@MasonG said:
"How to effectively buy and sell without taking a loss?"
Nobody has a guarantee of not taking a loss on their purchases. If you're buying and selling, there is always a risk that you'll pay more than you can get when you resell.
And that's true whether you are a dealer or a (blessed) "collector".
@MasonG said:
"How to effectively buy and sell without taking a loss?"
Nobody has a guarantee of not taking a loss on their purchases. If you're buying and selling, there is always a risk that you'll pay more than you can get when you resell.
And that's true whether you are a dealer or a (blessed) "collector".
Exactly. If you want anything like a guarantee, you'll have to restrict your buying to coins you can get for a tiny fraction of current retail value. Will that limit your buying opportunities? Almost certainly. But then again, you won't lose money on your purchases. Probably.
@Lostintranslation said:
Geez Louise. After reading the posts on this thread, I am depressed. I am an old guy with coins purchased from long ago up to recently. Until the last ten years or so, I hated TPGs and the coins being in holders. I am old and loved filling Whitmans. Now as I decide what to do with them, I have no clue how to sell them. My grandkids just want money. If I sell them to dealers, are you telling me that they will discount their price to include having my raw coins graded? I know they operate on margins, I thought around 60% of retail. But I'm getting the feeling that may be a high number. I have no clue what I have in the vast majority of these coins. I will not sell on Ebay because of their rules and fees.. I also have a bunch of currency mainly fancy serial numbers and the like. My total value of everything is less than $50k. I also have bullion valued around $30k and will give it to the kids. So any suggestions on how to get the coins and currency sold at a fair price to me and the buyer? I will not sell off individually, so no cherry picking. This may be hard to undertake. Thanks AC
I recently disposed of an assemblage of "stuff", probably roughly the same class and quantity of material as the $50k of raw coins in Whitman albums you allude to. It was long and painful. If I had to do it again, I would ship it all to one reputable dealer or auction house and be done with it. Note that "retail" for raw Whitman folders is likely around 80% of Greysheet, so your expectation should be about 60% of Greysheet. Unless they are high-end, of course.
Timing makes a huge difference. I recently helped sell off a large collection of about 1800+ certified coins purchased over a 20 year period. Some coins the owner made large amounts, some he lost 50-75%
@Lostintranslation said:
Geez Louise. After reading the posts on this thread, I am depressed. I am an old guy with coins purchased from long ago up to recently. Until the last ten years or so, I hated TPGs and the coins being in holders. I am old and loved filling Whitmans. Now as I decide what to do with them, I have no clue how to sell them. My grandkids just want money. If I sell them to dealers, are you telling me that they will discount their price to include having my raw coins graded? I know they operate on margins, I thought around 60% of retail. But I'm getting the feeling that may be a high number. I have no clue what I have in the vast majority of these coins. I will not sell on Ebay because of their rules and fees.. I also have a bunch of currency mainly fancy serial numbers and the like. My total value of everything is less than $50k. I also have bullion valued around $30k and will give it to the kids. So any suggestions on how to get the coins and currency sold at a fair price to me and the buyer? I will not sell off individually, so no cherry picking. This may be hard to undertake. Thanks AC
Sounds like you need to create a thread with specific info about your coins so you can hear more precise advice.
Seated Half Society member #38 "Got a flaming heart, can't get my fill"
@joebb21 said:
Timing makes a huge difference. I recently helped sell off a large collection of about 1800+ certified coins purchased over a 20 year period. Some coins the owner made large amounts, some he lost 50-75%
It's true. And I sometimes think that timing is more sheer luck than intelligence. Pittman made a fortune buying coins. He bought some tremendous rarities. He also bought crap like U.S. Mint and Proof sets. He was simply obsessed with coins. Turns out, he was buying at the right time and lived long enough that his estate sold at a good time.
@jmlanzaf said:
And I sometimes think that timing is more sheer luck than intelligence.
That's why I don't depend on my collection to be an investment. I'm sure there are plenty of people on this forum who will make tons of money on their coins because they're so good at picking winners but I'm not going to be counting on being able to do that myself.
Buying is always done during a snapshot in time. You can buy a coin under GreySheet and watch it go up or down in value before it even arrives. A few rules of thumb are to buy only coins already encapsulated since raw coins are exceptionally hard to receive full value for. Similarly, coins already graded have equity paid for by someone else. Buying at auction has the most potential since some coins just never get enough interest to receive full value.
A great strategy is to know CLEARLY the value of a target coin before ever bidding, stick to a rigid number, then assert yourself. Whether live, online or mail bidding (or similar) always calculate the buyers premium (if any) into the cost.
Whether you're buying from Heritage., Great Collections or at a local auction these are disciplines required to buy right.
Notice I omit Dealer purchases. Frankly, Dealers and coin shops know what they have (save for varieties they're not interested in searching for) and want top dollar on everything. You can do OK trading with Dealers but purchasing under sheet, rarely happens.
Great Collections often has terrific buys on common coins, Heritage, Stacks and the rest often have thousand dollar coins go at huge discounts. Homework is a must!!
Finally, YOU MUST sell something from time to time. If you never sell you have no idea if you're buying right, or kidding yourself. Selling too takes a certain strategy. Interestingly, selling to your local coin shop or Dealer often can reap startling results.
