Jump to content
Sign in to follow this  
multi collection

Coin Collector

Recommended Posts

multi collection    10
multi collection

Dear All

Now I'm 27 years old

I've been collecting coins about 5 years from now (It's my hobby)

I spend all my money on coins

Soon I got my salary, I keep on buying coins.

till now my bank account are less than R1000

I always tell my wife. "I'm saving money not spending money, the money that I saving is for our retirement pay"

I'll wait till my age to 50, than I'll start to sale my coins

To all collector, please share your experience, I like to hear from you

Share this post


Link to post
Share on other sites
Guest Guest   
Guest Guest

The reality is that the money you are saving now is backed by a financial system that will collapse very soon.

 

When it does the world will change within days

 

When people are wanting to survive they will have little interest in "rare coins".

 

But that is my view.

 

Kind regards

 

Scott Balson

Share this post


Link to post
Share on other sites
ATOMICSQUIRREL    10
ATOMICSQUIRREL
The reality is that the money you are saving now is backed by a financial system that will collapse very soon.

 

When it does the world will change within days

 

When people are wanting to survive they will have little interest in "rare coins".

 

But that is my view.

 

Kind regards

 

Scott Balson

 

What do you mean...?:wtf:

Share this post


Link to post
Share on other sites
Muligan    10
Muligan
What do you mean...?:wtf:

Once paper money goes out the door , collector coins will have no real value other than bullion.

Share this post


Link to post
Share on other sites
Dulal    10
Dulal
Dear All

 

Now I'm 27 years old

I've been collecting coins about 5 years from now (It's my hobby)

I spend all my money on coins

Soon I got my salary, I keep on buying coins.

till now my bank account are less than R1000

I always tell my wife. "I'm saving money not spending money, the money that I saving is for our retirement pay"

I'll wait till my age to 50, than I'll start to sale my coins

To all collector, please share your experience, I like to hear from you

 

Don't put all eggs in one basket

Edited by Dulal

Share this post


Link to post
Share on other sites
Little Miss Muffet    20
Little Miss Muffet

Multi Coin, you just carry on collecting.

Nothing will replace the beauty and diversity of a coin collection.

Coin collecting will always be around.

Share this post


Link to post
Share on other sites
ANTONDIRK    10
ANTONDIRK

Keep up the collecting

 

Dear multi collection,

Don't be put off by the doomsday prophets about the financial system collapsing. In America and parts of Europe this might happen and it will have some effect on South Africa. BUT the Chinese public are doing the right thing, they are buying safe haven precious metals, especially Gold.

My advice would be to collect/buy Silver coins, Gold coins and rare to scarce coins - but go for good quality coins in high grades. They are your hedge against inflation, but even more against any collapsing financial systems.

Keep up the collecting and keep on doing it right and it may just be your best pension money ever. That's what I am doing and it feels right to me. Happy collecting, Dirk

Multi collection, our friend Geewhizz is absolutely right. Most of my collection is of coins that look nice to me. They are pleasing to the eye as well as keeping part of history in your hand/safe. The ZAR coins are my favorite and after them the King George V coins with the beautifule obverse like ours, India's and Australia's for instance. Beauty is in the eye of the beholder and when you buy remember that. Collect and/or invest in coins that you like. Dirk

Edited by ANTONDIRK
approval of other advice

Share this post


Link to post
Share on other sites
multi collection    10
multi collection
Dear multi collection,

Don't be put off by the doomsday prophets about the financial system collapsing. In America and parts of Europe this might happen and it will have some effect on South Africa. BUT the Chinese public are doing the right thing, they are buying safe haven precious metals, especially Gold.

My advice would be to collect/buy Silver coins, Gold coins and rare to scarce coins - but go for good quality coins in high grades. They are your hedge against inflation, but even more against any collapsing financial systems.

Keep up the collecting and keep on doing it right and it may just be your best pension money ever. That's what I am doing and it feels right to me. Happy collecting, Dirk

Multi collection, our friend Geewhizz is absolutely right. Most of my collection is of coins that look nice to me. They are pleasing to the eye as well as keeping part of history in your hand/safe. The ZAR coins are my favorite and after them the King George V coins with the beautifule obverse like ours, India's and Australia's for instance. Beauty is in the eye of the beholder and when you buy remember that. Collect and/or invest in coins that you like. Dirk

 

Thanks for you advice

REGARD

Multi Collection

Share this post


Link to post
Share on other sites
alloway65    10
alloway65

Whatever one thinks will happen in the (near) future, I still believe one should still have a balanced investment portfolio and some of life's necessities:

 

A secure Property.

Stocks/shares.....these days mainly invested in gold and silver.

Cash on hand enough for a month or two living expenses.

