« THIS & THAT from Uncle Fred | Home | Warren Buffett advises Oboma-Interesting! »
INVESTING FOR THE FUTURE - COINS OR??
By fred | August 2, 2008
The other day I promised to discuss coin collecting, or rather investing in coins as opposed to other investment opportunities.
Looking back over the many years of my life, and that of my very close friends, I would have to say the very rich, the guys that made the most money, did it with property. Now that takes a lot of backbone. To be a successful landlord, make money as such, you have to know the game, and be tough as hell. You have got to make rules for tenants and stick to them, be able to with-stand sob stories etc.
Next - I would say stocks however you have be a little foxy there too. You have to be willing to study the market, now about the market, attend lectures, or attend Internet lectures. If you want to make money on the market you damn will have to know what you are doing. As they say in cards, a time to hold em and a time to fold em. That or you need a system, for the average guy the system mentioned in my book (Position Cost Averaging – ‘PCA’) should do it. However there is trading, if I had a long term outlook I would set my Position Cost Averaging program on a quarterly basis. Four trades a year with some good solid stocks will make you rich enough.
If I was younger, say from 20 to 40 years of age I would attend some schools like they have at Investment systems, they are free to learn. With computers acting with the speed of light you can get programs that for only a few hundred dollars will put the odds in your favor. You can’t be lazy like your 79 year Uncle Fred you gotta get up early, have good discipline and follow a given program. If you have the capacity to do that, and a gut of steel you will get rich very early in your life.
So now let’s discuss coins. If I was from 20 to 40 years old I would likely be working the stock market for all it was worth – HOWEVER – I would still buy pre 1964 silver coins with all my spare money. I would be storing them in a large safety deposit box at my bank. What would I buy?
I would first study eBay, put various dates of coins on a ‘Watch’ so I could see what the final price was. If you do that for a few months you will soon know what is ‘fair market’ for a roll of coins. Did you say rolls – Uncle Fred? Yes, rolls! If you are a collector you likely would buy individual coins, seeking the very best, careful to find only the very finest, flawless coins – as an investor you want good coins but you do not want to pay a premium in cost, freight, etc. You are investing not collecting. A big difference.
Twenty to fifty years down the line, the collector may or may not make as much money selling his collection, BUT he will have to sell to ANOTHER collector to get full value. Another collector that will inspect every coin for the slightest flaw. If you are an investor you are buying to fill the needs of collectors, but general those without the vast knowledge of coins that a genuine collector has. There are thousand of collectors, what I call average collectors that are not so knowledgeable, but realize that old coins are a good investment and will put their spare bucks into coins now and them. They know that their value will not decrease – those, or folks like them are your future customers.
So—rule number one for a coin investor is to try to always by rolls. Yes, this means that instead of the fun of buying a few dollars worth of coins on eBay constantly and having the excitement of winning you will have to save up a few hundred dollars before you bid as most good rolls are at least that. Remember – when you have the few hundred to bid on rolls that you do not get caught up in the excitement of bidding, remember what I said about first doing a study of the ending prices paid for a roll of the grade, year and value that you are bidding on. You must be disciplined – there will soon be another roll of the same year, etc, for you to bid on. If you bid six times and win at your price once, so be it. Just means you are a smart businessman.
Grade – to be a coin investor you do not have to be an expert in grading. Oh, eventually you will look at enough coins, read your copy of RED BOOK OF U. S. COINS and have a very good idea of what you have grade wish. But – in the beginning just remember to only buy ‘BU’ coins – BU is short for ‘Brilliant Un-circulated’ - so only buy Brilliant Un-circulated coin. They will be advertised in eBay auctions – always with the BU in the description line.
I have to tuck in here that you should always have at your finger tips a RED BOOK OF U. S. COINS. They cost about $20 dollar for a current version. BUT – you do not need a ‘current’ version, go to a used book store and buy one for only a couple bucks. You are not buying newly minted coins; you are buying only coins that were minted prior to 1964, so any old book will do.
