Educate yourself first, spend your money second

By Bret Evans

There is an old adage in coin collecting “buy the book before you buy the coin.”

On the surface, it states that knowledge is important. The word book is there simply because at one time that was where coin knowledge usually resided. It seems hard to refute that statement, but it can also be a challenge to focus on getting information when you really want to build your collection.

The importance of detailed information seems less relevant today when most coins worth more than a modest amount have been placed in a holder that gives you a description of the coin and the grade.

It didn’t really make complete sense to me until connected with another rule of thumb, that two factors influencing the price of a coin in any given transaction are motivation and knowledge.

Motivation is pretty obvious. If the seller needs to make the transaction because of outside pressures they can usually be prepared to accept a lower amount than usual. On the other hand, if the buyer really wants the coin today they will usually be willing to pay more than they usually would to close the deal.

The other is knowledge and that can be about the grade, market conditions, or attribution. The important thing to remember is that whoever has the most knowledge usually gets the best of the deal, and if you’re up against a dealer who sells coins for a living you better do your homework.

When it comes to grading, the informed collector looks at holders, even those from reputable companies, with a critical eye. Not all MS-63s, for instance, are the same. Some may be better than average and could possibly score a 64 if resubmitted. Others may have already gone through the process and don’t have the potential for more points.

Another factor is some years were better ones than others for the Royal Canadian Mint. What may be considered merely a better than average strike on a good year could be among the best-known from a bad year.

When it comes to attribution, the field is even more complex.

Among specialist collectors, there are literally dozens of minor varieties that are not recognized by the standard catalogues or even most grading firms.

Spotting one of these, and knowing someone else is seeking one, spells opportunity.

I once heard someone describe another dealer by saying he could make $100 in two minutes just by buying an item at one table on the bourse and walking a few feet over and selling it to another dealer.

As preposterous as it sounds, I’ve seen it happen. I’ve also made what I thought were good buys, only to find out that I was wrong after I checked the coin out later.

Simply put, a bad deal can cost you more than the cost of gaining knowledge, while a good deal more than pays you back.

So where do you gain this elusive knowledge?

The good news is that it doesn’t have to be expensive.

I believe that collectors should invest in a subscription to Canadian Coin News, and they should also consider membership in the Royal Canadian Numismatic Association (RCNA) for their outstanding journal.

The RCNA also has a correspondence course which gives any collector an all-around grounding in numismatics.

On top of that there are also seminars conducted at conventions, at coin shows, and sometimes at stand-alone events. In most cases they don’t cost anything at all.

There are also lots of books. Unfortunately they are usually pricey, printed in small numbers, and often out of print, but they are well worth the effort.

The Internet can be a great source, but remember that it has as much misinformation as information, so double check and learn which sources can be trusted. There are more than a few forums out there, some of which are good sources of impartial information.

Finally, there is the incredible resource of informed collectors and dealers.

Now don’t expect everyone to be eager to tell you everything they know, right off the bat. Most numismatists know that knowledge has a value. But having said that, collectors are often willing to share an opinion on a coin, and help out with a few tips. It takes time and patience, and willingness to share what you know, but eventually you will discover that your knowledge grows.

So it may not be necessary to literally buy the book, but the message behind the adage is as true today as it has always been.

Educate yourself first, spend your money second.

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