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AUCTIONS & COLLECTIBLES Modern CAR COLLECTING
F O R T H E N E XT 2 0 Y E A R S
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16 The Hobby of Kings Amber Ness takes us on trip through the world of coin collecting and numismatics and explains the fundamentals and differences between coin and bullion investing.
6 World News 12 Metals Market Report SPECIAL FEATURES
22 Counterfeit and LBMA 28 Investing for Geeks 34 Busting the Myths in Sports Memorabilia
22 Counterfeit and LBMA
58 Five Years of Treasure NUMISMATICS
The importance of Good Delivery is tackled again this time in relation to the world of counterfeiting in bullion and the coin world.
16 The Hobby of Kings HARD ASSETS
40 Buying Metals at Auction
34 Busting the Myths of Sports Memorabilia A seasoned expert reviews some of the myths surrounding this market and provides some much-needed clarity to investors looking to add to their collections.
50 10 Tips LIFESTYLE AND LUXURY
46 The Knife That is Art 54 Just Luxe 66 Building Wealth Through Cards 72 Cars for the Next 20 Years MINING & MINERALS
58 Five Years of Treasure
80 Mining News REFERENCE
Hector Cantú details for us age-old treasure from the past five years sold at auction and provides a wide array of super-antiques to keep your collector’s fire stoked.
88 Preferred Dealers 94 Events 96 Hindsight
72 Cars for the Next 20 Years Jason Vaile takes a look at the coolest vehicles on the planet that will be in the collector’s focus for the next 20 years and beyond. Don’t get caught speeding!
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EDITOR’S NOTE
AUGUST / SEPTEMBER 2014
PRESENTED BY: AHA Metals, LLC VP CONTENT: Brad Hastedt EDITORIAL SUPPORT: Kevin Thompson
Collecting in All Forms
VP SALES & MARKETING: Mike Obert SUBSCRIPTIONS: Leigh Chamberlain LAYOUT DESIGN: Noel ‘Kip’ M. Macasero, J.K. Monte de
G
reetings to all of our readers and hopefully you have enjoyed the season and experienced plenty of warm summer fun in your part of the world. Welcome back to the next edition of American Hard Assets.
Ramos, (Open Look Creative Solutions)
FEATURE WRITERS: Eavan Moore, Jason Vaile, Amber Ness, Richard Alexander Rogers, Michael Haynes, Vicki Arkoff, Mila Pantovich, Dave Sliepka, Emily Manke, Hector Cantú, Doug
This issue, our focus is on collecting and auctions. Not only for precious metals, but for all different kinds of assets that you, the reader, may be interested in and investing in as the moment. Assets are the focus here and we’re bringing you lots of content with a definite focus on gold and silver, but also great info on numismatics, refining news, baseball cards, collectible knives, and a whole host of other interesting stuff.
Kale, Abe Elias, Hayden Tubbs
CONTRIBUTORS: Christy Stewart, John W. Garibald, John Maben
DISCLAIMER: American Hard Assets is 100% American owned. All contents of American Hard Assets (AHA) are for information purposes
As we always do in this part of the publication, we ask you again to please visit our website atwww.ahametals.com. In there you will find the up-to-date news and stories you’ve come to expect from AHA along with great content from our partners, real-time updates, exchange rates, metal prices, and more. We’ve introduced more original content on the site in recent months from our great bench of industry writers and plan to feature even more going forward.
only. AHA does not guarantee the accuracy, completeness or timeliness of the contents. None of the information contained herein constitutes a solicitation, offer, opinion, or reccomendation by AHA to buy or sell any security or commodity, nor legal, tax, accounting, or investment advice or services regarding the profitability or suitability of any security, commodity or investment. All commentary and advice in this publication is of a general nature
So, we’re all set to head into the Fall and to take a look at collectible bullion and other great hard asset auctions and collectibles that will stir your interest. We are excited to bring you this fourth issue of the year and, as always, don’t hesitate to give us feedback on the magazine or online to help us get better. We say it every time, but we are committed to bringing you the news and stories you want and need to see. 4th Q UAR
Thank you for continuing your commitment to this publication and keep up with American Hard Assets for all your metals news in the future.
objectives. You should always consult a licensed financial advisor for your personal investment advice. Please do your own research.
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H A R D A S S E T U P D A T E S | World News
World News Updates
World’s Largest Economy 2014
T
CHINA
his year China will become world’s largest economy. New economic world order: 1. China. 2. USA. 3. India
World Bank’s new report shows that China is all but guaranteed to outperform the US this year as the world’s largest economy, currently just a hair’s breadth away from claiming the first spot, while India stands at a solid third place.
the process, India vaulted from the tenth-largest world economy to the third-largest in the span of just six years. But given the rate at which China has grown, which is astronomical by any standard, the World Bank surmises that the eastern superpower will surpass the US in economic size at some point this year itself. China’s economy has sustained to rise at an accelerated rate, increasing by 7.7% in the last quarter of 2013 and falling only slightly to 7.4% in the first quarter of this year, according to Reuters. The US, meanwhile, only rose 0.1% in the first quarter of 2014. In terms of the total world GDP, the US accounted for about 17.1% of it in 2011. China followed closely with 14.9%, and India was third with just 6.4%. The rest of the top 12, according to the report, were Japan (4.8%), Germany (3.7%), the Russian Federation (3.5%), Brazil (3.1%), France (2.6%), the UK (2.4%), Indonesia (2.3%), Italy (2.3%), and Mexico (2.1%). The same order holds when examining the countries in terms of their percentage of the US GDP, albeit with different percentages.
The study, put together under the World Bank’s International Comparison Program, analyzed the Purchasing Power Parity (PPP) of various nations. By using PPP, says the report, researchers were allowed to essentially equalize the disparate currencies of the countries that were studied, and compare “size and price levels of economies around the world.” The numbers, all of which are from 2011, show that China’s overall GDP was 87% of that of the US, more than double the 43% that Chinese GDP was in relation to the US in 2005. India had similar growth, jumping from 19% of US GDP in 2005 to 37% in 2011; in
However, of those nations, India is the one with the highest index of GDP per capita (when examined via PPP), at 127. To put that number in perspective, Indonesia comes in at second place with 107, while China has 99, Brazil has 80, Mexico has 72, and the US is actually in last place of the top 12 nations, with an index of 12. The six largest middle-income economies – China, India, Russia, Brazil, Indonesia, and Mexico – constituted just over 32% of the world’s total GDP in 2011, which was just shy of the 33% accounted for by the world’s six high-income economies (the US, Japan, Germany, France, the UK, and Italy). In total, these 12 nations were responsible for more than half of the world’s total GDP in 2011. Source: www.americanbazaaronline.com
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World News | H A R D A S S E T U P D A T E S
World News Updates
N U M I S M A T I C S The World of Coin Collecting
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or more than 200 years, coin collecting or numismatics, has been a popular hobby in the United States (and many other countries).
