Last-Minute Gifts for the Investors in Your Family

Alexander Green
by Alexander Green, Chief Investment Strategist, The Oxford Club
last-minute gifts 0

It’s tough to buy Christmas gifts for some people. My wife tells me I’m one of them.

I don’t want much. And what I do want I mostly have. Or, at least I thought I did until I got interested recently in a somewhat obscure corner of the numismatic universe: ancient coins.

In the early history of our species, people bartered for what they needed. But in 1100 B.C., the Chinese made a historic innovation: money. Specifically, they cast bronze coins.

Five hundred years later, Lydia’s King Alyattes minted the first official currency, coins made from a mixture of gold and silver. The practice spread quickly and before long, coins began appearing in various civilizations around the world.

On a recent trip to Greece, a colleague stepped off our tour bus and was accosted by a young man who offered to sell him a bag of ancient Greek coins for a few hundred dollars. He insisted they were real, but my buddy gave them the fish eye.

Good thing he did. We later learned they were fakes... and practically worthless. But genuine ancient coins are not only pieces of history but highly sought-after collectibles.

To get the full story, a few years ago I interviewed Michael Checkan, Pillar One Advisor to The Oxford Club (the publisher of Investment U) and the chairman and CEO of Asset Strategies International.

Here is a brief excerpt:

Alex: I’m personally fascinated by the history of money and ancient coins in particular. I love, for instance, the Widow’s Mite I got from you recently. Tell me, what sparked your own interest in ancient coins?

Michael: I have always been interested in the history coins provide since beginning my career in the precious metals and foreign exchange markets in the mid-1960s. In the beginning, I collected mainly American gold and silver coins. (Remember, Americans could not own gold bullion until 1975.)

Eventually I started buying ancient coins once they became certified by an independent coin grading service. Just think, holding an ancient coin in your hand. Instantly, the 2,000-plus years of history that have passed come alive to me.

Alex: Do you view these as collectibles, investments or both?

Michael: Both. They are investments in that the right coin at the right price will always be in demand within the ancient coin collectors market, which is truly an international one. Ancient rare coins, much like U.S. coins, are tangible assets that have excellent value potential in a market that is uncorrelated to the stock and bond markets.

Alex: What should an investor look for in selecting ancient coins?

Michael: We always advise our clients to buy high-grade, visually appealing coins that are certified by the Numismatic Guaranty Corporation (NGC). NGC gives each coin an objective third-party grade based on its quality and preservation. This removes the guesswork from an otherwise subjective field and contributes to the overall liquidity of the coin. In addition to those factors, I would suggest selecting coins that are the most interesting to the individual. There is some amazing history in these coins.

Alex: What about fraud? How are coins this old authenticated? It seems like it must be a highly specialized field.

Michael: It is definitely a highly specialized field, but with the 2008 addition of NGC’s ancient certification service, we can now know with confidence the quality of a coin, and NGC does not grade coins that cannot be verified as authentic. One of the most important benefits of NGC’s service is that it has helped to standardize the trading of ancient coins - ultimately allowing new collectors and investors from other financial fields to participate.

Alex: Are there any particular ancient coins you recommend right now?

Michael: We have seen tremendous growth in the ancient coin market both in the U.S. and abroad. The coins that have the most demand, and whose values have performed quite well, have just the right combination of scarcity and quality. We are currently suggesting gold, silver and bronze coins of the Twelve Caesars from the beginning of the Roman Empire. We like this series a lot - there are some extremely scarce coins, increased demand among collectors - and it begins with Julius Caesar! We have also found that the gold stater coin of Alexander the Great has performed quite well over the years. After that, we suggest high-grade, meaning almost uncirculated or mint state, specimens from the ancient Greek and Roman series.

Alex: Thanks for your insights, Michael.

Good investing,

Alex

Thoughts on this article? Leave a comment below.

A Play on a More Conventional Kind of Christmas Gift

Ancient coins can be a great gift for friends and family members who have an interest in finance, precious metals or numismatics. But they’re not the first thing that jumps to mind when most people think about Christmas gifts.

For many people, clothes are the standard Christmas gifts. Alex’s Oxford Communiqué subscribers are set to capitalize on this holiday staple through their position in PVH Corp. (NYSE: PVH), one of the world’s most prominent clothing brands.

Here’s Alex checking on the pick back in November...

Few apparel companies - or apparel retailers - have had much to crow about lately.

Ralph Lauren, J. Crew, Abercrombie & Fitch, Aéropostale, Gap and others have all experienced well-publicized troubles.

However, PVH Corp. (NYSE: PVH), a member of our Oxford Trading Portfolio, is a notable exception.

In the most recent quarter, earnings soared 37% on a 7% increase in sales.

The stock has nearly doubled since we got in last year. And there appears to be plenty of upside ahead.

Based in New York City, PVH is one of the world’s largest apparel companies.

Its iconic brands - accounting for over $8 billion in annual revenue - include Calvin Klein, Tommy Hilfiger, Van Heusen, Izod, Arrow, Speedo, Warner’s, Olga and True & Co.

PVH markets its merchandise through websites, retail stores, discount outlets and wholesale channels in more than 40 countries.

The company’s roots go back 135 years. Yet PVH transformed itself with the acquisitions of Calvin Klein in 2003, Tommy Hilfiger in 2010 and Warnaco - which controls Calvin Klein’s two largest apparel categories, jeans and underwear - in 2013.

How has PVH prospered while so many apparel companies have floundered?

Let’s begin by putting things in perspective. Apparel sales are hardly in a depression.

Many shoppers have simply switched from brick-and-mortar stores to the internet. Annual garment sales - at more than $2 trillion - are still rising.

The world population is growing by 75 million people a year.

Discretionary income is increasing in the world’s emerging markets, home to 85% of the world’s population and 90% of those under 30. And industry research shows these newly affluent consumers are drawn to the cachet of global brands.

PVH understands this. Fifteen years ago, its sales came almost exclusively from North America. Today it owns significant businesses in Europe, Latin America and Asia. These regions now represent more than 20% of its annual operating income.

They will be an even larger part in the years ahead.

- Samuel Taube with Alexander Green

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