The Gold and Silver Mine 14.25

   The Gold and Silver Mine

 

 

A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.

 

Last weeks’ article about auctions and the fact they don’t always meet expectations was timely, given that the results of the auction for the rarest stamp are now in.

 

If you recall, I wrote about this stamp, the One Penny stamp from the South American country of British Guiana several months ago. It is the only stamp known of this design, has long held the title of the rarest stamp and has been the object of desire for many a stamp collector. This stamp, with much fanfare, was put up for auction as part of the estate of its last owner and heir of the du Pont fortune, John E. du Pont who died in jail after being convicted of murder. See, money doesn’t guarantee happiness.

 

Anyhow, the auction house handling the sale placed a pre auction estimate of $10 million to $20 million price. Quite a range don’t you think? Well, as I stated in my previous article, estimates don’t always become reality as the final price was $9.5 million including buyers premium. That means the buyer probably had to cough up an additional $.5 million for the auction house. Not bad for a days work.

 

Don’t get me wrong, $9.5 million for a small piece of paper is a respectable price for this stamp. And it is a new record price paid for a stamp. It just highlights what I said about auctions not always living up to their hype.

 

By weight, this is the rarest of all collectibles. But for value, that is price paid, art and other items exceed that number. As for coins, the rarest to sell in auction recently was an 1794 Flowing Hair Silver Dollar which brought slightly over $10 million. Plus there are other coins in private collections whose owners have turned down higher offers, or if those coins are ever brought to auction they would bring higher prices than the $10 million.

 

This brings me back to my opinion last week that while auction houses have their place in the market, they don’t always offer the best alternative to disposing of collectibles. For the very rare and truly unique items they definitely are the way to go as the auction houses exposure to the marketplace and their advertising budget allow them to reach a broad audience. But even with that, as the auction for the worlds rarest stamp shows, they don’t always deliver on expectations.

 

Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old WaWa building just past the former Cardiff Circle. The also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, The Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.

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The Gold and Silver Mine 14.24

   The Gold and Silver Mine

 

 

A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.

 

With rare coins, currency and (soon) stamps setting record prices in auction, the logical question one has when considering selling a collection “is selling through an auction house going to get the most value for my collection?”.

 

Once again there is no simple answer to this question, so let me share some of my experiences, having dealt with the major auction houses, Christie’s, Sotheby’s and Heritage, just to name the majors.

 

First and most importantly when an auction house publicizes a record price for something in their auction, there may be hundreds or even thousands of other items in that same auction that may or may not reached expectation, let alone set records.

 

Auction houses typically will only accept items of a minimum value, and even then, lower value items will be responsible for a higher percentage commission on the sale price.

 

Now, about commissions. Commissions are how an auction house makes money while covering their expenses, which among other things include labor, handling of auction items, printing catalogs and conducting the actual auction plus collecting the money afterward. Commission typically vary from 10% to 20% of the sale price, the lower the value of the item, the higher the commission, and are collected from both the buyer and seller. An example would be if a coin were to be auctioned with a final bid of $1000, at 20% commission, the buyer would pay $1200.00 and the seller would receive $800.00, the auction house getting $400.00, the difference, for their effort.

 

And then there’s the wait time for to get paid. A typical time line is first contacting the auction house to discuss your items. Then you must send or deliver your items which will be cataloged and scheduled for auction, the date to be determined by the auction house. Then, once the item has been sold, you may wait an additional 30 to 60 days before you receive payment since the auction houses offer 30 day payment options to their bidders.

 

And the main thing to consider is there is no guarantee that you receive the price you expect. Since most auction houses will not allow you to place a reserve price on your items, (or if they do allow that, you will be responsible for the commission on your reserve price if the item doesn’t sell) you must accept whatever your item brings at auction, less commission. Also they will not allow you to bid on your items so you can’t drive the price up. Depending on the auction house and the market, the price realized can be disappointing. I have seen auctions where there were so many items offered, that there were not enough bidders to absorb everything, and the bid prices were lower than the market price.