The Sheldon grading scale, which positions the condition of all coins, from Good (AG3) to Perfect Mint State (MS70), is something a neophyte collector must be familiar with in order to understand the hobby. The United States Mint (with branches in Philadelphia, Denver, San Francisco and West Point) currently creates, designs and produces all of the coinage supplied in the U.S. The main metals of most coins are: copper, silver, nickel and gold. Most young collectors usually commence with the basic Lincoln penny albums, and work their way up to other groups of coins. There are also carefully assembled “type” sets, which consist of one coin of each denomination. This can be a very large set, when you consider the frequent design changes. Then, there are the “high rollers” who spend many thousands of dollars for key (rare) date coins. Some rarities have sold more than a million dollars each! In order to get the fairest deal for your coins, you must know how coins are sold and traded. Another proposition is to learn what the daily price of bullion is. This can be found on the Internet or your local newspaper (commodities section). Review this list of possible outlets for buying and selling coins. Large national coin dealers: Many of these dealers are found on the Internet or in magazine ads. You can acquire pricing information; however, these long-distance outfits are far away, which limits examination of the actual coins that you’re interested in.
Local coin dealers and coin shows: This is an ideal situation, as you meet the dealer, and you can look at the merchandise. It is best to verify their Better Business Bureau ratings. Most dealers are honest and reputable. Remember, a graded or certified coin (NGC or PCGS) can be researched and an accurate value verified. These are called “slabbed” coins. A word of caution, however: DO NOT walk in to a coin shop or a coin show without having a good idea of what your coins are worth! A good suggestion is to “shop around,” and compare offers. Auction houses: Millions of dollars worth of coins are sold every year via the “live” auction route. This is especially true of the rarities. One advantage of a live auction is that you are able to view the lots or sets of coins that will be sold (prior to the actual bidding). E-Bay (The online auction site) has been successful for many people. It is best to understand terms such as “Consignment,” “Hammer Price,” and “Reserve Bids.” Take the time to familiarize yourself with the mechanics and the bidding procedures of this Internet site. Mail-away gold buyers: This is a sure-fire to lose money! The ads of TV are very tempting. You fill up an envelope with gold jewelry or gold coins, and send it off to some far-off company, which promises to give you a “fair price” for your metal, and your check within a few weeks. Really now? If it seems too good to be true, it is! Hotel buyers: It sure sounds good! Those large-sized newspapers ads. The fancy local area hotels. The promises of “top prices” paid. When the dust settles, you are lucky to get 30 cents on the dollar! After the company organizing these hotel “shows” leaves town, you are out of luck. Advice — stay away for these folks! Miscellaneous: Pawnshops and jewelry stores are usually not certified or qualified coin dealers. You will be fortunate to be paid the regular bullion price for the metal content. Pawnshops can be convenient when you are looking for an unclaimed item that has been lowered in price or need to get hold of a short-term loan.
Source: www.melrose.wickedlocal.com
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H A R D A S S E T U P D A T E S | World News
World News Updates
World’s Most Expensive “Gold” Bicycle This solid gold 24-carat bicycle is the most expensive in the world. The one of a kind mountain bike was produced by The House of Solid Gold, based in California, and comes with an estimated $1,005,300 price tag. The flash two-wheeler is covered almost entirely with 24-carat gold, and comes complete with a customized seat cover crafted from brown alligator hide. If that wasn’t flash enough, it also has a unique water bottle, which is coated in solid gold and decorated with stingray skin. Hugh Power, CEO of House of Solid Gold, said: ‘The idea came about while I was extreme mountain biking on a similar bike. It was during this ride that the idea was born to build a gold bike, custom-made with all the latest hi-tech gear. But the true challenge I faced was to make sure that the bike would be rideable – and I was still able to cover 99% of the bike completely in gold.
‘This is the only gold bike in existence. And there will only be 13 made in total with each one being custom built and totally unique in its own right.’ It took more than 750 hours to painstakingly handcraft the elaborate cycle, and there are plans to produce just a dozen more of the luxury items. Each bike will be engraved with the artist’s signature, dated and numbered as one of 13. The 57-year-old entrepreneur added: ‘The price tag on the bike is only so high because most – if not all – of the proceeds will be donated to charity. ‘The Way to Happiness Foundation is a global non-profit, nonreligious charitable organization that do a lot of impressive work to combat crime and violence worldwide. ‘And buying the bike is more a way for the wealthy who want to donate their money to a great worldly cause, and receive the bike as a token.’
Source: www.uk.news.yahoo.com
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World News | H A R D A S S E T U P D A T E S
World News Updates
The Bitcoin “Crisis” 5 Reasons It Can’t Be Killed
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ith a cursory glance, at today’s price ($500), you’d think that the Coca-Cola of cryptos is careening toward disaster. In order to know why that’s not the case, you might need a quick recap on how we got to this juncture. Near the end of last year, Bitcoin was being gobbled up at an unbelievable $1100 per coin.
with Bitcoin at large, but with the implementation method of certain exchanges. Unfortunately, Mt.Gox still wasn’t able to get their act together. They went into full damage control mode, preventing their users from making withdrawals altogether. That’s when people really started freaking out. A shit-storm of downright apocalyptic press ensued, contributing to a big dip in the price of Bitcoin.
Early 2014 was a PR nightmare for bitcoin. The crypto was constantly being linked to money laundering and drugs, most infamously in the case of The Silk Road. But, the most damning sequence of events was due to a known security vulnerability and good-old-fashioned ineptness.
In light of this Mt. Gox debacle, other big players in the Bitcoin community banded together to say enough is enough. This cryotocurrency coterie further demonized Mt. Gox, strongly implying they could no longer be trusted. Meanwhile, reports were circulating that over $400 million worth of Bitcoin had been “stolen” from Mt. Gox customers due to exploitation of the very same bug they’d been battling. By the end of February, Gox went dark completely, along with all that missing Bitcoin.
The Hurricane Gox By February, major (but known to be sketchy) Bitcoin exchange Mt. Gox had been having problems for quite awhile. Because of that aforementioned security issue, Mt. Gox halted some of their user’s ability to withdraw Bitcoin while they fixed the hiccup. Other more legit companies came forward to show that this wasn’t a problem
In late March, the government of China slapped some really provisional rules on banks with regard to Bitcoin, essentially putting it in a legal gray area. Some are also reacting negatively to the IRS’s recent ruling on Bitcoin.
Source: www.huffingtonpost.com
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H A R D A S S E T U P D A T E S | World News
World News Updates
So, now that we’ve trudged through the (highly-simplified) negative muck and mire of the last few months, let’s take a look at the 5 reasons Bitcoin is not only here for the long haul, but may seriously impact the world in a litany of positive ways.
5. The Spread For cryptos to really wield a lot of power, they need to be easy to use. That means merchants must accept it on a wider scale — and that they are. There are thousandsof local restaurants, bars and businesses primed to take your sweet coin. On the web, significant players like Square, Stripe, Overstock, and Tiger Direct are a few of the latest to pick it up. No, it’s not at Target or Amazon yet, but if it ever is expect another bump in interest, price and media hype.
4. The Progeny Because of Bitcoin’s coding is available to the public, there’s been a rabbit-like reproduction rate of crypto currencies. Literally hundreds of Bitcoin spinoffs, or “forks” have sprouted up and dozens of them are quite successful, with market caps well into the millions of dollars. Some even argue that certain more nimble cryptos like Litecoin, Feathercoin, or (my favorite) Dogecoin, actually improve upon what Bitcoin started.
