A Solid First Step in Diversification
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In my 20 years of rare coin and precious metals experience I have written a number of investment letters. Some better than others, but this particular letter is easily the most important. It goes to the front of the line because there are strongly evident investment fundamentals which all focus on one particular gold coin. I can't remember a better situation bringing together the right coin at the right time. Now add two important extras: First this coin is backed by a gold market ready to once again explode. And second, a popular book written by well known author David Bowers provides added insight into why the $20 gold piece holds a unique place in rare coin investing. |
The coin I'm talking about is America's $20 Saint-Gaudens gold piece minted from 1907 through 1933. Few collectors and investors realize that almost without exception this coin already ranks among their first choices. It's a natural first choice when you consider that the $20 gold piece not only stood for wealth, it defined wealth since the Civil War. Most everyone owns them, or wants to own them because they have the broadest appeal of any coin ever issued by our government. And the best part of this investment idea is that these gold coins are selling at low premiums and have easily the largest following of all American gold coins.
And I recommend investing in the Saint Gaudens graded only by PCGS for reasons I will explain in a few moments, but if you are new to certified coin you can learn more about PCGS with the PCGS Grading Process Video.
I have analyzed, plotted and condensed the price performance of the $20 Saint-Gaudens in three separate phases to better illustrate this money-making plan and decided that the best price to value ratio exists in two particular grades: PCGS MS64 and PCGS MS65. So let's consider these two grades in three different phases of the still developing market.
These particular grades in the absurd increase in value documented in 1978 through 1980. Believe me this investment time frame provides impressive evidence of how investors turned crisis into profits as higher grade US gold coins moved higher and then doubled in price. This period exceeded even my wildest expectations and remains a great historical example of just how high the prices of these early gold coins can move when inflation strikes.
From the market bottom in 1982 through 1985. A time frame that clearly illustrates the rock-solid value offered by the Saint-Gaudens in PCGS MS64 and MS65 grade.
And finally from 1986 to the present date. This is the most advantageous time frame for today's investor because it focuses on true independent 3rd party grading. Since 1986 the condition of a coin, and therefore its value, has been defined by PCGS (The Professional Coin Grading Service). This final phase is the most dynamic because independent grading has limited the number of PCGS graded MS64 and MS65 Saint Gaudens available to a fraction of the original mintages.
Add to this powerful market appeal another investment feature which few consider: The $20 gold piece provides a "Triple Play" advantage: (1) Because it contains almost an ounce of gold it is looked at by many as simply another bullion option. (2) Because it is considered scarce by collectors an unseen collecting base eagerly seek this important coin. (3) Because the last of these gold coins were struck in 1933 many experts believe they cannot be confiscated in the event that bullion is recalled in the United States.
FIVE COMPELLING REASONS TO INVEST IN $20 SAINT-GAUDENS TODAY
I've already said the Saint Gaudens is the most universally traded. It is also the most universally owned and creates the most phenomenal demand both in this country and abroad. Great collectors, wealthy royalty and government treasuries all typically own the Saint-Gaudens. They know market after market this coin holds value. Rather than owning only bullion, major governments and astute foreign powers also put their money into United States $20 gold pieces because they know that for the safest hard asset hedge, in good times and in bad, this coin goes to the front of the line.
Another reason to invest in this
coin is so obvious you will have to bear with me
for a moment. Have you ever really looked at one?
Studied it? I have seen virtually every coin
produced by the United States from colonial times
to the present day, literally hundreds of
different types and you know what? The Saint
Gaudens design, with its beautiful relief, is the
most majestic.
This coin is a stand-alone art form and is
historically significant as well. Sooner or later
the average guy is going to realize the financial
trap our government has created with the
unlimited printing of paper money and continued
bailouts in the private sector. When this happens
the public will look and buy this coin because of
its beauty, its weight, and its history.
I've told you about this coin's
high gold content, but let's be more specific.
Every $20 Saint-Gaudens contains nearly one ounce
of pure gold which means if gold moves up $100
this coin will follow.
But there is more than weight working for you in
our favorite gold choice. This coin combines
rarity and exploits a well-established collector
and investor market. When rarity and demand meet
head-on the price movements can be explosive. A
psychological momentum develops as scarcity
creates volatility and investors become more
aggressive. The upward price movement is not a
one to one function. It's more likely that the
price of high grade $20 Saints will move 2 or 3
times the relative price of gold bullion. This
price action comes from the combination of
rarity, and the notion that the investing public
will "lose their chance to buy". This
interaction between rarity, weight, and demand
simply does not exist in the bullion play.
