Playing Coins is like Gambling

[multi collection 10]

:confused:Playing Coins is like Gambling:confused:

 

*Playing coins is going to make money or not ? Who knows ?

*Buying (Don't know is value or not ?)

*Selling on auction (Don't know is going to lose money or not ?)

*Grading (Don't know the coin are how high is going to be grade?)

 

Playing Coins are very difficult to think, it's just like gambling, going to win or lose ? Who Knows ?

[Pierre_Henri 95]

Playing Coins ...?

 

What do you mean by the word "Playing" ?

 

Pierre

[BumbleBee 10]

If you like coins and you like to gamble then you need to buy R5 Mandela coins. The more you buy, the more you're going to loose.

 

For most of us collectors, it is a fun and interesting hobby and if you're serious about coins then you need to do your research, if you just want to make a quick buck then coins is not for you.

[jwither 17]

In most fields of speculation, making money is difficult most of the time. Its primarily during asset manias such as what existed for many stock and real estate markets where it appeared to be easy. Those days are over for the foreseeable future.

 

With coins, it is even easier to lose money because coins are not widgets or at least most of them are not. For those here who collect South African coins almost exclusively, you probably are not aware that making money in those of your country has almost certainly been MUCH EASIER than with those from other countries. So if you find it difficult with these coins, just think how hard it is for most others.

 

South African coins have been in a long term bull market, from what I know, the late 1990's. There are some of you who have been collecting longer than that and I would imagine that if you have high quality collections, you must have an unreliazed windfall. But I sense from the comments and questions on this forum that this is the exception and not the norm. I would also expect this or else prices would not have been so cheap before.

 

Most buyers lose money because they make mistakes, either due to a lack of discipline or because they do not know what they are doing. This is true of any "investment" field. To make money, you either need to be able to buy coins at advantageous prices. Or, if bought at "market" value, you need to catch a long term trend and ride it. Most who make money do so by the latter because they are generally paying closer to "retail".

[ThomasMueller 10]

Its primarily during asset manias such as what existed for many stock and real estate markets where it appeared to be easy (to make money)

 

Most people buy at high prices and sell at a low level. So they lose money, when it appears easy to make money.

 

South African coins have been in a long term bull market, from what I know, the late 1990's.

 

Yes, that´s true. I would say mid 90`s.

 

To make money, you either need to be able to buy coins at advantageous prices. Or, if bought at "market" value, you need to catch a long term trend and ride it. Most who make money do so by the latter because they are generally paying closer to "retail".

 

In this forum in a thread (What to buy?) about 3 months ago I recommended modern Chinese coins (PRC). Since then (not bene: three month ago!) modern Chinese commemorative coins doubbled in value!

[jwither 17]

After 15 years of an uptrend, South African coins are now still reasonably priced versus most other coins based upon my knowledge, but no longer dirt cheap as they were when I started collecting them and up to 2004..

 

There also selective coins that I would describe as overpriced. Examples of these include the 1892 and 1898 1D, the 1897 3D, 6D and 1/, 1898 pond, 1923 1D and a few others.

 

At current prices, buyers will find it much more difficult to make money than they did before. Much of the "easy" money is gone. It was a once in a lifetime opportunity and the "law of large numbers" makes a repeat performance unlikely.

[ThomasMueller 10]

The "King" of ZAR numismatics the veldpond was sold in 1998 at Heritage Auctions for US $2.415 (including buyer`s premium). That coin was graded by PCGS as MS63 (!), so it`s unlikely that you will find a veldpond in a much better condition.

 

This coin may be worth right now about 24.000 US Dollars, ten times more than 12 years ago.

 

What will that coin be worth in a decade? 240.000 Dollars????

[jwither 17]

From 1999, the price change you provide represents a real price increase of probably about six times since there has probably been about a 30% to 40% cumulative price increase in the USA in USD since 1999. In real terms, the chances of that repeat performance are essentilaly ZERO. That is what I meant by the "law of large numbers". Expensive coins (or anything else) simply do not hardly ever increase in price prortionately as much as cheaper ones because few can afford to pay the increased prices which would be required to then buy them.

 

Even accounting for price changes, unless there is much higher price inflation than I expect (something I do not in the next several years as I have explained in other posts), the chances of a Veld Pond selling for anything remotely close to $240,000 by 2020 in this grade are also close to ZERO.

