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selling your collection

41 posts in this topic

Hi Folks , Well thats most of my collection gone with just a few left to move. The coins went at Great collections and had a good experience with them with communication and listings which had a good number of bidders but sad to see them go :-(

What became apparent was the desprepency between dealers purchase prices and my sale prices

I had a lot of Purchases from one dealer that were well supported with a good amount of bids and the prices I realised were within 10% of my original purchase price and a couple sold above :-)

But the 6 that I bought from a couple of other large dealers that I bought from realised less than 1/2 of what I originally bought them for and a couple around 1/3.

 

Now don't get me wrong these were no dogs but I am left wondering around purchasing from some dealers on name alone . I have never minded stumping up for good coins in the range that I buy in but am left wondering about the quality always shines through and paying $980 for something as nice as this and selling for $421 less sellers fee is a hard pill to swallow

 

image-20.jpg

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X2, I think a lot of times folks are simply going by published MV's when they bid and generally won't pay up over for a truly eye appealing coin. Especially at auction houses that don't have the best images that bring out the stunning aspects of an eye appealing coin, and if said coin is not able to be viewed in hand. I have paid way over market value for coins in auction, but only after having it viewed in hand by someone for me or viewing it myself. So also many who may pay up are cautious about aggressive bids if they don't have a in hand examination.

 

Hence, for coins one has paid up for eye appeal, some times the best way to get the best sell price is to go to the right boutique dealers. It helps to have a good relationship with said dealer. The alternative is to sell from your own website or the BST's here and ATS, and be patient and wait for the right collector to come along tha appreciates the value of your eye appealing coins. I always have done better with these options over auction houses. I know that these options are hard to do given where you live, but that is probably the best way to get value for your coins. I know it is too late since you already sold them off, but maybe others in the same predicament can gain insight from MHO here.

 

Best, HT

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Hi Folks , Well thats most of my collection gone with just a few left to move. The coins went at Great collections and had a good experience with them with communication and listings which had a good number of bidders but sad to see them go :-(

What became apparent was the desprepency between dealers purchase prices and my sale prices

I had a lot of Purchases from one dealer that were well supported with a good amount of bids and the prices I realised were within 10% of my original purchase price and a couple sold above :-)

But the 6 that I bought from a couple of other large dealers that I bought from realised less than 1/2 of what I originally bought them for and a couple around 1/3.

 

Now don't get me wrong these were no dogs but I am left wondering around purchasing from some dealers on name alone . I have never minded stumping up for good coins in the range that I buy in but am left wondering about the quality always shines through and paying $980 for something as nice as this and selling for $421 less sellers fee is a hard pill to swallow

 

image-20.jpg

 

In cases where your prices realized were a lot less than the amounts you paid, it could be because you paid too much when you acquired them, because the market dropped after you bought them or a combination of the two. Either way, I'm sorry that your results weren't better.

 

By the way, the toning pattern on the Liberty Nickel looks like it was from a set of fabulously toned ones in a Heritage sale, years ago. I bought and sold a few of them, back then.

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Some dealers charge very high prices relative to the wholesale market. If you go to a number of shows on the national circuit, you get to know who they are. I don't know how they do it, but some of them have been in the business for many years.

 

Yes, you can get burned if you buy at the top of market and sell at the bottom. Sometimes the frenzy to buy something that is "hot," which everyone seems to want at the moment, can get the best of us.

 

There is also the thought that we might all be sitting in deckchairs on the "hobby Titanic." It seems like the shows are mostly populated by a bunch of old guys like me. It's hard to say how many of the younger generation will be there to buy our collections when the time comes.

 

I'm sorry that you took some losses, and I know that the tax laws are a bear. Gamblers are treated better than coin collectors. I just hope that you enjoyed the hobby while you were in it, and don't be shy about talking with us in the future.

 

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As amply shown, coins are not an investment - they are a hobby and source of enjoyment.

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As amply shown, coins are not an investment - they are a hobby and source of enjoyment.

