How To Get Collectibles For Free

It isn't rocket science.  I think we all know that you'll get a better price for your collectibles if you sell them individually.  If your collectibles consist of five rare coins, three rare pieces of currency and a couple of rare comicbooks, do you think you'd get more money for them if you sold them as a group?  Of course not.  Because the comicbook collector who may want one of your comics would be forced to buy coins and currency.  She might not know anything about them, right?  And if she didn't, she'd bid on them conservatively...that's just human nature.

OK, what about 3 dissimilar revolvers from the 1800's?  The guy who really knows his Colt Revolvers may not have much knowledge on the value of an off-brand, so he'll bid conservatively.  Perhaps he'd bid against another fellow who doesn't have the money for the off-brand revolvers so he doesn't place a large bid, even though he could have paid top dollar for that off-brand.

See the point?  Selling items in individual lots is almost always bad for the seller.  The only time it is good for the seller is if the items are very similar and cheap so that the savings in shipping costs can outweigh the seller's disgust of having to buy items they don't want.

But this article is about getting stuff for free!

We've established that selling things in a lot, group, or collection is generally bad, right?  But let us remember, what is bad for the seller is probably good for the buyer!

As a buyer, we should be looking for lots.

I bought a lot of two coins and two Hawaii Emergency $5 notes.  I sold just one of the $5 notes for almost as much I paid for the entire lot.  I haven't gotten around to selling the coins yet, but they should easily sell for more that I have left in the lot.  So I get to keep the best $5 note for free.

I recently bought a large group of Mexican Currency from a dealer friend.  I got a pretty good price.  Good enough to place some of the items up for sale to get my money back, and I will get to keep a few pieces for myself.

As I write this, I'm waiting on an auction lot I won to arrive by mail. It's also foreign currency.  When I get it, I can sell off a couple of the pieces from that lot and have the rest free and clear.

See?  Free stuff.  It can be labor intensive, but if cash is tight you can "earn" free stuff by playing the middle man and selling the lot/collection as it should have been sold....individually.

A Common Theme Among Collectors

It's been a while since I blogged, so I thought I'd share a thought with you.  Over the last few weekends, I tried my hand as a comic book dealer.  I set up at some shows with the idea of both selling, and buying.  I set my prices to sell my "lesser" material at bargain prices and I wanted top dollar for my nice material.

Fact is, I knew exactly what I wanted to sell my better comicbooks for.  How did I price them?  I have a low grade copy of Hulk #2 in a CGC Slab.  My copy grades a 3.0. 

I set my sell price at the dollar figure that would allow me to take the cash and then go to a popular on-line auction site and buy the same book in the grade 3.5.  While this may give the impression that my book was over-priced, it was not.  I shopped hard for that 3.5, and all I needed was a buyer who wanted my book and wasn't aware of a slighlty nicer copy.  Alas, it did not happen.  In fact, I sold very few expensive comics while I was acting as a dealer.  Disappointing, really.  I do not attribute it to my prices, but rather to the economy in general.  People seemed to sit on their wallets at the shows I was selling at.

Always one to make lemonade out of lemons, I decided to make money other ways.  I did sell a lot of Manga books and a few hats and some of the cheaper books.  They paid for the adventure.  But another way I wanted to make money was on the purchase of comicbooks.  I looked at the shows as a buying opportunity.

OK, we're drilling down to the point of this long-winded diatribe.  I met not just one, but several collectors who were interested in my better priced books, but did not buy.  Seeing that they weren't interested in purchasing, after establishing they had good books at home, I told them that I was a buyer.

and here's the thing...

Of the guys who truly gave the impression of having good stuff, they all had one thing in common:

THEY ALL REFUSED TO SELL ANYTHING.

Yep, there's the theme of this blog entry.  All of them refused to sell their good material.  And that makes sense.  Why is it that savers always have money and spenders never do?  Because the spenders give their money to someone else, but the savers do not.  The same is true of collectors.  If you want to have a big collection, worth oodles and oodles of cash, you must learn one important rule.