 

So is sending your items through auction a guarantee you will get the best price? Unless you have something of great rarity, probably not. Negotiating the sale of your items with a dealer has many advantages, first and foremost if you don’t like the price offered, you don’t have to sell. And if you do agree on a price, you will be paid immediately, no waiting.

 

This is not to say auction houses are not a viable option, but one must exercise care when deciding to go that route. I have used auction houses in the past with a degree of success, but I’ve also experienced some major disappointments.

 

Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old WaWa building just past the former Cardiff Circle. The also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, The Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.

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The Gold and Silver Mine 14.23

   The Gold and Silver Mine

 

 

A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.

 

Last weeks’ article was about gold and silver as investments and if there is any potential for the prices to rise in the future. This week I will give some insight relative to investing in rare coins and currency. That differs from buying just bullion items as the value of an investment in gold and silver bullion items rises and falls with the metals market, whereas the value of rare coins will change based on demand and supply, independent of the price of the metals. Although the track record of rare coin investments is very good, there are never any guarantees and not every rare coin investment increases in value. Careful selection is important.

 

First let’s clarify the difference between investing, collecting and just buying and accumulating coins and currency. A collector usually has an objective in mind such as completing a set of some denomination of coin, obtaining a collection of different types of coins or whatever may strike the persons’ fancy. That’s the reward of collecting; doing what makes that person happy with value a secondary consideration.

 

An accumulator (think hoarder) is probably the most unfocused of the bunch as he just wants to get the most he can get his hands on without any clear idea of what he is purchasing. This person is under the misguided illusion that whatever he buys is worth more than he has paid and can be sold for an immediate profit. We actually had someone like this purchase a piece of currency, only to come back several days later complaining rather verbosely that he couldn’t immediately sell it for a profit. We refunded his money and asked him not to come back.

 

A person who is investing in coins has spent time studying and learning about coins and currency, much as any investor would do before putting out their hard earned cash. This would be the same approach if one were buying stocks, bonds, property, etc. Typically an investor, after studying coins and currency and learning about mintages, rarity and condition will chose a topic that appeals due to a proven track record of increasing in value, or one that has a good potential to increase in the future. And an investor is interested in quality, not quantity, so his portfolio may be comprised of anywhere from several to several dozen coins, all of a high quality or rare nature.

 

There are many options available that represent good investment opportunities and its’ not my place to make recommendations, but the main thing to remember that although certain coins make excellent investments, the typical minimum hold time is 5 years in order to realize a sufficient profit that would equal or exceed that of other investment opportunities. This is because the difference between the buy and sell prices (or commission) is higher on rare coins than bullion items. Even considering that factor, rare coins can make good investments.

 

An example of some prices for coins similar to ones I owned years ago, a 1943 copper (bronze) cent just sold in auction for $329,000 – I paid $5000 for one back in the mid 1970’s. I sold a 1895 Silver Dollar (no mint mark and graded XF) for $4500 in 1984. That same coin is now worth over $30,000. Maybe I should have been an investor rather than a dealer, but as a dealer I have bragging rights that I once owned some very rare coins.

 

Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old WaWa building just past the former Cardiff Circle. The also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, The Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.

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The Gold and Silver Mine 14.22

The Gold and Silver Mine

 

 

A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.

 

With gold and silver taking a breather now, I’m asked by my customers is this a good time to buy because prices are lower, or should they consider selling because the price of these metals may go lower? I wish there was an easy answer to that question, and because there are so called “experts” arguing both directions for the prices, I guess my opinion is just as valid as theirs. So here goes.

