The Rare Coin Company debacle

kchan1111 · February 13, 2017, 10:30:05 PM

Heard a lot about the Rare Coin Company debacle. It was before my time as collector.

But specifically, what coins were in those portfolio? Pre-decimals? Decimals? Sovereigns? World coins?

Just curious.

Fulvio · February 13, 2017, 10:41:54 PM

It would have been mostly Pre-decimals, but possibly some other stuff too. Would have varied by collector and what they were advised to buy.

trout · February 13, 2017, 10:42:19 PM

Quote from: 'kchan1111' pid='105280' dateline='1486987205'Heard a lot about the Rare Coin Company debacle. It was before my time as collector.

But specifically, what coins were in those portfolio? Pre-decimals? Decimals? Sovereigns? World coins?

Just curious.

Pretty much everything including notes.

Fulvio · February 13, 2017, 10:45:29 PM

Yeah, they were big on notes.. Wasn't there one batch that was worth some $5.5 million IIRC?

interest · February 13, 2017, 10:46:01 PM

Yes, all of those plus Banknotes, they had some real top shelf stuff some absolute beautiful coins & notes, each month when their cattle dog arrived I would drool at some of their stock.
You could pay for it & they would "Mind" it for you in their safe.
Also they did sell some lesser type coins from both mints.
I had a lot of their cattle dogs, but when I moved I threw them out.
When I lived in Sydney I lived very close to their Sydney Rep, John ?? who I would have dinner with once a month at the local RSL,
when they went belly up it was just as big a surprise to him, out of work with no job prospects.

Quote from: 'kchan1111' pid='105280' dateline='1486987205'Heard a lot about the Rare Coin Company debacle. It was before my time as collector.

But specifically, what coins were in those portfolio? Pre-decimals? Decimals? Sovereigns? World coins?

Just curious.

kchan1111 · February 13, 2017, 10:55:29 PM

I just got Andrew Crellin's regular email and he mentioned the Rare Coin company. I know about it but don't know what coins they had.

Just crazy how they would guarantee minimum rate of return and immediate buy back for such an liquid and speculative asset. So unfortunate to see so many people hurt.

What are typical price range? 10k+ or mosty coins a few $k.

Fulvio · February 14, 2017, 12:14:48 AM

Quote from: 'kchan1111' pid='105285' dateline='1486988729'So unfortunate to see so many people hurt.

Most, if not all, got their coins out. I recall seeing a figure of 85% from the receivers at one stage.

The loss was in the unrealised expectations of profit. Not the same thing.

If you buy a $1,000 coin and it goes bye-byes, you're out $1,000.

If you buy a $1,000 with the promise that next year you can sell it for $2,000, then the company goes bust and you get your coin, well, you still have the coin. It may only be worth $500, but you can always sit on it until the price hopefully recovers.

That said, most of their clients weren't collectors. If you 'invest' your life savings, and it all goes bad, you may well be forced to sell at the bottom because you must have an income. Your $1,000 suddenly crystallises into $500 in your hand, so you've lost half your money.

interest · February 14, 2017, 09:50:47 AM

Part of the reason they went belly up was these changes to Self Funded Super.

Part of the reason

Not the only reason but a big part.

robbiegal · February 14, 2017, 09:52:49 AM

https://thewest.com.au/business/finance/retirees-snared-in-collapse-of-coin-dealer-ng-ya-353465

trout · February 14, 2017, 10:19:20 AM

The problem that I saw with the Rare coin coy's business model is that I created a market that never existed before and by doing so artificially inflated the prices of rare/scarce coins and notes across the board by the increased demand from investors in this company.

At the end of the day the inflated values became too much for the market to bear and the coins/notes became unsellable at that price.
This would have happened eventually even if the changes to self funded super were not implemented.

What happened with the collapse of this company had a profound effect on the market in Australia and even now I don't think that the dust has quite settled yet and the market for these notes and coins is still going through a period of adjustment.

I do think that many of our coins and notes are greatly undervalued at the moment because of the uncertainty that this companies collapse has created and only time will tell when the confidence in the market will return and the real values can be established and maintained.

wwwww · February 14, 2017, 10:37:31 AM

They sold collectibles at prices well in excess of their market value on the promise of future returns and financed those future returns with capital from new investors.

It worked as long as they kept the market of investors growing, once that stopped they could no longer finance people selling and as such went bankrupt.

autocoupler · February 14, 2017, 11:30:40 AM

Not a bad deal if you can have multiple clients bidding for items you already hold on their behalf. There was also a banknote trader who's name escapes me, who operated a business on similar lines and suffered a similar fate as T. R. C. C.

Some years ago I found myself bidding against Robert Jackman at an IAG auction for a mule dollar. It was a bit daunting knowing he had the artillery to easily blow me out of the game, but I had a figure in my head that I wasn't prepared to bid above so I ploughed on. Anyhow, as things turned out I was the winning bidder, and at the fall of the hammer he turned to me and gave a big grin which got me thinking was he just feeling sorry for me, or had he forced me above its true value. As things turned out he hadn't :yahoo:

Fulvio · February 14, 2017, 02:37:08 PM

Quote from: 'wwwww' pid='105295' dateline='1487030851'the promise of future returns and financed those future returns with capital from new investors.

Which is what a Ponzi scheme is. :angel:

nealeffendi · February 14, 2017, 03:17:45 PM

I agree with Trout. If there was 240 million in coins/notes leaking onto the market (especially if they are retirees who had to liquidate) then that would explain why the market is still weak and will remain weak for years to come. I'm sure that some of us have picked up bargains though and as we are primarily collectors and not investors the weakness is good for us.
AC I think that banknote dealer was John Petit Rare Banknotes.
Also whatever happened to Barry Winsor?

robbiegal · February 14, 2017, 08:30:19 PM

Quote from: 'autocoupler' pid='105296' dateline='1487034040'Not a bad deal if you can have multiple clients bidding for items you already hold on their behalf. There was also a banknote trader who's name escapes me, who operated a business on similar lines and suffered a similar fate as T. R. C. C.

Some years ago I found myself bidding against Robert Jackman at an IAG auction for a mule dollar. It was a bit daunting knowing he had the artillery to easily blow me out of the game, but I had a figure in my head that I wasn't prepared to bid above so I ploughed on. Anyhow, as things turned out I was the winning bidder, and at the fall of the hammer he turned to me and gave a big grin which got me thinking was he just feeling sorry for me, or had he forced me above its true value. As things turned out he hadn't :yahoo:

i'd bet you a hundred bucks that it was his coin

Quote from: 'nealeffendi' pid='105303' dateline='1487047665'I agree with Trout. If there was 240 million in coins/notes leaking onto the market (especially if they are retirees who had to liquidate) then that would explain why the market is still weak and will remain weak for years to come. I'm sure that some of us have picked up bargains though and as we are primarily collectors and not investors the weakness is good for us.
AC I think that banknote dealer was John Petit Rare Banknotes.
Also whatever happened to Barry Winsor?

yes i do believe it was him as well