login

Author Topic: A naive investor's lot  (Read 1637 times)

0 Members and 1 Guest are viewing this topic.

Offline Figleaf

  • Administrator
  • Honorary Member
  • *****
  • Posts: 25 352
A naive investor's lot
« on: June 22, 2009, 09:55:24 AM »
Check both sides of the coin
Collecting rare coins offers excellent potential for profit. That is, if you can avoid the influx of Chinese counterfeits.
By Richard Morrison, Financial Post, May 23, 2009
 
Among all the collectible items you might want to diversify your investment portfolio with, rare coins offer the most potential for profit, as there are more wealthy coin collectors than there are say, collectors of stamps, baseball cards, comic books or just about anything else.

Sadly, counterfeiters have figured this out too. A simple search on eBay and a few online auction sites show that it's common for rare coins to attract bids of $1,000 or more -- and that means huge profits for those who can pass off counterfeits bought for a few dollars as the real thing.

Neal Shymko, a coin collector in Edmonton, logged on to eBay in February and spotted a package of 15 Canadian 50˘ pieces being offered by a Quebec-based seller. Twelve of the 15 coins were of so little value their combined worth would be about $50, Mr. Shymko says, but three coins, from 1888, 1890 and 1894, were noteworthy, and he won the package with a $4,000 bid, then paid with a money order.

The coins arrived soon enough. After a quick glance showed they were indeed old 50˘ coins, Mr. Shymko logged on to eBay and gave the seller positive feedback -- a favourable review of the transaction, a move he later regretted, since eBay does not allow changes.

Mr. Shymko says he grew suspicious about the three high-end coins when he took them out and noticed they felt unusually light. Such coins should weigh 12 grams, but when he put them on his postal scale, each of the three weighed only 8.5 grams.

"Just to make sure my scale wasn't out I checked other coins I have from the same time period and they all weighed in at the 12-gram mark," Mr. Shymko says.

Before putting them in a safety deposit box with the rest of his collection, he examined the three coins and discovered they'd been struck improperly, with the same obverse, or front, for all three, and a historically incorrect obverse for the 1894 coin. As a final clue, Mr. Shymko noticed the seller had reused a box with a label from China, where producing replicas of rare coins is a huge industry.

Mr. Shymko contacted the seller, who first claimed an inability to understand English, then fell silent when Mr. Shymko used an online translator to correspond in French.

"All correspondence from them has now ceased," Mr. Shymko says.

Mr. Shymko complained to eBay, which sent him a few form-letter replies and said its staff was investigating but could not offer further details because of privacy issues.

"Ebay has been totally useless in this matter," he says.

Andrea Stairs, an eBay Canada spokesperson, described the incident as "not typical to eBay," noting that according to the information she has, the seller, who spoke no English, used a translation program and listed the item in good faith.

The incident "was the result of a couple of really unusual events," says Ms. Stairs. "We have a zero tolerance for counterfeits and we're doing our best to make sure that those things don't hit the marketplace," she says, adding that eBay works with the RCMP, the provincial police forces and members of the numismatic community to develop guidelines and policies that help protect buyers from purchasing illegal merchandise.

Ms. Stairs says if Mr. Shymko had paid with PayPal, he would have been protected up to the full amount of the purchase price -- something Mr. Shymko says he's heard several times since then, but which doesn't make him feel any better.

A recent search on eBay found 352 replicas of rare Canadian coins for sale, all but four from sellers in China. Another 9,950 replica U. S. coins were listed; of these, 9,134 were from China. There is nothing illegal about buying or selling a replica, as long as the coin is stamped as such. A collector who wants the 1936 "dot" Canadian 1˘, for example, might want a replica since only three genuine ones exist, going for prices of $200,000 and up. A replica of the coin on eBay, however, is just $4.65, with free shipping. A replica of the extremely rare 1921 Canadian 50˘ piece, which goes for $35,000 to $85,000, depending on its condition, was on offer for US$4.

On eBay, the photographs of the coin copies show the word "replica" stamped into the coin. But if it arrives without a stamp, the buyer has a counterfeit coin.

To avoid being victimized by a counterfeit coin, it's best to stick to coins that have been independently examined, graded and encapsulated in tamper-proof holders. In Canada, that means only buying coins graded by International Coin Certification Service (ICCS) of Toronto or Canadian Coin Certification Service (CCCS) based in Saint-Basile-Le-Grand, Que. ( canadiancoincertification.com).

Louis Chevrier, CCCS president and chief grader, has been a coin collector for 35 years, a dealer for 16 years and a coin auctioneer for the past five years. He says he can usually spot a fake coin right away.

"It raises a red flag with me. I get a gut feeling there is something wrong," he says, adding that some Chinese replicas are often crudely made but novice collectors could still be fooled.

Mike Marshall, a coin collector in Trenton, Ont., says he has tried without success to make police enforce Section 406 of the Criminal Code, which deals with counterfeit coins, and to persuade politicians to contact eBay and urge them to disallow the sale of "replica" coins.

"One phone call from an agency of power in Canada to eBay would end the influx," Mr. Marshall says.

rmorrison@nationalpost.com

Source: The Vancouver Sun
« Last Edit: July 04, 2009, 03:41:07 PM by Figleaf »
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline Figleaf

  • Administrator
  • Honorary Member
  • *****
  • Posts: 25 352
Re: An naive investor's lot
« Reply #1 on: June 22, 2009, 11:43:58 AM »
The simplicity of the reasoning of why coins would be a "good investment" never ceases to amaze me. Here it is: "rare coins offer the most potential for profit, as there are more wealthy coin collectors than there are say, collectors of stamps, baseball cards, comic books or just about anything else". This author calls himself a financial journalist.

