What would you do in todays coin market if...

[lkenefic]

I posted this ATS, but I wanted som others opinions on this as well...

 

...... you had gotten a pile of $$ together to buy one of the key dates of your series of interest (Lincoln Cents and Indian Heads in my case) but just can't seen to find the "right" coin. Finding properly graded certified coins is tough! I braced myself for the sticker shock at the front end and fully realized I'd be paying quite a bit for even a VG specimen (1877) or an F12 (1909-S VDB) but I figured the pieces would be more conservatively graded. Most pieces I've seen are overgraded (IMHO) by 2-3 (in some cases 5) points. It doesn't sound like much but the difference in price between an 8 and a 12 for the 1877 is quite a bit of money... perhaps $400 in some cases.

 

So my question to the group is twofold: Would you wait for the" right coin" and just keep the money you had socked away for this purpose..or... These coins are overpriced in an overinflated coin market...buy something else that seems like a decent deal and wait for a down-turn in the overall market (ie...'89). Along this later line of reasoning, I've passed on a couple of Seated Dollars for my type set that were decent deals and now Seateds are a bit more difficult to find...

 

...Thoughts??

 

[TomB]

I would pay up for the right coin.

[bsshog40]

If it was a coin I wanted bad, I would wait for the right one that I wanted!

[EZ_E]

I have a complete set of Mercury dimes lacking the '16D. I refuse to buy that coin in today's market.

 

Not only is the market bringing stupid money for these relatively common coins but all key date are market graded to the point where it is insulting.

 

You can put two PCGS graded F15 Mercs side by side. A common coin will be accurately graded but the '16 D is but a VG. Talk about double jeopardy! I don't appreciate this ploy in the least bit so I refuse to play.

 

I think the best approach is to learn all of the diagnostics and buy the coin raw if one could be found.

 

But, as a type collector, I must pay market value if I want a decent type to fill a void. So, it all depends upon how deep one's passion runs for a certain series to determine if one desires to purchase an over valued, over graded key coin for their set.

[MarkFeld]

If you buy a coin because it "seems like a decent deal" you are very likely going to end up with something you don't care about and which could still decline in value. It's YOUR decision, however.

[Arizonadesertrat]

Be patient, and wait until you find the right coin--do not settle for something that has a problem (cleaned, spot tooled, etc.) in order to lessen a purchase price.

 

As far as your comments regarding Seated dollars getting more expensive are concerned, your anticipated grade range may make a difference. If you are looking for AU55-58 coins with lots of eye appeal, then they just might increase in value faster than low-grade Lincoln/Indian Head cent keys. If not, and you are looking for cheaper Seated dollars (e.g., VF coins) for your 7070 type set, I would get the key cents you need first. All of these coins (as long as they aren't problem examples) will continue to significantly increase in value, so the issue is relative rates of increase as you plan future purchases.

[BillJones]

I've been pulling my head in like turtle. I've got a list of mid 19th century type coins that I would like to buy. BUT the prices are really high, and the supply is really thin. A very ordinary PR or MS 63 or 64 coin can now bring $5 grand or more. It's hard to believe that with all the mortgage defaults and real estate melt downs that the coin market has not been effected.

 

This bull market is getting long in the tooth IMO.

[Arizonadesertrat]

I hear you, and and counting my pennies too. Fortunately, the supply of nice type coins is very thin and I have learned to walk away from coins that aren't all there for the grade.

[astrostu]

Wait. You have your money saved up, it's burning a hole in your pocket ... but just wait. If you have something like a money market account, why don't you put the cash in there? Assuming we're talking about $1-10k (just guessing based on the F-12 PCGS price of a 1909 S VDB), you could bring in maybe $10/month interest on the money while you wait!

 

I'm in something of a similar situation but with a computer: I saved $50/week since June '06 through August '07 (for $3k) to buy a new desktop. But Apple hasn't updated their Mac Pros since August '06, and I refuse to pay 2006 prices for 2006 hardware in 2007. So rather than let the cash sit in my checking account, I stuck it into my money market account to get some interest on it and keep it more out of mind while I wait for Apple to upgrade.

[notabene-migration]

I think in the sort of situation you describe it might be best to call on a specific dealer you've had good experiences with in the past and tell them what you're looking for and roughly what you're looking to pay, and ask them to notify you if/when they come across these for you. If you've been a good customer in the past, many dealers would work with you in this way. I'd prefer one that knows how to photograph coins well and is willing to shoot me an email with photos of proposed coins to speed the process, but if you can find one that's also willing to ship them out for your evaluation, then that's nice too.

