Self Reliance

One of the great things about buying hard assets is that it promotes self reliance. Self reliance is one of the most important keys to success as it helps to abate entropy. In other words, if your life is engineered so that you rely on others to fill your needs then your life will tend towards disorder, either very rapidly as in the case of the real estate market melting down or through inflationary attrition.

By taking some of your money slated to saving or investing and using it to buy hard assets you will have one more form of wealth in your tool box. You will also have a form that cannot be taken away by a bank going under, or by a rogue trader burying the company in which you're a stockholder in a mountain of risky derivatives.

There is a wide range of hard assets available to people based on their interests. High end watches, art, cars, guns, diamonds and gold come to mind first. But neither anything that is sought after by collectors can be considered a hard asset. For my purposes I wouldn't consider livestock to be a hard asset because it's not something you can simply store properly and forget, but many people might debate the point with me. They are of course fundamentally correct to consider live stock because the single most important feature to properly acquiring hard assets is that you understand the asset at a basal level. It must capture the attention of your Id so to speak.

Coins and precious metals are by far the best hard asset to buy, simply because they are the most liquid. Other hard assets such as cars or guns can be somewhat difficult to sell. You have absolutely got to find the right guy when he has money in his pocket. Diamonds are liquid but the entire market is dominated by people trying to buy them cheap and so you have incredibly large spreads. Other than coins and precious metals nothing offers such a tight market (buy/sell spreads) and the ability to get fast cash most anywhere.

Remember, self reliance is a hard won attribute but well worth it. Promote self reliance to yourself, friends, and children by encouraging them to sock some metals away.

The balance of the coin market.

With the economy's woes over the last few years one thing that may or may not be surprising is that the demand for coins has remained strong. There have been some price corrections, but as a whole the prices of rare coins have done very well.

One of the biggest factors for coins doing well is the fact that many of them are made with precious metals. Gold and silver are primary metals that many coins were made of for years. With the prices of gold and silver rising over the last few years it has also brought up the prices of rare coins. Silver quarters that were worth $1-$1.50 each are now worth around $4 each just based on their silver content. Common silver dimes, quarters, halves, and dollars have all experienced price increases because of silver being worth more.

Equally, gold coins have done very well. A typical $20 gold coin that was $300-$350 in the late 1990's is now $1500-$1650. But the metal content is not the only rise that common gold coins are experiencing. Lets look at a $20 Saint Gaudens as an example. Years ago a nice uncirculated coin (MS-63) would typically bring about $75 over the spice of spot. Today that same coin trades at $250-400 over the price of spot. Not only is the gold worth more, but the premiums are up as well.

Rare date dollars are a good area to look at for price corrections. I will use the example of an 1879-CC Morgan dollar in MS-63. At the peak of the market this coin was worth $6,500-$7,000. Today it is worth $5,000-$5,500, but if you look back just a few years further it was only worth about $3,000. Yes the price has corrected, but it still worth much more than it was about seven years ago, and today the market is holding firm.

Prices of rare coins are good news in our economy today. With those looking for extra cash, selling coins or a coin collection is a great option. The coins are generally worth more today than they were 5-10 years ago, and that is a great thing for those who need cash. Many collectors that were buying coins over the last 20 years are now able to cash them in for hefty profits. The proverbial “rainy day” saving of rare coins is paying off.

Just as interesting is that many are actively seeking rare coins as a way to store value. Over the last 20 years many collected out of excess, but today are buying coins as a way to preserve value. Demand for rare coins remains very strong.

The market today is experiencing a nice balance. Which way the pendulum will swing from here is yet to be seen, but for right now it is a great time for buying or selling.

Use your experts if you are investing in coins

Coin collecting has long been a hobby, but over the last few decades the skyrocketing value of rare coins has attracted a new set of buyers who are looking at coins as an investment. Making investments in coins can be very lucrative and has out preformed many investment sectors in the last decade. Unlike a collector, the investor has a different set of rules for making purchases.

With this in mind a savvy investor should be consulting more than one expert.

Since coins are the main focus of this investment sector a professional coin dealer is an obvious first choice. A knowledgeable dealer can steer one away from deals that are not what they appear to be. In rising markets there are many sales forces out there that vie for limited investment dollars. Salesmen are often focused on selling coins that have a higher percentage of profit for themselves and not on what is priced best in the market. Knowing how to steer through these turbulent waters and getting price double checks is a must.

