Strategies of a Numismatic Expert… Revealed

By Brian Zweig

In Tuesday’s newsletter, we covered some of the most common questions we are asked about numismatic coins—including the types of markets, buying, selling, storage, and even counterfeits. Today’s interview is from a leading numismatic expert, whose passion for coins extends back several decades. We’ll be discussing his background, as well as common trends and concerns that he’s seen among investors in the market.

Q: What’s your background in numismatics?

A: Like most people involved in the numismatic industry, I began as a collector first. I actually became a coin dealer by accident. In high school, I sold off some of my duplicates, and, much to my surprise, I ended up making money on these extra coins. By my late teens, I was attending every major numismatic convention. Initially, my strategy was simple—I basically was an arbitrageur. I was literally buying coins at one booth and selling them for more at another.

Shortly thereafter, I became a wholesale buyer for one of the largest dealers in the industry. Major retailers and marketers would give me their orders, and it was my job to find the coins they needed. I traveled all across the country attending every major coin show and auction, where I would review thousands and thousands of coins in search of specific items.

As time went on, my role expanded. Some of my clients have a precise idea of what they want—and it’s simply my job to locate the material. Other clients began asking me to find coins (or groups of coins) that I felt represented outstanding value. I basically serve as their eyes and ears in the marketplace. When I see something that fits their requirements, I pounce.

Q: What are investors’ typical concerns and motivations?

A: Every investor’s concerns and motivations are different, but most want to receive some kind of return on their investment. This includes folks who never plan on selling and acquire coins for pure enjoyment. Even then, most take comfort in knowing they’re buying something with real and tangible value. This is a major reason why numismatic coins are so popular. With many hobbies and pursuits, the money spent may never be recouped. Assets like boats, antique cars, and rare wine stand to lose value, require maintenance, deteriorate, and/or depreciate. Coins, meanwhile, have an excellent chance of retaining their value, if not appreciating, over time.

I also find that true collectors often make money even if that’s not their goal. Disciplined and savvy collectors, historically, have realized fantastic returns. They often pursue the most desirable and appealing material—and are rewarded accordingly when they sell. Buying quality material provides the best of both worlds: 1) it provides owners with tremendous satisfaction, and 2) it tends to fetch outstanding prices when it’s time to sell.

Q: How has the current economic and political climate affected the numismatic market?

A: It’s a strange set of circumstances right now. The equity, bond, and real estate markets have been rallying—and investors are jumping on the bandwagon. An incredible amount of money is being channeled toward these assets. Meanwhile, the precious metals and numismatic markets are very quiet.

I’m not seeing investors drop out of the market—they’re just spending less right now. They’re lured by the opportunity to make a quick buck in these other sectors. However, I can see conditions changing quite a bit once stocks, real estate, and bonds lose their momentum. There are plenty of triggers that could cause this: political turmoil, economic instability, geopolitical tensions, questionable equity valuations, and the crippling national debt. I’m not sure which of those factors will “stop the music,” but any one of these situations could extinguish the rally in paper assets.

What does this mean for coin buyers today? Contrarians and savvy numismatists can make some outstanding buys. Some great coins are trading at extremely compelling levels right now. Identifying these opportunities still requires some research and help from a trusted numismatic dealer. If you work with the right coin dealer and do your homework, however, you can pick up some fantastic items right now at bargain prices!

Q: What kind of buying trends are you seeing/do you see?

A: Today’s rare coin buyer is extremely savvy and quality-conscious. Investors have an incredible amount of information available to them. This includes PCGS/NGC population reports, more accurate price guide reporting, outstanding numismatic reference books, and online research databases. The net result: many coins that were once overlooked are now starting to gain in value. I remember a decade ago when certain rare date gold coins were extremely illiquid and difficult to sell. People who are familiar with numismatics realize how difficult these coins are to find. However, investors are sometimes unaware of the opportunity the coins present.

The very first five figure coin I ever bought was an 1864 Liberty Quarter Eagle. It’s an incredibly rare coin; just a couple dozen pieces are known in all grades. I went years without seeing one, and when I did, I jumped all over it. I thought the coin was a steal at just over $10,000, but I actually had an extremely difficult time selling it. I eventually sold the coin for a slight loss at $9,750. That was in 2001—today that exact same coin is probably worth $30,000 to $40,000! What changed since? Investors have done their homework and realize how scarce the coin truly is.

