90% Silver Proof Roosevelt Dime Rolls

90% Silver Proof Roosevelt Dime Rolls
Photo Credit: Sandspur Coins and Collectibles

90% Silver Proof Roosevelt Dime Rolls

Buy It Now Price: $76.90 (price as of 2019; item no longer available)

Pros:

-These gorgeous proof Roosevelt dime rolls feature 50 frosted coins struck from solid 90% silver, giving them a face value of $5 each.

-Each dime is exactly 2.5 grams of 90% fine silver, giving a total net silver content of 112.5 grams (3.617 troy ounces) per roll.

-Proof coins are special presentation issues struck from specially prepared dies under ideal conditions.  They are intended primarily for collectors and usually sell for significant premiums over non-proof versions.

-All Roosevelt dimes were struck in 90% silver from the inception of the series in 1946 until 1964, when silver was removed from most circulating U.S. coinage.  No silver dimes were struck for the next 28-years.  Then, in 1992 the U.S. government began issuing annual proof sets that contained regular-circulating coin denominations (including dimes) minted in silver.

-Although the seller is not specific about the dates you might receive, the photos seem to indicate that most of these silver proof Roosevelt dime rolls will be modern (i.e. 1992 and later) in nature.  Of course, we can’t rule out the possibility that you might receive early 1960s, or even late 1950s, silver proof Roosevelt dimes.

-Modern silver proof dimes struck since 1992 are much rarer than their circulating counterparts, with mintages usually less than 1/1000th of the latter.  They are also rarer than non-silver proof dimes, having been minted at only 1/2 to 1/3 their rate.

-With spot silver trading for around $14.85 a troy ounce, these silver proof Roosevelt dime rolls contain just under $54 worth of silver each.  This means you are only paying around $23 over melt per roll – a premium of about 43%.  This is quite a low premium for proof coins, which will always have at least some numismatic potential.

-I’m normally not a fan of most modern coinage from a collector’s perspective.  They are often staggeringly over-issued base-metal abominations, with little hope of future numismatic demand.  However, I am willing to make exceptions for extraordinary situations.  And these silver proof Roosevelt dime rolls certainly qualify as extraordinary, with their blazing gem cameo specimens minted in precious metal.

-I believe these 90% silver proof Roosevelt dime rolls are well worth the $77 asking price.  They would be a great addition to any silver bullion stack, adding the diversification of collector’s value to what is otherwise a straightforward bullion purchase.

 

Cons:

-If you are just looking to stockpile junk silver, you can buy a roll of circulated 90% silver Roosevelt dimes for maybe $60 to $65.  So each silver proof Roosevelt dime roll will cost you an extra $15 over an equivalent junk roll.  But this hardly seems like a con to me, given the added investment potential of proof issues.

 

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Ancient Ptolemaic Bronze Coins

Ancient Ptolemaic Bronze Coins
Photo Credit: highrating_lowprice

We live in an age of striking impermanence.  And yet we occasionally stumble across something that is the antithesis of the ephemeral.  Sometimes an item – a very special item – speaks to us across the void of millennia, connecting us with civilizations long dead.

This is exactly how I feel about the Ptolemaic bronze coins of ancient Egypt.

The Ptolemaic dynasty was a remarkable Hellenistic empire founded by one of Alexander the Great’s finest generals, Ptolemy I.  After Alexander died unexpectedly in 323 BC, Ptolemy I carved an Egyptian kingdom out of the ruins of Alexander’s rapidly disintegrating empire.   By fusing Greek culture with native Egyptian customs, the Ptolemies created the most successful and enduring of Alexander’s successor states.

Ptolemy I’s empire lasted longer than any other major Hellenistic kingdom, only meeting its end in 30 BC after its infamous queen, the cunning seductress Cleopatra, was defeated at the great battle of Actium in the Ionian Sea.  Rather than enduring a humiliating surrender to Rome’s first emperor, Augustus Caesar, Cleopatra instead chose to commit suicide via the poisonous bite of a deadly asp.

Ancient Ptolemaic bronze coins usually display the laureate, ram-horned head of the god Zeus-Ammon on the obverse and a noble eagle (or twin eagles) on the reverse.  Zeus-Ammon was the Hellenistic synthesis of Zeus, the Greek king of the gods, and his horned Egyptian counterpart Ammon.  This merger of Greek and Egyptian culture reflected Ptolemaic policies promoting themselves as the new Pharaohs of Egypt.

