The State Of Coin Collecting: Strong, Weak, or Something Else ?
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We talk about this in other threads, thought that this quote from an article a few years ago might elicit some interesting responses.

"...coin dealer and longtime consumer advocate Scott Travers, lamented the fact that a classic high-population quarter that he owned had lost significant value (from $34,000 to $6,000 USD) in recent years. He pointed out that the United States Mint had a customer base approaching one million people and proposed that somehow the coin industry, through better outreach, could bring those buyers into the classic coin market–thereby firming up the market for his coin. Charles asked to see Scott’s coin and commented on how nice it was and that he wished that it, and all other coins like it, had maintained their value but then offered a riposte: the U.S. Mint customer is not a classic coin customer because classic coins are now too expensive for them!

Scott replied, saying that the average Mint customer spends more than that over the course of the year. Without seeing the data Scott is referring to, one can assume that, given the fact that the Mint does not offer $6,000 coins, any collector that is using the U.S. Mint as a primary source for coins is spending significantly less than $6,000 on a per-coin basis. One also wonders, with a per capita GDP at just above $58,000, how many collectors in the United States have the resources to buy even one coin at such a price level.

If we are bemoaning how cheap $6,000 coins are compared to where they used to be, then you have to wonder: who is it, exactly, that we expect to sweep in and buy all this stuff?"

Folks..."Charles" is a 13-year old collector in the article. 

Complete article here:

https://coinweek.com/opinion/at-the-ana-many-attempts-to-bridge-the-coin-collecting-divide/

Lots of information to discuss...the specific coin that Travers is down on (I'm surprised it's down 80% because it looks like he paid a 1989 Bubble price and in other articles he talks about selling out of them and just moving on and taking your losses)....the Mint's customer base and how many transition to numismatic coins.....how much Mint customers spend on coins annually versus more hardcore collectors.

Edited by GoldFinger1969
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There are a lot of directions this thread could take.

If your question from the title of this thread is measured by the price level, this is a very imprecise metric.  I understand why people do it, but it doesn't really provide an accurate reflection of the state of collecting as a hobby.

The example from the article is primarily reflective of financially motivated buying and so are most other purchases anywhere near or above this price, especially for US coinage.  For all but a handful of buyers, there are plenty of comparable substitutes (either in slightly lower quality or another date/MM) at much lower prices.

To anticipate a possible reply, the distinction I am trying to make is that while no one may buy an expensive coin believing or intending to lose money, presumably they will be more willing to risk it for the low proportion of coins with higher collector appeal.

The only reason this coin sold for $34,000 previously is because it was bought during an unprecedented speculative environment.

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The state of the coin market is all the above at any given time and for certain segments of the market.  The coin market moves and flows has ups and downs and is subject to the manipulations of both speculators/dealers and collectors.  Some series come into favor and others fall out, white was king now color is, red was king now brown is sought, this too will change going forward.  With regard to the specific passage you quoted Scott bought and held an item at the wrong time for too much and who's population likely increased (I did not read the article so that is an assumption on my part) all of which led to a decline of value.  If you want to play in the deep end of the pool you have to accept that you are risking large losses.

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33 minutes ago, World Colonial said:

If your question from the title of this thread is measured by the price level, this is a very imprecise metric.  I understand why people do it, but it doesn't really provide an accurate reflection of the state of collecting as a hobby.....The only reason this coin sold for $34,000 previously is because it was bought during an unprecedented speculative environment.

Yes, it's just that at the time this article was written (2017) it was 27 or 28 years past the Coin Bubble peak and in the past Scott Travers talked about moving on from coins that had gotten slammed.  It's possible he just likes this particular one.  I was just surprised an actual hardcore collector/dealer was still holding something from the Coin Bubble 27 years later (I assume it was purchased then, because I can't see that price paid and the subsequent decline from buying it anytime after the 1990's).

33 minutes ago, World Colonial said:

To anticipate a possible reply, the distinction I am trying to make is that while no one may buy an expensive coin believing or intending to lose money, presumably they will be more willing to risk it for the low proportion of coins with higher collector appeal.

