To slab or not to slab...

[dennrein 10]

The other day I came across an interesting thread on a coin forum from Germany. They were discussing how best to "free coins from their jail", jail being NGC and PCGS slabs that coins are bought in, mainly from the US. It made me realize that slabbing is not accepted as the thing to be doing to your valuable coins in all parts of the world. In fact at the World Money Fair a couple of weeks ago in Berlin there were very few dealers at all with coins in slabs and dealers with slabbed coins didn't seem to be getting a lot of the action. Slabbing seems to be something very much connected to the US market and especially to dealing on the internet. In the age of photoshop, despite money back guarantees and seller reputations, some people seem to require a "third party backup".

 

The current South African market is at a crossroads. There are a lot of voices asserting that slabs are the way to go. There is SACGS, the South African grading service, there is Coinguidesa.com, the first slabbed coin guide about to start, and there are a lot of people trying to find out how and where to slab their coins. If I remember correctly, slabbing South African coins actually really got going when the Mandela coin hype started. Suddenly you found people taking circulation coins and getting them slabbed by the hundreds of thousands, just to make them look special. And it worked for a while until the frenzy died down. What we are left with now is a market where the next few years will show whether slabbing, too, was just an episode or is here to stay.

[dennrein 10]

To slab or not to slab...

 

I am no fan of slabbing. Here are the reasons why:

 

1. Tradition: South African coins have traditionally been graded according to the British scale (F, VF, EF, UNC) as opposed to the American one (XF 45, AU 50, MS 60, MS 61 etc.). Why should we start grading them differently? Is the American scale superior?

 

2. Not superior: The answer is no. On the contrary, the American scale (0-70) appears to be more nuanced, but as jwither has stated elsewhere, it is a case of mock preciseness. No-one can tell an MS 60 from an MS 61, or an MS 64 from an MS65. The scale appears to be more detailed, but there is no way that grading could ever be replicated as reliably as the scale suggests. This is why often, when people aren’t happy with the grade, they resubmit and presto: we have a different grade. The British system, on the other hand, doesn’t promise an accuracy it can’t keep. There are nuances here as well, with + and -, but it is certainly the more honest scale in that you won’t find a ++, +- or whatever.

 

3. Investing: It is true that slabbing allows for people who have absolutely no knowledge of numismatics to speculate with coins. How often have I read the hint: Don’t buy the slab, buy the coin. The fact is that people have been buying the slabs and this applies not only to novices. I wouldn’t be surprised if people started listing auctions without any pics of coins but just the slab details. Slabs are great for investors, and to be honest there’s a bit of an investor in all of us, but they destroy the joy of collecting beautiful coins – because with slabbing, it’s not all about the coins.

 

4. Mistakes: One might say we all make mistakes. So if NGC slabs a 1936 farthing as an MS coin, it just goes to show that they are only human. Go and tell that to the people who spent the money! Who exactly are the people who slab our coins? Are there specific South Africa specialists at NGC and PCGS? Can they tell a weak strike from actual wear on a 1930 tickey? I have my doubts. What most impressed me in Alex Urizzi’s account of his research into Union coinage the other day was that he has been in constant contact with dealers who have been on top of the market for several decades. Who would you trust more? A couple of Americans who grade a South African coin every fortnight or a dealer who has been handling these coins all his life? In fact, when it comes down to the nitty gritty, this is how authenticity is still established in South Africa. People trust dealers more than they trust third party grading companies. You won’t find that kind of experience (with South African coins) at NGC/ PCGS.

 

5. Dealers: Speaking of dealers, living abroad I like to check out some SA dealers’ web sites every once in a while. I have four traditional sites I check out because they list coins and (at least used to list) prices. These are the four: Randburg Coin, Alec Kaplan & Son, Killarney P&G Coin Co. and Brian Hern’s Coinshoppe. Of these four, only Randburg has actually taken to slabbing and you’ll hardly find any unslabbed coins on their site. Killarney P&G also have slabbed coins, but the vast majority are unslabbed. I have never seen any slabbed coins at Alec Kaplan’s or Brian Hern’s sites. You might say these are old school dealers, missing the boat. I say these are dealers with decades of experience, not letting a couple of graders from America tell them what coins they’ve got.

Edited February 28, 2011 by dennrein

[dennrein 10]

To slab or not to slab...

