Making Good Decisions in Numismatics

The earlier in one’s numismatic journey that you start making good decisions the better. In this article we will go through some of the key areas in good decision making.

Quality over quantity

Regardless whether you are a hobby or an investment numismatist making the right decision is key. Anyone who is extremely wealthy can be a good numismatist but it takes skill for a person of moderate means to build a decent collection.

It is always better to acquire quality over quantity. This can be for practical as well as strategic reasons. Here are some things to think about.

• How much space do you have, if you are using a vault or use a safe how much does that cost?
• How are you storing your coins? Are you ensuring that you are not storing them in such a way that encourages the spread of verdigris or bag marks?
• The effort involved in searching through your coins and the cost of flips, folders and slabs

Below: I have known people to waste large amounts of their resources in using flips rather than folders. I went through a period of doing this myself.

I know quite a few people that collect world coins and very often the flip will have cost more than the coin in question, that is without counting the cost of the plastic box.

There is a lot of debate of whether it is good to buy few very expensive coins or lots of cheap coins. If you are just a hobbyist you can do whatever you want. However if you want to sell your coins or anticipate your coins being a nest egg for your children it will likely be better to have silver or gold. 

The higher the weight and numismatic value the better. You should work at your price limit, taking advantages of price spikes in silver and gold by selling part of your collection. This will add rolling value to your collection. You can simply wait til the price goes down to buy again. 

Never sell everything and totally get out as the market might be on the cusp of a new high. Look particularly for turbulent times on the forex as a pre spike indicator.   

Don’t waste money on expensive silver and gold bullion for the numismatic value. An ounce of silver is an ounce of silver, paying an extra $4 an ounce for a special edition bullion is more than likely a waste of time unless the mintage is below 10,000. Very few people are buying gold 1oz bullion coins for the numismatic value. 

Storage

A lot of people repeat quite frequently that they do not own a coin, they are merely temporary guardians of it. That is quite true, a coin from the 1700s might have had 8 or more owners. That is supposing the owners acquired the coin early in life and had a good full life.

I prefer to use folders as these are inexpensive, if you are a bibliophile it is possible to put sticker labels on the folders. This is not to say flips don’t have their place. It is justifiable to put some coins into flips. Make sure that the flips you use are mylar and not the cheaper generic plastics as the cheaper ones can damage the coin over time or create a patina, something like we have seen with the UK decimal wallets from the 1970s. 

The Australian copper piece in the image below has lost its MS 70 patina. This piece would have gone into the folder at the highest grade.

The example below combines two mistakes, one being the type of plastic and the other the lack of air tight storage. Other considerations include storing the coins away from light, heat and damp. 

The different metals that are inside a folder can interact in different ways this is observable in some of the folders you will come across. Copper and it’s alloys are prone to verdigris, The 1, 2 and ½ pence coins in the image above are copper and the 5 and 10 pence coins are copper nickel. Having the 100% copper coins at the open end was a mistake as it likely drew the verdigris in to effect the CuNi coins, you can see a spot of verdigris on the 10 pence near the lions crown. 

Verdigris can destroy a coin’s value and can afflict a coin in a matter of days. It behaves much like mold although it is actually a copper oxide. The makeup of verdigris can depend on the alloy.

So keep your coins away from verdigris coins, verdigris cannot really be cleaned off, it is best to quarantine your verdigris coins. Some coins like roman coins will hold their value with small spots of well managed verdigris due to the nature of their usually being dug up.

Where are you buying?

Where you buy, swap or dig up your coins really matters. You will need trustworthy contacts; you will need to research prices and try to legally avoid taxes on your collection. 

There are also a lot of fakes coming out of china at the moment. The Chinese are increasingly skilled at creating alloys that look and feel like silver. These fakes can be worth just 50c. This is something that has affected most markets over the past few years. The counterfeiters are involved in what is a low risk high return industry. Many of the counterfeiters made millions selling fake Morgan Dollars and are now diversifying their portfolio.

The website Ali Express is useful for buying numismatic supplies, tokens and things like loupes. However some sellers are supplying fraudsters with unmarked copies. 

The copies are almost identical to the real thing. I have bought some in the past to feel them in the hand, a lot of them are as heavy as gold.

Don’t buy gold from small dealers unless they are very well reputed. If you want to buy gold it’s best to go for the cheapest commercial vendor. 

With regards to silver you can take advantage of non-commercial sale prices by testing your coins on the spot.

This is how you do it:

• Weigh your coin, compare the weight to the listing on Numista.
• A worn coin might weigh a few grams less, a coin being worn does not mean it is real.
• Build a magnet slide. Here’s how. 
• Being silver doesn’t mean it is real.
• Have a look at the features, do the features match the picture of the coin in Numista, PCGS and NGC also release bulletins on new fakes that they spot. Usually fakes will flood the market in high numbers, usually sharing mistakes. 
• You can also use an amp meter to test metals, different densities give a different reading. 

Sadly it is getting to the point where we have to watch out for fakes versions quite common coins. This is largely due to governments being unable to tackle China’s exporters. 

Keep an eye on this blog for more articles on making good numismatic decisions.

Provided by Mr. Alan Gingelos