NEW COLLECTOR INFO
This is personal opinion only,
an appropriate perspective in the field of numismatics, where opinion,
unencumbered by any facts other than the existence of the specimen, is
often all there is in the discussion. The author has found himself
fixated on numismata for half of his childhood and all of his adult life.
He has attempted to wrest profit from his obsession for about 35 years.
That's where his opinions come from.
This presentation is divided
into sections:
1.
Why collect?
2.
What is collectable
3.
Identification
4.
Grading
5.
Storage & display
6.
The business
7.
Investment
1. WHY COLLECT?
Don't know. I remember
being acquisitive toward small, shiny round, flat discs before I could
read. I started out with washers and tiddly winks. 55 odd years
later I notice that every class of object has it's aficionados and that
each is served by a market. I don't know why for some people it is
coins rather than cars or chocolate moulds. All I know is that certain
people find themselves attracted to money as a collectible, and want to
spend time and substance on the objects of their desire.
If you've collected something
for a while you've undoubtedly noticed that most people are not collectors
and don't care about your collection. If your collection has gotten
to the point that you've spent significant time and money on it you will
have met a few people who think your devotion to your hobby is nuts.
Relations occasionally get strained. You can kick back in the sure
knowledge that for at least the past century the objects you collect have
increased in value, and that during that period a well-put-together
collection has repaid both the time and the capital outlay involved in
it's assembly.
Coins, etc. are treated with
in a variety of manners ranging from their conversion into jewelry to involved
scientific study for the purposes of historical reconstruction. Money
having been part of the world scene for 2500 years, the collectors of money-objects
develop automatically a deeper understanding of the place of economics
in human history than do those who merely get and spend the stuff.
2. WHAT IS COLLECTABLE?
Metal coins are the mainstay
of most numismatic collections. These were first made about between 2700-3000
years ago, with either China (probably) or Turkey being the home of the
first issues. A subset of metal coins are bullion ingots, such as
the American Eagles, Chinese pandas, South Indian fanams, etc., made primarily
for the convenience of hoarders. Next most popular field is banknotes,
which have been in regular use since the 18th century, and whose at-the-moment
unobtainable earliest issues date from 500+ years before that. Plenty
of cheap banknotes are available to make a nice collection. Token
collectors are a growing cohort. Many types of these unofficial coins
are readily available.
Objects other than metal discs
and pieces of paper have been used as money, and the collection of "Odd-and-Curious"
or "Primitive" or "Traditional" money objects is the passion of a small
and practically religiously dedicated group of collectors. The O&C
people sometimes end up being world class experts in some aspect of a culture
whose valuable objects they have collected, performing first class anthropological
work.
Commemorative medals also form
a large and coherent field of study, but their size makes them a bit harder
to deal, and therefor to come by. Most dealers will have a couple
of medals in stock. Very few will have hundreds lying around.
They're too big.
A bit farther afield, but still
intimately related to the core idea of money, are award medals, (which
are made the same way as coins), and by extension various other insigniae
from military ranks to uniform buttons to license tags. On the paper
side of "exonumia" are checks, chits and "good-fors," bond and share certificates,
etc. And of late we have collectible plastic: credit and ATM cards,
phone cards, etc. Finally, you will find that "coin-dealers" have made
a market niche for themselves in other collectible fields: fossils (small
ancient objects), sports cards (general size and shape of banknotes), and
as bullion dealers.
In numismatics, as in every
other merchandise line, there are "regular" items and "specials."
In numismatics the regulars are the coins, etc. issued to general circulation.
The specials come in these categories:
1.
Commemorative issues. Most, but not all, are sold by the issuing
government as a collectible for more than their face value,
2.
Nummiae, commemorative or not, done up by the government in a fancy package
and sold as a collectible for more than its face value,
3.
Manufacturing mistakes of various kinds.
It is the author's opinion that
many governments have been turning out too many frothy concoctions for
collectors of late. 100 ounce gold coins, forsooth!