If you do what you always did, you get what you always got.
In order for someone to make profit on a coin. He needs to buy hot coins or coins that are in demand. He needs to study mintage and population report to get to the right price to buy.
@jt88 said:
In order for someone to make profit on a coin. He needs to buy hot coins or coins that are in demand. He needs to study mintage and population report to get to the right price to buy.
None of that comes close to making sure there’s no loss when the coins are sold.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
@DollarAfterDollar said:
Buying is always done during a snapshot in time. You can buy a coin under GreySheet and watch it go up or down in value before it even arrives. A few rules of thumb are to buy only coins already encapsulated since raw coins are exceptionally hard to receive full value for. Similarly, coins already graded have equity paid for by someone else. Buying at auction has the most potential since some coins just never get enough interest to receive full value.
A great strategy is to know CLEARLY the value of a target coin before ever bidding, stick to a rigid number, then assert yourself. Whether live, online or mail bidding (or similar) always calculate the buyers premium (if any) into the cost.
Whether you're buying from Heritage., Great Collections or at a local auction these are disciplines required to buy right.
Notice I omit Dealer purchases. Frankly, Dealers and coin shops know what they have (save for varieties they're not interested in searching for) and want top dollar on everything. You can do OK trading with Dealers but purchasing under sheet, rarely happens.
Great Collections often has terrific buys on common coins, Heritage, Stacks and the rest often have thousand dollar coins go at huge discounts. Homework is a must!!
Finally, YOU MUST sell something from time to time. If you never sell you have no idea if you're buying right, or kidding yourself. Selling too takes a certain strategy. Interestingly, selling to your local coin shop or Dealer often can reap startling results.
You can't buy a coin at public auction for less than Grey and then assume you can turn around and get Grey for it. Don't get me wrong, in do it all the time. I also do the same thing buying from dealers. But there is a timing and effort piece that you were ignoring. If you want full value for something, you have to list it and wait for the buyer or move it to a better venue than where you bought it. The coin I bought at auction for under Grey might otherwise be YOUR coin.
@jt88 said:
In order for someone to make profit on a coin. He needs to buy hot coins or coins that are in demand. He needs to study mintage and population report to get to the right price to buy.
None of that comes close to making sure there’s no loss when the coins are sold.
Quite. All analysis here is simplistic and ignores things like the "motivated seller" vs "motivated buyer" piece of the puzzle. Especially when it comes to selling an estate or entire collection, you are stuck selling into a snapshot in time.
We see high end haircuts posted here all the time where someone spent 5 or 6 figures on a coin only to sell it months or years later for less. So even buying a "hot" high end coin is no guarantee.
I only knew one person who never lost money on a coin. She worked for a gentleman with a $40+ million net worth who had a coin and stamp business as an amusement and who didn't care if the store ever made money. It was her policy to never sell a coin for less than she paid. And she didn't. But she had a proof trade dollar for almost 30 years because she bought it in the late 80sv and then the price crashed. She also had an 1800 (?)gold piece for about the same amount of time. Unless you are willing to spend 30 years disposing of your collection or estate, you're going to have to take a loss here or there.
I might also add, per something you said in your other thread, I think you'd have far less fun building a collection based on this principle. You could never stretch to buy a coin you loved because you would be pushing the price above market. The coin you love more than anybody else will be worth more to you than anyone else. What kind of collection do you have if you'll only buy "bargains" and not coins that you actually love?
Holding a coin for 30 years and finally selling it at a 10% profit over the original purchase price counts as losing money in my book. Inflation is a real thing.
Fortunately, most rare coins keep up with inflation. If they didn't, they'd be worth less than original face value, right?
@rhedden said:
Holding a coin for 30 years and finally selling it at a 10% profit over the original purchase price counts as losing money in my book. Inflation is a real thing.
Fortunately, most rare coins keep up with inflation. If they didn't, they'd be worth less than original face value, right?
I agree. That's also why I do not consider coins a good investment. People overlook the opportunity costs of their lifelong accumulation.
Numismatic investment is risky. One can buy an item right but they are going to need to find somebody who will pay the money when it sells. Furthermore many investors like deer in the headlights have no accounting knowledge or clue how inflation, lost opportunity costs (income investments or paying off debt) can eat into any coin profits, nor realization of overhead and selling costs.
Not taking a loss means you don’t get cash flow on that item. If u send it to auc loss is a possibility. If your online store or table at show your in control. However you still need somebody who will pay the money. Last nite was looking at a popular auc house. I input a bid on one item I like which seemed a bit too much and immediately to my disgust the bid was bid up (nuk bidder) probably some rich player. I decided auc sniper / eBay better way to go for me and left. One would have to bid on last second have chance if any. That’s ok I can still find somewhere buy it right anyway so put in your little nuk bids and be be buried in it.
There was a Lisot video from a FUN presentation by Don Bonser on Lincoln cents from many years ago. All of his undervalued calls had lost money or treaded water for nearly a decade. And he is one of the experts for the series.
The 2019 ANA grading seminar cemented what I already suspected... Keep expanding my circle of competence, take a few educated risks, and the eventually knowledge and opportunity will intersect.
Gotta be ruthless in the screening process.
