Posted on 04/08/2005 8:31:35 AM PDT by Columbus Dawg
Since 1998, Ohio has invested millions of dollars in the unregulated world of rare coins, buying nickels, dimes, and pennies. Controlling the money for the state? Prominent local Republican and coin dealer Tom Noe, whose firm made more than $1 million off the deal last year alone.
The agreement to invest the money in rare coins is rare itself: The Blade could find no other instance of a state government investing in a rare coin fund. Neither the state nor Mr. Noe could provide one.
"I don't think I'd be excited to invest in rare coins," Vermont Treasurer Mike Ablowich said. "It's a little unusual."
The Ohio Bureau of Workers' Compensation has continued to be the sole investor in Mr. Noe's Capital Coin funds despite strong concerns raised by an auditor with the bureau about possible conflicts of interest and whether the state's millions were adequately protected.
And the state has maintained its stake in Capital Coin despite documented problems:
(Excerpt) Read more at toledoblade.com ...
A question unasked and unanswered in your excerpt is, what has the share price done during the time the state has been invested in it. I don't know about "rare" coins, but bullion coins have been going up for several years now. If the fund is making money, why the stink? And if the fund has lost money, consider all the states that are invested in places like Fannie Mae, and the millions or billions placed at risk if/when they finally go under as a result of their scandals, and the impending collapse of the housing bubble.
Because state governmental entities should not invest in extremely risky funds, regardless of their past performance. Junk bond funds sometimes do extremely well, but they're a bad - and rightly prohibited - investment for a pension plan.
We can't turn a blind eye to corruption on our own side. One-way principles are no principles at all.
That said, what are the real facts here? What's the return on this investment as compared to other types of investments? Are there any advantages to it?
If the economy appears to be cratering such that rare coins ever become a serious investment, skip the coins and go straight to canned goods and shotguns.
The correct title of the article is:
Ohio agency sinks millions into rare coins
When the day comes that gold coins are the means of exchange, I'll be glad I went long on lead...
The investments have performed well. They were made as a part of a "alternative managers" program. The program, by design, looked for opportunities outside of traditional bonds, individual stocks and equity funds.
This is an attempt by the Ohio Democrat party to make some political hay
The investment has made money for the state.
I think that this is just a smear campaign by Democrats against Mr. Noe. In an interview with the Toledo Blade editoral board with Governor Taft, you could tell the questioning by the board was directed about Noe.
I think someone has a vendetta against Mr. Noe.
I am waiting for my law school alma mater to start hyping Coleman because he is an alum (they did it when he was running for Lt. Governor) and of course the law school faculty is all extreme lefties. On the other hand, Blackwell is a fellow Xavier alum (my undergrad and MBA), so I have another reason, beyond my basketball season tickets, to be proud of being a Musketeer first in all categories.
I personaly think lead in a steel and brass jacket is a better investment, but that's what makes horse races.
I do admit to having about 1,000+ bottles of whiskey, et al (from a liquor store that went belly up on a building I leased and they high-tailed w/out paying rent) tucked away under a barn.
Figure that's far more likely to be valuable than gold.
There are plenty of pension plans invested in junk bond funds.
If you can endure the crap long enough and read the article, it appears that the State invested $50 mil, and made a profit of over $12 mil, which they split 80/20 with Noe's firm. If that's correct (and it's in the Gay Blade, so who knows?), the State cleared $9 mil on a $50 mil investment, a cool 18%. Not bad. Seems to me that the real headline here should have been "State of Ohio Makes Profitable Investment; Dems Demand Investigation". ;-)
"Because state governmental entities should not invest in extremely risky funds,..."
You got that right! They shouldn't be investing it at all, they should be putting it in a lock box or trust fund!
What would you say of a company that has >50:1 debt to equity, has restated its earnings by $11 billion, and will be destroyed (taking a large part of the economy with it) if interest rates rise rapidly? I'd call that "extremely risky" - it's fannie mae, and lots of state governments are invested in it.
That's determined by demand. I have a complete US coin collection up to about 1989. Then I have ~$3000 in gold coins and a bunch of foreign currency thrown in from now defunct governments. It all fits in a big suitcase that sits in a closet. It weighs over 200 lbs. It's worth about $50K base currency value. I want to buy Iraqi Dinars before that country gets it's act together and shove them in there too. I have Swiss and French Francs, Lira, Pounds, Yuan, Yen, Czecks, Rubles in paper and coins going back 100 years, along with some coins I cannot figure out.
I just stuff things in there and with God's help, I'll figure it all out and tabulate it all. Jesus can sit around with me and put it all in some sort of organized sense. Then He can help me with my Lladro collection. Then He can fill my truck with gas and wash it while I stand around scratching my behind indecisively clueless about my belly-button lint on this day:)
This is not an extremely risk investment.
The Toledo Blade offers no evidence that it is an extremely risky investment.
They do mention that an expensive coin was lost in the mail. However, it's highly doubtful that it was sent uninsured, so that's a risk for the insurance company, not the fund.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.