Gold dilemma
SimpleCollector
Posts: 536 ✭✭✭✭✭
Reaching out to the board for thoughts on how to progress my gold collection. I still straddle the line between a coin collector ( definatelynhave that gene) and an investor/business mindset.
A few years ago when I decided to sell my type set, forum members gave me good advice to ponder. So here I am again. Over the past few years, I put a 14 peace type set (12 peace gold plus 2 classic heads) together. My criteria was likely the best looking coin I could find at the time for the price closest to bullion...did I pay more than bullion for the $3 and type 2 $1, of course, but I was still on a fairly strict budget.
I find myself gravitating toward now adding nice coins (let’s say au58 CAC) and building a second type set. That is the true coin collector side.
On the other hand, even despite the recent increase in premiums, I can still find nice $5 liberty and Indian and $10 liberty and Indian for small premiums over melt. Say ms62 $5/10 for $480/900. The business side of me says I will be happy adding different dates and looking for nicer coins. Or perhaps adding different mints and following the close to melt strategy.
I saw winestevens awesome collection ( and while I can’t do it at that level, au58 isn’t shabby) , but I also see people who have nice date runs or large gold collections.
For any of you that ever had similar dilemmas, curious on thoughts and or insight into what you did or what you wish you did.
Thanks
Comments
No right or wrong answer really it seems your current strategy is working for you so no reason to change unless your getting bored with what you've been buying.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
Why would you want to buy high? I would wait until gold settled back down.
gold is not going to settle down anytime soon
Gold is going haywire, I'd hold on for dear life.
I don't mean to be grim but I have been following this event since it's beginning in Hubei in Nov. There will be very many estates being liquidated until a vaccine is developed. The only thing we can do until then is test and isolate, and we are not doing that.
There will be a flood of keys and rare dates and sets. And that's not taking into consideration the potential for a very many number of coins to be melted ala 2010. I don't know what it's gonna do exactly, no one does, but I can't help but think this will sever the relationship between collectibles and melt.
I fear we will lose a lot of history. You can do whatever you so please, but if I could afford to have something like that lay around, I'd let it lay around.
Has there ever been an effective coronavirus vaccine?
All my research indicates a hard "no".
My tastes have always run toward the best coins I could afford, within reason. What does the last phrase mean? I seldom paid the huge premiums for “mega grade” coins, like MS-67 or 68 until a few years ago. carefully MS-64 coins were often good enough.
I did very well with the nice coins, but have been burned with the few “mega grade” coins I have. Right now I think that gold bullion is speculatively priced. It will come down when the dust settles, which might happen sooner than you think. Humans can get very creative when pushed, especially under the capitalist system.
I don’t think that bullion oriented coins are a great buy right now, but that’s just an opinion. Collector coins might not be good either because the younger generations don’t seem to be collectors. In other words, when you are buying collector coins, you are buying a luxury item, almost like a luxury automobile. Consider it a lousy investment that you buy for pleasure with the possibility of providing positive returns some day.
As bullion has risen, coins trading close to melt like $20 Saints or Libs have shot up in price. Gold coins that trade at a significant premium to melt have, in my observation, stayed about the same. So that shrinks the premium of course.
I started like you, trying to get the best graded coins close to melt. But I expanded my aperture a bit, not as an investment but as a collection, because I wanted to. Every "rare" coin I have ever sold or traded up I've lost money on.
Maybe in a generation they will be worth a lot more, but at that point I also assume that virtually any other investment will have surpassed my collection in terms of $$ appreciation / ROI.
Put together a collection to enjoy and appreciate the art and history of it. I think only those who are experts in spotting undergraded coins to upgrade / cac and resell (or buying well under market value) are making any money.
Be realistic about transaction costs too. As an occasional seller on ebay you'll pay 13% (ebay/paypal) plus shipping costs to sell a coin. Or go to your local dealer who will offer you 75% of retail if you are lucky, but at least you dont have to deal with ebay.
So a rare coin would need to appreciate in my estimate about 20% to break even on it. For comparison, another 20% increase in gold spot would put it over $2k.
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Is gold high now? Does that mean it cant go much further? What would be "low" ? When will that happen?
This is not the time to be paying high numismatic premiums for anything. The economic situation is getting worse by the day and cash IS going to be king. Collectibles are going to be a luxury that few ordinary folks can afford. Stay as close to bullion value as possible on any gold coin purchases.
If you are collecting, buy the coins that please you and build the set you are proud of....If you are investing, buy low, sell high....I know that is simplistic, but the basics apply. Also, no reason you cannot do both if the funds are available. Cheers, RickO
I agree with Ricko, take your time to collect nicer coins if you have the money, but don't expect a profit later.
