Interested in collectors opinion’s on optimal purchases

[KMAG100]

Wanted to pose a question to the board? First let me set up the response with a couple of assumptions:

- First let’s assume annual quarterly budget for the purchase of coins at $2,000.

 

- All coins purchased are assumed to be solid representations of their respective grades.

Grade/ Price Bracket

 

62-63/ $ 450-$ 550

65/ $ 650-$ 750

66/ $1,500-$2,000

67/ $3,000-$3,500

68/ $20,000-up

 

The quarterly budget is arbitrary, along with the prices of the different grades of coin X. Only looking to illustrate this particular type of price structure versus quarterly budget to generate responses to which coins would you tend to key in on.

 

The optimal grade for coin X is 67, however would that still be what you would target given the budget constraints? What would be your optimal grade and why?

 

[coinman_23885]

I would rather save up and buy something special rather than compromise. If the MS67 was really worth $3,000 (i.e. not a coin whose entire value lies in the plastic), then I would not buy any coins during the first quarter and use some proceeds from the second quarter to buy the MS67. The stretch to MS68 may or may not be worth it.

[DaveG]

Well, there are a lot of variables you're not addressing:

 

Are you building a Registry Set? Are you putting together a set at all? If your answer is "yes", how many coins are in the set?

 

How often do you "need" to make a purchase?

 

How available are these coins?

 

In any event, a decade or so ago, Dave Bowers wrote an essay suggesting that most collectors would be well advised to buy the grade just below a big price jump. In this case, he'd advise buying the MS-65 for $650-$750.

[physics-fan3.14]

You have to balance the needs/desires/goals of your set with the scarcity/desirability/availability of the coin with your budget/ potential money/cash in hand.

 

While coin X might be optimal for some people in 67, that might not be the best for your set. You have to find the intersection of all 3 - set, coin, and money - to find the actual optimal coin.

[KMAG100]

 

In any event, a decade or so ago, Dave Bowers wrote an essay suggesting that most collectors would be well advised to buy the grade just below a big price jump. In this case, he'd advise buying the MS-65 for $650-$750.

 

I did read the Bowers book, thus what got me wondering about the question...I would argue in Bowers representation he would say the 67 was the optimal purchase and I would argue that the 65 is the optimal purchase with respect to quarterly budget under these set of assumptions. IMHO

[coinman_23885]

Buy the best you can afford.

[KMAG100]

Buy the best you can afford.

 

I can say when I have done that I felt the most intrinsic joy and thus a sense of the best exchange of price for return of value.

[Mr.Mcknowitall]

 

In any event, a decade or so ago, Dave Bowers wrote an essay suggesting that most collectors would be well advised to buy the grade just below a big price jump. In this case, he'd advise buying the MS-65 for $650-$750.

 

I did read the Bowers book, thus what got me wondering about the question...I would argue in Bowers representation he would say the 67 was the optimal purchase and I would argue that the 65 is the optimal purchase with respect to quarterly budget under these set of assumptions. IMHO

 

I would argue that you are setting aside an entire class of coins......circulated.....that would represent an optimal purchase dollar for dollar, would be far more liquid quick movers if you had to do so, and many circulated type coins exceed their uncirculated brothers and sisters in rarity condition for the grade, and are very satisfying on many levels to own.

[World Colonial]

Sounds to me your questions is primarily based upon financial considerations. What do you want to collect?

[wdrob]

 

I have an algorithm I developed for a proprietary Android App designed only to make decisions on which coins to buy. I just point the camera at a potential coin, in or out of a holder, and it will crunch some numbers and tell me just which coin I really like.

 

It's amazing technology. Half the time I never even realized that I liked the coin.

 

 

 

 

 

[RWB]

When Bowers wrote the short essay, a MS 65 was what is now called a MS 67.

[coinman_23885]

When Bowers wrote the short essay, a MS 65 was what is now called a MS 67.

 

(thumbs u

[KMAG100]

I have an algorithm I developed for a proprietary Android App designed only to make decisions on which coins to buy. I just point the camera at a potential coin, in or out of a holder, and it will crunch some numbers and tell me just which coin I really like.

 

It's amazing technology. Half the time I never even realized that I liked the coin.

 

 

 

 

 

Congrats ..sounds like you are part of the "app for that generation"...good luck with that.

