The powers that be at PCGS and NGC have never sat down and said “let’s deliberately ruin such and such issue by misattributing them or miscalculating them.” Unfortunately, this is exactly what they have done on a number of important U.S. gold coins. I have selected six. There are more, but these examples are egregious enough to merit discussion.
Read MoreHow so?
Let's take a look at a few of the ways the rare coin market is far, far different in 2013 than it was in 2008 or 2003.
1. CAC becomes a force. Five or ten years ago, CAC didn't exist and the major services didn't have someone "checking their work." This led to some sloppy grading and clearly the existence of CAC has tightened standards. Does this mean the services (or CAC) are perfect? Most clearly not but I think grading is more consistent now than in the past and this is evidenced that fewer dealers are making a living solely as "breakout" specialists.
I see a big change in the market from another CAC-related perspective as well. In some series, if a coin doesn't have a CAC sticker, this can mean the kiss of death. I think this is an unfortunate circumstance and I'm guessing this wasn't something that John Albanese had in mind when he established CAC. But as of the middle of 2013, we can look at auction prices and dealer sales and gauge that a CAC sticker clearly increases liquidity and in some cases it increases prices by a significant amount.
2. Interesting coins outperform all others. In the rare date gold market, the coins which are clearly in the highest level of demand are those which are interesting to multiple groups of collectors. As an example, a coin like an 1855-O gold dollar has multiple levels of demand because it is a distinct one-year type coin while an 1850-O gold dollar (which is three times as rare in Uncirculated but priced at about one-third to one-half as much) is of interest mostly to a smaller group of specialists.
This isn't to say that people deliberately sought "boring" coins before. But in 2013 (and beyond) it seems clear to me that people want coins with an interesting story behind them.
Some examples of interesting branch mint gold coins include 1855-D gold dollars, 1861-D gold dollars and half eagles, 1839-O quarter eagles, 1854-D three dollars, 1838-C and 1838-D half eagles, 1838 eagles, 1861-S Paquet double eagles. Coins like this have at least a few things in common: they are either one-year types or first year of issues or they have very interesting back stories which appeal to a wide variety of collectors. I call these coins "multiple level of demand" issues and they are clearly in vogue right now.
3. Pricing Becomes Complicated. A decade ago, rare coin pricing was fairly simple. You had a coin--let's say an 1885-CC double eagle--and it was graded AU58 by PCGS. You looked at the Greysheet and saw that Bid was $10,000. The coin was pretty decent, it was a popular, low-mintage CC issue and, therefore, it was worth 10% over Bid. You priced it at $11,000 and if it didn't sell quickly, you lowered the price to $10,500. Simple.
But today, there are countless variations of 1885-CC double eagles. It could be a PCGS coin or an NGC coin. It could have a CAC sticker or not have a sticker. It could have a "+" designation or a "*" designation (or even both). It could be in an old green label holder. The possibilities are literally endless.
Suddenly, many significant coins have four, five, six or even more potential variations and just as many possibilities when it comes to pricing. The 1885-CC double eagle in AU58 could be worth $20,000 or it could be worth $25,000 or it could even be worth $30,000. And that's not taking into consideration the possibility that it's an upgradable coin and it is worth $35,000 or more.
Unfortunately, the Greysheet has not kept up with this widening range of prices. Today's collector has to be very nimble or very well-connected to know the price differences between a PCGS/CAC and an NGC/non-CAC coin in his series; especially if he specializes in something like St. Gaudens double eagleswhere the variation(s) in prices can be dramatic.
4. Every Picture Tells a Story. As I have written about before, the advent of the internet has made numismatics an increasingly visual hobby. With most collectors making their purchases solely based on images from dealer or auction websites, the visual appeal of a coin has become paramount. Unless a coin is very rare, in today's market it is visual appeal which sells a coin more than almost anything else.
This tends to be less true in the branch mint gold area than in silver coins where superb color can mean staggering premiums. But, as I have noted in the past, how a coin will look on my website once it has been imaged is a major consideration in the process I use to determine if I will or won't buy a coin.
Which brings us to the next point.