 

6. Finest known fallacy: There is another thing that drives me up the wall: The POP1 myth. What the grading companies are effectively trying to do is monopolize our view on coins and the coin market. What these companies don’t get to see doesn’t pop up (if you’ll excuse the pun) in their list. As far as these companies are concerned, what isn’t in their pop lists, doesn’t exist. So if dealers and collectors start gauging the value of coins according to these lists, as has also started in South Africa, they force everyone involved to go slabbing. You can’t just have an extremely beautiful uncirculated halfcrown, it has to be an MS 66 POP 1. This is what gets you a premium. If you refuse to slab, you lose. Sooner or later, the whole market becomes dependent on the companies. They won’t mind. But the most beautiful coin in the world lies in the eye of the beholder (there is no objectivity between MS 66 and MS 67!) and this is especially true for the top notch coins. The more coins remain unslabbed, the less sure you can be of how secure your POP1 position will be. So the joke effectively would be on those who have slabbed their coins if enough collectors decide to resist slabbing and choose the traditional route of leaving their coins unslabbed. The slabbing system will only work effectively if most, if not all, adhere to it.

 

7. Commonwealth: South African Union coins are Commonwealth coins. So most people from abroad who collect South African coins collect them as part of the Commonwealth. This is why the second biggest online auction site for South African coins, after BoB, is Ebay’s UK site. The British aren’t particularly fond of slabs. The same applies, as far as I can tell, to the Australian and NZ markets. It is a mystery to me why South Africans should be breaking out of the mould and letting the American market dictate them what to do with their coins. Commonwealth collectors don’t seem to insist on slabbing at all.

 

8. Aesthetics: A lot of the above points only apply to American grading companies. But I don’t like any kind of permanent coin slabbing. It has something to do with aesthetics. Slabbing is like wearing your nicest jewellery in a plastic bag. That’s not how it was meant to be worn. And coins weren’t meant to be put in pieces of plastic you can’t or aren’t supposed to open.

 

9. Collectors not grading companies: What I find particularly worrying is when grading and selling start mingling, as with SACGS. Grading should never be interfered with by profit interests. This, obviously, is also true for dealers. That is why I found Geejay’s idea of a collectors’ association so appealing. Wouldn’t it be great to have top collectors touring around the country once a year (e.g. Joburg, Durban, Cape Town) and giving young collectors feedback on their collections. This would avoid novices’ uncertainties and with experience they will learn how to grade coins themselves. How about we spread the knowledge and education instead of letting someone else dictate the terms of trade. It’s decision time: will slabs become the new numismatic currency? Or will the power stay with the collectors?

 

By the way: According to the German forum I mentioned in the beginning, a small screw driver is supposed to work best for removing PCGS slabs.

 

Regards

dennrein

Edited February 28, 2011 by dennrein

[Pierre_Henri 25]

Who can you trust on the Internet today when buying coins?

 

Firstly, thank you for an excellent post that must have taken you quite a while to compile.

I unfortunately do not have the time at the moment to comment on all your points.

I’ll be short and sweet in saying the following:-

Internet sales of coins over the past decade have sealed the fate of slabbing coins: There is no chance in hell that I would ever buy any expensive coin on any internet site without it first being verified by a trustworthy third party grading company like NGC or PCGS.

Yes, I would buy an unslabbed coin if I could inspect it myself, but the chances for that are almost zero. I would also buy an unslabbed coin from a few dealers based on their good reputation, but, for example, one of the 4 SA dealers you mentioned is renowned for selling cleaned coins without stating the fact.

So regarding buying EXPENSIVE and RARE coins on internet sites, I would say that one do not really have an alternative than slabbed coins.

I mean, would you really bid R10 000 on a coin you really want (but unslabbed) listed by Mr. Unknown on a site like Bid-or-Buy or E-Bay?

Pierre

[dennrein 10]

Trust is the word

 

Thanks for your thoughts, Pierre. The question remains, would the slab still make a difference if you were buying a R10.000 coin from someone who has zero sales to his name? I think not. We all know that it’s easy to fake plastic holders. So in effect it boils down to trust. You state yourself that you’d be prepared to pay big money for unslabbed coins from sellers you trust.

I have to admit it is hard to find really good coins on BoB that aren’t slabbed. Maybe I’m playing Don Quixote here, fighting against windmills, while the die has already been cast. But there are some really respectable international sellers like Lockdales, Paulsons, AWcoins, jeep_1964 and Mothzw – and until recently 4kids, for that matter – who regularly offer really beautiful unslabbed coins. It breaks my heart to think that next time I see them they’ll be stuck in a piece of plastic for the rest of their days. What seems to be happening currently is that everyone is looking for unslabbed MS coins only to go running to NGC or PCGS, have them slabbed, and be able to refer to the POP stats when the coin goes on auction next time. Is that what our hobby is about?