3. The Philosophy “Price is the least interesting thing about Bitcoin… At first, almost everyone who got involved did so for philosophical reasons. We saw Bitcoin as a great idea, as a way to separate money from the state.” — Roger Ver, The New York Times. One of the most attractive things about Bitcoin is the philosophy behind it. It’s designed to be completely decentralized, anonymous, egalitarian, and free from external or internal manipulation. It’s neither liberal nor conservative. There’s no Federal Reserve sending down mandates from on high. It is, 100 percent, a digital manifestation of the consensus of its users.
2. The Numbers Let’s start with the cryptography and coding. Consider this — of the hundreds of cryptocurriences out there, basically all of them use Bitcoin’s backbone. Because the king of cryptos is open-source, everyone has worked together to create something highly-functional and thus far, unhackable. As Bitcoin continues to mature, so do the exchanges and wallets, making them safer. As we’ve seen from the Mt. Gox snafu, companies that aren’t backed by a strong team of properly qualified people simply cease to exist, leaving the strong to take the reigns.
1. The Community Ultimately, the power of Bitcoin is, and always will be, in the hands of the people that use it. Thousands of people in over 60 countries are gathering in meat space to learn, discuss and philosophize about Bitcoin. While attendees definitely run the gamut in terms demographics, experience and degree of technical knowledge, many are deeply involved in shaping how the technology will be used and experienced going forward. Because of this passionate, highly engaged grassroots community, literally hundreds of startups with an average value of nearly $4 million have cropped up in just a couple of years. Given the fact that this technology and its implementation is still so young, we don’t know what these companies, coders, meet-up groups, miners and just flat-out curious people will eventually accomplish. But, when you diminish or scoff at Bitcoin at this point, you’re essentially deriding hundreds of thousands of tech-savvy, hungry, young people — not a great group to bet against. Though speculation and hyperbole will surely continue as the price inevitably waxes and wanes, the technology, infrastructure and tenacious group of humans pushing this thing forward aren’t simply going to stop. Despite all the misinformation, resistance and doomsday prognostication along the way, Bitcoin has and will continue to defiantly weather the storm. Source: www.huffingtonpost.com
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World News | H A R D A S S E T U P D A T E S
World News Updates
MIAMI MONEY The Most Expensive Penthouse Condo in Miami Beach History t the very top of Miami Beach’s Faena House is a super-luxe penthouse condo that was listed for $50 million is in contract, making it the most expensive condo ever sold in Miami Beach, according to The Wall Street Journal.
A
Most notably, the penthouse features a beautiful “alero,” a sweeping Brazilian-style terrace that wraps around the entire building and adds a staggering 7,000 square feet of outdoor living space.
Though the closing price and the identity of the buyer were not revealed, the agent who represented the buyer told the WSJ that “his client liked the privacy afforded by the fact that the building has a rooftop pool and is relatively small—47 units.”
Designed by Foster + Partners (the same architects responsible for the Hearst Tower’s new facade), the 8,000-square-foot condo unit has five bedrooms, a private interior elevator, a media room, great room and dressing room, and two custom kitchens according to the Faena House’s website. Outside there’s also a cabana, an outdoor kitchenette and private 70-foot infinity pool.
Argentina’s Faena Group developed and built the Faena House, an 18-story condominium tower that sits on Miami Beach’s widest stretch of white sand. It contains 47 residences, but the penthouse, with panoramic views of the beach, bay and downtown skyline is by far the most luxurious.
All building residents have access to hotel-style services and amenities such as valet and private concierge service, fitness center and an in-house spa with direct ocean views, a private Beach Club with full cabana service, and two pools.
Source: www.businessinsider.com
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S E C T I O N N A M E | Story Name
By Michael Haynes,
ceo apmex.com
It may be time for diversification because of uncertainty.
B
oth Gold and Silver have been up and down in the first half of 2014, but what is the time, what is the season for Gold and Silver for the second half of 2014 and beyond?
the second half of 2013, has limited the authorized purchasers from placing orders to an amount based on an allocation of the production of the Mint up until May of 2014.
Physical Silver has recently been in a market where the supply and the demand have been very close with virtually no surplus or deficit in ounces since 2006, except for slight increases in 2009 and 2010. As shown in Table 1, global Silver inventories have decreased approximately 784 million ounces since 2000.
When examining the supply of physical Silver since 2000, the Secondary market supply has annually provided between 24% and 30% of the aggregate supply and in 2013, the portion provided by Secondary sources was a 13 year low of 24%. In fact, the 2013 Secondary market supply was approximately 230 million troy ounces, approximately the same level as in 2004, nine years earlier.
Because the net position in Physical Silver has been edging downward since 2000 and because in recent years, physical Silver supply and demand has been so close to a net zero change in inventories, the overall market for physical Silver has been very reactive to price changes. For example, the United States Mint, since
The issue in the Secondary market supply seems to be the market price of Silver. In Chart 1, the annual Secondary supply is shown relative to the price of Silver per ounce and falling
While no one can predict the future, we can look at recent data along with the current economic “tea leaves� and provide some interpretation and perhaps some insight.
How Silver is Biding Time in 2014
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Metals Market Report | H A R D A S S E T U P D A T E S
Silver prices in 2012 and 2013 seem to be having a significant effect on the decisions in the Secondary Silver market to submit Silver for refining. Although there are many factors in the supply of Silver, it appears that Silver prices may have an impact on the inflow from Secondary sources and perhaps may cause mining activity to slow.
in 2000 to a record level of over 136 million troy ounces in 2013, an increase of over 260% and an increase of 43% from 2012 to 2013. In Chart 3, it appears that lower Silver prices in 2013 did not inhibit investment coinage demand, but on the contrary, such demand increased to record levels.
Chart 1.Annual Secondary Source of Silver and Silver Price per Troy Ounce, 2000-2013.
Chart 3. Annual Physical Investment Demand in Silver Coinage and Price perTroy Ounce, 2000-2013.
From the demand side of Silver, there is evidence of rapidly increasing demand in Photovoltaics (batteries and solar devices), increasing in demand by 46% in 2013 over 2012. Shown in Chart 2 are the major segments of fabrication demand in Silver since 2000. Generally speaking, lower Silver prices should have a positive effect on demand from the largest segment of demand in Jewelry/Silverware as lower prices should stimulate more demand.
Will the alarm go off in Silver?
Chart 2.Annual Fabrication Demand for Silver in Troy Ounces by Segment, 2000-1013.
With Silver prices hovering around $20 per troy ounce, the historical data would indicate that supplies of Silver, especially from the Secondary markets, will be constricted. On the demand side, industrial use of Silver will not be inhibited by lower Silver prices and perhaps fabrication demand may increase in the Jewelry/Silverware segment as prices remain relatively low compared to the prior three years. Also affecting Silver demand, investment coinage does not appear to be negatively impacted by lower Silver prices, but on the contrary, investment coinage demand rose in 2013 to record levels and the year to date mintage by the United States Mint seems to be approximately the same pace in 2014 as 2013. Accordingly, will Silver prices rise given the pressure applied by lower supply and potentially rising demand? While no one can predict the future, it appears that the clock is ticking on physical Silver.
