An Investment "Classic" with Timeless Value
The Morgan Silver Dollar
In more than 25 years investing in premier rare coins,
a few legendary coins come to mind. These are the "classics"
–coins that have literally made fortunes for some
of the richest investors and collectors in America. These
select few coins are timeless beauties. They’ve held
their value for decades… continue to be loaded with
appreciation potential…and should be part of any rare
coin portfolio. Among the "classics," one of my
all time favorites is the stunning Morgan Silver Dollar.
Born From the Ashes of the Civil War
Perhaps no coin I know has such a rich tapestry of history
behind it, including politics, war and social unrest, like
the Morgan Silver Dollar.
Although this coin didn’t appear until 1878, its
story actually begins in the early days of the Civil War.
At that time, people in the Confederacy hoarded silver and
gold coins. They understood the importance of currency with
intrinsic value.
But the United States pulled precious metals out of circulation.
They needed the gold and silver to pay off wartime debts
and interest on loans, including those from European countries.
Even so, a surplus of silver started to build up. This
was due to: 1) the discovery of a great storehouse of silver
at the Comstock Lode; and 2) the fact that the newly unified
Germany under Otto Von Bismarck, went on the gold standard
and dumped tons of silver on the open market. Naturally,
silver prices dropped.
By that time in this country, there were powerful men who
owned sizable interests in the Comstock Lode; men such as
Stanford, Ralston, Crocker, Hearst and Sutro.
These "Silverites," as they were known, were
alarmed at the drop in silver prices, so they pressured
Washington to do something about it. The government tried
minting a silver dollar to be used only for trade with the
Far East. This siphoned off much of the surplus silver.
But it wasn’t enough.
The Mandate for the Most Famous U.S.
Silver Dollar of Them All
So, in 1878, Congress mandated the creation of a brand-new
silver dollar. It also required the government to buy between
two and four million dollars worth of silver each month
to make the coins. To create this coin, Mint Director Henry
Linderman hired an engraver from England by the name of
George T. Morgan. Morgan’s hiring infuriated the Chief
Engraver at that time, a cantankerous man by the name of
William Barber.
Barber was so incensed that he was not asked to design
the coin, he did everything he could to sabotage Morgan’s
efforts to design a new silver dollar. He even said there
was no room for Morgan to work in the mint. So, Morgan created
most of his designs at the boarding house where he was staying.
The Face That Launched a Million Coins
During that time, Morgan met a respectable, local schoolteacher
by the name of Anna Williams. She had the kind of classic
beauty he needed for the face of Liberty.
At first, she refused: Proper young women of the time didn’t
model for artists. She later agreed when she considered
how her likeness would be used.
The result was a coin of timeless beauty and value.
In the end, so many Morgan Silver Dollars were struck,
that they all couldn’t be circulated. At that time,
most of the population was in the East where they used the
more convenient paper currency.
So, the surplus coins were bagged and kept in vaults.
The Silverites sensed that these indeed were special coins,
so they bought up hordes of them.
When the price of silver rose once again, these already
wealthy investors multiplied their fortunes.
Today, the Morgan Silver Dollar can be the foundation of
any portfolio — as an investment, part of a collection,
or as a way to preserve money in times of inflation or instability.
The Mother Lode!
How a $40 investment became the richest silver "strike" ever discovered in America
One of the key sources for the enormous amount of silver
needed for the Morgan Silver Dollar was the legendary Comstock
Lode.
The story of the Comstock Lode begins in 1857 when a prospector,
by the name of Henry Comstock, was seeking gold in the eastern
slopes of Mt. Davidson, not far from Reno, Nevada.
Comstock soon encountered a problem that all gold prospectors
had. When they were working their claims, a blue sticky
mud kept sticking to their picks and shovels. But they wanted
gold so badly, they were willing to put up with "that
dang blue stuff."
Why the "Blue Stuff" Became
a Fortune in Silver
As it happens so often throughout history, in their zeal
to pursue one opportunity, people tend to overlook or ignore
a greater opportunity. So, when the gold started getting
scarce, and Comstock thought the value of the mine was diminishing,
he sold it for $11,000. Never one to hold on to his earnings,
he drank and gambled away even that small sum. Henry Comstock
died penniless.