5. In Crust We Trust. After years and years of beating the "buy original coins" drum, it looks like many collectors of branch mint and early gold have begun to listen to me. This has been reinforced by the emergence of CAC (see above) who tends to appreciate originality and rewards coins which have not been dipped or processed.
The change of taste towards "dirty original gold" has no been without consequence(s). The first I've noticed is that both PCGS and NGC now sometimes over-reward originality. How ironic is this? For years, the services tacitly endorsed the dipping of coins to make them bright so that they would achieve the highest possible grade. By now, so many coins have been ruined by this that when a nice original AU50 is sent in, the chances are good that it will grade AU55 or even AU58 just because it has original skin.
Another consequence is that collectors who want original surfaced coins typically mistake so-so or ugly coins with some color for nice coins with really nice color. This is understandable. Let me give you example. At a recent show, a collector showed me a group of coins which he had purchased through auctions in the last three years. He wanted me to verify that they were all "crusty and original." The coins ranged from not even remotely original to reasonably original but were not attractive. I thought they were clearly nicer than the bright, dipped out junque which he might have bought a few years ago but he still didn't fully "get" the concept of crust. And I'm not sure many collectors--or dealers--do. And this is what, in my opinion, makes the whole 'dirty original gold" craze somewhat ironic.
6. True Rarity Becomes Appreciated. Because of the preponderance of numismatic information, collectors are a lot smarter in 2013 than they were in 2003. Many collectors have access to information which, a decade ago, was only accessible to real students of the hobby.
One consequence of this is that you don't have to "convince" collectors that a certain issue is rare. You can prove how rare a coin is by how often it does--or doesn't-- appear at auction and how high--or low--the populations are at PCGS and NGC.
This has made tastes change in recent years. As an example, I just sold a very, very cool San Francisco eagle which was one of the two or three finest known for the date. Ten years ago, I would have bought this coin and my reaction would have been "cool item but who the heck am I going to sell this to?" Cut forward to 2013 and not only did I pay a very strong price for the coin with no hesitation but my reaction was "cool item; I better not put it on my website because so many people will want this that I'm going to anger the collectors I don't call about it."
I see this trend intensifying in the coin market in the coming years. Whether you are spending $1,500 or $15,000 do you want to own a coin which is hard to find or one which is rare? And what if rarity can now be quantified due to the number of coins which have been graded by PCGS and NGC and the auction archives which Heritage and PCGS make readily available?
What are some of the recent trends in the coin market which you find interesting? Feel free to leave your comments about this topic in the space below or email me at dwn@ont.com to continue this discussion.
After 25+ years of encapsulating coins and 50+ million submissions, it is clear that PCGS and NGC have had a huge impact on the way we view coin rarity. I have personally learned many things: which coins are rare and which are not; which coins are true condition rarities and how issues within a specific series can be viewed on a comparative basis. This got me to thinking: how many coins within a series need to be graded (on a percentage basis) to make definitive rarity statements? And once this has been determined, what percentage of coins within certain series have already been graded by PCGS and NGC? To start making trenchant observations about absolute and conditional rarity, I think we have to feel confident that over 50-60% of all known coins in a specific series have been graded. When it comes to expensive (let's say $5,000 and up) gold coins, I think the percentage of all coins graded by PCGS and/or NGC ranges from a low of around 65-70% to a high of close to 90%.
Let's take a look at a few specific areas and try to guess what percentage of coins have been graded.
1. Charlotte and Dahlonega Gold
The Charlotte and Dahlonega market was reasonably hesitant to embrace third-party grading and this initially made sense, given how erratically these coins were graded by PCGS and NGC during their formative years. But by the end of the 1980's, submitters were more confident and large quantities of these pieces were being encapsulated. And given the high average value of C+D gold, it makes sense that even the low end coins would eventually be sent in for slabbing.
My guess is that a great majority of Charlotte and Dahlonega gold in all denominations resides in PCGS or NGC holders as of 2013. There are certainly still a few old school collectors who have held out and won't have " those confounded newfangled slabs" in their collections but these are seen less and less as the years pass. And given the fact that there were never many C+D coins in overseas sources, such as European banks, the thought of bags of Dahlonega half eagles lurking in Dortmund seems remote.
