Confessions Of A Coin Junkie - Roi

Good write up.

I thought I was having a dream while reading it. It sounded just like my life! I am a business major and I also keep very detailed records of all of my purchases. My kids are not yet teenagers and I am not sure if they will be interested in my collection or not. I hope so...

My coin money comes from a side job so my wife doesn't care too much about what I spend on coins, but honestly she has no clue. All of my primary job income goes directly into the checking account and it is used for normal monthly expenses. I think about what I have spent on coins/bullion and I stop and think what could I have done with that? I have only been in the hobby for 10 years but the amount of money you spend adds up quick.

I have finally stopped buying any and everything I see I like. I don't think I have bought a numismatic coin this year. I have sold some of my coins that I was no longer interested in. Hardly ever did I make money selling. Sometimes I broke even and most of the times I ended up losing $10-$20. I am excepting my small loss as a learning experience. I am also telling myself that if I didn't spend it on coins I would more than likely spend it on things that produced no return and would be worthless after spending money on it.

As with many other members here, this also rings true for me.

I do hope some of the coins I have purchased will maintain or
increase in value. I know many of them will not, but I do like
filling albums.

I try to keep a balance and also purchase bullion related coins,
bars and rounds. This could go either way, as far as investing goes.

I wish I had kept better records, but then it might be scary to know
how much I have put into my collection.

I personally not a big fan of coins as investments but I usually focus more on sub $1000 coins and perhaps things might be different at the top. I have often heard and read that the ultra rarities make good investments. So back in November of 2016, I decided to conduct relatively quick, crude study to see whether there might be merit to investing in ultra rarities. Data for the study was gathered from the auction description. All coins were U.S and ranged from colonials to federal issues to patterns but with a heavy emphasis on federal issues. Most of the coins I looked at sold for more $100,000 at the most recent sale with a few in the high 5 figures. All coins must have sold at least twice and at least 20 years apart. I chose 20 years to help ensure that the period would include at least one market cycle. Prices used in the analysis were actual sales. For the stock return, I used the dqydj.com s&p 500 periodic reinvestment calculator. The management fees were included in stock return. Neither the costs to sell the coins nor taxes were included in the analysis since that varies from individual to individual. I included a tie category if the returns were within about a percent of each other or if the coin sold more than 3 times and in some periods did better and others worse by roughly the same amount and same number of periods. Finally, the returns used to make the comparisons were geometric.

So out of 147 coins, 49 did better, 89 did worse, and 9 were about the same or indecisive. The colonials and non gold federal issues had 27 doing better; 29 doing worse; and 4 about a tie. The federal gold had 15 doing better; 51 doing worse; and 5 in about a tie. Patterns had 7 doing better and 9 doing worse. If I recall correctly, many of the coins especially the gold had auction dates in the 1980's and many were Pogue coins. Looking at greysheet prices and stock market data from 1980's that seemed like a period when coin prices were relatively high and stock market valuations relatively low. There were probably several aggressive bidders for the gold coins driving up the prices. I think these factors may be why so many gold coins failed to beat stocks. I know that this analysis is flawed but something more sound would be very time consuming. Take it for what it's worth.

Hobbies aren't an investment, investing in coins you would have been able to buy one maybe two with a reasonable expectation for what your collection has cost.

You have enjoyed your collection for 20-30 years, who cares if you over paid for some or lose money on some. You probably spent more money going out to eat in the time frame you have been collecting. If you enjoy coins use spending money to buy them and enjoy them you can't take money with you when you're dead, if you just want to invest then invest in stocks.

I always find it a bit odd people stress so much about whether or not they make money on their coin when they sell or the price they paid for something they want, yet people will go to the movies/a bar/out to eat ect all of which when the experience is over you have a return of exactly 0 and spent far more then you would have at home

Well said, basebal21.

Stocks work because of diversity. No one should be putting all of their money into one stock. Diversity is what allows for consistent long term gains.

Having some diversity in your coins will certainly help maintain overall value, but that can be difficult when you collect what you like. Sometimes the things we like just do not hold value.

Everyone is envious of stock market returns during the late stages of a bull market. That's why retail investors always get in at the wrong time. In 08 (which seems like just yesterday to me), everyone on this forum probably bragged about how smart they were for investing in coins when the market crumbled. Posts like yours probably didn't exist during that time period.

When the next bear market comes, I suspect you will be doing less second guessing.