 

First let’s look at gold. Gold has many uses in addition to being an investment, mainly jewelry and electronics. It is a hedge against inflation (which is virtually nonexistent) and a safe haven in times of international turmoil (gold jumped when trouble started in the Ukraine, but has since settled down). India once was the largest importer of gold for use in their jewelry industry where many brides received huge dowries of gold jewelry, but an import tax levied recently put a crimp on their imports. China, with its’ exploding economy and rising middle class surpassed India recently as the largest importer of gold, but the recent downturn in their economy has caused a pause. Having given a few basics affecting the price of gold, here is my opinion, and only my opinion.

 

First and for most I always recommend an investment of no more than 10% of your portfolio, and that you hope you don’t make a profit on that investment. Why? Because if gold is going up due to one or several of the above factors, chances are the value of your other investments is going down. (Last year gold and the stock market actually tracked each other going up, something I hadn’t seen before.) If you want to buy gold, buy something you understand such as a gold coin that is sold only at a fixed percent over its’ bullion value. And consider buying some small fractional pieces in addition to 1 ounce coins, just so if you need only a small amount of money you don’t have to sell a full ounce coin. I’ve listened to some of the doom and gloom buyers of gold who fret that they will have problems using gold to make purchase if the economy falls apart. I try to convince them that scenario won’t happen, but if it did the median of exchange would still be the dollar. The gold would be converted into dollars and then spent for whatever purpose. The example I use is inflationary post World One Germany where everything was priced in the millions and billions of marks, but the mark was still the monetary unit as would be the dollar were hyperinflation to occur here.

 

Silver is a cheaper commodity for investment purposes, but is subject to more radical ups and downs. Plus there have been recent accusations of market manipulation that may have some merit.

 

My crystal ball tells me that there are some difficult times ahead, both with our economy and with international disorder (a fancy way of saying conflicts). So having said that, I like to have a little gold around just in case.

 

Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old WaWa building just past the former Cardiff Circle. They also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, The Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.

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The Gold and Silver Mine 14.21

The Gold and Silver Mine

 

 

A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.

 

Several weeks ago I wrote about how coin collecting doesn’t have to be an expensive proposition, and gave examples of how searching through pocket change for Lincoln cents or Washington state quarters can be rewarding and inexpensive. Well, another category of collecting that can be fun and inexpensive is foreign coins and currency.

 

Collecting coins and currency (not investing) is a matter of personal interest and therefore there is no wrong way to go putting a collection together. Examples of collections of foreign coins I’ve seen include one coin from every country (I don’t know if that collection will ever be completed with countries coming and going as they have), coins from countries that no longer exist, coins with animals, coins with odd shapes, coins with Kings and Queens depicted (if was common practice for countries to have a portrait of the reigning monarch on their coins verses in the United States where no living persons’ image can be used). Other examples include coinage of the European Union whose individual countries mint Euro coins that can be used in any member country but with a design unique to their country. And don’t forget our neighbor to the north, Canada. Since the population of Canada is much smaller than the United States, their mintage figures are much less, yet compared to the U.S. their prices are reasonable. Plus they have a coin program in place where they change their designs periodically. And since Canadians have vacationed in South Jersey for many years, a lot of their coins have been left behind.

 

Foreign currency is another area of collecting that offers not only a wide variety of options, but also offers notes that are truly beautiful examples of functional art. Unlike the United States whose currency has had a typically boring look for over one hundred years, currency of many other countries are beautiful and colorful and have incorporated security features such as watermarks in the paper to thwart counterfeiting, something we have just recently started. As with coins, the opportunity to collect a variety of different topics (animals, fish, people, etc) allows a collector to tailor their collection to their interests. Want to feel rich? Collect post World War 1 German inflationary banknotes whose values are in the millions and billions of marks. And unlike the United States whose currency from the 1860’s to date is still legal tender (meaning it can still be spent for its’ face value, although you wouldn’t want to do that because its’ collector value is much higher), these note have no monetary exchange value. Since most other countries financial systems have not been as stable as ours, they have gone through periods of inflation, devaluation, regime changes, resulting in their older currency having no exchange value and being worth only what a collector is willing to pay. Again using the European Union as an example, the currency of all of the member nations in use prior to joining the Union is no longer spendable in those countries. I have read where this caused a real panic in Italy amongst some of its’ wealthy citizens who hoarded large quantities of high denomination Lira notes to avoid paying taxes. The realization was that those notes would become worthless after being replaced with the Euro if the owner didn’t exchange them and face the taxman.

