The Good Life: Rare Coins Paved With Gold

If you don't have the time or acumen to build and manage your own rare-coin portfolio, there are other ways an investor can ride the potential returns of this investment style. There are three public companies in the space that together can be considered as a "Coin Index."

The first company, bulletin board-traded Superior Galleries, is run by Mr. DiGenova, and is probably the only pure play in the space. The company generates income from coin auctions, retail operations (currently launching online coin stores through Amazon and Overstock) and also makes income from buying and selling coins ("proprietary trading") for its own inventory. Additionally, the company does high-yield, asset-backed lending, where coin collections are the collateral. The company had over 50% year-over-year revenue growth last year and generated cash from operations.

While Superior sells the coins, Collector's Universe (CLCT Quote) is the premier grader of coins. Charging a $6 to $200 fee per item graded, the company also grades stamps, autographs and other collectibles. Revenue was up 40% year over year last fiscal year and income rose 200%.

Greg Manning Auctions (GMAI Quote) is also in the auction space, but in addition to coins, it sells baseball cards, stamps, art and other rare items. In the past year, revenue is up 22% year over year and income is up 96%.

Coins are here to stay, and like any product of inflation combined with artistry and precious metals, will rise in value forever. Make money off of money: the good life indeed.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider Collector's Universe, Superior Galleries and Greg Manning Auctions to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.