The 10 Rules of Successful Coin Collecting

10 Rules of Successful Coin Collecting according to The American Numismatic Association;

 I. Education 

The most successful coin collectors take time to learn as much as they can about numismatics. They not only study coins but the dynamics of the market as well. To learn about coins, I strongly suggest that you buy and read as many books as possible. You can supplement these books with specific catalogs that relate to your chosen field of specialization. A serious collector might even go as far as creating a database of prices that relate to his specialty. Other suggestions for new collectors include subscribing to periodicals such as Coin World and Numismatic News. You should join the American Numismatic Association and use their library (they will send books by mail to members). Become friendly with other collectors and communicate with them by phone or e-mail. And don’t be afraid to ask questions.

 II. Specialization 

It is too hard to begin a coin collection without having goals and boundaries. I have always been a strong believer that it is better to view numismatics with a “micro” perspective as opposed to a “macro” perspective. As an example, if you start by collecting Charlotte gold coinage, your “world of focus” becomes 52 specific issues. It is realistic to assume that an intelligent individual who is willing to commit time to this area of study could become relatively knowledgeable within a year or two. To become similarly knowledgeable in a larger field of study (such as all branch mint US gold coins produced between 1838 and 1907) requires many more years. Becoming a well-versed specialist will allow you to level the playing field between you and dealers and it should enable you to make better purchases.

III. Patience 

We live in an era of immediate gratification. New collectors often have the urge to jump in very quickly and complete their sets as fast as they can. The best coin collections are built over the course of many years. Sometimes, it is possible to purchase a number of great coins in a very short period of time. But most times, the opportunities to purchase great coins are few and far between. The new collector should avoid the temptation to buy the “wrong coin” just because he needs it for his set and he does not want to wait. Impetuous decisions are invariably incorrect and usually prove costly over the course of time. 

IV. Connections 

It amazes me how many serious collectors get their “meatiest” information on topics such as pricing, market conditions and future trends from such third-hand sources as newsletters, coin magazines and coin brokers. This information is almost always well out of date and totally biased. (Remember that most newsletters which recommend specific coins are written by dealers who have taken a position in what they are touting). The only way to get real information about the coin market is from a dealer or collector who regularly attends shows and auctions. This discounts most coin brokers/salesmen as they get diluted information from their superiors and then pass on these half-baked “truths” to the masses. I personally view it as my duty to pass on accurate information to good clients. Conversely, I will not willing pass this information onto “tire kickers.” The best way to get good information is to establish a good working relationship with a well-connected, reliable dealer. 

V. Thinking Like a Collector 

Anyone who approaches numismatics with a dispassionate attitude is a virtual certainty to lose money. Conversely, most pure collectors make money; often times in spite of themselves. This is because they buy coins for the right reason: they love them. They what interests them and they carefully research their purchases. They know for example, that a coin similar to one they just purchased sold for 10% more at a major auction. They know that they are not buying overhyped coins at the height of a promotional period. They are not buying coins just because a voice at the other end of the phone told them to and they are not buying them because this person told them their new coins would “increase in value 50-75% over the next three years.” Remember this rule because it may be the most important one of the ten listed here: learn to think and act like a true collector and you will have more fun now and have a better chance to expect a reasonable profit on your purchases over the course of time. 

VI. Connoisseurship 

I define connoisseurship as the ability to discern true quality in a specific field. In numismatics, the connoisseur is able to determine which coins have the most aesthetic eye appeal and which, literally, stand apart from the “typical” piece. A numismatic connoisseur, for instance, is able to appreciate a truly original gold coin with rich, “crusty” coloration. He is able to innately sense that 150 year old coins do not have to be big and bright in order to be desirable. Connoisseurship is a natural ability. You either are able to naturally determine the “best” or you are not. If you are not a born connoisseur (and very few people are) then you should find a dealer who has this ability to assist you with your purchases. I would estimate that less than 5% of all coin collections are “connoisseur quality” and those that are typically the ones that show the greatest financial appreciation over the course of time.