 

In the last few years, the census population of the Veldpond has soared and at over 100, even accounting for potential duplicate submissions, it is not really that scarce of a coin GIVEN ITS PRICE, contrary to what many or most think. (The NGC census is 116, with 61 in mint state, 13 in MS-63 and 22 graded higher.) In 1999, there were few in the census and they hardly ever showed up for public sale, at least outside of South Africa. Now they show up at least occasionally.

 

Though I would consider it the number 2 South Africa coin in popularity/prominence (behind the 1898 "Single 9"), people need to have more realistic expectations for what this (or any other) coin should be worth.

 

Even at its CURRENT price, the Veldpond is ALREADY one of the MOST expensive coins in the world given its relative scarcity. Can it reach this type of price anyway? Yes, if people ignore financial considerations.

 

Is the Veldpond a very desirable coin? Absolutely. Is this type of future price likely justified given comporable alternatives elsewhere? Absolutely not. To a prospective "investor", there are other coins that are of either comporable historical interest or scarcer that either sell for less than the Veldpond now or would in the future if this price level was reached.

 

The primary (really only) way I could see this price forecast being met is if there are a sufficient number of local buyers who are both willing and, more importantly, able to pay this type of price. Whether there are or not is complete guesswork. Though I believe there are proportionately many collectors of ZAR outside of South Africa who actively collect the better coins, the tendency of collectors who pursue a series outside their home country is to have competing alternatives.

[jwither 17]

One correction to both your post and my last one. I checked the Heritage archives. I could not find the 1999 sale you referenced but I did see six others, including three on January 4, 2010. Yes, three in one auction. One was an NGC AU-55 and the other two were MS-63. The prices realized were about $22,000, $34,000 and $49,000. There was also a prior sale of an NGC MS-64 for about $54,000 and an NGC MS-66 for $92,000.

 

What these results mean is that, though the appreciation to reach your target is less (much less), this coin is even more expensive and less competitive today versus other comporable and scarcer coins than I thought. This is more true for the AU coin than the others. At $22,000, there are few other AU coins, even many scarcer ones, that would sell for that kind of money or anywhere near it.

[EWAAN Galleries 11]

Hi All

 

Interesting news for the online market. Been a while since a Veldpond sold on auction on Bid or Buy

 

Check this out:

 

Graded Coins - Look @@@ 1902 ZAR Veldpond NGC MS63 - NO SLASH - Ultra Ultra Rare - Perfect was sold for R450,000.00 on 24 Jul at 21:37 by EWAAN Galleries in Johannesburg (ID:24156238)

 

Regards,

 

 

EWAAN Auction Galleries

[ThomasMueller 10]

Hello,

 

It seems that I have only very little credibility here in this forum.!

 

What I said was true, is true and will be true. In the mid 90`s an uncirculated Veld Pond was worth about US $2000, sometimes even cheaper!!!

 

The Heritage Auction I refer is 1998 ANA Sale 190 Lot: 7399

 

Zuid-Afrikaansche Republiek Veld pond 1902 "ZAR" and the date/"... World

 

If this coin is now worth about US $50.000, according to your information, that`s great!!!

I am not located in South Africa or in the US and don´t have actual prices.

 

But: I don´t see any increase in value in the Veld Pond any more. South Africans may see things different, but that´s my point of view.

 

After a boom for 10 to 15 years there will be a bear market.

 

I am still bullish for the Chinese coin market, especially the old imperial and local issues.

 

I recently offered an old Chinese dragon dollar eBay at a without fee day (special offer only here in Germany). I wanted to sell that coin at 20 times in paid some years ago for it (in Singapore). This offer was a joke but one Chinese really wanted to buy that dragon dollar...

 

Good night

 

Thomas

[Guest Guest]

Hi Thomas

 

I for one enjoy your posts and your participation. We don't always have to agree with everything others write on the forum, many don't agree with me... but we will always learn something. I agree with your comments about the Veldpond - to me it is one of the most historically significant coins in the world.

 

Kind regards

 

Scott Balson

[jwither 17]

Thomas,

 

I'm not sure what you are even talking about. I am not putting your posts down. I simply write differently than most others do and it is nothing against you. When I have a contrary opinion, I say so, whether others agree with me or not.