 

Where to start with a collection of foreign coins or currency? Well, it seems almost everyone has some tucked away, either from trips abroad on vacation, a member of the military serving overseas, coins and currency from the old country brought over when immigrating to the United States, just to give a few examples. Family and friends are a good starting point for obtaining some coins and paper money from other countries, and many times people having yard sales or setting up at flea markets will offer foreign coins for sale, usually at bulk prices. So select a topic and happy hunting. And since many countries minted coins from silver prior to the 1960’s, you may get lucky by finding a silver coin or two.

 

Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old WaWa building just past the former Cardiff Circle. The also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, The Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.

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The Gold and Silver Mine 14.20

 The Gold and Silver Mine

 

 

A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.

 

Several weeks ago I wrote about my trip to the Baltimore Coin Convention and being on hand for the release of the National Baseball Hall of Fame 75th Anniversary Commemorative Coins. This coin was unique in as it is the first coin not struck flat, but rather cupped, with one side featuring and appearing like the side of a baseball and the other featuring a cupped baseball glove. Well, these coins have proven to be a “hit” with collectors and sports fans. (sorry, I couldn’t resist the pun)

 

These coins were struck in both proof and uncirculated condition for a $5 gold coin, a $1 silver coin and half dollar clad coins. Mintage figures for these coins are as follows: $5 gold – 32,026 proof, 17,974 uncirculated; Silver $1 – 119,869 proof, 74,203 uncirculated; Half Dollars – total of 750,000 for both proof and uncirculated. It appears all except the half dollars are sold out, with the mint yet to deliver confirmed orders. It appears the half dollar is going to “strike out” with collectors (oops, I did it again) since less than 200,000 have been sold as of April 20th.

 

The secondary market sales of the silver dollars have seen prices in excess of twice the issue price with graded examples and first day issue coins commanding very high prices. In my opinion, the coins in gold and silver will be popular and will command a premium price, but probably not as high as some of the asking prices for the graded coins in Proof-70 and MS70 since more coins are to be graded and the availability of those coins will go up. Now is not the time to chase the market. If you were fortunate enough to have ordered one (or more) from the mint, you are ahead of the game (again, no pun intended).

 

The other coins I wrote about after I attended the Baltimore Convention were those gold coins from the California Hoard, and what beauties they were. Well, they are now coming to market, with the first coin, a $20 gold piece dated 1874 and struck in the San Francisco Mint being auctioned at the Old San Francisco Mint on May 27th with the proceeds to used towards the restoration of the mint. Expect this coin to bring a high price because of its’ charitable nature. Immediately following the auction, more coins will be offered online at fixed prices at either Amazon.com/treasure or Kagins.com. The cheapest coins will be priced at $2500, but these coins have been damaged, possibly by the original owner digging up the containers to add more coins. Undamaged, circulated and graded coins (by PCGS) will be priced in the $3000-$3500 range with the lowest priced mint state coins to start at $5000.

 

These are the commonest coins from the hoard. Remember there were many others in extremely high grade, some being the finest condition known, including the 1866-S “No Motto” $20 dollar gold piece graded MS62+ and valued in excess of $1 million. The final disposition of those coins has not been communicated.

 

Are these coins that are being sold on line worth the premium asked over common $20 gold pieces in similar grades? Maybe. Other coins attributed to treasure finds or sunken ships have premiums the public is willing to pay, and the premium asked for these coins is not unreasonable. So if you want to own a piece of history, the lines will be open May 28th.

