Another post in this forum related to flipping gold coins got me to thinking about this topic. My observations are based on a quarter century of coin collecting/dealing and are opinions only. But my opinions are based on long experience backed up with monetary losses and gains of my own money. I would suggest that such "opinions" have more value than most you will find on the web.

There have been many books written about this topic and I can recommend some but right now I just want to hit a couple of the high spots, fueled by some excellent red wine with dinner.

I'm not planning on writing a book so I'll try to keep it brief. First of all, a potential or current collector needs to evaluate his goals as related to his finances. Very simply put, there are very broadly 3 types of coin collections as relates to coin collectors, foreign, US, and ancients. Any of these can be broken down into numerous subsets. Let's just keep it relatively simple now and stick to US coins. Any of these subsets can require substantial monetary committments.

Breaking that down, there are 3 areas of collectings that apply to serious (real money) collectors, very early (loosely defined as prior to 1840), mid 19th century series, which goes up to the early 20th century, and modern which is to date. These can easily be broken down into further categories such as copper, silver, or gold coins. Since most people are not blessed with unlimited funds, and if you are a serious collector, breaking them down is necessary. These subsets of copper, silver, or gold coins can also be broken down further into face values such as quarters, half dollars, proofs, quarter eagles, half eagles, etc. Why?, because the money for the best coins has gotten so large that VERY few individuals can afford a general collection, and only a FEW can really afford to collect a whole series. We're talking REAL money here, I'd hesitate to come up with a number but millions of dollars are just a start IF one is referring to collecting coins which have maximum appreciation values.

A "fun" collector can easily make serious money off of his collection but it will likely take him a very long time to realize it, say 50 years or so. I'm mostly addressing this to those who have shorter time frames and more money available to invest and view a coin collection as one way to legally avoid potential estate tax problems, since really rare coins are not fungible and are subject to widely varying opinions of their current worth.

I guess I'm running out of wine here, but my advice is to buy the VERY best quality that you can afford. From an investor/collector POV IT IS MUCH BETTER TO BUY ONE OR TWO CONDITION CENSUS COINS, PREFERABLY OF A POPULAR SERIES, THAN 10 RUN OF THE MILL DECENT EXAMPLES.IT IS BETTER THAN THAT TO BUY ONE FINEST KNOWN COINS THAN TWO OR THREE CONDITION CENSUS COINS.

LEARN ALL YOU CAN ABOUT YOUR CHOSEN AREA. Books are so cheap, relative to the monies involved that even a few hundred dollars for books, if it educates you even a very small amount,is chicken feed. Unless you are a "natural", you will waste years of time and many thousands of dollars trying to learn what any decent coin guy could teach you in a few sessions. Try to find a honest dealer (very tough) who will tech you and sell you expensive coins at a reasonable mark up (5 to 20%). If you can grade coins yourself (and I mean you really can GRADE coins), go to auctions and bid for your account. Be aware that in the last 20 years many, if not most, expensive coins have been REPEATEDLY fucked with to get a higher grade in a NGC or PCGS holder. These efforts have been often successful and the result is a more expensive fucked up coin. Try not to buy these coins. Real collectors (the 3 or 6 left) hate this practive but the market is not driven by them. In the long run this is a HORRIBLE and destructive practice but the dealers who are doing it are playing for a large increase in current value.

I might expand on this later, but take this away, buy the absolute best coin you can afford for your level of collecting. Be able to PERSONALLy evaluate a coin or have someone you kknow and trust do it for you or you WILL ABSOLUTELY BE FUCKED out of money and possibly some serious money. End rant and I hope this helps someone.

I want to back up a second and say that coin collecting is a fun hobby and can be a lifelong interest for someone, the current 50 states quarters are a fine example of how a kid or someone with limited funds can get into a fascinating hobby, but this person is not who I am addressing this post to. I'll gladly answer any questions I can if anyone is interested.

