A fascinating hobby, to coin a phrase

A mysterious treasure trove that had vanished for decades emerges in auction to raise record prices

When I was five, my father gave me an Irish half-crown someone had slipped him in change. As I grew, I accumulated a motley assortment of foreign coins, donated by friends and relatives. Then I began to use pocket-money to buy inexpensive historic British coinage from local dealers and junk-shops. The result was a typical schoolboy's hoard.

When I was five, my father gave me an Irish half-crown someone had slipped him in change. As I grew, I accumulated a motley assortment of foreign coins, donated by friends and relatives. Then I began to use pocket-money to buy inexpensive historic British coinage from local dealers and junk-shops. The result was a typical schoolboy's hoard.

The heirs of the Slaney bequest had more luck with their coin collection, part of which broke records in a recent auction in London, raising £1.07m.

The late Slaney was a very private man about whom little is known, because he bought through only two dealers, Baldwin and Spinks, identifying himself only by number.

But he had purchased only the best examples, starting in the 1940s, and today's collectors battled with their chequebooks to secure the numismatic gems dealers and collectors did not know he had squirreled away.

Prices for the 285 coins on offer started at £46 apiece. But the highlight of the collection was the celebrated 1663 Petition Crown by Thomas Simon, a masterpiece of the engraver's craft. It was bought in 1950 for £450. In May, it sold for £120,000, a record for an English silver coin. The 150-fold net increase in value over 53 years equates to an annual return of about 12 per cent.

In my teens, I decided to specialise in Tudor and Stuart silver coins with portraits. I invested in monthly catalogues and dealers would send me lists of new stock. Many dealers now have websites with information on stock, and coin fairs, now more common, are good places to scour for gems.

Two of my first buys in the 1960s were Elizabeth I sixpences, dated 1561 and 1570. The first cost £25, the second £14. Today they would be worth up to £1,000 and £500 respectively. Two gold 1656 Cromwell broads (20-shilling pieces) bought for £325 and £350 at about the same time, would now be worth £12,500 each.

Coin prices gathered momentum with the approach of UK decimalisation in 1971. The demand for historic coins increased, and from 1970 to 1975, prices rose fourfold. The steepest rise was in 1973 and 1974 when the stock market nose-dived. Many people saw coins, antiques and other collectables as a safe haven from inflation and some bought without real knowledge of the subject.

Towards the end of the decade, the price of gold and silver bullion was beginning to soar, and this fuelled demand further. Investors, not collectors, dominated the coin market. But in the early 1980s many investors sold their collections and prices fell as the market was flooded. By 1985, a coin in average condition would sell for half its 1975 value. Today it would sell marginally above its mid-1970s level.

Taking inflation into account, this means prices are lower now in real terms than 25 years ago. So surely this means coins are a good buy? Edward Baldwin, of A H Baldwin & Son, the London coin dealer, says: "Buy coins for interest and enjoyment, selecting the best you can afford. If you follow these criteria, history tells us they are likely to increase in value in time."

In all areas of collecting, there are many snares to trap the unwary. Supply, demand and fakes to one side, a coin's value is determined by its exact design, legend, mintmark and date and, most importantly, its exact state of preservation. With the help of a decent catalogue, the first factors are within anyone's grasp.

But assessing a coin's condition can be a stumbling block to a newcomer. Get it wrong and you will pay over the odds for your lot. Minuscule signs of circulation can impact dramatically on a coin's value. There are also the shades of grading on the coin to consider. A nicely toned piece is worth more than one with normal ageing, and a cleaned piece is worth considerably less.

Translating these factors into financial terms requires experience by viewing auctions and dealers' stock. Happily, auction houses and dealers are generous with the time they are prepared to devote to newcomers. If you are prepared to spend time on carefully forming a collection, you should acquire coins that will show a good return in 20 years.

And as well as the financial aspects of the pastime, I enjoy coins for themselves. They are a tangible link with the past: every coin tells a story and a nation's coinage tells its history. The study of coins embraces heraldry, lettering, economics, costume, politics, theology, engineering, metallurgy, architecture, language and geography. Nearly half a century after my first encounter, I am still hooked.

THE GOLDEN RULES

* Make sure you seek quality, not quantity.

* Buy from a reputable dealer or, with guidance at auction.

* Avoid new limited issues specially made for collectors because they rarely increase in value.

Further information:

Spink & Son is the UK's leading coin dealer, auctioneer and publisher of numismatic books. www.spinkandson.com.

The Spink Standard Catalogue of British Coins: Coins Of England and The United Kingdom gives a history of coinage and guidance on collecting.

* Find coin clubs at www.coinclubs.freeserve.co.uk

* Coin dealers can be found at the British Numismatic Trade Association, www.bnta.net

* The British Museum has one of the world's best coin galleries. www.thebritishmuseum.ac.uk