To begin with, most collectors are not rich. Those who are, catch the eye of superficial journalists when they spend idiotic amounts on pieces that did not circulate, but the great mass of collectors are not in the newspapers and the great mass of coins are cheap.

It is ludicrous to compare an investment in coins with an investment in other collector items, not with stocks or bonds. Furthermore, this bread-writer presents no evidence of the return on coins. He seems to ignore even what "rare" means. Also, he does not consider the risk on investing in coins, let alone compare risk and return. He is obviously ignorant of the fact that the Chinese fake grading company's holders. All he does is drive more poor retail investors into markets where professionals will take over their pension money free of charge. :(

The crowning folly is of course to consider only demand and not supply. There are plenty of cases of coins that were once hard to find and are now plentiful, even though in some of these cases, the price has remained on silly levels. Moreover, there is anecdotal evidence that the interest in coin collecting diminishes in North America, which would indicate lower future price levels.

The naiveté of the collector who spent his money on high priced items from a Chinese seller on eBay and believes eBay should help him pales with the outright stupidity of this journalist.

Peter
« Last Edit: July 18, 2009, 06:35:50 PM by Figleaf »
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline Figleaf

  • Administrator
  • Honorary Member
  • *****
  • Posts: 25 352
Re: A naive investor's lot
« Reply #2 on: July 18, 2009, 01:31:56 AM »
Trenton coin collector pleased bogus coins are taken off Ebay
Posted on Thursday, July 16th, 2009

A Trenton coin collector is celebrating the success of his two-year campaign to get counterfeits of classic Canadian coins dropped from Ebay.

Forty-eight-year-old Mike Marshall says he at first faced a lot of disinterest from police and federal officials in Ottawa.

He and the Royal Canadian Mounted Police got die-struck fakes of older Canadian and Newfoundland coins, which six firms in China still produce and sell there, removed over the past week.

Marshall is a collector and is retired from the military.

Source: Mix 97
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline alglasser

  • Meritorious Member
  • ****
  • Posts: 833
Re: A naive investor's lot
« Reply #3 on: February 10, 2011, 09:17:06 PM »
While building my U.S. type set over many years, I proudly added a 1795 dollar, VF 20, certified by a reasonably respected company. A couple of years ago, I submitted it to PCGS and it turned out to be a Chinese Counterfeit. Although the certifying company DID work with me thanks to assistance from some great guys on the NGC board, it was enough of a turn off to certification as a whole and I put my U.S. tupe set on hold...though I can't afford to add more anyway...much too pricey for what I am lacking.

I then dived heavily into my music coin set and was wondering if certification of modern foreign is really an asset to a coin's "value" or not. I have some better pieces, including several highest certified grades in PCGS and NGC holders. Then I got to thinking...SO WHAT! At $15 or $20 a pop, why would I pay to certify these coins as there is so little demand and I just love the coins...not the plastic. I never paid for any certifications, got them certified for free when I belonged to the PCGS and NGC clubs (which I think are great, by the way) but I have to question if ANY modern world commemorative issue is worth certification. To me, no. I don't think it markedly increases the value or the market for the coin. I don't know...I just got turned off to the whole "certification industry". My whole U.S. type set is certified by PCGS or NGC...with a few ANACS and very few SEGS....about 15 of my hundreds of music coin collection are  certified, and I have no intention of increasing than number.

As an example, I have what is (or used to be) the highest graded Austria 25 schilling Haydn coin certiofied by PCGS at MS 65 and the highest graded  Russia 50 Rouble Gold Tchaikovsky coin NGC Proof 69 Ultra Cameo. Because they are in the plastic...and may be highest graded, does that make them any more valuable? I think not.

So now I go raw unless the coin is already certified. I put them in the nice rigid plastic Eagle holders, in the pages and they look just as good...if not better than those slabs. Alan

Offline Figleaf

  • Administrator
  • Honorary Member
  • *****
  • Posts: 25 352
Re: A naive investor's lot
« Reply #4 on: February 10, 2011, 10:49:26 PM »
I don't think you will find (m)any people on this site who see the utility of grading companies. It's not a question of money. Advanced collectors do not collect as an investment. Selling their collection is usually traumatic far beyond the proceeds of the sale.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline andyg

  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 3 061
  • DERBYS · UK
Re: A naive investor's lot
« Reply #5 on: February 11, 2011, 12:00:53 AM »
I don't think you will find (m)any people on this site who see the utility of grading companies.

I'm thinking of getting all my new year tokens certified - just because no one else has - so I will proudly be able to proclaim that my tokens are the finest known. (are you listening Dale?) ;)

It's yet another "advantage" of getting your coins certified :-X
always willing to trade modern UK coins for modern coins from elsewhere....

Offline alglasser

  • Meritorious Member
  • ****
  • Posts: 833
Re: A naive investor's lot
« Reply #6 on: February 11, 2011, 12:44:55 AM »
If NGC or PCGS would offer me free certification so I could have the best in category collection (maybe)...I'd do it...but neither company is exactly breaking down my door. Maybe someone already beat me to it??? Right now, I'd rather not plop thousands of $ into a bunch of plastic.

Alan