Ask yourself "Where is the collector demand coming from?"
Make a list... Complete Set, Type set, Date Set (key or semi key date)
Make a second list... grade jumps, color, variety, strike, condition etc...
Ideally it should have cross appeal to the type/date/complete set collector.
If three or more on the second list boxes are checked? Buy the coin.
I haven't lost money on any PCGS sub since the class.
Doubt I have lost money on any single purchase in past three years.
It works for my small scale flipping scheme, and should give the long term collector a good shot.
BST: KindaNewish (3/21/21), WQuarterFreddie (3/30/21), Meltdown (4/6/21), DBSTrader2 (5/5/21) AKA- unclemonkey on Blow Out
@yspsales said:
There was a Lisot video from a FUN presentation by Don Bonser on Lincoln cents from many years ago. All of his undervalued calls had lost money or treaded water for nearly a decade.
The 2019 ANA grading seminar cemented what I already suspected... Keep expanding my circle of competence, take a few educated risks, and the eventually knowledge and opportunity will intersect.
Gotta be ruthless in the screening process.
Ask yourself "Where is the collector demand coming from?"
Make a list... Complete Set, Type set, Date Set (key or semi key date)
Make a second list... grade jumps, color, variety, strike, condition etc...
Ideally it should have cross appeal to the type/date/complete set collector.
If three or more on the second list boxes are checked? Buy the coin.
I haven't lost money on any PCGS sub since the class.
Doubt I have lost money on any single purchase in past three years.
It works for my small scale flipping scheme, and should give the long term collector a good shot.
I think it is considerably easier to flip coins for profit than it is to selectively buy coins that you know will appreciate in value. I guess that means it's easier to be a dealer than investor.
@yspsales said:
There was a Lisot video from a FUN presentation by Don Bonser on Lincoln cents from many years ago. All of his undervalued calls had lost money or treaded water for nearly a decade.
The 2019 ANA grading seminar cemented what I already suspected... Keep expanding my circle of competence, take a few educated risks, and the eventually knowledge and opportunity will intersect.
Gotta be ruthless in the screening process.
Ask yourself "Where is the collector demand coming from?"
Make a list... Complete Set, Type set, Date Set (key or semi key date)
Make a second list... grade jumps, color, variety, strike, condition etc...
Ideally it should have cross appeal to the type/date/complete set collector.
If three or more on the second list boxes are checked? Buy the coin.
I haven't lost money on any PCGS sub since the class.
Doubt I have lost money on any single purchase in past three years.
It works for my small scale flipping scheme, and should give the long term collector a good shot.
I have no idea how many coins you’ve bought and sold during the past three years. But my thought is that you’ve been helped by a generally strong market and perhaps, other good luck. I’d say something similar to just about anyone - whether collector or dealer - who has sold a good number of coins and hasn’t lost money on any of them.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
@MFeld said:
I have no idea how many coins you’ve bought and sold during the past three years. But my thought is that you’ve been helped by a generally strong market and perhaps, other good luck. I’d say something similar to just about anyone - whether collector or dealer - who has sold a good number of coins and hasn’t lost money on any of them.
I would argue that if you aren't losing money here and there, then you probably aren't pushing yourself enough. Sure, it helps to stick with what you know. You have to expand your boundaries somehow.
Ebay costs sellers around 10% in most cases so for a seller to make a profit he has to mark up a percentage over that based on his costs. Buy/sell spreads are enough to make it hard for a buyer to get out of an item without taking a significant loss if the seller knows what he's doing.
It takes buying low / selling high really make it. Plus working your angle. One can work an angle on material allowing a good markup. For eBay a 50 pct markup good minimum target set one’s angle considering the costs operating there. However on bullion this not really achievable. Focus on material competition unlikely have if possible.
Old thread or not this question really caught me off guard. I can honestly say I have never bought a rare coin with the idea I was going to make money.
I have spent more than 40 years ,(30 as a partner in a wholesale business.) I have taken hundreds of products, set a specific mark-up say(2.75 per case), and then resold them. Can honestly say I don't even know if such a thing can be done with coins. Who has a few cases of 1859-s seated Half Dollars sitting around?
On another note, my partner had a favorite saying when we were deciding what we would be spending on next. "Would you rather make 40% on a ten thousand dollar sale, or 10% on a hundred thousand dollar sale." He was a 100,000 thousand dollar kind of guy. I can't help but wonder though, what kind of capitalization you need in the rare coin industry. Bet it plays a big role though.
Final thought. Worded differently by an earlier poster, but same concept. Many years ago a dealer gave me this advice. "before you pull the trigger, even if you swear you never ever intend to sell a coin, try to look at it through the eyes of the NEXT buyer. If you are bothered by hairlines, think it's to dark, has an unsightly toning spot, whatever, the next buyer will see that too. Use this rule and you will end up with a better collection." No doubt, better coins should also mean better re-sale. James
I'll add some advice to my 10-year old comment on page one. Take some lessons from the history of the coin market and avoid purchasing high-risk items that might undergo a short-term "crash" in value or a long-term decline. Here are some tried and true ways to part with your money:
Buy common date, super-high-grade coins that are the flavor of the week, just because of the grade on the holder. The price crashes when the grading game changes, or more of them get certified, or Wall Street money pulls out (hello 1989), etc.