Full disclosure:

I buy and sell certain coins all the time for my collections but I AM NOT a coin dealer any longer and have no interest in trying to sell ANYONE in here a rare coin. I am currently mostly collecting colonial 8 Escudos. There is an upcoming auction in Europe for my type of coins in which I hope to buy one or two of the offerings. They won't be cheap.

Just for a further example, I just sold a GOLD Indian head penny that I bought in 1989 for about 4 times what I paid for it. This was not a home run, but it was a very esoteric coin that I bought when I foolishly thought I could "bull" the coin market. In retrospect, buying it was a big mistake, I was wrong because the demand for that particular type of ooin is EXTREMELY limited. OTOH I have sold some Lib 20s which I bought in the same time frame for over 20 times what I paid for them. I'm not sure if I was smarter or luckier but I'll take those results on average.

PPS: In general, bigger coins of the same rarity will sell for more than smaller (lower denomination) coins that may even be slightly rarer. Sometimes these trends go overboard and the astute collector can buy a very rare smaller coin for less money than it should be worth in the long run. At auction viewings, one should ALWAYS look at the really rare issues and put a number on them. Doesn't mean you have to buy, or even bid, but it is a good practice once you have a feel for the market.

I just finished spending some serious time and money figuring and buying coins in the Colonial 8 Escudo auction I had mentioned above that was held in Barcelona, Spain. I nearly went, but used an agent instead. I am very happy with my purchases but they are long term investments. The Spanish Colonial market is slowly increasing in value as time goes by, I had to pay probably double what I would have had to pay for the same type of coin a few years back. Of course, most of the coins I was trying to buy over there only come along every decade or two. Compared to the US market, there are so many TRULY rare coins in this area of collecting that it is staggering. It is a difficult area of collecting to learn and more difficult to collect the best quality coins. It is also difficult to buy at reasonable price levels. There is a much lesser degree of both tranparency and knowledge in this area than in US coin collecting.

Which brings me to the point of this post......while none of them are perfect, Heritage Auctions in Dallas has improved by exponential amounts in their coin and other auctions in the last 10 years. They now dominate the US coin auction business, one which used to be ruled by Stack's in NY and a few others. Most of the others have fallen by the wayside or are completely out of the business. Superior in Beverly Hills is one example, Bowers and Merena is another that are no longer a factor. I believe in the long run that Heritage will give Sotheby's a real run for their money in all areas of art auctions. Their site iswww.ha.com and is worth looking at. If you have any idea of what you are doing, you can reseach REAL US coin values to a fair degree of accuracy, keeping in mind that a picture, while they do a very decent job of coin and other photography, doesn't tell the whole tale by any means. I have absolutely zero to do with Heritage and really don't even like the owners very much, but can admire a job well done.

Again, I'm almost positive this won't apply to anyone in here unless Saeed has suddenly become a coin collector , but a near perfect example of the type of coin that I was talking about for someone who is worried about the value of the (his) dollar and wants to diversify his holdings is coming up in the Heritage Long Beach auction at the end of this month. It is the 1856-0 $20 in SP-63. This is a wonderful coin that I have kicked my ass mentally at least a 100 times for not buying in 1995 in Beverly Hills when I was the under bidder. I quit at $180,000 and my fellow dealer Win Carner bought it for either himself or was acting as an agent for $185,000 plus the juice of 15%.

Many people believe the 1870-CC $20 is the rarest Am. Lib. $20. This is absolutely wrong and there are probably at least twice as many 70-CCs as there are 56-0s. Just for example, at one time I owned 3 70-CCs. I'd have been a lot smarter than I am if I had kept them. The 1854-0 is more rare than the 70-CC as well. I feel quite confident in saying there are less than 10 1856-0s in existence and this coin is multiples better than the second place coin which I owned and sold to help pay for part of my ranch. That coin was an XF-45 and brought well in excess of $200,000 quite a few years ago. This coin meets all the qualifications of long term value increases......it is the Finest Known by far of it's date and mint, any coin of that date and mint is extremely rare, and it is a larger sized coin in a widely collected series, American Lib $20s. It just doesn't get much better, there are a few, but they cost a lot more these days.