When you look at PCGS and NGC populations figures for C+D mint gold, you have to remember a few things. The first is that these figures are inflated by resubmissions. The second is that they, of course, do not include damaged or cleaned coins which do not qualify for slabbing. Taking these two factors into consideration, I'd still say that the percentage of C+D gold which has been graded by PCGS and NGC is comparatively high; ranging from 75 to 85% of the known examples. In the case of choice, high end pieces (MS60 and above) this might be as high as 90% with the few renegade raw coins being those held by museums such as the ANS and the Smithsonian.
2. Proof Gold
I always felt that one aspect of slabbing which was undervalued was its ability to protect fragile coins. Back in the old days, coins were typically transported to shows loose in 2x2 plastic flips and it would always make me cringe to see a coin like a Gem Proof Liberty Head double eagle in a soft flip. You knew that these coins were collecting hairlines with every trip to Long Beach or New York. Slabs were far safer environments for such coins. Because of this, Proof gold was an early adherent and by the late 1980's/early 1990's many Proof gold coins were already in slabs.
Then came the Great Proof Gold Era of 1995-2000 when collections such as Childs, Bass and Pittman were sold at auction. In some cases you had very rare issues with ten or so known coins having three different survivors sold in a short period of time. Virtually all of these coins wound up being encapsulated or, in the case of the Bass collection, were sold in PCGS slabs.
There are still two rich sources of unslabbed Proof gold: the ANS collection and the US Mint collection in the Smithsonian. But other than these two, I doubt if there are more than a handful of gradable Proof gold coins that still lurk in the raw. I'm going to guess that the percentage of pre-1916 proof US gold coins that have been graded by PCGS and NGC are at least 85% and may actually be as high as 90%.
3. Early Gold
I can remember auctions full of interesting unslabbed early gold coins as recently as the mid-1990's but these days are long, long gone. Today, virtually all early gold that is capable of being encapsulated is now encased in slabs. There were holdouts in this area of the market who lasted longer than in the two categories mentioned above and for good (and bad) reasons. I can remember dealing with some old time collections as recently as the 1990's who felt that they knew more about early gold than PCGS and NGC did and, in a few cases, they were right. Also, lower grade early gold wasn't as expensive then as it is now and a raw problem-free 1810 half eagle wasn't looked at like a man with two heads might be today.
The grading services have vastly improved their ability to grade early gold and most of the old time collectors who scoffed at slabs have passed away or are no longer active. Today's generation of early gold collectors and investors would just as soon eat dirt as they would buy any early gold coin unslabbed and they have come to rely on PCGS and NGC to help them grade these complicated issues. As a result, I'd have to estimate that at least 75-85% of all early gold is now encapsulated and I wouldn't be surprised if the actual number is as high as 90%.
4. Generic Gold
When I speak of Generic Gold, I aam refering about coins such as common date With Motto Liberty Head half eagles and common St. Gaudens double eagles. Staggering numbers of these coins exist in the higher circulated grades and the lower Uncirculated grades and many of these have been graded by PCGS and NGC. If you look at population figures for coins like 1901-S eagles in MS62 to MS64 or 1927 Saints in MS62 to MS64, the numbers are pretty impressive.
But I think there are still very large quantities of these coins that have not been sent in to PCGS and NGC. I know for a fact that there are at least six or seven American firms who import large amounts of United States gold coins from European and other overseas sources every month. While supplies from Europe ebb and flow, the quantities coming over every year are still immense; in the tens of thousands at the very least.
So while there are hundreds and hundreds of thousands of generics in slabs, I think that the quantity of raw coins remains very large. I'm sort of guessing here but I wouldn't be surprised if the number of slabbed generic coins in slabs is only 50% of the total that have survived.
5. Miscellaneous
As I mentioned above, one of the parameters of slabbing coins is the economics involved. If a coin is worth $400, it is less likely to be slabbed than if it is worth $3,000. But a reasonably interesting $400 coin, like an AU50 1851-O dollar is more likely to be slabbed than an uninteresting $400 gold coin like a common date $2.50 Indian in AU50. Becuase of this fact, I think there are still tens of thousands of cheap American gold coins which have yet to be slabbed although this number is diminishing over time due to the rise in gold prices and the demand for slabbed coins versus raw coins.
