Five years is enough for Steve Sjuggerud.
Editor of the widely circulated investment advisory newsletter True Wealth, Sjuggerud was arguably the most influential proponent of collectible coins as an investment. (Disclosure: I subscribe to True Wealth.)
His reasoning: “…historically, rare coins soared in gold bull markets.”
In his January 2010 issue of True Wealth just out, he’s issuing a “sell” on collectible coins.
Given the circulation of his newsletter, Sjuggerud had great influence popularizing collectible coins as an investment. Though many cautioned that collectible coin prices are extremely hard to forecast, marketers took the concept and ran with it. After all, past performance showed there was enough truth to the claim to make it credible.
But, as we know, past performance is no guarantee of future results.
Sjurrerud’s favorite was the $20 Saint Gaudens coin in MS65 grade which he advised buying in 2003 when it was priced at $905. With the Saint Gaudens today selling for approximately $2700, he says, “A 200% gain is nothing to complain about, of course. But it’s only roughly in line with the increase in the price of gold since we bought those coins. Said another way, all the profit we’ve made is from the increase in the gold price. We haven’t make any money on the collector’s premium.”
“Those coins” he refers to are a collection of major gold coins minted during the 19th and 20th centuries:
$20 Liberty
$20 Saint–Gaudens
$10 Liberty
$10 Indian
$5 Liberty
$2.50 Liberty
$2.50 Indian
In his December 2004, issue he recommended buying the set and priced it at $24,000. Today, he prices this set at $31,730 for an increase of approximately 32%.
Sjuggerud says, “…we’ve owned the set for five years. In that time gold has risen 150%. The seven-piece set hasn’t kept up with the price of gold…It’s not even close.”
Apparently Sjuggerud still has faith in gold itself as “catastrophe insurance.”
“Could gold soar some day? I believe so. Could the rare coins soar even more than the price of gold? Absolutely!
“But we gave the trade five years. At some point, I have to admit I might not have gotten it right.”
In short, be careful in the markets. Even gold, the ultimate safe haven, can throw curves.
Sjurrerud apparently believes collectible coins have thrown one curve too many.
Comments