Regards

Dennrein

[Pierre_Henri 25]

We are talking about truly RARE coins here ...

 

Thanks for your thoughts, Pierre. The question remains, would the slab still make a difference if you were buying a R10.000 coin from someone who has zero sales to his name? I think not.

 

Yes it would

 

We all know that it’s easy to fake plastic holders.

 

No, its not when NGC or PCGS holders. There are some Chinese fakes around , but not easy.

 

But there are some really respectable international sellers like Lockdales, Paulsons, AWcoins, jeep_1964 and Mothzw – and until recently 4kids, for that matter – who regularly offer really beautiful unslabbed coins.

 

I do not know any of the names you mention they are not BoB sellers as far as I know - and regarding "4kids" whom that I regard as one of the top Union experts in SA - not sure what you mean by - "until recently" ...

 

It breaks my heart to think that next time I see them they’ll be stuck in a piece of plastic for the rest of their days. What seems to be happening currently is that everyone is looking for unslabbed MS coins only to go running to NGC or PCGS, have them slabbed, and be able to refer to the POP stats when the coin goes on auction next time. Is that what our hobby is about?

 

Yes it seems to be the standard for buying RARE coins on INTERNET sites.

 

For the rest, the Mandela R5 frenzy lot included, I think no rare coin collector needs to be concerned.

 

Regards

 

Pierre

[dennrein 10]

Truly rare coins

 

I can understand that someone investing in truly rare coins wants some kind of guarantee. Granted. Truly rare is maybe about one percent of what is dealed on BoB or Ebay on a day to day basis. I am talking about 2.000 rands upwards for a single coin. What is happening now, is that a lot of people think that everything belongs in a slab. It's like with fashion. The top guns are doing it, so everyone thinks they have to join in.

Referring to your other points:

1. I wouldn't have expected that. You would blindly trust the slab. Most people in everyday life have to build up a reputation before they can sell big stuff. And if they haven't, it's always best to be very careful.

2. Here are some examples of news about fake slabs:

http://www.ngccoin.com/news/viewarticle.aspx?IDArticle=954

http://www.flickr.com/photos/coinforgeryebay/4186069756/

http://coins.about.com/b/2008/03/28/pcgs-warns-against-fake-slabs.htm

http://china-mint.info/forum/index.php?topic=361.0

Don't forget, these are only cases where the counterfeiters made mistakes. Granted, there are no SA coins involved. But if prices keep climbing as they've done, we may see a lot of this stuff happening with our coins.

3. The names I mentioned are from Ebay because, as I stated, you hardly find any nice coins on Bob that aren't slabbed. It's different on Ebay. The reference to 4kids meant that he sold a lot of beautiful unslabbed coins on Ebay last year. He hasn't done so for a while - that's why I said "until recently".

4. "It seems to be the standard" is correct from a certain point of view. What I was trying to convey is that it is not the standard everywhere and that slabbing is not the inevitable fate of SA numismatics. It depends on your perspective. Looking at BoB, you seem to have a lot of people on your side. And because a lot of people have slabbed so much by now it does seem unlikely that they would support what I'm saying as it would amount to admitting that hundreds of grading rands have gone down the drain.

Regards

dennrein

[jwither 11]

You have a lot in your comments and I only have time to briefly respond to all your points.

 

My limited experience with both BoB and SA dealers is that they DO NOT grade according to British standards. My experience is that SA coins are graded more towards US standards.

 

I'm not sure whether the British or Sheldon scale is any better because in my experience, neither are applied consistently. Also, I do not remember saying that it is not possible to distinguish between all MS grades, only some of them. For example, I'm not going to claim that I am the most highly qualified grader to tell the difference between an MS-61 or MS-62, but I believe it to be much easier than with an MS-69 or MS-70. Or for that matter, any of the "ultra" high grades. But in any event, since the price difference for the lower MS grades should not be that great, it matters much less. I consider it pointless to pay substantial premiums for the much higher grades because the coins do not look that much different and in over 99% of the time, the coin itself is not rare at all except as a "conditional" rarity which is an artificial, arbitrary and narrow definition of scarcity.

 

As far as I am concerned, the SA coin market is not at a "crossroads" when it comes to slabbing. The "train" so to speak, has already left the station. And its not just the countries you mentioned that do not prefer slabbing, it is ALL of them except for the USA, South Africa and to a lesser extent, Canada. You can verify this from the NGC and PCGS census reports.