Investing does not stop with finding a dealer though. One must also have an accountant or tax adviser in their corner if they are looking to maximize their investment. An accountant can help one through the tax consequences of profit or loss accrued while investing. Keeping records is first and foremost on the investing side. Knowing what the profit, or loss, is can help one formulate a strategy for selling when the time comes. Some items may be taxed differently than others. You may end up paying more taxes if you sell without consulting your accountant first, especially if you are straddling a new tax bracket.

When investing, knowledge of the various rules involved in buying and selling coins or bullion is very helpful. A professional coin dealer can help with a host of these cash and reporting rules, but an accountant will also help in knowing what the tax consequences may be. Using experts in different fields helps streamline the process.

Of course when it comes to coins very rarely do we see a person that is strictly a collector, and conversely we rarely see one who is just an investor. Collectors usually do not buy coins without having the thought that one day it will hopefully be worth more. Investors seldom buy coins unless inspired by an aesthetic desire. The blend of emotional and rational thought goes into nearly every coin buying decision.

For most involved in coins, it will be a convergence of hobby and investment. Keeping records of purchases and sales is one of the most important things you can do. It can help to show where your emotional focus is and give your accountant the accurate information needed to comply with tax rules. Make sure you are talking to both you accountant and coin dealer before making large uninformed leaps, both professions can help you to make a sound decision.

Cleaning coins: removing dirt and value

 

If you want some good advice, “Don't clean your coins” is just that. Does this mean that coins should never be cleaned? No, but usually cleaning your coins removes not only dirt, but also value.

There are really only a two ways to clean coins, abrasives or solvents. An abrasive will leave tell tale signs that a coin has been polished or cleaned. From harsh abrasives such as Brillo pads to mild ones such as tooth paste or silver polish both change the surface of a coin forever by putting lines in the metals surface. Solvents on the other hand tend to be used more. From the mildness of water to the power of acids solvents don't add lines to a coins surface. But an acid actually removes a microscopic layer of metal from the coin, altering the original luster forever.

Most collectors want to buy coins in their most original state, and each stage of circulation has its own unique characteristics. People often clean coins to try to make them look better than they really are. Most collectors and dealers quickly recognize these cleanings and are not fooled.

If there is something on the surface that is harming the coin (such as PVC, or polyvinyl chloride from plastics) cleaning the coin will actually preserve it. Toning, or tarnish, shows that a coin is original and uncleaned. If the toning is nice looking it actually adds value to a coin. Toning is an oxidation of the metal and if it is going too far into the surface of the coin it may be removed to preserve the coin.

Two negative scenarios stick out in my mind. 

Once I appraised a collection of Carson City Dollars. The coins were polished with a buffing wheel. The owner stated that a jeweler friend of theirs had polished the coins as a favor because they were toning a little. Now worth a mere $9,000 the collection would have been worth over $30,000 had it not been polished. If the collection had been left alone or maybe dipped in a mild acid if the toning was harming the coins these folks would have preserved most of their coin value.

The other example was when a man with a metal detector found a rare $20 gold coin. With a squirt of water and a quick rub with the thumb he was able to read the date. But, with that rub the dirt etched the surface and took his $12,000 prize down to a mere $2,000 find. Leaving the dirt on the coin was not an option, but by 'field cleaning' the coin the abrasiveness of the dirt marred the coins surface forever.

Knowing which coins need cleaning or preserving can be determined by asking an expert. I always tell my clients that less than 1 in 1000 coins that come into our store ever need cleaning. Cleaning them the wrong way could ruin them forever. If you are unsure just take the advice, don't clean your coins and ask an expert.

Twenty Cent Pieces; The Susan B. Anthony of the 1800's

 
Many can remember when the Susan B. Anthony (SBA) dollar debuted in 1979. The coin was about the same size as a quarter, had the same color, and what most would describe as an ugly design, plus it was easy to mistakenly pass out as a quarter if one wasn't focused on their change. With waning popularity and people grumbling that it was too confusingly close to the size of a quarter the coin was quickly discontinued in 1981. Most of the 1979 issues were put out into the real world to circulate, by 1980 very few wanted to get the new dollar coin and by 1981 none that were minted were released to general circulation. Revived in 1999 for a short run before the of Sacagaweas and Presidential dollars the SBA was a miserable failure.

Interestingly enough, the SBA had a predecessor of similar disgust in the 1800's. With a lack of change circulating, the U.S. mint tried a number of new denominations to help in change making. The shortest lived was the twenty cent piece. Born in 1875 it was only struck for circulation until 1876. Then the next two years saw proof strikes for collectors only.