VII. Learning to Grade 

I have seen people spend millions of dollars on rare coins without having the slightest idea how to grade. They put their complete trust in dealers and in third-party grading. Frankly, this attitude leaves me baffled. If I do not feel very comfortable grading a specific type of coin, I do not buy it. As an example, I think Indian Head half eagles are extremely hard to grade. To be totally honest, I can’t grade the damn things. My solution? I don’t buy them. By the same token, I feel that I am a world-class grader of Liberty Head half eagles. So I buy a lot of them. There are some simple rules when it comes to grading. First–and foremost–you need to view as many coins as possible. I would recommend that you attend shows and auctions and carefully look at coins. Secondly, I would take one of the grading classes offered by the American Numismatic Association at their annual Summer Seminars. Thirdly, I would make the decision to specialize, so that you have fewer types of coins to learn to grade. Fourthly, I would try to learn grading tips from the dealer(s) that I buy the majority of my coins from. Finally, I would always remember that while third-party grading is a great safety net for the beginner, there is nothing like your own knowledge. 

VIII. Thinking Long Term 

Coins are a terrible short-term investment. Even if you buy coins at a fair “retail” mark-up, you are still paying at least 10-20% over typical wholesale prices. This means that any coins that you purchase have to go up at least 10-20% for you to break even. When coins were heavily touted as investments in the 1980’s, the common logic was that you needed to hold at least three to five years. I would suggest that you should plan to hold your coins at least ten years and preferably more. The greatest collections (Eliasberg, Pittman, Norweb, etc.) were built over the course of fifty+ years.

IX. Quality Not Quantity 

Let’s say that you have a coin budget of $20,000 per year. I would suggest that you purchase four or five really nice $4000-$5000 coins each year than twenty $1000 pieces. The coin market of the future will be even more predicated on quality than it already is. High quality coins will become harder to find and, consequently, more expensive. The decision to purchase the best coins you can afford will prove to be very intelligent over the course of time. A few years ago, another dealer had an advertising campaign that basically said that your entire collection should be able to fit into a PCGS shipping box (i.e., it would be twenty coins). While this never really caught on, I think his idea actually has some merit. If you have decided to be more of a “generalist” buyer than a “specialist,” I like the concept of having a small collection of great coins instead of a large collection of nondescript coins.

X. Buying the Best You Can

Understand if you are new to coin collecting and you know next to nothing about coins and the coin market, you have no business purchasing $10,000+ items. I would strongly suggest that you start small and take at least three to six months to study the market. Once you feel more comfortable, you can take a bigger plunge into the coin market.

 Source

Cash in on Coins: Your Loose Change Could Be Worth A Lot More Than You Think

 

The United States government has stopped minting pennies, leading to a surge in interest in coin collecting as both a hobby and a financial investment. This shift has turned common loose change into a sought-after commodity, with some rare coins selling for millions of dollars.

The Beginnings of the Kennedy Half Dollar

On November 22, 1963, during a presidential motorcade in downtown Dallas, Texas, Lee Harvey Oswald shot the President John Fitzgerald Kennedy in his neck and he died soon afterward. On that same day, after hearing the sad news, the current director of the mint, Ava Adams made a phone call to the chief engraver of the mint, Gilroy Roberts to talk about the plans of putting the assassinated president on either a quarter which currently depicted Washington, half-dollar with Benjamin Frankin, or a dollar coin on which was currently the peace design. After talking with the deceased Kennedys wife, Jaqueline, Jaqueline had said that she would prefer him to be depicted on a half dollar. Shortly after this, many letters were received asking for a coin to honor him, and the chief engraver took Kennedys inaugural medal, and with several changes, both minor and major, it was ready to be depicted on the half-dollar. The assistant engraver, Frank Gasparro, engraved the reverse, which shows the Great Seal of the United States. In the middle of December, Jaqueline reviewed the designs and stated that she did not like how the hair was shown, so that was reworked to a layout that she liked. A little after one month from his death, congress approved the coin. It needed to be approved by congress because its design had not been in use for over 25 years. If a coins design has been in use over 25 years, the Secretary of the Treasury can authorize a change without consent by congress. By the time congress passed the law on December 30, 1963, dies had already been sent to the Denver Mint because of such high anticipation of congress approving the production.