Buy a famous rarity like an 1804 dollar for a record price during a hot market, only to realize that only three other people could afford it, and two of them died the week after the auction. (Avoid thin markets.)
Buy problem coins that aren't certified, or they are certified as problem-free by a third tier grading service run out of some dude's garage
Buy bullion at the peak of a market run-up
Pay a huge price for a "rare" coin that is known to turn up from time to time (Shipwrecks, rare-date gold exported to Europe long ago)
Buy overgraded raw coins!
Buy counterfeits!
What is safe to buy then? Any certified coin that has the following characteristics: 1) true rarity in an absolutely sense, not just in high grade; 2) a steady collector following; 3) a long history of price appreciation; 4) is free of problems that would discourage potential buyers; 5) is unlikely to suddenly turn up in quantity in a bank hoard, a collector's hoard, or a shipwreck. The last item is hard to predict, but one can hedge his bets.
When I buy a coin, I like to ask myself who is going to buy it from me for a higher price in 10-20 years. The answer should be that "multiple affluent collectors will gladly compete with each other to acquire this item." I don't always practice what I preach, but I try.
Collect newly minted coins upon their distribution from the mint into the channels of commerce. Look for the highest quality newly minted coins you can find (through new roll searching and from pocket change that includes just released new issues).
Hold onto the highest quality coins you find and monitor what their market value is as the years go by.
For those coins that increase in value to the point where you can sell them for more than face value, sell them.
Instant profit.
For those other coins that do not increase in value, spend them or turn them into the bank (to recover the face value of each coin that you acquired for face value).
Doing the above will result in you never suffering a financial loss and will result in you obtaining some amount of profit (of course you will devote untold hours of time to do the above; and while looking for newly minted coins that are keepers you will likely be bored out of your mind).
The above is a sure fire way to make sure you never suffer a financial loss.
If only my parents (both born in the 1920s), grandparents (all four born in the 1870s and 1880s), great grandparents (all eight of them born in the 1820s and 1830s) and great, great, great grandparents (all 16 of them likely born from 1790 - 1810) had done the above; kept their collections of newly minted coins acquired at face value; and passed them down the generations to me.
@ErrorsOnCoins said:
I paid too much for a coin today. The coin is really nice. I have not seen a similar example.
I will not lose money on this coin for sure.
Well then it isn't too much...
Well more than I wanted to pay, but I bought it anyway.
I'm trying to do a day trade with a stock I bought today on margin to completely pay for the coin.
Completed the trade this AM. Got the coin for free.
No you didn’t. You “paid too much” for the coin (your words). Gambling in the stock market is something else entirely.
Gambling in the stock market is a new part of my business diversification. I am way too heavy into coins. I have more free cash flow than there are coins to buy. The extra cash is a diversification investment (gamble) into the stock market and part of my business strategy.
I'm not sure how I missed this thread 10 years ago.
Anyone who tells you they've never lost money on a coin is either lying or hasn't done anything.
If your goal is strictly to make money, it's not really rocket science...you make your money when you buy the item.
If profit/gain is the primary objective, then that makes one an investor imo more so than a collector. IMO true collectors do it for the enjoyment of it. Sure, they might hope that their collections accrue extra value should they or their heirs ever decide to sell, but that isn't their primary motivation. jmho
‘Big red flag’: How police caught man charged with selling phony gold
by: Jack Shea
December 12,2022
December 12, 2022
NORTH RIDGEVILLE, Ohio (WJW) – An investigation by North Ridgeville found that all that glitters is not necessarily gold.
Detectives say an investor who purchased what he thought was $20,000 worth of gold coins and bars from a dealer by the name of “Giovanni,” was actually buying scrap metal with a coating of gold. Investigators say “Giovanni,” whose real name is Philip Kovalcik III, reached out to investors on Craigslist and Facebook Marketplace, offering gold bars and coins at a discount.
Detective John Zingale told FOX 8, “I would say that’s a pretty big red flag. Gold is pretty standardized in what they call a spot price and it’s pretty well known among collectors that if you’re getting below that, there’s probably something bad about the situation.”
The first customer who purchased the bars and coins from “Giovanni the Gold Dealer” later sold some of the items to another investor, who it turns out was more experienced in buying and selling gold.
“He went home and started looking at it, and believed it didn’t look right, based on the dimensions, the weight, there was just something off about it, and he believed that he has actually been sold fake gold instead,” said Detective Zingale.
Police took the coins and bars to a jeweler, who used the latest equipment to determine that the man had in fact been sold counterfeit gold.
“The top layer of them is gold and as far as you could tell, it looked good but once you get underneath, it’s a little heavier, it can be lead, copper, nickel, brass, a whole number of different metals that are there just to make it feel the same weight that genuine gold is,” said Zingale.
Detectives asked one of the customers who had been ripped off to arrange another meeting with “Giovanni,” and when he tried to sell more counterfeit coins and bars, the 34-year-old Kovalcik was arrested on charges that include theft, trademark counterfeiting, criminal simulation and telecommunications fraud.
Investigators say Philip Kovalcik III and other perpetrators of the fraud are using the names of legitimate gold coin companies, with similar packaging, serial numbers and even QR codes.
