Two biggest newbie mistakes

RYK · June 3, 2005 4:12AM

IMO, there are two big newbie mistakes that I made, and I see repeated here over and over again.

1. Shopping for coins by price, not by quality. When I started out, I bought quite a few frankly ugly $20 Libs because I thought I was getting a good deal on them (in Heritage auctions, on ebay, etc.). I was aided by a rising gold market and was able to get out of them without losing my a$$. I have learned to shop for quality first and foremost and then worry about the price. Chances are, if you are buying from a knowledgeable seller, you are not going to get a rip on a nice coin.

2. Not spending time reading and learning, but instead, jumping right in. Not a huge problem, especially if you start out with small money (whatever that is to you). Realize that the more experience you gain, the more your taste and direction is likely to change. When I first started, I wanted to buy everything in sight (Longacre thinks I still do). Take your time, read and learn about the coins you buy, and be patient.

ER · June 3, 2005 4:14AM

<< IMO, there are two big newbie mistakes that I made, and I see repeated here over and over again.

1. Shopping for coins by price, not by quality. When I started out, I bought quite a few frankly ugly $20 Libs because I thought I was getting a good deal on them (in Heritage auctions, on ebay, etc.). I was aided by a rising gold market and was able to get out of them without losing my a$$. I have learned to shop for quality first and foremost and then worry about the price. Chances are, if you are buying from a knowledgeable seller, you are not going to get a rip on a nice coin.

2. Not spending time reading and learning, but instead, jumping right in. Not a huge problem, especially if you start out with small money (whatever that is to you). Realize that the more experience you gain, the more your taste and direction is likely to change. When I first started, I wanted to buy everything in sight (Longacre thinks I still do). Take your time, read and learn about the coins you buy, and be patient. >>

Sounds like me a few years back.

Mercury · June 3, 2005 4:18AM

THis would fall into the not learning first catagory- I bought several raw coins, before I learned to tell what a cleaned coin looks like. Well, I now have several examples to constantly remind me.

mgoodm3 · June 3, 2005 4:18AM

I did a little of that early on, but have since seen the light.

LanLord · June 3, 2005 4:27AM

I agree, but would add:

3 - Impatience, I need "XYZ" coin now to fill a hole in an album or collection. Don't fall into that fallicy. You don't need it, and there will always be another one (with extremely few exceptions)

ER · June 3, 2005 4:33AM

<< I agree, but would add:

3 - Impatience, I need "XYZ" coin now to fill a hole in an album or collection. Don't fall into that fallicy. You don't need it, and there will always be another one (with extremely few exceptions) >>

Tom, I'm still doing it.

Longacre · June 3, 2005 4:34AM

I agree that jumping in too fast is one of the biggest mistakes. But who can blame a new collector? It is so easy to buy something online, and it is a lot easier than buying and actually reading a book. I also think that collecting is not a foot race, and the best collections are built slowly and steadily (but not too slowly!). Another mistake is thinking that you know more than you really know.

PS. I still think that RYK buys everything in sight.

Numismanic · June 3, 2005 4:38AM

<< I agree, but would add:

3 - Impatience, I need "XYZ" coin now to fill a hole in an album or collection. Don't fall into that fallicy. You don't need it, and there will always be another one (with extremely few exceptions) >>

Tom, I'm still doing it.

>>

Me too.

culbert · June 3, 2005 4:43AM

I am very new to the hobby. Several people have told me that if I am going to buy coins this early in my collecting, I should buy slabbed coins. That is all that I have bought. What do you think of that advice?

Thank you for your help

RYK · June 3, 2005 4:44AM

PS. I still think that RYK buys everything in sight.

Ah, come on! I did not buy that 55-O $5 (yet).

Longacre · June 3, 2005 4:48AM

<< PS. I still think that RYK buys everything in sight.

Ah, come on! I did not buy that 55-O $5 (yet). >>

You'd better not. I am waiting until it goes "on hold" and then complain that I never get to buy anything good.

ER · June 3, 2005 4:51AM

<< I am very new to the hobby. Several people have told me that if I am going to buy coins this early in my collecting, I should buy slabbed coins. That is all that I have bought. What do you think of that advice?

Thank you for your help >>

Slabbed coins that are guaranteed by the TPG services. But, there is no substitute for learning.

RYK · June 3, 2005 4:52AM

Several people have told me that if I am going to buy coins this early in my collecting, I should buy slabbed coins.

That depends on what you are collecting, and it protects you for grade and authenticity but not for eye appeal and some problems. There are a lot of fugly coins in PCGS and NGC holders.

