New V's Old Coins

Welcome to the forum tassie. I collect both decimal & Pre-decimal, but due to the cost of a lot of the Pre-Dec stuff, I mainly concentrate on decimals. I do have quite a few PreDec's, but have to confess I inherited the majority of them. What you decide to collect depends on what you can afford.

Like Yass, I buy RAM Mint sets from the Post Office each year, & I also search through hordes of circulating coins for errors and have found some worthy ones. It's great to find a reasonably valuable coin as it only costs it's face value. Cheap as chips!

My rellies know that if they're thinking of getting me any pressies, I prefer to receive coins, so I occasionally score that way.

I also don't buy any coins that are classified as NCLT (Non Circulating Legal Tender) although I do own a few. Some people specialize in $1's or PNC's (Postal Numismatic Covers).

I actually do both. Australian coins are my favourites. I've got a slight advantage in that I don't insist on shiney AU coins because I don't consider my collection to be an "investment." It's my passion, my pride, and I don't care what it's worth. I love coins with history to them, that have circulated and fulfilled their purpose. Coins in these lower grades are always easy to find, just not always so if you're trying to find a particular date.

Here in the US, finding decimals is just about as hard as finding the Pre's.

I dislike dealing with either of the Australian Mints however. They seem far overpriced as to what they offer, and the shipping to the US is killer. I've got a very close friend living in NSW, and he can often ship numismatic items he purchases from the Post Office cheaper than the mint itself.

G'day, there are much more rewarding ways of investing money than in coins. I collect because coins provide a tangible link between me and past events.
To my thinking, NCLT are just shiny lumps of metal, with no story to tell.
The latest RAM sets, you pay nearly $30 for six coins with face value $3.85, and there's no limit on the quantity produced, seem a poor formula for an increase in value.
I agree that ther's fun to be had sharing a hobby within the family. Oz coins enable us to discuss native fauna. The commemoratives become a springboard to consider history and other issues.
Surely, some inexpensive fun can be had, challenging the youngsters to put together a set of coins, taken from circulation. As less worn specimens emerge, these can replace thos previously collected. This way, the collection only costs face value. The first challenge might be to collect the coins of the child's own year of birth.
Get them into the habit of looking, then next they can acquire errors & varieties. And of course, any foreign coins, which opens up - forgive the pun - a world of new opportunities.
My father wasn't a collector, but he encouraged me to look at both coins and stamps as a way of appreciating the wider world. I was lucky, in that he kept a pub near the docks, and we got a lot of low-denomination foreign coins over the bar.
Coin collecting doesn't have to be expensive: it only requires interest, and adherence to purpose. The more effort, rather than money, that one puts into it, gives the greatest satisfaction.
For what it's worth, my elder boy is only 4, but I'll try to share my interest with him and the younger one when they're old enough to read.
Peter in Oz

Ho! Terry. You certainly spread your family collection well apart. Good luck..
regards,

I imagine someone like Belinda Downie would disagree with coins not being a good investment. While not all coins are good for investment, some rare Australian coins most certainly are!

The two basic ingredients for the best performing investment coins are that 1. they be rare and 2. that they are wanted (in demand). There are other factors involved but these are the main things to look out for. Research is very important to discover which coins meet these demands.

Usually they are not cheap! Unless you think you've found a "sleeper". There are a number of rare coins out there that are under valued. Many Australian half sovereigns are far more rare than the over rated 1930 penny and 1923 half penny yet they sell at a fraction of the price - if you can get them, but for how long? Try putting together a half sovereign set and you will find some dates/mintmarks very difficult to find.

Investors differ from collectors in that they may only buy one or two coins per year and put all available funds into them. After all one or two gems will always be worth more than a pile of junk. From a collectors point of view however, buying one coin per year is extremely boring! I like to receive parcels in the mail more often than that Lol.

Investment coins due to extreme rarity can also be downright *cough* ugly. The holey dollars and dumps IMO look about as attractive as a mud pie. More often than not they are worn and in terrible condition, yet demand and shortage of numbers have driven the price high. Not that all investment coins are ugly though either. The designs on early gold coinage are very attractive.

So, best decide which (investor or collector) you are and be happy. Even as a collector our coins are still worth something. The money we spend on coins isn't gone, as SuperDave reminds us, it's just converted into another form.

I posted a couple of days ago regarding investments in coins. I probably should clarify my thinking a bit. Of course this is the way I see investing and others may disagree. 'Investing' to me means that with a degree of certainty, you can forcast your return on investment. If you cannot do that with a relative degree of certainty, then it is speculation, regardess of whether you win lose or draw.