Gold May be Waiting for the Bell to Ring
The final section of demand is from investment measured by Silver bullion coin production in the six main issuing countries of the United States, Canada, Austria, Germany, Mexico and China along with other countries consuming physical Silver in coin production. The investment coin Silver demand has grown from approximately 38 million troy ounces
Gold supply is proportionately more reliant on mining than secondary sources over the last nine quarters with mining providing on the average 67% of the market supply for the entire period, but in the last four quarters ended March 31, 2014, mining has provided a higher portion of total market supply of 73%, 70%, 72% and 69%, respectively, of total market supply. The converse of this Gold supply is secondary sources which have been, not surprisingly, below recent historical levels. Chart 4 shows that for the last five quarters ended March 31, 2014, secondary sources of Gold have consistently fallen below levels established in the previous four quarters ended December 31, 2012. This means that physical Gold supply has been hindered for the entire year of 2013 and continuing in the first quarter of 2014. www.ahametals.com American Hard Assets | 13
H A R D A S S E T U P D A T E S | Metals Market Report
Chart 4.Quarterly Secondary Source of Gold and Gold Price per Troy Ounce, Q1 2012 – Q1 2014.
When examining the demand for Gold, it is evident in Chart 5 that the demand in Jewelry, Technology and even in Central Bank purchases is relatively consistent, quarter after quarter for the last nine months. However, the Investment demand seems to expand and contract, expanding during the three consecutive quarters ended December 31, 2012, yet contracting for the four consecutive quarters ended December 31, 2013. For the quarter ended March 31, 2014, Investment demand expanded by 47% over the quarter ended December 31, 2013. Chart 5.Quarterly Demand for Gold in Troy Ounces by Segment, Q1 2012 – Q1 2014.
Chart 6.Quarterly Net Investment Demand for Gold in Troy Ounces, Q1 2012 – Q1 2014.
Note that the Net Investment Demand did contract for the four consecutive quarters ended December 31, 2013, however, this was caused primarily by the liquidations from the Gold ETFs. The data shows that the Physical Gold Bar and Coin investment demand was more than sufficient to offset the ETF liquidations. In fact, Physical Gold Bar and Coin demand increased each quarter for the four consecutive quarters ended June 30, 2013, with physical investors in contradiction to ETF investors during most of this period. Many believe that the Gold ETF has more investors with short term trading windows, perhaps a day up to a month in duration, while Physical Gold Bar and Coin investors have a longer term outlook, perhaps three to five years.
When will time strike midnight and awake the Gold market? From the supply side, Gold is meeting the demand with a decreasing contribution from the secondary sources, which sources are unlikely to increase without a price rise to attract more of the Gold product ready for recycling. From the demand side, all of the segments of Gold demand, except for Investment demand, are relatively stable for the last nine quarters. Investment Gold demand recorded a net contraction in recent quarters but only as a result of Gold ETFs shedding ounces which were readily absorbed by the Physical Gold Bar and Coin demand.
Even though the Investment demand has both expanded and contracted, Chart 6 shows the breakout of Investment demand between the Gold ETFs and Physical Gold Bar and Coin. (For the sake of clarity, according to the World Gold Council, the data for Physical God Bar and Coin demand relates only to the investor demand for the physical Gold and does not include any Gold Bars for any of the future exchanges.)
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With the supply and demand for Gold appears to bring on the two factors, (1) secondary market supply influenced by current Gold prices, and (2) Investment demand influenced by relatively strong long term oriented Physical Gold Bar and Coin demand and short term oriented Gold ETF demand. Accordingly, the it appears that the time for Gold awakening may be an event in the global economic markets or a global political event that causes the short term investors to expand Gold ETF demand which would also likely increase the long term investors demand for Physical Gold Bar and Coin demand. For those awaiting such an event, look to the European Union and the Euro and to the upcoming United States Congressional elections in November 2014, which in both cases may provide evidence of the coming economic course.
Story Name | S E C T I O N N A M E
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S E C T I O N N A M E | Story Name
A Glimpse Into the World of Numismatics By Amber Ness
O
n June 2 of this year, Doritos launched a clever campaign: the 24K Gold-Plated Doritos® Chip Replica Giveaway.
Hoping to start a stampede of customers filling their arms with as many bags of the salty snack as they could carry, the campaign also targeted a growing number of Americans investing in precious metals — and collecting it.
Collecting Gold: An Ancient Pastime A renewed interest in precious metals and coin-collecting doesn’t mean it’s a new phenomenon. In fact, collecting gold artifacts has been popular among the affluent since the beginning of civilization. Coin-collecting is a tradition as ancient as Rome.
The 50-year-old snackfood brand released 3,000 (inedible) gold-plated tortilla chips, and tickets to redeem them were found inside random bags of Jacked Bold - Mystery Flavor Doritos. Worth about $31 apiece, each tortilla-chip-o-gold came with a chance to win the grand prize — a 2.5 ounce, 24-karat gold replica of the iconic chip, valued at roughly $3,000.
Catalogued by sovereign treasuries, hoarded by nobility, and viewed as a portable form of art, coins have been valued above and beyond their metal content for millennia. First Roman Emperor Augustus (September 23, 63 BC - August 19, 14 AD) was famous for flaunting his personal stash of historic coins in front of prestigious guests, even offering them as lavish gifts.
Besides offering customers the thrill of an old fashioned treasure-hunt, the Doritos giveaway satisfied a renewed interest in precious metals among increasingly-young, mainstream investors, along with a desire to own collectible bullion.
Under Emperor Trajan Decius (AD 249 - 251), the Roman Mint began producing commemorative coins honoring past rulers and the coinage they produced.
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The Hobby of Kings | N U M I S M A T I C S
Perhaps a lost art during the Dark Ages, coin collecting grew in prominence during the Renaissance, quickly dubbed the “Hobby of Kings.” Accessible mainly to the gentry, princes across Europe began handpicking the world’s most ancient, beautiful and collectible coins as a diversion — and a way to flaunt their wealth. Famous Italian poet and scholar Francesco Petrarch (1304 - 1374) is widely regarded as the first major coin collector of the cultural rebirth. He honed his craft after vine diggers began asking him to classify ancient coins they found long-forgotten in the earth. In 1355 Petrarch unveiled his remarkable collection to Holy Roman Emperor Charles IV, garnering the sobriquet the “Father of Numismatics.” By the seventeenth century, ardent numismatic study was underway. During the Enlightenment, it grew as a legitimate academic discipline — a science — and coin collecting would never be the same. Vast collections owned by wealthy families were catalogued and examined, and treatises were quickly published, bringing numismatics to the masses. Coin collecting was soon accessible to the middle class, giving average citizens the rare opportunity to own a tangible (and affordable) piece of history. In the centuries following, collectors began to purchase exotic coins from all corners of the earth, along with rare, antique and commemorative coins from home. Fast forward to today, and purchasing coins is not only a hobby, but a form of investing — a way to safeguard one’s hard-earned wealth.
Coin Collecting vs. Bullion Investing
• Chinese Pandas Minted by the People’s Republic of China, Chinese gold and silver Pandas are considered legal tender, issued in various sizes from 1/20 to one ounce. Though they are highly popular among investors, annually-changing designs make these coins collectible, too. The coins celebrate one of the China’s most iconic creatures: the giant panda. The obverse (or front) of the coin features the Temple of Heaven, a famous UNESCO World Heritage Site built between 1406 and 1420 in celebration of the Winter Solstice.
