15 Coins You Don't Want to Buy or Hold

1. THE
YOU DON’T WANT
TO BUY OR HOLD
15COINS

2. 1American Federal Rare Coin & Bullion
THE 15 COINS
YOU DON’T WANTS TO
BUY OR OWN
The following 15-point synopsis will illustrate those categories of
coins that in my opinion do not offer significant upside potential
and should therefore be viewed as unattractive investments.
Here are the first four points you’ll want to consider before
making a rare coin purchase.
• The rarity of the coin
• The coin’s value as a recognized collectible
• The coin’s trading history
• The coin’s status among the network of dealers and
collectors
Dear Coin Investors and Collectors,
As president of American Federal Rare Coin and Bullion, I
have compiled my 30+ years of experience into this easy-to-
read booklet in which you will learn to identify the 15 coins to
completely avoid. Don’t get caught in one of the many scams
out there!
I am a member and abide by the Code of Ethics of both:
PNG–Professional Numismatic Guild (Member #553) and
the American Numismatic Association (Life Member # 5211).
I also belong to a host of other coin organizations including
NGC, TNA, CSNA and FUN.
Remember that here at American Federal, we believe in
educating our clients so that YOU can make the right invest-
ing decisions for your life. Call us at 800-221-7694 or email
me (nick@americanfederal.com) and we’ll help get you on the
right track.
Sincerely,
Nick Grovich
President
American Federal Rare Coin & Bullion
500 Easy Street
P.O. Box 5810
Carefree, AZ 85377-5810
www.americanfederal.com

3. American Federal Rare Coin & Bullion2 3American Federal Rare Coin & Bullion
MODERN COINS
Modern coins includes the Jefferson 5¢,
Franklin 50¢, Roosevelt 10¢, Kennedy
50¢, and most other coins that were
minted after 1945. To put it bluntly, most of these coins are
simply not rare and due to their abundance and availability,
have no real chance of seeing any significant increase in
value. You may notice a trend of collecting these coins in the
highest grade
possible. In my
opinion, this
trend may
well turn out
to be a fad.
#1
NEW MINT COINS
#2Modern commemoratives such as
State Quarters, Washington 50¢,
Olympic Gold coins, USO and other
new issues almost always experience a decline in price after
the first offering. Initially, the United States Government sells
these coins at a somewhat arbitrary price, letting the market
determine the secondary value. Keep an eye out for the
recent editorials and news stories that are commenting on the
dubious investment value of such coins.
Occasionally there are new mint coins that skyrocket, but this
is virtually impossible to know ahead
of time and therefore a high
risk investment.

4. American Federal Rare Coin & Bullion4 5American Federal Rare Coin & Bullion
COMMON COINS
THAT ARE STUCK IN
TRADING LEVELS#3
HOARD COINS
#4This includes such “rare treasures” as
the Wells Fargo 1908 $20 St. Gaudens
and Redfield $1. Initially, millions were
minted. Large quantities were bagged
and stored in bank vaults, private hands, or lost. The market
was then determined by a supply that was kept artificially low.
That is, until these “rare” coins were dumped on the market.
Consequently, what may seem like a good price based on
the previous valuation of the coin becomes a money losing
proposition once the quantity is increased by a multiple of ten
to a hundred times and the dealer network stops supporting
the prices.
Whenever you have an ever-increasing supply of any item
and a market becomes saturated, elementary economics
dictate that the value of the product will decrease
significantly. Many of these hoard coins
are historically significant and you may
choose to buy for this reason
alone, just don’t expect to
make money.
Coins such as the common date
MS-65 Buffalo 5¢, 1938-45
MS-65 to MS-66 Mercury 10¢,
and common date Morgan and
Peace $1 in MS-63 and MS-64
condition are not rare or collectible
due to their relatively high supplies.
Since the value of these coins are
typically only marginally higher
than the cost of grading, the
minute the market does show
some life, hundreds and even
thousands get submitted for
grading, thereby causing
a glut in the
market and
decreasing the
price back to its
previous level.