The coins diameter was very close and the obverse design was nearly identical to that of a quarter. Consequently people hated the coin and very few were struck. Three mints produced the twenty cent coin. Philadelphia in all four years, Carson City in 1875 and 1876, and San Francisco in 1875 only. San Francisco produced the most coins by minting over 1.1million in 1875. Philadelphia produced them for four years, but still only made less than 53 thousand. Carson City struck just over 143 thousand, but of the 10,000 struck in 1876 most were melted.

If one is looking to obtain a twenty cent coin it can be done starting at about $100, but if you wanted to complete a set of these cast-offs from the 1800's be prepared to spend a few dollars. The Philadelphia 1875 and 1876 coins start at about $200, but the 1877 and 1878 coins totaled less than 1,000 pieces and will set you back anywhere from $3,000 and up. San Francisco coins are obviously the easiest and start at about $100. Carson City coins are where things get expensive. The 1875-CC is not too expensive and starts at about $300, but the 1876-CC has become legendary.

With the twenty cent pieces being chided as a mistake the mint ordered Carson City to destroy what coins they had not released to the public. So, even though 10,000 coins were struck most ended up in the melting pot. Today it is estimated that there are only about 15 pieces known to exist. Most of the coins known were pieces that had been sent back east for assay. Only a couple are believed to have made it into circulation and finding one would be any collectors dream. But with the 1876-CC coins starting in the six figure range it could pay to look for one.

Putting your two cents in

 

Sayings sometimes reflect bygone eras that are now just distant and foreign to today's society. The phrases, “two cents”, “your two cents worth”, or “put your two cents in” are used in some of our lingo today, but most have never even seen a two cent coin.

Our two cent coin was introduced in 1864. As the civil war marched on a lack of coinage in the country spurred the minting of a two cent piece. During the war people hoarded coins of copper, silver and gold. With uncertainty in the air most were trying not to have their value tied up in paper currency, especially since there was no way of predicting which currency would end up being worth even the paper it was printed on. Postage was either two or three cents at the time and with the lack of cents circulating our government was looking for solutions to these short comings, and so a natural coin to introduce was the two cent coin.

The two cent coin carried a motto that had never been used in our coinage before but is now on all of our coins, “In God We Trust”. Increased religious sentiments during our country's civil war spurred this new motto. Since the motto's inception it has appeared on nearly every U.S. coin designed. Two cent pieces were struck in copper at twice the weight of a copper cent minted in the same year.

The need for two cent coins abated after the civil war and so they were no longer minted after 1873, and in 1873 only proofs were minted for collectors. One of the shortest lived coins ever produced in America, today it is increasingly popular with coin collectors. Ironically since the need for small coinage was so great, today a two cent coin can be found for under $20. With a mintage of nearly 20 million in 1864 and another 13+ million in 1865 the two cent piece is part of many collections today.

Overall the denomination was only struck for ten years making it a relatively easy set to collect today. According to price guides a complete set (including the large and small motto varieties of 1864) can be obtained for under $3,000. Just like any collectable the price can vary by demand, and condition can also be a factor. In 2008 an 1872 in MS-65 Red sold for over $37,000 at public auction. And one of the rarest was sold in October of 2000, an 1864 Small motto in Proof 66 Red realized over $74,000 and has an estimated value of more than $100,000 today.

Whether you just want to own one as an example or if you want to challenge yourself to a world class registry set, the two cent series can be a fun way to collect part of our history. And if you are ever asked to give someone your “two cents worth” you will now be able to relate this saying to its origin.

Roadshows: Here today gone tomorrow.

 

   A few years ago PBS developed a new phenomenon, “The Antiques Roadshow”. This now famous show travels from city to city offering appraisals for antique items. The appraisal event is recorded and edited into a television show which is aired on PBS. As experts describe the items owners and the audience wait with baited breath for the final conclusion. Is this item worth a lot of money? Some items look very plain and are worth small fortunes. Others look expensive and turn out to be worth very little or are reproductions. Either way it is engrossing to watch as items are appraised.

    “The Antique Roadshow” is not a forum for selling ones items. In fact “The Antiques Roadshow” prohibits any of its appraisers from using “The Antiques Roadshow” name to solicit business from the public. Why is this fact important? There are companies that travel around trying to buy old items that use 'Roadshow' in their name. Do not be confused, these people are not “The Antiques Roadshow”.

'Roadshow' buyers enter a town, advertise heavily to buy for a few days, and then are gone. These buyers play on the fact that you only have a few days to see them before they are gone. This scenario entices many people to visit these road buyers while they are in town.