With all this being said, there are still some overlooked and undervalued areas of the market. These opportunities are few and far between, but they still exist. There are still some outstanding bargains to be found in the marketplace, if you are willing to put in some effort and seek the help of a professional coin dealer. The 1864 Quarter Eagle is a perfect example. Even though it has tripled in price over the past 15 to 20 years, an excellent argument could be made that it’s still dramatically undervalued. I can name a half dozen gold coins that aren’t as rare, but sell for hundreds of thousands of dollars!

Q: What’s the most important thing to consider when buying rare coins?

A: A long time ago, I was given advice by a mentor and fellow dealer. He told me there were two keys to success in the industry: target great coins and/or more common material at cheap prices. It’s okay to buy generic coins, but be sure to buy them at the right levels. MS64 $20 Saint-Gaudens Double Eagles are an excellent example. They’re fairly easy to access at the moment and priced at absurdly low premiums. They definitely make sense at today’s price point.

$20 Saint-Gaudens Double Eagle

Where better material is concerned, price is secondary to rarity, quality, and historical significance. I’ve followed that advice ever since, and am glad that I have. In the long run, I’ve rarely lost money buying great items.

Q: For a bullion investor looking to take the next step to numismatics, where should one start?

A: A great place to start would be $20 gold pieces, such as $20 “Saints” and $20 Liberty Double Eagles. They’re approximately an ounce of gold and are priced almost like bullion right now. Even better-quality coins like MS64 $20 Saints are priced close to melt value. They’re a great entry into the numismatic world. One great thing about the numismatic marketplace right now: lots of great material is currently available at low premiums. You can get high-quality vintage coins with rich histories for a modest amount over melt value.

Regardless of what you buy, I would offer one more suggestion: work with a reputable dealer. The numismatic world is a vast marketplace, and there’s a seemingly endless amount of material available. That’s true in both hot and cold markets. It’s imperative you work with a dealer who selectively picks the right coins. All too often, companies just market whatever is readily available and/or “stuck” in their inventory. The best dealers offer coins that truly represent excellent value. Coins of exceptional quality, rarity, and historical significance will be more enjoyable to own—and more profitable in the long run. Make sure your numismatic source shares this philosophy.

Are You Ready to Get Started?

When investing in numismatic coins, we typically suggest a long-term holding period of at least five years for you to reap the full benefits of your investment. As we mentioned in Tuesday’s newsletter, it’s important to buy only numismatic coins graded and slabbed by recognized coin grading services, such as the Professional Coin Grading Service (PCGS) or the Numismatic Guaranty Corporation (NGC). At ASI, all of our numismatic coins are graded by PCGS or NGC.

ASI offers a Spotlight coin program specifically catered to providing investors with exclusive offers and pricing on specific numismatic coins or coin sets. Our numismatic experts spend months scouring the globe looking for coins they feel are tremendous values. These are coins that are either overlooked, undervalued, trending upward, or poised to break out. They are always PCGS or NGC graded, and arrive sealed and slabbed. Spotlight coins are only available in a limited quantity, as they are often selling at an incredible deal, and typically sell out within a few days due to their high demand. To receive exclusive early access to our FREE Spotlight coin newsletter, simply click here to be added to our Numismatic Navigator alerts.

For those of you looking to take advantage of one of our most trending coins, MS64 $20 Saints are a good place to get started. MS64 $20 Saints are currently available at just $1,499 per coin*. Designed by the renowned sculptor, Augustus Saint-Gaudens, these coins are heralded as the most beautiful American coin!

Not only are numismatics popular with us, but other experts, like Steve Sjuggerud of Stansberry Research, have these coins on their radar: “First, these coins represent an ‘island of safety’ from currency fluctuations. Their intrinsic value and desirability are not dependent on what's going on with the dollar, the euro, or any other individual currencies. They're also sellable in almost any place on Earth in a wide range of currencies, as opposed to many traditional assets that are denominated in dollars.”

If you missed Tuesday’s article, you can read it here. For additional questions about numismatic coin investing or starting your own portfolio, please call us at 800-831-0007 or email us.

*Prices subject to change based on market fluctuation and product availability. Prices reflected are for cash, check, or bank wire. Free shipping is available on qualifying purchases. Please call for details. Offer expires Friday, August 25, 2017.