There are remarkably few ancient and medieval bronze coins that can be considered investment worthy.  I am of the opinion that only Imperial Roman bronze coinage joins its Ptolemaic peers in meriting serious investment consideration.  Being low denomination pieces, pre-modern bronze coinage was often carelessly minted via sloppy striking with crude dies.  This resulted in poor quality coins that collectors tend to pass up in favor of gold or silver coins.

Fortunately, ancient Ptolemaic bronze coins were a notable exception to this rule.  Dies engraved in the finest Greek style were used to meticulously strike these numismatic masterpieces in magnificently high relief.  In addition, Ptolemaic bronze coins can be enormous, reaching up to 50 millimeters (2 inches) in diameter and 100 grams (3.5 ounces) in weight.

Interestingly, most examples have a small, depressed dimple on the center of both faces of the coin.  This is a commonplace byproduct of the ancient manufacturing process.

When purchasing these marvelous ancient coins it is important to look for examples that are well-centered, well-struck and have a pleasing patina.  Patina is a thin layer of attractive oxidation that accumulates on a bronze coin over the course of centuries.  Although green or brown patinas are most commonly encountered, a myriad of other colors is also possible, including black, red and even blue!

A fine patina not only materially increases the beauty and value of a bronze coin, but also protects it against harmful corrosion as well. This is one of the reasons ancient or medieval bronze coinage should never be cleaned.

Bronze coins were the workhorse denominations of the ancient Mediterranean world, regularly used to purchase life’s necessities like bread, olive oil and wine.  Consequently, surviving specimens tend to be heavily worn.  Therefore, it is imperative to only consider coins with light to moderate wear.

Ancient bronze coins could also circulate for immense lengths of times, causing some pieces to be worn down to little more than smooth metal slugs.  In one anecdotal story, an ancient Imperial Roman bronze coin was found counterstruck with a revaluation mark from 16th century Spain, implying that the piece circulated continuously for approximately 1500 years!

Another key attribute to consider when collecting Egyptian Ptolemaic bronze coins is size.  A bronze coin’s size is expressed in conjunction the abbreviation “AE” – which stands for bronze – followed by a number that reflects the coin’s diameter in millimeters.  As an example, “AE30” would be a bronze coin with a diameter of 30 millimeters.

I consider investment quality Ptolemaic bronze coinage to start at 27 or 28 millimeters in diameter, with specimens over 30 millimeters being preferable.  As you can probably guess, the larger a coin is, the higher its price.  This is understandable, as larger Egyptian Ptolemaic bronze coins were struck in such high relief as to border on being ancient sculpture, rather than merely coins!

An Egyptian Ptolemaic bronze coin portraying the ram-horned god Zeus-Ammon with his wild, windswept hair is the epitome of ancient Greek Hellenistic art.  And yet these timeless coins are still grossly underappreciated in today’s art market.  Investment grade examples start at around $100 and go up to about $500 in price.  Truly magnificent, museum quality coins are uncommon, but will sometimes be offered for sale above $500.

As these coins become more widely acknowledged, prices are certain to rise.  After all, a massive, high-relief bronze coin that captures the ancient cultural amalgamation of Hellenistic Greece and Pharaonic Egypt is a work of art to be coveted.

 

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Old Mine Cut Edwardian Diamond Ring, Circa 1905

Old Mine Cut Edwardian Diamond Ring, Circa 1905
Photo Credit: Authentic Jewelry and Coin

Old Mine Cut Edwardian Diamond Ring, Circa 1905

Buy It Now Price: $1,079.99 (price as of 2019; item no longer available)

Pros:

-This Edwardian diamond ring exudes Gilded era elegance with 9 sparkling old mine cut diamonds mounted in an 18 karat gold checkerboard setting.

-The face of this luscious antique ring measures 12.4 mm (0.49 inches) tall by 11.7 mm (0.46 inches) wide.  The entire ring weighs a substantial 4.22 grams (0.1356 troy ounces), which is quite a lot for a ring this size.