 

This is the the truest statement you will ever hear in numismatics. Anyone who tells you anything different is mistaken.

 

Nick

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While in general I agree with the above statement I also think that selling is something that needs to be planned out. It's always a good idea to understand a coins "current" market value and the general demand for a particular series. It may be valued more or less than the price paid and there may be a lack of interest accordingly.

 

Once that number is understood then you can put the coin in an auction with a reserve to prevent from getting massacred upon it's resale. If it's value has dropped significantly you might choose to wait until the market for it improves.

 

It pays to do some homework.

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Unless I get an unexpected sibling inheritance, my present US Gold 100 Year Essential (but not quintessential) Type Set will go with me to my grave. (Well, actually, just short of my grave, so figuratively speaking.)

 

A very diabolical presentation, as I may reveal in future journals.

 

If you were to receive my collection, you might immediately contact Fox's Strange Inheritance (Jamie Colby), tell them what seems to be the case, and they would come running, cameras rolling, to be in on it in real time.

 

And I just bet it would make it on the air.

 

Extreme Wow Factor!!!

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As amply shown, coins are not an investment - they are a hobby and source of enjoyment.

 

This is the the truest statement you will ever hear in numismatics. Anyone who tells you anything different is mistaken.

 

Nick

 

I hear this all the time on these boards and I just don't agree. An investment is something you buy with the hope of earning income or profit. It doesn't have to only make money. Stocks and bonds are clearly investments and they lose money frequently, even over long periods of time. No one is saying coins are a guaranteed investment. It seems obvious to me that a very large portion of the community treats coin collecting (and many other collectibles, such as art or cars) with the hope (or even expectation) of making a profit. That makes it an investment.

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I put together a 7070 set of varieties, for the most part, and sold some of them through GC and received ho-hum results. Variety collectors are a very eclectic small group and timing is everything when selling ANYTHING. The loses that I incurred were written off as "memory tax"...I got to enjoy them for a while.

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"Hope" does not make an investment.

 

Expectation and hope are fundamentally the same thing - they may only differ by probabilities. Also, coins in general have appreciated over the long term. If FMV holds or goes up over the holding period, you still have to overcome a fairly large spread relative to liquid securities. Plus, this can be compounded by paying more than fair ask or selling for less than fair bid. These factors make it harder to make money. They do NOT mean coin collecting can't be reasonably called an investment.

 

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Coins are not the best investment out there, to be sure, but there does exist a potential for profitable returns, which is all that is required to meet the definition of an investment.

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Probably the only way to invest in coins is to actively be involved in dealing coins if you want to make a profit. However; you'll need to have proper acumen and business skills.

 

Personally; I just collect so not looking for profit. I would like to breakeven if I had to liquidate for whatever reason, and would invest time and effort in selling collection myself if ever faced with that reality.

 

Maybe put the same amount of effort in selling a collection that you put building a collection if you want money back with profit.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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As amply shown, coins are not an investment - they are a hobby and source of enjoyment.

 

This is the the truest statement you will ever hear in numismatics. Anyone who tells you anything different is mistaken.

 

Nick

 

I hear this all the time on these boards and I just don't agree. An investment is something you buy with the hope of earning income or profit. It doesn't have to only make money. Stocks and bonds are clearly investments and they lose money frequently, even over long periods of time. No one is saying coins are a guaranteed investment. It seems obvious to me that a very large portion of the community treats coin collecting (and many other collectibles, such as art or cars) with the hope (or even expectation) of making a profit. That makes it an investment.

 

What you described for every asset you listed is actually speculation which many (if not most) people generically call investment. I call it "investment" (in quotes) in every single one of my posts here and elsewhere because I recognize it exactly for what it is, speculation.

 

The reason I make the distinction is primarily (but not only) because it is much easier for most people to rationalize buying something they would never otherwise buy or overpay for when they willfully choose to fool themselves that they are "investing". Coins are actually luxury collectible trinkets which no one needs for any purposes whatsoever. Unlike mainstream assets such as shares, bonds or real estate, they don't produce any income streams either.

