Rare coins - general question

[coinbug]

I suppose this question could be applied to all collectibles but I'm concerned with coins so I'll ask here.

Is it a good idea or a bad idea to purchase additional examples of a rare coin if you are fortunate enough to encounter them in order to a) have them, and b) reduce the supply available with the idea of raising the price?

Are there collectors who focus on a few rare coins and buy multiples of them, and if there are how does that work out for them?

 

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[Mackaydon]

Reducing the population of one rare coin by buying several does not increase the value of the remaining population; only DEMAND for that coin will affect its value.
Said differently, if the coin is rare but there is no demand, what is its value?
If I had the funds, I'd diversify by buying different rare coins, with the hope that at least one of them would truly be a winner in the future.
Don......

 

[Iron Patch]

It's a catch 22... if the coins are super rare and very sought after you would be spending tens of thousands of dollars... maybe hundreds of thousands. But if they are just $50 or a few hundred, or a few thousand, you won't make a dent in the population, or like Don mentioned, affect the demand... so the question is sort of a non starter. That said, the way it can work and make sense is to buy if you are getting a good deal and know you can sell for more.

 

[coinbug]

The coins in question are medieval, not modern, so they are rare to begin with and are a variation which makes them rarer still. Currently, they fetch a premium to their grade (though there are so few sales I may be the only one paying it lol). Note these aren't super valuable coins - a few hundred dollars.

I take the points mentioned above, and have also realized that if the price did increase more examples would magically come on the market.

I still wonder whether there are any well-known coin collectors who have pursued this strategy. There is something compelling about having multiple examples of a rare item - a superb example, another with stellar provenance, a lesser one you might part with if sufficiently motivated etc.

 

[l.cutler]

It has been done, I believe some years ago someone was buying up all the 1844 dimes they could. Can't remember how it came out. There have been other instances as well.

 

[jerseyben]

My opinion: It might work in theory but not in practice.

 

[insontis]

Am I the only one who made a mental comparison of this to roulette? You can bet big on one and hope it hits for a huge payout, though however unlikely. Reversely you can spread your investments across a wider field and have a greater chance of coming out ahead..

 

[JerseyDigger19]

Hello Coinbug,

I've been selling ancient and medieval coins for 15 years and I have to say it is EXTREMELY dangerous to do this! The prices for ancients and medievals over $100 are hugely variable and range widely from auction to auction, so a coin that sells for $500 at a "lucky" US auction could go for $200 the next month in Germany. Also trends in specific types of rarities over time can change dramatically simply because one or two buyers are present or out of the market. Case in point - about 10 years ago I collected the Constantinian "camp gate" series and also wanted to get my hands on some of the rarer Constantine Rome mint emissions. I used to buy and sell mostly on ebay, and there were 2 guys with hugely deep pockets that would literally bid on every example that came along. For a coin I wanted to bid $150 on, one would snipe $525 and the other would bid $600 and win it at $530. The same thing happened for the commoner campgates, even merely scarce types went for $50 or $75 because there were quite a few collectors chasing them. Today I would have a hard time selling those coins for $20, and while the Rome guys are still bidding like crazy, imagine for a second if they were both out on vacation and the three highest bids were not $600, $525 and $150 but $150, $70 and $50. Then - you guessed it - I would win it for $71, and the seller would be hugely disappointed. That's the world of ancients and medievals!

 

[Silver Searcher]

They can devalue over night, especially if a hoard comes to light. This happened when back in the late nineties a huge hoard of saxon sceats came to light, they where scattered, and the site was being night hawked, the values plummeted because the coins came up for sale all over the place.

SS