Are there any long term "investors" in rare coins?

MrEureka

Everyone that I know that identifies himself as a "coin investor" talks long-term but acts short-term. For example, they buy coins with the intention of holding long term, and then panic sell after another coin in the same holder sells for less, or after bullion markets sink, or after the Fed threatens to raise rates, etc.

It wasn't that way 20+ years ago, but it seems to be the new normal.

On the other hand, I don't know that many coin investors, so I welcome others to correct me if I'm wrong.

OPA

Originally posted by: MrEureka
Everyone that I know that identifies himself as a "coin investor" talks long-term but acts short-term. For example, they buy coins with the intention of holding long term, and then panic sell after another coin in the same holder sells for less, or after bullion markets sink, or after the Fed threatens to raise rates, etc.

It wasn't that way 20+ years ago, but it seems to be the new normal.

On the other hand, I don't know that many coin investors, so I welcome others to correct me if I'm wrong.

I suspect that they are "cutting their loses," just like any investment.

TwoSides2aCoin

I'm wrong, no matter. So my opinion doesn't count.

bidask

Mr Eureka ,

That is an excellent question and observation .

Boosibri

I think many "investors" in any asset class, stocks or you name it, act in this manner. They either don't have an independent thesis that stands on its own merits or they lack the emotional fortitude to deal with volatility.

coindeuce

Define long term, and how it provides any particular advantage over short term. Are you referring to the impact relative to high profile coins only ? How would the difference in longevity of hold impact coins that are relatively unknown, if they can be brought to a level of widespread desire by better marketing practices or by fostering better knowledge about them ?

keyman64

Pogue?

roadrunner

I held 2 of my better previous coins for 18 and 22 years. Thing is, I did try to get out of them at an earlier market peak at the 4 and 8 year points....missed the window though. It's not easy to pass up a 5X increase in 4 years. I actually tried a 2nd time at the 12 and 16 year point but the market offers weren't strong enough. I "settled" for a 7.5X increase on one of these coins after 18 years. But, 5X in 4 years would have made a lot more financial sense. That same coin showed a 16X increase in 5 yrs (1975-1980). Who wouldn't take that off the table? And then followed by a 65% drop over 6 years. Sometimes the collector ego has to take a back seat to what the markets are saying. If one's intention has no concern on financial loss or gain, then disregard all this. If you have the intention of at least getting your money back, or would like to get a profit, then you have to pay attention to Mr. Market. I'm married to my wife....not my coins.



There have been such large swings in the markets at times that playing the 6-10 year cycles is about as good as it gets. On many coins, you can buy them back for 20-50% discount just a few years later. There are always great coins to buy. We all can't be Pogues with 20-30 year time frames. Even TDN was out of his momentous seated dollar set in under 10 years (6 yrs?). And he was able to buy the set back, likely for a nice discount. What could have beat buying in 1974-1976 and selling in 1979-early 1980? Or how about buying in 1982 and selling in 1989/1990? And then buying again in 1995-1997 and selling in 2007-2008? In reality, our little coin market has been on the whipsaw train since the 1960's. But those market relationships are for another discussion.



The large whipsaws in financial and collector markets might make the 15-30 year holds a bit obsolete for most people. If you're collecting in an area that is fairly immune from volatility (say Fine-XF type coins), then you have less reason to sell on overall market whipsaws. Long term for the "investment" side of today's rare coin market is probably just the next up cycle of 5-12 years. If they start lasting 20-30 years I'm all for it. Though even longer commodity cycles don't seem to last more than 16-18 years. And who is lucky enough to buy at the very bottom? The rare coin market bottomed in 1995-1996 but the train didn't get a lot more riders until 2003-2004 when most financial markets had rebounded. But, there are usually a number of signs along the way suggesting things are winding down. One could suggest that the entire "modern" rare coin "investment" market is only 40-45 years old and began as the baby boomers became young adults...and the closing of the international gold window in August 1971 (think Ivy, Halperin and others gearing up their rare coin dealer pursuits). How does this cycle carry on w/o the flag bearers?

