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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Five sure-fire ways to make money in coins

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.

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1 comment
First, let me mention that I am a dealer. I agree with what you write, as far as it goes. What you neglect to mention is that rare coins have a track record of price appreciation going back decades, generations even. An investor can research the price history of a coin and then decide whether or not to invest. It constantly amazes me that most collector/investors don't do this but instead rely on their "gut feeling".