[WinstonWare]

In my experience, the “right coin” only comes along once every few months and maybe not that frequently. Given the opportunity to obtain “the right” coin I would pay what I needed to in order to obtain the coin.

[lkenefic]

Thanks for all the advice... I've been looking for either of the "keys" now for only four months or so ...so I guess I really need to be more patient. I'd gotten to the point where I really wanted to "finish" off a date/MM set and since I've been working on both of these sets since I was a kid...well...you get the picture...

 

In the meantime though, I'm working on a 7070, Large Cents, and a Morgan Dollar Date set...whewwww... When I come across decent deals for these other sets, I try not to dip into the "key date" fund... it's was just difficult recently as I came across a couple of nice looking Seated Dollars (un-fussed with XFs) at what I thought were decent deals...I passed as I would have had to delve into the key-date fund.... I'm really trying to keep focussed here!!

[just carl]

The majority of people think you should wait. I would assume those that say that are elderly and remember the good old days when low mintage coins were always available. Just my opinion. However, with the State Quarters, all types of new baby sized dollar coins, a few wierd Jefferson Nickels, coin collecting has boomed dramatically. This means that there are lots and lots and lots more coin collectors out there. In a country of 300,000,000 people, and throw in other country people that all collect US coins, try to imagine a 16D Mercury Dime with a mintage of 264,000 being common. With the upcoming 2009 aniversary of the Lincoln Cent, imagine the rush to obtain a bit of history with a combination 1909 and 2009, in S Mint and also with a VDB on the reverse. 1909S VDB mintage 484,000. No, not millions, thousands. And your being told to wait. Yeah, right, for what. They will never be available at all soon enough. If only 1% of the people collect these coins, your competing with 3,000,000 for the same coin in the USA alone.

I suggest if you find one such coin, buy it now. If they are ever available someday in a better grade, think about upgrading then. You may or may not be able to afford such coins in ten years, but better to have one now and be able to say I've got one that millions of other collectors want. Not Gee why did I listen to those people? They all have one and I don't. Naturally, they've got yours.

[Arizonadesertrat]

'The majority of people think you should wait. I would assume those that say that are elderly and remember the good old days when low mintage coins were always available.'

 

Elderly? Who are you calling elderly, young whipper snapper? Many of the smartest people I ever met were shrewd, old farts (and neither be I).

 

Your numbers regarding collectors who spend real money (versus picking items out of pocket change or buying an occasional silver round) are way off. If your 3M collecting figure were accurate, there'd be a coin dealer on every corner of a city business district.

 

What I tried to express in an earlier post was the opinion that quality is what matters most when forming a coin collection (or any other kind of collection). In order to build a collection to be proud of and hopefully retain one's monetary investment, it is imperative that patience be exercised and that the collector acquire a sense of connosieurship (be very choosy as coins with identical grades can have very different eye appeal). 'Getting it right now' isn't necessarily compatible with this collecting philosophy, and impatience frequently leads to purchases that are regretted later on. (And I say this as a result of having been there and done that.) The only time your mantra makes sense is when you are faced with having to buy a coin now or forget about seeing another specimen for many years.

 

[Zoins]

Assuming the coin was pricey enough that I wouldn't just expense it, if it takes a few months for the right coin to come along, I would wait till the bull market ends. If it takes decades for the right coin to come along, I might pull the trigger in today's high flying market, but it'd have to be a very special coin.

[lkenefic]

Make no mistake, I've passed up several coins that were holdered that either had corrosion spots that I didn't care for, were 2-3 points overgraded, or simply had crappy eye appeal for the grade... These coins are definitely out there. A quick search on Heritage brings up a few...ebay brings up many more. The crux is overcoming some of the cr@p-tastic offerings to find something I really want.

 

As far as "getting something right now" to fill the void in my collection and "upgrading later"... over the long haul this becomes an incredibly expensive proposition. Over the last year, I retro-filled some of the hole fillers in my IHC and Lincoln Cent collections... one case in point... instead of purchasing a damaged F12 1872 IHC for $100... I should have just ponied up the $300 for a problem free VF to begin with.

[Arizonadesertrat]

Exactly. Looks like you're ready to join the ranks of the elderly.

[ldhair]

Great thread.

I bought a lot of coins at a much younger age because they were a decent deal.

Now I look back and have to question some of what I bought. Now that I'm in the elderly crowd I would want that last coin to complete a long term set to be something special and consider the price second.

