Registry points vs. dollar value

[MichaelG-migration]

I have another question (actually two). I'm a relative newbie, and I'm finding the experience and advice on this forum very valuable.

 

Here's my hypothetical situation. I have $10,000 to invest in coins. (Invest is the key word here, recognizing that some members don't consider coins an investment). I would like to get the biggest bang for my buck. I've noticed that points assigned to coins in the registry sets don't always have a direct relationship the CDN, Heritage or PCGS values. It would seem that the folks assigning points to the registry coins are applying some knowledge about the coin that is not CURRENTLY reflected in the price. With that lengthy preface, here's my question: Would it make economic sense to give a dollar value to points (say $1), then to purchase coins that were significantly higher than values posted in the CDN? Would these coins have a greater potential for appreciation?

 

Thanks in advance for your advice.

 

Michael

[Dermott]

If you're looking at coins as an investment, the Registry(s) are the wrong direction to turn. Unless you're already sitting on a hoard of uber-graded items, you won't increase your $10,000 any and will probably lose most of it depending on what you buy.

 

One case in point is the Buffalo Dollar (the 2001 Commem). Had you snagged one or more from the mint when they went on sale, you could have turned the 10k into a tidy profit on the aftermarket, especially in the first few weeks after it was released. However buying one now will not net you very much as the price level for the coin seems to have hit its peak. Now don't get me wrong, I'm not trying to say that the Buffalo Dollar is a bad coin, it's actually one of the better commems made, however its price has already spiked and dropped back a bit. As an investment/speculation item, it's already settled. The "fire" is gone.

 

Common, later-date super-grade coins are at a peak right now. They're popular and thus their prices have already been pushed up (like the Buffalo Dollar). Unless you already have them, you'd be starting at or at least near the top of the market. You're more liable to lose most of the 10k than make anything on it.

 

Instead, I'd personally advise studying various Key Date issues of earlier coins. 1909s VDB Wheat cents, 1877 Indian Cent, 1955 Doubled Die Wheat, 1916d Merc, etc. You don't have to get one in blazing, pristine condition. But as a case in point, had you been able to purchase as many S VDBs as you could 5 years ago with that 10k, you would have more than doubled its value by now and it will continue to grow over the years because it is an established piece.

 

If you really want to invest in coins, it's best to learn key dates and varieties and get what you can of them, even if it's not MS-67*. At least from what I have learned.

[Oldtrader3]

IMHO there is probably a correlation between Registry points and price within a single series only. Since there is not much correlation between price and scarcity, between series, across the board there can not be here either. Saints and Morgans will always be more popular than Seated and Barber coins and will probably always cost more.

[ms66quarters]

I think in certain series the registry point value is out of whack with coin values. An example would be the washington quarter series,I've noticed that the 1955-D and the 1961-D in MS-66 holder the prices have slightly increased,especially the 55-D but the registry point value is 63 pts. and 23 pts. respectively.

 

If you look to invest I would look at keydate coin's

 

Rob

[MichaelG-migration]

I would guess there are lots of examples in every series - I limited my search to Morgans. I certainly agree that key dates in any series have the greatest potential for appreciation..

 

If a person wanted to put together a Registry set of Morgan's with the highest points per dollar invested, all coins would be graded from AU to MS63. As the coins increase in grade, the additional points do not reflect the increased value.

As an example, Stellar has submitted 4 coins for which he received 11,574 points. The CDN value is $660,000. Dave, on the other hand, has submitted around 65 coins for 19,425 points. I didn't add up the CDN values, but I would estimate it to be less than $15 K. So what do points mean?

 

So, to rephrase my question, if I were going to invest in MS63 Morgans, should I choose coins where the points exceed the CDN values and avoid the ones that are less? Or is trying to make sense of this a waste of time?

 

MichaelG

[dragon]

Michael,

 

The points awarded for Registry Set participants have no correlation vs. their investment potential or otherwise. They are geared to reward the smaller collector, and the NGC points system is in no way a reflection of a coins value or rarity in any given grade. The way to accumulate the maximum number of registry points is to buy the commonest dates in higher grades as opposed to rarer or more expensive dates, as the common dates are usually give 3 or 4 times the number of registry points vs. their dollar value, whereas the rare dates are usually severely discounted as far as points go. I've seen collections worth 6 or 7 thousand dollars ranked higher than collections worth 30 or 40 thousand dollars on the registries, it's just a way to encourage the smaller guy to participate and compete with the heavy hitters. I will point out however that NGC's setup is far more accurate IMO than the PCGS registry.

 

dragon

[TomB]

I will second dragon's excellent post and add some other details. As has been written, the Registry point system is not linked to coin value in a one-to-one relationship. The lower the value of the coin, in general, the higher the points you will receive for that coin as a ratio of points earned divided by coin value. Please keep in mind that this is mostly for MS or PF pieces as most of the Registry sets are geared toward those ranges. As an example, you might look at the Complete Type Set where a 1796 quarter in F12 is "worth" about 4500 points yet sells for approximately $10k and compare this to an MS68 clad Roosevelt plus an MS68 silver Ike plus an MS68 state quarter plus an MS64 high relief Peace dollar. I use those four coins in combination because they cost, together, about $1k yet they receive the same points, in total, as the $10k 1796 quarter. The current system is geared to encourage collectors to buy and submit coins that are worth less than the many coins currently in holders. This is done to stimulate interest in certain slabbed coins and increase submission rates for these coins. Think about it, without the Registry sets do you think that state quarters would be submitted in the enormous volume that they are at this time? Of course not. The truth is that as a coin's intrinsic value increases, the Registry reward (points earned divided by coin value) decreases. It's all about marketing.

 

I agree that the NGC Registry is far and away better than the PCGS concept for its finer gradient and more inclusive element.

[fcloud-migration]

Wow, great post! Matt, I agree with you 100%!

 

 

Now, I would like to add

If you are looking only for investments, stick with what has a history of increading in value. For the most part that would be key and simi-key coins, and outstanding examples of common dates, but I would say pre WWII. Also, keep in mind there is no guarantee of profit. The coin market runs in cycles and I think we have been going up for a while now. I remember the market was hot in the mid 1960s only to decrease in the 1970s and so on.

 

If you are into coins for an investment you may have selected the wrong hobby. Buy what you like and don't worry about profit, it will be more fun than noodling over the profit stuff.

[MichaelG-migration]

With any investment, there is no guarantee of profit. Every object of value runs in cycles - real estate, equities, precious metals, commodities, etc. I think you'd agree that coins have been a better "investment" than the stock market in the last 2 years.

 

Why is it that many collectors don't consider their collection an invrestment. It's certainly an investment of time. I suppose that many collectors are purists, and believe that thinking of their collection in terms of it's worth and appreciation is somehow demeaning. "If it's something I really need for my collection, price is no object".

 

My collection has been a great investment - if I divide the profits I've made by the time I've spent, I must be making around 65 cents an hour. Which is a whole lot better than I did with stamps.

 

I'd really like to take a poll to see how many collectors who post on this forum consider their collection an investment. Has this question been asked before?

 

Thanks for your post Tony,

 

MichaelG

[Oldtrader3]

Yeah, I think that I lost about $0.65 per hour on stamps. That is why I stopped collecting them years ago. Do not assume that coins are a good investment. Even "Investment" grade coins lose money in a bad economy.

 

People that make money consistantly on coins, know their series inside out and are able to grade those coins well. They buy MS65/66 coins at MS64 prices.