building a collection the "wrong way"
Gazes
Posts: 2,315 ✭✭✭✭✭
There are many clichés and "rules" about how to go about building a collection. Over the years, I have come to the conclusion that one size does not fit all. There are many ways to go about it. Here is one way that I think merits consideration especially to someone that is not near the end of their collecting career.
Pick a few areas to collect. Purchase the coins that interest you. Every now and then sell those coins to make one large purchase (the type of coin that is a centerpiece to a collection). Repeat over and over (but always keep the centerpiece coins).
This method goes against a lot of rules: 1) buy coins and hold for the long term 2) if you buy and sell you will lose money 3) buy the best coin you can afford (rather than buy a cheaper coin and then sell for a better one later).
Here is why someone might consider my "technique". First, it is human nature when you are involved in anything including coins to want "action". It is very difficult for a new collector to methodically pass over coins, save all their money for the best coin they can buy and then wait again for a long period before buying the next coin. People like activity. If they are new or newish to the hobby, it is hard to just buy one coin a year. Eventually they get bored and stop. So yes, buying lots of coins only to sell them after a relatively short period may economically not be the best move but at the end of the day they may enjoy and stay in the hobby longer.
Further, by taking this road, you slowly accumulate centerpiece after centerpiece. My hunch is someone doing this in the long run will have a hell of collection. Also, along the way they are learning everytime they buy and sell a coin.
Definitely not for everyone but sometimes it pays to think about something in a new way.
Comments
@Gazes Thanks for your thoughtful post.
It’s always refreshing to hear other collectors’ perspectives!👍
Stuart
Collect 18th & 19th Century US Type Coins, Silver Dollars, $20 Gold Double Eagles and World Crowns & Talers with High Eye Appeal
"Luck is what happens when Preparation meets Opportunity"
Someone collecting like this may end up with a hell of a collection but will have way overpaid for it.
But you are right about the basic psychology of collectors. Waiting to buy the one big coin is probably not going to work for people who want to fill holes. But it is going to come at a huge cost, especially in a coin market that is weak at the bottom end.
Then again, as long as they are having fun!
All comments reflect the opinion of the author, evn when irrefutably accurate.
Hard to figure out in general terms. A centerpiece coin for you might not be one for me or vice versa.
Maybe the person is doing it for education or entertainment purposes only. Won't spend more the $20 on any coin in his collection. Not super valuable but can still be a nice collection.
I think quite a few collectors start out with loftier intentions but end up doing exactly this. For me at this point, it is probably smart to buy 1-2 coins per year for my type set, but it sure isn't as exciting as pounding away at a set of Walkers or Buff nickels.
Then buy 1 or 2 coins for the type set and pound away on a circ set of F-12 buff nickels at the same time.
Investment in coins a long term activity.
@Gazes
I think you hit the nail on the head with this:
“...when you are involved in anything including coins to want ‘action’”
With the advent of the “instant-on”, “instant-answers”, and “instant” everything there has to be even more action.
When there is no action then boredom sets in. To relieve the boredom then it’s natural to find something else or do or do something within the hobby that has action. Perhaps adventuring into world or ancient coins, error coins, selling coins, or perhaps causing a fuss (I’ll let your imagination run wild on this but all one needs to do is read certain thread posted here/elsewhere).
Finding the thing or things to do to relieve the boredom in this hobby, at least for me, is to have other hobby(ies).
My 2c.
My recipe:
Buy the keys first.
Upgrade when you can and sell off duplicates and raw pieces.
Determine your optimal collecting grade (the highest grade in which your money is maximized within the scope of quality).
Buy the best you can afford.
Have fun filling in the "generic" or "common" dates later as a 'reward' to yourself.
Don't be afraid to pay up for an exemplary piece.
be diligent and PATIENT as it is a labor of love.
Read books, align yourself with good people and dealers and study your series, as much as possible (auction archives and prices realized).
Sometimes, it’s better to be LUCKY than good. 🍀 🍺👍
My Full Walker Registry Set (1916-1947):
https://www.ngccoin.com/registry/competitive-sets/16292/
I try to focus on one series or type.
I use bullion. When the right coin comes along, I will think long and hard about cutting some bullion loose to buy the coin. More so than with cash. Downside is that by the time arrangements can be made the right coin may be gone and bullion has to be restocked during a price dip.
I think that a better "action" might be to study every coin you have in depth rather than to be constantly buying and selling. Learning more and sharing it with others are “actions” that can be more satisfying than constant turnover.