 

Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old WaWa building just past the former Cardiff Circle. The also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, The Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.

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The Gold and Silver Mine 14.19

The Gold and Silver Mine

 

 

A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.

 

Collecting coins doesn’t have to be an expensive endeavor (remember, I said collecting, not investing). There are many opportunities to collect United States coins on a modest budget, examples being Lincoln Cents starting from 1959. 1959 was the year the design on the reverse of the coin changed from having 2 wheat stalks framing the words “One Cent” to the new design featuring the Lincoln Memorial. Although the earlier design with the wheat stalks, which were minted from 1909 until 1958 have virtually disappeared from circulation, the cents with the Lincoln Memorial are plentiful. So if someone wanted to start collecting these cents, they could purchase one of those inexpensive blue coin albums that have holes for each date and mint and then start going through their coins to try to fill all the openings in the album. If you are fortunate enough to have a relative who just throws all their change into a large container, you may be able to get their permission to search for coins to place in your album. And remember, there are some scarce varieties of Lincoln cents that can be found in circulation or in hoards of pocket change, so this can also be considered a treasure hunt. But if you are going through someone else’s coins, a sharing or reimbursement arrangement is advisable.

 

Another coin that is collectible on a modest budget is the State Quarter series and by extension the Possessions and National Parks series that followed. In 1999 the U.S. Mint started striking 5 different quarters each year with each quarter representing a state and picturing something unique or memorable about that state. The program was to last 10 years in order to feature each of the 50 states with the coins struck in both the Philadelphia and Denver mints. These coins were meant to be released for general circulation while coins struck in the San Francisco Mint in Proof condition were to be placed in collector sets. Maps were made out of heavy cardboard picturing the United States and having a cutout within each state to allow to placement of the state quarter at that location. This was an alternative to the aforementioned blue coin albums which were also made to hold the quarters. If someone were to collect one coin from each state, regardless of which mint struck the coin, the total investment would be a mere $12.50. A side benefit to our young collectors is this map offered a good visual of the United States and the location of each state. And because each coin featured a different design, it makes an interesting display.

 

These are just 2 examples of collecting coins on a limited budget. Any series of coins that is still in circulation offer an opportunity to assemble a set of these coins by searching pocket change, yet the thrill of the hunt is what drives many collectors. That thrill is the accomplishment of finding a coin that fills one of the holes in their album and is something only collectors will understand.

 

Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old WaWa building just past the former Cardiff Circle. The also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, The Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.

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The Gold and Silver Mine 14.18

The Gold and Silver Mine

 

 

A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.

 

Several weeks ago I wrote about a hoard of gold coins that were discovered in California by a couple out walking their dog on their property. This hoard consisted of gold coins minted from 1854 to 1894 with some being in the finest condition known and having an estimated value in excess of $10 million.

 

Well, another hoard has come to light, one that will surpass the California hoard in both value and size, 30 tons of coins to be exact. That’s right, 30 tons! While details about this hoard are sketchy, what is know is the coins were accumulated over many years by the owner who evidently was just interested in collecting as many coins as possible without any interest in rarity or variety.

 

The coins have been acquired by Stack’s Bowers Galleries, a New York City auction company and named The Stack’s West 57th Street Collection, (collection being somewhat of an understatement) possibly so named because of the location where the coins were stored. It took 2 large transport trucks, under armed guard to move the 30 ton hoard to a secure vault where the coins are to be sorted and prepared for auction. The contents of this hoard were reported to contain bags of everything from large cents to Morgan Silver Dollars, all sealed and put away by the original owner. Other bags are reported to contain Washington Quarters, Franklin Halves, Indian and Flying Eagle cents and as many as 10,000 1909 VDB Lincoln Cents. While there may indeed be some rare coins in this hoard, the majority will just be common collector coins.