Also, do not sell the gold coins you already have, unless you need the money.
I knew it would happen.
Thanks for the input so far. Always like getting others peoples thoughts to help me understand where I want to go. (Hoping others will also voice thoughts).
Some additional thoughts /input from me:
I am not overly concerned with the price of gold or where it is going in this dilemma. I have been buying over the last few years and view it as dollar cost averaging. I probably add a coin every quarter.
Could I afford to do both...likely Yes... but for some reason I view collecting coins as a hobby and lets say I could allocate 1% of net worth to that hobby. I view generic gold coins more as bullion. Easy to track the melt value of each coin on a spreadsheet. At the stage of life I am in, I have been slowly trying to move some percent of assets into precious metals...let’s say a target could be 5%.
I agree with pedzola, in that most collector coins I have bought and sold, resulted in some loss after fees, grading, shipping are taken into account, so nice hobby, but I am much better at buying stocks than coins for investment and appreciation.
So based on the above, the two thoughts running through my mind right now are:
If target spend is 1% hobby and 5% precious metal, maybe 1 out of every 6 coins is truly collector based and rest are combo of bullion/ eye appeal.
Never viewed myself as a contrarian investor, but I have been buying generic gold because there was no interest and mark ups were low...As interest is now high in those coins, maybe it’s time to zig whiles others zag...ie) maybe the markup/price on collector coins will now come down some as there won’t be as much demand...time to buy...perhaps
So a nice generic ms62 $10 Indian or a spectacular Au58/CAC type 2 $1????? Still deciding
It seems that the majority of slabbed MS coins are not selling as well as raw coins. People are paying more for raw, as the sheeple believe the hype that the gold bugs are spreading. This leaves a potential opportunity to find nice MS slabbed coins selling at lower prices. Depending on population of a date/mm, the "common" ones are more affordable. I see the ones with spotting and less attractive toning the best bargains. Sellers are hesitant to lower pricing yet, or risk at auction, the best appearing specimens within each grade. For a AU type set, your question might be is it worth paying for a slabbed coin when you can find raw coins, or MS coins selling close to AU prices.
Buy whatever interests you. Over the last six months I have been buying coins which I find numismatically interesting at prices close to spot. A 1900’s $20 in lower MS doesn’t do anything to the collector in me and buying top pop coins is not my cup of tea.
Here are some coins which I have recently bought with small premiums. I submitted the Saint to CAC myself and the 1854 and 1856 came with the sticker.
@skier07 ....Those are very nice gold coins....Cheers, RickO
Wow, I was skeptical of your comment that their are no vaccines for any of the know coronaviruses. But when I checked the CDC website about the other coronaviruses it said, "There is no vaccine to protect you against human coronaviruses..."
https://www.cdc.gov/coronavirus/general-information.html
Join the fight against Minnesota's unjust coin dealer tax law.
Were you saying the same thing when gold was under $1200? Prices were under that late in 2018 and have been steadily rising ever since. A 18 month steady climb is being caused by something other than "hype that the gold bugs are spreading".
Mark
What about people who, ya know, like buying raw gold? Asking for a friend.
There's a raw coin inside every slab. Just sayin'.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Yup.
The only one for SARS that got into trials actually made them sicker rather than protecting them. Not to scare anyone. But all this talk of doing nothing until there is a vaccine is unlikely. You may have targeted quarantines (like South Korea) instead of general quarantines or something. But I don't think I would put all my eggs in the vaccine basket.
And it is always only one hammer strike away from being raw again...
I posted something but it is gone? Let's try again.
I am addressing the OPs question. Based on the current market, I can see by far extraordinary high premiums on bullion. Buyers are justifying these premiums on auctions and just by buying. I see major dealers on eBay dropping the prices of slabbed coins, like I described.
If you want to look back, look at 2011 through 2013. Leading into 2011 bullion started a good consistent uptrend. As gold broke $1,550 (and silver $30) people were lining up selling their stashes. The COMEX changed margins and added new fees. Sellers changed their spread from about 10% on silver and 5% on gold to higher amounts to protect themselves from the new trading ranges that were happening. By the end of 2013 spot was back where it was at the beginning of 2011, the 3 year ride was over. This though has nothing to do with the current market, nor does 2018.
I was generally only commenting on the idea that prices rose due to hype.