Unless you are a dealer, buying and selling becomes a very expensive proposition. It seems that dealers are less likely to work on smaller margins (10 to 20%) on items priced at several hundred dollars and higher. Instead they need to buy low and sell high. That makes constantly churning your collection an expensive proposition.
Have I given up on some collections? Sure. I sold my Indian cent collection when I was young and let my half cent by die variety set go when I was middle aged. I have let individual pieces go when my interest waned and I saw no future in them for me. I have sold almost all of the coins that upgraded. Still I’ve had on-going areas of interest that have existed since the 1960s, and I’ve branched out from there.
Today, I think that there is overemphasis on key date coins and “centerpieces.” Some collectors won’t buy anything except key dates, and that is a very narrow approach to the hobby. In the Civil War Token field, I’ve known collectors who won’t buy anything unless the book said there 10 or few examples known. They missed out on a lot of interesting material that has some great stories surrounding it. They also concentrated on some “stuff” that was marketed by when it was made as “rare” and really does not have much going for it other than that.
I just throw that out there for those who might not have the biggest budgets. There is room for you to enjoy the hobby just as much as those who spend millions. All you have to do is avoid running with the herd. Do some studying and think for yourself.
@BillJones
The only thing I can add to your, “All you have to do is avoid running with the herd. Do some studying and think for yourself,” is that I agree and this can be applied to anything one does.
There are pros and cons to every approach, I suppose, but I do like the idea of occasionally selling some coins, and upgrading to nicer examples. When you sell, you learn a tremendous amount of information. For example:
Did I overpay when I originally purchased the piece?
Has general interest faded in the series I'm working with?
Are there specific grade ranges that are simply not in demand?
Did I miss a problem that bothers prospective buyers?
Answers to these questions will help you greatly on your future purchases.
Good luck!
Dave
Over the past year I decided either I acquire every coin in a series (pre-33 gold) or just one as a type example. I sold several Saints and Classic Head $5’s for example and put those resources into some great type coins. I do like other (non-gold) coins and gravitate toward the keys. It felt good to replace several coins for one higher end example.
I like the saying "keep the best and sell the rest"
My YouTube Channel
A collection doesn't have to be complete to be "good." With that view, I'd much rather hold off on the keys (which tend to be fully priced these days) and focus on the semi-keys or sleepers. If I started out doing a set of Barber quarters I don't know if I'd ever buy the 96-s, 01-s, or 13-s. I'd me much happier with all the other coins in the set, that are often very hard to get, cost far less, and under strong demand from other date set collectors.
I like to buy coins with "good value and potential," and in many cases the key dates have been there and done that. We're still in the era where key dates are heavily influenced by original mintages and going along with the past 45 years. Buy "worthy" coins regardless of what they are....that tend to stand out from the majority, even if the coin is generic in nature. There are always top quality generics in each grade that put others to shame. You can only determine that by immersing yourself in the market and doing some research. Knowing more than your dealers on particular areas is a good way to start.
The longer I’m into this hobby the narrower my criteria of a piece gets. At first it was simply an example of something, now it’s about the date, strike, color, luster, grade, slab, pops etc, not in any order, cause it all has to be there......It just takes more to get me excited now. On one hand, I miss the ol days where I could get lots of “action” buying, but it’s not like I’m not still having interesting fun hunting and researching for something killer now that I have built a respectable collection and knowledge base built up. Knowledge to know where I want to be when it’s finally time to pop on something.
Like fishing, sure, I could go out and have a lot of “action” casting into a school of white bass or perch or something but I’m more into hunting a trophy pike even if that means I don’t get a bite very often, I’m still fishing and at the lake the whole time, and then that one day comes when something rocks your world.
I think its cool for anyone to do whatever they want and evolve as you go, and I’ll add its probably still good to have an eye on an exit strategy, but that shouldn’t dominate every decision you make with your collection.
Done !
Did 
Ahhhhh.... mmmm.....
My YouTube Channel
A lot of good points in this thread. One thing i would add is this: pick the characteristics that most appeal to you (grade, appearances, etc...) and don't get distracted by filling holes with lesser examples (even keys). If you're like me and appreciate a nice solid MS63 with original skin, it's only a matter of time until your bright and shiny AU55 key placeholder will end-up bugging you.
8 Reales Madness Collection
Instagram: 8 Reales Numis
Just like everything else, it depends on the collector, the amount of interest they have, the amount of skill they have (with grading etc), the amount of money they have and the amount of time they have to invest in the hobby.
On average, from my experience, younger collectors tend to have less time (busy with schooling, careers, building a family etc) and less hobby money. Many millennials and gen z collectors I know churn their collection/flip coins etc to afford coins or to make large purchases.