 

In terms of the four dealers you list, I have only bought a few coins from Alec Kaplan and Killarney. Based upon what I see on BoB, I'll never buy any coin from Randburg. They used to have reasonable list prices on their website but now, I consider what they are asking to be vastly inflated. Anyone who pays those prices is either going to lose a huge percentage of their outlay immediately, have to sell to another uninformed buyer, or possibly wait years to get their money back. From Killarney, I bought coins from them once and doubt that I will again. Several of the coins were either problem coins, overgraded or both. And like many other dealers, when they posted list prices, they used those from Hern which in many instances, are just plain wrong. The most overpriced coins are the scacer KGV in grades of "EF" which in actuality, are only worth a fraction of catalog.

 

I agree that not all coins should be graded. But one reason why collectors and "investors" prefer it is because of the example I just gave. I bought those sight unseen (as I do for 99%+ of my coins) and the coin turns out to be a dog even thoigh you paid good money for it. If sellers would accurately describe (even if not price) their coins, then maybe buyers would not prefer graded coins. Since I live in the US and have bought far more from eBay, my experience with that source is that most sellers of raw coins try to dump garbage by silence. They do not lie, they just do not disclose the actual merits or demerits of the coin. This "caveat emptor" is what accounts for the dismal prices of most raw coins, even if the coin is actually not a problem coin. Earlier on, I had a lot of success buying good coins raw at fair prices on eBay, but not now. Recently, even a large seller and German dealer sold me a piece of garbage and he had to know it. He was just hoping that I would not notice it which, unfortunately for him, I did and sent it back.

 

It is the improved marketability which is the main benefit of slabbing. Go look on BoB or eBay and see how much garbage that is up for sale that is not graded. It is the vast majority. That is why this material sells for such low prices.

Edited February 28, 2011 by jwither

[dennrein 10]

Thank you jwither for your comments. You are probably right that we’ve passed the crossroads.

 

It is a fact that US standards were introduced to South Africa via slabs. British standards are still applied by the afore mentioned dealers with the exception of Randcoin and were common sense before slabs appeared on the scene. The fact that you believe that SA coins are mostly graded by US standards shows how fast slabs have done away with SA numismatic traditions.

 

I agree that there truly are a lot of worthless unslabbed coins on the market. To me this makes picking up the nice ones all the more fun. Slabs spoil the fun by (pseudo-)objectivizing everything.

 

I’m glad you agree that not all coins should be graded. There are three reasons I can think of why you would slab a coin:

 

1. Authenticity: Slabs show you a coin is not a fake. But would someone go to the trouble of faking a coin worth less than R2.000? I don’t think so. I could list dozens of slabbed coins on BoB that no-one would ever bother faking.

 

2. Assisting novices: Slabs tell novices what grade a coin is. But novices won’t go around buying high value coins straight away. They usually start with more common cheaper coins, i.e. unslabbed coins. So slabbing for educational purposes makes no sense.

 

3. Assisting experts: Slabs tell experts what grade a coin is. But why would you have to tell an expert what grade a coin is? He’s an expert, remember? The problem is that auction sites often don’t allow for high resolution pictures. Compare the pics on heritage auctions. If you had pics like that, what expert would need slabs to tell him what grade a coin is?

 

So slabbing is probably most indebted to auction sites not allowing for proper documentation. Otherwise slabbing would only make sense if your coins are really rare or if you’re in it to make a quick buck.

 

Regards

dennrein

Edited February 28, 2011 by dennrein

[jwither 11]

I agree with your last comments. I prefer graded coins because of the improved marketability (as I said before) but also because it makes it easier to handle and store them by providing some additional protection. I will admit though, that there is something to be said for actually holding a coin in hand which the slabs takes away and some (most outside the USA) do not like that.

 

To me, the counterfeit problem is not much of an issue at all for South African coins, especially Union. I am aware of some problems with ZAR fakes (though only generically) but the fact of the matter is that most of either are simply not worth the bother of counterfeiting, unless there are counterfeiters within South Afrrica itself who do this more than I think. The only others that would LIKELY do so are those from China (who counterfeit everything) but even then, there are far more valuable coins to use as targets and really, since even most non-SA dealers and collectors believe Union coins to be worth so much less than they actually are, it would probably never occur to them to even do it.

 

Another reason why I consider it unlikely is because it would only work in small numbers. For example, there are copies of the 1931 silver Union business strikes sold on eBay (the 2/ and 2/6). But if someone actually tried to make a "real" fake, how many could they sell given that the NGC census for the 2/ is a big fat ZERO and only ONE for the 2/6, and this specimen all of a G-4? Why even bother? The chances of having any better specimen go undetected given the scrutiny it would receive I would say is likely very low. And it would not be much easier for many other issues which are more common but still rare in better graqdes. These are woth some money but not "big" money". A few could be sold, maybe a handful. But nobody is going get away with for example, selling dozens or hundreds of coins like the 1926 1/, 2/ or 2/6 or the 1925 2/ or 1933 2/6.