I don't think I can raise the money to bid myself (just kind of tapped myself out on 8 Escudos), but this coin would be a steal for a long term investor at anything under $500,000 and probably a very good buy up to about $650,000 to $700,000, including the juice. It may well sell for twice these numbers but anyone who is serious should be there with his powder dry because it might not in these economic times. As I mentioned above, put a number on a coin and bid up to that number and STOP. Sometimes if the coin is really nice or we really want it, we'll put a plus or a "push" on our bid and bid one more increment if we think it might buy it but that is IT, just like in anything else, you rarely make money by overpaying for something. OTOH, if you really know something is truly rare, such as this 1856-0 then I'm now sure what overpaying would be........my numbers above are just rational suggestions, if I had the money and was still collecting O mint $20s then I'd exceed rationality but I'm a collector at heart.

How about the new Odamnya silver dollar. Aluminum and both sides are tails.

Kidding aside, and no expert here, but I have learned that it is far better to acquire one prime coin than several of lesser quality.

quote:

Kidding aside, and no expert here, but I have learned that it is far better to acquire one prime coin than several of lesser quality.

That is absolutely correct, a lesson that many collectors have a hard time understanding for the first few years of their efforts, if they ever do.

Well, kick myself mentally one more time, the 1856-0 $20 that I could have bought for just over $200,000 in 1995 is now pre-bid at $1,437,500 (including buyer's fee) and that is before it opens on the floor........I didn't think it would bring this much, but it is. I'll let you know the final bid just to piss myself off some more.........

Well, it sold for the pre-auction bid price of $1,250,000.00 plus the 15% buyer's premium, total, $1,437,500.00 as mentioned above. However, I'm not positive this was a real sale, often the sellers of some big, meaning expensive, coins will put it up for sale and "protect" it up to the number they want for it, hoping someone will bid higher. This may, or may not, have been the case with this coin. I could find out, but it doesn't really matter to me. I stress, I have NO knowledge that this is what happened and it may have been a 100% genuine sale. Que sera, sera.

For those of you who have recently won the lottery, instead of pooping it off like most winners, I direct your attention to this coin auction which has more super rarities than almost any I've ever seen. True, they are Spanish or pre-Spanish but there are dozens of coins that are unique or nearly so.....items that are seen once in a lifetime if then. This is the same company and the same seller that I bought a few really rare pieces from back in April at the colonial auction. Theoretically, and I stress theoretically, my purchases are worth about 10% more than I paid for them, since the Euro is up from the high 120s/low 130s back in April to the current level of about 1.46 plus. Currency fluctuations can go either way, but rare coins go up over time if you buy quality and rarity at a reasonable price.

I direct your newly found wealth's attention to lot 1863, a Spanish 100 (hell I didn't even know there was a 100 escudo coin and I collect colonial 8 escudos), a huge coin, unique, that weighs over 11 troy ounces of .917 gold, or put another way over 10 ounces of pure gold, that's a big coin, biggest US gold coin was $50, or about 2 1/2 ounces gold.

If it sells for the estimate of Euro 2,000,000, plus the buyer's premium it will probably be the highest priced non-US coin ever sold, over $3,000,000 US dollars.

I'm not saying it's worth it, but you won't find another one around to price shop it with. Good luck, I'm priced out.

I gave up coin collecing when I was about ten. I found a funny 1955 (as I recall) penny. It looked like it had been whacked twice. I had it for a month or so then probably bought a piece of gum with it. A double-die obverse I believe they called it.