Gotcha....and it might be a particular type that Travers likes, so no argument still holding it.

What makes it stranger is that the coin at $6K probably is UP from recent lows and the post-Bubble crash yet it is stil down over 80%.  That's a REAL SHELLACKING that is probably in the extremis.  I would think that trophy or high-end ultra-rares would go down less just because they have deep-pocketed buyers willing to pony up at a certain level, unlike Morgans that can go down 75% and the price can't move up because there are thousands at the grade level available.

Edited by GoldFinger1969
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2 minutes ago, GoldFinger1969 said:

Yes, it's just that at the time this article was written (2017) it was 27 or 28 years past the Coin Bubble peak and in the past Scott Travers talked about moving on from coins that had gotten slammed.  It's possible he just likes this particular one.  I was just surprised an actual hardcore collector/dealer was still holding something from the Coin Bubble 27 years later (I assume it was purchased then, because I can't see that price paid and the subsequent decline from buying it anytime after the 1990's).

I don't believe that either he or hardly anyone else really likes this type of coin anywhere near as much as inferred or claimed by US "collecting".  That's why I pointed to much cheaper substitutes.  Anyone can buy this type of coin any day of the week which is why I ignore all the hype expressing contrary sentiments.   They can buy it later whenever they want for less if it loses value.

While I have not read all his books or articles, he sure writes about the financial aspect a lot for someone who is supposedly so interested in collecting.  (I post about it because of the underlying buyer behavior, since there is little or nothing actually interesting about the coin being discussed most of the time.)  This isn't a criticism of him specifically, it's a common reflection of particularly US buyers of most expensive US coinage.

12 minutes ago, GoldFinger1969 said:

What makes it stranger is that the coin at $6K probably is UP from recent lows and the post-Bubble crash yet it is stil down over 80%.  That's a REAL SHELLACKING that is probably in the extremis.  I would think that trophy or high-end ultra-rares would go down less just because they have deep-pocketed buyers willing to pony up at a certain level, unlike Morgans that can go down 75% and the price can't move up because there are thousands at the grade level available.

I don't find it surprising since I don't see the coin as I infer from your post, though I do believe it it's how many (maybe most) US based collectors see it.  This is my opinion of most supposedly "trophy" US coinage where most of the distinction reflected in the price is actually from the TPG holder label.  Sure, the coin is nice but I can buy a comparable substitute for a fraction of the price or something else far more interesting for the same or a lot less if bought as a collectible.

There are other (US) coins fitting the description you provided, but this isn't one because it wasn't competitive versus the alternatives anywhere near peak price.

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Overall, I don't believe that "coin collecting" is really about money. Once a person transitions to acquisition for monetary reasons, they become merely speculators. That's a rather broad statement but seems to fit 19th and 20th century collecting patterns.

U.S. Mint's mailing list size is of limited consequence for the reasons World Colonial mentioned. A partnership with ANA might be fruitful, but ANA is too inept to be of much help, and the present Mint Bureau is too profit-oriented to care. The Mint's numismatic items are strictly business, completely free of real pleasure.

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36 minutes ago, RWB said:

Overall, I don't believe that "coin collecting" is really about money. Once a person transitions to acquisition for monetary reasons, they become merely speculators. That's a rather broad statement but seems to fit 19th and 20th century collecting patterns.

I agree with you but with the added qualification that it varies with the types of coins being bought.

Going by the TPG population data, "widget" coins like common pre-1933 gold and Morgan dollars must either be predominantly owned by non-collectors or by collectors in multiple for financial reasons.  There aren't anywhere near enough collectors for the supply and no one needs more than one or at most a few examples for their collection.  Similar idea for most NCLT which seems to be bought as a metal substitute.

Low priced coins such as those collected in the US in the 1960's are recreational purchases; an alternative form of consumption.  Since collectors are more affluent now versus the past, I'd guess that the price point where this applies is noticeably higher, depending upon what is being bought.