 

The best coins to counterfeit are those that are both common but still worth decent money because they are very popular. Issues like the Mexican pillar dollar (eight reales) even in better circulated grades. There were millions of these struck over almost half a century. So counterfeiting tens or even hundreds of thousands is a possibility, especially since many of these coins are sold to novice buyers. This is true even though each coin may be worth only $200 to $400. Or US silver dollars and the 1907 "High Relief" $20 gold coin. The latter had a mintage of 11,000 yet sells for OVER $20,000 USD in a grade like MS-63 and there are many of these coins. Reportedly, I have heard that there may be MORE FAKES than real coins!

 

If financial considerations are secondary to a collector or not important at all, they are much better off buying raw coins if they know how to evaluate them and can inspect them in person. I have been able to buy many very nice and better Union (and some ZAR) for a fraction of their graded prices. I'm not buying much of anything now, but if I were and did not care about resale, I certainly would not pay current prices for graded coins. That I can promise you.

Edited February 28, 2011 by jwither

[Guest Guest]

From a personal perspective

 

I have never slabbed one coin although I own quite a few slabbed pieces.

 

I guess I am from the old school - who like to be able to get close and personal with their coins. I often sit down, pick out a coin and just study it closely - wondering what its past history was!

 

Recently I sold a dated slabbed Griquatown Pattern and an unslabbed Griquatown pattern (undated) of similar grades.

 

The rarer coin, in my view, is the dated piece - but it sold for less than the undated unslabbed coin which had a beautiful tone on it.

 

Slabbing coins costs money and unless it is an exceptional investment piece (over US$20,000) I would not be bothered. A few good high quality scans of the coin gives the potential buyer a very good idea of what he is buying. And if the seller has an excellent track record slabbing seems to become rather irrelevant.

 

Like anything if you are going to slab coins pick a point where the "investment" is just not worth it. ie don't slab a coin worth just a few dollars, but I guess that's pretty obvious. The graders at NGC and PCGS do not always get it right and often get it wrong.

 

Kind regards

 

Scott Balson

[jwither 11]

"Slabbing coins costs money and unless it is an exceptional investment piece (over US$20,000) I would not be bothered. A few good high quality scans of the coin gives the potential buyer a very good idea of what he is buying. And if the seller has an excellent track record slabbing seems to become rather irrelevant."

 

I do not completely agree with this. By the example you gave, the graded and more common coin sold for more than the ungraded scarcer one. If anyone decides to do that consistently, they are going to be leaving money "on the table"

 

Being a reputable seller will certainly make a difference, but its not enough. I would be willing to pay more from a coin I bought from say you than someone I do not know about at all. But at resale, I am not convinced that I would get the best price without having it graded first. I believe not.

 

The main problem I have with not just graded versus ungraded pricing but pricing generally is the disproportional weight given to grade over scarcity and other attributes. I'm not an advocate of paying substantial premiums for coins that are "conditional" rarities or nearly so, "rainbow" toned coins (which sell for absurd premiums in the US) and the like, "Conditional" rarities and the higher grade MS coins are all the rage with "investors" of South Africa coins today, just as they are in the US and have bene for years. I have been a seller of many of my better grade SA coins in the last year. I would rather buy coins from other (non-South African) series or scarcer SA coins in better AU grades. They are much better relative values.

[Guest Guest]

Investor v Numismatist

 

Hi John

 

When I read your email I see the words of an investor. Most people who buy my coins are true numismatists. While the investors try to skim the cream at the top it is the hardcore numismatists who make up the body and flavour of the Cupaccino... and I am happy to be counted among those swirling in the liquid appreciation of what makes our hobby so special!

 

Without the "hardcore numismatists" there would be no cream.

 

There is a difference.

 

Kind regards

 

Scott Balson

[dennrein 10]

SA vs. (almost) rest of world

 

Thanks for sharing your thoughts, Mr. Balson.

 

Slabs are putting a rift through the collecting community. On BoB you will currently find highly exaggerated prices for slabbed coins on the one hand and really low quality unslabbed coins on the other. There is very little in between. As jwither said, few people are prepared to pay the prices a lot of slabbed coins are going for. The premium is just too high. It's a similar inflation to the Mandela coin phenomenon. Currently the collecting elite (i.e. people who have got the assets) are exchanging these coins amongst themselves, while the collecting proletariat is left with the crumbs.

