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Gerald Tebben

Five Facts

Gerald Tebben

Gerald Tebben, a Coin World columnist for more than 30 years, also contributes to Coin World’s Coin Values and edits the Central States Numismatic Society’s journal, The Centinel. He collects coins that tell stories.

Coin World’s bloggers are not edited by Coin World’s editorial staff and blog posts reflect the views of the individual author.

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Archive for 'September 2014'

    Five sure-fire ways to make money in coins: Buy blue chips

    September 30, 2014 2:34 PM by

    After introducing the topic and discussing the first sure-fire way to make money in coins, buying and holding, here’s my second sure-fire tip.

    Buy blue chips. Look for coins that have a large market base and show a long period of sustained appreciation. Blue chips are key coins in popularly collected series. Think 1909-S VDB Lincoln cents, 1916 Standing Liberty quarters and 1893-S Morgan dollars. Year in and year out blue chips go up in value, and they go up in all grades.

    Just about every American collector has started a date-and-mint-mark collection of Lincoln cents at some point. The final five holes – 1909-S, 1909-S VDB, 1914-D, 1922 plain and 1931-S – though, are a stumbling block. Every collector wants to fill them, but many are deterred by price.

    The five key coins, at least in circulated grades, hold the series’ value. Some have been on collectors’ wish lists for more than a century. There is tremendous demand for them. Just about every year they go up in value, regardless of what the bullion market is doing, regardless, to a large part, of what the general economy is doing.

    If Warren Buffett collected coins, he’d collect blue chips. Collecting key coins is as close to Buffet’s signature “value” investing as a collector can get.

    One caution about coins that appear to be blue chips, but are not. The value of a blue chip coin is based on genuine scarcity and genuine demand. If enough examples of a coin exist for it to be promoted on TV or in ads, then it’s too common to be a blue chip. Its value will disappear as soon as the advertising stops.

    Next:  Inflection points

    Five sure-fire ways to make money in coins: Buy and hold

    September 23, 2014 3:51 PM by

    After introducing the topic in my last post, here’s my first sure-fire way to make money in coins.

    Buy and hold. This classic stock advice applies to coins, too.  Pick a good coin and hold on to it.  

    While there are notable exceptions (1950-D nickels, for example, are worth less now than they were 50 years ago), coins in the long run tend to go up in value, sometimes spectacularly.

    In 1950 famed collector Louis E. Eliasberg Sr. spent $4,000 for the unique 1873-CC half dime, the capstone of his collection. In May 1996, the coin sold for $550,000.

    If Eliasberg had placed the money in a 3 percent passbook savings account, his estate would have amassed $15,580 by 1996.  The same amount invested in stocks in 1950 (using the Dow Jones Industrial Average as a proxy) would have grown to $116,000 by May 22, 1996.

    While that coin outshines just about everything else, run-of-the-mill collector coins tend to go up year after year, too If you compare a Red Book from 2004 with this year’s, you’ll find few negatives. The farther back you go, the larger and more numerous the positives.

    In 1976, a 1909-S VDB cent cataloged for $115 in Good condition. Today it catalogs for $750.

    Keep in mind, though, that you’re paying retail prices for coins (even if the seller claims he’s selling at wholesale) and that you’ll have to hold on to the coin long enough to cover the spread (figure 30 percent) between wholesale and retail before turning a profit.

    Next:  Buy blue chips

    Five sure-fire ways to make money in coins

    September 19, 2014 9:19 AM by
    Investing in coins is a little different from investing in stocks. Though, some of the same principles apply. Here are five sure-fire ways to make money in coins.

    But, first here’s an overview of the differences between stocks and numismatic investments.

    Stocks are productive assets. Coins are non-productive assets.

    A stock’s value is based largely on how much money the company earns. Investors buy a company’s stock based on such measurable things as the company’s price-to-earnings ratio and how well the company is doing in comparison to other companies in its sector.

    Coins, on the other hand, are valued solely on the interplay of supply and demand.  Supply, for the most part, is fixed and known; demand is neither.

    A coin goes up in value only when more people want one now than did before. Numismatic investments are not made on the basis of a rational evaluation of metrics, but rather on a gut feeling – sometimes a guided gut feeling - that more people will want a given coin tomorrow than do today. Economists call this the greater fool theory. The purchaser is a fool who believes a greater fool will come along and pay him more than he paid for the asset.

    NEXT POST: Buy and hold.

    Five U.S. numismatic nudes

    September 2, 2014 11:41 AM by

    Nudes full and partial abound in art and sometimes on United States coins, medals and paper money.

    Here are five U.S. numismatic naughties:

    Bare Breast Standing Liberty quarter. Beloved by 15-year-old boys everywhere, the Standing Liberty quarter dollar issued in 1916 and early 1917 shows Liberty holding a shield and baring a breast. Researcher Walter Breen claimed in his Complete Encyclopedia of U.S. and Colonial Coins that the design was modified in 1917 to cover the offending breast because of pressure from Anthony Comstock’s New York Society for the Suppression of Vice, a morality police that disbanded in 1950. Coins issued from mid-1917 on show chainmail over the offending breast.

    U.S. Diplomatic medal. This U.S. Mint medal, designed by Thomas Jefferson shows a bare-breasted Indian maiden representing Peace welcoming a nude male Mercury, representing Commerce, to America. Jefferson commissioned famed French engraver Augustin Dupre to produce the medal “as a medal to be given to diplomatic characters on their taking leave of us.” The State Department discontinued use of the medal in 1791 but bronze copies have periodically been available from the U.S. Mint over the centuries.  It is currently listed as “sold out” on the Mint’s website.

    $5 Educational bill. This 1896 silver certificate, part of the 1890s Educational Series, shows an allegorical scene titled  “Electricity Presenting Light to the World. “ Electricity is holding a gleaming light bulb above her head and baring a breast.  Breen claimed that Comstock objected to these items, too, and forced their recall. Some sources, too, claim Boston bankers refused to accept the bill, giving rise to the expression, “Banned in Boston.” Both claims are likely hokum but make for good stories

    1984 Olympic commemorative silver dollar. The obverse of the coin shows naked male and female torso statues above the entrance to the Los Angeles Olympic stadium.  How naked, though, is up in the air.  Mint Director Donna Pope said the artists submitted very explicit plaster models.  She called Bill Smith, the Philadelphia Mint’s head of production, and told him “in rather specific terms ‘to lower the relief on a certain portion of the male torso.’ The coin we all dreaded didn’t look that terrible.”

    1915 S Panama-Pacific International Exposition half dollar.  The obverse, designed by Chief Engraver Charles E. Barber, shows a representation of Columbia scattering flowers and the back of a naked cherub holding a cornucopia.  The design reprises one Morgan created for the reverse of the 1907 U.S. Mint medal marking the departure of the Great White Fleet for its around-the-world cruise to show the flag and American might.