Hedging yourself against price increases

GoldenEyeNumismatics

I'm working on a set of coins that I anticipate will rise in value over the next few years. Sometimes, I'll settle for a subpar or ugly example to fill a hole in the set to hedge myself against price increases until I can find a nicer one. Usually, I'll only do this if the cruddy coin is offered at an exceptionally cheap price... something that I could flip right away if I wanted to.

Do you ever find yourself doing this?

llafoe

I send all my subpar and ugly examples to RickO... they come back PQ and pretty everytime!

Sonorandesertrat

No, I think that it's a waste of time. It's better to buy 'right' and make each purchase count.
[Price increases do not always occur across the board as far as grades are concerned, and the 'buy what you don't
really care for and trade up later' strategy isn't a good one in general.]
When I find myself looking at a coin, thinking that I really don't care for it, but I'm bored and realize that I'm trying to
find a reason for buying it, I can now snap out of it and just walk away. Never try to talk yourself into
buying a coin---if you have enough experience, you should trust your initial instincts.

MidLifeCrisis

Every time I have settled for a sub-par coin, I have regretted it.

I have found that patience in this hobby is one of the most difficult attributes to develop and maintain, but one of the most rewarding.

AMRC

Buying Subpar coins has never worked out to be a hedge for me. Buying the key-date(s) in the finest example I can afford at the start of a collection has. But to each his own.

LindeDad

Having over the years built numerous sets I too went for fillers in lower grades than my target grade for the set. And by buying wisely I in most cases was able to turn the coin for at least my cost and usually for a profit.
My experience is that what you might find unappealing might fit the needs of someone else. And since you have a long time to play this game go for it buying and then selling keeps you in the know of what the market is doing plus gives you the chance to see more coins along the road which usually means a better eye for that special one when it comes along.

DoubleEagle59

If your main target is protecting yourself against rising prices, I think you're buying the wrong items.

Come see us over on the PM forum

My apologies if I've misunderstood your opening statement.

questor54

I used to buy space fillers several collecting incarnations ago, now I try to buy each coin only once.

RedTiger

Let me get this straight: a person thinks a certain coin or coin series is going to go up in value. Buys sub-par examples of that coin or series that he/she doesn't really care for, but they are gonna go up. The intent is to trade the sub-par examples towards a better examples down the road? Sounds like an okay plan for a dealer, and a poor plan for an average collector.

RYK

That's not my sort of thing.

COALPORTER

<< <i>If your main target is protecting yourself against rising prices, I think you're buying the wrong items.

Come see us over on the PM forum

My apologies if I've misunderstood your opening statement. >>



Well, that is really what a hedge is. When spending on coins, one could invest in PMs too offset rising prices. PM are much easier to sell off for a fair price. Unlike the hastle off winding down a collector coin "investment".

golden

Buy the right coin the first time.

AuNuggets

I agree with others who say "Buy Right First". I hate having ANY coin in my collection that I wouldn't mind owning for the long haul. If there is something there that is "not quite right" or sub-par as you say, it bugs me to death until I get rid of it. If a coin is not of a quality that I would hold forever, I never buy it in the first place.

AnkurJ

I try not to settle, becaue every time I have, I have regretted it. Luckily I have sold off most of those problem coins, and in some cases for a loss.

For a while, I was known on the boards to buy problem coins. Currently the only problem coins in my set are my 1793 large cents. Those I can live with.

GrumpyEd

Buying the best keys you can afford first is best.
If you can't spring for the nice keys now it would work better to hold off on the keys and buy a nice non key to keep the set moving.

The reasoning is that even a nice non key should move up better than a cruddy key coin.
If you're doing well flipping the cruddy coins it might mean you're a good seller more than it means the cruddy coins went up.

I could be wrong, maybe your idea of cruddy isn't as cruddy as mine

renomedphys

If you build a collection with really nice keys and ho-hum everything else, you'll do fine when you go to sell. The other way around... not so much.

PerryHall

<< <i>Buy the right coin the first time. >>



Yup! And you'll save yourself money in the long run and save yourself the grief of trying to dispose of your low quality coins.

ColonialCoinUnion

<< <i>I'm working on a set of coins that I anticipate will rise in value over the next few years. Sometimes, I'll settle for a subpar or ugly example to fill a hole in the set to hedge myself against price increases until I can find a nicer one. Usually, I'll only do this if the cruddy coin is offered at an exceptionally cheap price... something that I could flip right away if I wanted to.

Do you ever find yourself doing this? >>



No. It really sounds like a terrible idea to me.

Trime

Once!
Well, maybe more than once.
When most coinsters start they collect and accumulate; with time if you are wise you learn to be very selective
If you want to buiild a great collection; have strict criteria and lots of patience.
There are some once in lifetime opportunities in Numismatics that majustify purchasing a coin below your standard, but very few.