–Old mine cut diamonds were a cushion-shaped diamond cut popular from the early 19th century until around 1910.  They were defined by high crowns, deep pavilions, and large culets.  These unique proportions endowed old mine cut diamonds with a dazzling fire and charming warmth that simply can’t be found in modern brilliant cut diamonds.

-The seller estimates the average weight of each H-I color, VVS2-VS1 clarity diamond in the ring to be around 0.18 carats, for a grand total carat weight of 1.62.  From the measurements of the ring given, I have conservatively calculated that the diamonds weigh between 0.10 and 0.20 carats each, for a total guesstimated weight of 1.35 carats.  This discrepancy (1.35 carats versus 1.62 carats) is minor, but underscores the fact that the stated carat weight of a mounted stone is always an approximation.

–The Edwardian period was wedged in-between the death of Queen Victoria around the year 1900 and the start of World War I in 1914.  Although it didn’t persist for very long, the Edwardian era was famous for its glorification of wealth, luxury and the aristocracy – think Downton Abbey.

-I estimate the melt value of the gold in this Edwardian diamond ring to be around $170 (with the spot price of gold at $1,335 an ounce.)  While the old mine cut diamonds are harder to value, I think they should be worth at least $500 a carat (on a bad day) for a total value of $675.

-This Edwardian diamond ring is in great condition, with no excessive wear, damage or obvious repairs.  In addition, it features superb goldwork with no messy solder or other distractions – an incredibly unusual situation for a ring that is over a century old.

-Totaling the value of the ring’s gold and diamonds gives an aggregate intrinsic value of nearly $850.  This is only $230 off the asking price, which is a pleasant surprise.  It is rare to find quality antique jewelry selling for anywhere close to its intrinsic value these days.

-The ring’s gold grid pattern conveys a sense of solidity while the old mine cut diamonds allow it to retain that characteristic Edwardian feeling of etherealness.  This might seem like a contradiction, but this antique ring manages to pull it off brilliantly nonetheless.

–Edwardian jewelry is becoming increasingly scarce and desirable as the years pass, setting the stage for an inevitable upward readjustment in value.

-At an asking price of less than $1,100, this Edwardian diamond ring would be a great choice for the antique collector, investor or jewelry buff.  I cannot stress how rare it is to find such a superb piece of antique jewelry for such a low price.

 

Cons:

-This Edwardian diamond ring is set exclusively with melee stones.  These are defined as faceted diamonds weighing less than 0.20 carats (or 20 points) each.  Melee diamonds are primarily used as accent pieces in modern jewelry because they cost less per carat than larger diamonds.  I don’t think the primary motivation for using melee diamonds in this wonderful old ring was monetary, but aesthetic.  However, the fact remains that melee diamonds (even old mine cut melee diamonds) are worth less per carat than their larger, non-melee equivalents.

 

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The Cruel Myth of Dividend Growth Investing

The Cruel Myth of Dividend Growth Investing

One of the blogs that I frequent is called the Dividend Growth Investor.  I found one of its recent posts, titled “A Case Study of My Investment in Kraft Foods” to be particularly intriguing.  Of course, what I found most interesting about the post is how badly it misinterpreted the past and incorrectly forecasts the future.

So let’s dig into some of the ugly details.

The crux of the article is that the author invested in Kraft Foods (KFT) way back in April 2010 at just over $30 a share.  The intervening years were good, with a grand total of $17.88 paid out in dividends (to early 2019).  In addition, the original company split into two successor companies: Mondelez (MDLZ) and Kraft Heinz (KHC), which are worth about $58 after accounting for mergers and spinoffs.

The reason the author wrote the post was to prove that even a mediocre dividend growth investing play can still work out alright.  In this case, Kraft Heinz cut its dividend in February 2019, prompting shares in the firm to collapse from $48 to around $34 a share.

No worries, though!  Our intrepid dividend growth blogger simply sold his shares at the going market price in the wake of the dividend cut because Kraft Heinz no longer met his investment criteria.  Even accounting for this unfortunate divestiture, he still claimed a robust 11.1% annualized return (without reinvesting dividends) over the nearly 9 year period – more than doubling his money.

This seems like a great return, all thanks to (in his words) “selecting quality companies at good valuations, being diversified, and maintaining proper risk management techniques.”

