My brother collected stamps when we were young but I thought philately will get you nowhere and became a numismatist instead. It was from the 6th to 8th grade when I would spend all free hours and all free cash flow investing in rare coins. It was my first obsession with trading, because I did it for the joy of making money one day, not to have one of every coin.

All my coins were housed neatly in books with a ledger for each item’s cost, condition, where found, and value. Each quarter the revised published values would come out and I would update the ledger with new values, unrealized gains and losses, and foot and cross foot the big book to get my profit. It was strictly a buy and hold strategy with dollar cost averaging thrown in — each week’s allowance and odd job money was invested. It was a contest with my best friend at the time; to see who had the best value change from period to period, but he would often in bad quarters fudge the grades a bit higher for marketing purposes. I never did that — he probably runs a hedge fund now.

There was a kind older gentleman who ran the coin shop in Springfield, Virginia where we would stop after school to gaze the coins and plan our purchases. He took a kindness to us and offered us tips and favors when trading, waiving part of the regular vig, to entice us. Maybe it was an angle too, like buying drugs, he was often referred to as the “coin dealer.” There was an auction board on the wall where people could put up their coins for sale each week with penciled in bids to close Wednesday nights at 6PM. It was eBay before Bill Gates dropped out of Harvard.

I learned the hard way about the dangers early on when I went a little crazy sensing some extraordinary “values”– someone put a bunch of stuff on the wall at a 30% discount to the book listed value. In no time I had accumulated $136 of winning bids and got the first margin call of my life. While than may not seem a large sum right now, getting a substantial margin call 6th grade early 1970’s for the son of a working military man, it was all the money in the world. I had until close of business Friday to pay. The only way to pay was to borrow, or sell assets. Unable to admit this stupidity to my parents I was forced to sell assets. And the only buyer in town was the coin dealer. And the only value he paid was 50% of book. So I sold $250 worth of my collection to add $200 in “value,” it was the worst quarter of my young trading career, and a devastating but valuable lesson.

After that I bought strategically, and sold even more strategically, and never with borrowed funds. The collection was worth $650 in 1977 as compiled from “Handbook of United States Coins-With Premium List” (1977 thirty-fourth edition by RS Yeoman), the last time I paid much attention to it. It sits untouched in a box in my closet that hasn’t been opened in 32 years and seven relocations — for security purposes it’s taped shut and marketed in big red letters “baby toys.” As for returns, I checked one coin, my favorite, a nearly uncirculated (let’s call it AU-50) 1909 S V.D.B.. At the time it was worth $112.50 according to the book, and now is worth $660.00 according to coincollecting.com. That’s 5.7% return for 32 years. Not bad.

Steve Leslie writes:

I met Bruce McNall in the late 1980s when he put together limited partnerships of rare coins with Merrill Lynch. He is a short stubby character who gained fame via sports team ownerships and celebrity status, associating with the likes of John Candy and Wayne Gretzky. He was responsible for bringing Gretzky to LA and owned some assets with him. One in particular was the most famous baseball card in history, the Honus Wagner. He began his career as curator for Getty Museum and went on ultimately to Federal prison after coins began disappearing from the partnership. He was considered the ultimate authority on rare, ancient coins. A tragic story but one that is becoming all to familiar.





Speak your mind

6 Comments so far

  1. Steve Leslie on February 16, 2010 9:58 am

    Every child in America should visit Washington D.C. at least once. And by all means see the Smithsonian Institute buildings. My favorite is the Museum of American History where one may visit the vast coin collection. There one may see some of the rarest coins in the world. My personal favorite is the St Gaudin's double eagle on display. Simply awe-inspiring. In addition to the coins, there is an amazing assortment of paper currency. In can be a rewarding and enjoyable experience. Questions: What is the largest paper currency every printed and who is represented on it? Which president restricted the circulation of large denomination bills in what year and for what reason?

  2. Glenn Pribus on February 17, 2010 2:15 am

    That's my son Nick. I remember his coins well. He probably has the first nickel he ever made and every one since. Now it's the stock market and he does well every year. In his blogs he calls me "my father the Colonel" and chides me for being so conservative.

  3. Acetrader on February 17, 2010 3:52 pm

    Good Story. Remember the coin "dealer" who was a high flier in the 80/90's…bought the LA Kings and Gretzky? Bruce McSomething or another… I believe it turned out he stole the coins from graves across the globe… ended up in prison?

  4. G simmons on February 17, 2010 6:46 pm

    I have a coin that i THINK is like 600bc alexander the great etc … i would love to know its value !!! if you have time to tell me i can show u pic or show it on Skype etc …

    i also bought a sic amt i dont know if you knew this trick but the mint had a 90 day return policy so i bought tons gold eagles from mint in Dec 2008 at $974,86 and trading the futursar ound them riskless lol how i have then at a cost base of like 4-500 and there are worth a bunch ? saw on ebay for 1800! do you know who would maybe want to buy them ?

  5. Steve Leslie on February 19, 2010 9:25 am

    Since nobody chose to comment: The highest paper currency in circulation is the 100 bill. In 1969 Nixon eliminated higher denominations from circulation because of drug cartel operations. The highest currency printed is the $100,000 with Wilson on the face. It is only used by the Federal Reserve and it is illegal for private citizens to own one.

  6. Coin Auction on December 6, 2010 3:22 pm

    Never borrow to invest in coins! Good advice. I’ve seen people bury themselves doing this.


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