CalGold · June 3, 2005 4:54AM

Unfortunately, from some of the things I have seen posted here of late, one of their biggest mistakes might be believing what they read here. "Here" meaning the forum generally, not this thread

CG

RYK · June 3, 2005 5:01AM

Unfortunately, from some of the things I have seen posted here of late, one of their biggest mistakes might be believing what they read here. "Here" meaning the forum generally, not this thread

I am glad that you edited your post.

While I cannot disagree with your statement, where else can you ask a question and get a variety of responses from people ranging in experience from the newest of newbie collectors to the most advanced collectors to dealers of varying experience and specialty? (and for free) It sure beats groping around in the dark, at the mercy of the neighborhood coin shark, I mean, shop, like it was when I was a kid.

PerryHall · June 3, 2005 5:05AM

<< I am very new to the hobby. Several people have told me that if I am going to buy coins this early in my collecting, I should buy slabbed coins. That is all that I have bought. What do you think of that advice?

Thank you for your help >>

Slabbed coins (top tier only) are a lot better than buying raw especially from some of the full page ads in Coin World.

cladking · June 3, 2005 5:09AM

The biggest mistake most newbies make is that once they learn the rudiments of grading
and have a redbook they usually believe they are intimately familiar with the coin market.
Most advanced collectors and dealers specialize a great deal and are always learning more
about the nuances of the market in their specialties. Very few people ever get a good feel
for the market overall simply because of its size and complexity. Many market segments are
composed of so few individuals that it changes everytime one of them does. Just because
the Redbook says something is worth a specific value doesn't mean that it's not worth ten
times that or one tenth of it anyway. Throw in the vagaries of grading and it's hardly unus-
ual for newbies to pay far too much while they think they're cleaning up.

One learns far more about the market while selling than when buying. One doesn't sell a
nice XF bust half at a flea market or a roll of BU '38-D nickels to a rare coin dealer. Not only
will the offers be disappointing they will be misleading. Many coins can be taken to the cor-
ner coin shop and others will need to go to specific buyers who make markets or move large
quantities of esoteric coins. Prices are mostly determined by what the highest buyers are
paying and the difficulty of getting a coin to them efficiently. Newbies are well advised to try
to get a good feel for these wholesale prices and to actually sell a coin once in a while.

LanLord · June 3, 2005 5:19AM

<< The biggest mistake most newbies make is that once they learn the rudiments of grading
and have a redbook they usually believe they are intimately familiar with the coin market.
Most advanced collectors and dealers specialize a great deal and are always learning more
about the nuances of the market in their specialties. Very few people ever get a good feel
for the market overall simply because of its size and complexity. Many market segments are
composed of so few individuals that it changes everytime one of them does. Just because
the Redbook says something is worth a specific value doesn't mean that it's not worth ten
times that or one tenth of it anyway. Throw in the vagaries of grading and it's hardly unus-
ual for newbies to pay far too much while they think they're cleaning up.

One learns far more about the market while selling than when buying. One doesn't sell a
nice XF bust half at a flea market or a roll of BU '38-D nickels to a rare coin dealer. Not only
will the offers be disappointing they will be misleading. Many coins can be taken to the cor-
ner coin shop and others will need to go to specific buyers who make markets or move large
quantities of esoteric coins. Prices are mostly determined by what the highest buyers are
paying and the difficulty of getting a coin to them efficiently. Newbies are well advised to try
to get a good feel for these wholesale prices and to actually sell a coin once in a while. >>

Truer words were never spoken (er, uh, written) Great info "king of clad"

coinfool · June 3, 2005 5:25AM

<< I am very new to the hobby. Several people have told me that if I am going to buy coins this early in my collecting, I should buy slabbed coins. That is all that I have bought. What do you think of that advice?

Thank you for your help >>

I made all of the above mistakes, big time. One thing I would say about buying slabbed coins isdon't just buy the grade on the slab, but buy the coin. There may be 100 MS65 coins (of your choice), but you should buy the one with the greatest eye appeal. There is a huge difference in eye appeal of coins in the same grade.

ttown · June 3, 2005 5:27AM

I guess a lot has to do if your buying at the "peak" of a market or the "bottom". I don't think too many faired well in their purchases towards the end of the last market in the 80's. On the other hand I've done well buying these so called low grade common date MS staints and libs for around $300 to $325 when the market on gold was around $260 in 1999.

My biggest mistake will be not selling them before we hit another bottom but hey I'm a collector. If I have to take a 16X glass to tell the diference in a coin I'm over paying IMO. You can play the "near peak" and "near bottom" game if you want to make money like the commodities or stock markets. IMO if your coins don't benfit from Gold or Silver we are nearer peak than a bottom.

ellewood · June 3, 2005 6:15AM

I made BOTH of those mistakes myself and I'm not afraid to admit it. I think because of those mistakes I am a better collector. Well said.

geb209 · June 3, 2005 6:16AM

I think the biggest tip to any newbie is to learn how to tell if a coin has been cleaned.

