Where the real rubber hits the road......when it comes to rare coins as an investment and hedge agai
ANACONDA
Posts: 4,692 ✭
As you know, I made a prediction not long ago that rare coin prices would be strong as would stock in CU for the next several years....at least until the end of 2012.
Also, as you know, I think the US economy is not going to improve soon.
Some collectors think that a softening US economy does not bode well for rare coin prices. I disagree that this is the only or most important item to consider.
The tsunami of people fleeing traditional assets in exchange for hard assets like truly rare desireable US coins is going to quite frankly overwhelm the coin market. The lessening of traditional collector funds will be nothing compared to the deluge of money seeking a safe haven. I have been around the block a few times (some would say "rode hard and put up wet") and have seen what inflationary pressures do to rare coin prices.
Coins that were carefully accumulated over the past 20 years.....fresh deals....coins people really want.....are going to go through the roof. Low end coins will continue to lag but even they will rise.
Many people at some point are going to see gold and silver as maybe a little too strong while seeing rare coin prices as bargains. They will put less into precious metals and more in that monster toned Morgan that is three standard deviations from the mean.....or that CC dollar that is incredibly rare compared to Mexican Onzas and still has almost an ounce of silver.
Evidence of this is already extent. The economy has been bad for quite a while but what have rare coin prices done? They have stayed strong. Why? Because rare coins are seen as a hedge against inflation as is gold and silver.
And the inflation roar can be heard off in the distance and soon it will blow everything down except those things such as rare coins.
Hear me now and think about it later.
Also, as you know, I think the US economy is not going to improve soon.
Some collectors think that a softening US economy does not bode well for rare coin prices. I disagree that this is the only or most important item to consider.
The tsunami of people fleeing traditional assets in exchange for hard assets like truly rare desireable US coins is going to quite frankly overwhelm the coin market. The lessening of traditional collector funds will be nothing compared to the deluge of money seeking a safe haven. I have been around the block a few times (some would say "rode hard and put up wet") and have seen what inflationary pressures do to rare coin prices.
Coins that were carefully accumulated over the past 20 years.....fresh deals....coins people really want.....are going to go through the roof. Low end coins will continue to lag but even they will rise.
Many people at some point are going to see gold and silver as maybe a little too strong while seeing rare coin prices as bargains. They will put less into precious metals and more in that monster toned Morgan that is three standard deviations from the mean.....or that CC dollar that is incredibly rare compared to Mexican Onzas and still has almost an ounce of silver.
Evidence of this is already extent. The economy has been bad for quite a while but what have rare coin prices done? They have stayed strong. Why? Because rare coins are seen as a hedge against inflation as is gold and silver.
And the inflation roar can be heard off in the distance and soon it will blow everything down except those things such as rare coins.
Hear me now and think about it later.
0
Comments
are you refering to collectors universe stock ( CLCT) or are you refering to FIRST TRUST ISE GLOBAL COPPER INDEX FUND ( CU) stock ??
good to see you back.
Go BIG or GO HOME. ©Bill
<< <i>Adrian have you ever thought of writing a book, seriously? >>
Yes, I am working on my autobiography....and I also have an incredible idea about how to pay off the deficit in 10 years....called APTRES....
Anyway, back to the topic at hand.....did you know that 150 billion dollars worth of stocks are traded everyday and that is just on the new york stock exchange? But yet only 5 billion dollars worth of all rare coins are traded each year?
It won`t take much slosh over to the coin market to make things go crazy...and with the internet today, the promulgation of rare coins as an inflation hedge (that the ole US government doesn`t have to know about since they pay no dividends and can be bought and sold in cash) will be made like a Texas wildfire in stong wind.
<< <i>Anaconda,
are you refering to collectors universe stock ( CLCT) or are you refering to FIRST TRUST ISE GLOBAL COPPER INDEX FUND ( CU) stock ?? >>
Collectors Universe....did you know they pay close to a 10% dividend? That is quite something. And, no matter what coinage is being manufactured by whomever, they're gonna continue to be there, holdering coins.....forever.
<< <i>Like I said before
good to see you back. >>
Thanks, and I will make sure that check doesn`t bounce.....