 

As for the OP's experience, it is certainly much easier to buy most coins than it is to sell them without taking a loss. Also, though the coin pictured is or appears to be very nice, I don't believe there are very many buyers who are willing to pay significant premiums for eye appeal.

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Speculation and investment

 

The view of what distinguishes investment from speculation and speculation from excessive speculation varies widely among pundits, legislators and academics. Some sources note that speculation is simply a higher risk form of investment. Others define speculation more narrowly as positions not characterized as hedging.[2] The U.S. Commodity Futures Trading Commission defines a speculator as "a trader who does not hedge, but who trades with the objective of achieving profits through the successful anticipation of price movements."[3] The agency emphasizes that speculators serve important market functions, but defines excessive speculation as harmful to the proper functioning of futures markets.[4]

 

According to Ben Graham in The Intelligent Investor, the prototypical defensive investor is "...one interested chiefly in safety plus freedom from bother." He admits, however, that "...some speculation is necessary and unavoidable, for in many common-stock situations, there are substantial possibilities of both profit and loss, and the risks therein must be assumed by someone." Thus, many long-term investors, even those who buy and hold for decades, may be classified as speculators, excepting only the rare few who are primarily motivated by income or safety of principal and not eventually selling at a profit.[5]

 

Speculation is condemned on ethical-moral grounds as creating money from money and thereby promoting the vices of avarice and gambling.

 

There is opinion that it serves no purposes from a human and economic perspective [6]

 

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My definition of investment is whether any incremental value is created from the activity, as in real production. Or second, whether services are provided to an end user.

 

Buying stocks and bonds in the secondary market is merely paper shuffling, regardless that the financial services industry, the tax code (through the different treatment of capital gains) and most of the public wants to believe otherwise. I acknowledge it has an economic purpose (to a point) by providing liquidity but today's equity and debt markets more closely resemble a casino than anything else.

 

Buying stocks in an IPO is funding a business but the buyers are almost always exclusively passive participants. It isn't really any different than buying the shares in the secondary market.

 

Of course, stockholders do have voting rights and (in theory) have a say in how the business is run. But in actuality, individuals (as opposed to institutions) have as much influence on company management and the board as voters have on national elections. In other words, practically none.

 

Many also believe that buying a home is an "investment". It's actually a form of long term consumption, like buying a toothbrush but the assets just has a longer life. This is the prime example where people will rationalize and financially overextend themselves where otherwise they would not. Your house and mine only becomes more "valuable' primarily because of currency depreciation through the existing asset, credit and debt mania which has inflated the prices of all assets. The land is permanent but is put to no productive use while the structure is expensive to maintain.

 

Coins and other collectibles serve no economic function whatsoever, as a collectible. They may have utility otherwise but this is also as a consumer good. Or with coins in the recent past, have functioned as a limited store of value but this is almost exclusively because of the asset, credit and debt mania. This should be evident since coins only widely became "investments" in the 1970's after Nixon closed the "gold window".

 

The only real investment is a business. Somebody like Warren Buffet is an actual investor because BRK either has management control or can choose or directly influence management. Real estate bought for rent is also an investment because it provides an economic service to an end user. Same for NGC, PCGS and any coin dealer.

 

I don't view speculation negatively. I just see it for what it is, arbitraging changes in the monetary value for profit with zero value creation.

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WC, thank you for the detailed response. Your definition of investment is extremely limited and at odds with both the dictionary definition and the use in common practice. Berkshire Hathaway owns 400MM shares of Coca-Cola. I own 20. If Buffett's stake is an investment, so is mine.

Here's a simple question for all of you that don't think coins (or houses or gold or whatever) are not investments. If you own an asset, with an established value, and that asset appreciates (or (or is reasonably likely to) over time, how can that not be an investment? What would you call it?

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Expectation and hope are fundamentally the same thing - they may only differ by probabilities.