EastonCollection

Originally posted by: keyman64
Pogue?

Gardner, Newman, High Desert and there are plenty of others. The majority of them are really not known until the point in time when they sell or reach the market place. I believe that there are alot of great collections being put together by top collectors right now and most of them are a long time holder. Even some of these folks are really knowledgeable or experts of their specialized series.

Nysoto

There seems to be more current turnover of collections with shorter hold times than in the past (except Newman!). It is difficult to categorize someone as a pure collector or investor, they are usually some combination of both, as it is more fun to stare at a 1794 dollar than a bank or stock statement. Most of my collection is 10-30 years old and I have no desire to sell anytime soon. I think my early gold and bust coins could be decent investments but I don't know if I am really an investor.

ShadyDave

Sounds like whoever you are observing might want to be a coin investor, however they sound like a speculator and a poor one at that. They also sound like they have the wrong risk tolerance and are not very in-touch with where current opportunities are.






No matter what people say about market timing, you have to take a step back and observe the overall picture and determine what the smart move is. You have to time the market unless you enjoy throwing money out the window. Does it sound smart to buy stocks, coins, houses or any other item for a record price? People were not being rational during the housing boom in the mid-2000's but since everyone around them was doing it too they figured the market has to keep on going higher, right? How did that work out for them? Past performance is not indicative of future results.... We live in a different time and age but one thing is constant, prices go up and prices go down, make sure to buy when the prices are down unless you know something no one else knows

291fifth

The term "investor" is essentially obsolete. Today the way money is made (or lost) is pure speculation. Think of today's "investors" as day traders. They make very, very short plays on the market.

Collectibles, including coins, are likely to be poor performers over the next decades. Their ardent followers are fading from the scene and are not being replaced by sufficient numbers of new participants in the market. Last weekend I attended a stamp show for the first time in several years. I am in my late 60s and was one of the youngest people at the show. The people who were there are still very enthusiastic about stamps but in ten years will any of them still be around? The situation in coins is not as extreme but is headed in that direction.

It is this fading market for collectibles that will keep people from thinking about "long term investing." When the trend line is headed down what does the long term look like?

jcping

Originally posted by: 291fifth
The term "investor" is essentially obsolete. Today the way money is made (or lost) is pure speculation. Think of today's "investors" as day traders. They make very, very short plays on the market.

Collectibles, including coins, are likely to be poor performers over the next decades. Their ardent followers are fading from the scene and are not being replaced by sufficient numbers of new participants in the market. Last weekend I attended a stamp show for the first time in several years. I am in my late 60s and was one of the youngest people at the show. The people who were there are still very enthusiastic about stamps but in ten years will any of them still be around? The situation in coins is not as extreme but is headed in that direction.

It is this fading market for collectibles that will keep people from thinking about "long term investing." When the trend line is headed down what does the long term look like?

Well said. My heart is with your statement. When you don't call you are a coin investor, sometimes, many made much more money at the end. Did Elisaberg or Pittman call themselves coin investors?

In the first a few set registry years, I saw many "so-called collectors" built sets (e.g., comm, 3c etc) and flipped them in big auctions once the set is completed and rank top in PCGS set registry. Many successfully "speculate" their goals Should them be called coin collectors?

ctf_error_coins

I am building/ built a business inventory of unique major error coins. I do consider this a long term investment.

AnkurJ

Excellent post RoadRunner!

Cougar1978

I am an investor buying and selling coins on a regular basis - ST / LT Capital Gain / Loss. If I can flip a coin for an immediate profit, I do so. Others I may hold until I get my retail price. I have many items in my ebay store BIN / Make Offer where I have room. Long Term investing is not what I am about as my goal is buy low / sell high taking advantage of the cycle then sell when an item may be peaking. I enjoy coins but am not so emotionally tied to them holding them for decades. I occasionally take tables at shows when the trade offs are favorable. I try to keep inventory under control so I am not whipsawed by market cycles or pushed into forced sell situations. Sadly I see many in forced sell situations who overpaid or overbought for coins being offered on the bourse or realizing on the Bay in the 65-70% of market value range (this is an average, can be much less) or as low as say 20 back of bid in current market conditions. Some even worse as players know that is all they can flip them for.