And it turns out often that
the secondary market, where you go to sell your coins when you get tired
of them, will not support the government's price on those coins, and the
original purchaser loses money. Example: with a few exceptions, every
modern USA commemorative dollar is easily available from dealers at up
to 60% off its issue price. One of the jackpot coins goes for about
2x issue, the other about 125%.
Just my opinion.
3. IDENTIFICATION
Some of what you can collect
is easy to identify, but a lot of it isn't. How do you decide if
it's a good deal (if you're going to buy it) or worth anything (if you
found it)? You need references. For the field of "modern world
coins" the standard reference in English is The Standard Catalog of World
Coins, Colin Bruce II, ed., Krause-Mishler (KM) Publications. Currently
there are five volumes covering the 17th, 18th, 19th, 20th, and 21st centuries.
Revised editions are published frequently (perhaps more frequently than
necessary!) They have in them about 99% of the 20th century
coins declining to perhaps 50% of the 17th century, with suggested prices
in several grades of preservation, not all of which necessarily exist .
Prices range from reasonabaly accurate to guess to hopefully optimistic,
with some extremely undervalued keys. Most people use them.
For paper money the core reference
is also by KM: The Standard Catalog of World Paper Money, (3 volumes).
These catalogs give each item
a unique number, and the numbers are used by most dealers to identify their
offerings. If you don't have these catalogs you'll have a problem
reading many dealer lists, mine for instance.
Many specialized catalogs are
available by country and time period. Thousands. I have about
100 books in my reference library, and I use about 20 of them all the time.
A numismatic cliche with which I wholeheartedly agree: "Buy the book before
you buy the coin."
4. GRADING
Here it is: straight and simple.
COINS
Poor. Coins in this
condition are very worn. They are recognizable as to type, but large
portions of the design will be worn flat. Secondary identifiers
such as date and mintmark may be missing, or there may be bad damage.
Fair. Most of the
design will be seen. At least part of the lettering around the rim
will be visible, including the date and mintmark. Coin is thoroughly
identifiable.
About Good (aG). The
outer half of the lettering around the rim will be worn. The major
design elements will be visible, but there will be very little detail.
Good (G). The outermost
part of the lettering around the rim will be worn. Some of the detail
of the major design elements will be seen.
Very Good (VG). All
of the lettering will be visible, though some may be quite worn.
There will be more internal detail in the major design elements, and some
fine detail may be present in the deeper spots.
Fine (F). The rim
is complete, and there is some detail on the highest spots. In England
they sometimes call something "good fine" (gF) to describe a mid-grade.
Very Fine (VF). Most
of the fine detail is visible, but there is wear on the highest points.
Coins in this grade have some wear all over, and lack the luster of higher
grade coins. "gVF" is used by Anglodites and Anglophiles.
Extremely Fine (EF or XF).
There will be wear on only the highest points of the design. The
coin will have some, but not all, of its original luster (original sheen).
About Uncirculated (AU).
There will be only slight wear on the high spots or slight scuffing of
the fields. The coin will have almost full luster. The wear
may be so slight that you will have to play with the light or use a magnifying
glass to see it. A lot of AU coins are passed as Unc by scuzzball
dealers. English equivalent: gXF.
Uncirculated (Unc - pronounced
"unk"). There is no wear. No matter how carefully you
examine the coin you will not see any. There may, however, be a few
small marks caused by the coin hitting other coins after it was ejected
from the minting machine. These are called bag marks. And there
can be toning. In some cases you will find a bronze coin completely
toned to dark brown described as "toned Unc." Not by me. An Unc coin
should have some luster, at least a trace. And you'd better to be
able to explain where the rest of the luster went. You'll also find silver
coins with so much toning you can hardly grade them.
Proof (PF). These
are specially made coins. The blanks on which they are struck are
polished, and the dies used to strike them are specially treated.
To make a sharper impression, proofs are struck several times. The
result is a coin with mirror fields and (usually) frosted devices.
Modern proof coins are usually put in fancy packages and sold by the mint
to collectors for more than their face value.
