Worst Buys in 2001 - How about today?
MidLifeCrisis
Posts: 10,563 ✭✭✭✭✭
I found the article below in my files. I don't remember where I got it from, but I didn't write it. I think it's an interesting read now, so I thought I'd share it with you and invite your comments.
Worst Buys in 2001
Some of the most intelligent and successful coin buyers I’ve ever known, and this includes some of the current “big names” in the coin business are constantly trying to identify trends before they become common knowledge while looking for outstanding values others have overlooked.
After being around some of the “top guns” in the coin business I’ve developed a theory. These key people, who are capable of spending many millions of dollars if the right deal comes along, develop shopping lists by removing coins from them rather than adding to the list. They are eager to consider purchasing anything—unless it is on the “black list” of proven bad choices. Often the list of coins to stay away from has been created based on negative personal experience. When you lose money on a coin that experience tends to stick with you and makes you cautious about buying the same thing again.
These are some of the coins I would absolutely AVOID buying during the rest of the year—maybe forever!
Statehood Quarters. The novelty and curiosity surrounding this series is history. Once unusual pocket change has now become common pocket change. If you have State quarters you can sell at a profit take these profits now. By no measure can any of these coins be considered rare. They have been hoarded by the millions. To maintain interest in the series The Mint will continue to generate bloopers and blunders. I’m guessing the next marketing scheme will involve creating coins struck from two reverse dies. For this reason, I can’t suggest completely ignoring the series. Quick profits may become available and they should be quickly taken. Keep in mind a lot of ho-hum states with ho-hum designs are going to get their special coins before we see an end to the series. And the minute the Average American realizes that one of the new quarters is just as worthless as any other quarter the game has been played. This has happened.
Common Grade Gold Coins. I don’t see the bullion markets doing much for the rest of the year. I do see demand for average condition gold coins declining further. There has always been plenty of this material around and the telemarketers and promoters can only peddle so much of it. It’s seems many promoters are discovering they can do just as well peddling novelty items and other semi-numismatic material while avoiding the high cost and risk associated with maintaining gold inventories.
Common High Grade Coins. Avoiding this material is not really new advice, but it is prudent to offer the reminder that what was once a special coin in a MS-65 or MS-66 PCGS holder isn’t nearly as exciting anymore. The promoters have really worked this market hard during the last few years and there are now plenty of disappointed customers with material they would dearly love to sell. Maybe condition will always be king. It seems to help if the coin matters as well.
Supposed Rarities. In my view there are too many expensive coins floating around in the marketplace. A $30,000 coin used to be something special and its importance was obvious and important to serious numismatists. Now the market seems littered with “valuable” coins where the value is primarily associated with hyper-condition, strike, or other elements that are not directly related to traditional considerations of what made a coin rare.
I see substantial downside risk in owning recently (several decades or less) discovered finest knowns, especially when aside from the grade, the coin is hardly a classic rarity. Collectors have traditionally collected coins in certain ways. A collection usually has a theme and purpose. Acquiring a random basket of supposed rarities has often been more a function of the dealer community than the objective of collectors. When you must explain to the customer why a particular coin is so expensive and valuable you are asking for trouble.
Do you have some “worst buys” that should be added to this list?
Worst Buys in 2001
Some of the most intelligent and successful coin buyers I’ve ever known, and this includes some of the current “big names” in the coin business are constantly trying to identify trends before they become common knowledge while looking for outstanding values others have overlooked.
After being around some of the “top guns” in the coin business I’ve developed a theory. These key people, who are capable of spending many millions of dollars if the right deal comes along, develop shopping lists by removing coins from them rather than adding to the list. They are eager to consider purchasing anything—unless it is on the “black list” of proven bad choices. Often the list of coins to stay away from has been created based on negative personal experience. When you lose money on a coin that experience tends to stick with you and makes you cautious about buying the same thing again.
These are some of the coins I would absolutely AVOID buying during the rest of the year—maybe forever!
Statehood Quarters. The novelty and curiosity surrounding this series is history. Once unusual pocket change has now become common pocket change. If you have State quarters you can sell at a profit take these profits now. By no measure can any of these coins be considered rare. They have been hoarded by the millions. To maintain interest in the series The Mint will continue to generate bloopers and blunders. I’m guessing the next marketing scheme will involve creating coins struck from two reverse dies. For this reason, I can’t suggest completely ignoring the series. Quick profits may become available and they should be quickly taken. Keep in mind a lot of ho-hum states with ho-hum designs are going to get their special coins before we see an end to the series. And the minute the Average American realizes that one of the new quarters is just as worthless as any other quarter the game has been played. This has happened.
Common Grade Gold Coins. I don’t see the bullion markets doing much for the rest of the year. I do see demand for average condition gold coins declining further. There has always been plenty of this material around and the telemarketers and promoters can only peddle so much of it. It’s seems many promoters are discovering they can do just as well peddling novelty items and other semi-numismatic material while avoiding the high cost and risk associated with maintaining gold inventories.
Common High Grade Coins. Avoiding this material is not really new advice, but it is prudent to offer the reminder that what was once a special coin in a MS-65 or MS-66 PCGS holder isn’t nearly as exciting anymore. The promoters have really worked this market hard during the last few years and there are now plenty of disappointed customers with material they would dearly love to sell. Maybe condition will always be king. It seems to help if the coin matters as well.