For everything else, since (expensive) coins usually aren't competitive "investments", I don't believe collectors are usually buying it strictly for financial reasons.  Concurrently, they would usually never buy it without the expectation of getting most, all or more of their money back.

When the coin is actually difficult to buy and especially has a higher preference, collectors will be far more willing to "stretch" at a price which includes years of potential appreciation.  That's what I do on occasion and have read the same sentiments many times.

There is no point in doing that for most higher grade US coinage because it isn't actually scarce and can be bought any time or near future.  It also isn't usually interesting enough where they won't usually settle for a slightly (or even much) lower quality and (much) cheaper substitute or just buy something unrelated.

How the above applies is collector specific predominantly driven by their financial circumstances, risk tolerance and attitude toward collecting.

Edited by World Colonial
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My own experience is that as a person who bought occasional gold and silver bullion from the U.S. Mint and/or LCS....eventually I got into other gold (Saints) and silver (Morgans, commemoratives) coins.

I had never even heard of Saint-Gaudens coins I think until the 2009 UHR.  Ironic, because a family member who was buying gold for close to 20 years while I did financial work for them was in fact buying Saints from Blanchard, probably mentioned it to me (the specific type), but I never put 2 and 2 together and followed up.

Edited by GoldFinger1969
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5 minutes ago, RWB said:

TPG data are fundamentally biased and flawed. They are of little use except to confuse.

True, but I don't believe that wrong for the most common coinage which is listed by the tens or hundreds of thousands: 1904 double eagles, some Saints, really common Morgan and Peace dollars up to MS-66.  The price spreads between the grades with the highest populations and the probability of an upgrade usually either make it pointless or of limited financial benefit.  There is limited motivation to resubmit an 1881-S MS-65 Morgan dollar or a 1904 MS-63 DE.

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12 minutes ago, GoldFinger1969 said:

My own experience is that as a person who bought occasional gold and silver bullion from the U.S. Mint and/or LCS....eventually I got into other gold (Saints) and silver (Morgans, commemoratives) coins.

I had never even heard of Saint-Gaudens coins I think until the 2009 UHR.  Ironic, because a family member who was buying gold for close to 20 years while I did financial work for them was in fact buying Saints from Blanchard, probably mentioned it to me (the specific type), but I never put 2 and 2 together and followed up.

My inference is that your example isn't unusual.  With many mints selling NCLT and bullion, those inclined to buy gold and silver bullion will transition to collector buying the series you mentioned.

They may also hold these coins for years or decades for philosophical reasons, something they would never do for any coin with a noticeable numismatic premium.

This isn't because they believe gold, silver or these coin substitutes are necessarily fantastic investments, but because they see it as the best lowest risk option to preserve their purchasing power and living standards.

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3 minutes ago, World Colonial said:

There is limited motivation to resubmit an 1881-S MS-65 Morgan dollar or a 1904 MS-63 DE.

Right, there are certain levels at which the price spikes up a ton.  It's also why a "+" or CAC designation can be worth alot to price at the inflection points.

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3 minutes ago, World Colonial said:

My inference is that your example isn't unusual.  With many mints selling NCLT and bullion, those inclined to buy gold and silver bullion will transition to collector buying the series you mentioned.  They may also hold these coins for years or decades for philosophical reasons, something they would never do for any coin with a noticeable numismatic premium.  This isn't because they believe gold, silver or these coin substitutes are necessarily fantastic investments, but because they see it as the best lowest risk option to preserve their purchasing power and living standards.

Yup.....I hope to buy a 1907 HR which will cost a multiple of the gold bullion content.  Hopefully, it appreciates but if it goes up 40% in price or down 25% from the price I pay I will not be selling/buying. 

Of course, if I had one and it went up like 3x in value in a year or two because of a bubble-spike or something, then I might take the money and run and hope to buy back later at post-crash prices.  xD

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It appears to me the OP is heavily biased towards the dealer experience.  In that case, financial gain always seems to be the overriding determinant of how "enjoyable" the coin market is.

