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.
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