If your going to invest in coins then you need should have a strategy how your going to sell them and make money. This is not a one dimensional game.



Coins offered to me are subject to my wholesale offer which is based on inventory needs, what I think I can sell it for, and current market conditions. I enjoy the real estate show flip or flop and approach coins the same way, that is does the deal have strong profit potential. So if deal not there, no interest.

oreville

I do not know what I am.

I thought I was collecting coins for my retirement and to enjoy it until it is time for the next generation to enjoy.

I believe I am a hybrid coin collector and treating my coin collection as my pension which seems to fit the old time long term coin collecgors like Norweb, Eliasberg...

TopographicOceans

I still have my Whitman album of Lincoln cents from when I was a kid

OldIndianNutKase

I think that coin investors tend to focus much more on coins which have great potential for appreciation as differentiated by collectors who acumulate date sets. A type set collector could be construed as coin investor as he can cherry pick coins with good potential from many series.

BAJJERFAN

I'd guess that a bigtime dealer Like Laura would be in a position to give a reliable answer.

pennyannie

I don't know a single coin investor and not a whole lot of collectors. IMO there are a lot of better places to park your money with less risk.



I doubt if most dealers really believe the stories they tell to the public.

mercurydimeguy

My ex partner in a venture, the CFO of my startup and a great guy, tought me something.



He was an options trader on the Philadelphia exchange and came out of retirement to do a startup with me. He had owned 2 seats and made a lot of money back in the day.



Here was his perspective/advice...



"Mike, after 25 years I've come to realize there is no such a thing as a longer term investor or investment. Any so-called long term investment is simply a short term investment that went bad."



/mdg.

OperationButter

Its human emotion. Sell when everyone is selling and buy when things are going up and everyone feels all warm and fuzzy and things are "safe". Unfortunately that usually leads to churning the account and lower long term appreciation of your nest egg.

DaveG

The longest-term coins "investors" I know are the collectors and dealers who bought really nice coins four or five or six decades ago and squirreled them away.



Otherwise, I think, if you're an involved (or "active") investor then you're always comparing asset classes to each other and you're rotating in and out of them to take advantage of price cycles.

Lakesammman

I've never got the impression that "investor" equalled "long term".



There are long term and short term gains, just like any other market. I've taken advantage of both.



Thanks again for the beer.

bidask

Originally posted by: 291fifth
The term "investor" is essentially obsolete. Today the way money is made (or lost) is pure speculation. Think of today's "investors" as day traders. They make very, very short plays on the market.

Collectibles, including coins, are likely to be poor performers over the next decades. Their ardent followers are fading from the scene and are not being replaced by sufficient numbers of new participants in the market. Last weekend I attended a stamp show for the first time in several years. I am in my late 60s and was one of the youngest people at the show. The people who were there are still very enthusiastic about stamps but in ten years will any of them still be around? The situation in coins is not as extreme but is headed in that direction.

It is this fading market for collectibles that will keep people from thinking about "long term investing." When the trend line is headed down what does the long term look like?

Upticks overtime in global economic growth that translates into increased discretionary spending translates world coin opportunities ......

mrearlygold

One of my "investments" ( circa 1996-97 or thereabouts ) was to assemble as many early easier date $10's ( 1799's and 1797 large eagles although these are somewhat better, 1801's etc ) as I could as I really felt that the 1799's in AU-58 would "someday" be worth 25K each in which case I was hoping to accumulate a box or more of them between $5500 and $7500. Sell at 25K

Well I lost a lot when I went into Toms Amazing Adventure in SE Asia and when I came back the coins had already more than doubled ( 2003 ) and I sold a bunch of them. Funny how they went much higher right after that

S-it happens



At this point these are not the ones I'd pick for my "investment" portfolio and think there's lots better to be had but it'll require more per coin

19Lyds

Originally posted by: MrEureka

Everyone that I know that identifies himself as a "coin investor" talks long-term but acts short-term. For example, they buy coins with the intention of holding long term, and then panic sell after another coin in the same holder sells for less, or after bullion markets sink, or after the Fed threatens to raise rates, etc.



