Article slams coin dealers and investors
logger7
Posts: 9,077 ✭✭✭✭✭
I was talking to a coin dealer I know well, he found this article very critical of coins dealers. I'm not sure if it has been discussed on the forums?
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Isn't that the pot calling the kettle black?
https://americanfederal.com/
Is this ironic or a coincidence? American Federal is located at
500 Easy Street, Carefree, AZ
https://americanfederal.com/about/staff/
Coins are available. Funny to think that's the great caveat. Buyers beware.
``https://ebay.us/m/KxolR5
My take was that the article was slamming investing in collectible coins. Presents one side of the story that all investors should be aware of.
No Way Out: Stimulus and Money Printing Are the Only Path Left
First, it's not an article. It's an advertisement. And one that is full of crap, at that.
The shortened version is: they're all crooks, but trust us and only us. Where do I sign up??!!!
Nick's newsletters go right in the trash. He wants you to sell him your numismatic stuff on cheap and usually replace it with his over priced bullion.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
My head was starting to hurt, so I stopped at page 3.
Based on the comments above, I will not open the article.
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb, Ricko
Bad transactions with : nobody to date
Transparent sales pitch.
Here's a warning parable for coin collectors...
There are a number of fresh myths in that article which is somewhat ironic. They should have weeded out their own market misconceptions before printing the article.
Their very first sentence of the 15 myths is just incorrect. It only goes downhill from there.
Very few people have made money investing in rare coins, except for
those who have purchased either bullion related coins or the super
rarities.
Since the mid-1970's when I first started off in better US coinage, I often made money on my coins, and very few were bullion related and NONE were super rarities. It doesn't take a genius. Ironically, on their website they now recommend gem Proof Barbers for investment....yet those are clearly not super rarities nor bullion? Huh??? What's the track record of gem proof Barbers since 1989?
With slabs, CAC, and dealer mentors, it's even easier today to not lose money in coins. You could revamp this article and put in most any collectible and probably most main line investments including stocks and bonds.
The fact that he states a coin price has to double to barely break even was one that made me laugh.
Alternative CoinFacts.
10-4,
My Instagram picturesErik
My registry sets
I can see where warnings here would be useful. This wouldn't be for dealers people here frequent like Legend, DWN, CRO, etc. It's more suitable for pointing out the pitfalls of dealers using telemarketers to go after retirement funds and the PCI scenario.
Of course, you should be skeptical of everyone, even the one publishing these warnings.
At one point, they say coins graded back in the 80s were overgraded and not worth much. On his facebook page, he is saying collectors are now paying a premium for coins in old holders, so sell them to him now! haha.
All this while pushing his opinion that Proof Barber Coinage is a strong buy and a "Limited Risk".
"The Time is Right for Rare Coins".
Well now... that is a true potpourri of 'information'.....Not sure of the intent of the article, but there is a lot of apparent self promotion (trust me - which for many means **** you)..... and a couple of points to consider... Mostly it was a huge waste of twenty minutes... Cheers, RickO
"Fake News !"
"Everything is on its way to somewhere. Everything." - George Malley, Phenomenon
http://www.american-legacy-coins.com
If you are not a coin collector, there is a fair amount of truth here. People who don’t know how to grade, who don’t know how collectors think and who are simply “investing” in coins to make money are going to get skinned most of time. If you don’t have a passion for coin collecting, you shouldn’t be buying coins. He’s right about that, but much of the other stuff in this article is extremely self-serving for his bullion business.
He’s right about the stuff the boiler room guys sell. They don’t have “rare” coins to sell, and most it is overpriced with little hope for long term price appreciation.
The truth is speculating in precious metals can be just as dangerous as buying “rare” coins. And when these guys put their clients into metallic trash like “one and a half ounce polar bears” you are buying something that does not have an active market other than items that sell for less than their melt value, actually more like their scrap value.
I don’t know how this guy expects to sell any “rare” coins to anybody after they have read this piece. I know I want nothing to do with him.
And as for the Professional Numismatists Guild, I have known some really great dealers who belong it, and I have known some others who were the among the worst in the business.
Dave Ramsey got straight to the point, "Don't invest in things you don't fully understand." (Not an actual quote but
his message is crystal clear.)
No bias in that ad whatsoever.
"Keep your malarkey filter in good operating order" -Walter Breen
Every word of it is true in general. Of course there are always exceptions to the rule, but in general it is 100% accurate. I have no illusions about my collecting. Would I like to make money or at least get my money back? Of course, who wouldn't. I approach it as a hobby, and not my retirement or savings. I have coins maybe no one would pay for, but I like them. I have others that I might be able to start a bidding war with. I really don't care.
Bullion as a commodity, is a portfolio strategy same as any other commodity.
Some of you should read the article instead of dismissing it before you do.
While the author definitely has a viewpoint that would be self serving, there are more than a few kernels of truth about the coin market in the article
I don't think most of this information is applicable to me... I'm a coin collector, not an investor.
He is right about one thing though... if you don't take the time to get really good at grading, develop an eye for nice pieces, and gwt knowledge about the coins you want to collect, you will lose a bunch of money in short order if your sole purpose is to flip them for a profit.
I feel like I have a hobby in which I can recoup at least part of my money for my indulgence if needed. Not like bowling, or beer drinking, or whatever...
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Hans Tulving used to peddle this same "information."
There are ridiculous statements, but there are several accurate points as well. Buying rare coins is like an adventure in the Wild West - a free for all. If the rare coin market was regulated like the financial market there would be several coin dealers facing hefty lawsuits and government fines and perhaps even criminal charges.
Which do you consider "ridiculous?"
