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Set goal and the reward will follow

 

Last week’s news story about the slabbing by Numismatic Guaranty Corp. of Walter Perschke’s Brasher doubloon and its current estimated value of $10 million looks like the realization of every collectors dream: buy the best and let the market reward you over time.

Imagine paying $430,000 in 1979 and having a coin worth $10 million today. That is an impressive achievement. Too many collectors in that year were buying everything in gold or silver that was round and shiny without giving deeper thought to the necessity of buying something that has meaning to collectors over the long haul and truly having a rarity factor.

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That works out to a return of about 10 percent compounded annually. To generate that kind of return consistently over 33 years is something.

Have I achieved it? Of course not. I am much better at finding assets that achieve the opposite of success, like the bank stocks that blew up in my retirement plan back in 2008 because I had bought them years before thinking the 4 percent and 5 percent dividends were generous.

To say that Perschke had a clear eye toward timeless numismatic value is probably an understatement.

But what’s a collector to do who cannot find the millions of dollars necessary to buy the eternal keys, the 1804 dollar, the 1894-S dime, the 1913 Liberty Head nickel and the 1885 Trade dollar?

Back when I was a kid in 1967, I wasn’t intimidated by the $46,000 that Aubrey Bebee paid for his 1913 Liberty Head nickel. I was earning $5 a week on my paper route and anything seemed possible.

Now, however, I know that these classic rarities will always be beyond my budget.

That does not mean there are not golden opportunities in the present. You just have to find them.

First and foremost, keeping in mind the market rewards collectors who have logically built and completed sets of classic collector coins, that is still the best path to take. Find what interests you, whether it be early coppers, Mercury dimes or Walking Liberty half dollars and build a high-quality set.

But you can also look around. We have many developing series. American Eagles are popular. Chances are, they will remain so.

What about the new series like Presidential dollars, or gold Buffalo coins? There is opportunity in those series as well. While there are never any guarantees, the secret is to figure out what you like, study it in depth and go at it with all you’ve got. The reward will come.

There is a paradox at work. Persons I have interviewed after the sale of their big name collections are often wistful that their effort is finished. They had been rewarded by the market. Any worries they might have had about the outcome were over, but they regretted the fact that they would miss the ongoing satisfaction of building something over time.

That is something to remember. In the future, we might ask ourselves why we didn’t realize just how good we had it as collectors back in 2012.

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