of the last bear market. Suppose further that you rode the bull market hard, and never parted with those coins. Other than numismatic value, do you consider these coins to be essentially equivalent to cash, which can be liquidated almost instantaneously, sort of like a stock? Or do you view them as not completely liquid, but not completely illiquid either? How comfortable would you be with liquidating a collection if you needed to convert it to cash?

Shamika

I think it depends on what you mean by "rare coins". There are rare coins that are always in demand and some that are only collected by a select group. I would not consider the esoteric rarities as super liquid, but other coins such as the S-VDB or 14-D Lincolns can be sold to just about any dealer at any time.

ziggy29

No, they aren't cash. Something worth $10,000 is only "equivalent to cash" if they can *very* quickly be converted into $10,000 cash.

Many high-quality, well-selected $10,000 coins can fetch $10,000 or more if you're willing to wait for the right buyer.

Many $10,000 coins can be sold almost immediately for cash, but likely for far less than $10,000.

But very few (any?) $10,000 coins can consistently be liquidated almost immediately for $10,000 cash.

RYK

<< <i>No, they aren't cash. Something worth $10,000 is only "equivalent to cash" if they can *very* quickly be converted into $10,000 cash.

Many high-quality, well-selected $10,000 coins can fetch $10,000 or more if you're willing to wait for the right buyer.

Many $10,000 coins can be sold almost immediately for cash, but likely for far less than $10,000.

But very few (any?) $10,000 coins can consistently be liquidated almost immediately for $10,000 cash. >>



For the 21,456th time, I agree with Ziggy. Cash is cash, coin is coin, but coin is not necessarily cash. That statement is based on my personal experience.

Sunnywood

The coin market is thinly capitalized relative to true financial and capital markets. The liquidity in the coin market could dry up very fast under the wrong circumstances. It would be quite foolish, in my view, to consider coins anywhere near fully liquid. Just remember that a thing is only worth what someone is willing to pay you for it. If the buyers disappear ... well you get the picture. This is not just doomsaying; we've seen it all before, at least twice in my lifetime.

I'm not trying to be an alarmist, but if one needed liquidity and had some valuable coins that one could stand to part with, it would be wise to act before the market contracts. I can't imagine anyone thinking that the coin market will suffer no adverse effects whatsoever from the massive dislocation taking place in the financial markets.

Of course, I've been predicting a correction in coins for several years, and I've been wrong. So what do I know?

Best,
Sunnywood

eCoinquest

If I have a 1909 S VDB it is definitely as good as cash but only 1 Cent cash, or in the case of copper cents 2 cents.

originalisbest

Agreed with Sunnywood. I have some valuable as bullion-based, common $20's and "junk" 90% that are as close to liquid as anything else numismatic I have; most of the rest of it is not all that liquid, really.

291fifth

Collectibles such as coins are definitely not cash.

Regardless of what the various price guides say, liquidity varies greatly from coin to coin and series to series.

Would you like to be trying to sell a large number of major TPG slabbed, but obviously dipped, AU Barber Half Dollars in this market? Would the market want them at anything close to what the price guides say?

What about scarce, but not rare, date coins? Is the current market paying any premium for them over what is paid for common dates? I don't know the answer, but if I were in the market for them right now I wouldn't pay any premium.

During the recession of 1982 the coin market became very illiquid (or perhaps it could be more accurately said that the coin market was liquid at a loss, often a big loss.) It could happen again.

In tough times, real cash is king.

MikeInFL

<< <i>In another thread about the doldrums of the markets, the panic on Wall Street, and the uncertainty of whether investment bankers will be able to rake in seven figure fees with ease anytime soon, a very prominent collector on these boards made the following statement: "Cash is king."

I thought this was interesting. This board member was speaking about converting rare coins into cash. However, I have never really thought of rare coins as being essentially equivalent to cash. Suppose that you have a collection of truly rare coins, and bought them at the bottom of the last bear market. Suppose further that you rode the bull market hard, and never parted with those coins. Other than numismatic value, do you consider these coins to be essentially equivalent to cash, which can be liquidated almost instantaneously, sort of like a stock? Or do you view them as not completely liquid, but not completely illiquid either? How comfortable would you be with liquidating a collection if you needed to convert it to cash? >>



No, coins aren't cash. And worse, cash (particularly USD) is crap. Gold (bullion) is king, IMO.

PrivateCoinCollector

"In some countries , precious metals (usually gold and silver) are considered also liquid assets."

ArizonaJack

If you buy right, you should be able to convert at zero or minimal loss quickly

Lakesammman

I recently needed to raise some cash and did so w/o having to sell my unique patterns - very pleased with the results. Most of the coins had buyers in waiting with other back up buyers - no widgets. Laura/Legend passed and missed out on some cool coins.