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Commodity Investing

Saint Gaudens Double Eagle

Last week, I came across a study by Alan Ziobrowski, an academic economist at Georgia State University. He meticulously went through the common stock trades of every U.S. senator between 1993 and 1998. (This information is available from the Financial Disclosure Reports that every senator and representative – and president and cabinet members – are required to file.)

Guess what? They outperformed the market averages by 12 percentage points!

That’s right, on a trade-weighted basis, they made over 25% a year, compared to 13% return on the S&P 500 Index. Ziobrowski and his academic associates found no significant difference between Republicans and Democrats. They all made above-average returns by “somehow” buying and selling stocks at the right time.

Ziobrowski & Co. conclude: “These results clearly support the notion that members of the Senate trade with a substantial informational advantage over ordinary investors. The results suggest that Senators knew when to buy their common stocks and when to sell.”

Surprised? Well, maybe not. We all suspect our representatives line their pockets using their privileged positions, and why they line up in droves to run for political office. But now we have academic proof that our government leaders have the inside scoop.

Fortunately, we can get it, too. And that’s what Investment U is all about. Here’s my gold “insider’s” favorite play… the Saint Gaudens Double Eagle, one of the world’s rarest and most treasured coins.*

A Rare Bargain In the Rare Coin Market: The Saint Gaudens Double Eagle

At the annual Investment U conference in Phoenix this month, I met with my favorite coin dealer, Van Simmons (who also happens to be the world’s expert on collectibles, diamonds, guns, and knives). He told me about a unique situation.

The $20 St. Gaudens Double Eagle (called “Saints” in the industry) is without a doubt the world’s most beautiful coin. Minted between 1907 and 1933, they are readily available in grades up to Mint State 64 (MS 64). But Superb Gem MS66 Saints are extremely rare… and expensive.

During the recent run-up in gold to over $700 an ounce last year, MS 66 Saints sold for more than $5,000 each. However, since then, two events have occurred which have created a bargain opportunity.

First, gold bullion prices have dropped to around $650 an ounce. And second, most importantly, the public is involved in a “mini craze” clamoring to buy the new gold 1-ounce Buffalos from the U.S. Mint. It is estimated that $300 million worth of gold Buffalos have been sold. (Yes, I like them too.) Telemarketing firms have urged investors to dump their vintage U.S. gold coins to buy the Buffalos.

Consequently, MS 66 Saints – which are difficult to locate – have fallen 40% from their highs, and can now be purchased for $2,895 (more or less). Van tells me that these prices simply can’t last, and those who buy now will be happy investors a year from now (of course, there are no guarantees).

If you want to buy one of these beautiful coins, I suggest you give Van a call at David Hall’s Rare Coins – 800.759.7575.

Good investing,

Mark

*Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of Wall Street analysts.


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