• America the Beautiful Silver Coins Commissioned by America’s Beautiful National Parks Quarter Dollar Coin Act of 2008, the United States Mint began issuing America the Beautiful (ATB) five ounce silver coins in 2010. Among the world’s most popular bullion series, the coins pay tribute to national treasures, both natural and man-made. Each year, five coins are released honoring different monuments — from Yellowstone to Mount Rushmore. The series is also issued in more affordable (and also collectible) quarter sets.
In the world of coins, there are two camps: numismatic coin collecting and bullion investing. Though the two often overlap, they are not one in the same. So what is the difference between numismatic and bullion coins?
• Canadian Wildlife Series
Put simply, a collectible coin has value based on its rarity, history and condition, while a bullion coin has value based mainly on its precious metal content. For instance, a 1933 Double Eagle sold for $7.5 million in 2002. Why, you ask? Because few of the coins escaped melting by the United States Mint after it became illegal to own gold coins during the Great Depression. The sheer rarity of a 1933 Double Eagle makes it incredibly collectible — and expensive. Yet there is sometimes an overlap between numismatic and bullion investment coins and rounds. Bullion coins in pristine condition (graded Mint State 69 or 70), limited releases, commemoratives, special editions, colorized coins, temporary series or proof condition coins may all be collectible forms of bullion.
The Royal Canadian Mint is famous for producing some of the world’s purest bullion coins in some of the most striking designs, and that includes its Silver Wildlife Series. Launched in September of 2010, the series celebrates Canadian wildlife at its finest. The coins contain an ounce of pure silver, and are released in extremely limited quantities — making them highly collectible.
• Australian Lunar Series Deemed legal tender, the Perth Mint of Australia’s Lunar Series made its debut in 1999, followed by the Lunar Series II in 2008.
Both private companies and sovereign mints are increasing their emphasis on high-end art, thanks to a new wave of demand for collectible bullion coins.
Wildly popular among investors and collectors thanks to
And there are countless examples.
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N U M I S M A T I C S | The Hobby of Kings
annually-changing designs and purity of metal, these gold and silver coins celebrate China’s ancient Lunar Calendar, which assigns each year an animal. For instance 2014 is the Year of the Horse, and this year’s design features the fierce image of a running stallion.
• Pre-1933 Gold Coins Pre-1933 gold coins — including Saint Gaudens Double Eagles, Indian Head Eagles and Walking Liberties — are each a piece of history and an investment in gold. In 1933, the brand new Roosevelt Administration ordered Americans to relinquish their gold coins to the government, hoping to end the depression. Gold coins weren’t issued by the United States Mint for another 40 years, adding to the value of coins produced before the nation left the gold standard.
• United States Proof and Mint Sets The United States Mint releases proof, silver proof and uncirculated clad coin sets each and every year. Touted as “the staple of coin collecting” by the mint, accessible versions of the nation’s most popular coins are beautifully packaged inside inert (safe) materials, perfect for the collector looking for an affordable bet.
• Collectible Private Mint Rounds Sovereign mint coins are not the only forms of bullion that are collectible. Private mints all over the country are producing rounds that may be more valuable than their metal content alone. Capitalizing on the latest zombie craze — initiated in part by AMC’s wildly popular show, The Walking Dead — Provident Mint began producing the Zombucks: Currency of the Apocalypse™ silver and copper round series. “Zombifying” some of the United States’ most iconic coins, from the Morgan Silver Dollar to the famous Gold Buffalo, the series exploded onto the blogosphere and spread like wildfire, making the rounds an instant success. Released in limited quantities, the mint plans to produce 10 designs in total (one every three months) to hordes of anxiously-waiting investors — and collectors.
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What exactly makes a coin collectible, valuable or expensive? The answer is generally demand + notoriety. The Fundamentals of Collecting Coins In an article published by ABC News, Scott Travers, author of The Coin Collector’s Survival Manual said typical pieces like $20 gold coins are often viewed as prudent investments because their value is about equal to their weight in gold. “So there’s very little downside to them,” said Traverse, during the World’s Fair of Money. “If gold goes down in value, collectors (who prize the coins for their beauty or historical significance) will still pay about that price. And if gold goes up in value, then the coins become worth even more.” Yet that doesn’t mean collecting stops at the prudent. What exactly makes a coin collectible, valuable or expensive? The answer is generally demand + notoriety. If there are fewer of a particular coin than there are collectors who want to own it, the coin grows more collectible. And expensive.
Defining Coin Collecting Besides labeling it one of the world’s oldest hobbies, the Encyclopedia Britannica defines coin collecting — or numismatics — as “the systematic accumulation and study of coins, tokens, paper money and objects of similar form and purpose.” The Smithsonian Institution, established in 1846, has its roots in numismatics: James Smithson’s donation to found the institution was made in 104,960 British Gold Sovereigns. Over the course of the next century, the museum’s collection continued to grow, and the Smithsonian’s National Numismatic Collection was formed — the official coin cabinet of the United States and part of the National Museum of American History. Today, the museum is home to more than a million numismatic objects. Some of the Smithsonian’s most valuable coins include: • A Class II 1804 Silver Dollar - Considered one of the United States’ most famous coins, the 1804 Silver Dollar was actually a counterfeit struck 50 years later. Only one of the coins exists, and it insured for more than $3 million.
The Hobby of Kings | N U M I S M A T I C S • 1933 Double Eagles - Holding the record for the second highest price paid at auction, a 1933 Double Eagle sold for a whopping $7.59 million in 2002.
• 1913 Liberty Head Nickel - Insured for $2.5 million, the Smithsonian holds one of only five of these coins known to exist.
• 1776 Continental Dollar - The first coin designed for the United States — and believed to be the brainchild of Benjamin Franklin — this short-lived coin failed, thanks to a lack of French silver available to the colonies.
Besides the Smithsonian, in the mid-nineteenth century, coin regulatory bodies began to spring up, aiming to further the study of coins. The Royal Numismatic Society was founded in 1836, followed by the American Numismatic Society (1858), the American Numismatic Association (1891), and later, the Royal Canadian Numismatic Association (1950). These organizations, along with a deeper understanding of the science of numismatics, proved to be invaluable, as the collecting of coins grew in prominence among the masses — and once again, the rich and famous.
• 1849 $20 Gold Coin - The first $20 coin released by the United States, the Smithsonian owns the only final strike known in existence.
The Playboy King and His Famous Coin Collection Farouk I of Egypt reigned from 1936 - 1952. An avid collector of all-things opulent and strange, the country’s last monarch was often called the “playboy king” — his horde of palaces, cars and even suits (he was rumored to own 1,000) was world-famous. A notorious kleptomaniac, Farouk once stole a pocket watch from Winston Churchill. Yet of all Farouk’s collectibles — like stamps, art, cars, antiques, clocks and even pornography — the king’s most famous assortment was rare coins. Comprised of nearly 9,000 coins (including a 1913 Olsen Liberty Nickel, a 1933 Double Eagle and a South African Single 9), most of his collection was amassed by exploiting hard-hit Americans who were desperate for cash during the Great Depression. Yet Karma never fails to be a you-know-what, and when the king was exiled to Monaco in 1952, all of his prized possessions — including his many coins — were auctioned off, and the revenue deposited into the national treasury.
