Coin Collecting - What Are the Numbers?

As I write this, we're in the final days of processing a "rather large" collection of Australian decimal coins that we took delivery of just after Christmas 2023, and it got me thinking about ways we can help ourselves as collectors end up where we want to be.

When I say this collection was "rather large", I mean it filled two full-sized utes at the time it was delivered to us; the boxes took up our entire kitchen for the better part of a month while we worked through it and the total weight must have easily exceeded 250 kilograms.

Storage, Records and Maintenance - Boring!

A collection this big isn't necessarily a problem, but the way a collection is stored, recorded, built and maintained over time can cause major problems, that was the case here.

One of the things I've observed about most collectors is that we hardly ever test our assumptions about the market until it comes time to sell. Experience shows that is way too damn late to get in touch with reality!

It's one thing to start collecting with wide-eyed enthusiasm and to enjoy the collecting journey, it can be quite another to exit a collection without any regret or disappointment. 

I meet many collectors who delight in building and owning their collection, but when the eventual sale process delivers a series of confronting home truths that mean their anticipated outcome was never anything more than a pipe dream, it wipes away all of the satisfaction they'd enjoyed over the years. I believe life is too damn short for us to have to put up with outcomes like that.

The Collection That Grew Like Topsy

This particular collection looks to have grown like topsy over the years - I understand he started with a few inherited older coins and then made a few eBay purchases to add to them. Some of his coins were found out of circulation and he made a few purchases of other coins from dealers. At some stage, it looks like the owner made a solid contact at their local post office (he had boxes holding dozens of the same coins or sets!) and also made a concerted effort to withdraw cash from the bank so he could build bulk quantities of specific circulating coins. 

To compound the situation, the collection wasn't organised at all - valuable coins were mixed in with bulk lots (so he bought items at marked-up retail prices even though he already owned them but had lost them); certain sets had been pulled apart to sell individual key items (which destroyed the value of the residual set); multiple lots were stored in different locations (making it hard to get a clear idea of how many he owned of certain coins); there were numerous incomplete collections underway at the same time which meant he never completed any of the large variety of marketable sets - fewer sets underway at the same time would have allowed him to focus spending and finish more sets).

I Can See It Far More Easily - I Have Perspective

One thing I'm clear on is that it was really easy for me to draw the conclusions that I have because I have a reasonable degree of perspective. I could see things far more easily than the owner could, I wasn't caught up in the mess of storage and activity as he was.

Mind you, just in the few weeks we had responsibility for it, I got a really strong dose of the stress and uncertainty that comes from having an out-of-control collection. Not knowing where things were; not being certain how much there was of what; being unclear on which coins were worth money and which ones weren't; not knowing whether everything decent had been accounted for - it wasn't easy.

The only way we could regain control during the process was to grant ourselves some perspective - to physically stand back and reflect on the numbers. We now have the entire collection wrapped up apart from some final paperwork, so although it wasn't impossible to sort out, it was challenging.

So how could this collector have built in some kind of circuit-breaker into his collecting to ensure it ended up where he wanted it to be? I'm clear that bringing some structure and dare I say it discipline into a collecting effort might sound to be a real killjoy, but the reality is some common sense before the crunch comes could have saved a whole lot of unnecessary grief.

It's a bit like quarter-time or half-time in a football match - we check the scoreboard heading into the sheds so we can start to develop a clear idea about what's working and what's not. The coach might also look at each player's statistics to see how effective they've been in playing their role.

In some ways, our approach as dealers for vendors in situations like this is completely different to the approach that a collector needs to take while they're in the throes of building their collection.

Our charter is to identify any coins that have a material value, appraise them appropriately and then buy them. Our task is made easier in that the numbers we need to keep checking are values - a coin will either be valuable or not, so it's either in or out.

With this collection, it meant we were left with several trolleys of "remainder" coins that didn't hold a meaningful commercial value. They were loaded up and taken to the bank - if only all of life's problems could be disposed of as easily as that! 

As we were working through the collection, our test for the coins and notes in each box, bag and container was to focus on value.

So What Is The Circuit Breaker?

So if a collector is interested in avoiding a collision with reality when it comes time to sell, how are they supposed to implement a circuit breaker that brings about a feedback loop they can learn from?

I'd suggest that some kind of periodic review is in order, in much the same way a gardener might review their garden at the beginning or end of a season. Just how deep and regular that review is will depend on the collector and the importance of their endeavour.

So what numbers are an active collector supposed to focus on when they conduct this review? It really is too materialistic to focus solely on value when we're checking our collecting activities are on track, the market can take years to make a solid move and understanding your coin has risen in notional value by 5.83% perhaps isn't as much feedback as we need in a situation like this. So, it makes sense to take more factors into account.

Some of the measures of satisfaction we might want to check in when reviewing our collection are:

Satisfaction - Would we buy this coin again, knowing what we know now?
Cohesion - Does this coin or note fit in with others in the collection to build towards a series or set that will be satisfying once complete?
Value - does this coin have the same appeal that it had when we first bought it?

There will undoubtedly be other parameters to check when it comes to reviewing a collection - whatever they might be, I believe a periodic check-in BEFORE it comes time to sell makes perfect sense for many collectors.