Type vs. Date vs. Variety vs. Die State Collecting - Chances of Breaking Even Long-Term
msch1man
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I do NOT consider my coin collection an investment; however, I do hope that if I had to sell my collection say 10 years from now, I'd come close to getting my money back out of it. I'm interested in all bust coinage (draped and capped)...half cents through dollars, but am most actively collecting bust quarters by Browning variety. There was a recent auction I was tracking where a decent looking R5 quarter brought basically common type coin money. In other words, it didn't seem that the R5 die marriage seemed to carry much of a premium. Anyway, this got me thinking about my collection and whether or not collecting by variety was decreasing the chances that I'll get my money back out of it whenever I do sell it.
I know there are more, but in general four of the more popular ways to collect a series are as follows: by Type, by Date, by Die Marriage Variety, and by Die State for Each Variety.
All things being equal, the type collector is going to have the fewest coins, the most common coins, and the highest graded coins while the die state collector is at the other end of the spectrum and will have the most coins, the rarest coins, and the lowest graded coins.
Curious if others have thought about this too.
Let's say you have a coin budget budget of $250 per month. Over the next 10 years, that means you will have spent $30K on your coin collection. Which collector (type, date, variety, die state) stands the best chance of getting their $30K back when it comes time to sell?
I know there are more, but in general four of the more popular ways to collect a series are as follows: by Type, by Date, by Die Marriage Variety, and by Die State for Each Variety.
All things being equal, the type collector is going to have the fewest coins, the most common coins, and the highest graded coins while the die state collector is at the other end of the spectrum and will have the most coins, the rarest coins, and the lowest graded coins.
Curious if others have thought about this too.
Let's say you have a coin budget budget of $250 per month. Over the next 10 years, that means you will have spent $30K on your coin collection. Which collector (type, date, variety, die state) stands the best chance of getting their $30K back when it comes time to sell?
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<< <i>I do NOT consider my coin collection an investment; however, I do hope that if I had to sell my collection say 10 years from now, I'd come close to getting my money back out of it. I'm interested in all bust coinage (draped and capped)...half cents through dollars, but am most actively collecting bust quarters by Browning variety. There was a recent auction I was tracking where a decent looking R5 quarter brought basically common type coin money. In other words, it didn't seem that the R5 die marriage seemed to carry much of a premium. Anyway, this got me thinking about my collection and whether or not collecting by variety was decreasing the chances that I'll get my money back out of it whenever I do sell it.
I know there are more, but in general four of the more popular ways to collect a series are as follows: by Type, by Date, by Die Marriage Variety, and by Die State for Each Variety.
All things being equal, the type collector is going to have the fewest coins, the most common coins, and the highest graded coins while the die state collector is at the other end of the spectrum and will have the most coins, the rarest coins, and the lowest graded coins.
Curious if others have thought about this too.
Let's say you have a coin budget budget of $250 per month. Over the next 10 years, that means you will have spent $30K on your coin collection. Which collector (type, date, variety, die state) stands the best chance of getting their $30K back when it comes time to sell? >>
Better date type, it has a stronger demand base and tends to trade at tighter margins where varities and common coins tend to sit and draw offers with larger cushions.
If you really want to protect yourself read up on Doug winters multiple layers of demand and look for coins be they type or date that match that criteria.
Many will look at the rear view mirror and say XYZ did well during the past 5, 10, or 20 years, and draw that line into the future. Rarely does it work that way, though trends in coins can last a long time.
Many were telling folks to buy rare dates, and some have had a bloodbath recently in some series, with mega percentage declines. Many have said to "buy the best grade you can afford." Again, in some series it has been a blood bath for some of the top pops, as pops exploded in a few series, and prices plummeted.
Again, a person can buy wrong in any series any kind of collecting, and also buy right. Some luck factors in, but overwhelmingly the predictor will be the skill level of the collector/dealer.
/edit to add: so bottom line advice collect what you like. You're more likely to be passionate and learn more about what you really like than anything else.
Experience the World through Numismatics...it's more than you can imagine.
I am seeing two types of sellers. Those that refuse to adjust prices downward and are sitting on coins for years and those that are adjusting prices accordingly to move inventory. It's a great time to be a buyer if you have cash to spend and a long term outlook.
I don't think collecting bust coins by die variety is ever going to stop with the wealth of information available today versus 30 years ago. I think the coin market in general is weak and will rebound.
So what I am trying to say is that I wouldn't question your collecting philosophy based on what you are seeing right now because the whole market seems blah in all types, dates, varieties and die states
Predicting what will go up in value over the longer term is much like predicting interest rates. The past is NOT a predictor of the future.
Buying right in a series that does not go down in value on average is probably the best opportunity to ensure getting your money back out. That said, I collected Washington quarters for a while and was fortunate to get out of that series before the pull back in values. It had nothing to do with my knowledge or market perception, just blind luck in one of my change in collecting philosophy moments.
I would offer the suggestion that collecting type coins in the best grade available to your budget is the best hedge as you will have what is hot and what is not in terms of series, thus a diversified portfolio.
It all goes back to collect what you like and hope the market does not bite you in 10 years for any of a 1,000 reasons.
Ill add: I myself have always been fascinated with better date coins. In the past , I would always look for the best and try to obtain that, but either price or availability would cause me to take a marginal coin if need be. In the past year or so, I do not buy any coins I don't care how rare unless it has a wow factor , or a coin that others would love to have/own. When it comes time to sell, I want to own coins people want or are waiting to buy. I had some rare seated coins that don't come around often, but were just marginally acceptable, these were very tough sales when the time came to move em.