I think interest rates will have to rise some but I think rates will stay low because the powers that be will try to continue to stimulate the economy with low interest rates while fiddling with the numbers (like they have been doing) to argue that there is no inflation and hence no new reason to raise rates.
Here's another little tidbit........the truly rare coins....especially the esoteric ones that don`t make the sheets (blue, grey, etc.) will be a very good place to put your money......information is much more widely extant and more permanent and more findable.....
For example, that only GSA Seated Dollar....that has just hit the market after being unavailable for like 30 years......there will be GSA collectors who will fight over that....forever........possibly snatched up by a dealer......initially .....and then held hostage because dealers usually have more courage than collectors ......initially...........it takes time sometimes for value to sink in.
Here`s another example: that rare NJ copper that recently brought over 100k...on eBay! Truly rare, esoteric....BUT avidly collected.
And things don`t have to be avidly collected by 100 different guys....just a small handful of avid collectors who will only get one shot - maybe in their lifetime to buy a centerpiece to their collection. It`s usually the guy that doesn`t belly up to the bar and empty his pockets that regrets it....not the guy who gets it but had to pay dearly for it.....he`s the guy with the smile on his face.
<< <i>
<< <i>Anaconda,
are you refering to collectors universe stock ( CLCT) or are you refering to FIRST TRUST ISE GLOBAL COPPER INDEX FUND ( CU) stock ?? >>
Collectors Universe....did you know they pay close to a 10% dividend? That is quite something. And, no matter what coinage is being manufactured by whomever, they're gonna continue to be there, holdering coins.....forever. >>
CLCT stock has not been strong, while they do pay a divedend of 32 cents had you purchased the IPO of CLCT stock in 2000 you would be down roughly 50% and even that 32 cent divedend couldnt cover that. I am not sure when you made your prediction about CLCT stock but the stock did nothing but drop from 2005 to 2009 and has only just now attempted to try and reach the level of 2005 and still at that its down 50% from 2000 levels. Even if you purchased the stock last november you would be down roughly 25% considering the stock dropped roughly 2.00 since then. Your prediction about CLCT stock could not have been any more incorrect. Since 2010 the CEO has sold almost 1,000,000 dollars worth of his stock alone.
So, the question posited from my perspective is "would you do better with a basket of rare coins than in the stock market?".
I think it would be interesting revisit this thread in a couple of years and see how the following coins have fared
MS64 Bust Half
MS64 High Relief Saint
MS65RD 1909-S VDB Lincoln Cent
MS64 1916-D Mercury Dime
MS63 Trade Dollar 1877
MS64 1932-D Washington Quarter
AU50 Bust Dollar
I chose these coins at random as a few are popular, not particularly rare, but always sought after. The others are regularly traded. I did not choose dates for a few as I was thinking the more common dates, not the mega-dollar rarities.
The other thing that might be interesting is to see how the collectable coins fare against bullion using $1500 an ounce for gold right now.
Thoughts?
But to anwer the OP question, I think its a GOOD thing to own something TWO rich people want.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>the skyrocketing price of bullion gold and silver has caused a dis connect with the rare coin market and its apples and oranges today.
But to anwer the OP question, I think its a GOOD thing to own something TWO rich people want. >>
Or hope that the Guvmint and/or the public believe that the rare coin biz is too big/important to fail.
assets, not just coins. That would include art, antiques, sports memorabilia, stamps, vintage musical instruments, historical artifacts, rare books, autographs, movie
memorabilia, etc. The list is endless really. And also competing for the tangible dollar are all the bullion related ETF's, ETN's, etc. where you don't have to pay the full
capital gains tax if you hold your items >1 yr.
My view of the coin market is that there has been little recovery if any in 90% of it. And that includes gem unc and proof type coins. Really high end pieces as well as
CAC are doing ok. But those are a tiny part of the market. If or when investor dollars start flowing into the market they won't gravitate towards a pop 1 GSA dollar, but
towards items they can understand more easily. That just might be common date MS64-66 Morgan dollars, or gem Saints, or a MS65 seated quarter. Unless you have
pop tops, massive toners, finest knowns/condition census, early choice coppers, or what Legend wants to buy, etc....this market has been in the dumps since late 2008.