Another prospector sold his claim for $40 to George Hearst,
the father of William Randolph Hearst, and ran down the
mountain announcing " I tricked the Californians."
That $40 investment became one of the richest mines in the
West, creating one of history’s legendary fortunes.
What none of the prospectors knew, was that "the Californians"
were actually shrewd businessmen who recognized the true
value of the mines.
One day, a local rancher was walking past one of the mines
and saw piles of the blue mud the prospectors kept throwing
away. He picked up a sample and took it back to San Francisco
to have it assayed. As it turned out, this muck that was
plaguing the miners in their quest for a few flecks of gold
was actually high grade silver ore. It wasn’t long
before a group of San Francisco investors began quietly
taking over claim after claim.
Nearly $100,000,000 of Silver Taken in Just 3 Years!
Once the California interests bought out many of the mines,
the Comstock Lode started producing silver in great quantities.
At that time, the techniques for refining silver were quite
crude. They used a mercury amalgam, which not only poisoned
the rivers, but left half of the silver behind. Since the
ore was so rich, no one seemed to care.
In fact, the mines were so productive that President Lincoln
pushed through statehood for Nevada even though it didn’t
have the population required by the Constitution. The gold
and silver from the state helped the North pay for their
effort in the Civil War.
Then one day, in 1873, miners discovered a vein of rich
silver ore about the thickness of a knife blade. As they
followed the vein, it gradually widened. Eventually, this
thin ray of hope became a vein 320 feed wide. The ore was
so rich, that they had to mix it with waste rock in order
to process it.
In 1875, the vein produced a whopping $25,000,000. In 1876,
$32,000,000. And in 1877, the richest bonanza year ever,
the take was $36,000,000.
In all, the wealth from the Comstock Lode was the source
of some of this country’s most legendary fortunes.
It helped save the Union... build the nation’s railroads...
and provide silver to produce the stunning Morgan Silver
Dollar.
The Golden 9
9 Reasons Why Rare Coins are a Wise Investment in Today’s Overvalued Market
If you’ve been watching the news, I’m sure you’ll
agree: It’s a scenario with a lot of "red flags":
Unbridled speculation in the stock and bond markets.
A record run-up in stock prices.
A failure of the public to build savings.
An intractable Federal deficit.
And an overall moral decay.
That’s why I’ve been advocating a course of
action that I believe will help you preserve your hard-earned
wealth for yourself and for your family.
The 5-10% Safeguard
Of course, you know I think a significant portion of anyone’s
portfolio should be in Treasury Bills. That way, you’re
certain to get back what you put in, plus a little extra
to help ease the bite of inflation.
But I also recommend you put a minimum of 5% to 10% of
your portfolio into precious metals. But not just any precious
metals. I think that as long as you’re investing in
gold or silver, you should make sure that they’re
High-Powered – that is, precious metals that have
even more value and upside earning potential than ordinary
bullion. Specifically, rare coins.
Here now are 9 reasons why rare coins are one of the best
investments you can make at this time:
1. You’ll protect your assets.
Rare coins have the distinct advantage of having intrinsic
value. In other words, the metal the coins are made of has
worth in and of itself. The simple truth is, precious metals
never go out of style. They’re always in demand. And
when your precious metal is in the form of an historic rare
coin, it’s even more valuable.
2. You’ll enjoy tremendous upside potential.
Right now, precious metals are far below their historic
highs. And if history tells us anything, whatever comes
down, usually goes back up. I can only say that the potential
is definitely there. And when precious metals are in the
form of rare coins, the price tends to go up farther and
faster than just plain bullion.
3. You’ll supercharge your investment in metals.
It’s only common sense when you think about it. Any
time the world needs more gold or silver, we can just dig
it out of the ground. But gold or silver in the form of
a rare coin is completely different. We can’t go back
in history and create more historic coins. Whatever is available
is all there is. So, your precious metal is even more precious
in the form of an historic coin.
4. You’ll fight inflation.
Back when I was young, a $20 gold piece would buy a high-quality
men’s suit. I can now buy several high-quality suits
with the same $20 gold piece. Why is that? Because paper
money isn’t worth as much these days. But precious
metals are. They retain their value in spite of inflation.