IF YOU GET SOMETHING REALLY GOOD, DON'T SELL IT.

The best way to get a great return on a collection is to fill that collection with good things and keep them.  If you sell your best stuff, you end up with a collection of run-of-the-mill stuff, or no collection at all.

So, if you collect, and you get something great, don't sell it.  If you absolutely need cash, try to sell off the more common stuff first.  That can take discipline and timing because the fastest way to raise cash is to sell the better stuff.  But try not to do that, OK?

Local Auctions Don't Have to be Inconvenient

I've considered bidding on collectible auctions in the past, but I found it "infeasible" because I don't have the time to attend.  Boy, was I wrong!  You don't have to attend to win!

This weekend I went to a local auction site to look at currency.  They often hold back some for direct sales.  I learned that they were having an auction the next day, Sunday.  I lamented outloud that I couldn't go, and they told me that I could put in a proxy bid.  It was easy.  Fill out a form, mark down the lot you want to bid on, and then cross your fingers.  The nice thing about this method is that you can look at the item closely.  And in my case, I even used my smartphone to look up some of the items on ebay to find out what they were selling for.  I was convenient to have the time to do that.

So what happened?  I put in a $135 proxy bid on a CU64 Hawaii $1 note, certified by PMG with an "exceptional paper quality (EPQ)" designation.  I also put in a $110 bid on a 1917 $2 note in VF+ condition.  Conclusion?  I won them both.  My winning bids were $100 plus an $18 buyers fee on the Hawaiian note, and $90 plus a $17 buyers fee.  Total cost...about $225 combined.  Value of these notes on Ebay is about $180 for the Hawaii and $150 for the $2 note.  That's a gain of $105 on some nice notes.  I intend to keep them, so it boosts my progress in my on-going flipping contest.  After my comicbook sales last week, I was at $213.  So now I can add 1/3 of $105, or $35, so I'm now at $248.  (The reader may not be aware, but when I decide to keep an item, I can only declare 1/3 of the "profit" per the contest rules.  I might be selling some more comicbooks which I recently stole (ahem...I mean purchased) from a local dealer if I can find the time.

 The bottom line is this though....local auction proxy bids can be very good, and you can inspect the merchandise too.  Just remember that you need to factor in a buyer's premium...in my case, a hefty 18%

Collector Steve

Observations from a big comicbook show

I just got back from the 2012 Megacon comicbook convention.  I have to say, comicbooks were selling briskly!  Dealers were complaining that much of their good material sold quickly.  By the time I got there on Saturday, the second day of the show, I felt lucky that I found anything good for full guide prices.  Seemed like all of the good material still lingering on the dealers display were overpriced.  And for the priviledge of paying guide for nice items, I had to really search!

Interestingly, I've been hearing anecdotal feedback about coins and currency sales as well.  Things are picking up a bit.  Perhaps this is a sign that the economy is improving, or just new confidence in collectibles in general.  Whatever the case, good material costs more than guide.  If you can find it for guide, you may be doing better than you think if you buy it.

Steve

A Secret Between Us

Let me guess...you saw the title of this thread and your curiousity got the better of you.  You had to open it up and find out what it said, right?  If so, congrats.  I think your curiousity is going to pay off for you.  Read this all the way through and you'll see why.

Way back in the year 2009 (remember then?) we were in a deepest part of the great recession and people needed money.  At the same time, the company that produces coinstar machines was growing by leaps and bounds.  Coinstar machines make it so convenient to cash in your change...just pour it into a machine and they deduct a fee for "folding money".   This set up the perfect storm for recirculation of old coinage.  So many people on hard times brought in their old coins to cash them in that the banks were awash with coinage.  So the banks didn't order much new coinage, and mintages were abnormally low.

Now lets talk about one of my favorite coins, the Jefferson Nickel.  I love them as a collectible coin.  I've always thought they are under-rated as a coin.  They have overdates, repunched mintmarks, silver varieties, and unique toning that makes them very fun to collect.  Plus, unlike many coin series, they are inexpensive enough to collect by date and mintmark, which speaks volumes about the future potential of the series.

