Coins are cool

saintguru · August 16, 2006 11:04AM

let's say you have a coin that you bought in a HOT series, that is still going up....at least now.

You have a coin that you paid 50K for 2 years ago and it's an extraordinary gem. You get a bid from a VERY reliable collector to buy the coin in the fall...with collateral for 150K. The price on the sheet is 125K

You planned on holding these for a decade thinking that prices could be considerably higher yet. You are not concerned with the profit, per se, but the potential that it could go significantly higher....or it could not...so it's a market call.

What would you do?

I have taken the deal.

One undisclosed fact...I bought this coin for my daughter's college! It's for her. She's 10 now. That adds a VERY interesting twist to this scenario? (I opted to withhold this to get an unbiased consensus)

I'm taking payment in PCGS generic $20 gold. I still have many MONSTERSaints so I'm not out by any means....

Thanks all for the opinions. I had pretty much decided in advance that this was going to be done, but the "collector" in me made me post this.

Russ · August 16, 2006 11:08AM

Sell. Bulls make money, bears make money, pigs get slaughtered.

Russ, NCNE

Peaceman · August 16, 2006 11:08AM

Ahh... Greed...

Not worried about profit...

saintguru · August 16, 2006 11:11AM

It's a "collection" coin. Some of you don't understand the saying that "great sets are built in the first decade." I know it's a lot of money...but guess what...it was a lot of money when I bought it. the sheet was 32K then.

Prices are always relative.

Timing is not.

So that is both sides of the debate. It this the right time. I am very bullish these coins.

Russ · August 16, 2006 11:13AM

You'll never go broke taking a profit.

Russ, NCNE

123cents · August 16, 2006 11:15AM

Take the money and run.

arlea1957 · August 16, 2006 11:17AM

<< Sell. Bulls make money, bears make money, pigs get slaughtered.

Russ, NCNE >>

Maybe the first time I agreed with Russ..... except for his eye on the Kennedy (never pubically acknowledged)

saintguru · August 16, 2006 11:17AM

You guys are FAST to run.

Maybe I was so smart that my original plan is right. To hold it for 10 years.

CoinResource · August 16, 2006 11:18AM

Hold it

roadrunner · August 16, 2006 11:18AM

Sell.....or better yet trade. 3X profit? You'll be kicking yourself when it eventually falls and you still own it. I had a similar occurence in 1990 where I missed the window for a 5X profit in only 4 years. I had to wait another 14 years for the market to recover
(it eventually fell to 50% of it's value after 6 years....ouch). And I was sure this coin could never really go down much in value (finest known for date by 3 MS pts, only gem known to exist, unlisted price in UNC, 1 of 4 decent uncs known). This was a collector coin as well, irreplaceable. But there comes a time to sell. I bought it with that intention always in my mind. Picked $100K as the value I wanted. While I didn't get that, it jumped so far ahead of other coins that I wanted (and could get) that it was time to move it out when $70K seemed reachable.....and move to pastures yet cultivated.

Certainly there must be something else that you could put that $150K into to protect your $100K gain? A trade into a more stable area (like a 1794 dollar) would be one thought....or even a pile of MS64/65/66 common saints. In any case I'd certainly take the $100K profit. There's no guarantee that a bigger move is yet to come. A series that is hot will cool. And when it is the hottest is when you think it has tons of potential left......just as the bottom drops out. A 3X gain in any major league coin is immense. This is not a penny stock or MS68 Roosy dime that can go up 10X. I consider a 3X move for the general investment coin market to be all the money. There are exceptions, but not many. The general gem silver type coin market is up around 30-50% since this started in 1996-1998. It should eventually end up at 100-200%. There are series that are already up 100-200% that I'd be leery of.

But if you are sure of the coin going further then play it. Just be aware that your window to sell it at the peak may be all of a week to a month.

roadrunner

IGWT · August 16, 2006 11:19AM

Leave the gun, take the cannoli.

saintguru · August 16, 2006 11:22AM

<< Leave the gun, take the cannoli.