 

I would like to reiterate that slabbing is not a logical necessity. Most countries - and that means thousands of collectors all over the world - don't want their coins slabbed. In their view there is no point in doing it. It only detracts from the beauty of a coin. So if the SA market, i.e. SA collectors, opt for the slab logic, then that is their fate. It's like with democracy, where voters get the government (read: coin market) they deserve.

 

Regards

dennrein

[jwither 11]

Hi John

 

When I read your email I see the words of an investor. Most people who buy my coins are true numismatists. While the investors try to skim the cream at the top it is the hardcore numismatists who make up the body and flavour of the Cupaccino... and I am happy to be counted among those swirling in the liquid appreciation of what makes our hobby so special!

 

Without the "hardcore numismatists" there would be no cream.

 

There is a difference.

 

Kind regards

 

Scott Balson

 

I am aware of that. But if you are not concerned with the financial consideraitons, that makes you one of the few who are not, regardless of whether they are a "collector" or "investor". The idea that most buyers of coins cannot be both and should not be concerned or pay attention to the financial aspects is a fallacy.

 

From my standpoint, I consider it IRRATIONAL not to pay attention to these aspects. Even if I did not care if I made or lost money, I would still make it a priority if for no other reason than to buy, sell and trade coins I bought cheaply for others that I want.

Edited March 1, 2011 by jwither

[jwither 11]

The spread between slabbed and raw coins does not make sense, but what makes even less sense are some of the prices that I see asked for slabbed coins on both eBay and BoB. What I would like to know is, who is actually paying those prices if anyone? Is anyone? I do not know because I have not bought anything on boB in a long time (where the worst examples exist) and unlike eBay, its either not possible or I have not identified how to save ended auctions in my view list. So I do not know if any of these coins actually sell for these inflated prices or not. The Mandela coins are by far the worst but it is hardly limited to just those items.

 

I find it impossible to believe that more than a few buyers are actually so uninformed to pay the prices I see. And I also fail to see how dealers who consistently ask these prices can stay in business.

Edited March 1, 2011 by jwither

[Bellcoin 10]

The BIG positive regarding "slabbed" coins is one CAN obtain unslabbed coins at bargain prices - even on BOB. Just look carefully. Examples I can give - bought an 1892 tickey for R125.00, NGC graded MS62, 1893 shilling R850.00 - at PCGS strong vf maybe even xf, 1893 3p R90.00, NGC AU58, I can go on.

 

I think ZARBOY as quoted situations like the above before.

 

So for those of us willing to buy unslabbed, there are bargains to be had.

 

Slabbed is not the be all and end all.

[Guest Guest]

Investing in coins

 

Hi John

 

You say,

I am aware of that. But if you are not concerned with the financial consideraitons, that makes you one of the few who are not, regardless of whether they are a "collector" or "investor". The idea that most buyers of coins cannot be both and should not be concerned or pay attention to the financial aspects is a fallacy.

 

We agree.

 

If you visited my token coin website covering pre-1900 coins in South Africa you would understand that my love for coins is their largely unresearched history. My favourite coin is a 1916 25 Piastre Egyptian crown given to me by my father when I was a young boy. I would part with a Veldpond before I parted with this coin which is polished and only worth its silver value. It is as much part of me as life - as it has been with me most of my years on this earth.

 

You have to look no further to the Strachan and Co to see that I get very attached to coins that I have an emotional attachment to. There is absolutely no investment involved in spending thousands of hours researching like I have over 30 years. That's why I get very annoyed when relatively new collectors who have no understanding of my passion and commitment for my hobby ignorantly suggest that my work on Strachan coins is "financially motivated". The recent books by Milner Snell (I have just received my copies) reflect how my passion in the token of East Griqualand has spread and, from a small flame, a fire has been ignited in this once tiny area of numismatics. As Allyn Jacobs says in the foreword of Milner's Transkei book it is discovering the unique history of each token series that makes this specialist area of our hobby so rewarding! There is no better reflection of a period from our distant past than a coin which has endured, after being handled by countless people from that time and place - nothing else could. The relatively inexpensive cost of that unique coin to the numismatist (because every coin has its own unique history) makes the ownership of such a coin achievable to just about everyone. That is the key ingredient of our great hobby to me!

 

My website simply reflects my love for my hobby. If you visit the site you will see dozens of pages of research on early South African books in my collection, the history of the Griqua (which resulted in my book "Children of the Mist"), information on a large number of tokens and old documents. Where is the financial motivation in that for a numismatist?