Even though not truly rare, there are coins that I like owning(1st and for most because I like owning them) but also because people will always want them , and they are nice : examples 1893-s Morgan PCGS 55 CAC, 1901-s Quarter PCGS 53 CAC, 1916-D Mercury Dime PCGS 64+CAC. In actuality, it would probably be easier to sell one of those , than say my 1871-cc Seated Quarter or 1804 Bust dime PCGS 45
Friend of mine a few years ago tried to get me to get into die varieties for Draped and Capped bust halves. Its an area that does not do anything for me, he kept telling me how rare certain ones are , and so forth. Recently he had to dispose of most and found out , in some cases these are not as easy to get rid as you would think. Auction results were all over the map, in some cases he took a huge bath because there were not enough buyers this time around to push up bidding. This could have been several factors including demand, people who were bidding before have now obtained an example or no longer want one, recently discovered examples, market conditions etc.
Acknowledging red tiger's "knowledge/buy right" point so it doesn't matter, yet doesn't a certain price point influence ease of sale? I know there are collectors at all levels, but considering an economy that is not healthy (and at least continuing for the next several years), it would seem that there will be fewer buyers within a certain cost range (excluding whales who can buy at any time no matter the price) regardless of type, rarity, etc. So, if you accept that premise, wouldn't coins that are 5-15K have a tougher time upon resale considering the perhaps diminishing number of collectors who can afford them?
"Got a flaming heart, can't get my fill"
I think to do well in the long term, your coins are going to need to have multiple things going for them.
I wouldn't be putting money into any minor die varieties or unpopular series, no matter how rare, unless the coin also had great eye appeal.
I'd stick with collecting popular series by date and major (Redbook) varieties if you are concerned about long term value, and choose coins that are nice, or even exceptional, for the grade.
But of course if you WANT to collect by die state and all die varieties, that's fine, but put on your bargain hunter's cap. I think the specialized collectors love to cherry pick such coins, but don't really want to 'pay up' for them....so don't bury yourself in such coins.
Although a type set does have common dates in it most of the time, those common dates are in the higher grades. Common dates in high grades can still be good. Therefore I'd say that a type set, with its built-in diversity, offers the best chance of coming out even or ahead IMO. Circulated sets, which contain a lot of common dates, is the best way to come out as a loser, even if you hold the set for a long time.
As for die variety collecting, I did very well when I sold my half cent die variety set, but that worked out for two reasons. First, I was sort of "ground floor" buyer who bought the coins before they got hot. Second, I was setting up as a dealer at the time and got better prices as a result. Unfortunately since I have retired, I have run into the dealer attitude that "You pay peanuts to the public" when they offer you coins as opposed to other dealers, to whom they know they will have to pay better prices.
For example I sold four coins to a local dealer at fair prices. I know for a fact that he sold all four pieces at a profit inside of a week. I took some more coins to him of equal quality and collector interest. That time he started low balling me.
But don't gloss over the "original and eye appealing" input...because there is so much dreck out there, eye appeal will always be in demand
My 10 cents
THIS
AND...If a key goal is not ending up awash in red ink:
1. Learn how to shrewdly evaluate what you intend to collect--many collectors don't do this (as RedTiger has noted in many posts that are worth reading).
2. Buy nice pieces before they become more popular with collectors (e.g., buy before the TPGs start grading/encapsulating them).
3. Buy pieces that look very high end for their grades and get them upgraded before you sell.
4. Buy pieces that have extraordinary, monster eye appeal (the kind that would prompt multiple bidders to duke it out) and sell them at auction.
5. Don't fall too much in love with your coins and sell them when their values appear to be close to maxed out. This requires thinking more like an investor than a collector.
6. Sell your coins many decades after you bought them (like EP Newman, etc., but this won't help if you bought at a crazy market high).
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
Hoard the keys.
Method 1: complete the set. I have previously completed date/mm sets of BU Barber dimes, mid-grade large cents (1793-1857), half dimes (1794-1873-s), Bust quarters (1796-1838), Seated quarters(1838-1891-s), and proof Liberty nickels, minus a few "impossible" dates that would cost over $25k each to obtain. My personal experience is that set building has cost me a lot of money. Much of the set ends up being nice coins for which I paid too much, while another group of coins is average-looking, common-date material that I would not have bought - except that I'm building a set. Bad business practices, really! I plan to stop obsessive-compulsive set building. Might start a support group- Setbuildaholics Anonymous (LOL).
Method 2: buy PQ coins only, forget the set. In this method, I target only monster PCGS/NGC coins with great eye appeal, or rare dates/varieties, but
coins have to be reasonably priced. There is no intention to complete a set of anything, ever. In the long run, this is the most satisfying method of collecting for me. It results in a "Box of 20" approach with highly desirable examples of each Type you collect, bought at fair prices. I don't overpay for anything because I don't ever "need" a coin to fill a hole. PQ and truly rare coins can see large increases in value over the mid to long term, too. Compare this tactic with a completing a set of 75 coins in which you only enjoy looking at 2 or 3 of them, and ultimately have a lot of work to do when you sell the rest.
Method 3: think like a dealer. In this final method, I try to buy coins too cheaply, either by cherrypicking or by attending auctions and buying the material that "falls through the cracks." I save any PQ/rare coins and flip the rest for short-term gains. For an educated collector who plays "vest pocket dealer" once in a while, returns on this method can be eye-opening. One $50 cherrypick on eBay that turns into a $7,000 sale can keep your whole collection in the black for quite a long time.
In the long run, some combination of method 2 and Method 3 will allow you to buy the coins you really want, and either break even or make a profit. But I recommend avoiding #1, based on personal experience.