If you were a buyer between 2008 & 2011 you had plenty of time to sell off anything you had purchased at a decent profit. Similarly, anyone who has purchased from the end of 2013 thru the early summer of 2019 will do quite well also. The market has offered the opportunity for a decent profit and time to make the decision. I don't see any "hype that the gold bugs are spreading", just clear market movements. I have not bought since the price eclipsed $1350 (except for a few that I knew should command a premium) or so but up until the virus shut down local shows and my LCD I could still purchase raw classic American gold at a couple dollars over spot.
Numismatic gold premiums have generally been shrinking since the peak in November 2009. For some coins it was even earlier in 2006. Average key date coins, and really high grades on gold type coins have been a loser for over 10 yrs. And there's no reason to expect this to change.....due to declining interest, fewer collectors, more slabbed specimens showing up, and grade inflation. There's too many gem $1, $2-1/2, $5, $10 coins to expect differently. You'll have to be quite the date and variety picker to find the coins that will break this streak....maybe in 19th century CC, C, and D gold? Or pre-1840 "type coin" gold. Whatever you choose ensure the coins are fully original and unusual.
I would tend to lean towards great looking VF30-MS65 coins that trade to small premiums to their bullion. How about an VF30-XF-45 1913-S $10 Indian? A lot of better date $5's, $10's, $20's sell for under 10% premium to bullion. If the price of gold continues a lot higher, the numismatic premiums will continue to shrink away.....even CAC coins. Back in November 2009 and Sept 2011 the premium for CAC $20's shrunk to almost nothing when MS63 $20 LIbs and MS64 Saints were over $2000 each. It's all about the gold then. $5,000/oz gold will not bring in new collectors for Type 1 or 2 $1 gold coins. Check out the PCGS gold coin index and see how Type gold has done. $3 gold coins in XF to MS63 are a good indicator of the "rare" gold coin market. And in reality, they're actually pretty common in an absolute sense.
When it comes time to sell your collection....the price of gold will probably be the major factor. Your decision is not made any easier considering that gold has advanced from $1200 to $1700 in the past 2 yrs.
I want a $50 Pan Pac Octagonal still. One day............
At a slight premium to melt, of course
Oh my god I got to do that with some half eagles and holy christ how fun all of that was. From the pliers to the hammer and eye protection, to the pieces hitting my face and getting everywhere. Not kidding, I can't wait to do it again.
I'm taking this!! :-) thank you so much lol
There's 2 US human trials right now, a third in Germany, a fourth in Canada and the Gates foundation just announced work on another two days ago.
The richest and smartest and most expensive experts are working on this. Literally everyone on the planet has a vested interest in solving this.
These things will take longer than a few months.
Coronavirus is unique but not that unique. We have dealt with Typhoid Mary situations before. And MERS had a protective shell too; this is nothing new, just new combinations of suck. This is a more infectious, deadlier version of SARS with body armor.
What we know about SARS/MERS is already being put to practical use for SARS-Cov-2. The genetic code has been released so people worldwide can build the virus themselves to learn how to destroy it. This was a few days ago.
You know we have to discover viruses before we make the vaccines, right? A vaccine can't exist before the discovery of the virus. That would explain why there's no evidence of one existing in history. This virus didn't exist in history until half a year ago.
The virus may have been around for many months or years before last November. Until it found it's way out of a lab.
With all of the currency the government is going to be spreading around, the price of everything will go up. Value, no, but price, yes.
Like Alan Greenspan said, Social Security will never go broke - we can print as many dollars as we need to send out. We can pay any amount to anyone with Social Security payments. We just can't guarantee what the dollars will be worth.
This particular strain of Coronavirus, COVID-19, did not exist until recently. Other strains have been around and known for much longer.
Choice Numismatics www.ChoiceCoin.com
CN eBay
All of my collection is in a safe deposit box!
I went to the dark side after my US gold type set and started a monarch type set of gold sovereigns. These were fun to collect since they are mostly at melt except for the pre Victoria ones. There are ten different effigies in a basic set (from Victoria forward) with 4 different ones pre Victoria starting in 1817. QE2 has five different effigies, Victoria three.
It’s higher now considering all that is happening in the world and it could continue to go up as well. Low was the 1200-1300$ range after the run to 2000$/oz. As mentioned here it’s ok to buy and collect but to make a huge investment right now with these premiums I don’t think is wise. When things do turn for the better it quite possibly will settle back down. Maybe that would be a better time for you.
The worst one I have ever seen was in a details grade PCGS holder. The story was it was found inside of a wall in a building that was razed. It was quite banged up, but instantly recognizable. The asking price was around $20,000. The dealer had it at the major shows for over a year. I guess it sold or the dealer put it into his vault for later.
