Dear Daily Crux reader, Van is the president of David Hall Rare Coins, and co-founder of the highly-respected Professional Coin Grading Service, which revolutionized the rare coin market. Given the huge rally in precious metals recently, you might expect rare gold and silver coins to be expensive today… but Van says this isn't the case at all. In fact, he says two of the world's best coins are cheaper than they've ever been. Read on to learn about two of the best buys in precious metals today, and get Van's thoughts on where the rare coin and collectibles market could be headed next. –––––––––––––––––––––––––––––––––––––––––– The Daily Crux Sunday Interview The Daily Crux: Van, what's the state of the rare coin market these days? Crux: Thanks for talking with us, Van.
Longtime Stansberry Research readers know Van Simmons is one of the world's foremost experts on rare coins and collectibles.
Regards,
Justin Brill
Managing Editor, The Daily Crux
www.thedailycrux.com
The greatest values in precious metals today
Van Simmons: The rare coin market is healthy… It's very liquid. But we have seen a bit of a shakeout with the price of gold going down. So it's taken many of these coins out of the so-called "weak hands." Most of the people left are the strong, longer-term investors… That's who's holding most of this stuff right now.
Some of this area has become very inexpensive, and I can assure you it's not going to stay this cheap forever. This is how the rare coin market works… it rarely trades step for step with precious metals. In the last big bull market of the '70s, many of the coins didn't actually make big moves until after the metals had soared.
As this bull market matures and begins to draw more interest from the public, I think you're going to see investors increasingly move away from bullion and into assets like gold and silver stocks and rare coins that will offer much more leverage to the price of the metals. Considering how inexpensive some of the coins have become, I think they're some of the best values in the world today.
Crux: Are there any coins you're especially excited about right now?
Simmons: Absolutely. The number one value in the world today is probably the pre-1933 Saint-Gaudens gold coins graded MS65 – meaning they're in mint condition.
Let me put it in perspective… These coins should easily trade at two or three times the price of gold. At the previous all-time peak in 1980, gold traded for $850, but the MS65 Saint-Gaudens went for $5,500 at their peak… meaning they traded for more than six times the price of gold.
Today, they trade at about $2,100, or less than 60% over the price of gold. This is the cheapest these coins have ever been relative to the price of gold. It's hard to imagine them becoming much cheaper.
So we're talking about the potential for gains of up to 85% as these coins return to their historic value… and that's if gold goes nowhere. If they were to return to the previous peak premium to gold, these coins could rise more than 10 times from current levels. And these are some of the most beautiful gold coins the U.S. ever minted… so there's always going to be demand for them.
As my friend Steve Sjuggerud likes to say, owning these coins is like owning a junior gold mining stock, but with less risk. If gold goes as high as many believe it could, these coins could soar hundreds of percent just like the stocks… but your downside is limited. Junior gold companies can go out of business – and a huge number of them do. But these coins contain just under an ounce of pure gold… so your risk is limited by the price of gold.
Crux: Do you have any recommendations for readers who might be looking to make smaller investments?
----------- Advertisement -----------
How to Buy U.S. Gov't-Created Silver for $2.08
The U.S. Gov't has created a little-known way to own silver for just $2.08.
It has nothing to do with stocks... options... collectible coins... or anything you've likely heard of before.
But this silver investment could be one of the cheapest ways to protect your money from the decline of the U.S. dollar.
Click here for details.
----------------------------------------
Simmons: Well, another of the great values right now – that is also very affordable – is the silver Morgan Dollar. They're also a great example of how rare coins can behave in a big bull market.
In 1976, silver was going for less than $4 an ounce, and MS65 Morgan Dollars were $60 apiece. Just four years later in 1980, silver hit $48 an ounce… but the MS65 Morgans were still trading for just $80 a coin. They had moved up only about 30%.
Then, of course, silver collapsed… But people began to realize that while silver had gone up over 10 times, the Morgans hadn't really done anything. So like I mentioned earlier, the Morgans didn't begin to move until after silver had peaked. The MS65 Morgans went from $80 to $800 on a dealer-to-dealer basis from 1980 to 1986… during a time when silver dropped 90% in value.
The Morgans then fell all the way back down to $125 by the mid-'90s while silver was trading around $5 or $6. Now silver is back up to $26 or $27, and the Morgans have barely moved again. They're trading around $170 apiece. I mean, at that price, they're practically a joke… that's just ridiculously inexpensive.
Sooner or later investors will begin focusing on the great value here, and we'll likely see them soar several hundred percent again. If silver can manage to make new all-time highs like gold, the sky is truly the limit.
Crux: Are there any other coins or collectibles on your radar right now?
Simmons: Well, the other coins I like quite a bit are MS65 Ten-Dollar Indians. These are actually more expensive than the Saint-Gaudens, but they're also very rare.
For comparison, PCGS (Professional Coin Grading Service) has graded 110,000 of the MS65 Saint-Gaudens, while we've graded only about 3,000 of the Ten-Dollar Indians. They currently trade at a little less than $4,400, but that's a very low premium to the rarity. These are a great value too.
As far as collectibles… The stamp market has moved up quite a bit over the past year. It became overpriced, but it's probably starting to come down a little bit in price.
Guns have also become very expensive, although some of the World War I and World War II pieces – old antique guns, but in factory new condition – are still very underpriced. They're a couple thousand dollars. And to me that just seems almost free, they're so cheap.
I also like – and this is kind of an oddball subject – but I've been buying some of the California-style watercolor artists from the '20s to the '40s. I've probably read about 30 books on them, and I think that's an area that's very, very desirable.
It was a huge market prior to World War II. They would show art all across the United States in different museums, in different shows. And then the war came along and the world kind of changed. People started moving more towards the modern art era through the '50s and '60s… So the California regional art kind of disappeared.
Some of the paintings you can buy for $1,000 to $3,000 are just fantastic pieces of art to hang on the wall. The downside for me is zero at this point. It's a steal – you can buy a lot for your money.
The problem is finding somebody who deals in them that's honest… and I know one or two guys who I think are very honest and very straight. So if anyone's interested in these, they can give me a call and I'd be glad to give them a couple names.
Everyone's taste is a little different, but I think the California regional and landscape type of art is fantastic. By regional, I mean paintings of people sitting there working on their car on the side of the road with a gas station in the back… Or the San Francisco scene where you've got the red car going underneath the bridges, there's people walking around with umbrellas, that type of thing. In other words, things that were going on in the region.
There are many books written by Gordon T. McClelland and others that you can take a look at to get a feel for this stuff. I think it's fantastic, and I expect it to be a great investment… but this isn't like the coins I mentioned earlier. This is a much longer-term, 10 to 20 year type of investment.
Simmons: My pleasure. Thanks for having me.
Editor's note: Van is happy to speak with Daily Crux readers about making coin and collectible investments. You can reach him at (800) 759-7575 or (949) 567-1325, or e-mail him at info@davidhall.com.
Sunday, 30 January 2011
Posts