There's no recovery yet. The coin shops are only surviving and prospering on bullion sales. Their regular coin sales are almost non-existant compared to 3 yrs ago. I'm
not saying that it won't come out of this funk. The stag-flationary 70's had a lull period from Dec 1974 - August 1976 before taking off again. Maybe that was what coins
just did from Sept 2008 to Feb 2011. But if the inflationary impact of 1977-1980 is repeated, then certainly money will creep into coins. But back then nothing was graded
and it was the wild west. Today we have graded coins, but we shot lots of holes in the confidence of the system with prices all over the map for the same coin in the same
grade. Toss in CAC, secure, plus, star, etc and you have lots of confusion for the new investors to fight through. If they are sharp they will probably seek the most solidly
graded coins vailable. That will still leave a huge portion of the market untouched, just like it is now. A relatively small sphere of solidly graded coins will be boosted.
The others will drag behind. That's a problem since the majority own the "others."
In the 1970's other than buying gold/silver bullion or investing in miners, there was no real "easy" or convenient way to invest in bullion. Today there are ETF's, ETN's,
bullion mutual funds, and other very simple ways to enter the market. This has drawn a lot of money away from other areas. Ultimately, it may what keeps a lot of the
hot money away from rare coins. If you can double your money quicker buying the silver 2X bull fund AGQ, why mess with bulky silver or numismatic coins?
roadrunner
<< <i>I know history never repeats exactly, but there are some similarities to what happened in the 80s before interest rates went crazy. Of course, if you needed cash it would kill you to get a bank loan, so cash was king. I am starting to build a cash position in the event this happens, which would enable me to make some nifty deals. >>
The first part of your post hits the nail on the head, we think we know what's happening (read some of the post), but you are right, history seldom repeats itself exactly. I think the only way to really CYA is to diversify as much as possible, including some rare coins. As has been said, the BEST coins will appreciate or hold their value so you have to buy the RIGHT ones.
Cash is always good, it does enable you to pick up "deals" when they are available, just don't make it too much of a component of your assets, and of course your age group makes a big difference in how to buy.
People should do what they want to do, and for their own reasons.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
shrinking of the middle class is working against a lot of coins. Money is still flow-
ing to the wealthy as it leaves the middle class and huge profits in metals will
prop up lower value coins for some time. Extremely rare and valuable coins may
be a good investment for a decade or more yet but some of the more common
coins are already on borrowed time. There's little danger to real collectors but
those spending money chasing hot coins are likely to get burned again.
There will be lots of growth in the coming decades for foreign coins minted be-
tween 700 BC and 2008. There will be explosive gains in some countries and
many of the moderns. As always though it is the collectors who will generally
do the best.
With the advent of the computer I really expect to see all types of exonumia
doing better in the long run but there's little support for this belief to date. Some
exonumia will now sell at a price based on retail which is far higher than the old
wholesale price but these prices don't seem to be changing. The demand is
thinner than I expected. Perhaps there are simply fewer collectors of similar
material than I had thought or maybe they just haven't found the tokens and
medals with their themes yet. Maybe google doesn't work right.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Semi-numismatic coins provide a bullion play along with a coin play. How much will you pay for a certified gold $10 with a mintage of a few thousand? Ask the 'spouse'.
<< <i>
<< <i>I know history never repeats exactly, but there are some similarities to what happened in the 80s before interest rates went crazy. Of course, if you needed cash it would kill you to get a bank loan, so cash was king. I am starting to build a cash position in the event this happens, which would enable me to make some nifty deals. >>
The first part of your post hits the nail on the head, we think we know what's happening (read some of the post), but you are right, history seldom repeats itself exactly. I think the only way to really CYA is to diversify as much as possible, including some rare coins. As has been said, the BEST coins will appreciate or hold their value so you have to buy the RIGHT ones.
Cash is always good, it does enable you to pick up "deals" when they are available, just don't make it too much of a component of your assets, and of course your age group makes a big difference in how to buy. >>
Cash is not always good. Check out Germany in the 1920s, Greece in the 1940s, etc. etc. Oh yeah, I forgot! It can't happen here! Just because the money supply is EXPLODING doesn't mean the dollar is worth less. No reason to worry, especially for those on fixed incomes or with fixed dollar-denominated assets like government or corporate bonds. Everything will be fine!