Modifiers. Scratches,
nicks, rim bruises are detractors and should be taken into consideration.
It is appropriate to mention hairlines and fingerprints if the coin is
proof or Unc. Heavy toning should be mentioned. Jewelry mounts
or spots indicating removal of same, holes, heavy polishing, etc. are considered
damage and should significantly lower the price.
Cleaning coins with chemicals
works sometimes and sometimes it doesn't. When it's done well and
luck is with you you end up with a significantly nicer coin. But
the road you'll follow will be littered with the mangled corpses of the
coins you destroyed on your road to that level of expertise.
Caveat: Some coins are
not well struck. Other coins are made with worn dies. This
is common in coins made before the middle of the 19th century, and still
occurs today. Worn hubs were used to make the dies for USA coins
of the 1970s, and the 1993 Azerbaijan aluminum coins are so crude that
many come from the mint looking "VF." You have to take this into
consideration when grading these coins, thus dealers may use phrases like
"VF for type," which means the coin looks like it's VG.
Numerical grades. 30 years
ago it was considered sufficient that a coin be merely uncirculated.
Things are different today. There is now a numerical grading system
that is used for expensive, high grade coins. In this new system,
AU is called AU-55, and Unc is called MS (for mint state), with numbers
ranging from MS-60 (which dealers will often call "commercial Unc") up
to MS-70 (absolutely perfect and completely unbelievable). The difference
in value can be dramatic. A given Franklin half dollar in MS-60 might
sell for around $10.00, but the same coin in MS-65 may go for $100.00,
and in MS-70 it could approach $1000.00. Naturally there is a lot
of disagreement when a good coin is given a high grade number. People
can loose a fortune on a bad day.
Slabs. These for hire, prestige
professional grading services have sprung up of late. You send your
coin to them with a hefty fee and they send back your coin in a fancy plastic
holder with their opinion of its grade. It is important to bear in
mind when looking at such coins that grading is purely subjective personal
opinion, even if hidden behind a faceless "board of graders." You
need to look at the coin itself, not the holder it comes in, and make your
own decision that it is or is not as advertised.
PAPER
Unc - Absolutely no wear,
no folds, no bent corners, no dirt, no nothing.
AU - One soft fold or wrinkle
or bent corner.
XF - Two soft folds or one
hard fold or one small smudge.
VF - Up to 4 hard folds,
bit of dirt.
F - Plenty of folds,
wear, dirt, but no holes or breaks.
VG - Lots of wear up to
and including breaks and holes. Usually limp. An XF note with
small tear will usually be priced as VG.
G - The whole note
is there, but significant damage.
aG - Can have a piece missing.
poor - Barely identifiable
rag or piece
Modifiers - A pair of staple
holes or paper clip rust mark should be mentioned and will usually drop
the price to the next lower grade. Unremovable glue or ink spots are severe
detractors and can drop the effective grade 2 or more notches. Cleaned
and/or ironed notes are occasionally found and should be acknowledged by
the dealer. They will drop the grade a notch or more. Tip the
note to the light, hold it up to the light, sniff it, etc. Paper
proofs are special printings and are mostly rare.
5. STORAGE & DISPLAY
Uncirculated and proof coins
stop being pristine very quickly if they are handled. If you want
to keep them perfect you need to protect them. This is how you do
it.
First, handle the coin only
by its edges, using clean hands so you don't get your corrosive sweat all
over it. (A greasy finger on a new penny will produce an unremovable
fingerprint within a few weeks.) Then put the coin into one of four
possible containers: a polybag which is then inserted into a paper envelope;
a mylar & cardboard sandwich holder; a hard plastic holder; or a plastic
tube if you have enough coins to make a roll.
Circulated pocket change does
not require this degree of care. While just one rub will drop a coin from
Unc to AU, weeks of circulation are needed to get it to XF , months and
years to go to VF and F, and decades to get into the VG range.
Today's coins are tough.
Today, ready-made storage materials
are available. We have basically three choices:
1. Put the coins in little envelopes or holders
in a standard sized box.