DUIGUY · June 3, 2005 6:24AM

Bin there, done that !

RYK · June 3, 2005 9:32AM

I made all of the above mistakes, big time. One thing I would say about buying slabbed coins isdon't just buy the grade on the slab, but buy the coin. There may be 100 MS65 coins (of your choice), but you should buy the one with the greatest eye appeal. There is a huge difference in eye appeal of coins in the same grade.

Good point which goes under the heading of shopping for quality and learning to recognize quality.

I guess a lot has to do if your buying at the "peak" of a market or the "bottom". I don't think too many faired well in their purchases towards the end of the last market in the 80's. On the other hand I've done well buying these so called low grade common date MS staints and libs for around $300 to $325 when the market on gold was around $260 in 1999.

Bad. Thinking like an investor, not a collector.

I think the biggest tip to any newbie is to learn how to tell if a coin has been cleaned.

Learning to distinguish original coins from unoriginal coins is a lifelong process.

ajia · June 3, 2005 9:43AM

Two (3) biggest newbie mistakes.

1. Shopping for coins by price, not by quality.
2. Not spending time reading and learning, but instead, jumping right in.
3 - Impatience, I need "XYZ" coin now to fill a hole in an album or collection.

I see this as maybe the 3 biggest lessons for newbies, not neccesarily as mistakes.

I still am 'learning'. I have L.A. 70 miles away, but the local shop carries 99.9% raw coins (They currently have 1 PCGS graded Morgan...that's it for graded coins). So, in a sense, I buy coins there based on quality, not price, they're all rather inexpensive.
Yes, I have gotten over buying 'bulk' coins off eBay....back when I first started collecting I bought bulk Morgans & Peace hoping to find some nice dates.....of course 75% where 1921 Morgans & 1922 Peace!

#2 & #3 are somewhat related....I know I am still impatient, that's my nature, not just with coins. I want it & I want it now! I would suggest doing homework & deciding what grades you want to achieve for your set (if buying graded coins) & stick to that......I think I have spent more time & money buying coins that I ended up upgrading than anybody should.....look at all my dupes & upgraded coins!

Set a grade for each coin that you want based on ___(what you can afford?), then look for it. Don't buy something you'll upgrade next month.

Of course, easier said than done, for me anyway.

BillJones · June 3, 2005 10:21AM

#3. Buying very high grade coins at highly speculative prices to gain a higher spot in either registry.

#4. Taking on the attitude that if I pass on this coin now, there will not be an opportunity to buy one in the future. This does have some legitimacy, BUT ONLY if you have been collecting a series for a long time and KNOW when you really need to pull the trigger. If you think this way early on in the process of building a collection, you are probably headed for problems.

Myqqy · June 3, 2005 10:37AM

Very good thread RYK- I see myself in your mistakes (only on a lower budget)........

Barry · June 3, 2005 10:47AM

<< #3. Buying very high grade coins at highly speculative prices to gain a higher spot in either registry. >>

This isn't much of a newbie error. It's more for veteran egos, oops, I mean collectors.

Fairlaneman · June 3, 2005 11:13AM

<< Set a grade for each coin that you want based on ___(what you can afford?), then look for it. Don't buy something you'll upgrade next month. >>

A very key point along with the others that have been mebtioned. If you can find a dealer that will tell you what has been quoted above stick with him/her. This type of dealer is looking out for your best interests within the hobby and not just trying to sell you something.

Edit to Add: Yep I made all of the blunders also the first time around back in the early 80's....

Ken

majorbigtime · June 3, 2005 12:36PM

<< 

<< I am very new to the hobby. Several people have told me that if I am going to buy coins this early in my collecting, I should buy slabbed coins. That is all that I have bought. What do you think of that advice?

Thank you for your help >>

Slabbed coins that are guaranteed by the TPG services. But, there is no substitute for learning. >>

Yes, but.

Stay with the "Big 3" services, PCGS, NGC or ANACS--the rest are suspect IMO.

jom · June 3, 2005 12:36PM

<< 1. Shopping for coins by price, not by quality. >>

True but I'd state it as follows:

1. Shopping for coins by GRADE, not by quality.

jom

Tsimmerdown · June 3, 2005 12:39PM

<< IMO, there are two big newbie mistakes that I made, and I see repeated here over and over again.

1. Shopping for coins by price, not by quality. When I started out, I bought quite a few frankly ugly $20 Libs because I thought I was getting a good deal on them (in Heritage auctions, on ebay, etc.). I was aided by a rising gold market and was able to get out of them without losing my a$$. I have learned to shop for quality first and foremost and then worry about the price. Chances are, if you are buying from a knowledgeable seller, you are not going to get a rip on a nice coin.