So if I buy lottery tickets because I hope I will win then it's an investment? :)

 

If you own an asset, with an established value, and that asset appreciates (or (or is reasonably likely to) over time, how can that not be an investment? What would you call it?

Good luck.

 

With respect to the OP, on the bright side the losses incured on some items can be used to offset the gains made on the others to reduce the 28% capital gains tax.

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WC, thank you for the detailed response. Your definition of investment is extremely limited and at odds with both the dictionary definition and the use in common practice. Berkshire Hathaway owns 400MM shares of Coca-Cola. I own 20. If Buffett's stake is an investment, so is mine.

Here's a simple question for all of you that don't think coins (or houses or gold or whatever) are not investments. If you own an asset, with an established value, and that asset appreciates (or (or is reasonably likely to) over time, how can that not be an investment? What would you call it?

 

Here are my answers to your questions.

 

I don't use the dictionary definition and everyone is free to disagree with me. I believe my application is based upon economic reality and common sense.

 

On BRK, I explained that in my prior post. Warren Buffet is able to act as a business owner because his voting stake enables him to actually influence how the company operates. He can elect directors or become a board member himself and with it, can influence or set the strategic direction of the company. You or I owning 20 shares (or even 20,000) can do neither.

 

Your last question of appreciating assets is simply a matter of differences in definition. I call it speculation but it doesn't have any practical difference except I believe from a psychological perspective which I still believe is important.

 

If you or I view something as an "investment", our financial behavior will be different than if we view it as speculation or consumption.

 

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A poor and speculative one, but I could see that argument. Why would people buy lottery tickets if not for the possibility of making money? A lottery ticket is not much different in payoff structure than an early stage start-up. However, it is basically gambling on a single event which I would describe differently than holding an investment. I would distinguish between gambling and speculating based on the single event status, rather than arbitrary start and end points. I haven't thought about it until now though.

 

If all we're going to quibble over is the probability, then fine. We can draw the line as high as 50% so anything over that has the clear expectation of making a profit, to meet the strict definition of investment (obviously tickets and coins have no income). I would still say that one can have a greater than 50% expectation of making money with coins. Expertise and holding period will play a big part in that though.

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The liberty nickel series from what I've heard is not particularly strong or has weakened. Plus there are some coins that will just do better at HA or Stacks than the two week GC listing turnaround.

 

Other options would be getting the CAC sticker then top quality photography and then doing a listing through a top quality coin dealer on a consignment basis or ebay yourself.

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I would still say that one can have a greater than 50% expectation of making money with coins. Expertise and holding period will play a big part in that though.

 

Assuming a knowledgeable collector, that has been a reasonable assumption, in the past. I am dubious this is going to be equally true over the next (arbitrarily selected) 50+ years as it has been in the last 50+. Or even the next 20.

 

Different series or even individual coins can move contra cyclically to the coin market in the aggregate. But in the aggregate, the market for US coins is dependent upon general economic conditions because of the price level and scale of collecting. It isn't like the coins I collect where the collector base and demand is much smaller and lower and where prices can increase or decrease regardless of the economy because it only takes a very low number of buyers or sellers to set the market.

 

Since at least 1999 which is when US median household income peaked according to the data I have, most Americans are either worse off or a lot worse off now than then. Considering the only thing that even prevented a worse decline is the continuation of the greatest asset, credit and debt mania in the history of civilization, to expect a repeat performance is hugely optimistic.

 

It is an unpopular opinion but there is no doubt in my mind that most Americans (and by implication coin collectors) are going to worse off or much worse off for the foreseeable future versus today and the recent past. Today's standard of living and capacity to pay current coin prices is disproportionately dependent upon the unsustainable availability of artificially cheap debt.

 

Most current and future collectors won't be able to support the current price level either, at least measured in constant prices. The only exception that I can see is if the composition of the collector base changes to include a more affluent buyer which I don't believe will happen for the vast majority of coins which most collectors own or buy. An example of that is the coin profiled in the OP.