There are still some non-gold series where lots of nice collector-grade coins have not been slabbed due mostly to collector preference. Examples of this include Large Cents, Seated Liberty coinage and Barber coinage in all denominations. This includes significant numbers of problem-free coins in the $100-2,500 price range in grades ranging from AG to AU. You can still go to coin shows and find interesting raw coins like 1862-S half dollars in nice EF45 or 1874-CC trade dollars in VF30. While I don't see the end of the line--yet--for such coins, I can tell you that more and more are being "made" at PCGS and NGC.
So what can we conclude from my percentage guesstimates regarding numbers of coins graded at the services?
The most important conclusions is that, yes, sizable percentages of many United States gold coins have been encapsulated and due to this fact we can make statements about rarity--fundamental, absolute and condition--which really couldn't be made as recently as a decade ago.
That said, there are still important and impressive individual coins "in the wild" and in collections that are not widely known which always make me hesitate to make definitive statements along the line of "this is the finest known" or "this is the rarest Liberty Head half eagle in Uncirculated" (and believe me, I make more of these statements than the average coin dealer...) With the recent sale announcement of the Eric Newman collection, this reminded that important new discoveries (or re-discoveries) await us with each passing year.
I want to know your thoughts on this subject. If you'd like, share them below or email me at dwn@ont.com.
Every year, I participate in the Rosen Report in which I (along with an impressive panel of fellow dealers) answer a series of timely and interesting questions which pertain to the rare coin market. This year's version of the report was interesting and I think that you will find my answers to be informative. Please note that all of the questions are as asked by Maurice Rosen; the answers are the exact ones which I gave to him. These answers were published in December 2012 and January 2013. Out of respect for the "freshness" of Mr. Rosen's newsletter, I waited a while to publish them.
1) Much has been said and written about the glut of off-grade and problem slabbed coins (due to sloppy grading, doctoring, and just very low-end coins for the grade). The comparison of those coins in the market versus truly high-quality, eye-appealing coins --the ones we constantly look to buy-- is striking.
A) Will we always have this glut?
I’m guessing that in the 1880’s, the collectors of that era were complaining that there were a lot of not-very-nice coins around so this “complaint” is not new. Also, you have to realize that grading is a continuum. MS63 is actually a series of grades, ranging from 63.0 to 63.9. You never see the 63.7, 63.8 and 63.9 coins because they are being tried and re-tried for higher grades and the 63.5 and 63.6 coins are being sold by retailers like myself, Legend and Pinnacle to our best clients and don’t get offered to the average collector. So what most collectors see is the “dreck”—i.e., the 63.2 and 63.3 coins that just barely made it. It’s no great conspiracy and not at the fault of the services; it’s more the dynamics of the marketplace.
B) What would reduce or even eliminate it? And, what needs to be done to achieve that?
You will never reduce grading mistakes by the services. The coins are being graded by humans and even the best grader gets a few things wrong every day. Multiple this by three graders, all making a few mistakes every day, and at the end of a decade or two of grading you have a few thousand egregious errors. A few things the services can do is 1) be more proactive about cleaning up their mistakes 2) use more outside consultants for esoteric coins that they don’t really understand 3) rotate the graders more frequently 4) shame the blatant doctors of coins by outing them.
C) Isn't it true that there's always been a glut of inferior slabbed coins but it is due to our heightened awareness to grading and improved tastes that the situation is magnified?
I disagree with this. I think the number of dealers and collectors who really, truly know how to grade (like at the level of a Jason Carter or a Ryan Carroll) is always going to be very few, just like only a few athletes are ever going to be able to run like Usain Bolt or hit like Miguel Cabrera. The seeming “glut” of crappy coins is mostly because so few nice, fresh coins are available and the 10-15% of coins in any series that are “A” quality are so amazingly easy to sell right now, most collectors (and many dealers) never see them. Remember: even before third-party grading there were still a lot of schlocky coins in the market.
2) Is it time to recognize Modern Coins as a more legitimate part of numismatics, therefore worthy of an investor's consideration? Or, do you regard those coins as largely a hustle of sorts, too speculative and over-exploited? And, whether you like Moderns or not, are there any you see that are worth investing in?