• 1851 $50 Gold Coin - This octagonally-shaped coin was minted in San Francisco by United States Assayer, Augustus Humbert. Today, the coin is worth around $50,000.
The majority of Farouk’s collection was sold off during the Palace Collections of Egypt auction, held in February of 1954 in Cairo. The Egyptian government, clueless about the value of the coins, sold most of them in lots for less than 10 percent of their worth. This must have been a crushing blow to the failed ruler, whose collection would be worth more than $150 million today.
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S E C T I O N N A M E | Story Name
Birth of the Grading Scale Famously (or perhaps infamously) known for his Ivy League Nude Posture Photos — a group of photographs taken between the 1940’s and 1970’s, brandished as a study on rickets, scoliosis and lordosis, but widely believed to have been an attempt to support his theory on body types and social hierarchy — William Herbert Sheldon, Jr (18981977) was an American psychologist.
Because the condition of a coin is so integral to its value and collectibility, Sheldon’s scale may be one of the most important benchmarks in the study of numismatics.
He was also a numismatist.
A psychologist first, Sheldon surely understood the human psyche. As a numismatist, he understood the value of a rare, exotic or historic coin. And as both, he recognized the human drive to possess a tangible connection to history — to own a great work of art, no matter how small. He knew the yearning we all have to achieve greatness. And to live like kings.
In 1949, Sheldon devised a 70-point system called the Quantitative Scale for Condition that would forever change the way a coin’s condition was measured.
Surely, the mastermind behind the scale used worldwide to evaluate one of the most popular collectibles in history understood the awe a rare coin strikes in the heart of men.
Though the scale was tweaked by the American Numismatic Association in the decades after its inception, the Sheldon Scale is used for coin grading to this day, namely by the Numismatic Guaranty Corporation and the Professional Coin Grading Service — two of the most trusted third-party grading services in the world.
After all, it’s been happening since the beginning.
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“There are those much more rare people who never lose their curiosity, their almost childlike wonder at the world — those people who continue to learn and to grow intellectually until the day they die. And these usually are the people who make contributions, who leave some part of the world a little better off than it was before they entered it.” ~William H. Sheldon
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S P E C I A L F E A T U R E | Counterfeiting
Why LBMA and Good Delivery are Important By Richard Alexander Rogers
T
hese days at the Olympics, despite a literal world of disparate cultures competing, each with their own unique customs and habits, there is a winning celebration that has become almost universal. After the medals are passed out and the anthems played, as hundreds of camera lenses turn towards the podium, the athlete (or team) at the top raise their gold medal to their mouth and smile. And then they take a bite.
The bite-down is of course a reference to what, at least according to television, was the preferred method of gold testing in the old west. You know the scene: somebody offers the dusky gunslinger a job, dusky gunslinger demands payment in advance and, taking a gold coin (Spanish doubloon?) out of the leather pouch, chomps into the coin with his teeth to make sure it’s not bogus.
It’s a charming move that manages to tread the space between too boring and too flashy. But for players in the precious metals game, it can be seen as a bit reminiscent of a danger that bullion investors must be aware of. And while it may also seem a bit silly, the peril of counterfeit coins and bars is very real even today.
Despite being a centuries-old method, it would actually have been fairly able to detect the most common methods of faking authenticity. Since gold is a relatively soft and malleable metal, a gentle bite into the center of a genuine coin would provide a little bit of give and may even leave indentation on the coin while a painted disc of iron would feel very different. Another method of
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Counterfeiting | S P E C I A L F E A T U R E
counterfeiting that also reaches a long time back was called “nickel plugging.” Here, a skilled culprit would have removed the coins “plug”-- usually silver-- and either replaced it with less valuable metal or simply resurfaced the coin hoping nobody noticed. As you can guess, a good chomp would be a solid defense against this as well. As would the very real threat of being shot in the desert, one must assume. At this point in the article it is a writer’s legal responsibility to tell the reader, perhaps unfortunately, that we have progressed to a day and age where you are strongly discouraged from shooting dead anyone who sells you bogus goods. That said, there are still plenty of counterfeiters using these methods today. These days the “paint job” method is certainly the easiest to sniff out. Every kind of bullion imaginable from 5-gram gold bars to silver kilogram ingots, from American silver eagles to cartoonishly large
Because different metals are have different densities, it’s very difficult to replicate the correct weight if the bullion is entirely counterfeit. gold bricks have been -- and are being -- counterfeited simply by applying a thick coat of paint to a less-precious metal that has been molded into the correct shape. In person, the weight of the material will always be the best giveaway for this kind of forgery. Because different metals are have different densities, it’s very difficult to replicate the correct weight if the bullion is entirely counterfeit. Always verify the weight of any loose bullion that you purchase, the correct mass can be easily found online. Especially for coins and other small
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S E C T I O N N A M E | Story Name
pieces, it is also useful to keep a small magnet handy as pure gold is not magnetic. (The best place to buy the correct magnet will be a hardware store, as the typical refrigerator magnet does not carry a strong enough magnetic force.) There are certainly other methods to immediately detect counterfeits made this way-- scratch/acid testing, drilling etc-- but with the exception of some ingots/bars these processes come at the cost of severely devaluing your own material should it prove to be legitimate.
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In contrast “plugging,” sometimes called “coring” nowadays, has made a little more progress as technology has improved. While the paint job can be used to fake most any form of bullion, plugging is most effective-- and most commonly used-- in defrauding investors looking to purchase large bars of gold or silver. The standard method these days begins with counterfeiters drilling (or coring) out the center of the bar, lengthwise, from one end. They then extract the core-- pure gold-- and replace it with another metal of similar density,
Counterfeiting | S P E C I A L F E A T U R E
Buying bad bullion can often be avoided simply by checking the correct weight of the material according to the official mint or manufacturer. usually tungsten or lead. Finally, a small amount of pure gold is melted over the holes that drilling the bar created. While the weight of these tampered bars can often be very close to the correct mark for genuine bars (particularly if tungsten is used to fill the center,) the de-valued bars are usually off by several grams on either side. Once again, buying bad bullion can often be avoided simply by checking the correct weight of the material according to the official mint or manufacturer. Broadly speaking, there are several ways to demonstrate the validity of any coins or bullion one is considering buying from
a vendor. Unfortunately, the most effective methods involve damaging or at times completely destroying (by melting) the product which can severely devalue your investment. And whatever new techniques may come along for combating counterfeiting-- just like the constant fight to prevent blood doping or PED use in athletics-- the cheaters will always be one step ahead of the game. It seems bleak, doesn’t it? In reality though, there is one foolproof way to be certain of the material you’re buying: only by from established, reputable producers with a verifiable history. While individual investors will generally be priced out of buying bullion directly from the refiners themselves, as long as good common sense is applied when finding a bullion retailer to do business with then an investors next priority should be to ensure they are buying either sovereign bullion from major government mints or bullion bars minted by a well known refiner.
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S P E C I A L F E A T U R E | Counterfeiting
More expensive? Sometimes. Worth it? Always. An individual investor can certainly take some time researching several refiners, asking around to suppliers and other interested parties about which product to buy. Alternatively, an individual investor really only needs to consult one list: the LBMA Good Delivery List. As these pages have certainly discussed before, the LBMA Good Delivery standard is unmatched in global bullion dealing. When buying clean material produced by this select group of refiners, found worldwide, an individual investor can carry the same confidence as a bank when purchasing bullion bars or rounds.