I am primarily a collector, so for me, the enjoyment experience trumps issues like "price" and "value".  I have overpaid for coins numerous times (sometimes heavily), because I know that the pleasure of owning the coin more than makes up for losing some money during the financial transaction.  (That's why I have owned many of my coins for 30 years or more.)

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2 hours ago, James_OldeTowne said:

It appears to me the OP is heavily biased towards the dealer experience.  In that case, financial gain always seems to be the overriding determinant of how "enjoyable" the coin market is.

I'm not a dealer, just a collector.  But I do think that the hobby would be worse if not for dealers.

Financial gain has NOTHING to do with my enjoyment of the hobby.  I would only hope if the prices on stuff I already own were to take a big hit, that I could buy my Wishlist Coins at a nice discount. 

James, my coins are a pleausre, not a financial resource I count on.  Like you it's nice if I bought them at a good time/price but it's the enjoyment of the coins that matters most to me.

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Edited by GoldFinger1969
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I'll just say this. While my dad and both loved collecting coins over the years, absolutely NO ONE in my family is interested in coins at all.  I am at the point in my life where I know that if I die, my collection will be sold for pennies on the dollar by my heirs.

I am seriously thinking of selling my collection at this point in my life (65 years old) and just having fun with the proceeds. I am having a hard time deciding what to do.

Very sad.

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44 minutes ago, MorganMan said:

I'll just say this. While my dad and both loved collecting coins over the years, absolutely NO ONE in my family is interested in coins at all.  I am at the point in my life where I know that if I die, my collection will be sold for pennies on the dollar by my heirs.

Only pennies on the dollar ?  Did you buy alot of stuff "high" or it just never moved up ?

I'd say on balance my stuff, going back 20 years or so, is up because of the low prices I paid for some silver and gold coins, esp. bullion or quasi-bullion.

44 minutes ago, MorganMan said:

I am seriously thinking of selling my collection at this point in my life (65 years old) and just having fun with the proceeds. I am having a hard time deciding what to do. Very sad.

No nieces or nephews or friends of the family who are into coins ?  What about responsible financial investors....someone like that might appreciate coins as a quasi-investment.

Nothing wrong either with enjoying the proceeds, esp. if $$$ are tight.

Edited by GoldFinger1969
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Being newer to the hobby than most, and living in the Northeast, I think the hobby is doing well or strong.  

I'm a member of 3 clubs and they have between 20 to 50 active members in each.

There are two monthly shows that I attend that are always busy, admittedly, 1 had less dealers during my visit last month, and the second has their first show this weekend.

The local bi-monthly auction is well attended and realizes good prices.

If these people are all chasing financial rewards, the hobby is in much better shape.  If they're collecting because they enjoy it, the hobby seems vibrant.

I've gotten to the point where I've found my niche and am focusing on those items and having fun.

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State of collecting I believe falls under the categories of strong and something else.  Still a strong base of collectors - old school, and a new school growing segment of online only types in the hobby.   The online only types makes judging the hobby from turnout at shows, brick and mortar shops, and live events no longer be a good measure of how the hobby is doing.  Hobby is strong just evolving to the current times in many ways.

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On 11/5/2020 at 10:22 AM, GoldFinger1969 said:

Scott replied, saying that the average Mint customer spends more than that over the course of the year. Without seeing the data Scott is referring to, one can assume that, given the fact that the Mint does not offer $6,000 coins, any collector that is using the U.S. Mint as a primary source for coins is spending significantly less than $6,000 on a per-coin basis. One also wonders, with a per capita GDP at just above $58,000, how many collectors in the United States have the resources to buy even one coin at such a price level.

If we are bemoaning how cheap $6,000 coins are compared to where they used to be, then you have to wonder: who is it, exactly, that we expect to sweep in and buy all this stuff?"

Lots of information to discuss...the Mint's customer base and how many transition to numismatic coins.....how much Mint customers spend on coins annually versus more hardcore collectors.

Thought I would comment on this part of your post since I did not initially.