5. American Federal Rare Coin & Bullion6 7American Federal Rare Coin & Bullion
LOW POPULATION,
UNRECOGNIZED
RARE COINS#5
LOW POPULATION
COINS
#6
Certain rare date gold and type coins
are especially vulnerable to high
premiums, even though they contain no corresponding market
demand, meaning that the price is artificially set by the few
trading in such rarities.
Coins like the 1873 Open 3 $20 Liberty are not well
recognized, and therefore only have a slim chance of
appreciating, as you must find the one-in-a-million collector
who is actively seeking that coin. This makes for an
investment that is not liquid in nature. If you want to reduce
your risk and make money in the coin market, it is imperative
that you stick to actively traded coins with some degree of
market appeal as opposed to making emotional decisions in
your portfolio strategy.
The $20 Liberty Type II coins in AU to
MS-62, for example, are not recognized
or collectible. Generally speaking, the
market cares little about coins of a low grade regardless of
how rare they are, except for those few exceptions like the
1909-S VDB cent or the 1895 Morgan Dollar. Remember,
when purchasing rare coins, you are doing so with the intent
of selling them one day for a profit. If a coin is so rare that it is
not known, and therefore not coveted by the market at large,
you may have little chance to sell it, let alone at a profit.
This has been increasingly touted with a huge variety of
modern foreign coins. Some Mints will actually make “special
order” coins for dealers in select cases. Often mintages as
low as 99 coins or up to a couple thousand are made and
sold to a single dealer. These coins are created expressly for
the resale market and often no real collectors market exists
except for the one the selling dealer can create.
They include huge Kilo sized coins and special occasion coins
as well as exotic sounding pieces. I have even seen coins with
diamond chips or rubies mounted on them. Some are actually
quite beautiful. However, they rarely turn out to be profitable
collectables. Even the coins with low mintages will rarely
appreciate in any secondary market because once the dealer
sells out there is no one left to run up the price.
It’s hard to grasp that a coin with a mintages as low as 99
pieces is not a rare coin. If you consider though, that there are
thousands of coins with small mintages and not nearly enough
collectors to care about that many coins, then it begins to
make sense.

6. American Federal Rare Coin & Bullion8 9American Federal Rare Coin & Bullion
TREASURE COINS
#7
FOREIGN BULLION
TYPE COINS
#8
“Gold Doubloons,” “Pieces of Eight” and other shipwreck
coins make for great conversation, but are normally poor
investments. These coins do not fit my initial criteria of being
rare, collectable or recognized. Most “treasure ships” are
loaded with tons of these coins. Since they were the most
widely used method of payment they were manufactured in
bulk. While they are indeed old, age has little to do with coin
value and appreciation.
Foreign bullion coins come from countries other than the
U.S. These include coins such as Russian 5 Rubles, Pandas,
foreign Olympic coins, U.K. Proof Gold sets, 20 Francs, Kilo
silver coins, and a huge variety of newly minted oddities that
are not collectable. This means that you will have a hard time
recouping your investment, even if gold takes off. Their only
real worth is the value of the gold contained in them, which
will very likely be below the original purchase price.

7. American Federal Rare Coin & Bullion10 11American Federal Rare Coin & Bullion
COMMON COINS
#9
BU ROLLS
AND LATE DATE
PROOF SETS #10Coins in this large category are usually
the ones being pushed by the large
telemarketing firms. This category includes
all grades of St. Gaudens, common Morgan $1 in MS-60
to MS-66 condition, and common Peace $1
graded at MS-60 to MS-65. Brokers love
these because buying huge supplies
makes them very inexpensive at
wholesale. Common coins have
consistently under-performed in the
market by a large margin, even losing
value while other coins were
going up. For example,
between January of
1987 and June of 1989,
the “rare coin market”
appreciated by as much
as 335%! However, certain
common coins, like the $20 St.
Gaudens, Morgan Dollars and $20 Liberties, dropped in value
as much as 18%. If you didn’t know this and your portfolio
currently contains them, do yourself a favor and convert them
into coins that have a real chance of appreciating in value or
simply stick to bullion.
Proof Franklins, Washington 25¢, BU Buffalo 5¢ rolls,
Jefferson 5¢ rolls, Lincoln 1¢ rolls - all are a fluke of
promotional efforts made back in the 60’s. These products
are far too common to have any upside potential due to the
large amounts that currently exist on the market. Although
the price of silver has risen from $3.50, many rolls like
Buffalo nickels and Mercury dimes have decreased as much
as 50%, during the same period of time. Even if the prices
of rare coins dramatically increase due to their quantity and
availability, I
would expect
minimal upward
movement for
this class of coin.

8. American Federal Rare Coin & Bullion12 13American Federal Rare Coin & Bullion
#11CALIFORNIA
FRACTIONAL
GOLD COINS
Although very rare and somewhat collectable, these items are
not well recognized and do not have an active trading market.
Often, the spreads are so large that it becomes difficult to
make money. However, if you simply want a fun coin to
collect, these coins are certainly very historic.
ESOTERIC COINS
#12Esoteric coins, like the Kellogg $50 Restrike, are rare oddities
that have no established liquid market. They are very thinly
traded and only a small number of collectors buy them. These
coins also include Territorials and early 19th century rare
date coins. My word to the wise: leave esoteric coins to the
egocentric collector.

9. American Federal Rare Coin & Bullion14 15American Federal Rare Coin & Bullion
COMPLETE SETS
OF COINS#13Many dealers will encourage you to purchase coins in an
attempt to complete a full or “short” set. The pitch is that
once you complete a set, the coins are worth more than the
sum of the coins’ value. By going through the hard work of
finding the whole set it should make sense that your payoff
would come once you complete the set.
Unfortunately, that almost never happens. If you
look into auction records you’ll see that sets
are completely broken down into individual
coins. Many of those dismantled sets took
some very dedicated numismatist a
lifetime to acquire. I personally have
seen auctioneers take separate bids
on a collection or set. The first bid
would be as a set. The next would
be by taking bids individually on
the coins in a set. In my 30+ years attending auctions, I have
never seen the set price come out equal to or more than the
individual bids. Why is this the case? The auction company is
paid to get every dollar out of the collection and often splits
the set apart to maximize the price. This happens on a regular
basis.
I handled the finest known “Registry Set” of $10 Indian Head
gold pieces. This was truly a one of a kind set. To get the most
money for it, I had to sell the coins individually.
Again, many would question why?
Think about it though… buyers are merely
other collectors or dealers supplying their
clients with coins. If the
buyer

