In my more than 40 years of experience in dealing in rare coins, and from what I’ve seen in my historical numismatic research, virtually all buyers of rare coins hope to make a profit on the rare coins they buy. This is true today, and it was true during the nineteenth and twentieth centuries and earlier.
I don’t know of anyone who thinks of rare coins as consumables, considering the money spent on them as just money that’s thrown away that will never be seen again. At minimum, coin collectors hope to at least get their money back when they sell their coins.
However, there seems to be a stigma within the coin “hobby” (some dealers call it an “industry”) about calling people “investors” who buy coins betting that they will appreciate monetarily during the long-term. This seems to describe virtually all coin collectors.
Is a person who spends, say $200,000, on a rare coin just a “collector” who doesn’t give a rip about the money? Is this a person who doesn’t care whether he’s getting fair value for the money, or even whether he’ll ever get the money back? I don’t think so!
I think such a buyer of a rare coin wants to be convinced he’s getting fair value for his money. He probably thinks about the carrying cost, also known as “opportunity cost” of owning this rare coin – in other words, lost interest or lost investment income on the money (of course this would be higher during times of higher interest rates). And he undoubtedly thinks about the potential for long-term appreciation in the market price of this coin.
Therefore, I believe that virtually all coin “collectors” can also be called “investors.” I think this is true, whether one is spending (investing) $50 on a circulated coin, or as in the above example, $200,000 on a very rare coin.
When considering such a purchase, buyers analyze the current market value of the coin, its grade, any problems it has, how it fits into their collection, who will want to purchase it in the future, etc. This is similar to an investor who buys a stock or a piece of real estate. They analyze their purchases. And most people enjoy the pride of ownership in owning stocks or real estate, or even fine art, just as coin collectors enjoy owning coins.
Even a pure investor has to learn something about collecting coins and the coin market. I was in the Philadelphia office of an attorney who collects coins a couple weeks ago. He’s a very knowledgeable collector who has fun with coins. We were reviewing his coins to decide which ones to submit to CAC for certification – this is another “investment” angle.
While there, he showed me a spreadsheet on which he analyzed the market prices and relevant factors, such as mintages and grading service population totals, about the area of coins he specializes in so he can make additional “investment” purchases. Obviously, this astute collector is using his coin collecting and market knowledge to profit, in addition to his enjoyment of the coin collecting hobby.
Of course some people have other hobbies that are pure hobbies, like fishing or visiting art museums, or even walkers, such as English “ramblers” who even have an association. But there are also people who monetize those hobbies, such as the fisherman who enters tournaments to win money, or the fine art connoisseur who invests in paintings.
So, while it’s true that one can be just a pure coin “collector,” without regard to monetary considerations, aren’t virtually all coin collectors part investor? Because of its nature, coin collecting is not a hobby that doesn’t have a financial cost. How about yourself – are you a pure coin collector, a collector/investor, or a pure investor?
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