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Rare Coin Market Update

Rare Coin Market Update #13 (Archives)

I believe Numis Network business model is just another SCAM that will burn thousands of investors!

by James DiGeorgia 2012-06-08 14:48:13

There is no economically efficient way to guarantee the principal invested in rare coins or precious metals. Rare coins and precious metals must be considered either a hedge against catastrophic economic disaster, inflation or as a speculative investment.

As a result no dealer, broker or company selling can honestly hope to guarantee the principal invested in rare coins or precious metals to its clients.

Rare coins and the physical precious metals market are not securities and are therefore not policed by State or Federal securities departments like the SEC -- as long as coins sold by dealers, and brokers are delivered in a timely manner and are sold on a cash and carry basis -- with no guarantees about price appreciation.

Yet, there is one company that sells predominantly ANACS graded rare coins and precious metals related coins as investments with the promise of a “5 year 100% buyback guarantee”…

The Industry's BEST and ONLY Buy Back Guarantee:

Numis Network guarantees to buy back any coin purchased through their Silver Premier Club, in 5 years, for 100% of the original purchase price!

There are some catches.
•    This guarantee applies to only to coins sold via its Silver Premium Premier Club which costs $75 to join and does not include the return of any shipping or taxes either incurred when you bought the coins or when you sell the coins.
•    The 5 year 100% buyback guarantee is only good if you hold the coins for the full 5 year period and you sell them back to the company within 120 days after the 5 year deadline.

If the coins you have paid $10,000 are worth $3,000 in one, two, three or four years and you need to sell – you will not benefit from the 100% money back guarantee – you will only get the $3,000 and lose more than 60%!

•    The guarantee is only valid to the original buyer.
•    Eligible coins must be submitted for Buy Back with a completed Buy Back Submission Form and Buy Back Authorization Number (BBAN) must be obtained by calling (866) 920-1080 prior to returning coins.
•    Coins must be returned to Numis Network via trackable shipping service.

In my opinion the “5 year 100% buyback guarantee” is a fraud. Any guarantee that requires you holding the precious metals or rare coin investment for a full five years before its exercisable – makes me wince.
Based on my 35 years in the rare coin and precious metals markets as well as two decades of financial market experience makes me wonder how the guarantee and offer violates both Federal and State Securities laws.
Numis Network would have to place literally every dollar it receives for the sale of the rare coin and precious metals products sold under this guarantee in a segregated escrow bank account for 5 years in order to make the case that the company guarantee is an honest guarantee.

In my opinion Numis Network focuses on modern ANACS silver coins graded Proof 70 and Mint State 70 condition at very healthy enough mark ups of between 50% and 80%.
While you can join Numis Network’s Silver Premium Premier Club for $75 and set up a 4 coin a month auto ship program that locks you into their 5 year 100% buyback guarantee. You can also join the company’s Independent Sales Representative Program – sort of multi level marketing program that promises pay outs that include the potential of earning a …

6Star Silver BMW Program

Show the world your success.
Earn a silver 6 series or 7 series BMW.

$5,000 Rank Advancement Bonus
$1,500/month BMW Car Allowance

The problem with this of course is how can Numis Network pay their Independent Sales Representative’s referral fees and cover its operations and still take build up a segregated escrow account with the funds it may need to cover an en mass demand for a full refund in 5 years for all Silver Premium Premier Club auto ship coins?

In short a client paying $10,000 for  ANACS MS70 Silver Eagles cannot reasonably expect that Numis Network has the ability to set aside the funds needed to back up the 5 years 100% Buy Back Guarantee.

Let me tell you, 35 years of experience tells me that even if this guarantee isn’t a violation of State and Federal securities laws, no rare coin and precious metals company could possibly back up this guarantee -- unless silver and gold go up at least 100% in the five years and the firm stays in business with enough accrued earnings on hand – just in case silver falls in price.

I called the firm and spoke to a representative who assured me that any question I had about the firm could be found on the website. When I asked about how her employers back up their 5 year 100% guarantee – she said … “We have insurance.”
Again 35 years in rare coins and precious metals and I know of no such insurance coverage. To me this is the kind of story investors are told when buying phony bond, mortgage security and other spurious securities investments.

In my opinion, sooner or later I will be proven right about Numis Network. All of this leads me to call and ask to speak with James Taylor the CEO and principal owner of ANACS. I wanted to know where he stands on the “5 year 100% money back guarantee” and why he has affiliated his firm so closely with Numis Network.

James is a Harvard graduate that has been in the rare coin business for more than two decades (that I am aware of) should be able to shed light on the matter. I left a message leaving my personal cell number so he could call me after hours. As of 48 hours since leaving the message he has not returned my call. Nothing should be inferred by his not calling. If he does call and wants to go on the record, I will of course amend this Market Update.

As for now I cannot recommend Numis Network. In my opinion the company’s business model is just another SCAM that will burn thousands of investors!

Best Wishes

James DiGeorgia