From Barron's Penta blog:
Collecting old coins isn’t what it used to be. Just ask Jeff Garrett, a collector and dealer based in Lexington, Kentucky. He recently bought a minority stake in a 1913 Liberty Head nickel worth nearly $3.2 million. Up to that point, Garrett had thought nothing of purchasing coins of around $100,000 in value, but this, he says, took his collecting “to a new level.” It was both thrilling and a little frightening, he says—“I lost a considerable amount of sleep.”
More and more collectors are getting in on that kind of excitement. While iconic coins selling for more than $1 million used to be headline news, they now seem almost commonplace. The last six months have seen two record-breaking sales, with Stack’s Bowers, a top auction house for coins and paper currency, selling an 1891 $1,000 silver certificate for $2.6 million and a 1794 silver dollar for $10 million. That was the first coin to break the eight-figure barrier at auction.
If history is any guide, those gems will be worth even more down the road. “Coin collecting is a fabulous investment,” Garrett says, “If you look back and see what coins have done in the last 10 years a lot of them have doubled and tripled in price.”
Garrett’s partial ownership of that nickel could itself be an excellent investment. The coin certainly has pedigree: Although the U.S. Mint replaced the Liberty nickel with an Indian Buffalo nickel in 1913, a rogue Mint employee made five of the Liberty coins. Those five are now highly sought after. The one Garrett snagged had been owned by noted collector George O. Walton of North Carolina. After Walton died some 50 years ago—in a car crash en route to a coin exhibition—an auction house mistakenly told his family the coin was a counterfeit. The nickel remained stashed in his sister’s closet for most of the intervening years. When the family eventually took it out to show to experts, it was authenticated and put on the block.
For Garrett, 55, buying a piece of it was the culmination of a lifelong love of coins. In an interview, he described a trip to Washington D.C. when he was a teenager, in which he marveled over the Smithsonian’s Lilly collection. In 1968, Josiah Lilly donated over 6,150 coins, including an almost complete collection of U.S. gold coins. “When I went in there it totally set me off,” Garrett say, “It was just a room full of gold.” Since then, Garrett has made U.S. gold coins his specialty.
1913 Liberty Nickel purchased recentlypurchased for nearly $3.2 million
People, Garrett says, “are generally fascinated with money.” And since the financial crisis of 2008, fascination has, for many, become an obsession. Chalk it up to the world’s new ardor for gold. When the dollar fell out of favor a few years ago, goldbugs flocked in droves to precious metals. Even though gold has fallen to about $1,300 per troy ounce from a peak of $1,800 late last year, there is still serious support for investing in rare coins.See also:
Rare-coin auction houses, like Stack’s Bowers and Heritage Numismatic Auctions, have clearly benefited from the trend. Stack’s Bowers has seen live auction sales increase more than two-fold, from $55 million in 2010 to $125 million over the past 12-months. Dave Bowers, chairman emeritus at Stack’s Bowers, sees the strong sales as vindication of rare coins as a tangible asset investment post-financial crisis....MORE
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