Another important point. In case
you're unaware our government considers the
United States $20 gold piece a rare coin even
though premiums on high-grade coins are
ridiculously low. That's important because it is
not subject to the normal reporting requirements
associated with ordinary bullion coins. This, of
course, adds unconditional security and privacy.
These factors combine, adding another dimension
to demand. People who are privacy oriented will
clamor for this coin instead of bullion.
I believe the move by our government to record
(IRS Form 1099B) names, mailing addresses, and
social security numbers of bullion sellers is
only the beginning. The Krugerrand and Maple Leaf
gold bullion coins were targeted first. It is
inevitable that further and more severe
government controls will be placed on gold
bullion. Many experts believe that if this
happens the Saint-Gaudens will become everyone's
gold coin of choice because they are not subject
to confiscation.
The recent problems in stocks and financials in general provide a giant source of fresh money to push prices higher. Many confirmed stock players are now actively looking for alternative investments. And with interest rates at 20-year lows who wants to keep their money in a savings account?
TWO REASONS THE SAINT-GAUDENS IS A UNIQUE TRADING VEHICLE
The suitability of the "Double Eagle" in large deals is outstanding because everyone recognizes and admires this large gold coin. It is also available in large enough numbers to create a trading pool. A pool lends itself to cost averaging, large promotion, and provides the benefit of size which brings in the big money everyone is looking for to move the general market higher. For these reasons the first Wall Street trading pools were dominated by these particular coins.
The money paid over the actual gold content is low relative to its rarity and popularity, which encourages new investors who have only considered gold bullion coins.
THESE 2 GRAPHS DETAIL THE LONG TERM PRICE ACTION
If you believe in the protection of gold, move 25% to 50% of your bullion holdings into Saint-Gaudens $20 gold pieces in PCGS MS64 (Choice Uncirculated) or MS65 (Gem Uncirculated). By doing so you benefit from scarcity, weight, psychological demand, and the possible confiscation problem is solved. What follows are 2 graphs of the wholesale price of $20 Saint-Gaudens. The first graph is the MS64 example, which hit a high of $2100. The second considers the MS65 coin, which reached a high of $4000.
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7 REASONS THIS COIN PROVIDES PROTECTION & POTENTIAL
Unconditional grading has forever
changed investment in rare coins. It has replaced
uncertainty with cash buying power in the real
world. The Saint-Gaudens I recommend have been
professionally graded by the most fiercely
independent and highly respected grading
organization in the world: The Professional Coin
Grading Service or PCGS. This point is essential:
There are a number of so-called independent
grading services, many of which fall short in
their promise to deliver consistent results. Why
take chances? Insist on your investment coins
being graded by The Professional Coin Grading
Service.
Owning United States twenties graded by PCGS
allows the investor to define their own
investment strategy as to grade and price because
they no longer have to be dependent on any
dealer. But just how many MS64 and MS65 PCGS
Saint-Gaudens are there? Actually not many
considering the overall demand for almost all
Saint-Gaudens fall below this
investment standard because most of these coins
now show wear due to years in circulation.
This coin is accepted and embraced by over 500
dealers nationwide. That means you are never tied
down to any particular geographical area. We are
always just a phone call away, but should you
decide to move there are dozens of local dealers
eager to purchase your PCGS gold for top dollar,
thus ensuring fair prices no matter where you or
your family members call home.
I have just described how relatively few high grade $20's remain, but let's look at some real numbers. Add up the mintages and assume that 90% of these coins are still around. Now from the Population Report figure how many MS64 and MS65 coins have been graded. The percentages are impressive! Less than 2/10 of 1% of all Saint-Gaudens have been graded MS63 or above. In other words less than 1 coin in 500 would qualify!
Also for the first time the serious rare coin limited partnership is a reality. Since the advent of PCGS (1986) my reliable sources indicate that dozens of very large trading funds and limited partnerships have been formed (some in the $50 to $150 million range). All buy and sell the $20 Saint-Gaudens. Many believe such pooling of money is just beginning in rare coins as people pull money out of stocks.