>>

That's MY line!

lkenefic · August 16, 2006 11:24AM

<< You'll never go broke taking a profit.

Russ, NCNE >>

michael · August 16, 2006 11:24AM

if it is in your core collection

and

not replaceable at twice of what you paid

and

it is above average eye appeal

and

pq for the current grade holder it is in

and

you do not need the money

and

you love it

then keep it

bidask · August 16, 2006 11:30AM

<< let's say you have a coin that you bought in a HOT series, that is still going up....at least now.

You have a coin that you paid 50K for 2 years ago and it's an extraordinary gem. You get a bid from a VERY reliable collector to buy the coin in the fall...with collateral for 150K. The price on the sheet is 125K

You planned on holding these for a decade thinking that prices could be considerably higher yet. You are not concerned with the profit, per se, but the potential that it could go significantly higher....or it could not...so it's a market call.

What would you do? >>

I would stick with your long term plan to hold for 10 years for the reasons you outlined. If the coin is truly extraordinary and you do not need the funds, then I would hold. No question.

Keyrock · August 16, 2006 11:36AM

If I had no other plans for the money, I would probably hold out. It's time in the market, not timing the market. Great material will always be in demand.

slipgate · August 16, 2006 11:41AM

You're way out of my league but my 2 cents is to hold it unless you have some losses to offset it. That's quite a lot of money in profit that would be hard not to declare.

Given that, it is quite probable that the coin will be worth what it is today sometime again in the next 10 years.

BAJJERFAN · August 16, 2006 11:42AM

A bird in the hand is worth two in the bush.

Then again if you don't need the money, keep it.

roadrunner · August 16, 2006 11:45AM

Great material IS always in demand. But at the depths of a coin market bottom, as low as 30-50% of former prices....exceptions might be TDN's 1913 Lib nickel or an 1853-0 NA half (3 known).
I still use the Amon Carter 1794 dollar SP66 as an example of how good coins fall too. That reached $1 MILL in 1989 and ultimately sold for around $300k as the market collapsed. Today it's worth multiples of that $1 MILL so on a long term hold the piece held up.
But for someone not looking to hold for 15 years it would have been a tough ride. The more recent coin cycles have been so investor and dealer driven by the end that it is inevitable that even gem
rare date Saints will take a plunge.

10 years from now may be a terrible window to select. If the market peaks in say 3-5 years. 10 years may be the next bottom...a terrible time to sell...even for great coins. Note that Eliasberg sold in 1997 just as the market was bouncing off the bottom. But his collection was the springboard for the up market very similar to what Norweb did in 1987-1988 for that market.

roadrunner

Louis · August 16, 2006 11:49AM

He doesn't want to listen unless you tell him what he wants to hear.

saintguru · August 16, 2006 11:52AM

<< He doesn't want to listen unless you tell him what he wants to hear.

>>

Hell, CrackerJack..I'm hearing both sides.

I want to hear good reasoning and I am hearing quite a bit. Remember that this is "hypothetical."

TwoSides2aCoin · August 16, 2006 11:59AM

this guy that lives down the street from me is really smart with money.
He says buy and hold. Ownership of something you believe in is better than profiting off something you don't believe in.

His name is Warren.

Do what you like,...I would hold based on my love for the piece and it's potential
.... unless of course, I needed a new yacht or somethin'.

both short and long term on rarities offer profit. The long term profit offers retirement while the short term offers mild comfort.

roadrunner · August 16, 2006 12:05PM

The buy and hold strategy worked wonders in equities for this past 20 year bull market. But I question it today, and certainly don't recommend it for hard assets (ie collectibles) that you are considering profiting on. If you have no concern for a profit, then buy and hold works just as well as anything else. The opportunities that existed in the 50's and 60's and 70's (before going all fiat) will never happen again with our current currency. Those days are history and the fallout from it is still yet to be resolved. Trying to equate buying assets in those days to today makes little sense to me. I doubt that pro-money managers today follow their own advice to us of "buy and hold." What they do in their own investments is probably just the opposite: "buy and sell at the right time."

roadrunner

JRocco · August 16, 2006 12:06PM

no

saintguru · August 16, 2006 12:13PM

NO???

