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Metals Market Report Weekly Archive
 

The Mike Fuljenz Metals Market Report

May 2018 - Week 5 Edition

This is the Time of Year to Buy Gold (and Sell Stocks)

Gold and stocks tend to move in opposite directions – one zigs while the other zags.  Stocks tend to rise in the first half of the year and gold in the second half. Many investors, especially those new to precious metals, don’t know that gold is seasonal. This is primarily due to traditional jewelry demand, including the wedding season in India and demand in other fall and winter holiday seasons. Stocks tend to fall in the summer months when demand declines, with most historical crashes coming in September and October.

September is gold’s best month and it is also the worst month for stocks.  In the last 20 years, August has become the worst month for stocks. Stretching out to a six-month time span, August to January is the best time for gold, while May to October is the worst time for stocks.  Therefore, the best time to switch a portion of one’s portfolio from stocks to gold would be between May 1 and July 31 – right about now!

Gold Rebounded

Gold rebounded above $1,300 last Thursday when it seemed the North Korean summit was off again, but when the on-again, off-again summit seemed on again, gold stayed above $1,300 this time around. Gold is struggling to gather some momentum in a generally flat market for both stocks and metals. On the Tuesday morning after Memorial Day, gold soared $10 in 30 minutes, then fell and rose again, mostly on uncertainty about Italy and a shake-up in the euro – which is falling relative to the dollar.  As a result, gold just reached an 11-month high of 1130 euros per ounce, even though gold has been down in dollar terms.

How Smart Coin Buyers Can Become Multi-Millionaires

Louis E. Eliasberg, a Baltimore banker, accomplished what many thought to be impossible: In just 16 years, beginning in 1934, he assembled the only complete collection of U.S. coins – the only one that contained regular-issue coins of every denomination from every date they were issued and every mint that made them in those years.  News of this achievement not only electrified fellow hobbyists but impressed the entire nation. It was considered so significant that Life magazine, then regular reading for millions of Americans, featured Eliasberg and his coins in a lavish photo layout. He began collecting coins to circumvent the Gold Surrender Order of 1933, which required U.S. citizens to turn in their gold coins but exempted collectible coins.  “I realized the only way I could legally acquire gold was by becoming a numismatist, so in 1934, to the extent of my means, I started buying gold coins.” During the 16 years it took him to complete his collection, Eliasberg spent less than $400,000. When the collection was sold between 1982 and 2005, it realized a total of roughly $55 million.

John Jay Pittman, a chemical engineer for Eastman Kodak, was also a man of limited discretionary income when he began buying coins in earnest in the mid-1940s. But he had a razor-sharp mind and a keen eye for quality and value. He also had an uncanny instinct for spotting exceptional bargains. In all, his total coin collection cost him just a few hundred thousand dollars, but by the time he died a half-century later in 1996, his collection was sold off between 1997 and 1999 for more than $30 million. “John was not a wealthy man, except in knowledge,” a longtime friend recalled. “He was one of the smartest people I’ve ever known, with a wonderful memory, and he was way ahead of his time in terms of knowing which coins to buy. But he was on a definite budget.” Judged by today’s standards, coin prices were incredibly low in the 1940s, when Pittman bought many of his coins. Still, at a time when most collectors put far less emphasis on quality than on rarity, Pittman had the foresight to insist on the best – not only uncirculated quality, but also the very finest specimens he could afford.

Harold Bareford, a New York City lawyer, began buying coins the same time as Pittman, just after World War II.  In 1947, he summed up his coin buying philosophy this way: “I collect only the finest specimens and am not interested in any coin which is not perfect.” He was also meticulous in the records he kept, making it easy to track the performance of his coins. His records show, for instance, that in 1947 he paid just $310 for a 1933 eagle ($10 gold piece). When his heirs sold it in 1978, it brought $92,500 – nearly 300 times what he had paid for it. And coin prices in 1978 were well below present-day levels. In all, Bareford’s gold coins fetched about $1.2 million – or 87 times his original outlay of $13,832. And they would bring multiples of that if offered for sale today.  But Harold Bareford’s story offers a cautionary tale, too: He all but stopped buying U.S. coins in 1955 because, in his opinion, they had gotten too expensive, even though, of course, they were still tremendous bargains then!

Louis Eliasberg, John Pittman and Harold Bareford are all regarded today as great collectors. But none of them was born into wealth. All three developed a golden touch through reading reliable award-winning research material, showing close attention to quality and rarity, with a focused emphasis on set building details, while understanding that those who invest time and effort in the hobby will get the biggest return.  Call an account representative today for more free award-winning information!

 

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