2. Put them in compartmented trays.
3. Put them in an album.
Boxes provide the simplest method
of storing coins. Your coins will be easy to get to, and you'll be
able to fit a lot of them in a small space. If you want to take your
coins to a show or a club meeting you can carry a large number of coins
in a closed box. They won't fall out or slide around.
Special boxes are made for coin
collecting. The standard size box has a 2" x 2" face (5 cm x 5 cm),
and comes in various lengths from 9" to 14" (22.9-35.6cm). This size
will accommodate coins a little larger than the old US silver dollar.
For special purposes both larger and smaller size boxes are available.
Cardboard is the material normally used, and although these are adequate
for most purposes, heavy duty versions in plastic and metal are also available.
Coins of any value to their
owner should not be thrown loose into the box. They need to be protected
against wear, and you, as the curator of your collection, need to do the
protecting. There two kinds of products made for use with standard
boxes: envelopes and holders.
Envelopes are available in either
paper or plastic. Paper envelopes are the cheapest, of course, and
the easiest to use. Just put the coin in and fold over the flap.
They come in different colors, and there is plenty of space to write down
any notes you might want to make regarding the coin that's in it.
Their convenience is unmatched when there are a large number of coins to
be processed.
There are two drawbacks to paper
envelopes. You can't see the coin unless you take it out, and each
time you do take it out you're handling it, which can eventually cause
wear and reduce value. Also, the envelope itself might damage coins
of certain metals, because of the sulphur in the paper. Sulphur will
cause silver and copper to tone, and can produce corrosion on the aluminum
and zinc which are used in many foreign coins.
A solution to these problems
is to put the coin in little inert plastic sleeves inside the paper envelope.
The sleeves used to be made of cellophane, but now are made of polyethylene
(polybags.) They are a good idea. There are also some special,
chemically impregnated paper strips that are supposed to retard corrosion,
but I don't like them. They wear out after a while, dissipating the
chemical into the air where you can breathe it.
Plastic envelopes are usually
called flips. They come in numerous styles, and are usually made
out of soft vinyl or harder mylar. Some styles have 2 pockets, one
for the coin and the other for a little paper insert on which you can write
your notes on the coin. The obvious advantage is that you can see
the coin, but there are some drawbacks. The hard ones can break, and the
soft ones can release corrosive fumes which can damage the coins inside.
Despite their fragility, hard plastic flips are all right for most purposes.
I do not recommend soft plastic flips.
Holders come in two categories.
One is a foldable cardboard frame, usually 4" x 2" (10cm x 5cm), with two
holes punched side by side and a mylar sheet glued over them. You
put the coin on the mylar over one hole, fold the holder in the center,
and then seal the edges, either with staples or tape. Occasionally
they come pre-glued, but most of these are inferior products, and should
usually be avoided.
If you're going to staple the
holders, try to find a stapler with a "flat" contour anvil rather than
a "curved" contour. Or you could flatten your curved staples with
a needle nose plier. A silver coin in a holder leaning against a
staple protruding from the next coin's holder will develop an "iron stain"
which may not come out.
In a nutshell, cardboard holders
are a bother. But they are cheap. The other kind of holder
is made of hard plastic, and comes in two halves, which are either hinged
or screwed together. Some of these hard plastic holders are very
good, but they can be expensive and they take up a lot of space.
Trays are the classic storage
method, used by museums. The coins sit in little compartments in
these specially made trays, which are then stored in a cabinet. Fancy
trays are made of wood and lined with velvet, but cheaper products are
available of molded plastic. Fancy trays and cabinets are very expensive
and use up quite a bit of space, and the cheap trays will break with use.
Also, if you should happen to drop a tray the coins will go flying.
Unless you are a real traditionalist or have special needs you probably
will not want to use trays.