2. Not spending time reading and learning, but instead, jumping right in. Not a huge problem, especially if you start out with small money (whatever that is to you). Realize that the more experience you gain, the more your taste and direction is likely to change. When I first started, I wanted to buy everything in sight (Longacre thinks I still do). Take your time, read and learn about the coins you buy, and be patient. >>

I have made both these mistakes.

RYK · June 3, 2005 12:47PM

#4. Taking on the attitude that if I pass on this coin now, there will not be an opportunity to buy one in the future. This does have some legitimacy, BUT ONLY if you have been collecting a series for a long time and KNOW when you really need to pull the trigger. If you think this way early on in the process of building a collection, you are probably headed for problems.

Bill, this one is a judgment call and takes considerably more experience in my opinion. I was just lamenting to a friend about a great opportunity I passed up a couple of years ago--something that will likely never be offered again. If I knew then what I know now, I would have been all over it. Hindsight is 20-20. My friend says that it was better to pass and that the experience has made me a better collector. Maybe, but I would rather be a worse-off collector and have the coins!

RYK · June 3, 2005 12:55PM

<< 1. Shopping for coins by price, not by quality. >>

True but I'd state it as follows:

1. Shopping for coins by GRADE, not by quality.

Jom,

I agree with this as a corollary. A nice XF definitely trumps an unattractive AU and usually for less money. It still comes down to quality and being able to recognize it (or quality for the grade, if you prefer).

roadrunner · June 3, 2005 1:14PM

All these are great points, but another one to consider is that most collectors (yes, most...maybe 3/4) under-estimate the mark up they are really paying for coins. In other words they are more buried than they think. Contribute this to grading skills and not being able to recognize minor/major problem coins, etc. And since most never sell anything until the "end," they never realize the problem. They over-estimate their ability to navigage the market and get "good deals." I'd say 90% of collectors lose money in the end and probably half of them would think they are about even. I'd have to say that 95-99% of the retail transactions that occur each year are not good deals by any stretch. And you never get the right perspective on value in the market unless you routinely try to sell coins. Unless you have spent considerable time trying to sell coins at some point, you are probably on the wrong end of your coin purchases. Just my 2 cents. Of course if you don't care what you pay or what your coins are worth down the road, you can skip this post....so enjoy those coins.!

The majority of coins bought on the retail side, by a GREAT MAJORITY are not good deals. But it usually takes years or decades to figure it out. It would be nice if that weren't the case. Getting taken advantage of or being totally ripped by your favorite sellers is rarely understood until it's way too late.

roadrunner

JRocco · June 3, 2005 1:45PM

<< << 1. Shopping for coins by price, not by quality. >>

True but I'd state it as follows:

1. Shopping for coins by GRADE, not by quality.

Jom,

I agree with this as a corollary. A nice XF definitely trumps an unattractive AU and usually for less money. It still comes down to quality and being able to recognize it (or quality for the grade, if you prefer). >>

This is really true, Often people forget that the grade is only 1 aspect of the coin. Many times a nice AU is better- more attractive- than an 60-62 or a nice XF better than an AU. Every coin has to be evaluated on its own, not just by grade.

coinlieutenant · June 3, 2005 1:46PM

I hear you...

BillJones · June 4, 2005 12:00AM

<< #4. Taking on the attitude that if I pass on this coin now, there will not be an opportunity to buy one in the future. This does have some legitimacy, BUT ONLY if you have been collecting a series for a long time and KNOW when you really need to pull the trigger. If you think this way early on in the process of building a collection, you are probably headed for problems.

Bill, this one is a judgment call and takes considerably more experience in my opinion. I was just lamenting to a friend about a great opportunity I passed up a couple of years ago--something that will likely never be offered again. If I knew then what I know now, I would have been all over it. Hindsight is 20-20. My friend says that it was better to pass and that the experience has made me a better collector. Maybe, but I would rather be a worse-off collector and have the coins! >>

In the past five years I've had only one of these type regrets, and it wasn't even over a coin. About four years ago a dealer had a George Washington Inauguration button that came with an old ANACS authenticity certificate. It was the highly desirable variety with “GW” in script in the center, “Long live the president” surrounding that, and the initials of each of the original 13 states surrounding that. The original shank was intact, which is a very big deal for me.

I didn’t have the cash in my collector account for it, and I passed, not once but twice. After the piece sold, I learned that the market had gone up on these pieces. It’s not so much the lost profit for me as it is the idea that I probably won’t be able to add one of these to my political collection. A couple years ago a real idiot paid $12,000 for one in a high hyped up auction. More money than brains …

The button is really worth $3,500 to $5,000 in COLLECTABLE condition. I could have owned that on for $2 grand.

Two biggest newbie mistakes

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