I should say that in my experience, there are certain coins or sets of coins that you can forcast, with a somewhat degree of certainty within a period of time, your return on investment if the purchase is purly an investment. (provided the 'investor' has a certain amount of knowledge in what they doing. But even here, my opinion is that this still borders on speculation.)

Let's take a somewhat easy example of what I am saying. The 2007 Magic Pudding Baby Mint Set. Historically the RAM has produced the baby sets between 25K and 35K total. Here is what we know, now that the RAM is sold out.

-There's a certain amount that will be taken off the market until baby's born in 2007 reach the age of 18 -80.

-$1 coins are a popular coin to collect

-2007 baby sets are the only place to get what I call the Pudding Dollar

-$1 collectors will buy these for the $1 coin, making the set popular.

Here's what we don't know (and this is kind of important if you are an investor)

-The total mintage (could be high or low)

-How many actually are given to baby's and we'll never see them again

-How many speculators are buying them now to flip later.

-Will the RAM produce a '08 baby set with an exclusive coin. Ifso the Pudding Dollar loses a bit of lustre.

This is quite an easy example and my OPINION only is that the issue price being $30.50, the market price will maybe be $75 by Christmas, and possibly climbing to $100 a year from now. If I'm right, and you bought one at $30.50 last year, your return on investment is approximately 145% annual return at Christmas and 114% annual return if you wait another year and sell at $100. (These %'s were done very quickly and may be slightly innacurate).

There is also a possibility that mintages are low, the $1 coin is highly demanded and my numbers are very conservative. But my numbers could also be very inflated. This is my point about coins being speculative rather than good investment vehicles. There are a lot of unknowns. When the 'don't knows' come in my numbers could be skewed high or low, which is what makes it, in my opinion, speculating.

Now who can tell me what the 1930 penny will do next year to a degree of certainty? If you have $20K - $200K to invest will you do better by buying real estate, a business, Bank deposit or a 1930 penny? I don't know, but I can give myself a greater guarantee with the first 3. With a bank deposit, there is a very high degree of what your return will be. They tell when you deposit the money. I would classify that as an investment. One day, I will have a 1930 penny I believe, but I will buy it to look at, when I feel I don't need the $$$ for other things. I'm sure it will increase in value, but until I can forcast that, to me it is not an investment.

When I buy real estate or businesses, I know what rent/sales are and I know what expenses are. I know what I can control. And I can determine quite accurately what my return is going to be. Real estate for capital gains is specualtive, I have no idea what the market is going to do. I only know what I can rent something for or sell a product for.

My elaborated point is that I love coins!! I love the art, the history, the use, and the jingle. I love having them, finding them, touching them, looking at them and I really like that not one coin in my collection is worth less than what I paid for it within a short period of time.

I just feel that too many people lose sight of the difference between investing and speculating, whether that be real estate, the stock market, or coins. There is nothing wrong with speculating, it's made a lot of people a lot of money, but more people lose than win that game. I speculate a bit myself, but only with money I can afford to lose, of which I often do.

Coin dealers, by and large, are note either investors or speculators. They are retailers. They buy at wholesale and sell at retail.

Some people buy coins because they love them, but select coins that they believe will increase in value significantly. I define these people as 'value collectors', but collectors none-the-less. They base their selections on value, rather than series or type, but they still buy the coin because they love it. To me that is a collector (a smart collector), not an investor, not a speculator.

Well, this is my opinion on the subject. It gets discussed a lot and just thought I'd chime in. If you all feel that my post is too lengthy, boring and opinionated, just politly tell me to shut up, and I'll keep future posts on the lighter side.

Thanks.

'Investing' to me means that with a degree of certainty, you can forcast your return on investment. If you cannot do that with a relative degree of certainty, then it is speculation, regardess of whether you win lose or draw.

Even the mainstream financial press is starting to notice the inexorably Gold price rise, with lead stories on CNNMoney, Blooomberg, Reuters, and even Yahoo. Most of them "blamed" the Gold price rise on the US Dollar fall, of course. And many of them took care to gather quotes from "analysts" which said, in effect, that Gold was rising too far too fast and was therefore "risky".

Strange, on second thought, not so strange, that these same analysts have never once since the USDX bear began nearly six years ago said anything about the "risk" of holding US Dollars.


Here are the relative performances of $US Gold, the $US Index, and the Dow since Gold broke above $US 300 to stay on March 27, 2002:

..Market..........March 27-02....Sept 28-07......Result........Percent
.....$US Gold..........$302.20......$742.80....+$440.60......+145.80%
$US Index.........118.91........77.62.......-41.29 ........-34.72%
Dow.................10427.........13895.......+3468........+33.26%