No WHAT? You want a necktie like Luca?

bidask · August 16, 2006 12:14PM

<< The buy and hold strategy worked wonders in equities for this past 20 year bull market. But I question it today, and certainly don't recommend it for hard assets (ie collectibles) that you are considering profiting on. If you have no concern for a profit, then buy and hold works just as well as anything else. The opportunities that existed in the 50's and 60's and 70's (before going all fiat) will never happen again with our current currency. Those days are history and the fallout from it is still yet to be resolved. Trying to equate buying assets in those days to today makes little sense to me. I doubt that pro-money managers today follow their own advice to us of "buy and hold." What they do in their own investments is probably just the opposite: "buy and sell at the right time."

roadrunner >>

Not true. Many pros and investors hold for the long term. But equities are not extraordinary and never will be. An extraordinary gem coin is.

BAJJERFAN · August 16, 2006 12:22PM

What is magical about 10 years? Sounds like your 10 years came 9 years early. The time to answer this question is BEFORE you buy the coin, not after. How many times have you heard about smoeone buying stock and the stock appreciates a lot, but they don't want to sell and pay the taxes due. The time to decide that is BEFORE you buy the stock. Then again the same folk would not turn down a winning lottery tik because they have to pay tax on their winnings; yet the only difference between the lottery and stock is their basis.

DMWJR · August 16, 2006 12:40PM

Nobody likes a surprise $100k like I do, but I would have to go with Michael.

TwoSides2aCoin · August 16, 2006 1:59PM

Through discussions behind the scenes regarding the strategy, I have to concede to a point.
With regards to economics, there are rises and falls in the market by where you could maximize your profits by selling and perhaps buying back in on the downward slide. So with this hypothetical, it would be difficult to hold this coin given the profit that can be made now.

If, in fact, the market drops later, a good investor or speculator would buy back in on the dip.

Here is where the Y in the road is. Since it is a RARITY, what are the chances it comes back on the market ?
It's a great argument and... it's hard to give up a ONCE in a LIFETIME rarity that could offer retirement by holding.

Thanks for the insight, roadrunner. Your views have many valid points.

johnsim03 · August 16, 2006 2:08PM

Hi Jay:

Depends on what the net gain will be, after taxes, and whether the money is needed
or desired for other purposes.

If the profit is not needed or desired, I would probably hold for the long-term.

Especially if the piece is simply not generally available anywhere else.

John

TAClough · August 16, 2006 2:24PM

<< Sell. Bulls make money, bears make money, pigs get slaughtered. >>

Great quote! I like it. Did you just make it up?

MrEureka · August 16, 2006 2:40PM

The price on the sheet is 125K

If you are operating on the assumption that "the sheet" tells you what a truly rare coin is worth, you're operating in the dark.

The bottom line is that you shouldn't sell if you're that bullish unless you think you can quickly replace the coin for a lower price.

MikeInFL · August 16, 2006 2:42PM

<< let's say you have a coin that you bought in a HOT series, that is still going up....at least now.

You have a coin that you paid 50K for 2 years ago and it's an extraordinary gem. You get a bid from a VERY reliable collector to buy the coin in the fall...with collateral for 150K. The price on the sheet is 125K

You planned on holding these for a decade thinking that prices could be considerably higher yet. You are not concerned with the profit, per se, but the potential that it could go significantly higher....or it could not...so it's a market call.

What would you do? >>

As

Given your scenario and if the coin is really all there, I would keep my finger on the pulse of the market, and ride it for all its worth. Having 8 more years to the end of the 10 year investment, I would be less inclined to dump it at this moment.

However, for many, myself included, $50k is a significant sum of money, so in all likelihood I would seriously consider a diversification strategy...Mike

HighRelief · August 16, 2006 2:54PM

I would hope the person buying my coin would make me an offer I could not refuse.

