When it comes to investing, luck is a necessity, but knowledge is vital
A collector can stack the odds in his or her favor by continuing to learn
Benjamin Franklin was a strong believer in luck, and found that the harder he worked, the luckier he got. Original images courtesy Heritage Auctions.
Many skill sets factor into making successful coin investments, from understanding grading and pricing, to developing an eye for quality within a grade. But one that doesn’t get as much attention is just as crucial: luck.
In a recent Wall St. Journal Magazine article on luck, actor Tom Selleck said, “If you’re going to pursue something, you should start where you might be the luckiest.”
That works for profitable collecting: why not start your collecting where you know the most and have the most interest? Focusing on what’s trendy or what commentators are saying is a good investment can be fine, provided you understand and like that area. Otherwise, you’re best to build and work to your strengths. Selleck ends by saying, “If you want to get lucky, stay at it.” Keep working to refine your skills.
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In the same story, professional poker player Maria Ho discusses the role of luck on her way to becoming one of the top ranked poker players in the game today. She said, “It’s important for poker players not to get psychologically stuck in the bad luck of a given hand.” She reasons that focusing on what went wrong impacts how a player plays the next hand, and suddenly one expects to lose.
In collecting for investment, some coins will be profitable and some may not be. Preparation and working to your strengths can tilt the odds in your favor, but sometimes when it comes time to sell, a coin may not bring as much as you thought it would.
Let’s say that a coin that you purchased thinking that it would upgrade doesn’t work out. For some Mint State coins, the price jump of a single grade point is enormous. While a typical MS-64 1923-S Peace dollar might sell at auction for $300, solid MS-65 ones can sell for 10 times that amount.
What if you purchased an exceptional example for $600 thinking that it would be a clear-cut Gem, and then, when you send it to third-party grading services, it continues to come back MS-64 multiple times. This unlucky situation shouldn’t stop you from trying to play the grading game but rather, it should cause you to take a closer look and get outside opinions as to why the coin is not making it to the next grade level.
Benjamin Franklin once said that diligence is the founder of good luck, and he observed that luck is a by-product of hard work. A collector can stack the odds in his or her favor by continuing to learn with every purchase and sale, whether it be a profitable one or not, and in doing so, become lucky.