On average, from my experience, older collectors tend to have more financial resources and available time, so they can afford to spend a little more time and money on their collection.
Some people like to hustle and others don't, I don't think that one way is right or wrong. I think it is beneficial for collectors to be buying and selling coins, as you would be better informed of the "pulse" of the market to know what's hot and what not.
While your solution does address the rampant need for immediate satisfaction in todays world, I have to agree with @jmlanzaf , that someone following this process may end up with a group of great coins he/she will also be buried in those coins.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
@Gazes - Thanks for your insight. It's interesting to learn about how/why others collect. It sometimes makes me think about why I am doing this, what my priorities and goals are, and whether I'm getting enjoyment out of my hobby, or how I can get even more enjoyment out of it! I'm re-evaluating all of that at the present. I started out being a hole-filler, first in Whitman albums, then in a self-made album with 2x2 flips, and then with slabs. That continued for a long time. But, now that I'm older, I realize don't necessarily need to collect every date/mint mark/VAM/die state, etc. of that series. So, I'm trying to figure out what I want to do with my current collection and what I want my "new" collection to be.
Yes, as with everyone here, I've overpaid for some coins. But, with growing knowledge, I'd like to think that I got some good deals, too, that more than made up for the overpaying. I guess I won't know until I sell. Or, maybe I'll never know. That's ok, too.
Everyone has their own way of collecting, and that's great. I say do whatever makes you happy and keeps you interested. If you buy one $4,000 coin a year, and are happy with that, and the saving and hunting to be able to do that is part of your fun, then go for it! If you love to compete with others for the highest grade Registry Set, and you get a thrill out of winning, go ahead and crush it! If you buy a bunch of "Lots" of low-grade coins on ebay to fill holes, and it keeps you busy and happy, keep it up! If you like buying $500.00 boxes of quarters from the bank and sort through them, that's cool, too! If you just buy a few coins that you find are beautiful, and study the hell out of them, and do more reading and researching, maybe that keeps you interested (but, PLEASE share your knowledge with the rest of us!). And, if you decide that everything you had been doing for the past 30 years just isn't doing it for you anymore, don't despair - feel free to re-evaluate your priorities and try something new! It's all good!!!
Happy hunting, everyone!
Rocking my "shiny-object-syndrome"!!!
A coin collector is just that. Not necessarily a coin investor. I add lots of cheap, enjoyable coins to my collection and have fun doing it. Sometimes I even come out ahead.
Collector, occasional seller
The main point of my OP was not to necessarily recommend this method of collecting but to point out this may be best for some even though it seemed to go against traditional thinking. Almost everyone on this forum probably started and did things the "wrong" way (i.e bought the coin before the book, bought a coin sight unseen, etc) but if we are still on the forum then it all worked out. Very very few people go about collecting exactly the "right" way. Figuring out stuff on your own can be the best education.
As for someone being buried by following the OP---maybe, maybe not. There are lots of ways to be buried in a coin. Hopefully if someone did use the method in the OP they would over time learn a lot about buying, prices, selling, liquidity, quality, etc. They may actually do very well by becoming savy. I think there is risk of being buried for those who just buy and hold forever since when it comes time to sell they may learn for the first time that they overpaid, had a bad eye, etc.
My main point is collectors should keep an open mind and that if you like to stay active and buy a lot, here is a way to do so and at the end of the day own some special coins.
It's good to sell once in awhile to get some feedback on the coins that are in your collection.
Well! Hmmmph! I think I'm calling Littleton today and cancelling my approvals.
I’m a big fan of centerpieces and really cool coins. I’m not a completist so I can avoid that trap.
m
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......
Most buy till it hurts then sell till it hurts more. rinse & repeat
Best place to buy !
Bronze Associate member
I think we sometimes forget that this is supposed to be.....FUN!!
Kind of like sex. If it feels good, do it.
I find threads like this extremely helpful, so I will add my thoughts in hopes of helping at least one other.
I have mentioned before that I collect on a limited budget. If it was not for the knowledge and support I get here (as well as on other forums) I would not be on the positive path I am with my collecting. I just don't have a lot of money to throw coins at the wall and see which one sticks (ie which one I like).
I have read on a few other forums (which I also enjoy) the very mistaken fact that this forum is "too snobby and full of rich guys". I am serious. Wow! They are missing out. I do not play on the deep end of the buying pool. But I find that all of you, no matter your financial means, are so generous with your knowledge. So whenever I see someone with that opinion, I am quick to correct them.
I think it is important to find your path with your collection, stick to it, but be open to straying from that path. For example, I mostly collect Washington Eagle Reverse quarters. Through the posts of @DCW, I came to love the work of Merriam. Though I cannot afford many of his pieces, I picked up one of his that had special meaning to me. It is therefore a centerpiece of my collection.
