Investing in Coins: some numbers to consider

Investing in Coins: some numbers to consider

Post by Michael Edward Marot » Sat, 20 Mar 1999 04:00:00



+----------------------------------------------------------+
|  Michael E. Marotta presents:       COIN  CHATS          |
+----------------------------------------------------------+

PROOF THAT COINS ARE A BAD INVESTMENT

What follows is a brief table of coin prices from 1973, 1992, and
1997.   First and foremost, it is equally possible to scour the
Red Books and construct a chart of winners.  (Perhaps you might
want to do that and post it to this newsgroup or website.)
However, there is nothing special about these coins, except that
they are popular and typical.

There is one surprise: the Five Dollar Gold 1909-O in Unc has
proved to be a strong performer.  On the other hand, there is a
always a difference between the reported retail price and the
actual buying price.  "Red Book" and "Trends" and "Greysheet" do
not buy or sell coins, they just report what some people say they
buy and sell for.

If you have good charisma, you can outdo the statistics.  If you
are a dealer -- even on weekends -- you know that you can beat
the statistics, not by selling coins, but by buying them.  If you
buy below wholesale, you can sell below retail and make money.

The charts also prove that hindsight is 20-20: if you wanted to
make the most money, selling in 1992 was better than selling in
1997.  It is a fact of life that people sell into their misery.
People generally sell when they have to and they take the price
they can get at that moment.  Remember that John Pittman never
made a single cent of profit on his coins -- his estate did.

Description       1973     1992    %APR   1997    %APR   %NetAPR
                  Redbk    Redbk   73-92   Ads    92-97   73-97
Columb Expo
50c 92 Unc60        14.       100   10      32    -20      3.5
50c 93 Unc60        14.       100   10      32    -20      3.5
25c 93 Unc60        90        475    9     300    - 8.7    3.7
Stone Mt Unc60      17.5       40    4      42      1      3.9

$5 Gold
1908-S Unc60       350       2000    9    1150    -10      5
1909-O Unc60       400       6000   15    6500      1.6   12
1915-P Unc60        70        350    9     335    -  .9    6.7

50c
1892-P XF           42        180    8.    145    - 4.2    5.2
1898-S VG            6.        15    5      17    - 2.5    4.4
1899-S XF           45        185    7.7   149    - 4.4    5.1
1919-S XF          160        500    6.2   575      2.8    5.5
1944-D XF            2          7    6.8     9      5.1    6.5

1c
1909-S VDB VG8     100        300    6     370      4.3    5.6
1909-S VDB Unc60   200        450    4.4   720      9.8    5.3
1914-D  Fine        45        110    4.8   125      4.3    5.4

My Income         6000      40000   10.5 60000      8.8   10.0

However, the bottom line is that the best investment is yourself.
In 1973, I was a stockboy at Montgomery Ward, enrolled in a two-
year curriculum in transportation management.  By working and
going to school, I changed careers twice -- though I still work
in and around transportation: next week I will be training a
group of machine operators at the plant that makes Corvette V-8s
in the operation of Zeiss programmable gages.

And there is a footnote to the bottom line.  If you are patient
over decades and watch the market before you dump them, your
coins will serve you as well as a passbook savings account.

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Investing in Coins: some numbers to consider

Post by Emin Ulu » Sat, 20 Mar 1999 04:00:00


I am sorry Michael, but your "proof" lacks any statistical validity
whatsoever.  You can't take a handful of coins and make sweeping
conclusions about the coin market based on just a couple of sampling
dates.  You can't compare apples (Redbook prices) to oranges (Ads).  

Although I would agree that some of your observations may indeed be
true, you fail to take into consideration other factors that can
influence the markets, such as fluctuations in the economy, rates of
inflation, collector interest, etc.  With regard to the latter point, I
have witnessed in the recent few years a huge amount of activity in
internet coin sales and I would argue that there is now a resurgence of
interest in coin collecting.  These issues have been the topic of much
discussion here on rcc recently.  Your article also fails to mention
that the single largest seller of numismatic items in the US is the US
mint, whose products are indeed IMHO a very poor investment.

I would suggest that you put a little more effort in your research
before shooting off conclusions based on your idea of what you think is
happening.  It tends to give a very biased and incorrect assessment of
this aspect of our shared hobby.

Emin

Quote:

> +----------------------------------------------------------+
> |  Michael E. Marotta presents:       COIN  CHATS          |
> +----------------------------------------------------------+

> PROOF THAT COINS ARE A BAD INVESTMENT

> What follows is a brief table of coin prices from 1973, 1992, and
> 1997.   First and foremost, it is equally possible to scour the
> Red Books and construct a chart of winners.  (Perhaps you might
> want to do that and post it to this newsgroup or website.)
> However, there is nothing special about these coins, except that
> they are popular and typical.


 
 
 

Investing in Coins: some numbers to consider

Post by Infoserv » Sat, 20 Mar 1999 04:00:00


Quote:
>However, the bottom line is that the best investment is yourself.
>In 1973, I was a stockboy at Montgomery Ward, enrolled in a two-
>year curriculum in transportation management.  By working and
>going to school, I changed careers twice -- though I still work
>in and around transportation: next week I will be training a
>group of machine operators at the plant that makes Corvette V-8s
>in the operation of Zeiss programmable gages.

Michael:

While I certainly respect the effort here, I'm not sure that the comparison of
coin investment  with self investment is a fair one.  After all, one can't
invest more in improving the return on coins as you can yourself.  Also (I hate
to bring this up), as time goes on, your earnings may (and probably will)
decline as you get too old for most firms to hire -- we all face this.  There
are only so many top level jobs in an organization and when you loose one
(takeover, new boss, etc.) you may not find a new one so easy.

Just my 2 Kopeks worth.

Ken

 
 
 

Investing in Coins: some numbers to consider

Post by Joe Fisch » Sat, 20 Mar 1999 04:00:00



: Description       1973     1992    %APR   1997    %APR   %NetAPR
:                   Redbk    Redbk   73-92   Ads    92-97   73-97
: My Income         6000      40000   10.5 60000      8.8   10.0
:
: However, the bottom line is that the best investment is yourself.
: In 1973, I was a stockboy at Montgomery Ward, enrolled in a two-
: year curriculum in transportation management.  

       And you think the increase from entry level to
a supposed income of 40000 in 20 years is in some way
like coin prices.
       You may not know it (Congress apparently doesn't
know it) but the average worker in the United States
still make less than 20000, so coins do well.

: And there is a footnote to the bottom line.  If you are patient
: over decades and watch the market before you dump them, your
: coins will serve you as well as a passbook savings account.

       That isn't why people have hobbies, with the
exception of BU collectors, the investment may not
be even worth considering in comparison to the fun
and enjoyment.
       But I bought $300 in silver quarters in 1973
with a 20 percent over face premium, what percentage
would that have given if sold in 1980 when the price
of silver was $50 per ounce?
       Maybe it would be best not to try to make a
living as a financial wizard. :-) :-)

Joe Fischer