Fuzzy Thinking?

skier07

This is a hypothetical scenario but am I thinking clearly? Let's assume I'm bullish regarding gold and silver. I'm thinking that silver has a chance to hit $50/oz. Does it make sense to sell common date slabbed 63 and 64 Morgans and then buy either gold or silver bullion?

I'm thinking if silver does get up to $50, common date silver dollars even if they're uncirculated and slabbed probably won't be worth much more then melt. Right now I can probably sell a 63 in the $50 range and a 64 in the $75-$100 range. If silver does go to $50 then I would almost double my money.

What doe everyone think?

Thanks,

Bruce

meluaufeet

I wouldn't unless it was my best source of funds.

I might be in the minority in this regard... you might want to try a poll and see what happens.

My basic premise is that a wider base of silver owners (investors, if you may) should also bring in more collectors. Most silver holders I know own some higher premium silver, whether its slabbed coins, or interesting bars, or modern issues -- foreign and domestic. I would however consider selling common date Morgans for better years, grades, and pq.

gecko109

In the spring of 2009, I cashed in my entire type coin set in order to go pure bullion. Have never regretted it once!!!

jmski52

I think you are correct in your thinking, as long as your transaction costs (i.e., buy-sell spread & commissions) don't eat up any advantage you would gain from making the trade. And there is always the tax question as well. Sometimes, it's better to go into "long-term hold" mode.

I am wrestling with that same question now - whether to cash in on some stuff that has nice gains in numismatic premium in order to buy more common bullion.

My accountant pointed out to me today that ordinary capital gains are taxed at a 15% rate, but collectibles are taxed at a 25% rate. But - what about common bullion? Does anyone know if common bullion is considered "collectible" or does a longterm bullion gain qualify as simply a longterm capital gain?

meluaufeet

My understanding is bullion is taxed as a collectible... under one year at personal income tax rate; over one year at 28%

PreTurb

sell numismatic, buy bullion. no question.

JCMhouston

In this case I would agree with selling. COmmon date common grade Morgans will not go up nearly as well as a pure bullion play.

DrBuster

Aren't common date 63/64s at spot price now anyway? What's the difference?

timrutnat

I say if you already have a lot of bullion then don't make the trade. If you have all numismatics and no bullion then make the trade. Pat Gorman recently said he wouldn't be surprised if MS64,65,66 morgans went up 10x in the next few months. Seemed like a stretch to me so I got on his radio show and asked him to explain his reasoning for saying this. He said back in 1989 an Iranian came into the market with something like 5 million dollars and sent prices sky high. His point was that it's a very small market and it doesn't take much money to move it. So I think from an investment standpoint it's wise to have most in bullion but also have some numismatics once your bullion base has been established.