by Adam Crum
No…Absolutely NOT! With the market Red-Hot, we are getting way too many phone calls from people saying they are being offered “Slabbed” coins for investment. When we ask, “Are they certified by PCGS or NGC?,” we are unfortunately hearing too many answers like, “Well no, they are certified by XYZ Company.”
While it is understandable that with so many NEW collectors and investors entering the market, there will be many mistakes made. But when those mistakes are made as a result of BAD information, the buyer tends to blame the market…become fatigued…and their interest in pursuing the market more seriously begins to fade. This is unacceptable.
Let me explain. I recently received coins graded by a third-world grading service and the coins, as is often the case, were grossly over-graded. When this was explained to the owner of the coins, he said, “Well, the company I bought them from said they were just as good as PCGS and NGC, and that they would buy them back anytime.”
My response was simple: A HUGE network of dealers that has come to trust and accept them as the industry authority supports the market for PCGS and NGC certified coins…and has done so for almost two decades. Why, then, would you ever want to buy any coin certified by any company other than these?
His answer: “Well, they said a PCGS MS67 Saint-Gaudens would cost me $8,000…and they said they had one “just as good” certified by XYZ for only $4,500.”
I wanted to say, “Oh, okay, I guess a big fat man in a red suit is going slip down your chimney and deliver it.” But I refrained, and my kinder side prevailed. I politely explained that there is no Santa Claus…and there is never reason enough to acquire any coins that are NOT certified by either PCGS or NGC!
Long story short, the owner of the XYZ-graded coins has lost thousands of dollars due to the misinformation given by the company which sold them. Not as a result of market ups and downs, but by simple fraud. Well, not to worry…they said they would buy them back…right?
Wrong! Since the return period has lapsed, the company is only obligated to buy them back at an offered price, usually significantly discounted, and that is if they CAN buy them back…or if they’re even still in business.
In addition, the coins purchased were not just over-graded, they were misrepresented as being “very rare.” Which brings me to my next point: Just because a coin is “slabbed” doesn’t mean it is RARE! Even PCGS and NGC grade and authenticate common coins which are available in huge quantities.
Yes, many of these coins are beautiful and even popular, but they may not be the best value in the long run. For example, the coins in question in the above story were of common dates in the $20 Saint-Gaudens series (minted 1907-1933). Not only were they over-graded, but they are also easily accessible. Even if these coins were graded correctly, they would be considered condition rarities. This simply means they are somewhat rare in very high grades, but in choice uncirculated condition, there are literally hundreds of thousands of coins that exist.
These are not the types of coins supported by most savvy collectors and investors, and not coins I recommend or consider suitable for long term investment. Two very simple fundamentals should be applied to every coin you consider for investment Rarity and Popularity. If both of these descriptions can be applied, then perhaps an acquisition is a good idea. So, whether you are just getting started or consider yourself sophisticated, I recommend you use these simple rules:
- Buy only PCGS and NGC certified coins.
- Buy only coins which are both Rare and Popular.
- And most importantly…Know the company you are dealing with! A relationship with a company that has longevity and financial backbone is your greatest asset. Such a company can usually provide the best pricing structure, flexible terms and liquidity due to the large quantity of clients with similar interests and goals!
But remember: Just because a coin is certified by PCGS and NGC doesn’t mean it is rare or suitable for your specific needs. Also, just because it is both Rare and Popular doesn’t guarantee it is a good value all the time. If you would like to discuss what I consider the best values in the market NOW…I would encourage you to contact your representative at Monaco Financial ASAP at 888-900-9948.