I bought a MS65 common date Saint around 2001-2002 for my general collection, for around $225. When I saw gold get up around $750, I sold it because I had trouble believing it was going much higher, although it did get over $2,000, and now back to what around $1,200? I should have bought 10,000 of them, but who knew.
(I have no idea who these people are, nor do I invest in bullion, but if I did, lowest cost to purchase rules no matter from whom, and has to be watched as a commodity)
He wants people to be smart buyers but he also wants to sell platinum ,
two mutually exclusive ideas. Plus Palladium is only $70 over spot on the website , great idea , huge markup on a coin literally no one will ever buy from you keep up the good work way to invest pigeon 
Yep
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Tulving also had pretty small buy-sell spreads and very competitive pricing.
Aside from the self-promotion and warnings of pitfalls that most people with any common sense should know anyway, there was quite a bit of truth to the article. Coin dealers are in business to make money, and so is he. I'm shocked!
I definitely agree with him that there are times that bullion has advantages over rare coins, and in many cases an MS-63 pre-1933 gold coin isn't rare anyhow (but the traditional markups & spreads would have you thinking so.)
I knew it would happen.
Precious metals are some of the safest transactions if you buy at the right time, and most pm dealers are very skeptical of numismatics, too much research, all it takes is a few burns and they probably threw up their hands with disgust.
I bought a 1907 $20 Lib. in MS63, super nice luster in the PCGS holder in the 90s from FJ Vollmer's for common money and sold it to a dealer when I found out it was worth hundreds more because of the date at the time. I have seen the same skepticism from a lot of the bullion dealers, God help those trying to sell nice certified material, let alone nice raw coins to them. Ultimately sellers need to do a lot of research online, which is beyond the ken of many people especially families that inherit rare coins and currency.
How many big bankers, hedge funds players, regulators, politicians, etc. who were directly involved in the 2006-2009 financial crisis actually go to jail? ZERO. How many criminal referrals did the Office of Thrift Supervision bring forward? ZERO. Compare that to the Savings and Loan scandal of the 1980's where over 30,000 lawsuits were administered by the OTS, many resulting in financial claw backs, fines/jail time, over 1000 felony convictions....and the 2008 crisis was 70X the size of what occurred in the 1980's.
Not a single felony conviction of a big banker/big mortgage player this past time around. Maybe our wish should be that the big financials should be regulated as well as the rare coin business. Read some of the articles/interviews by S&L bank regulator/prosecutor/law professor William K. Black.
http://billmoyers.com/2013/09/17/hundreds-of-wall-street-execs-went-to-prison-during-the-last-fraud-fueled-bank-crisis/
We don't need more government regulation. All that does is increase the opportunities for bureaucrats to extend their power and influence into the economy. Most bureaucrats don’t have the expertise to run what they say they are regulating for the better, and it opens up the possibilities for more dishonesty and corruption. The progressive reflex to regulate more and more is already out of control.
WHAT !!??? MS 65 Morgans aren't $1,000 any more?
They never should have reached $1,000 in the first place. The coins are almost as common as dirt,
Coins are horrible investments for most. A number of the points made in the article/advertisement are accurate. Most, including me, should only purchase coins for enjoyment of the hobby.
How so? Do you have any in YOUR pocket?
It's a finely crafted ad but good marketing needs positive arguments lol. I am sure a lot of these guys are hurting from the summer doldrums and competition w eBay.
Please, MS-65 Morgan Dollars are the kind of stuff that the boilerroom guys push off on the "coin investors" who don't know any better. The number of 1881-S dollars in that grade category would be enough to choak an ox,
The supply of these things is such that they can promoted to the hilt, much to the discredit of the hobby.
Typical strategies used by "investment" groups that want to undercut other options; salt the fields of others while promoting advantageous ones.
"At American Federal we can
compare virtually any coin you own
or are thinking of owning to bullion
or other coins.
If you think rare coins are giving you
a “gold” related investment you
are in for a shock. See how
your investment really
stacks up."
Actually bait and switch is pretty common; a loss leader offering in the WS Journal or other publication, people call in to order and they are then offered MS/PR69-70 coins at inflated prices.
"The best dealer, in my biased opinion (because I
am one) is one that deals nationally. These dealers should be members of
national coin industry organizations, of which the best is PNG-Professional
Numismatic Guild. Here at American Federal, for example, we physically
deal in all 50 states; we deal with market makers, auctioneers and both
collectors and their representatives. It takes a lot of manpower and
relationships to stay current in today’s market. As a national dealer, it is
our job to know what is behind the market. We look at why collectors are
buying, for example, because it tells different stories. If someone is buying
simply to support his or her inventory, it’s different than someone buying in
anticipation of doing a major promotion. Believe it or not, only a handful of
us dealers do most of the national business.
We, at American Federal, pride ourselves in being a top national dealer,
with 30+ years of experience. We truly care about our clients and work to
make our transactions transparent and profitable for all parties. You can
trust us at American Federal…coins and bullion are our only business!
We buy and sell all types of rare coins and bullion".
I did a quick search for customer feedback on yelp or google review without anything popping up, maybe they scour the internet getting problem reviews removed which is not hard to do.
If a numismatic business has a number of employees geared toward sales and paid on volume it is unlikely collectors will yield anything but a poor return due to overhead.
I think I want that PO1 Hawaiian Dollar in the upcoming Stacks sale that was someone's pocket piece. Maybe give it to my wife who is Hawaiian. (She has a knockout Hawaiian coin collection!)
One of the nastiest words in numismatics to me is "market maker." It turns my stomach.
Actually, unmessed with dirt, with no human made chemicals in it, is getting pretty rare these days........