Numismatic gold purchases.......how can a person be sure ?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I have been contacted by gold dealers (some of the largest, most reputable companies) promoting certain numismatic coins. I believe in shopping around, and when I call another company, I am always told that I am being sold a bill of goods, so to speak. Of course, then, that company tries to push another coin off on me.
This is unlike brokerage firms, which pretty much agree on selling stock from blue chip companies. In my experience, the gold dealers undercut each other.
Can the average person ever be sure he is making a wise investment? I'm talking some of the highest graded coins (MS65's)
This latest call was over some coins from a shipwreck some of you may know about.The sellor tried to tell me that these coins would have great historical value and there is a low population. Another dealer said no big deal, just because they came from a shipwreck and are in excellent condition. Also, because the shipwreck produced an increase in the availability of these coins, that will cause the price to go down.
Perhaps some gold dealers could toss in their opinions, if I'm not asking too much.
-- Jo Ann (MaJo@Michiana.com), June 11, 1999
I to , have been led down the path that you have been encountering. do not buy numismatic, nor what they call, "semi numismatic" coins, period. run, do not walk, away from these people.
-- ed (firstname.lastname@example.org), June 11, 1999.
Just say NO, Jo Ann. Buy bullion coins instead.
-- dave (email@example.com), June 11, 1999.
Jo Ann- I'm no expert on this, but I do have an opinion. If you are buying with an eye towards gold price increases, it would be silly to invest in historical coins. These command heavy premiums over modern currency gold coins. There is a train of thought that older coin would be exempt from confiscation due to collectability, rarity, etc. However, I do not think it would have to be something on the order of an Atocha coin to make it exempt. If you are interested in pursuing this kind of collecting, it is far better to do some homework, and then approach the dealers. If you are buying for weight, there are some excellent buys around now (not for long) and if buying most foreign issues, no questions.Buying over a certain amount in U.S., Canadian, and Krugerands,is from what I understand reportable to IRS.Hope I've been some help.
-- Gia (Laureltree7@hotmail.com), June 11, 1999.
JO ANN: I have had much experience in Numismatics. Though I have never been a dealer as such, I have worked for one in both "good times" and "bad."
In answer to your question, no! the average person cannot tell what an MS65 coin is, or whether a claim of such by "an authority" is accurate or not.
I would avoid like the plague, any coins offered to you for sale, the value of same established by their "numismatic value.
Let me share with you one of my early lessons of life, when, as a young (14) coin collector (numismatist!) I found a rather rare half dollar while looking through some rolls of same.
It was an "almost new" (XF-AU in the language of the trade)1921 liberty walking half dollar. I took it to a coin dealer whose store was near where I lived. I should point out that I had first looked up its value in the "red Book" (one of the publications featuring mintages and estimates of the value of US coins) so as to get some idea of its value. I do not remember its "book value" but in finishing this story I will try to get the relationships correct.
The book said it should be worth something on the order of $100. So, armed with this knowledge of its value I confidently presented this coin to the dealer. He looked at it and then indicated that it was indeed one of the rarer half dollars and was in excellent condition. He asked if I wished to sell it and I responded slyly that I did. He asked what I wanted for it, to which I replied "whatever is a fair price for such a nice coin." He said that he would give me $20 dollars for it. Somewhat shocked, but trying to remain clever I said that the book indicated its value to be around $100. He promptly handed me back the coin with the suggestion that I "sell it to the book," and went back to what he was doing when I entered the store.
If you want to invest in coins know what you are doing. If you think you are "investing" you would be better off placing your money in your matress. You will risk little other than theft or fire, and when it comes time to sell, you will only suffer the loss of the interest you would have earned in a savings account.
The same cannot be said for numismatic coins......
-- Dave Walden (firstname.lastname@example.org), June 11, 1999.
Jo Ann - The grading of coins is a matter of opinion. You can take the same coin to totally honest coin dealers and come up with different grading. Numismatic coins are no different than rare cars, furniture, stamps, books, etc. If you do not know as much as the dealer does, you are at that dealer's mercy.
Do yourself a favor, go to the main page under the Older Messages go to banking/finance and read all of the gold threads. Then go buy some junk silver and some 100 coronas.
-- Ken Seger (email@example.com), June 11, 1999.
If you want a real education on gold and silver (and how they relate to Y2K), visit Franklin Sanders' web site at www.the-moneychanger.com. Also, www.gold-eagle.com is another good one (always recommended by Andy).
As with anything else, the context under which you are asking these questions is extremely important. If you are looking for a way to optimize your position in a Y2K induced barter/breakdown scenario, absolutely go for 90% junk silver and small (1/10 oz say) gold coins (I've ordered American Eagles from www.ajpm.com). Clearly, rare coins, gems, etc., that require a level of expertise are totally inappropriate for Y2K survival planning.
-- Jack (firstname.lastname@example.org), June 12, 1999.
If you are serious find a dealer that will quote you both the bid and the ask prices. Surprisingly many will do this IF YOU ASK THEM. They need a steady supply of coins to sell to the next buyer. The lowest spread between BID, the price they will but your coin and ASK, the price that they would sellyou the same coin is 20%. So to make money you need a significant change in circumstances like 5-10 years or a dramtic increase in bullion or a special desire for a specific coin as in commeratives.
While Y2K may very likely be a significant change in circumstances, your dealer may be out of business and the market (yes, there is a coin market with a number of news letters/papers/magazines tracking it) may be difficult to establish.
For Y2K you may be better off purchasing junk silver or bullion coins like American Eagles or Canadian Maple Leafs. Still ask the seller what they would be offer to buyback your coin to get an idea of the spread they use.
-- Bill P (email@example.com), June 12, 1999.
Jo Ann Here is my experience. Six mo. ago I bought 3 #64 coins: 1900, 1903, 1904. I paid $4970 for the three. The 1900 went up $5, the '03 went down $50, and on 5/27 the '04 dropped from $1525 (purchase price) to $1200. The '04 just dropped another $100. I'm selling out ASAP. I was assured by the broker this was the investment of the future. I foolishly believed him when he told me I couldn't go wrong investing in coins. Everything I had read told me not to invest with my limited funds, but I fell for a fast talker. Live and learn, but this one hurt. If you can't afford to lose the money or you can't afford to wait 10-15 years for the returns don't do it. My preps have suffered as a result of my gullibility. You will do what you want, but I hope my experience serves as a warning to you and anyone else considering this purchase. It isn't something I am too proud of, but there it is.
-- Juniper (Msgullible@onebornaminute.com), June 12, 1999.
I fell for the same b.s, juniper. and, boy, do I feel gullible.
-- ed (firstname.lastname@example.org), June 13, 1999.
Bullion coins are confiscatable, based on previous experience. (1933) Numismatic coins would not be. Do not buy a coin that has not been certified by PCGS or NGC. It would not be necessary to buy over MS-63. Just run of the mill coins. Nothing extremely rare.
I recently have been buying the circulated coins. Still not confiscatable, not a real high premium.
Also, buying and selling of numismatic coins are not reportable to Uncle Sam.
-- Villain (email@example.com), June 13, 1999.