On March 24, 1964, the coins were to be released. 70,000 coins had been approved for public sale and a limit of forty half dollars per person. Even though they were going to be released on the 24th of March, the day before, on March 23, long lines had already wrapped around the blocks which the distribution centers were located on. The people in the lines were full of anticipation to purchase half dollars commemorating the deceased president, John Fitzgerald Kennedy, and by the end of the day, the coins were sold out.

The United States Mint was originally planning on minting 91 million half dollars that year from all of the mints combined, but the supply ran dry, and they were still not circulating, so the treasury had to increase the maximum mintage to the large amount of 141 million coins, 50 million more than the treasury assumed would be needed. There was still not a sign of the coins in circulation due to the immense hoarding. By the end of the year, 160 million half dollars had been minted, but there was still an overwhelming and endless demand for the halves. The treasury requested congress if they could mint 1965 coins dated 1964 to help satisfy the strong demand, and by the time 1965 came to an end, almost 430 million halves here existent which were dated 1964. As a comparison, this is more half dollars then all of the Benjamin Franklin Half Dollars in existence!

Article Source

How Politics Affected Early U.S. Coinage Designs

A topic that is rarely thought of or talked about by collectors of coins from the early United States Mint is What events and thoughts made the designs of early U.S. coins look like they do?A fact that is not known by many collectors today is that politics of that day were a huge influence in the design changes of United States coins early on in the history of our country.

Very early on in the history of the constitutional United States there were to major political parties, the first of the two was the Democratic-Republicans and the second was the Federalists. The Federalists wanted an effigy of the president on the coins but the Democratic-Republicans wanted an effigy of Liberty with flowing hair. The effigy of Liberty narrowly got approved by three votes, thus making the designs of our earliest United States coins have Liberty with flowing hair. A myth that Washington did not want to be on coins is clearly not the truth, when the first U.S. election came around not a single vote was against Washington. Clearly, if Washington did not want to be on the coinage of the young government his wish would have been granted by far more than the small amount of three votes that made the design show what it showed for many, many years.

In the middle of the 1790s, the mint got a new engraver named Robert Scott to fill in the vital office of engraving the hubs, which in turn would be used to make the dies which would be used for the nations coinage. The engraver, Robert Scott, along with two directors which served during the same time period while he was in office were Federalists which strongly opposed the Democratic-Republicans view. Because the Federalists employed at the mint were strongly opposed to flowing hair being shown on the nations coinage, they quickly changed Lady Libertys portrait and added a hair tie also known as a filet to the back of Libertys hair to keep it from flowing and removed the liberty cap to form a design which would appeal Federalists much better than the earlier designs which had been on the coinage of the U.S. Mint.\

In 1793 the United States suspended payments to France on the loan that had been made during and to help fund the American Revolution. France decided to counter this and soon France started seizing United States ships. In 1798 Robert Scott decided to make a stern political statement by placing the arrows in the eagle's left claw of the hubs for silver coinage, the one that the eagle was looking at, stating that America was ready for war. While some people say that this was accidental, Robert Scott paid meticulous attention to detail, so much that there was no way that he could have made such an obvious but yet hidden blunder. Later that year, the United States started the Quasi War against the French and Robert Scott, through the eagle on the reverse of silver coinage surely and clearly expressed what the U.S. was thinking at that time period in regards to France. Several years later, the reverse design was subsequently changed showing a more realistic arrow with the arrows in his right talons and an olive branch in his left representing peace, this design was also by Robert Scott and showed that he clearly understood which position the arrows and olive branch should be in.