Later when you gain a little more knowledge, get a feel for coins, you might find a roll for sale that is NOT brilliant un-circulated, if you can get it cheap enough, grab it, just make sure that the wording, dates, mint marks, etc, are clear and readable. Stick that in your safety deposit box also.
Mainly we are talking about silver coins here, pre 1964 coins, such as Franklin half dollars, Mercury dimes, Roosevelt dimes to 1964 not later, Washington Quarters to 1964 not later. Earlier silver coins, many may not be available in BU, but grab em if they are good enough prices, as long as the dates, etc, are readable - by the time you sell them they will be a hundred or more years old and collectors of those coins will not be so fussy. Then there are the Barber dimes, Barber quarter, etc. that are even older. Get your RED BOOK, look at the history of U. S. coins, then type them in searches on eBay, write down what their end up prices are, keep records. You will soon be a smarty about what the prices are and not overpay or over bid. Of course, there are rolls of dollar coins, now those in BU grade may be more than you can afford, I would get them in most any grade as cheap as I can find them. They are the Morgan silver dollars minted from the mid 1800’s or so to the early 1920’s and the Peace silver dollar after that for a few years.
There are a few other coins I would buy rolls of if I can find them at reasonable prices they are the Liberty head ‘V’ nickels – and of course the Indian head pennies, again if not BU, but still nice coins and you can get them cheap enough, buy, tuck em away.
A few tips about bidding on coins or for that matter any item on eBay. Check the closing date and time of the auction. Never buy on a Sunday night, too many folks bidding then. Look to buy on week nights or early morning week days, or very late at night. The best time to buy is on holiday weekends, folks have their attention else where. I never put up anything, jewelry from my eBay store or coins on a holiday weekend, I will not get rich selling then, I will only get rich buying then.
I could go on and on about coins, however this letter should start you off. Like my Old Danish Dad said about property, it is also true about coins. “They are making a lot of people but they are not making more land (coins) anymore!” Rare gets rarer, there are only so many of an item, the number of coins that was minted, the more people there are the more collectors there will be and the fewer coins to go around. Store em away, for twenty to fifty years in the future, then open the rolls, sell them on eBay as I have been doing individually – one at a time. Some coins I sell one - for as much as I paid for the roll of fifty, no problem.
One last remark – NEVER – NEVER STORE YOU COINS WHERE THEY CAN BECOME MILDUED. That can destroy their value faster than anything. I strongly suggest that you spend the $30 to $50 bucks it will cost you for a nice safety deposit box at you bank. They will be safe, free of mildew and be there when you are ready to sell.
If any of you have questions, please post them on this BLOG, I will be happy to explain whatever it is you want to know in more detail.
One of these days I will relate the early days of my coin collecting back in the 1960’s, and the Texas ‘Hunt’ family that in those distant days, tried to corner the silver market. The reason that there are a heck of a lot less U. S. silver coins than you may think, and why the coin mintage figures in most coin books is not correct. Will get to that one of these days.
In a few days I will be sending the early part of my family’s life history – “Everybody’s Danish” – hope you will stay tuned.
Love hearing from you anytime, just stick your two cents in whenever you feel like it.
Be good, and stay loved. Uncle Fred
Topics: U.S. Coins-Investing/Collecting for profit! |
August 2nd, 2008 at 7:01 pm
That’s MILLDEW!
August 15th, 2008 at 10:43 am
Dear Stan, sorry I am so late commenting, when you mentioned the idiots first, then the Democrats second, why didn’t you tell folks that the guys first in line - the idiots - were Republians. Not nice hiding a important fact like that.
Anyway that is a Republican now, after the total rape of our nation by the current crew, has to be deaf, blind, can’t read, or is one of the gang, take your pick.
I have voted Republican a few time, the assholes in Washington now are not Republicans. My old Danish Dad said a Republican was the guy that ran the corner bank. You gave him your money and when you got it back you had more than your had before. Are these Republicans??? Not by his standards nor mine!
Be good Stan stick around I am not done with your Republicans, not by a long shot.
You sound like a good guy with maybe a sense of humor, these guys in Washington do not however tickle my sense of humor.
Take care old buddy, Uncle Fred