Savings/money market accounts local and international if possible to spread risk.

Physical gold and silver.

Other salable collectables.

 

And hopefully necessities such as:

A good medical Aid.

No debts.

A reliable car or two.

A good support system.

A good stock of food enough for a few months.

An alternative heating source to electricity.

Accessible water.

Spare petrol.

As an old Boy Scout...."be prepared"!

Share this post


Link to post
Share on other sites
Muligan    10
Muligan

Agreed. And the "Other salable collectables." should be something you can sell in a short time so something there is an active market for.

Share this post


Link to post
Share on other sites
jwither    10
jwither
Whatever one thinks will happen in the (near) future, I still believe one should still have a balanced investment portfolio and some of life's necessities:

 

A secure Property.

Stocks/shares.....these days mainly invested in gold and silver.

Cash on hand enough for a month or two living expenses.

Savings/money market accounts local and international if possible to spread risk.

Physical gold and silver.

Other salable collectables.

 

And hopefully necessities such as:

A good medical Aid.

No debts.

A reliable car or two.

A good support system.

A good stock of food enough for a few months.

An alternative heating source to electricity.

Accessible water.

Spare petrol.

As an old Boy Scout...."be prepared"!

 

How someone should prepare is a primarily a function of two things. One is the resources available to them. And second, the alternative scenarious under their personal forecast.

 

By the standards of most, I am definitely a pessimist but not a "doom and gloomer", not yet anyway. I expect widespread economic hardship under depressionary conditions in the near future that in many places will be worse than in the 1930's. But I am not looking for global economic destitution. If that happens, "all bets are off' and you can forget about civilization as we know it. There is a well known forecast for that outcome in a famous book that I will not mention here. That is global economic destitution and if anything like that remotely happens, we can forget about gold. silver and especially coins providing much (if any) help at all.

 

If the United States and Europe financial systems collapse, the idea that South Africa "might" be impacted is pure unsubstantiated myth also. It is a pipe dream. There will be no "decoupling" for any country of any economic significance. Not for SA and not for China.

 

In terms of what to do, if relative prosperity continues, then at least some coins will probably do well, but not otherwise. It is only under the "hardship" of a scenario such as now or the 1970's where this is likely to be true because at least some people are buying (or hoarding) coins as substitutes for precious metals. But then, neither now nor the 1970's were or are really such "tough times" from the standpoint of history except for specific geographies, population segments or individuals.

 

Here is what I can tell you. If collectors or "investors' in SA (or any other country) were or really are that worried about actual adversity, they would NOT be placing a disproportionate amount of their wealth into coins because that is an extremely poor defensive strategy. The first thing that I would do would be to obtain a permanent visa or second passport so that I could get out of the country if necessary. And the second thing I would do is get as much of my wealth as I could afford offshore in a more stable country. As I have said before, if the economic (and by implication political) situation gets that bad in your country, how exactly does someone in SA plan to get their coins out of the country at the last minute and what good are they going to do them if they have to leave without them, assuming that is even possible? The answer to those questions is, maybe not at all and not very much.

Share this post


Link to post
Share on other sites
jwither    10
jwither
Agreed. And the "Other salable collectables." should be something you can sell in a short time so something there is an active market for.

 

Collectables (including coins) will only be salable under real economic hardship at fire sale prices. The reason for this is because no one really needs them for any purpose and by today's standards, the market will not be active either which is exactly what would create the fire sale prices I believe will exist under such circumstances. For Union and ZAR coins, this will be even more true if conditions in SA create a situation where people are forced to sell quickly because they need to leave the country, get their money offshore or both.

 

There are certain circumstances where I can see collectibles functioning as a legitimate wealth preservation vehicle but they are not the ones most here (or elsewhere) have in mind and they DEFINITELY DO NOT apply now. The SafeWealth Group has mentioned a scenario where, in the event that governments (presumably either in specific countries or through an NGO like the UN) ever made it impractical or impossible to own the better wealth preservation instruments (precious metals and selective currency notes which do not include the Rand), then "alternative" assets might, would or could be an option.

 

The examples they gave were gemstones, "art" (which could include gold) and masters paitings. They also mentioned platinum and palladium because they are much less likely than gold (or even silver) to be subject to a government ban or seizure, at least initially.

 

If these were the range of choices, then I could see some coins being a possible one in this list. But if this happened, it would not be anywhere near today's or the future higher prices implied from comments on this forum. Or at least, certainly not in purchasing power value. However, they could be good (or even great) values at the much lower prices that would almost certainly exist under such circumstances.