 

Please understand that my love for coins and their history does not blind me when it comes to investing. In the last year I have made more than 100% on my growing investment in silver coins, tea sets and silver bars and expect to double that profit before this year is out. My research in the BoB thread "On the cusp" just touches on my hours of personal research that I do in this very specific area. I share my knowledge here because I feel a kinmanship with fellow South African numismatists. It is that simple.

 

My specialist area of numismatics - a niche market of coins (largely pre-1900 South African tokens) reflects my love for coins and their history. The tokencoins website clearly demonstrates this fact more than anything else I could say here.

 

Paradoxically the hundreds of SA Crowns and other South African Union Coins I own are largely seen by me as nothing more than an investment for their silver value. However I do have a fair number that have numismatic value - including the finest recorded 1959 MS Crown.

 

There lies the difference between the love or my hobby and investing, so yes I am both collector and investor.

 

Kind regards

 

Scott Balson

Edited March 2, 2011 by ndoa18

[alloway65 10]

Hi All,

I buy coins slabbed and unslabbed as a would be collector and a speculator/investor.

Re the Mandela R5 Birthday coins, unslabbed you can sell these and maybe double or triple your money. However I had some of these R5 coins locally graded/slabbed with some good grades….I sold one for twenty three thousand I think it was and a another part set for about R5000.00…sold others too…..not a bad return. A lot of the remaining R5 Mandela Birthday coins I had I gave to family and friends as keepsakes.

I have also bought a lot of local silver Crowns in Proof & UNC condition which I will have locally graded and slabbed. Personally I cannot be bothered with the hassle of sending coins overseas to be graded and slabbed, the cost of shipping is horrendous and the chances of the coins being stolen on the way out of and into South Africa is not worth the risk and stress. Had enough stress in my 40 or so years in the corporate world.

Regards

David

[dennrein 10]

Upside and downside

 

The BIG positive regarding "slabbed" coins is one CAN obtain unslabbed coins at bargain prices - even on BOB. Just look carefully. Examples I can give - bought an 1892 tickey for R125.00, NGC graded MS62, 1893 shilling R850.00 - at PCGS strong vf maybe even xf, 1893 3p R90.00, NGC AU58, I can go on.

 

Hi Bellcoin,

 

in my opinion there is both a positive and a negative side to what you have written. The positive side is yes, those concentrating on unslabbed coins can still make the odd bargain. That is what I've also been doing, mainly on Ebay because very few BoB sellers offer Paypal to international buyers. The negative side is that you've slabbed those coins. So at current market conditions these coins will not be up for grabs at reasonable prices in the foreseeable future. It's this rationale that keeps reducing the amount of affordable coins to the average collector. I wonder, where is it going to end? If we project these developments into the future, one day we may only be exchanging pieces of plastic where no-one really cares about what's in them. From an investment point of view it's rational. It's like buying coins for their silver value, as Mr. Balson has encouraged us to do. But - at the risk of repeating myself - is that what collecting coins is about?

 

Regards

dennrein

[jwither 11]

The BIG positive regarding "slabbed" coins is one CAN obtain unslabbed coins at bargain prices - even on BOB. Just look carefully. Examples I can give - bought an 1892 tickey for R125.00, NGC graded MS62, 1893 shilling R850.00 - at PCGS strong vf maybe even xf, 1893 3p R90.00, NGC AU58, I can go on.

 

I think ZARBOY as quoted situations like the above before.

 

So for those of us willing to buy unslabbed, there are bargains to be had.

 

Slabbed is not the be all and end all.

 

What you describe is how I have made most of my money in South African coins. But lately, I have done so by buying coins from the few dealers that I know who carry them and public auctions. I have not been able to acquire much of anything from eBay lately at all which is where I used to acquire almost all of my coins.

 

On BoB, I am sure that there are opportunties to do so as you describe. I have just not taken the time to look for them because from the US, it is simply not worth the trouble. True, the grading cost is somewhat less because of postage but if I did buy any ungraded coins on BoB, I would likely just end up "eating" the cost on most of the "dogs" I would buy. And these "dogs" would probably be most of them because the listings almost never accurately describe the coins and even when you ask the seller, they either rmight not know themselves or not tell you anyway.

 

That one example I gave you that I bought from the German dealer on eBay. He is an actual dealer and not just a "Power Seller". I specifically asked him if the coin was the same color as the image and the state of the surfaces. If he had told me what the coin actually looked like, I would not have bought that coin. When I received it, it was obvious from the "look" that it had been cleaned in the past and any experienced collector would know it, even without magnification. I had bought from this dealer on two occassions before. Once, a Bolivia 1770 4 reales which graded NGC XF-40. This is a very scarce coin in this grade.