I love the idea of building sets of Washington quarters. I cannot currently afford to build a registry quality slabbed set. So instead, I have completed a circulated set in a Library of Coins Album, I am working on an "uncirculated" mostly white raw set, and have begun one of all circulation cameo. But I am building up my knowledge in the meantime so that if I do pick up a slabbed piece I understand how to grade and the differences in eye appeal, etc.
While all of this might not seem to have anything to do with the OP, let me explain. What @Gazes suggests is about having a plan, learning, and developing a collection which is ever-improving. That is what I am trying to do (aren't we all).
I appreciate all of the insight found in this thread and from all of you, everyday. Thank you!
Keep the best, sell the rest is how I collected.
The "best" became my inventory when I made the decision to become a coin dealer.
The OP's approach works perfectly.
A slightly less crass version of my earlier post:
I don't think anyone needs to apologize for collecting on a budget, or never owning a "centerpiece", or demanding the best of the best, or anything in between. Collecting is all about feeding the interest we somehow acquired. If that means from pocket change, fine. If that means being front and center at the world's biggest auctions, that's fine too.
Some go hungry buying the "best they can afford", some like me, collect below what they COULD afford, because we have our eyes on other monetary goals.
Some buy coins because they might give them a temporary thrill....others won't buy unless it's the absolute perfect coin.
The only question you have to ask is: Am I enjoying it?
If the answer is "No", then you're doing something wrong. If the answer is "Yes", don't let anyone even try to convince you that you're doing something wrong!
(Feeling philosophical today...and you are all victims now).
I like your strategy and I think there are a lot of collectors who more or less follow it. Myself, I just can't be bothered with selling anything, and dealing with all the crap that goes with being a "seller". I bought something because I wanted it, and even if I haven't looked at it in 10 years, I still "want" it.
during my years here it seems that most collectors go through some sort of evolution which is close to what you describe. we may each buy coins somewhat haphazardly but over time become more focused, both on what we collect and on the quality of what we buy. I have suggested to many collectors that they should learn how to sell because it will make them a better buyer and help finance key coins in the future.
it has taken me a long time to learn that in this Hobby less is almost always more.
Ocassionally saints appear to "load up" a bunch of really nice coins.
It's not that way now and the really nice stuff is moon money.
Maybe it's because so few collect sets of any kind (date, basic or beyond)
If I bought the best available saint of each date right now I'd have a 25% dreck.
About 6 months ago it was a different story.
Kind of strange and maybe it's just a weird series but it seems to go in buy/don't buy cycles.
My Saint Set
Good thread and responses.
Find an area that interests you.
Learn how to grade.
Find someone to mentor you and give you feedback on potential purchases. This will make you a better grader.
Only buy a nice coin for the grade and keep it.
Don't pay double or triple recent auction prices for a nice coin for the grade. You will probably not be able to upgrade your coin, and you'll be buried in it.
Another reason to buy a nice coin for the grade and keep it is if you're lucky, you're back 10-15% each time you buy and sell a coin. Do the math.
"Seu cabra da peste,
"Sou Mangueira......."
Interesting thread. Over the years, I have seen all the above 'collecting methods' suggested...and, no doubt, there are merits to many.....However, I consider coin collecting to be a hobby.... something I do because I enjoy history, the look of coins, the hunt for coins, the fun and excitement of acquiring a special coin. I rebel against structure in what I consider to be my casual pastime....and I do not sell coins, simply because I purchased/acquired each coin because I was interested in it and wanted to own one. As Bruce Lee said "Running water never grows stale. So you just have to 'keep on flowing.'" So, I keep flowing, and learning, and having fun. Cheers, RickO
I prefer to live vicariously through TDN or what have you when he posts here. So much cheaper.
Also buying some books before buying a single coin can really tame your desire to start purchasing right away.
You learn so much in a short amount of time that you may come to the conclusion you do not want to actually purchase now.
And one more thing. If you have been a collector of many things throughout the years.. by the time you hit your 40s or so you should have a pretty good clue that most hobbies do not generate decent returns unless you are very very knowledgeable.
In the end.. with almost all hobbies.. less is more.
I have followed the OP approach, not by design mind you. I just get bored after I complete a set so I sell off the "easy" coins (which may be keys as many keys are readily available for a price). I keep the coins that speak to me the loudest or that were the toughest to locate. There is also the issue of available space, slabs take up a helluva lot of room. Yes, there is a transaction cost to this, but i look at that as hobby enjoyment money.