I’m not a big fan of modern coins but I totally understand why people collect them and can understand their appeal, such as it is. I don’t think that modern coins in PR70 or MS70 are worth such big premiums but, then again, I think common date Walkers in MS68 or PR68 are bad deals as well.
If I had to select an area in the modern coin market to invest in, it would be the Spouse coins. Some of these have very low mintages and if the market for these were created and nurtured by a legitimate modern coin dealership, I think they could see good long-term growth. My main caveats in modern coins are don’t overspend for quality and stay with low mintage issues.
3) A) Of all worthy slabbable coins (pre-Moderns of sufficient economic value to be submitted) what percentage would you say have been slabbed? Indeed, have the services pretty much penetrated the universe of those coins?
Not including Morgan Dollars and Saints (which still seem to exist in significant quantities as raw coins), I would say that over 75% of all the worthy coins have been slabbed. In the case of areas such as early gold or Proof gold, the percentage of slab-worthy coins that have been graded at least once by the services may be as high as 90%
B) If so, what are the implications here?
I can think of at least two major implications here. The first is that if NGC and PCGS clean up their population figures reasonably well, we can, for the first time, have a pretty good idea of the absolute rarity for many issues. The second implication is that really “fresh” coins (and by this I mean stuff that has never been to the services) are probably even rarer than we think they are. The next time a really great really fresh deal (like the remainder of the Bass collection or Eric Newman’s coins) come on the market, you will see a level of demand for cons like this unseen in numismatic history.
4) What one series of reasonably moderate cost to complete (say, under $25,000) would you recommend an investor look into? Please explain your selection.
$25,000 is a pretty limiting amount for working on a set but if this is all that I have to work with, I’m going with Proof 64 Barber Dimes. Let’s see…there are 24 different dates and at an average cost of around $750-1000 per coin (and no key dates with big premiums. That means a set of reasonably scarce coins with good eye appeal could be done well within budget. I would focus on nicely toned coins with cameo designation that were just a hairline or two away from grading higher. And at just a few hundred bucks more for 65’s, you could throw a few Gems into the set.
5) The premiums for generic U.S. gold coins are coming back slightly from their lows of a year ago. A) Have the dynamics of this market changed so much that it is wishful thinking to expect premiums to expand much more? Why so?
In the past, there were a number of large marketers who sold generic gold. Now they sell modern coins. The supply of generics has stayed constant but there is a pronounced lack of demand. It’s understandable why the marketers have punted generics from their programs. Other than Saints, most generics just don’t have a really compelling story. Modern coins can be sold in MS69/PR69 and MS70/PR70 grades, they have reasonably attractive designs and they have performed fairly well over the course of the last decade.
B) If you think premiums can increase a lot, please explain why and what conditions would arise to bring that about. Also, please state which issues here offer the best investment potential.
Unless the large marketers decide to re-focus on generics, I don’t see this market doing that well. This was always a very heavily manipulated market with periodic “shortages” created by the suppliers and market conditions generated by promotions. If a firm suddenly starts a promotion on, say Indian Head half eagles in MS64 and they need 500 coins, you’ll see prices shoot up. But the way the market is now, there is no real reason for most generics to increase in value. I don’t really care for the “investment potential” of generics but I do buy MS66 Saints for my personal holdings as I like the supply/demand ratio of these coins.
6) There's talk about the government phasing out the use of coins and paper money as technology provides digital and other forms of payment.
A) How would such a development effect the coin market?
My first reaction was if coins and paper money are phased out, this will add a flavor of “uniqueness” to our markets as we are suddenly dealing in obsolete products. But as I thought more about this, I thinking phasing out coins and paper money would harm the market(s). Even though no one searches their change for interesting coins anymore like we did as kids, getting a new generation of collectors interested in coins will be a lot harder if they don’t even know what a “coin” or a “bill” is.
B) Would it open the door to certain oppressive government actions bearing down on the coin market?
I think any of the (potential) oppressive government actions on coins in the future are going to be based on VAT’s or comprehensive interstate internet taxation.
7) Some folks have the feeling that the U.S. coin market has been so researched and exploited that every stone has been overturned and there are few, if any, areas left with standout potential.
A) What are your thoughts here?