 

It will be up to Stack’s Bowers to open and sort the contents of these bags in order to prepare them for auction. They are optimistic that they will find many rarities as well as new, unlisted varieties once the sorting process gets underway. Talk about a treasure hunt, that process alone could take years. And the estimated value of this hoard is in excess of $15 million.

 

The interesting part about this hoard is that it contains average circulated coins, not rare high grade specimens. Therefore when these coins come to market they should be in a price range that is affordable to the average collector. In fact, with this many coins coming to market, one would expect the price of these coins to drop relative to current values. Since value is determined by the 3 factors of supply, demand and condition, increasing supply by such a large factor can do nothing but reduce the value of many coins, at least for the short term until all these coins can be absorbed into the market.

 

This has been an interesting year for coin discoveries, but I have always maintained that there are many discoveries yet to be found. Maybe not of the magnitude of the gold hoard and the 30 ton hoard, but certainly of sizable value. And with our area being populated since the 1600’s, I’m sure treasures exist in our own back yards, attics and basements, just waiting to be discovered.

 

Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old WaWa building just past the former Cardiff Circle. The also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, The Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.

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The Gold and Silver Mine 14.17

The Gold and Silver Mine

 

 

A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.

 

Much has been written about bubbles, bubbles in the stock market, bubbles in the housing market, etc. Bubbles occur when too many people jump into a market where they think it’s easy to make money, with the end result being just the opposite when the market crashes and there are no buyers or buyers paying a fraction of the items’ original worth. And this is not a new phenomenon. The same thing occurred in the 1600’s with the Dutch Tulip Mania when people paid huge sums for tulip bulbs thinking they were going to get rich by selling them at a higher amount to someone else. I guess you can see where this was headed. And the end was not pretty. And the ends to recent bubbles have not been pretty either.

 

Over the years I’ve seen similar occurrences in the collectibles market, the first I experienced being the silver art bar market in the 1970’s. They were called art bars because of the design each one featured. I believe it started with a company minting a 1 ounce silver bar for Christmas depicting an image of Santa Clause. It was a cute idea as it was attractive, and reasonably inexpensive as silver was only a couple of dollars an ounce at that time. Because of the interest from the public, not only coin collectors, other bars were designed for other holidays, each showing the year so that it would be necessary to design a new bar with a different design for subsequent years. The popularity increased and so did the number of different bars being designed which then included people, objects, zodiac signs and political commentary, just to name a few. Initially there may be 1 new bar issued per month, but as interest (bubble) increased, the number of bars increased to several per week. Still, with the low price of silver, costs weren’t prohibitive.

 

But then things got out of hand. Enterprising (I don’t want to use the word greedy) individuals started producing “limited edition” bars that sold for a premium many times higher than the regular bars. They also started making bars that had the feature colored in or “enameled” which also commanded a much higher price. Then there were “error” bars where the design was incorrect or there was a spelling mistake and when the “error” was corrected, the error bars commanded a premium. Suddenly, instead of this being something that could be pursued at modest expense, it became something that could break a budget. I remember setting up and displaying at a coin show in Philadelphia during the mid 1970’s, having showcases with both coins and silver bars. Yes, you could fill a showcase with just silver bars because of all the different designs that had been made. While standing behind my cases, I heard several people comment while looking over all silver bars that were available, state that they were going to stop collecting because they couldn’t afford to keep up with all the new choices. I knew then that the end of the silver bar market was near, and liquidated my inventory as soon as I could. While I lost a little money, it was nowhere near what others lost who held on and waited to see if the market would turn around. The market did turn around in 1980, not because of a renewed interest in collecting art bars but because silver increased tenfold and the bars were worth more for their scrap silver value than what was paid as a collectible.

 

There are many more examples of bubbles in the collectibles market, think Beanie Babies, comic books(Death of Superman, these were purchased in case quantities by “investors“), baseball cards(chase cards, autograph inserts, limited editions), Pogs (do you even remember them?), Cabbage Patch Kids; I could go on and on.