 

 

[BillJones]

Several comments on the previous posts.

 

- Buying a coin now and upgrading later is a poor strategy. If you buy a sub par coin and then upgrade it in bull market, the replacement coin, which is presumably better, will only cost you more. You might make back something on the rejected coin, but by in large the higher the grade (within reason) the larger the price increases over time. If you buy the replacement in a down market, the rejected coin will be at best worth less, and at the worst almost impossible to sell. Buy the right coin for you from the get go.

 

- Contrary to how it might seem today, bull markets do NOT last forever, and that goes double for runaway bull markets. Back in 1979-80 coin prices were nuts, and the “experts” were telling us would last forever. Then the crash came, and some people, especially speculators, got wiped out. This market will take a breather, and it could be a significant one.

 

- Yes, the State Quarters and the like have added new collectors, but do those collectors really count in the market for truly scarce coins? Most of these guys a plucking coins from circulation or buying a state quarter for a dollar or two. The rubber meets the road when prices get up to a few hundred dollars per coin. You would be surprised how many collectors are “out” at the level.

 

- As it was in the stamp hobby, the government is now issuing too many different coins for collector consumption. I’ve been a collector since 1960, and I’ve been through periods when each new coin was a special event. It’s hard to believe how excited collectors were over the Kennedy half dollar in 1964 or the Ike dollar in 1971. Today I’m going ho-hum. I’ve had a enough of coins that will never circulate that are issued only get our money.

 

[Arizonadesertrat]

 

- Yes, the State Quarters and the like have added new collectors, but do those collectors really count in the market for truly scarce coins? Most of these guys a plucking coins from circulation or buying a state quarter for a dollar or two. The rubber meets the road when prices get up to a few hundred dollars per coin. You would be surprised how many collectors are “out” at the level.

I agree, and a large percentage drop out at the $2-3K per year level, etc.

 

- As it was in the stamp hobby, the government is now issuing too many different coins for collector consumption. I’ve been a collector since 1960, and I’ve been through periods when each new coin was a special event. It’s hard to believe how excited collectors were over the Kennedy half dollar in 1964 or the Ike dollar in 1971. Today I’m going ho-hum. I’ve had a enough of coins that will never circulate that are issued only get our money.

This is why I don't collect contemporary mint products. There are so many of 'em that they remind me of stuff that churned out of the Franklin Mint (and most of these items had much nicer designs).

 

[Arizonadesertrat]

"- Contrary to how it might seem today, bull markets do [not] last forever, and that goes double for runaway bull markets. Back in 1979-80 coin prices were nuts, and the “experts” were telling us [this] would last forever. Then the crash came, and some people, especially speculators, got wiped out. This market will take a breather, and it could be a significant one." [billJones]

 

A lot of the speculators were also dealers, and many went under. There are fewer dealers today than there were 30 years ago, in part because of the collapse.

 

I have also been wondering about the strength of the coin market, and have been mulling over the wisdom of buying bigger ticket (for me, above $2,500 a pop) items during the next year or two. A downturning coin market could enable me to pick up items more cheaply if I am patient, assuming that their current owners let go of them (even now, there isn't a lot of really nice material coming up for sale). And I hopefully have several decades to enable me to outlast a bad spell in the market. [Of course, just carl may think I'm too 'elderly' already.]

 

Are economic fears dampening collector enthusiasm?

[lkenefic]

Exactly. Looks like you're ready to join the ranks of the elderly.

 

Whoa there!!! Be careful!!! I might have to come down there and beat you with my cane!!!

 

Seriously though... it's taken me quite a number of years and more than a few mistakes to develop "the eye". I'm by no means perfect and I fully expect to make more mistakes. I just hope they aren't too costly!

 

Leo

[Arizonadesertrat]

We need to start a new organization for 'elderly' collectors. I suggest CENT (Consortium of Elderly Numismatic Traders).

[lkenefic]

...I second the motion!!!

[Arizonadesertrat]

In the spirit of CENT, a 'Booby Head' award will be given out at irregular intervals (membership is not required to receive this recognition, and I already have someone in mind [see an earlier post to this thread]).

 

We'll need some divisions:

Half Cents (for the under 50 crowd)

Large Cents (maybe Extra-Large Cents too)

Flyers (ideal for the business executives)

Indian Head Cents (all members of this division will receive a special Snow number)

Wheaties (to keep members' strength up)

Two Cents (for pragmatic types)

No Cents (for casual participants who just want an 1883 Liberty nickel)

 

Other suggestions welcome!