If you think about it, the majority of the research on US coins has been focused on a few areas. There are plenty of series that have next to no research. And even areas that have specialized books about them often lack good general information. An example: if you collect bust half dollars, the Overton book is great. But it is solely about die varieties. What if you want basic information about, say, an 1812 half dollar and don’t care about die varieties. No one has ever written a good general collector’s guide to Bust Halves that discusses the rarity of the coins (date by date), how they should look, which coins are the finest known for each year, how to tell Proofs from business strikes, etc.
B) What area or areas seem relatively unexploited to you?
A few areas that come to mind are Proof bust silver coins (someone should write a book on these…), San Francisco Liberty Head gold (especially quarter eagles, half eagles and eagles), Philadelphia gold and early gold.
C) Any favorite issues there?
Just about any 100% no-questions-asked Proof bust silver or gold coin is a great value. Same goes for many pre-1878 San Francisco quarter eagles and half eagles in EF45 and better with original color and surfaces.
8) The commem market (silver and gold) has been in the doghouse since the wild highs of 1989.
A) What will it take to revive it?
Commemoratives aren’t marketed properly. Sellers always describe coins with comments about how cheap they are relative to 1989. Who cares! That’s not a smart approach. They need to be marketed for their beauty, their relative scarcity and their collectability, not because they are thirty cents on the dollar when compared to 1989. If a large firm like Blanchard suddenly got interested in commems, the coins could increase in value. Perhaps a really good new how-to-collect book might help this series as well.
B) What specific issues have noteworthy potential?
I’ve always been fond of the issues from the 1910’s and 1920’s in MS65 and MS66. I also like coins with really nice color but not enough of a “wild” appearance that they bring huge premiums.
9) Are Morgan and Peace $1s still a great choice for investment gains? Which issues do you like best.
Scarcer date O mint dollars in MS65. For Peace Dollars, I like nearly any non-Philadelphia issue in MS65 with original surfaces.
10) CAC coins: A) Is the market warming more and more to CAC'd coins such that investors should focus almost exclusively on them?
In my opinion, CAC has made extremely strong inroads into the high end of the coin market. If you look at auction results for CAC, they inevitably bring higher prices. When I have a CAC and non-CAC example of the same issue on my website, the CAC coin inevitably sells first. I don’t agree with the thought that a non-CAC coin is a “bad” coin but I feel that people who are buying coins primarily as an investment are probably better off focusing on CAC material, especially if they are not comfortable with their ability to distinguish an A coin from a B coin.
B) In what areas do CAC'd coins have the greatest impact?
The areas that CAC has made the greatest impact are the areas which the grading services are most inconsistent on: common date St. Gaudens double eagles in MS66 and MS67, better date 20th century gold issues in MS65, Proof gold, high end early gold.
C) The least impact?
Collector coins such as colonials, early copper, rare date bust and seated, EF-AU early gold, certain areas of the rare date gold market.
11) Since 2001, gold has risen 7-fold from the 250's to as high as the 1900's. During these last 12 years the government has largely not changed the climate or rules under which transactions take place, nor taxes on or ownership of gold. Something tells me that the next multi-fold increase in gold's price will see the government taking a much more aggressive and oppressive role in the market. A) What are your thoughts here?
As state and federal deficits increase, the government is going to have to get more create about producing revenue without raising taxes. I would imagine that large profit-taking in gold, should metal prices rise to, say, $3,000 per ounce, would put these gains on the radar for the government.
B) How might the rare coin market behave with such heightened presence of the government in the gold market?
For many collectors, one of the beauties about the coin market is that it remains essentially unregulated. Regulating it certainly won’t be a way to attract more people into the hobby.
12) What's the one coin that could come onto the market that would cause the biggest splash in and out of the industry? Why so? (Examples: 1873S Seated $1, 1849 $20).
The currently missing third known example of the 1854-S half eagle would be a pretty big deal for me or the second 1870-S three dollar that was supposedly placed in the mint cornerstone. But I think the coin that would actually cause the biggest splash would be an 1849 $20 that someone could own. That coin would bring a lot of money!!
13) You have $1 million in fun money. What one coin or series would you buy to hold for the next ten years? Please explain your selection.