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Because of the stringent process and testing required for a refinery to achieve Good Delivery status, every bar they produce will have a uniform appearance down to the color, weight, and texture of the bar. Certainly the designs and/or stamping will be identical, allowing you or your broker to discern quickly whether any given bar is the genuine article. When dealing with smaller bars, LBMA Good Delivery producers often pack the bars individually in tamper-proof “certi-cards.� If the package is intact, you can be certain that the bar is the real deal. These top of the line refiners also take their reputation particularly seriously, and are actively searching for any reports of counterfeit material attempting to copy their material.
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S E C T I O N N A M E | Story Name
GEEK INVESTING T
hey say the meek shall inherit the earth. Well, it’s too late. The geeks already have. With the IT and video game industry raking in billions of dollars, it’s no surprise that the men leading these companies may be a little on the geeky side. I don’t think Bill Gates or Mark Cuban would insist that they are the coolest guys around. Heck, who doesn’t have a little geek hidden inside? Your odd collection of Pez dispensers that sit on your desk, or your affinity to anything that has Superman on it, are sign that you may be a closet geek.
By Jason Vaile
Old enough now to appreciate it even more and keep it in the pristine condition that other collectors covet. More and more nostalgic toy shops are popping up around the country to cater to just those investors. Shops that carry unopened mint condition boxes of toys that date back to the 60’s. The secondary market on these geek investments continues to grow, and so do the numbers of collectors.
COMIC BOOKS Comic books were originally worthless pulp sold in drugstores for a dime in the 1930’s and 40’s. Millions of each issue were printed, read, then passed around to friends and eventually thrown away. A few people collected them for pleasure, but not many. It wasn’t until the 1980’s that collecting comics was actually thought of as a sound investment.
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Investing for Geeks | S P E C I A L F E A T U R E
In 1974, you could buy an average copy of Action Comics #1, the first appearance of Superman, for about $400. By 1984, that same comic cost $5,000. At the end of the 1980’s, auction houses like Sotheby’s and Christie’s began auctioning comics. In December of 1991, a Detective’s Comic #27, the first appearance of Batman, sold for $55,000. A few months later, an Action Comics #1 auctioned for $82,500. Comic collecting was now a hot market.
Disney wanted. The toys, the merchandise, the theme parks, and the multi-billion dollar film franchises.
Comic Book Eras Comics have evolved over the years. They have a rich history that reflects the culture and times of America through their pages. The different eras of comics are defined by their ages.
The Golden Age (1938-1945) At the investment level, high-value comics were appreciating at an amazing rate in the 1990’s. Comic book shops were popping up all over the nation. Even new comic releases saw giant value jumps shortly after hitting the market. One that sold for sixty cents could often fetch 1000% return after just a few months. The comic bubble burst in 1993. Marvel, one of the comic giants, was facing bankruptcy. Even the value of classics like Action Comics #1 and Detective Comics #27 plummeted. The market had become oversaturated with over-priced comics, which turned off both collectors and investors. New sales dropped 70%. In 1996, Marvel filed for bankruptcy.
The comic market has recovered and is beginning to thrive again. Some Golden Age comics are creeping into the six-figure range. The price of high-value older issues continue to rise. In 2010, comic book sales started breaking records. That same year, an Action Comics #1 sold for $1 million and shortly after a Detective #27 for $1.075 million. The comic geek was reborn. In 2009, Disney acquired Marvel for $4 billion. The comic book industry had not recovered that greatly, it was the comic book properties that
American readers took interest in the funny pages printed in newspapers and magazines. Collections of these were published, but were made up of just reprints. As demand grew, publishers needed original material featuring the audiences favorite characters. The new comics were pitched to adolescent boys seeking adventurous heroes. Other issues were targeted at an older audience with racy, pulp fiction stories. In 1938, Superman was born in the pages of Action Comics #1. He ushered in a new era of superheroes. In 1939, Namor and the Human Torch were created. Shortly after, Captain American, Batman and Wonder Woman lept off the page and into the history books. The superhero formula was now finding its place, and publishers began making a fortune off books that cost only a few pennies to produce.
Most valuable comics of the era: Action Comics #1 and Detective Comics #27 - $2.1 Million (each)
The Atom Age (1946-1956) Fredric Wertham M.D. almost brought about the end of comics. His book, Seduction of the Innocent, blamed comics for the delinquency of all children. He even claimed Batman and Robin were pushing a homosexual agenda. This led to neighborhood comic book burnings. www.ahametals.com American Hard Assets | 29
S P E C I A L F E A T U R E | Investing for Geeks In order to fight these accusations, the Comic Code Authority (CCA) was established in 1954. This was a self-policing and censorship code created by the comic book industry.
Most Valuable Comic of the era: Green Lantern #76 - $37,000
The Copper Age (1984-1992) The market was flooded with independent comic book publishers. Most of these books were in black and white and published on very poor quality paper. A few of these hit their mark with fans though, including Teenage Mutant Ninja Turtles, Hellboy and Sin City.
Most Valuable Comic of the era: Fantastic Four #1 - $105,000
The Silver Age (1957-1969) In this era, both DC and Marvel were completely revamping themselves. Times were changing and the old heroes that had become so well-known had to be reinvented for a new generation. DC gave more modern backstories to their heroes. Marvel was relatively new, and gave most of their heroes powers that were derived from some sort of radiation exposure. Hulk was powered by Gamma radiation. Spiderman was bitten by a radioactive spider. The X-Men were the children of the atom.
The darker, grittier comics were also appealing to the reader. Both Watchmen and Dark Knight thrilled fans with a scarier world that their heroes could inhabit. At the end of the Copper Age, gimmick covers were flooding the shelves. Silver foil, multi-layered die cut covers, and even holographic images allowed publishers to pander to the quick sell.
Most Valuable Comic of the era: Teenage Mutant Ninja Turtles #1 $15,000
The Modern Age (1992-Present)
Most Valuable Comic of the era: Amazing Fantasy #15 (First appearance of Spiderman) - $1.1 Million
The Bronze Age (1970-1984) In the 1970’s, comic book shops began opening around the country. This allowed the industry to reach costumers directly. It encouraged the idea of collecting rare and valuable comics. It even sparked the idea of comic book conventions.
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This era began with a death. The death of Superman. This comic caused thousands of people to flood local comic shops to see how Superman died. But as quickly as the new fans appeared, they disappeared, and many comic shops with them. Japanese comics, or Manga, were becoming their own niche market. Hollywood discovered that comic book movies could be quite profitable, and comics began tying in story lines to films to draw in new fans. Most Valuable Comic of the era: Walking Dead #1 - $11,300
Investing for Geeks | S P E C I A L F E A T U R E
ACTION FIGURES The most compelling reason to collect toys is simply because you love them. Usually one’s inclination to collect toys is connected to childhood memories. The toys you played with or shared with your friends, the great movies you saw and then played with the toys. Somehow action figures have a magical way of bringing back those great moments and helping to recapture that youth.