Detectives say Kovalcik was trying to capitalize on the latest get-rich-quick scheme in the criminal underworld.
“There’s been an influx from what I’ve seen of counterfeit gold coming into the economy, so there’s a bit of a concern that we’re going to see more of this in the future, and one of the hopes is to stem the flow of this before it gets too bad. The best advice, stick to the known retailers, if the deal sounds too good to be true, it probably is,” said Detective Zingale.
Lets be honest, you will lose some money. Ok, now what? The best formula is buying that special coin within its pricing range. If a coin in a given grade generally sells for $X and you buy it for $X+X+X. You are going to lose money.
After years of buying coins, I can say without a doubt, that no matter how special a coin is, its eye appeal and aesthetics, if I greatly over paid, I end up being greatly let down.
Coins I tend to keep and appreciate the most have that eye appeal and the right price that I purchased it for. That "right" price usually being the ability to sell the coin at the same price or some profit.
@Cougar1978 said:
If your buying coins your an investor not a collector. A collector imo is somebody who acquires coins at face value.
If you want make money in RCI you need to churn your inventory (investment). Not doing that you will most likely lose money. The market can be volatile, coins can go bad in the holder.
It’s your responsibility to investigate the various sell venues: eBay, auctions, taking a table at a show, vest pocket trading. Making money in RCI is tough, competition is brutal (many highly experienced well heeled), overhead expenses will drown you. At shows many out pick u off - lowball. Don’t let them. Like positive yardage on offense - develop strategy buy low /sell high. Nobody cares or is going to hold your hand or care if you lose your rear end. Do not finance it with debt. The only real rule: Buy low sell High. Being in a coin club can help. My first show shared a table with friend who was good mentor in the biz.
I don’t know where or how you got the idea that paying above face value disqualifies someone from being a collector.
noun: collector; plural noun: collectors
1.
a person who collects things of a specified type, professionally or as a hobby.
"an art collector"
The logical distinction between "collector" and "investor" is how they treat their purchase financially. If the buyer treats the purchase as alternative consumption which is something no one else can know, they are collecting, regardless of what anyone else thinks.
I don't believe most collectors collect believing they can make money. If they do, they will soon learn otherwise. I agree with the post before the topic was reopened that there is "slippage" that comes at the expense of the end buyer by those who make or facilitate a market in coins. These people aren't going to do it for free and it's not reasonable to expect anything else.
It's my inference that above a certain financial level which is collector specific, the goal is usually to avoid being "buried".
In short for me a hobby is not an investment. I know it can be if you really know what your doing and do enough work and research when you buy, but then it could cross the line and become a job. I have one of those already. This hobby of mine is a distraction from that. Once it turns into a job or I no longer find it fun, it's time to sell and get out.
Agree a hobby is not an investment.
But what most people call "investment" is actually speculation. "Investing" sounds so much more prudent, and it's also useful to rationalize financial decisions we would otherwise often or usually not make.
In coins, those who are in the business are actually investing. No different than any other business. Per the earlier post, no, transferring coins between collectors adds no economic value but the business (dealership, auction house) as an entity may have and increase in value.
Great subject. I think always keep on mind that if you are buying for investment, then don't over pay in the first place. If you're buying for enjoyment, then it's ok to take a loss when you decide to sell.
Comments
And that's true whether you are a dealer or a (blessed) "collector".
Exactly. If you want anything like a guarantee, you'll have to restrict your buying to coins you can get for a tiny fraction of current retail value. Will that limit your buying opportunities? Almost certainly. But then again, you won't lose money on your purchases. Probably.
I recently disposed of an assemblage of "stuff", probably roughly the same class and quantity of material as the $50k of raw coins in Whitman albums you allude to. It was long and painful. If I had to do it again, I would ship it all to one reputable dealer or auction house and be done with it. Note that "retail" for raw Whitman folders is likely around 80% of Greysheet, so your expectation should be about 60% of Greysheet. Unless they are high-end, of course.
LIBERTY SEATED DIMES WITH MAJOR VARIETIES CIRCULATION STRIKES (1837-1891) digital album
Timing makes a huge difference. I recently helped sell off a large collection of about 1800+ certified coins purchased over a 20 year period. Some coins the owner made large amounts, some he lost 50-75%
Sounds like you need to create a thread with specific info about your coins so you can hear more precise advice.
"Got a flaming heart, can't get my fill"
It's true. And I sometimes think that timing is more sheer luck than intelligence. Pittman made a fortune buying coins. He bought some tremendous rarities. He also bought crap like U.S. Mint and Proof sets. He was simply obsessed with coins. Turns out, he was buying at the right time and lived long enough that his estate sold at a good time.
That's why I don't depend on my collection to be an investment. I'm sure there are plenty of people on this forum who will make tons of money on their coins because they're so good at picking winners but I'm not going to be counting on being able to do that myself.
Buying is always done during a snapshot in time. You can buy a coin under GreySheet and watch it go up or down in value before it even arrives. A few rules of thumb are to buy only coins already encapsulated since raw coins are exceptionally hard to receive full value for. Similarly, coins already graded have equity paid for by someone else. Buying at auction has the most potential since some coins just never get enough interest to receive full value.