By now, you've probably figured out that this article is about the 2009 nickel.  Yes it is!  But here's the interesting part.  The 2009 Philadelphia ("P") mint nickel was the first to be found in pocket change in the middle of 2009.  39.8 million of these nickels were minted, making them the lowest mintage for a few decades.  Because of that, these nickels were well received in the aftermarket.  I watched prices of these nickels climb to about $80 a roll before they showed up in large numbers.  Then this glut of nickels, and competition to sell them drove the roll prices down to about the $18 level (that I witnessed) before supplies started to dry up.  Prices then began to climb and they are now at about $60 per roll (early 2012 prices).

Here's the cool part.  The Denver mint 2009 ("D") nickels seem to be following in the footsteps of the "P" mint nickels.  They have a slightly higher mintage of 46.8 million.  But interestingly, they weren't even released until a few months into 2010!  I did see a roll of these nickels that may, or may not have been a genuine ebay listing that surfaced in 2009 that sold for almost $200 a roll.  That doesn't matter.  My point is that these nickels were released almost a year later than their "P" mint cousins.  What happened then?  Well, I watched their per roll price fall from $60 per roll downward to a low of $8 each.  Yours truly, bought a few of them at $8 on speculation a few months ago.  Since that time, the price has steadily risen to about $15 per roll individually and it sure does seem like the prices are drying up.  I managed to buy some more on a bulk purchase that will cost me about $11 per roll delivered.

To recap, the "P" mint started at $80 per roll, suffered through a glut of sales on ebay that drove the price down to about $18 a roll before rebounding to about $60 per roll.  The "D" mint rolls were released a year later, and in part because they are almost as rare, appear to be following the same path.  Like every collectible that I mention in this blog, you need to make up your own mind on purchasing these, but it wouldn't surprise me to see these selling for $50 a roll within a year or so.

If you buy some 2009-D Nickels, you need to make sure that you are buying uncirculated "BU" rolls. Original bank rolls.  Focus on getting them as cheap as you can per roll after factoring in your shipping costs.  Once you get them, don't open the rolls.  Some of their value is tied to the fact that they are unsearched. 

Now remember, this is our secret...your reward for reading this blog.  Here's a link that sorts lowest prices first on ebay for your research:  http://www.ebay.com/sch/i.html?_nkw=2009%20d%20nickel%20roll%20-p&_dmpt=Coins_US_Individual&_fln=1&_sc=1&_sop=15&_ssov=1&_trksid=p3286.c0.m1539&_mPrRngCbx=1&_udlo=4&_udhi=

Collector Steve

***Update:  When I wrote that article, I finished buying some rolls at $11 each.  Some I got as cheap as $8.  It appears they are now around $16 each for the best deal.  That's a 50% to 100% return so far in about 6 months or so.  You can make a killing in collectibles if you apply the right concepts.

Another Score

I had to travel today.  I spent part of my lunch hour at a coin shop in a samll town.  I found a 1913-P Type II Buffalo nickel graded MS63 in an NGC slab for a bargain price of $50 even.  The Redbook guide says it is a $80 coin in this grade but one sold last week on Ebay for $125 in the same grade in the same Slab. (A special thanks and a shout-out to my friend Curvey for looking that up for me over the phone!) 

I think I'll keep it.  It's a nice type coin and it's worth enough to where it is worth its storage space.

Collector Steve

I've got a time machine and $800

Here's the situation.  The year is 2010, I have $800 and a time machine.  The year 2010 is when I bought my comicbook price guide, so bear with me.  Unfortunately, since I'm on a budget, I bought my time machine as a "scratch and dent" model so it will only go back 8 years.  Now I'm a really big comicbook fan, so I set my time machine to transport me to a really big comicbook convention in the year 2002.  I figure Spiderman comicbooks are a good safe bet, so my plan is to spend my $800 on some Spiderman comicbooks at the convention and then zip back to the year 2010 with my investment. Hopefully, I'll choose the right comicbooks.

