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Coin Collecting Mistakes and How To Avoid Them
by Larry

Mistakes do happen and when they occur, a price must be paid. This is so true in every aspect of our lives as the universal law of sowing and reaping rules supreme. The old adage that doctors bury their mistakes may have merit in the field of coin collecting too. If you pay too much for a coin it may be a mistake that you have to live many years with or even die with. As a treasure finding hobbyist who loves coins and have dug up coins worth over $100,000. 00, I want to share a few important lessons on purchasing, selling and storing coins.

Mistake #1: Stinking Thinking Syndrome

There are five magic words in life that apply to the coin collector–”Your thoughts create your life.” Too many think of themselves as purists and take a dim view when someone mentions the investment potential of a coin. This is stinking thinking! Think first as an investor and second as a collector. There are many reasons for buying coins and the pleasure of collecting them is important. I would never buy any coin that I didn’t like. The beauty and historical signifigance of a coin can make them attractive to you but the value of that coin is most important. Big ticket items like homes and fine cars are almost always bought with resale potential foremost in making that purchase. Think this same way when purchasing rare and valuable coins.


Mistake # 2 : Fad Buying

Coin publications and dealers get caught-up in the hype of the latest fad. I got started collecting when the roll fad was big in the 1960’s and in a short period of time the fad began to fade and many lost much money with common date roll stock that they could not dump. The 1995 doubled-die Lincoln cent is a classic modern example of fad buying. This error coin showed significant doubling particularly in the word Liberty on the obverse or heads side of the coin. Prices sky-rocketed to over $200 each in 1995 until thousands of examples and many varieties turned up in boxes and bags that were sold at premium prices. By the end of the year the value had dropped to less than 10% of the highs realized earlier. Avoid buying these fads as they could be your coin collecting nightmare.

Mistake #3: Buying Low-End Coins

The process of coin grading is a very sophisticated syndrome. Coins are graded from Fair to Mint state 70. Many dealers have a tendency to sell low-end coins at what appears to be big discounts geared at attracting novice buyers. In Mint State 60-65 coins there are many levels so that those who grade them attach codes to determine even the difference between low and high end coins at these levels. Very light scratches are still scratches and if you notice it on a coin do not buy it, even if the discount is big. You may pay for it “big” down the line.

Mistake #4: Misjudging The Rarity Level

People who are new to buying and selling coins frequently make mistakes about the rarity level, as well as the value, of certain coins. You can only get this kind of knowledge by talking with experts, by attending auctions and studying auction catalogs, by reading the population and census reports of the major grading services and by paying attention to what is happening in the coin marketplace. Most coins are commonplace not really rare. The word rare is thrown around by many to get quick sales of common coins. Disregard most of the calls on buying rare coins without having the ability to really know the difference. This can be a very expensive mistake.

Mistake #5: Storing Your Coins Improperly

There are three major enemies in storing your coins. The first is environment. Coins must be stored in a dry, stable environment. Moisture is deadly and will start a chemical reaction that will permanently damage coins. The second enemy is the coin itself. It needs to be degreased before put into its storage container. This will remove impurities not visible to the naked eye that can ruin a coin over time. The third enemy is the storage container itself. Do not use plastic PVC flips that can destroy coin surfaces and be very careful in using cardboard 2×2’s as tiny pieces of loose paper can lead to carbon spots. Spend a modest amount of money to buy quality storage for your coins.

By adhering just to these five lessons on common mistakes you can gain some valuable but not expensive insight on buying, selling and storing your coins. I want to encourage all metal detector users who are coin collectors to abide here as well. We tend to be a little sloppy in handling and storing dug coins of potential value. There is an inherent beauty of finding instead of buying rare and valuable coins. Remember you are a part of the only hobby that pays you to participate. Here’s to “diggin it”! Larry



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