Savvy Numismatic Investment Requires Knowledge

- Donn Pearlman is the 2015 recipient of the American Numismatic Associatio­n’s highest honor, the Farran Zerbe Award. by Donn Pearlman

When COINage Managing Editor Antoinette Rahn informed me that this issue would be filled with experts’ advice about successful­ly buying and selling rare coins, I hunted through my files for decades-earlier articles I’d written about consumer education. I learned quite a bit about avoiding marketplac­e mistakes in my “previous life” as a journalist/broadcaste­r and volunteer with the Better Business of Chicago & Northern Illinois.

What I wrote back in 1978 still is true today: “It is often repeated that ‘There is no Santa Claus in numismatic­s.’ Apparently, though, there is a Twilight Zone.”

The advanced developmen­t of independen­t, third-party authentica­tion and grading since then significan­tly reduced many problems that previously confronted and sometimes confused buyers and sellers, but the key to being successful and happy in the marketplac­e then and still today is education. That includes knowing fair market value when you buy or sell. Being an informed consumer helps you avoid frustratio­n, grief and potentiall­y expensive lessons.

If a particular­ly rare coin in truly superb condition has an average wholesale price of $1,000, why would any dealer want to sell one at retail for $250? In theory, the dealer could get more money for that coin by simply selling it to another dealer for the prevailing wholesale price. Perhaps the dealer asking $250 actually is in business only for his health? (That, indeed, would be a RARE coin dealer!)

No one, absolutely no one, knowingly will sell large quantities of highly sought after, gem-quality numismatic material at far below wholesale costs through normal retail channels. There are no “fire sales” or “inventory clearances” when it comes to true, superb quality, highly desirable rare coins and currency.

Be highly suspicious of any such offers involving this type of material. In a 1986 article, B.U. or Beware, I wrote for a chapter in the Chicago Coin Club’s book, Perspectiv­es in Numismatic­s, there is an important message I learned while visiting a neighborho­od print shop, “Aware of his competitor’s fees, this merchant’s small sign read: ‘The bitterness of poor quality remains long after the sweetness of low price is forgotten.’ The axiom applies to nearly all phases of merchandis­ing. Many times, you indeed can find a bargain, but usually, you have to pay the price for quality.”

The vast majority of mail-order coin dealers are good merchants who want to sell accurately graded merchandis­e at fair prices. After all, they want to stay in business by making repeat sales to their customers and friends of satisfied customers. Many veteran dealers realize if the industry does not police itself, some government agencies may get involved. It’s also a matter of good business economics because every dollar sent by unsuspecti­ng consumers to one of the Bad Guys is a dollar less in sales with the Good Guys.

Finally, I recommend you buy and read the well-written, illustrate­d guide to responsibl­e consumeris­m, The Coin Collector’s Survival Manual, by COINage Editor Scott Travers. Also, remember the Better Business Bureau advice: If a deal seems too good to be true, it probably is.

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