Flea Markets and Pawn Shops
by Rory, The Daily Coin Forget coin roll hunting. Get out in the sunshine at the local flea market. Do your homework first! Learn about jewels, get a jewelers loupe, a scale and be prepared to look at a lot of rocks. None of what I am about to say is financial advice. Just so you know, I have been burned twice–both times were my fault. Greed got in the way of making a good decision and I paid the price. Fortunately, I have not repeated these errors so, we simply move on. You may already have a loupe and understand the basics of using this invaluable tool. I know a lot of people use a loupe to review coins, which is a great idea especially if you are a true coin collector. Scratches and scares are the enemy of coins. Much more subtle damage can be seen through a loupe and you may be able to tell if an old coin has been cleaned or not; which is something that I am not concerned with as I do not collect that type of coin. Too expensive and speculative. The gambler in me likes to speculate with rocks! Rocks are cool, beautiful and they can store a ton of wealth in a very tiny package. Jewels and jewelry can be a great way to begin diversifying your portfolio. You have precious gems, like diamonds, rubies and emeralds [in that order of rarity and expense]. Then you have semi-precious gems like sapphires, topaz and tanzanite. Somewhat rare and come in a variety of hues and saturation. We could discuss other stones as well, like my favorite and very elusive, Alexandrite, but that would take up way too much time for this exercise. This is where you need to a little understanding of what you are purchasing. As a suggestion take your jewelers loupe and go to a variety of pawn shops and jewelry stores. It’s important to use your own equipment so that you learn your equipment and not the one someone happens to have on hand. Review the various stones. Make sure you have good lighting, even if you have to move toward a window in order to have a good light source. Look at each stone from various angles. Move the jewelry around so that you get to see the stones in a variety light refractions. This will allow you to see what is inside the stone. As you are reviewing the stones look at the color. Is the color even throughout the stone? This is important. In colored stones, like rubies and emeralds, this is a key factor in value and worth. These two stones, in particular, can have lighter saturation in areas. This will hurt the value. Does the stone have carbon (black spots or streaks)? Does it have, what appears to be cracks, but are in fact called fissures or feathers. Fissures are fairly common in diamonds. How severe? How do they impact the overall beauty of the stone? How well defined? All of these questions will become part of your hunting skills. This is a factor in determining the four C’s. The Four C’s: Cut, Clarity, Color and Carat. This is how the value of all gem stones is determined. A big “rock” doesn’t mean anything if is loaded with carbon, feathers and, in the case of diamonds, is a grayish color. You want the appropriate cut for the stone. I like what people call “classic styling”, wether it be furniture, architecture, clothing or jewelry. It is called classic because it has stood the test of time. People, most people, are drawn to the classics even if they will not admit it publicly. Round, emerald, princess. These are considered the most popular cuts across the board for most gem stones. Marquee, baguette, pear. These are much less desirable cuts and have a more specific use and customer base. For our purposes, I would suggest acquiring the classics. Personally I like baguette diamonds, a lot! The problem is finding quality stones with that particular cut. What’s the most popular? round, princess and emerald—this is what the jeweler is going to focus on because of demand. Higher grade stones are going to be used for these cuts first. All the other cuts, and there are other cuts than I have listed, will usually have the “second tier” stones. Clarity refers to what is inside the stone. Can you see anything with the naked eye? What do you see when examining? In the case of softer stones, like emeralds and rubies, these stones can get scratched and chipped. They can also, over time, lose color. If you can see a “black dot” with the naked eye, while this is not what you may want, don’t allow that to be the only determining factor. It will hurt the value, however, the color and carat may over-ride this flaw. ALL stones should have inclusions. If you see an emerald or ruby that looks is overly clear and very “shiny”, it is probably lab created. These are “hard assets”. Each of the stones described above comes with two added bonuses. The first, and very important bonus, is this wealth can be easily transported. It is well documented when people were fleeing Germany during Hitler’s reign of terror, jewelry was sewn into their clothes hemlines. You can transport a lot of wealth in a very tiny package. The second bonus, is gold or platinum. Each of the stones are typically set in one of the precious metals. This is by far, in my opinion, their greatest bonus. This is how a person can begin to amass gold, on the cheap, along with putting together a great rock collection. Rocks are awesome and well worth a small investment of time and resources. Think of it this way, how many wives are going to get upset because their was a piece of jewelry brought into the house? Not very many. May be time to consider some alternatives to your coin collection and besides, it’s a great excuse to learn something new.