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Anybody Buying Coins?

edited December 2016 in Off-Topic
For those that might be interested.

Now that the US Dollar is gaining strength I've now begin to buy some silver eagles. I've read that the all in cost to mine an ounce of silver has in recent years been about $20.00 with some now saying that cost has dropped to about $15.00. Currently US Silver Eagle Dollars can now be bought back of $20.00. I usually, buy a roll of 20, or so, each year when I feel value might be had as silver prices are currently down with a strong US Dollar. Just last night the price of an ounce of silver dropped by about 6.5%. My thinking is that with inflation creap the price of silver will rise.

Link below is pricing on a lot of five coins.

http://www.ebay.com/itm/Special-Price-Lot-of-5-Random-Year-1-Oz-American-Silver-Eagle-Coins-SKU39414-/142087971942?hash=item21151a6466:g:uWsAAOSwIgNXs2Sb

You can also search eagles for 20 coin pricing.

In addition, the closed end fund ... CEF ... Central Fund of Canada is a good way I have found to play the metals (gold & silver) and it is currently selling back of $12.00 per share.

Old_Skeet

Comments

  • Hi @Old_Skeet,

    I've never been a coin collector but it seems like buying actual coins would be more of a hobby/personal interest rather than a way to invest. It seems like the quantity of coins you'd need to buy for even a small investment would be rather large and the transaction costs, in the form of shipping, would be rather high.

    Early this year the gold/silver ratio was 80:1 and rono was saying that 17:1 is more historically normal. It's now around 70:1 if I did my math right so it seems silver is still cheap relative to gold. I wonder, though, whether the potential for fiscal reform in the US and higher interest rates might continue to drive a stronger dollar and weaker prices for both silver and gold (all else being equal), even if silver should do better than gold based on rono's comments.
  • @Old_Skeet: As a hobby Yes, as an investment, No ! The same for stamps.
    Regards,
    Ted
  • edited December 2016
    I've got a good number of Morgan and Eagles that have been massed through the years by both my late father and myself. In the past, I have used both SGGDX, First Eagle Gold Fund and CEF, Central Fund of Canada for speculation and investment purposes.

    Holding silver coins and rounds want pay off until the price of silver rises and certain coins become more sought after by some collectors. Last week, I traded two 1900-O Morgans to a collector for ten 1922 Peace Dollars. Not sure, who got the best of this trade.

    Currently, the stock market is too richly priced for me. Although, I have not been doing any recent selling I've not been buying since the election. The coins are a way for me to dabble. Since, it is now a little too cold (forecast is down in the high teens tonight) for me to get out in the woods with Snickers & Buster ... I've ventured down to the local coin depot and traded a few coins with some collectors. Although, I don't consider myself a collector I've got some coins they seek. There is a local swap meet on Wednesday afternoons where locals can barter with each other.

    When it warms up next week I just might venture down to the old farm with Snickers & Buster and let them run a rabbit or two while I take the metal dector and see what I can find as an old Indian Trading path runs by the farm.

    For stamps, I'll leave that up to others.
  • edited December 2016
    I don't have coins, but I do have a bridge for sale. image
  • OK, that's pretty cool! I collected baseball cards mostly but also some football, basketball and hockey cards when I was a kid and they've all been sitting in boxes for decades. As with your coins I know I have some valuable cards but I've always feared the endless amounts of time I know I could spend trying to organize 10-15,000 cards in the most beneficial way.

    Good luck with your hunting if you make it to the old Indian path.
  • @rono is the go-to MFOer for advice, perspective, and history with respect to coins.
  • Hi Skeeter!
    Had been buying silver up to this year. Now, buying lead. Yep! Silver and lead.........it's a lot like leather and lace.....only different.
    God bless
    the Pudd
  • I find it inconvenient because of the need to store the coins, cost to store, and the weight of the coins, especially silver and lead, strains my aging back. Surly there's another way to invest in precious metals, maybe using mutual funds or ETFs.
  • Geez, you folks throw me a hanging curve and expect me to not swing . . .

    Hi folks,

    First off, I've been collecting coins for about 60 years. Early on, like so many, I collected everything - baseball cards, rock, stamps, and coins. I settled on coins because I knew that if push came to shove, I could at least spend them.

    There is investing in rare coins and there is hoarding bullion in one form or another. Different animals folks. I still feel that everyone should have 3-7% of their wealth in precious metals. This I feel is a core investment while more than this is speculation. Speculation is fine, but keep them separate. However, this is pm's and not rare coins.

    As for investing in rare coins, they have done well as an investment class over time but like any other collectable, you need to do your homework and learn the market. Most go into coin collecting like they go into stock investing - half baked at best.

    The Expert's Guide to Collecting Coins by Q. David Bowers is the best book if you want to learn about collecting coins. However, in general a coins value is determined by its scarcity, condition and desirability. Scarcity is basically mintage but can also be impacted by survivability. Condition is best determined and certified by a third party grading service like PCGS or NGC resulting in encapsulated or slabbed coins. This also greatly increases their fungibility. Desirability or demand is whether or not people want to collect them. Some series have been rats and some have been winners. Rats include Ikes, Susan B. Anthonies, statehood quarters, etc. Winners include morgans, Indianheads, anything from Carson City, etc. A couple of other tidbits. Never, ever, ever buy a coin off of TV. They are priced anywhere from 75-100% over retail. Also, don't buy relatively recent normal coins in ultra high grades. MS70 or PF70 First Strike sort of slabbed coins are a very sketchy market that I would avoid.

    Now let's get back to buying bullion at these prices. Right now silver is down around $15 an ounce and gold is a little over $1100. They're trading at 72/1 vs. the historical g/s ratio of 17/1/. Some will say that 35/1 is a better ratio but regardless, 72/1 is sufficiently skewed to cause me to overweight silver relative to gold in any pm purchases I make. Nothing fancy, but on the margin. Someone asked about storage. Geez, a roll of gold Eagles is about 2" tall and the size of a quarter. You can hide it in the oatmeal box. It's worth about $22K right now. Take a 100 oz. ingot of silver, paint it black and use it as a door stop. Or you can just buy generic bling.

    Conveniently, this is the time of year when the new crowns (2017) are released and sale prices are sweet for stackers like me. World crowns include eagles, maple leafs, pandas, libertads, britannias, etc. In addition to my annual purchases, I've been acquiring hockey pucks at these prices. These are the America the Beautiful 5 oz. 'coins'.

    As for paper bullion (bullion etf's or miners), I'm staying away while the momentum is still negative. I am not into trying to catch a falling knife.

    I had a play on this past spring but it was in the junior silver miners. That's where I've found the greatest leverage. Silver has much great leverage than gold AND where it can get crazy is with the juniors costing less that a $1.

    Some talked about paper investment choices. You can go with bullion or mining stocks. Most pm mutual funds invest in the mining stocks. There are bullion ETF's but they are taxed at 28%. To avoid this in a taxable account, CEF is the nut and still taxed normally. Personally, I like to have a fund - either bullion or miners - that covers both gold and silver. CEF is about 60/40 with real bullion. As for funds, I still own TGLDX which while mostly mining stocks, actually has some physical gold bullion.

    But as I said, I am acquiring physical silver at these prices but avoiding any paper plays at this time other than my very core holding. I do have a couple of canaries that I'm watching and will speak up when the mo changes.

    and so it goes,

    peace,

    rono
  • edited December 2016
    As I said, yes?

    Thanks @rono- wishing you a good Christmas and new year.

    OJ
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