Even in the mid twentieth century one can find examples of politically motivated changes on coin designs. Democrat Franklin Roosevelt was placed on the dimes shortly after his death in office. Shortly after his assassination, Democrat John F Kennedy replaced Benjamin Franklin on the half dollar. Not to be outdone by the Democrats, the Republicans placed Dwight D. Eisenhower on the largest coins in circulation at the time, the large dollar coins. If you think the coinage today is free of political intrigue, what are your thoughts of the American Women series of quarters?What about the decision to replace John Flanagans winning submission of George Washington on the quarter with the design that was submitted by Laura Gardin Fraser?Are there any political statements with these changes, or are they simply a reflection of the times?

Original Article Source

Tips for Buying Gold and Silver Bullion

Gold and silver prices have been at or near record levels recently, heightening interest in buying and selling gold and silver coins. Consumers, however, should resist the temptation to make impulse buys or to sell an item before researching its potential value.

Bullion Buying Checklist

Following the checklist below is encouraged when buying or selling gold or silver bullion coins:

1.) The reputation and expertise of your bullion dealer is important. 

Your dealer needs to be a respected name in the industry with experience buying and selling bullion in fluctuating markets. 

2.) Know the actual cost per ounce of precious metals. 

Gold, silver, and platinum prices fluctuate daily, so check that day’s spot price prior to making a transaction. Expect to pay a higher percentage over melt value for fractional gold pieces (1/10th, 1/4th, and 1/2 ounce) than for one-ounce pieces. Also, American Eagle and Canadian Maple Leaf bullion coins typically have a higher retail price than South African Kruggerrand bullion coins.

3.) Understand the fees and/or commissions involved. 

According to the Professional Numismatists Guild, the average retail commission for one-ounce American Eagle or Maple Leaf gold coins is about five or six percent.

4.) Arrange for timely delivery.

If immediate delivery is not possible, obtain from the seller in writing specific confirmation about the delivery date. Only then should you execute your order.

5.) Know that all investments come with risks. 

If you intend to buy bullion coins for investment purposes, your best protection is to spend time learning about the coins before you buy them. Uninformed buyers who make hasty purchases often overpay. Like any investment, there are no guarantees – and no one can predict with certainty that gold and silver prices will remain at the current levels or continue to appreciate.

6.) Protect against identity theft. 

Do not give out credit card numbers or bank account numbers or other private information such as Social Security numbers over the phone to anyone not known to you.

Source

 

Annealing & Whirlaway B-Roll

This b-roll shows the blanks arriving at the annealing furnace, where they will be heated to soften the metal. [NOTE: For most coins, annealing is done in a large furnace. However, because this process is difficult to capture on film, this video includes a shot of a 3-inch medal being annealed by a blowtorch. Because medals are made in lower quantities, it is possible to anneal them by hand.]

From the furnace, the blanks drop into a quench tank to reduce the temperature. Next, the blanks travel through a huge cylindrical tube called the "whirlaway." Suspended high above the ground, these tubes tilt at a 45-degree angle toward the washing and drying station. As the blanks travel up the whirlaway toward the washer, excess liquid is drained.

After leaving the whirlaway, blanks are placed in a washing machine. Similar to the washing machine process you might have in your home, the blanks go through a series of cycles that soak and shake the blanks in various chemicals.  This is to remove any oxides, tarnish, discoloration or contamination that remains after annealing.

Blanking B-Roll

 

All coins start as a sheet of metal. The United States Mint buys metal strips that are about 13 inches wide and 1,500 feet long, and these strips are wound into giant coils, which are easier to move. Each coil is fed through a blanking press, which punches out round discs called "blanks." The strip of metal that's left over is called webbing, and it will be shredded and recycled—usually into another sheet of metal.

The Mint doesn't make blanks for pennies—it buys them. However, the Mint supplies fabricators with the copper and zinc that are used to make the penny blanks.