Supposed Rarities. In my view there are too many expensive coins floating around in the marketplace. A $30,000 coin used to be something special and its importance was obvious and important to serious numismatists. Now the market seems littered with “valuable” coins where the value is primarily associated with hyper-condition, strike, or other elements that are not directly related to traditional considerations of what made a coin rare.
I see substantial downside risk in owning recently (several decades or less) discovered finest knowns, especially when aside from the grade, the coin is hardly a classic rarity. Collectors have traditionally collected coins in certain ways. A collection usually has a theme and purpose. Acquiring a random basket of supposed rarities has often been more a function of the dealer community than the objective of collectors. When you must explain to the customer why a particular coin is so expensive and valuable you are asking for trouble.
Do you have some “worst buys” that should be added to this list?
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CoinsAreFun Toned Silver Eagle Proof Album
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Gallery Mint Museum, Ron Landis& Joe Rust, The beginnings of the Golden Dollar
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More CoinsAreFun Pictorials NGC
My Adolph A. Weinman signature
Some of the "supposed" rarities were also good performers, though this list was much more selective than buying generic classic gold. Someone else recently posted their recommendations from about 10 years ago, and it was chock full of top pops from various series. Most top pops have done relatively well in terms of price, with the glaring exception of Franklin halves.
Ten year gold chart indicates about a quadruple in price. A collector would have been extraordinarily lucky to have numismatic non-gold coins that did as well.
http://www.kitco.com/LFgif/au3650nyb.gif
Wondercoin
Type 3 Cent Silver in MS 65
83 No Cent Nickel in MSS 66
Type Barber Dime in MS 66
Type Seated Dime in MS 65
If you bought any of these coins then, you'd still be underwater.
"Seu cabra da peste,
"Sou Mangueira......."
Oops.
<< <i>Generic gold was a bad buy in 2001?
Oops. >>
'
I think the outlook of the letter was one year. In that context, it probably was.
The tone of the letter sounds like a Legend Market Report.
<< <i>This guys predictions appear to be much more "right" than wrong. He certainly was more accurate than weathermen or economists. As for "supposed rarities" it seems to me his advise is still good - try getting a dealer interested in paying a premium for high grade clad, Jefferson nickels, Roosevelt dimes et cetera. >>
Eventually these too will have their "day in the sun" . . . I hope . . . Maybe . . . While I'm still kicking ! ! !
1947-P & D; 1948-D; 1949-P & S; 1950-D & S; and 1952-S.
Any help locating any of these OBW rolls would be gratefully appreciated!
<< <i>This guys predictions appear to be much more "right" than wrong. He certainly was more accurate than weathermen or economists. As for "supposed rarities" it seems to me his advise is still good - try getting a dealer interested in paying a premium for high grade clad, Jefferson nickels, Roosevelt dimes et cetera. >>
$30,000 was mentioned as the price range, and I don't know of too many modern series coins in that ballpark. More likely it was a bad call as I said, many of the top pops in classic series did quite well, though there were several exceptions as pointed out by another. I think the context was for classic top pops. For coins that were solid for the grade, many did very well.
<< <i>I think the outlook of the letter was one year. In that context, it probably was. >>
About the one year out comment, that is hogwash to cover the tracks of some bad calls. Virtually no one buys coins for price appreciation for one year, certainly not at retail, and not a single reputable dealer would suggest that their customers do it. Five years is often the minimum realistic holding period to realize a profit, and ten years is more common.
As always going forward, the next ten years are likely to be different from the last ten. It is informative to see that someone that likely was respected and highly regarded for their market knowledge made such bad calls. Keep that in mind when reading the top "advice" for today. The pundits today might be just as bad going forward.
Statehood quarters? Maybe - I know little about those other than to spend them. Maybe FBL Franklins and some other areas peaked several years ago. But as a whole the coin market was still in the dumps in 2001. As long as you bought quality in 2001 and not junk widgets you probably did ok. MS65 gem seated dimes are worth more today than in 2001, unless you bought low end coins or mistakes. Anyone buying anything gold in 2001 has done really well in almost every case.....except maybe the guy that bought the MS65 1933 $20 Saint (worst buy of 2002).
roadrunner
<< <i>I would disagree and say most everything that list had on it did quite well from 2001-2007/2008. The issue is always timing and getting out at the right time. During that time most MS/PF 64-67 type coins doubled in price. If you were fussy and hand selected some nice PQ ones in 2001 you might have tripled up or even quadrupled. MS65 Morgans were dirt cheap back around then as was most everything.
Statehood quarters? Maybe - I know little about those other than to spend them. Maybe FBL Franklins and some other areas peaked several years ago. But as a whole the coin market was still in the dumps in 2001. As long as you bought quality in 2001 and not junk widgets you probably did ok. MS65 gem seated dimes are worth more today than in 2001, unless you bought low end coins or mistakes. Anyone buying anything gold in 2001 has done really well in almost every case.....except maybe the guy that bought the MS65 1933 $20 Saint (worst buy of 2002).
>>
I expected the widespread downturn in late 2008 and had anticipated it for years. It did
seem to affect almost everything except a few high flying ultra-moderns and lots of the
highest quality classics.
To my surprise the moderns are not recovering as quickly. I can't really account for this
other than the speculation that the amount of raw material coming on the market from
the downturn hasn't been absorbed yet so is supressing prices.
Everything should recover to the degree the economy does.