 

The second time I bought multiple SA coins that later graded as follows: 1947 2/ NGC MS-63, 1939 2/ NGC AU-58, 1949 2/ NGC AU-58, 1945 2/6 NGC AU-58, 1942 2/6 NGC MS-64, 1937 2/ and 2/6 both NGC MS-62. There were a few others but those are the ones I recall. Of these only the 1947 2/ and 1942 2/6 were worth substantially more, but I bought all of these cheap even for the time which was in 2004.

Edited March 2, 2011 by jwither

[jwither 11]

Scott,

 

There are some coins that I am attached to as you are to your tokens or somewhat so, but its not my South African coins anymore. To add to my last post, when I bought that group of coins in 2004, I found the challenge of finding Union coins much greater which made it more interesting to me. Now that SA coins are a lot more available and more expensive, I am less interested in them. I have always found the "hunt" to be at least as interesting as the collecting aspects. To me, there is a lot more satisfaction in buying a coin that is difficult to find which means that most other collectors cannot also have it. I have zero interest in coins that anyone can buy at any time which is why I have little interest in US coins, no matter how "rare" they supposedly are which is not very most of the time. And it is even more satisfying when the coins are cheap like many of those I bought were and sometimes still are.

 

South African coins are nothing like US coins in terms of availability but definitely a lot more available than they used to be from what I see. With US coins, there are some collections that could literally be completed in ONE DAY in MS if the buyer has the money. True, you would likely overpay for it and the eye appeal would likely be less than optimal, but it could be done easily at any major coin show or just by checking dealer inventory on the internet. The biggest obstacle to the latter would probably be that there might not literally be enough time to make the internet searches and phone calls for a series like the Morgan Dollar. This set has about 85 coins I believe (I would have to count them). This is a very common series but many others are only slightly more difficult.

 

My favorite coins now are the Spanish colonial pillars. They are defintely historical but also extrememly difficult to find in the grades I buy them which is generally AU or MS. I will make some exceptions to this, but not many. For example, there is a PERU 1752 2 reales up for sale this month which I think might grade NGC VF-30. Normally, I would not bother with such a coin but as the first year of issue, there are very few of them and I have never seen another. The Gilboy reference lists it as (I believe) an "R4" which equates to less than 10 with a grade of VF or better. There might be more of them than that (I find his ratings to be inaccurate based upon my experience on many ocassions) but not many more.

Edited March 2, 2011 by jwither

[Bellcoin 10]

Let me rephrase a touch.

 

At another angle buying unslabbed quality coins allows one to build a decent collection at a reasonable outlay. There is of course no guarantee that the coin you buy is quality(sometimes the coin is - I quote - "a dog"), but spending time on BOB and Ebay and numerous other sites certainly allows one to find the right coins.

 

It would have been a back breaker for me to complete my collection buying only slabbed! And a collection is never complete!

 

Having them slabbed is just my choice, and yes I have turned a decent profit on certain coins. Yes I do buy slabbed coins - certain instances the slabbed coin is just better than I can find.

 

Cheers

John

[jwither 11]

I buy very few SA graded coins because the value proposition is just not there, even when the ask prices are not inflated. At current prices for many or most graded coins, I would rather buy them for one of my other series. They are much better values, though the price appreciation potential is or is likely to be less.

 

One other option that is viable IF the buyer does not mind buying a "problem" coin is to find NGC "Details" coins. Some of these do not look that different from their numerically graded counterparts and the prices are a fraction, sometimes as little as 10%.

 

I have several of these for the scarcer coins. Examples include two AU 1927 1/, AU 1927 2/, XF 1925 2/ and 1929 AU 2/6. All of these coins, especially the 1927 1/ which is described as "stained", are reasonably attractive. In my opinion, these coins are unfairly penalized financially versus numericaly graded coins at this time. With these coins, I did not knowingly buy them as problem coins (it is a hazard of buying coins remotely and often with no pictures) but I did not pay "big money" for any of them either. So while I have a current loss on some of them, it is not substantial even proportionately

[Rare NotesCoins 11]

I do understand some "BIg" names have been mention to start doing the grading for SACGS. Maybe this is what will help Herman and Co to get the grading company to the hights that is was supposed to get to.

 

I do agree South Africans know South African coins better than anyone else. So good luck to you Herman, now youre company will get beter feedback and results.

 

I also understand that branches will be oppened in Natal, Johannesburg were coins can be submitted. Looking forward to that. Maybe you will recieve 20 000 SA coins a month like NGC.

Good Luck

 

Rare NotesCoins