A great strategy is to know CLEARLY the value of a target coin before ever bidding, stick to a rigid number, then assert yourself. Whether live, online or mail bidding (or similar) always calculate the buyers premium (if any) into the cost.
Whether you're buying from Heritage., Great Collections or at a local auction these are disciplines required to buy right.
Notice I omit Dealer purchases. Frankly, Dealers and coin shops know what they have (save for varieties they're not interested in searching for) and want top dollar on everything. You can do OK trading with Dealers but purchasing under sheet, rarely happens.
Great Collections often has terrific buys on common coins, Heritage, Stacks and the rest often have thousand dollar coins go at huge discounts. Homework is a must!!
Finally, YOU MUST sell something from time to time. If you never sell you have no idea if you're buying right, or kidding yourself. Selling too takes a certain strategy. Interestingly, selling to your local coin shop or Dealer often can reap startling results.
In order for someone to make profit on a coin. He needs to buy hot coins or coins that are in demand. He needs to study mintage and population report to get to the right price to buy.
I don’t think selling a coin for profit is hard to do but selling coins for a living is hard to do.
None of that comes close to making sure there’s no loss when the coins are sold.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
You can't buy a coin at public auction for less than Grey and then assume you can turn around and get Grey for it. Don't get me wrong, in do it all the time. I also do the same thing buying from dealers. But there is a timing and effort piece that you were ignoring. If you want full value for something, you have to list it and wait for the buyer or move it to a better venue than where you bought it. The coin I bought at auction for under Grey might otherwise be YOUR coin.
Quite. All analysis here is simplistic and ignores things like the "motivated seller" vs "motivated buyer" piece of the puzzle. Especially when it comes to selling an estate or entire collection, you are stuck selling into a snapshot in time.
We see high end haircuts posted here all the time where someone spent 5 or 6 figures on a coin only to sell it months or years later for less. So even buying a "hot" high end coin is no guarantee.
I only knew one person who never lost money on a coin. She worked for a gentleman with a $40+ million net worth who had a coin and stamp business as an amusement and who didn't care if the store ever made money. It was her policy to never sell a coin for less than she paid. And she didn't. But she had a proof trade dollar for almost 30 years because she bought it in the late 80sv and then the price crashed. She also had an 1800 (?)gold piece for about the same amount of time. Unless you are willing to spend 30 years disposing of your collection or estate, you're going to have to take a loss here or there.
I might also add, per something you said in your other thread, I think you'd have far less fun building a collection based on this principle. You could never stretch to buy a coin you loved because you would be pushing the price above market. The coin you love more than anybody else will be worth more to you than anyone else. What kind of collection do you have if you'll only buy "bargains" and not coins that you actually love?
Holding a coin for 30 years and finally selling it at a 10% profit over the original purchase price counts as losing money in my book. Inflation is a real thing.
Fortunately, most rare coins keep up with inflation. If they didn't, they'd be worth less than original face value, right?
I agree. That's also why I do not consider coins a good investment. People overlook the opportunity costs of their lifelong accumulation.
Numismatic investment is risky. One can buy an item right but they are going to need to find somebody who will pay the money when it sells. Furthermore many investors like deer in the headlights have no accounting knowledge or clue how inflation, lost opportunity costs (income investments or paying off debt) can eat into any coin profits, nor realization of overhead and selling costs.
Not taking a loss means you don’t get cash flow on that item. If u send it to auc loss is a possibility. If your online store or table at show your in control. However you still need somebody who will pay the money. Last nite was looking at a popular auc house. I input a bid on one item I like which seemed a bit too much and immediately to my disgust the bid was bid up (nuk bidder) probably some rich player. I decided auc sniper / eBay better way to go for me and left. One would have to bid on last second have chance if any. That’s ok I can still find somewhere buy it right anyway so put in your little nuk bids and be be buried in it.
There was a Lisot video from a FUN presentation by Don Bonser on Lincoln cents from many years ago. All of his undervalued calls had lost money or treaded water for nearly a decade. And he is one of the experts for the series.
The 2019 ANA grading seminar cemented what I already suspected... Keep expanding my circle of competence, take a few educated risks, and the eventually knowledge and opportunity will intersect.
Gotta be ruthless in the screening process.
Ask yourself "Where is the collector demand coming from?"
Make a list... Complete Set, Type set, Date Set (key or semi key date)
Make a second list... grade jumps, color, variety, strike, condition etc...
Ideally it should have cross appeal to the type/date/complete set collector.
If three or more on the second list boxes are checked? Buy the coin.
I haven't lost money on any PCGS sub since the class.
Doubt I have lost money on any single purchase in past three years.
It works for my small scale flipping scheme, and should give the long term collector a good shot.
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I think it is considerably easier to flip coins for profit than it is to selectively buy coins that you know will appreciate in value. I guess that means it's easier to be a dealer than investor.
IG: DeCourcyCoinsEbay: neilrobertson
"Numismatic categorizations, if left unconstrained, will increase spontaneously over time." -me
I have no idea how many coins you’ve bought and sold during the past three years. But my thought is that you’ve been helped by a generally strong market and perhaps, other good luck. I’d say something similar to just about anyone - whether collector or dealer - who has sold a good number of coins and hasn’t lost money on any of them.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I would argue that if you aren't losing money here and there, then you probably aren't pushing yourself enough. Sure, it helps to stick with what you know. You have to expand your boundaries somehow.