[michael]

my app is in my brain based on 50+ years experience in the coin game

 

I like really scarce+ coins that are at least 150 years old to 500 years old that

have a great story to tell/historical context and are value priced in the grade right before the HUGE price jump to the next grade and have EXTRAORDINARY qualities and eye appeal

[KMAG100]

 

In any event, a decade or so ago, Dave Bowers wrote an essay suggesting that most collectors would be well advised to buy the grade just below a big price jump. In this case, he'd advise buying the MS-65 for $650-$750.

 

I did read the Bowers book, thus what got me wondering about the question...I would argue in Bowers representation he would say the 67 was the optimal purchase and I would argue that the 65 is the optimal purchase with respect to quarterly budget under these set of assumptions. IMHO

 

I would argue that you are setting aside an entire class of coins......circulated.....that would represent an optimal purchase dollar for dollar, would be far more liquid quick movers if you had to do so, and many circulated type coins exceed their uncirculated brothers and sisters in rarity condition for the grade, and are very satisfying on many levels to own.

 

I completely agree. ..the grade of coin in the assumption is only important as it relates to the illustration...circulated grades could apply also...I would admit...I personally have not developed the taste for circulated coins yet, however my years of collecting are small.

[KMAG100]

Sounds to me your questions is primarily based upon financial considerations. What do you want to collect?

With respect to US coinage I like half dollar strikes. I find the WLH the most interesting presently, however I find interest in all half dollars issues from 1794 threw present....so I think a type set is what I want to do as a collection. .. (not wanting to sell)...don't really care what heirs get for it...type set is for me and me only. What happens after death happens after death...that's why I think coinman suggestions are best for me with respect to personal collection...coins I plan to sell in my life time. Who cares as long as you can make money...

[wdrob]

I have an algorithm I developed for a proprietary Android App designed only to make decisions on which coins to buy. I just point the camera at a potential coin, in or out of a holder, and it will crunch some numbers and tell me just which coin I really like.

 

It's amazing technology. Half the time I never even realized that I liked the coin.

 

 

 

 

 

Congrats ..sounds like you are part of the "app for that generation"...good luck with that.

 

I used the wrong emoticon as it was not meant to be disparaging but just joking around. I fixed it up just a bit and put the correct emoticons in place.

 

Anyway, it was funny to me when I wrote it out.

 

 

[World Colonial]

Sounds to me your questions is primarily based upon financial considerations. What do you want to collect?

With respect to US coinage I like half dollar strikes. I find the WLH the most interesting presently, however I find interest in all half dollars issues from 1794 threw present....so I think a type set is what I want to do as a collection. .. (not wanting to sell)...don't really care what heirs get for it...type set is for me and me only. What happens after death happens after death...that's why I think coinman suggestions are best for me with respect to personal collection...coins I plan to sell in my life time. Who cares as long as you can make money...

 

In that case, I would follow Dave G's suggestion. I would look to buy the coin at the price point right below where the biggest increase occurs, though I admit it depends upon the specific prices, supply and your definition of quality.

 

Going by the most common definition of quality used today, I believe the highest graded coins are disproportionately vastly overpriced and though I admit this has apparently been the best financial strategy up to this point, I don't believe the price spreads are going to widen continuously "forever" because the difference in quality between the top coins in any issue is generally not that great. I also believe fewer people will be able to pay these prices since I expect most to become either poorer or a lot poorer for the foreseeable future.

 

Don't know if you read it but there was another thread covering "key dates". You didn't mention them specifically but I also believe that most of these in the most widely collected series are also going to underperform, though in this case I think it will be more in lower to average circulated grades.

[BillJones]

As "a numismatic omnivore" of all U.S. coinage from the Massachusetts silver (mid 1600) to the present, your question is one that I can't answer. I have purchased coins for my core collection from Fine-15 (only one piece) to PR-70 Ultra Cameo. The grade range is a reflection of what I was able to find combined with what I could afford. If I had insisted on only Mint State or Proof for everything, I would now have very few coins that are 200 years old and older. If I had purchased only coins in Fine, I would be very unhappy with the later coins in my collection. So I have a mix.

 

If there is a "sweet spot" for me in collecting it is often AU or at least EF-45. That has been the general area I have considered from the really tough, old coins in my collection. Very Fine graded pieces have usually been my minimum, but the 1796 half dollar in my collection is the Fine-15. I would have preferred one in VF, but that didn't worke out. It represents the rarest U.S. silver type coin, and if you check the listing in any recent Red Book you will see why price is a consideration. I can also tell you that what is available is involved in that too.

 

Check out my registry type sets if you would like a tour.