Albums are available in two
categories. One has cardboard pages with cut out holes. These
are usually made for a particular series of coins, Roosevelt dimes, for
instance. The cheapest cardboard albums have the holes backed with
paper, while more expensive versions have plastic sleeves covering the
hole on both sides so that the whole coin can be seen. These are
adequate for forming pocket change collections, but the cardboard will
usually cause undesirable toning on perfect coins.
The other type of album consists
of vinyl pages with pockets to fit the standard size holders. These
come ready-made, or you can get pages which fit a three ring looseleaf
binder. Looseleaf binders can be convenient both for storage and
display. The drawbacks include the time and effort required to put
the coins in the holders, put the holders in the sleeves, rearrange the
coins when you need to, etc. Also, as mentioned above, vinyl can
cause corrosion on certain kinds of coins.
For paper the equivalent of
paper envelopes is - paper envelopes. Usually people use regular gummed
or special "glassine" envelopes and put their collection in boxes.
An alternative would be in folders in a file cabinet. These methods
are pretty inefficient for paper money. Vinyl album pages are available,
but vinyl can damage paper as well as coins. There are various mylar
products on the market. Most are for box storage, and none of them
will hurt your notes. As for bigger items, the bigger they are the
harder to store. Sometimes you have to improvise. Or maybe you can
hire me to improvise for you.
As you can see from this discussion,
there are no final answers to the storage problem. Even old timers
can't make up their minds. But these are the possibilities, and you
will have to decide what you want to do, because, if you want to have a
collection, you'll have to do something.
6. THE BUSINESS
Dealers. Coin collectors
are accommodated by a large number of dealers running small operations.
In the USA there are several thousand dealers. Worldwide there are
several thousand more. In USA coin collecting is relatively less
popular than in some other countries. In Germany, for example, it
has been estimated that as much as 20% of the general population has collected
coins in the past 5 years. Here the figure would be in the 2% range.
That's still a lot of people, and the market, though small in mass terms,
is healthy.
Numerous countries have export
controls on their current coins and banknotes, antiquities, etc.
Other countries place no limits on the trading of coins. The commodities
peddled by us dealers are often procured by methods which were illegal
in the countries of origin, but are legal in countries of sale.
The numismatic market is essentially
unregulated. This means you should know what you're doing before
investing heavily. There are dealers who will shave a grade to make
a profit. If you can't get a yes-sir-right-away-sir-no-questions-asked-within-a-reasonable-time
return policy you should be wary of the dealer with whom you're dealing.
Prices - Are arrived at by reference
to standard catalogs, dealer's assessment of market conditions (supply/demand),
customer perspicacity and stubbornness.
The value of a given item is
dependent on three things:
1. Its
absolute rarity, or how many are available (supply),
2. Its
desirability, or how many people want it (demand),
3. It's
condition.
Absolute rarity starts with
how many were made, minus the number which have been destroyed for various
reasons, or are otherwise not available. For example, millions of
some particular old silver dollar might have been struck. However,
perhaps a large number of them were shipped overseas to China, where they
disappeared. Perhaps another quantity were held by the mint and later
melted, to be remade into quarters. Perhaps, too, the mint machinery
was not in top condition that year, and most of the coins are weakly struck,
making nice looking pieces of that date hard to find. Finally, of
the coins which were released to circulation, most can be expected to be
fairly worn. Thus, a coin which should have been common is actually
scarce.
Desirability depends on how
many people want a particular coin relative to how many examples are available.
A coin may be extremely rare, with only a few pieces being available in
the entire world, but if no one wants it, the dealer who owns it will keep
lowering the price until it sells.
Condition is a critical element
in pricing. A given coin in top condition can be literally thousands
of times more valuable than the same coin in low grade.
7. INVESTMENT
This is tricky. Whether
it's coins or banknotes or medals or whatever, relatively few pieces will
pay back their investment, but those that do will often do so handsomely.
Best general advice I have is to only buy the unquestionable best and preserve
it in that condition. Can't go wrong that way. Beware of advertised
"specials." The fact of the matter is that the dealers can only sell
what they have. You need to snag a good deal when it comes along,
but in general you should be looking for the stuff the dealers don't have.
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