Thread: Numismatics vs regular gold/silver

I'm a coin collector.

Gold and silver coins have two things that go into their value: Precious metal value and a collectors premium. Collectors premium is the condition of the coin, its rarity, the year etc. It all comes down to how rare it is. The only way you can make money is if you can get another collector to pay more than you did. So in that case you NEVER buy them at auctions, ebay auctions, brokers etc. You try to get them from someone who is eager to sell. So I would not deal with collector coins unless you knew exactly how to buy a coin WAY below its valued price.

So all in all buying gold and silver coins all comes down to playing with TWO market variables: Collectors value AND metal value. So it is way more tricky than just buying metal.

I'm currently looking into buying copper pennies. Why? because the price of copper is not that far away from the face value of a penny. So worst case scenario you can keep your principal of one penny =).

I'm of the opinion that more is better when talking about gold so I won't pay the premium for "rarer" gold. Coins, jewelry, bars..doesn't really matter.

socal - relating to your post. Here's Kyle Bass on Nickels

“The value of the metal in a nickel is worth six point eight cents,” he said. “Did you know that?”

I didn’t.

“I just bought a million dollars’ worth of them,” he said, and then, perhaps sensing I couldn’t do the math: “twenty million nickels.”

“You bought twenty million nickels?”

“Uh-huh.”

“How do you buy twenty million nickels?”

“Actually, it’s very difficult,” he said, and then explained that he had to call his bank and talk them into ordering him twenty million nickels. The bank had finally done it, but the Federal Reserve had its own questions. “The Fed apparently called my guy at the bank,” he says. “They asked him, ‘Why do you want all these nickels?’ So he called me and asked, ‘Why do you want all these nickels?’ And I said, ‘I just like nickels.’”

He pulled out a photograph of his nickels and handed it to me. There they were, piled up on giant wooden pallets in a Brink’s vault in downtown Dallas.

“I’m telling you, in the next two years they’ll change the content of the nickel,” he said. “You really ought to call your bank and buy some now.”

Some Words Of Advice From Kyle Bass | ZeroHedge

Originally Posted by Jake

“The value of the metal in a nickel is worth six point eight cents,” he said. “Did you know that?

Thats true, But when you invest in metal in the form of coins you have to remember that in order for the price to go up the demand has to go up or there has to be some scarcity or less supply.

So if I invest in copper pennies I would be betting that the demand for that metal would go up or the supply decreases all thing equal. But if supply goes up or if nobody wants/ NEEDS the metal the price of it goes down.

Originally Posted by socaldude

Thats true, But when you invest in metal in the form of coins you have to remember that in order for the price to go up the demand has to go up or there has to be some scarcity or less supply.

So if I invest in copper pennies I would be betting that the demand for that metal would go up or the supply decreases all thing equal. But if supply goes up or if nobody wants/ NEEDS the metal the price of it goes down.

But of course. The same could be said for anything. When you hold dollars / copper / nickel you have to believe that the demand for that will go up in the future or else you should be holding something else, yes? Or you just have to believe that the demand for (insert anything here) will go up as compared to the demand/quanity of the currency you choose to hold.

I've been buying gold and silver pretty aggressively for the past 5 years now. I started with junk silver and gold coins selling for spot price. I would stick to bullion grade coins at first, but would not rule out numismatics. They are usually easy to look up and often the seller is willing to take spot price. If you know what to look for you can make money on the collectible value as well. For example, I bought a bunch of platinum eagles at spot which were easily worth $50-100 a piece over spot.

I've found that if you keep an eye out and know what you're doing, there are plenty of deals to be had. A lot of times, the bigger the deal you make, the better deal you get. It helps to be ready to buy and have the cash easily accessible...you never know when somebody is selling and needs the money immediately.