5. You’ll enjoy liquidity.
These assets have the rare advantage of being easily bought
and sold because standardized grading allows you to buy
coins sight unseen. And, computerized national trading networks
give you ready access to a market for your coins.
6. You’ll protect your privacy.
I remember the time when we took our privacy for granted.
Those days are gone. But this is one investment no one but
you and your family needs to know about.
7. You'll protect your wealth from confiscation.
Back in 1933, the government confiscated all gold bullion
and bullion coins. Federal law gives them that power in
times of national emergency. But collectibles, such as rare
coins with recognized collector value, are exempt. So, the
next time the folks in Washington D.C. start looking to
regulate or confiscate gold, your coins will not be touched!
8. No tax consequences until liquidation.
If your coins increase in value, you won’t be taxed
on your profit until you sell them. And if you simply trade
your coins for other coins of equal or greater value, there
still are no taxes (if it’s a qualified like-kind
trade). I suggest you talk to your tax advisor about this
one.
9. You’ll literally own a piece of history.
Many times, rare coins are beautiful works of art created
by celebrated artists. But in every case, they're an important
part of their era. Holding one is like having a golden or
silver moment of time in your hand, passed down from a bygone
age. Because of this, they make excellent heirlooms or mementos
for you to pass on to future generation such as your children
or your grandchildren.
I suggest you look into rare coins yourself. Do your own
research. I think you’ll see the wisdom of buying
your precious metals in this form.
The Ideal Crisis Hedge
One of my greatest fears is that America will be hit by
a major crisis, and investors won’t be ready for it.
Too many Americans invest in stocks as if inflation, deflation
or an international financial or political crisis won’t
impact them. They’re wrong.
Too many Americans believe the Federal Reserve System will
protect them from the effects of crisis. Wrong again.
Key indicators suggest that the potential for crisis is
increasing.
As I’ve said many times on my radio program, both
inflation and deflation can be devastating to those who
are not prepared for it. And usually the former follows
the latter. This is one reason rare coins are the ideal
crisis hedge.
Rare coins should not be ignored today, because they offer
you investment benefits unlike any other.
For example, I know you’ve often heard that precious
metals are a hedge against inflation.
There’s a good reason for this. Precious metals are
what we call "counter-cyclical assets."
In other words, when the value of money is going down,
stock and bond prices drop; and when confidence in the banking
or currency markets is declining or when there’s a
threat of war, the value of precious metals often goes up.
Let me ask you: Do you think any of these conditions could
exist in the near future? We’ve seen them in the recent
past. History teaches us that we’ll see them again.
History also teaches us that, unlike paper assets, precious
metals are a universally accepted store of value. They have
intrinsic worth that maintains buying power. If you have
a $20 gold coin and a $20 dollar bill, eventually the paper
money will decline in value.
This understanding helped some of the richest coin investors
in America buy — and hold – coins through various
economic cycles.
How to Build a Growing Portfolio
Today
Factoring in today’s economic and investment conditions,
I recommend taking a systematic approach in building your
portfolio.
My research of successful coin portfolios shows that spectacular
profits have been produced in this way.
What I tell investors is to "Buy high quality coins,
hold them as a long-term investment and their value can
increase."
The secret to follow is Quality + Time = Profit Potential.
10 Questions to Ask Before You Buy
Rare Coins
Many folks who listen to my radio show are genuinely excited
about investing in rare coins. But naturally, they have
questions about actually buying rare coins.
So, here are some questions you should ask before you buy:
1. How long has your company been selling and buying rare
coins?
2. What are the potential rewards – and risks –
of my investment?
3. What is the coin’s value relative to bullion prices?
4. What is the coin’s price? What is the coin’s
historic price-performance pattern?
5. What will this coin add to my portfolio?
6. How are these coins certified? Authenticated?
7. Do you have a buy-back policy?
8. What kind of guarantee do you offer?
9. Is your company audited by a Big 6 accounting firm to
verify the company’s financial strength and profitability?
10. Does your company have a verifiable net worth of a
million dollars or more?