I've probably made more money with coins than with anything I've ever bought. Besides childhood collecting which got traded off for a gun, I got back into buying them for tax reasons in the mid 80s. Probably by blind luck, and after a few false starts, I've mostly bought coins that were high quality and rare while being somewhat out of favor with the then current collecting "thrust", meaning they were somewhat more reasonably priced in relation to the rest of the "hot" coin market (BTW this is the same logic I'm using to buy colonial 8 escudos now, but the market is slowly getting higher and hotter, may have to look elsewhere before long.......but who's complaining?, that means I've made money on what I've bought so far). It is a slow process, and patience is required (if you're impatient you will spend too much money on your purchases), along with a tolerance for mistakes (because, like in any field of investing you WILL make mistakes), but I've sold dozens of coins for over 10 times what I paid for them and they weren't cheap to start with. I'm not sure about percentage wise but my biggest dollar value one coin gain is when I bought one coin in 1988 for $12,500 and sold it a few years back for over $250,000....probably sold too soon (story of my life), it is worth nearly double that today but I used the money to buy land and it's gone up as well. I'm not suggesting that everyone should jump into coin collecting for profit......it can be profitable, but there are many traps that can catch the unwary......but if you're a natural collector and like the history of coins it is a fun hobby that can be a good investment IF you use your head before parting with your money.

Hint:
Don't ever "invest" in any deals offered to you on the phone or TV, whether they are coins, gold, mining, stocks, oil, or anything else the shysters use to separate people from their money. Just like stocks, do your own thinking, READ and learn what you're doing before you plunk your money down. DON'T buy an expensive coin just because it is in a holder with "X" grade on it, evaluate the coin yourself if you are capable of doing that (and if you're reading this for advice, you're almost certainly not), or have someone who REALLY knows what they are doing do it for you for a fee. It will be money well spent but the trick is finding a good "eye". Equally don't allow some internet "expert" (like me for example, how do you know if I know what I'm talking about?) to steer you into something you don't want to do or don't have the knowledge to do well. Knowledge can be acquired with a bit of work, but money spent poorly is lost forever. Caveat emptor.

Another hint: If a coin is truly rare and is the finest known or nearly so, and comes along, whether in an auction or by private treaty don't be afraid to be the last bidder or pay what seems a high price if you really understand the coin. Someone has to be the last and winning bidder, and you can't be a shrinking violet and buy the best at auction. My above told story of backing off the 1856-O $20 is an example of where I shrank when I should have kept going. If your money won't allow you to pay the auction price for a coin you really want, then don't get stupid and "settle" for another lesser coin UNLESS it meets your same type of collecting criteria but is less expensive for whatever market reasons. OTOH don't get stupid just because a coin is rare and meets your investing/collecting goals and grossly overpay either......you're not going to outbid someone like Bill Gates for example......put a maximum bid on it, even if the number seems ridiculously high but you know it is worth it AND STICK TO IT. That same 1856-O I told the story about above was sold 10 years earlier when it was "discovered" and new to the market, for nearly TWICE ($350,000 as I recall) what it sold for at the Superior auction where I was the underbidder and it sold for just over $200,000. Take that as a lesson, someone overpaid due to their excitement at a "new" (to the market) and exciting really rare coin, it can and will happen to anyone who buys many coins but try not to let it be you, especially on really costly purchases. Sometimes a "big" coin will attract a lot of attention and other, less attractive to the market coins might kind of fall thru the cracks a bit......but believe me, there are many, many, very smart people that figure these coins so you're not going to buy something that is worth a dollar for a dime EVER in a national level coin auction. Be realistic in what you can spend and find an area that fits your interests and pocketbook.

Well, a once in a lifetime miracle happened and the 100 Escudos coin sold for the opening bid of 800,000 Euros. With the buyer's premium that puts it at very roughly just over $1.4 million US dollars. It was bought by a smart group of dealers and is now for sale at multiples of the above price. There are some sick coin dealers who didn't believe it could be bought even for the 2 million Euro estimate and thus, didn't get ready for it. The Spanish museums ran out of money and couldn't buy it which is where everyone thought it would go.

Lesson: Even tho this was a very expensive coin in actual numbers, it sold for an incredible bargain price. Always figure anything really rare that can possibly fit in your budget.