The $20 gold coin market is quoted daily over a satellite-controlled computer trading network called The Certified Coin Exchange (CCE). Because of this interactive system instant price quotes are available. That means you will always know what your coins are worth because we provide a toll-free number to call any time you want to buy or sell.
Let's talk about rare coin value
and highlight the $20 Saint-Gaudens in
particular. Value is not abstract. It is a
function of demand, investor base and weight.
There are other important considerations like
beauty, rarity, affordability and profit
potential. All of which have a direct bearing on
a coin's worth. Of the things that positively
impact the value of any coin the $20 Saint
satisfies 95% of them.
Of all the coins I could recommend to you there
are a number that sell at very advantageous
prices. Some are very beautiful and some are very
rare. Ironically, the ones which are the most
rare might not be the safest to own because there
are only a handful of people who can afford them.
There are a limited number of PCGS graded
Saint-Gaudens, and I believe this inelastic
supply coupled with affordability and small
buy/sell spreads will cause a price explosion.
There is also more market depth in this coin than
in any other rare coin in today's market. This is
important because it means that you could sell 1
coin, 50 coins, or 2000 coins in short order.
We haven't yet considered a
sleeping giant. Inflation. Today's investor has
become seriously complacent by accepting the
"conventional wisdom" that inflation is
no longer a problem. Inflation is actually more
dangerous now because the size of the US money
supply and trade imbalances are in the
stratosphere.
In my opinion inflation is so serious it will
change our very way of life, just as it has for
many countries that have institutionalized the
printing press. Some Americans have been lulled
to sleep by the huge increase in our money
supply. I believe this stack of I.O.U.'s will
come crashing back in the form of sustained
inflation and the price of high-grade $20 gold
pieces could double and then double again!
Common sense will tell you that the future is
uncertain and everyone knows that past
performance does not necessarily prdict the
future, but since man has printed paper money
wise people have turned to gold to preserve
purchasing power. It is difficult to say if we
will ever see the frenzied buying of years past,
but even if we don't there is plenty of profit
built into these gold coins at current levels.
I have left protection from world problems, ultimate financial security, and privacy for last. These powerful qualities actually transcend profit. Now we don't subscribe to an Armageddon world-view, but there is a threat from terrorists that could create oil shock, social chaos or biological terror. Believe me, holding graded Saint-Gaudens provides a feeling of security that is unequalled in a world turned on its head. These gold coins do not answer to government. You are in complete control when holding them in your own hands or when they are placed in your private safe deposit box.
CONSIDER ONE OF MY THREE INVESTMENT STRATEGIES
I have worked diligently at distilling my thoughts because I believe this opportunity won't last forever. If, after reading and doing some of your own homework, you believe as I do simply follow my conservative approach:
The $20 Saint-Gaudens is not a bullion coin and most of the time does not act like one, so this choice is not a substitute for your bullion position. It is a diversification which offers a number of privacy and rarity advantages. If you are considering an investment in bullion gold coins, rethink your strategy to include rarity and optimize your dollars. Place up to 50% of that money into either PCGS MS64 or PCGS MS65 Saint-Gaudens. I honestly believe the profit potential in this integrated approach is too good to pass up. And if you act now there are few investors who can claim they beat you to the punch.
If you already own gold bullion coins (Eagles, Maple Leafs or Krugerrands), I strongly suggest taking a portion of this investment and converting it into PCGS graded Saint-Gaudens in MS64 or MS65. We offer a special higher buy price on all bullion coins used in trade for PCGS graded Saint-Gaudens, because we believe this trade will be a money maker in the longer term.
If you already own PCGS graded twenties consider adding to your holdings at these attractive levels. You won't be sorry when inflation and rising gold turn your coins into a money machine.
The specifics of your purchase, however, can wait until you are better informed. For the moment call a CNI representative. Ask all questions you might have, including the most probing and the ones that have been overlooked in this report. We provide straightforward answers including some potential pitfalls. You see, there is no investment that's without its blemishes, and you should understand there are always some flaws if you do it wrong. We will share years of investment experience and explain how to avoid the wrong way. And then provide the best reasons about what you should own and why it makes sense now. All before you spend one dime. Then you decide. Do this before the $20 gold piece market begins to move upward once again. We have built our reputation on credible information and excellent national pricing, so take the time to call and get all the facts on this developing market.
Copyright © 2010 CNI Inc.
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