I guess the unique shape that got people to buy more Pan-PAC $50 gold coins in 1916 still applies. The round one is rarer.
Popularity contest.
USA is simply a bad character in an extremely lousy neighborhood. We will escape the ramifications of OUR poor behavior until some other major country can do better. So long as the dollar remains king we will continue to pile up debt at a nauseating clip. IMHO, everyone should retain some physical gold as an insurance policy should %$#! hit the fan... JMO
everything we are seeing today is unprecedented, %$#! already hit the fan
You are mistaking the term. Coronavirus refers to an entire class of viruses including SARS and MERS as well as most common colds. There is no effective vaccine for any of them. Covid-19 is this particular variant. When I say there is no effective vaccine for a coronavirus, I'm not referring to Covid-19 but ALL OF THEM.
Since there remains no effective vaccine for SARS or MERS, not to mention the common cold, people who are waiting for a vaccine for their lives to return to normal may have a very long wait. I'm well aware of ongoing efforts. But there is no effective vaccine for ANY coronavirus and so the expectation that we may have one in 18 months or even 5 years is hopeful but not predictive.
You seem to have very strong opinions on many issues. Are you a doctor or epidemiologist? If not, I think I will take my advice regarding vaccines from experts rather than someone who has self investigated on the internet.
As you may know, I'm a Ph.D. chemist not an epidemiologist.
Nonetheless, my statement about coronavirus vaccines is not an opinion. It's a fact. Look it up. There are no known coronavirus vaccines that I can find. Two SARS vaccines made it to animal trials: one made them sicker, one was about 30% effective. Neither ever made it to clinical trials in humans as far as I can tell from the literature.
Go ahead, ask an epidemiologist or a doctor. I've asked every microbiologist I know. They will probably eventually get one, but people need to stop expecting the world to stay paused until one is available.
I would also point out to you the efficacy of vaccines for things like the flu are only 50 to 70%.
Recent studies on Covid suggest that reinfection is possible meaning the antibody response isn't that strong. That is problematic for a vaccine since that's how vaccine's work.
https://scientificamerican.com/article/what-immunity-to-covid-19-really-means/
https://nationalgeographic.com/science/2020/04/why-coronavirus-vaccine-could-take-way-longer-than-a-year/
https://blogs.scientificamerican.com/observations/can-we-really-develop-a-safe-effective-coronavirus-vaccine/
Per Wikipedia - You can go there for the references if you really want to read some more on the subject.
Previous coronavirus vaccine projects
Vaccines have been produced against several diseases caused by coronaviruses for animal use, including for infectious bronchitis virus in birds, canine coronavirus and feline coronavirus.[5]
Previous projects to develop vaccines for viruses in the family Coronaviridae that affect humans have been aimed at severe acute respiratory syndrome coronavirus (SARS) and Middle East respiratory syndrome (MERS). Vaccines against SARS[6] and MERS[7] have been tested in non-human animal models. As of 2020, there is no cure or protective vaccine for SARS that has been shown to be both safe and effective in humans.[8][9] According to research papers published in 2005 and 2006, the identification and development of novel vaccines and medicines to treat SARS was a priority for governments and public health agencies around the world.[10][11][12]
There is also no proven vaccine against MERS.[13] When MERS became prevalent, it was believed that existing SARS research may provide a useful template for developing vaccines and therapeutics against a MERS-CoV infection.[8][14] As of March 2020, there was one (DNA based) MERS vaccine which completed phase I clinical trials in humans,[15] and three others in progress, all of which are viral-vectored vaccines, two adenoviral-vectored (ChAdOx1-MERS, BVRS-GamVac), and one MVA-vectored (MVA-MERS-S).[16]
Perhaps you would listen to the CDC? Note under "treatment..."
https://cdc.gov/coronavirus/general-information.html
Treatment for common human coronaviruses
There is no vaccine to protect you against human coronaviruses and there are no specific treatments for illnesses caused by human coronaviruses.
LOL.
My original comment was simply leveled at the person who said that there would be no coin shows until there was a vaccine. I have no doubt there will eventually be something. But I don't think people should be planning on the world staying shut down until there is such a vaccine.
If you'd like something more scholarly:
https://sciencedirect.com/science/article/pii/B9780128045435000038
My horse's name is Losartan
(As an avid reader of pre-peer reviewed articles...Here is a sniff)
https://www.preprints.org/manuscript/202003.0457/v1
My Saint Set
Yes. All the current clinical trials show in vitro activity. The same with true with all the SARS and MERS vaccines that failed.