Just remember, it's not personal, it's only business.

relayer · August 16, 2006 2:59PM

<< 
The bottom line is that you shouldn't sell if you're that bullish unless you think you can quickly replace the coin for a lower price. >>

<< However, for many, myself included, $50k is a significant sum of money >>

$50k is a significant sum of money for EVERYBODY

<< Great quote! I like it. Did you just make it up? >>

It probably could be attributed to the book's author

RBinTex · August 16, 2006 4:04PM

Leave the coin (gun) take the money (canollis)

otherwise you (& Lucca Brazzi) sleep with the fishes

BAJJERFAN · August 16, 2006 9:39PM

<< Sell. Bulls make money, bears make money, pigs get slaughtered. >>

Great quote! I like it. Did you just make it up?

.......................................

That statement has been around in one form or another since Christ was a kid!!

RBinTex · August 17, 2006 12:58AM

<< Sell. Bulls make money, bears make money, pigs get slaughtered. >>

Great quote! I like it. Did you just make it up?

"... Greed is good ..."

MORGANHUNTER2 · August 17, 2006 2:45AM

Who said there will be a market for this 'rarity' in 10 years?

Who decided it was worth 150K? even if you bought it at 50K xx years ago, if the liquidity is there and your gain is not over powered by the tax imposed- it might be worth dumping at the 150, markets go up, markets go down- next session is round n round.

ohhhh ooo- take the money and run....

hiyosilver · August 17, 2006 2:49AM

It's a COLLECTOR coin.........if you can hold, keep it!!

Clankeye · August 17, 2006 2:50AM

I'd sell so fast
The time that passed
Would beat
A blinking eye

Russ · August 17, 2006 3:08AM

<< this guy that lives down the street from me is really smart with money.
He says buy and hold. Ownership of something you believe in is better than profiting off something you don't believe in.

His name is Warren. >>

He sold his silver well before the peak.

<< << Sell. Bulls make money, bears make money, pigs get slaughtered. >>

Great quote! I like it. Did you just make it up? >>

It's a very old Wall Street saying. Probably originated right around October of 1929.

Russ, NCNE

RYK · August 17, 2006 3:09AM

I would sell.

Baley · August 17, 2006 3:10AM

Gosh, I don't know what I would do..

I'm still trying to imagine such large numbers

very impressive

saintguru · August 17, 2006 3:11AM

I have taken the deal.

fact is, I bought this coin for my daughter's college. It's for her. That adds a VERY interesting twist to this scenario?

I'm taking payment in PCGS generic $20 gold. I still have many MONSTERSaints so I'm not out by any means....

Thanks all for the opinions. I had pretty much decided in advance that this was going to be done, but the "collector" in me made me post this.

RYK · August 17, 2006 3:15AM

To expand upon my answer, you earlier indicated that there was an investment objective to owning this coin. Any investor that can triple his money in two years is quite fortunate. While the series may be "HOT" now, it will not be "HOT" forever (sorry, JPKinLA), and the transition from HOT to COLD could be quite dramatic. The more expenesive, the more illiquid. Finally, RYK says, "$100k in the hand is worth $200k in the bush™."

Russ · August 17, 2006 3:18AM

I think you should keep it.

Russ, NCNE

RYK · August 17, 2006 3:19AM

I think you should keep it.

No kidding! When the hell are you ever going to even SEE one of those again?

Are you nuts?

jpkinla · August 17, 2006 3:21AM

To expand upon my answer, you earlier indicated that there was an investment objective to owning this coin. Any investor that can triple his money in two years is quite fortunate. While the series may be "HOT" now, it will not be "HOT" forever (sorry, JPKinLA), and the transition from HOT to COLD could be quite dramatic. The more expenesive, the more illiquid. Finally, RYK says, "$100k in the hand is worth $200k in the bush™."

I agree that coins go up and down but when you consider that Saints are among the most popular gold coins to own, one has to think hard about it. I don't have a problem with you selling the coin. I think you did great and in fact generics are cheap in my view.

relayer · August 17, 2006 3:23AM

You were wise to ignore my advice

saintguru · August 17, 2006 3:35AM

<< I think you should keep it.

Russ, NCNE >>

The kinder gentler Russ is GONE!

Coins are cool

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