ResearchCoin Collecting - How Not To Be A Chump
This is Mr. Smithers. He is at a coin show, looking at a coin for sale in one of the booths. The dealer who is selling the coins at the booth is standing in front of him, talking very earnestly, his hands moving all the time as he tells Mr. Smithers what a good investment the coin will be. He indicates the high grade of the coin on the label of the plastic slab, which it was encased in by the professional coin-grading service. The dealer has on hand a coin collector's trade magazine, opened to the article about the coin in question, which expresses a highly optimistic opinion about the expected increase in value of this coin. Mr. Smithers buys the coin.
After getting it home, he discovers (a) the professional coin-grading service is known to put much higher grades on it's slabs than what is actually the case, (b) the trade magazine is one of those dealer-favored rags that post impossibly inflated values for coin prices than what is actually the case in the market, and (c) another issue of the same coin at the same grade was bought by Mr. Smithers' neighbor at the same show three booths down for half the price, which would explain the dealer's earnest salesmanship.
Mr. Smithers has just demonstrated the importance of not being a chump.
In all the hobbies, it is coin and currency collecting which offers the greatest opportunity to make a fool of oneself, whether in buying or selling. It is most important to know what you're doing, and research thoroughly your field, before venturing out into that market.
Always carry a reputable pricing book. Which means the "Red Book", the Whitman's Guide Book of United States Coins. This is the chief official guide to both grades and prices, and as such is the fairest standard. However, don't even take it's word for what every coin is worth. Start with the price for a coin from the book, then compare the price for the same coin in the same grade from three other dealers. Average these sums, and you have at least a starting-place for determining what a coin is really worth.
Next, get really good at grading coins yourself. You should never attend a show without your own magnifying glass or eyepiece, and should have on hand a guide to the coin's various markers of grade descriptions. Check many other grades of the same coin, so you know what you're looking at. But professional grades on plastic slabs should never be taken at face value; some of these services may inflate a coin's grade by as much as five points - a difference of hundreds of dollars value in some cases. Grade it yourself or don't buy.
Take your time. It is seldom that the pretty piece which caught your eye will never be seen again anywhere. If you don't get it today, you'll find it again the next time. In fact, you'll see the same dealers again and again at different shows - they all make pretty much the same circuit. You should never allow pressure tactics from the dealer.
Also, never buy a coin from a TV offer - no matter how good it is, you'll find a better grade cheaper at a dealer, guaranteed. Be cautious buying coins on online auction sites - you should be able to see a good picture, and be sure you're dealing with a reasonably scrupulous person. Buying through trade magazines is another option, but here again go with a reputable outfit, preferably one with whom you've had face-to-face dealings with.
And you will have demonstrated the best ways not to be a chump!