But now the big question:  What do I buy?  Should I spend my $800 on one really important comicbook in low grade?  Or maybe a somewhat important comicbook (or two) in mid-grade?  Or perhaps I should buy a really mint version of a not so important comicbook.  What do I do?

Here are my choices:

1.  I can buy a "good" copy of Amazing Spiderman for exactly $800.  This agrees with the 2002 price guide loaned to me by a friendly dealer.  This book, in "good" isn't really that good at all.  A good comicbook looks pretty rough, but it is still intact.  Hmmm....It would be nice to have a Spidey #1! 

2.  Or, I can afford two comicbooks in Fine, like a Spiderman #5 in Fine for $414, which is an early Dr. Doom appearance (a really cool bad guy) and a Spidey #6 in Fine, which is the first appearance of the Lizard (another cool bad guy), for $375.  I'd still have enough change to buy an overpriced lunch for my $800.  These books look better than average, but they still show some wear.

3.  Lastly, I could spend my $800 on a Near Mint copy of Spiderman #17.  This is the not-so-important second appearance of the Green Goblin (yep, another cool bad guy).  By guide, it is a $875, but the dealer gave me  a 10% discount.  I figure maybe I can pass on that savings to the next guy and sell it for 10% off when I get back to the future (pay the good Karma forward).

I think I'll take option #2.  I figure I may as well take the middle of the road option by buying the two comics in Fine condition since I don't know the outcome.  Note that I'm careful to pay the dealer with currency dated before 2002 so as not to arouse suspicion. :)

Now I jump in my time machine and go back to the future to see how I did with my new purchase.

Option #1 is now worth $1500

Option #2 is now worth $636 plus $513 for the #5 and #6 respectively, totalling $1149.  Say $1170 after factoring the lunch money that I could have invested in something other than a hotdog.

Option #3 is now worth more than $2000.  I don't know exactly how much because the 2010 price guide only goes to a low end Near Mint grade.  Even with the 10% discount I need to give it for the sake of fairness (or Karma), I'm sure it's worth more than $2000 in the slightly lower (but still very high) grade.

So what can we conclude?

The return on our investment is a kinked line, like a "V" or a "U" where the Y-axis is return on investment and the X-axis is grade and I chose badly by selecting the middle of the curve.  It seems that it is better to spend a set amount of money either on a very key item in low grade, or a somewhat key item in a very high grade.  This is probably because collectors want items that are very key, even if they are in low grade, or the items that are in very high grade, even if they aren't as important.  Oh, and for the record the better collectibles in this scenario averaged around a 10% return.

So, does this work with other collectibles?

Quickly, here's a scenario:

In the 1990 Redbook price guide, $65 will either buy you: 

1.  A very rare "key", but very worn 1914-D cent in Good (low grade).

2.  Six Fine (mid-grade) 1910-S (semi-key) cents at $10 each with $5 left over for lunch. (or 6.5 coins if you want to think of it that way).

3.  A Choice Uncirculated (MS-63) 1919-S cent...(an uncommon but definitely not key coin).

How do those do in the 2012 Redbook Price guide?

1.  The 1914-D cent guides for $215.

2.  The six 1910-S cents (combined) guide for $143 after figuring in a similar return for the lunch money.

3.  The 1913-S cent sells for $275.

The average return on the best two selections in this example is about 6.2%.

Note that the selection of the coins was somewhat difficult due to the fact that the price of a low grade key coin and a mint state coin was so high relative to the price of a mid-grade more common coin.  It took many mid-grade coins to be equivalent to the amount you'd spend on one nice coin and the 1914-D isn't even the absolute key of the series! The comics, on the other hand, were all fairly key.  In effect, the division line between key vs. non-key coins is more obvious than it is with comics; possibly due to the fact that comics are keys due to their content/popularity, rather than their production numbers. (i.e., with coins, it's obvious if you have a key or not, but with comics, the transition is more subtle).

Regardless, low grade and key or high grade and non-key trumps mid-grade semi-key material most of the time for the same dollar value.

Collector Steve