 

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"If you or I view something as an "investment", our financial behavior will be different than if we view it as speculation or consumption."

 

 

 

There are low risk investments and high risk investment. There are practical investments motivated out of necessity. There are unpractical investments motivated out of desire. Coins are a high risk, unpractical investment.

 

The latter is what new collectors need to know. Telling them that coins are not an investment causes confusion at best or robs them of the incentive to learn enough about grading coins to make wise investment decisions at worst.

 

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"If you or I view something as an "investment", our financial behavior will be different than if we view it as speculation or consumption."

 

 

 

There are low risk investments and high risk investment. There are practical investments motivated out of necessity. There are unpractical investments motivated out of desire. Coins are a high risk, unpractical investment.

 

The latter is what new collectors need to know. Telling them that coins are not an investment causes confusion at best or robs them of the incentive to learn enough about grading coins to make wise investment decisions at worst.

 

I don't believe coins are an investment at all but that is my opinion and you can have a different one.

 

On your second paragraph, I agree that collectors need to be aware of the financial risk and that it is relatively high.

 

I disagree with the rest of your statement because anyone who is confused and can't follow the logic I laid out in my prior post here, that is their problem and not mine.

 

I don't see coins as investments and still have no trouble reconciling the supposed contradiction you stated. I have attempted to learn how to grade properly for what I buy because while I do not buy coins specifically for profit, I am not intentionally trying to lose money because time is money and I am not in the habit of throwing my life away.

 

Another reason this is a supposed problem is because of what many US collectors buy. They are buying US coins where most of the value is based upon a price structure which places an outsized emphasis on differences that any non-collector, practically all collectors outside the US today and presumably most US collectors in the past do or would have considered completely trivial but which are a big deal now.

 

No one needs to buy many (if not most) of the coins profiled here or PCGS which sell for large or astronomical premiums to those one or several grades lower. They can buy much cheaper ones and get the same satisfaction from their collecting experience even as they spend much less.

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"I have attempted to learn how to grade properly for what I buy because while I do not buy coins specifically for profit, I am not intentionally trying to lose money because time is money and I am not in the habit of throwing my life away."

 

 

 

So you treat coins like the investment they are, while at the same time denying that they are investments. An investment does not require profit. An investment only requires the potential for profit.

 

All coins have the potential for profit - if, like you, they are treated as an investment.

 

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"I have attempted to learn how to grade properly for what I buy because while I do not buy coins specifically for profit, I am not intentionally trying to lose money because time is money and I am not in the habit of throwing my life away."

 

So you treat coins like the investment they are, while at the same time denying that they are investments. An investment does not require profit. An investment only requires the potential for profit.

 

All coins have the potential for profit - if, like you, they are treated as an investment.

 

The point of the quote you used is that, of course I try to get value for what I buy. Just because I do doesn't mean I view it as an "investment" but apparently, you insist that I do. People do this all the time with any number of purchases which obviously aren't "investments".

 

It isn't an "either" or an "or". I can both try to get value for what I pay and recognize it for what it is, a combination of an alternate form of consumption and speculation. To believe otherwise is a logical fallacy.

 

Let me put it in another context for you. If I turn out to lose a substantial percentage of my outlay, I can assure you it will bother me a lot less than practically anyone else on this forum and on PCGS. The reason I know this is because the primary reason anyone would pay the premiums for most of the coins profiled on these two forums is because they view these coins as you do, as "investments". Given the minimal differences in appearance which are viewed as such a big deal, there certainly isn't another logical reason for it.

 

The one thing I certainly know is that these prices aren't being paid because of the coins relative numismatic merits, that is for sure.

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"Given the minimal differences in appearance which are viewed as such a big deal, there certainly isn't another logical reason for it."

 

 

 

The fact that so many do believe this - is what makes it a big deal.

 

You can have your purist and somewhat elitist view of what constitutes relative numismatic merits. It is your choice to make. Be a martyr.

 

There is nothing wrong with being a martyr if the cause is just.

 

 

 

 

 

 

 

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