Edited by jwither

Share this post


Link to post
Share on other sites
Muligan    10
Muligan

Great reply and I love the reasoning :)

See I agree 100% and even though the bullion might not fetch insane prices then as I also agree, it will buy you more than your 10000 shares in EDCON. ;)

 

I collect bullion but 1st and foremost I'm a realist that's why I support Scott's response to the Original Post as you cant put all your eggs in one basket. Build a portfolio and spread your risk.

Share this post


Link to post
Share on other sites
jwither    10
jwither

I agree that everyone should own some bullion, even though I have been incorrect (since I started posting here on this forum) on where the price would go.

 

As for building a portfolio and spreading the risk, you would have to be specific. Based upon the definition that most people use, I do not believe in that as a strategy at all. I do not agree with the imminence of a much higher or hyper inflationary scenario. I expect a global credit contraction. However, under either outcome, the conventional diversified portfolio will prove to be a complete failure as a hedge against economic adversity (a fall in living standards) and it will not protect anyone's wealth either.

 

It is only under a continuation of the status quo or possibly under a rerun of the 1970's that this strategy would succeed. The recent past has not been a rerun of the 1970's and I do not believe the near future will be either of these two outcomes.

 

Coins like share prices are a "bet" on continued future prosperity, at least in relative terms. And like most assets, they are priced far beyond what people can afford or what they will be worth in "bad" times.

 

The other thing that people need to consider is the risk-reward trade-off. When SA coins where dirt cheap such as they were for ZAR when I resumed collecting in 1998 and Union until about 2006, the risk was low because the prices were low. Now that prices have risen substantially, the risk is much greater but due to the human herding impulse, most here must believe the opposite if the comments expressed reflect their actual belief. Just as with the stock mania in 2000 and the real estate bubble in 2006, a long period of parabolic rising prices somehow magically means low(er) risk.

 

There is a recent post elsewhere on this forum about the current prices of some of the more common ZAR coins such as the 1892 1D and 1897 1/. The real question is not why prices have fallen so "low" recently, but how they were able to defy gravity for so long given the economic circumstances of what I believe are the typical buyers of these coins. I mean, it was one thing when someone could buy an MS 1892 1D in the vicinity of $50 (ungraded) like I did on many ocassions until four or five years ago. (I dumped every one of them at the prior inflated prices.) It is another entirely for any SA middle class collector to pay the "retail" price for an NGC MS-63 BN which until a year ago (or slightly longer) was in the $600 or $650 range. I do not see how the "typical" SA buyer of this coin can possibly afford to pay this type of price except in isolation.

 

The same goes for some of the scarcer coins such as those Union 1/2D which sold on Heritage recently. To give everyone here some perspective, most (or all) of them were "Ex-Remick". I saw those coins sell as one lot (ungraded) when Spinks sold his collection in December of 2006. The sale price was between $2000 and $3000 if I recall correctly. Remick probably owned them for anywhere up to 20 years (or more) and probably paid maybe as much as $200 for them, at most.

 

The most recent buyers of the 1925, 1926, 1928, 1931, 1932 and 1933 paid about $24,000 or about 10 TIMES on average versus the Spinks sale price. Now tell me this, who got the great deal? My answer except for the 1926 NGC MS-66 (which sold for $977) is the SELLER. The rest of the coins were either average values at best (1928 and 1933) or overpriced.

 

Evaluating their future prospects, none of them except the 1926 represent compelling "investments" at those prices. I can make this statement based upon the potential downside risk (which is substantial for all of them except the 1926 at this time), potential alternative "investments" that could be acquired with this money and various alternative returns in the forseeable future even if their prices continue to go up.

 

If the 1926 were sold today, in the next five years or next 10 years, I can see the current owner making an outsized profit on it. It is not improbable that they can sell it for twice or three times now. I expect the buyer of the 1931 NGC MS-65 RB and 1925 NGC MS-62 RB to lose money (in real terms with virtual certainty) on either of those coins. The 1931 is a choice piece but only "grade" rare and the 1925 sells for a miniscule fraction of that price ($3200) in a grade like AU-58, a coin which is really not that different given that this coin had little red based upon the image.

 

For the other three which represented better or somewhat better values, the question then becomes what type of annual compound return are they going to realize over the holding period? To double in five years would require about 15%. They could theretically rise more than that but I see little reason to expect that given what they sold for versus other (frequently better) Union coins. Given the risk-reward trade-off, I would say that buying shares of a "blue chip" stock such as Altria (Phillip Morris USA) is a better alternative. It has a dividend yield of about 5.75%, you can generate premium income by selling call options, much greater liquidity, probably lower downside risk and some capital gain appreciation potential under the circumstances that would also favor coins.

Edited by jwither

Share this post


Link to post
Share on other sites

Please sign in to comment

You will be able to leave a comment after signing in



Sign In Now
Sign in to follow this  

×