10. American Federal Rare Coin & Bullion16 17American Federal Rare Coin & Bullion
#14
needed a certain coin to upgrade or fill a hole in his set, he
would certainly be likely to pay something extra to get what he
needed. The problem is that none are willing to pay extra for
every coin in the collection.
This is a selling tactic used by dealers to talk you into buying
more coins. It’s easier to lock you into future sales and usually
charge you more than top dollar to finish your set. Ironically,
it is very likely that they bought a lot of other coins from other
sets that were being broken up.
Coin sets that dealers love to assemble for collectors include:
• $2 ½ Indian Heads
• Franklin Half Dollars
• Walking Liberty Half Dollars
• Gold Commemorative Coins
• Peace Dollars
• Silver Eagles
These are just a few examples of what I see most often. These
are favorites because it is fairly easy for dealers to obtain
all the coins in the set. I frequently run into investors who
mistakenly think that they have a one of a kind item because
the set is complete.
For investment purposes, you would be better off only buying
the key coins to the set so that you hold the most sought after
coins.
PATTERN COINS
Before a coin is issued, a prototype called a pattern is made.
Some of these coins are very collectable and do become
profitable, although narrow markets again limit the appeal.
Only a handful of experts are able to accurately evaluate
these coins and finding a collector for specific examples can
be difficult. Pricing is often a problem. If you are not well
connected to serious minded collectors who deal in such
coins, it is better to invest your money elsewhere.

11. American Federal Rare Coin & Bullion18
#15FIRST STRIKE AND
EARLY RELEASE
COINS.
For the past few years, dealers really jumped on a completely
arbitrary designation to add to their profit margins. In fact, the
U.S. Mint actually reported on their website that no such thing
as a First Strike exists on the modern Eagles or Buffaloes. In
the past, a First Strike was more of a ceremonial coin that
was documented and presented by the Mint and therefore
more valuable. Today, there is really no way to tell the first
strike from the last. The Mint uses very high standards and
goes to extremes on quality control. In fact, the Mint reports
that only 1500 coins are made on a single die and only 300-
500 on a Proof Eagle die for just that reason. Some services
went to Early Release instead. Take note that the only criteria
the grading services use is the date on the packaging from
the Mint. A serious collector will not pay extra for that. I
believe this is a totally contrived market that allows dealers to
make a larger mark-up on bullion coins. I can tell you for a fact
that when I sell these coins back into the market, they do not
command any premium whatsoever, even from the guys who
are touting them.
CONFIDENTIAL PORTFOLIO REVIEW SHEET
IMMEDIATE EVALUATION REQUIRED
Qty of
Coin(s)
Date
on Coin
Mint
Mark
Grading
Service
Grade
of Coin
Denomination
of Coin
RARE COIN & BULLION, Inc
500 Easy St. - P.O. Box 5810 - Carefree, AZ 85377-5810
Phone (800) 221-7694 - Fax (480) 553-5290
SPECIALFREE OFFER
Please use the backside of this form for additional coins.
Tearhere

12. Qty of
Coin(s)
Date
on Coin
Mint
Mark
Grading
Service
Grade
of Coin
For longer coin lists copy this form or use the additional forms enclosed
Denomination
of Coin
CONCLUSION
I hope that you find this information helpful as I use it to make
my everyday decisions in the business. I’ve given you a general
overview of the 15 coins you want to avoid or get rid of if you
own. Coin investors have too often told me that the best rare
coin investment was the coin they didn’t buy. Our goal here at
American Federal Rare Coin and Bullion is to help you avoid the
financial pitfalls in deciding when to buy and (or) sell.
We encourage and teach our clients how to research before
buying any rare coin. We’ll show you how to get alternative
opinions and get agreements in writing. Also, we can review your
coin portfolio and show you how to keep a close eye on coin
values. If you find yourself holding coins that have lost value, sell
them! If the value has dropped, holding and waiting for the value
to go up is not an option. It is not going to happen.
Please feel free to call us at 800-221-7694. With over 30 years
of experience, we at American Federal are always available to
offer alternative options about coin values when buying and (or)
selling.
We hope you take advantage of our FREE offer to review the
current value of your coins. You can either fill out the adjacent
form for a Free confidential Portfolio Review or visit www.
americanfederal.com to send it to us electronically. We look
forward to working with you in meeting your coin investing goals.

13. American Federal Rare Coin & Bullion22
American Federal Rare Coin & Bullion
500 Easy Street
P.O. Box 5810
Carefree, AZ 85377-5810
Phone (800) 221-7694
Fax (480) 553-5290
www.americanfederal.com