The mid-1960s saw a significant shift in the precious metals market. For the first time, more investors viewed gold and silver as strategic assets for wealth preservation rather than simple commodities. This period set the stage for these metals to become cornerstones for seeking financial security and growth. Reflecting on this evolution helps explain the continued appeal of precious metals as investment choices today. The early days of Monex* give us a front-row seat to the birth of silver coin investing and the clever strategies that helped it all come together.
*As referenced herein, “Monex” refers collectively to the various entities founded and operated since 1967 by Louis Carabini, selling precious metals coins and bullion to collectors and investors. These entities include, among others, Pacific Coast Coin Exchange, Monex International, Ltd. and Monex Deposit Company.
In 1965, the U.S. government made a big move—it stopped minting 90% silver coins and started producing copper-nickel versions instead. By mid-1966, silver coins were still circulating, making up about 60% of all coins out there. For those paying attention, this was a golden (or should we say silver?) opportunity. The founder of Monex, Louis Carabini, saw the potential and jumped in. As shared in a 1987 speech commemorating Monex’s 20th anniversary:
“I would go to the bank and buy as many rolls of these mixed coins as they would give me, take them home, and my wife Anna, my sons Chris and Mike, and I would manually cull out the clad coins. We would then take the clad coins back to the bank with some additional cash and get another batch until we accumulated as much as we could afford…”
Envision a family gathered around the kitchen table, meticulously sorting through stacks of coins to find the valuable silver ones. This effort represented a strategic investment. By the end, they had collected five bags of $1,000 in face value, transforming loose change into a substantial financial asset.
Louis recalled how these efforts were not exclusively about accumulating silver but recognizing a unique market opportunity:
“The silver coins we sorted were worth more in melt value than their face value, a fact that most people overlooked. We saw this as an opportunity to hold onto a scarce resource that was bound to increase in value as the market changed.”
This story is an excellent reminder for today’s investors that opportunities often come disguised as hard work. Markets shift, policies change, and those who see the potential and are willing to put in the effort can often find themselves ahead of the game.
In early 1967, Carabini and close friend Neil Chamberlain took the first significant step into business by purchasing a small coin shop in Long Beach, California. Neil, a coin collector with a keen interest in numismatics, believed in the potential of the coin business and saw it as a great way to acquire coins wholesale for his collection. With Neil’s enthusiasm and a bit of luck, they purchased a modest operation called Art’s Coin Shop. The team rebranded it as The Coin Chest, signaling the start of something bigger.
Reflecting on those humble beginnings, Louis noted:
“Neil worked part-time, and I occasionally. Business was very meager. Joe Burgett, an accountant, and a close friend, managed the store, and it was re-named The Coin Chest. These early days were challenging, but they were also crucial in shaping our approach to the market.”
It was a slow start, but often the best stories begin that way. Alongside them were other early contributors like Joe Burgett, an accountant who managed the store. Together, they systematically carved out a niche in the market, focusing on silver coins for collectors and investors.
Present-Day Takeaway: Even now, there’s a lesson in this for all of us. Finding your niche—whether in investing or business—is key. It’s about spotting a gap, understanding what people need, and then jumping in to fill that space. That’s exactly what Mr. Carabini did, and it’s a strategy that still pays off today.
June 1967 marked a turning point when the team made its first big sale: a $1,000 face-value bag of silver coins. This commemorative transaction wasn’t just a sale—it was the start of a whole new marketplace for investors.
Louis recalls:
“To fill the order, we borrowed 7 bags of quarters from Farmers & Merchants Bank and closed the shop, while Neil, his wife Sharon, Joe, Nell, Anna, Chris, Mike, and I picked out the silver coins from the bags.”
Talk about rolling up your sleeves! This hands-on, get-it-done attitude set the foundation for future growth. They were willing to do what it took to meet customer demand, even if it meant long hours and a little creativity.
Present-Day Takeaway: This approach—finding innovative solutions to meet demand—is still very relevant. An innovative mindset is necessary in today’s market, whether using technology, creating new products, or finding more efficient ways to serve customers. People who think outside the box often end up coming out ahead.
By 1968, things were getting more complicated. The supply of silver coins was drying up, and manually sorting through them became less practical. At the same time, the price of silver was creeping up, which made it tougher to get the coins they needed.
“During the last half of 1968, manual separation was too inefficient. The marketplace saw an opportunity to profit and developed coin-separating machines.”
These machines—one using electrical resistance and the other using weight—helped the business keep up with demand. They made the process faster and more efficient, allowing the company to continue thriving even as the silver coins became harder to find.
Present-Day Takeaway: This part of the story exemplifies how embracing technology can change the game. Keeping up with advancements, whether in trading platforms, storage options, or analytical tools, can provide investors with a significant edge.
A Nod to Future Innovations: Financing Silver Coins
Although this period was primarily about building a solid foundation, Louis Carabini was already thinking ahead about making silver investments more accessible. The idea of introducing financing options was just beginning to form, setting the stage for future growth and innovation that would define Monex’s market approach.
The early years of Monex highlight the importance of vision, adaptability, and dedication. From the humble beginnings of sorting coins at home to establishing a new market for investors, Monex’s experience provides valuable insights for today’s investors. As the precious metals market evolves, these stories remind us that adaptability, staying innovative, and recognizing opportunities can make all the difference.
For more intriguing Monex history and recollections from Monex founder Louis Carabini, explore our next post, Building a Market for Silver Coins: Key Moves by Monex (1967-1968), where we learn how Louis Carabini and his team laid the foundation for the silver coin investment market in the late 1960s, from strategic partnerships to innovative financing options. There’s plenty more to uncover in this fascinating chapter of the precious metals industry.
Excerpts from Louis Carabini’s memorable 20th Anniversary Speech, delivered in 1987.
Learn more about the ideas and vision that have influenced the precious metals investing industry and the Monex story in these related articles:
Each piece adds a unique perspective to the story and valuable insights into the foundation of Monex, its future, and the core principles of precious metals investing.
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