IG: DeCourcyCoinsEbay: neilrobertson
"Numismatic categorizations, if left unconstrained, will increase spontaneously over time." -me
It's a great topic and I appreciate the perspectives of the many forum members. In some ways, we could liken it to a class given at an ANA convention.
Please, please don't try this without consulting your tax professional.
... Deleted I lost track that this was an old blog
OMG ... My Mother was Right about Everything!
I wake up with a Good Attitude Every Day. Then … Idiots Happen!
Ebay costs sellers around 10% in most cases so for a seller to make a profit he has to mark up a percentage over that based on his costs. Buy/sell spreads are enough to make it hard for a buyer to get out of an item without taking a significant loss if the seller knows what he's doing.
I paid too much for a coin today. The coin is really nice. I have not seen a similar example.
I will not lose money on this coin for sure.
Well then it isn't too much...
Well more than I wanted to pay, but I bought it anyway.
I'm trying to do a day trade with a stock I bought today on margin to completely pay for the coin.
It takes buying low / selling high really make it. Plus working your angle. One can work an angle on material allowing a good markup. For eBay a 50 pct markup good minimum target set one’s angle considering the costs operating there. However on bullion this not really achievable. Focus on material competition unlikely have if possible.
Completed the trade this AM. Got the coin for free.
Old thread or not this question really caught me off guard. I can honestly say I have never bought a rare coin with the idea I was going to make money.
I have spent more than 40 years ,(30 as a partner in a wholesale business.) I have taken hundreds of products, set a specific mark-up say(2.75 per case), and then resold them. Can honestly say I don't even know if such a thing can be done with coins. Who has a few cases of 1859-s seated Half Dollars sitting around?
On another note, my partner had a favorite saying when we were deciding what we would be spending on next. "Would you rather make 40% on a ten thousand dollar sale, or 10% on a hundred thousand dollar sale." He was a 100,000 thousand dollar kind of guy. I can't help but wonder though, what kind of capitalization you need in the rare coin industry. Bet it plays a big role though.
Final thought. Worded differently by an earlier poster, but same concept. Many years ago a dealer gave me this advice. "before you pull the trigger, even if you swear you never ever intend to sell a coin, try to look at it through the eyes of the NEXT buyer. If you are bothered by hairlines, think it's to dark, has an unsightly toning spot, whatever, the next buyer will see that too. Use this rule and you will end up with a better collection." No doubt, better coins should also mean better re-sale. James
I'll add some advice to my 10-year old comment on page one. Take some lessons from the history of the coin market and avoid purchasing high-risk items that might undergo a short-term "crash" in value or a long-term decline. Here are some tried and true ways to part with your money:
Buy common date, super-high-grade coins that are the flavor of the week, just because of the grade on the holder. The price crashes when the grading game changes, or more of them get certified, or Wall Street money pulls out (hello 1989), etc.
Buy a famous rarity like an 1804 dollar for a record price during a hot market, only to realize that only three other people could afford it, and two of them died the week after the auction. (Avoid thin markets.)
Buy problem coins that aren't certified, or they are certified as problem-free by a third tier grading service run out of some dude's garage
Buy bullion at the peak of a market run-up
Pay a huge price for a "rare" coin that is known to turn up from time to time (Shipwrecks, rare-date gold exported to Europe long ago)
Buy overgraded raw coins!
Buy counterfeits!
What is safe to buy then? Any certified coin that has the following characteristics: 1) true rarity in an absolutely sense, not just in high grade; 2) a steady collector following; 3) a long history of price appreciation; 4) is free of problems that would discourage potential buyers; 5) is unlikely to suddenly turn up in quantity in a bank hoard, a collector's hoard, or a shipwreck. The last item is hard to predict, but one can hedge his bets.
When I buy a coin, I like to ask myself who is going to buy it from me for a higher price in 10-20 years. The answer should be that "multiple affluent collectors will gladly compete with each other to acquire this item." I don't always practice what I preach, but I try.
No you didn’t. You “paid too much” for the coin (your words). Gambling in the stock market is something else entirely.
Nothing is as expensive as free money.
Collect newly minted coins upon their distribution from the mint into the channels of commerce. Look for the highest quality newly minted coins you can find (through new roll searching and from pocket change that includes just released new issues).
Hold onto the highest quality coins you find and monitor what their market value is as the years go by.
For those coins that increase in value to the point where you can sell them for more than face value, sell them.
Instant profit.
For those other coins that do not increase in value, spend them or turn them into the bank (to recover the face value of each coin that you acquired for face value).
Doing the above will result in you never suffering a financial loss and will result in you obtaining some amount of profit (of course you will devote untold hours of time to do the above; and while looking for newly minted coins that are keepers you will likely be bored out of your mind).
The above is a sure fire way to make sure you never suffer a financial loss.
If only my parents (both born in the 1920s), grandparents (all four born in the 1870s and 1880s), great grandparents (all eight of them born in the 1820s and 1830s) and great, great, great grandparents (all 16 of them likely born from 1790 - 1810) had done the above; kept their collections of newly minted coins acquired at face value; and passed them down the generations to me.
