Buying, collecting, and selling

The G-O-O-O-O-A-L-!

The holding of historic and potentially valuable items in a collection may be the goal, but acquisition and ultimate liquidation are necessities. Acquisition by inheritance might be easy for a handful of collectors, but purchasing is a requirement for most. Similarly, liquidation might also be easy if collectors are intending to leave one or more collections to heirs. Depending on whether heirs desire to keep collections or not, there will come a time when the collection must move onto other owners. "Kicking the can down the road" won't last forever.

In recent years, many collectors have chosen to evade the problem of liquidation by donating to museums and historical societies. Selling is often difficult, so it is obvious why many collectors choose donation as an easy way out. Donations, however, have MANY downsides to donors, recipient organizations, and collectors, both now and into the future.


I am not sure whether buying collectible stocks and bonds in the United States has become easier or more difficult, but it has most assuredly changed since the mid-1990s. Collectors can currently buy from:

Possible ways to purchase collectible stocks and bonds
Purchase from Directly Remotely
Private individuals difficult moderate*
Professional dealers moderate easy*
Professional auctions moderate easy
Amateur auctions (eBay) easy
Antique malls difficult
Coin stores difficult moderate*
* requires seller to have web presence


Compared to collecting automobiles and motorboats, housing collections of stocks and bonds is trivial. However, certificates are still more difficult to store and haul out for inspection than coins, stamps, and paper money. They can be stored in albums, of course, but albums holding forty or fifty coupon bonds are somewhat bulky. None will fit in a typical safe box, so there is. of necessity, more effort spent at protecting collections from fires, floods, and more mundane threats like mildew and moisture. Still, a collection of a thousand stocks and bonds takes up much left space and requires dramatically less attention than a similar-sized collection of bamboo fly rods or electric guitars.

One of the most overlooked issues of collecting stocks and bonds has always been, and remains, avoiding deterioration of paper. Obviously, no collector is going to fold certificates and keep them in ordinary business envelopes. That would be silly. What is not silly is that paper does not last forever. By themselves, certificates printed on rag paper, like the paper used by American Bank Note Company and its competitors, are not problems. After all, many of those are over a century and a half old already and normally show no signs of falling apart anytime soon.

A greater problem occurs with typical generic certificates printed on wood pulp paper. Even if purely pH neutral twenty years ago, wood pulp paper of yesteryear probably contains lignin that eventually deteriorates and releases acidic compounds. Even that would not be a terrible problem if it weren't for the well-documented migration of acid from acidic paper to other paper. A certificate printed on rag paper stored in the vicinity of pulp paper certificates will eventually grow acidic. The aging process is slow, but unless mitigated, is inexorable.

If collectors were to do one thing to protect the hobby into the future, it would be to pay much more attention to preservation.

I have owned the certificate at right since a dealer gave me this in February, 2003. It remains the only one I have ever encountered. It was a gift because it was too fragile for the dealer to sell and it has only grown worse. Regardless of its apparent rarity, I am not sure it is salable in its current form.


Selling is where the rubber meets the road when determining how successful collectors might have been during their purchasing phase. Everyone knows the maxim of selling: "buy low, sell high." The prevailing wisdom is that prices will always be higher in the future than now,

Ah.., if that were only true!

I have had a few collectors estimate the prices of their certificates when they sent images. I've encountered 2x and 3x estimates of "value" over what they paid at auction, sometimes only a few months earlier. Since they had been high bidders, that meant no one else had been willing to pay more at the time. Yet the collectors who were corresponding with me were suggesting their certificate(s) had doubled or tripled in price simply because they owned it. I can't say whether they were correct or not because they did not immediately try to sell for profit. That is not what collectors do.

At some point, collectors or their heirs will probably sell their collections. Unlike Egyptian royalty, I doubt certificate collectors will be buried with their prized paper. (Rather, I should say I haven't heard of any collector making that choice.)

Still, many have chosen to evade the problem of selling during their lifetimes by either leaving collections to heirs or donating to museums and historical societies. Either choice is an easy way out for collectors, but likely to create several problems for their "beneficiaries."

Selling to dealers still remains a valid option, although the number of professional stock and bond dealers has decreased recently with retirements and deaths. Selling through professional auction houses remains a valid option and one I recommend. I am not saying collectors will cash out with as much money as hey would have in the 1990s, but it probably remains the least painful method of liquidation.

Selling through eBay is, for good or ill, a method several correspondents have attempted. I don't think any visitor to this website will argue that eBay prices are under-thrilling from the viewpoint of most sellers. I don't need to waste time beating that dead horse again, but selling through eBay will not be accomplished in a short period. I strongly doubt many sales will exceed initial purchase prices.


Managing and Settling a Numismatic Estate by the ANA

Donations are another option that I have seen grow with time. I fully appreciate that historical societies and museum need our support. What they usually don't need are collections of certificates. With rare exception, such organizations know nothing about certificates nor the significances of the companies involved. Some have experience at paper preservation and that is a good thing. More problematic is reality that donations remove certificates from the hobby. Collectors may have struggled for years finding rare and desirable certificates and then, in one fell swoop, their donations effectively prevent future collectors from doing the same thing.

Secondly, by hiding certificates away in organizations, whether large and famous or small and obscure, collectors and researchers rarely get to see them again. Think I'm lying? Go try it for yourself. Find out which nearby historical society, library, or museum holds certificates and go and try to see them. Oh, yeah. Good luck!

Even if donors require organizations scan their collections, require them to make those collections available for researchers, and maybe even fund such stipulations, there is no guarantee money will be used as directed. Furthermore, there is no guarantee they will actually grant access.

Many collectors will still make the choice to donate in efforts to gain tax exemptions, I most strongly recommend they check federal requirements with competent tax professionals. In the strongest manner possible, I recommend potential donors consult enrolled agents for tax advice prior to deciding to give away scripophily collections. If the term enrolled agent is a mystery, call the nearest H&R Block location and schedule an appointment with one. An enrolled agent is the highest level of tax professional. Do NOT trust any average tax preparer's advice, not even a lawyer's. Consult with a genuine tax professional.

Finally, I recommend acquiring a small booklet from the American Numismatic Association titled, Managing and Settling a Numismatic Estate: How to Dispose of a Coin Collection.