Mego’s cost-effective production of these action figures added to their bottom line. Using the same bodies on all of their figures, they simply changed the heads and costumes . This allowed them to mass produce these lines very easily. Mego also created the Kresge-style packaging that most action figures still use. It features a cardboard back and a clear plastic “bubble” that contained the figure.
G.I. Joe The “Moveable Man of Action,” or what we know today as the “action figure,” was the brain child of Stan Weston. His idea derived from the huge success of the Barbie doll, introduced by Mattel in 1959. Weston was watching a late night movie starring Robert Mitchum and Burgess Meredith when the name came to him. The film’s title was “The Story of G.I. Joe.”
In 1976, Mego rejected a deal to license figures from a small upcoming film called Star Wars. The deal seemed of little consequence when their rival Kenner got the contract. Mego filed for bankruptcy in 1982. Mego action figures now sell for about $2,000-2500. Their original sales price was $2-3. Mego produced an elastic Batman to compete with Stretch Armstrong. There are only two mint condition Elastic Batmans known to exist. These sell for about $40K each.
In 1964, the GI Joe action figure hit the shelves. It was articulated in 21 places and had a scar down the face to keep it from people calling it a doll. Purely by accident, the thumbnail was manufactured on the wrong side of the thumb. They later used this defect to protect against copyright infringement. In 1983, the federal law prohibiting the creation of children’s programming based on toys was lifted. Backed by an animated TV show and comic books, GI Joe resurrected its franchise in 3 3/4” glory. The prototype GI Joe toy soldier sold on Ebay for $200,000 in 2003. In the 3 3/4” line, G.I. Joe created a transforming series called “Manimals.” Although manufactured, the toys never made it to market. One of the Manimals, the “Vortex MDC,” sold for $20,000.
MEGO
Star Wars In 1978, the oil crisis led to a jump in the price of plastic. Most toy companies discontinued the 8” figure line and Kenner introduced 3 3/4” figures based on Star Wars. Unable to meet demand for the toys, Kenner issued “Early Bird Certificate Packages.” These could be mailed to Kenner to get four Star Wars action figures. The box also contained a diorama display stand, some stickers, and a fan club membership. These certificates with unopened figures now sell for around $3,500.
The Mego Corporation was founded in the early 1950’s and made mostly dime store toys. In 1971, Mego purchased a variety of licensing rights: Star Trek, Planet of the Apes, DC and Marvel Superheroes were just a few of its hugely successful franchises. GI Joe sales were falling in the 1970’s, while Mego was skyrocketing.
Throw the name Star Wars on something and it’s like printing money. Last year alone, the franchise raked in $3 billion in licensing revenue. Over the franchise lifetime, it has totaled $20 billion in licensing revenue, on top of the $4.4 billion in tickets and $7.8 billion in home entertainment products.
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S P E C I A L F E A T U R E | Investing for Geeks
Fox let George Lucas, creator of Star Wars, pass up an additional $500,000 directing fee in return for keeping licensing and merchandising rights for himself, a decision that would end up costing the studio billions. Lucas sold toy merchandising rights to Kenner in advance of Star Wars opening for a flat fee of $100,000 after Mego turned him down. By the end of 1978, Kenner had sold more than 40 million of the figures for gross sales revenue of more than $100 million. In 2004, Forbes estimated George Lucas’ worth at about $3.2 billion.
2. Vinyl Cape Jawa, 1978
The original Jawas had a thin plastic cape. The second wave were outfitted with a sewn cloth cape. Kenner was worried about perception of value when customers were getting a figure half the size for the same cost. Value: $2,000
1. Telescoping Lightsaber Darth Vader, 1978 The original “early bird” Darth Vader featured a light saber that telescoped out of his arm. These proved too difficult to produce and a second wave of single piece light sabers were made. Only a few hundred of this original design were made. Value: $6,000
THE INACTION FIGURES
Top 5 most valuable Star Wars Figures 5. Blue Snaggle tooth, 1978
Some collectors are rallying behind a new breed of collectible figures. These figures are based on real, historical people who aren’t necessarily superhuman. Some of these inaction heroes include, U.S. President Barack Obama, astronaut Buzz Aldrin and (who could forget) Prime Minister Sir John A. MacDonald (Who?). Typically retailing for more than $50, these figures are clearly beyond the reach of the typical kid’s allowance. Instead, they’re being snapped up by an eager community of collectors and enthusiasts, most of whom are in their 30’s and 40’s and grew up with Star Wars figures and G.I. Joes.
Kenner toy designers only had a small, grainy black and white photograph to design the prototype of the Snaggletooth figure. As a result, they got his color and size completely wrong. The figure was quickly scrapped, and is now one of the most rare figures on the market. Value: $400
4. Yak Face, 1985
In 1985, Kenner cancelled production of the Star Wars figure line. One last figure was produced, but never distributed in the United States. Some Yak Face figures were shipped to Europe and Canada, but never in the U.S. Value: $1,000
The inaction figures have evolved into an art form, with highly detailed dolls that are more statuettes than play things. Collectors will seek out models of people with whom they have a “visceral” connection. A Hong Kong company, In Icons, has been abuzz around the market with their new 12-inch pose able doll who looks eerily similar to the late, great Apple founder Steve Jobs. Original pre-orders sold for $135, but when Apple lawyers made them shut down production, the on-line prices skyrocketed to more than $3,500.
3. Rocket Firing Boba Fett, 1980
The original version of Boba Fett featured a rocket firing back pack. When Kenner began to worry about the safety of the firing projectile, they permanently glued the rocket in place when they were shipped. Value: $2,000 So feel free to get your geek on and buy that piece of nostalgia that will make you feel like a kid again. Remember, the only thing that separates the men from the boys...is the price of their toys. 32 | American Hard Assets www.ahametals.com
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Busting the Myths in Sports Memorabilia I
By David Sliepka
nvesting in sports collectibles and memorabilia is dangerous due to rampant fraud, and counterfeiting. In this article, I will explain why this and many other myths should be strongly examined before you put your money in ANY long term investment like sports cards. If you must answer that statement with a simple true or false, the technical answer is true. But at the same time, you would have to say the same thing about precious metals and stocks. If you are a life-long investor in metals, you may scoff at that comparison because you know your way around that business. You know the legit companies, and you know if something is too good to be true, it likely is. Fact of the matter, investing into any area you are not familiar with is dangerous due to the unsavory elements in any business, not because that business is inherently bad. Should you invest in memorabilia? The answer is not a yes for everyone just like it’s not no either. For those that have a passion for sports, the history, the numbers analysis, and the pure joy of hunt,
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sports investing can offer a unique collecting experience, and a great piece of nostalgia to your portfolio. Let’s examine some myths.
The bubble burst on sports collectibles in the 90’s. No one collects any more. In fact, there was a huge bubble that did burst in the 90’s in sports cards. At its height, there were nearly 20 card companies were producing hundreds of brands of sports cards each year. Fans just could not get enough. Some vintage rookie cards were starting to sell at record numbers, and the media latched on. Everyone thought that since a Mickey Mantle Rookie card sold for $25,000, I should by 100 of the next big rookie. Investors rushed in and were buying up cases upon cases of cards as a nest-egg for their kids’ college fund. Seemed like a good idea in 1991 when seemingly all prices were rising. But it was a classic bubble, and a borderline pyramid