By Richard Schwary - California Numismatic Investments
Not too long ago I got an interesting Email: “I’m new to rare coins and I would like you to recommend a rare coin. I want to double my money.” The intonation of the rest of the Email caused me to believe this fellow was sincere and looking for guidance so I called him and we chatted for a few minutes. He was in fact serious and intelligent so after my usual admonitions I realized that his electronic note was entirely proper considering his recent conversations with some of our coin dealer brethren.
This classic question can also be the result of too many telemarketing conversations which promise great rare coin gains in the short term and a fortune if you can wait a year or two. And even if our helping coin dealer or telemarketer does not open with advantages of higher prices there remains just below the surface of even knowledgeable professionals the intense questions about pricing and market direction. So for good reasons or some sort of dodge the money issue is on everyone’s mind even if they claim it is not and further this has been the case for a very long time.
A case in point is The Numismatist’s Downtown Companion (Volume Seven) Edited by Q. David Bowers. The beginning of this small story is a favorite of mine and begins on page 111 (J.W. Scott: Dealer in Coins and Medals by Thomas S. LaMarre): “Collectors are increasing and the demand for United States cents, half dollars and gold cannot be supplied at advancing prices. The buyers of real fine coins have made enormous profits in the past, but we venture to say that buyers of rare specimens today will realize quadruple the investment inside of 10 years.”
So is this advice from the latest rare coin investment newsletter? In fact it is a recommendation from the 1906 edition of J.W. Scott’s Silver Coin Catalogue, the “bible” of early collectors.
The recent Coin World commentary by Dave Bowers asks an important question about personal responsibility and price when it comes to purchasing rare coins without due diligence. And I can say from experience that I have seen people shell out hundreds of thousands of dollars for rare coins in the legitimate trade and not have the first idea of what they are doing. Now don’t get me wrong I don’t have a problem with rare coin profits because these encourage buyers and who does not like a climbing market?
But there is a great deal more to this price addiction and corporate involvement than anyone wants to openly discuss. Surely selling rare coins using price increases as a motivation can be ultimately unsatisfying and might even be doomed to failure in the long run.
Dealers have seen a virtually uninterrupted rise in the price of original rarities for a decade but even this is not to be enjoyed. And unlike the Hebrew prophet Daniel who was very skilled at dream interpretation our sincere dealer peanut galley claims there is never enough fresh material and foretells even higher prices right around the corner. But the unbelievable prices paid for rarity today coupled with recent Grey Sheet comments about what might happen to the desirable “other” certified coins which do not have a plus or shield or sticker makes me wonder if we all have not missed something along the way.
I have collected Seated dollars for years and still get more satisfaction out of a nice circulated antebellum date worth perhaps $700 because of where it might have been than I do out of a certified Proof 65 Cameo in the $16000 range although I’m very happy to own both and original examples of either are difficult to find.
So the real question might be are higher prices that vital to everyone’s well being and business plan? Could material gain somehow turn a wonderful and challenging occupation and hobby into a future utopian nightmare in which Ray Bradbury’s Illustrated Man simply laughs at you when raising your bidding paddle?
Perhaps the most important thing we can learn from today’s pricing has nothing to do with whether rare coins are moving higher or lower? Perhaps if the monetary aspects of collecting or investing in rarity are more important to you than the coin’s historical or numismatic importance you are in the wrong place. In other words if you buy the coin for reasons other than personal interest or self edification you have missed some of the most important and essential elements of ownership. Maybe David Hall got it right with simple commentary like “Have fun with your coin."