My description of the bigger spending "collector" US Mint customer is someone who is primarily buying NCLT (mostly everything other than commemoratives) as a metal substitute.  If this is their primary interest which I infer it is for most, they aren't candidates to buy any coin like an MS-65 Barber quarter.

Those who buy annual sets and commemoratives other than gold are either casual collectors, lower budget collectors or it's a sideline collection, not their primary interest.  Plenty of collectors on coin forums (some of whom seem to be hardcore) buy US Mint products as a sideline.  However, going by sales data, they are a minority.

The other two groups don't buy more expensive US classics either, either because they cannot afford it or have no interest.  Some casual collectors are potential candidates but that's all it will ever be for most of them.

As far as I am concerned, the reason this outcome was supposedly a mystery is frequently a detachment from reality.  That's what the article politely implied.  Reminds me of another article where another dealer hoped low budget collectors would "stretch" for a G-4 Trade Dollar then selling for about $500.  This isn't a mystery either.  Low budget collectors don't buy $500 coins and those who can seldom find the series competitive at this price in this quality.

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Excellent points, WC.....as I/we mentioned above.....as you get an increasingly sophisticated (financially) populace more inclined to save for their retirements and basic needs....they will learn about having some PMs in their portfolio and possibly segue over to numismatic coins either as a substitute (i.e., generic Saints in place of Eagles/Buffalos) or as an addition.

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1 minute ago, GoldFinger1969 said:

Excellent points, WC.....as I/we mentioned above.....as you get an increasingly sophisticated (financially) populace more inclined to save for their retirements and basic needs....they will learn about having some PMs in their portfolio and possibly segue over to numismatic coins either as a substitute (i.e., generic Saints in place of Eagles/Buffalos) or as an addition.

Not sure it is the result of increased sophistication but not trying to argue your point now.

Most people are crowd and trend followers, financially and otherwise.  This psychology explains the historic relative overvaluation today and for the last several decades in bonds (especially low quality garbage debt), US stocks and real estate.  It also previously existed in foreign stock markets and commodities.

I'm not bullish on the metals now but expect a bigger run-up later.  This is what I believe will get the public into PMs and indirectly, the coinage you mentioned.  I don't believe it will make much difference with other coinage but I might be wrong about that.  This is the only reason I can find to be long term positive on coin prices generally, as I otherwise expect an increasingly poorer population to be less inclined to buy most luxuries and don't believe the collector base will increase meaningfully either.

My inference is that the current primary buyer of generics is the "metal bug".  They own it as a permanent hedge though a few presumably believe it will make them rich.  I still believe enough of these people will be forced sellers later when economic conditions deteriorate substantially but we will see about that.

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1 minute ago, GoldFinger1969 said:

I think most Americans, even those in the investor class, are not aware of our rich history and artistry involving our currency and bills.  I know I wasn't and I'm a voracious reader and historian.

I presume most Americans from the traditional collector demographic group are aware collecting exists.  Those from more recent immigrant heavy groups, a lot less or not at all.

Where I differ with many other coin forum participants is that I disagree that any meaningful proportion or number of these people would become collectors if they knew more about it.  Certainly not where they would become so interested they would drive the prices of the coins most forum participants own meaningfully higher.

It isn't a lack of knowledge or awareness, it is a lack of interest.  I can also repeat my prior comments on how this relates to the current US pricing structure but anyone who has read my posts already knows what I think about that.

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On 11/5/2020 at 10:22 AM, GoldFinger1969 said:

We talk about this in other threads, thought that this quote from an article a few years ago might elicit some interesting responses.

"...coin dealer and longtime consumer advocate Scott Travers, lamented the fact that a classic high-population quarter that he owned had lost significant value (from $34,000 to $6,000 USD) in recent years. He pointed out that the United States Mint had a customer base approaching one million people and proposed that somehow the coin industry, through better outreach, could bring those buyers into the classic coin market–thereby firming up the market for his coin. Charles asked to see Scott’s coin and commented on how nice it was and that he wished that it, and all other coins like it, had maintained their value but then offered a riposte: the U.S. Mint customer is not a classic coin customer because classic coins are now too expensive for them!