The only problem is that his dividend growth investment strategy is a lie.  But like all good lies, it is clothed in half truths.

First off, he really did get an 11.1% per annum return from dividend growth investing.  But the more important question is: how exactly?  And can you and I replicate his success?

These are crucial details.  He would like you to believe that his good fortune was the product of buying a “solid company” at a “reasonable valuation” and then holding for the “long term”.  And if we were living in an economically normal environment, these justifications might be believable.

But these are not economically normal times.  Instead, what we’ve experienced over the past decade has been nothing less than the largest securities market bubble in the history of the world.  It is bigger than Japan’s twin real estate/stock market bubble in the 1980s, bigger than the Dutch Tulip Mania in the 1630s and bigger than the Wall Street Bubble of 1929.

Our current bubble exists on an almost incomprehensible scale.  In fact, our modern-day “Everything Bubble” is so massive that it pervades every niche and corner of the real economy, making it almost impossible for the average person to spot.  In other words, like a fish swimming through water, investors don’t realize they are lazily meandering through a vast bubble miasma.

What does this have to do with Kraft Foods and dividend growth investing?

It’s simple.  Investors in Kraft and other dividend growth companies did well over the past decade not because they were stock picking geniuses or because the firms had solid fundamentals, but because the Federal Reserve (and other central banks) inflated history’s greatest securities market bubble.

Kraft Foods took advantage of the Fed’s cheap money policies to buy back billions of dollars worth of their own shares over the years.  And they paid out generous dividends as well, amounting to billions of dollars more.  But here’s the kicker: the company didn’t have the cash flow from operations to pay out these billions of dollars.  Instead, the firm’s management financed these shareholder goodies by levering up their balance sheet!

What this means is that past shareholders (like our dividend growth investing blogger) benefited, while current and future shareholders will pay the price.  Both of Kraft Foods’ successor companies – Mondelez and Kraft Heinz – have accumulated substantial debt loads from these past financial sins.  Mondelez currently carries $19.4 billion in corporate debt while Kraft Heinz sports an eye-watering $31.3 billion debt load.  Oh, and both companies also have negative tangible book values, meaning their factories, offices and other physical assets are worth far, far less than the sums they’ve borrowed.

This is all a fancy way of saying that the future prospects for Mondelez and Kraft Heinz are questionable at best.  At worst, their high debt loads could ultimately endanger the future viability of both companies.  I know I wouldn’t want to own them.

Regardless, our dividend growth investing blogger can claim a Pyrrhic victory of sorts.  After all, he got out with a tidy profit despite Kraft’s pitfalls.  But it is important to note that he only made money because he sold before the bubble burst!  There are millions of current dividend growth investors who won’t get the message in time.  These unfortunates have swallowed the myth of “investing in stocks for the long term” and will inevitably ride the collapsing Everything Bubble into financial ruin.

So if you were to sell, where should you put the proceeds?

Well I can certainly tell you were you shouldn’t reinvest your windfall.  It is imperative you stay away from dividend growth companies.  Indeed, it would be wise to avoid the stock market altogether.  While there will always be a few niche industries that outperform regardless of the macro environment, I couldn’t begin to hazard a guess as to who will be the lucky winners.  Unfortunately, most companies will simply collapse in value once the Everything Bubble pops.

In fact, this prediction is already coming to pass.  Shares of Kraft Heinz have sagged from $34 to $28 in the last few months – an additional 17% loss on top of its earlier waterfall decline.

 

Kraft Heinz Stock Chart - The Cruel Myth of Dividend Growth Investing

 

I like cash as an alternative to redeploying money into the markets at the moment.  4-week U.S. Treasury bills are currently paying around 2.35%, which I find to be a decent risk-free rate in a world where most investment returns will undoubtedly have a negative sign in front of them.

For those looking for a little more investment potential, I find that tangible assets offer great value.  Gold, silver and platinum bullion are perennial favorites, with strong return profiles and almost no possibility of major capital impairment.  Investment grade antiques such as vintage wristwatches, antique jewelry and rare coins are also great choices.  They are tremendous bargains in the current environment, although you do have to exercise some caution due to their illiquidity.

In the final analysis, dividend growth investing is the cruelest lie of all – a seductive investment myth that has propagated because of the Federal Reserve’s Everything Bubble.

 

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