 

These all had a common theme, they started as collectibles that were reasonable in price and were fun to collect. Then someone, usually the people who make them and sell them, tries to expand the market through some sort of hype that these items are valuable and will go up in price. And when people believe the hype, the race is on to see who has the biggest collection when the bubble bursts.

 

The moral of this story is, if you collect something, do it because enjoy it and appreciate the items for what they are, not because you feel they will go up in value (even though they may). If you find yourself in the middle of a growing bubble, it may be time to sell out, take your profit and find a new item to collect.

 

Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old Wawa building just past the former Cardiff Circle. They also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, the Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.

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The Gold and Silver Mine 14.15

The Gold and Silver Mine

 

 

A weekly column dedicated to “digging out” current information about precious metals, coins and other numismatics.

 

This article is meant to be more serious and thought provoking than others I’ve written, but based on my observations, I consider it important. Especially if you have a collection of significant value. I title it “Who’s going to care for your collection when you’re gone?”

 

While “care” may not be the proper word, the intent is to make one think about what will happen to their collection if they pass away. Many of you may have wills that name executors and have guidance for the disposition of assets, but does that person really know the value of your collection? And can a collection be equally divided up amongst your heirs? And will your heirs look upon that division as being fair to them?

 

When I use the term “collection”, I am including just about everything, not just coins and stamps. And remember, just because you have collected these items over the years it doesn’t necessarily mean there is any great value in your collection. However if you’ve spent serious money accumulating expensive items, you may want to leave behind some idea as to their cost and worth.

 

The first step would be to have an itemized inventory listing the amount you paid for the more expensive items in your collection. Second could be a timely appraisal of your collection that determines the replacement costs of these items. (This would also serve as an appraisal for insurance purposes for a rider on your insurance policy. Insurance companies won’t provide coverage without an appraisal.) Have a frank discussion with whoever you designated as the executor, be it your spouse, children, attorney or accountant as to how the collection is to be distributed or liquidated. Make sure they know whether or not it is valuable and how to determine the best way to liquidate the collection. Remember too, liquidated value is different from replacement value, wholesale verses retail. Don’t leave things to chance, as they may not turn out how you would have wanted.

 

The best approach, and hardest, is when you reach a certain point in your life is to consider liquidating your collection yourself, because you are the most familiar with its value. There are several benefits to this approach, the best being you will have some money to do with as you wish, take a trip, buy a boat (no wait, don’t do that, that just requires an endless stream of money to support) well, you get the idea.

 

My observation over the years has been money can be divided evenly amongst heirs, things can’t. When you chose to turn your collection into cash, if there is anything left when you die (you should plan so there isn’t – enjoy it yourself), the money can be evenly divided. One of the worst things that happen is when things are left to be divided, and I’m not just referring to collections, I’m also including jewelry, silverware, etc, the recipients are not going to be happy with the way things are divided. I have seen numerous examples where relatives and even siblings will never speak to each other again because they felt cheated in the disposition of the estate. Think it doesn’t happen? I guarantee it does.

 

And worse, if heirs are not aware of the value of items left behind, their tendency may be just to throw things out without checking to see if there may be something of value. I remember an instance where a person working on a trash collection truck in Vineland came into our store with a baseball autographed by Babe Ruth that sat on the curb with other items that were being cleaned out of a house where the owner had just passed away. That is just one example of many we have seen. Don’t let this happen to you (or your heirs).

 

Douglas Keefe is the president of Beachcomber Coins, Inc. He and his wife Linda operate Beachcomber Coins and Collectibles formerly in the Shore Mall, now located at 6692 Black Horse Pike in the old Wawa building just past the former Cardiff Circle. They also have satellite offices in both Brigantine and Absecon. Between them they have over 70 years experience in the coin and precious metals business. They are members of The American Numismatic Association, the Industry Council of Tangible Assets, The Numismatic Guarantee Corporation, The Certified Coin Exchange and the Professional Coin Grading Service.

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