I guess what stands out to me with this quote is "high-population quarter." There are different aspects that can drive up a coin's price. Attractive eye appeal, ultra high grade, rarity, etc. If it's a coin with a high population then you're taking a greater risk. I don't know what the coin was but it doesn't surprise me that it could drop so much in value.

 

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24 minutes ago, punkaccountant said:

I guess what stands out to me with this quote is "high-population quarter." There are different aspects that can drive up a coin's price. Attractive eye appeal, ultra high grade, rarity, etc. If it's a coin with a high population then you're taking a greater risk. I don't know what the coin was but it doesn't surprise me that it could drop so much in value.

A coin like that is strictly numismatic, collector, or registry needed.  So yeah, big risk.

Now....there may be some risk with a 1907 High Relief Saint, too.  But at least there you are buying a unique coin -- a Double Eagle -- getting 1 ounce of gold ($2,000 today), getting a very famous sculptor's most famous work, getting what some consider the most beautiful coin ever produced by the United States, etc.

I'd be OK buying a premium 1907 HR Saint for $20,000 and then watching it lose half its value if I bought at exactly the wrong time.  I'd be less forgiving if I bought a mass-produced nothing-special quarter or half-dollar etc.

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28 minutes ago, GoldFinger1969 said:

A coin like that is strictly numismatic, collector, or registry needed.  So yeah, big risk.

Now....there may be some risk with a 1907 High Relief Saint, too.  But at least there you are buying a unique coin -- a Double Eagle -- getting 1 ounce of gold ($2,000 today), getting a very famous sculptor's most famous work, getting what some consider the most beautiful coin ever produced by the United States, etc.

I'd be OK buying a premium 1907 HR Saint for $20,000 and then watching it lose half its value if I bought at exactly the wrong time.  I'd be less forgiving if I bought a mass-produced nothing-special quarter or half-dollar etc.

Your description seems to be how most think.  The 1907 HR Saint is the most expensive coin I know for it's availability.  I'm not aware of another that is even close where the number of survivors all sell for at least five figures.

Previously for some reason, I thought the article said it was a semi-key Barber but it does not.  I'm guessing now that it's one of the more common Liberty Seated, better date Barber, or better date SLQ in at least 64 up to 66.

The pool of buyers for any of these coins even at $6,000 is very shallow.  

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1 hour ago, World Colonial said:

Your description seems to be how most think.  The 1907 HR Saint is the most expensive coin I know for it's availability.  I'm not aware of another that is even close where the number of survivors all sell for at least five figures. Previously for some reason, I thought the article said it was a semi-key Barber but it does not.  I'm guessing now that it's one of the more common Liberty Seated, better date Barber, or better date SLQ in at least 64 up to 66.  The pool of buyers for any of these coins even at $6,000 is very shallow.  

Yeah, you might get 1-time buyers of a 1907 HR from someone who reads about the coin or ASG, but the odds of someone forking over $6,000 for a Liberty Seated is pretty much confined to hard-core collectors.

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14 hours ago, GoldFinger1969 said:

Only pennies on the dollar ?  Did you buy alot of stuff "high" or it just never moved up ?

I'd say on balance my stuff, going back 20 years or so, is up because of the low prices I paid for some silver and gold coins, esp. bullion or quasi-bullion.

No nieces or nephews or friends of the family who are into coins ?  What about responsible financial investors....someone like that might appreciate coins as a quasi-investment.

Nothing wrong either with enjoying the proceeds, esp. if $$$ are tight.

I meant pennies on the dollar in today's market, ie, they would have no idea what to sell them for or to whom. And because of their lack of interest, would sell for less than market to get rid of them and have a little cash.. Tha vast majority of the coins I have were collected back in the 50's and 60's. The value has risen tremendously if I use that as a cost basis.

Money is not tight, but that is not the issue. I worked hard collecting what I have, and just do not want someone who they have no meaning to selling them. I would rather be the one to do it. I could chose who gets them, like collectors rather than some local gold and silver dealer who would just buy for melt prices..

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