    A wise person will recognize the fact that these companies spend enormous amounts of money to operate in a single area for just a few days. What does this mean? These road buyers must make very large profits to cover their expenses. The only question is, “at whose expense?”

    Checking with local buyers may often produce much higher payouts for your same items. Antique stores, coin shops, and pawn shops most often beat the prices offered by out of town buyers and the profits even stay in your own local economy.

If you are visiting an out of town 'Roadshow' and they are offering to buy your items they are not “The Antiques Roadshow” you see on television. If you end up visiting their show take the time to get a second offer before you sell to them. You may just be surprised at how often a local buyer pays much more that these road buyers. But remember, it is impossible to get a second offer after you have already sold your items to out of town buyers.

The Amazing Brokencc

The backbone of Numismatics is collecting and every dealer likes to specialize in his or her own area. At Northern Nevada Coin our signature collection is comprised of silver dollar errors. This is a highly specialized purview and proves difficult to find really great pieces. For the most part this is due to the large size of the coin, making quality control much easier and the smaller mintages.

Our trademark error is an 1884-CC Morgan Dollar that is split almost perfectly in half, and we have both halves preserved in MS64, an exceptional high grade for this era. CC coins were minted in our hometown of Carson City in the late 1800's during the Comstock Lode era. We do believe that this piece is unique and more interesting than any other coin we have ever seen.

A great deal of research has been done by our staff in order to determine exactly how this unique piece was preserved. During the minting process metal alloy is rolled out like cookie dough. Blanks, or planchets, are punched from the strips, just like making cookies. Occasionally the planchet suffers from an improper mixing of the metal. This happens more often than you might think, and when it does results may vary. Most often small flakes break away from the coin. Every once in a while a much larger break will occur, usually splitting the coin in half like an Oreo cookie.

The rarest occurrence is when there is a break across the coin such as the one we have.
Most of these types of errors would have never left the mint building because at that time coins were just money and nobody wanted a piece of money they couldn't spend. Besides that, the coiner could be fired for shoddy work. Quality control would have thrown this one back into the melting pot had they caught it. The fact that the break occurred on such a large coin also adds to its intrigue. On larger coins, errors were most often caught and destroyed at the mint being as they were easier to spot, imagine trying to spot errors in a great vat of dimes. Another amazing fact is that both halves of the coin remained with each other. In the world of errors, split planchets often have only one the two pieces surviving. We are glad that this coin has come to us having survived all these years in the state of preservation that it is.

Value? Errors are highly sought after prizes. It is a Morgan dollar error, which are exceedingly rare- It is the most dramatic error we have ever seen on a Morgan dollar- The Morgan dollar is the most widely collected series in numismatics, making this piece of great interest to many collectors- Furthermore, it is a Carson City Morgan dollar- of which, the CC mint mark is the most sought after mint, and many collectors collect only CC material- So.................Who knows? All we know is that the coin is not for sale and we do not disclose what it took to own this beauty. We will not discuss what we think it should sell for if we sold it, because we won't. It is here only so that you can see it and enjoy it along with us. We hope you enjoy previewing this rarity. If you are coming to Carson City, Reno, Virginia City, Sparks, or the Lake Tahoe area please feel free to stop by and view all of our dollar errors and the Amazing Broken CC.

 A lot of people come into our stores with the most basic question "How do I get started collecting coins?" My first answer may seem simplistic, "What do you like?" Again, simplistic but ultimately coin collecting is like anything else, if you don't enjoy it you cannot succeed at it.
Most endeavors require a certain amount of passion to succeed. Numismatics takes that to a new level. Because there is so much in the details of each piece it is important that you choose a denomination or period that you find incredibly fascinating so that you will be sure to focus on those details and learn as much as you can.
With that said it's probably best that, as a beginner, you develop a passion for Carson City Morgan dollars. I believe that Carson City Morgan dollars represent the best starter collection out there. There are only 13 dates, which limits the amount of information. Carson City Morgans also offer a nice sliding scale in value, you can start off your collection by buying nice uncirculated common dates for around $200 and gradually move up to the big one, the 1889-CC as you become more seasoned. Finally, this series is an always popular set with a great balance, CC Morgans are plentiful enough for the novice to shop and find a great deal, yet low enough in mintage to maintain demand and a sense of rarity.
I sincerely hopes this help you get started on your coin collection right away. Coin collecting is a richly rewarding hobby that is filled with fantastic historical tales, important lessons on value, and intriguing artistic designs.