It wasn't that way 20+ years ago, but it seems to be the new normal.



On the other hand, I don't know that many coin investors, so I welcome others to correct me if I'm wrong.

Well, I guess my holdings will be "Long Term" since they aren't worth doodly squat today!



PS: Why use the paragraph tags which aren't allowed on "replies"? I get a little tired of the Error code 103 only to have to go and edit all of them out just to be able to reply.

BAJJERFAN

Originally posted by: 19Lyds

Originally posted by: MrEureka

Everyone that I know that identifies himself as a "coin investor" talks long-term but acts short-term. For example, they buy coins with the intention of holding long term, and then panic sell after another coin in the same holder sells for less, or after bullion markets sink, or after the Fed threatens to raise rates, etc.



It wasn't that way 20+ years ago, but it seems to be the new normal.



On the other hand, I don't know that many coin investors, so I welcome others to correct me if I'm wrong.

Well, I guess my holdings will be "Long Term" since they aren't worth doodly squat today!



PS: Why use the paragraph tags which aren't allowed on "replies"? I get a little tired of the Error code 103 only to have to go and edit all of them out just to be able to reply.

If you are one of the lucky ones who doesn't the tags, you have no choice but to edit them out. Or face the error MONSTER!

Ronyahski

I don't think a coin investor is much different than a stock market investor, or any other investor. Human nature kicks in any most investor folk panic somewhat and let emotions get the best of them. End up selling moreso than they thought they would when markets takes a downturn. We've been in a bit of a down coin market recently. The only difference I see in the coin market if you go back 20 years is that we were in a sideways market that eventually turned upwards for many years. No reason to panic and sell during that time.

oih82w8

I am more of the "catch and release" collector unless something really grabs me.

UMCane

For me, collectible coins are another asset class. And as part of my portfolio, the smallest one at that. Too much time and effort is required to buy and sell for short term profit, so I purchase one each of the highest quality coins I will will invest in, and squirrel them away using "themes" & "showcases" as sub-collections.

...My ultimate goal would be to one of every pre-1965 CAC certified coin produced by the United States. MS as #1 priority. If I do not want to spend over a certain $$$ value for a "type" of coin, I'll consider AU. I'm just not into complete collections of any one series.

Since collector coins have very slow appreciation rates, they are for collecting, not profit. By design, my total collection at the end of the day will not exceed 5% of my net worth. Then, it will be passed on as a legacy.

TwoSides2aCoin

Look buddy… they're rare to me, in spite of anyone's opinion. And as "I SEE" them, a few are investments.

TPRC

I am a long term "investor" in rare coins.

unclebob

My budget is paltry.



Coins are a very minor subset to my net worth.



However, everyday I peruse Ebay or a coin show I chant the mantra quoted by Mel Fisher... "Today is the day..."



It's a hobby that consumes a lot more time than it should.



Still, I own a couple of coins that were pretty big cherry picks.



The multiples and rarity interest me as much as the coins.



I stockpile them until I see something (guns or watches) I want more.



All take a back seat to savings, mortgage debt reduction, etc...

MrEureka

Originally posted by: mercurydimeguy
My ex partner in a venture, the CFO of my startup and a great guy, tought me something.

He was an options trader on the Philadelphia exchange and came out of retirement to do a startup with me. He had owned 2 seats and made a lot of money back in the day.

Here was his perspective/advice...

"Mike, after 25 years I've come to realize there is no such a thing as a longer term investor or investment. Any so-called long term investment is simply a short term investment that went bad."

/mdg.

I would expect Warren Buffett to disagree.