Gambling in the stock market is a new part of my business diversification. I am way too heavy into coins. I have more free cash flow than there are coins to buy. The extra cash is a diversification investment (gamble) into the stock market and part of my business strategy.
On another thread I espoused grading sets and their importance to my journey. I grade for profit and education.
Hopefully there is a point where one stops paying tuition.
It has taken years to get to a point where my circle of competence is big enough to consume an entire day at a show.
For everyone that is going to be different.
Profits can come with a serious investment in time. Probably not without and not right out of the box.
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Well then it isn't too much...> @P0CKETCHANGE said:
EOC plays by his own rules of economics. 😉
You are 100% correct.
I'm not sure how I missed this thread 10 years ago.
Anyone who tells you they've never lost money on a coin is either lying or hasn't done anything.
If your goal is strictly to make money, it's not really rocket science...you make your money when you buy the item.
If profit/gain is the primary objective, then that makes one an investor imo more so than a collector. IMO true collectors do it for the enjoyment of it. Sure, they might hope that their collections accrue extra value should they or their heirs ever decide to sell, but that isn't their primary motivation. jmho
RIP Mom- 1932-2012
Or:
‘Big red flag’: How police caught man charged with selling phony gold
by: Jack Shea
December 12,2022
December 12, 2022
NORTH RIDGEVILLE, Ohio (WJW) – An investigation by North Ridgeville found that all that glitters is not necessarily gold.
Detectives say an investor who purchased what he thought was $20,000 worth of gold coins and bars from a dealer by the name of “Giovanni,” was actually buying scrap metal with a coating of gold. Investigators say “Giovanni,” whose real name is Philip Kovalcik III, reached out to investors on Craigslist and Facebook Marketplace, offering gold bars and coins at a discount.
Detective John Zingale told FOX 8, “I would say that’s a pretty big red flag. Gold is pretty standardized in what they call a spot price and it’s pretty well known among collectors that if you’re getting below that, there’s probably something bad about the situation.”
The first customer who purchased the bars and coins from “Giovanni the Gold Dealer” later sold some of the items to another investor, who it turns out was more experienced in buying and selling gold.
“He went home and started looking at it, and believed it didn’t look right, based on the dimensions, the weight, there was just something off about it, and he believed that he has actually been sold fake gold instead,” said Detective Zingale.
Police took the coins and bars to a jeweler, who used the latest equipment to determine that the man had in fact been sold counterfeit gold.
“The top layer of them is gold and as far as you could tell, it looked good but once you get underneath, it’s a little heavier, it can be lead, copper, nickel, brass, a whole number of different metals that are there just to make it feel the same weight that genuine gold is,” said Zingale.
Detectives asked one of the customers who had been ripped off to arrange another meeting with “Giovanni,” and when he tried to sell more counterfeit coins and bars, the 34-year-old Kovalcik was arrested on charges that include theft, trademark counterfeiting, criminal simulation and telecommunications fraud.
Investigators say Philip Kovalcik III and other perpetrators of the fraud are using the names of legitimate gold coin companies, with similar packaging, serial numbers and even QR codes.
Detectives say Kovalcik was trying to capitalize on the latest get-rich-quick scheme in the criminal underworld.
“There’s been an influx from what I’ve seen of counterfeit gold coming into the economy, so there’s a bit of a concern that we’re going to see more of this in the future, and one of the hopes is to stem the flow of this before it gets too bad. The best advice, stick to the known retailers, if the deal sounds too good to be true, it probably is,” said Detective Zingale.
Lets be honest, you will lose some money. Ok, now what? The best formula is buying that special coin within its pricing range. If a coin in a given grade generally sells for $X and you buy it for $X+X+X. You are going to lose money.
After years of buying coins, I can say without a doubt, that no matter how special a coin is, its eye appeal and aesthetics, if I greatly over paid, I end up being greatly let down.
Coins I tend to keep and appreciate the most have that eye appeal and the right price that I purchased it for. That "right" price usually being the ability to sell the coin at the same price or some profit.
The logical distinction between "collector" and "investor" is how they treat their purchase financially. If the buyer treats the purchase as alternative consumption which is something no one else can know, they are collecting, regardless of what anyone else thinks.
I don't believe most collectors collect believing they can make money. If they do, they will soon learn otherwise. I agree with the post before the topic was reopened that there is "slippage" that comes at the expense of the end buyer by those who make or facilitate a market in coins. These people aren't going to do it for free and it's not reasonable to expect anything else.
It's my inference that above a certain financial level which is collector specific, the goal is usually to avoid being "buried".
Agree a hobby is not an investment.
But what most people call "investment" is actually speculation. "Investing" sounds so much more prudent, and it's also useful to rationalize financial decisions we would otherwise often or usually not make.
In coins, those who are in the business are actually investing. No different than any other business. Per the earlier post, no, transferring coins between collectors adds no economic value but the business (dealership, auction house) as an entity may have and increase in value.
Great subject. I think always keep on mind that if you are buying for investment, then don't over pay in the first place. If you're buying for enjoyment, then it's ok to take a loss when you decide to sell.