 

I was not questioning that this coin sold for the price you stated in 1998 or 1999 and if you think that I did, I have no idea where you got that from my two posts. (I simply could not find it. I did not say it did not happen.) What I was questioning is the hypothetical future price you included. It might not have been intended as a price forecast (probably not) but that is what I was replying to.

[jwither 17]

Scott,

 

I agree with you that the ZAR Veld Pond IS one of the most significant historical coins in the world. Its a legenday coin to me under any standard and I like the coin, A LOT.

 

The point I was trying to make was on the financial merits which are reasonably presented. Its possible that I could be wrong but the logic I use is sound whether I turn out to be correct or not.

 

Also, I am not trying to dissuade anyone from buying this coin if they want to but I believe it would be incorrect to think that this coin is a bargain or undervalued at current prices. Personally, I consider it overpriced given current prices and scarcity, despite its historical appeal.

 

When it makes sense, I will present this type of analysis. I have done it many times on the NGC Message Boards. Sometimes people take offence to it but that is their choice because I have never told anyone they should not collect any coin if that is what they like. What some people do not apparently like in my analysis is opinions which are contrary to theirs which indicate that the coins they own might be "overvalued" or that they might lose value in the future.

 

What I would also ask others here to consider is that I am also an occasional seller of South African coins. In fact, that is all I usually sell and primarily to South African buyers, including to some members on this board. Whether someoone agrees with me or not, what no one can say is that my comments are self serving or that I am trying to promote any coin I have sold or might sell in the future. Anyone who wants to ask my opinion on any coin can do so. If I think the coin is undervalued, reasonably priced or overpriced, I will and have said so. Most of the time, my posts have expressed opinions that coins are overpriced but that is not my opinion on everything.

 

If the collector does not care about future financial performance, then it does not matter what they pay. But I know that this is not true most of the time. Its not true here and its not true on the NGC Message Boards either.

 

What I see both of this forum and on the NGC Message Boards is a lack of perspective on the RELATIVE FINANCIAL merits of the coins they collect. Many (BUT NOT MOST OR ALL) seem to have an over inflated opinion on what their coins should sell for now (mostly the NGC Message Boards) or their future financial prospects (both here and the NGC Message Boards).

 

If a collector cares about the financial aspects of their collection like most do, then they need to think more realistically about what they own and what they are going to pay for new acquisitions. Those who fail to do so are going to increase their chances of both overpaying and losing money.

 

I know that the way I think about coin values is not typical. Most do not compare the coins they buy to others or probably do not necessarily do so conciously. Many times, they will still buy coins even if they are "overpriced", either knowingly or unknowingly. Its one thing to do so with knowledge but entirely another under a lack of knowledge. One reason I do this is to attempt to get people to think about what they pay before they buy.

[Guest Guest]

Hi John

 

You are a valued and knowledgeable member of this forum, and like with Thomas, I respect your point of view although I might see things differently from time to time.

 

That is the essence of a forum.. learning different perspectives!

 

Kind regards

 

Scott Balson

[jwither 17]

Thanks for your compliments. I like reading your posts because you are one of the few who will bother to explain the reasoning behind the positions you have. Its true here and on the NGC Message Boards.

 

I know that you place a high prominence on the history behind a coin. The reason I know this is because i have read your extensive comments on your web page. I read it a long time ago and like it very much.

 

My position on the historicity of a coin is that, given comporable scarcity and popularity, the coin should sell at a substantial premium. But otherwise, not necessarily. (Once again, this evaluation is independent on the collectible merits of any coin.)

 

Also, its impossible to separate exactly how much of a coin's price is due to this factor and others. There are other historical coins that sell for less than this one, some much less. Some are more common but I'm not sure about all of them.

 

Examples of other historical coins that have at least as much merit as the Veld Pond (to an impartial observer) would include various coins from the Roman period such as those of Julius Caesar and Augustus Caesar and the Jewish Revolt from 66-70 A.D Other examples include the 1839 UK Victoria Coronation five pounds "Una and the Lion", "pirate" coins from the Spanish colonial period and some from the United States from the 1850's. An example of the latter would be the Territorial Gold U.S Assay Office $10 and $20 gold pieces.

 

The advantage from a price standpoint that the Veld Pond has over most or all of these coins is its prominence in South Africa Numismatics. Most of the others are relatively obscure even though they are not cheap.