Ah, the old million dollar fun money scenario… My answer would be predicated on what was available for sale at the time this money became available. If, for example, a fresh deal of early gold became available and I could spend the million dollars at an auction (and provide my client with fair value), I’d go in that direction. Or, if there was a great collection of Saints, I’d focus there. The main thing is that I would be looking for outstanding quality coins with great eye appeal and true overall rarity.
14) Are generics dead? Are there any issues here that offer good value, if not speculative appeal for someone looking to amass a position?
Generics aren’t necessarily dead but if you invest in them, you better have a way to market them or access to information about who is planning a big promotion. As an example, if a little birdy tells you that a TV shopping network is planning on promoting MS64 Morgans in a big way, then it might make sense to invest in these coins before prices go up. But that seems highly unrealistic for most collectors—even those with good connections
15) Two investors come to you to assemble a portfolio to hold for the next 5 to 10 years. One has $25,000 to commit, the other $250,000. What would you put into each of their portfolios? Why make those picks?
a) $25,000 portfolio: one each of the following: Reduced Size Capped Bust Dime (1828-1837) in MS65 with CAC approval (around $10,000), No Motto Seated half Dollar in MS65 with CAC approval (around $7,500), Indian Head half eagle in MS65 with CAC approval (around $12,500). Yes, I realize that adds up to $30,000…
b) $250,000 portfolio: one each of the following, most or all with CAC approval: a nice MS65 Red and Brown Matron Head Large cent from the 1820’s or 1830’s, no 1820 (around $10,000), an MS64 Large Size Bust Quarter 1815-1828 (around $15,000), a true Gem MS65 Capped Bust Half Dollar 1807-1836 (around $10,000), an MS64+ No Motto Seated Liberty Silver Dollar, 1840-1865, (around $10,000). That would be a total of around 50k on a group of nice type coins. Combined with the 30k portfolio above, this would be around 80k on type coins
Three Dollar Gold Piece, 1854-1889, an MS66 example (around $20,000), MS64 Classic Head Half Eagle, 1834-1838 ( around $20,000), No Motto Liberty Head half eagle, 1840-1865 in MS64 (around $15,000), a nice piece of Proof gold in PR64 or PR65 struck before 1900 and withy a mintage of less than 100 (around $35,000) and one really nice MS62 to MS63 Dahlonega quarter eagle or half eagle (around $20,000) That would be a total of around $110k+ on nice gold coins.
One great $50,000 coin, preferably in gold. Maybe something like a finest known Liberty Head eagle or a rare date Saint (has to be CAC approved) or an important Type One or CC Liberty Head double eagle.
The remaining 10k on hand selected MS65 Saints, all CAC approved.
Do you have any comments or further questions about my Rosen Report 2013 answers? If so, please contact me via email at dwn@ont.com
There are coins that are rare because of their grade ("condition rarities") and there are coins that are rare because only a small number survive ("absolute rarities"). Then there are coins that are a whole different category: I call them "dual rarities." These are coins that stand out as having an amazing combination of date rarity and grade rarity. There are not many of these and even fewer exist in the arena of United States gold coinage. In this article, I'm going to choose one coin from each denomination which I think is the ultimate dual rarity. Before I begin, I want to establish three parameters for true dual rarity. These are as follows:
1. The coin is a rare date. Whether due to low mintage or low survival rate, the coin is not easily available, even in lower grades.
2. The coin is exceptional well-preserved for the issue. This is based not only on the date but the type. In other words, if the coin is a No Motto half eagle, it is not only exceptional for the date, it is one of the best of the entire type as well.
3. Nothing close survives. There are coins that are dual rarities but other comparable examples exist for the date or for the type. An example (non-gold) is the 1845-O Dime, ex Eliasberg, graded MS69 by PCGS. It is the best early date Seated Dime known, its a rare date and the next finest known is somewhere in the AU58 to MS61 range. Now that's a dual rarity!
4. Only business strikes qualify. Proofs, especially near early dates, are very interesting but they were made in limited editions for collectors and we can expect these to have survived. Branch mint proofs or specimen strikes are another story and despite being controversial and slightly esoteric, I'm going to let them qualify. Its my list and I can be the Dual Rarities Czar if I want to. So there...
1. GOLD DOLLARS
This was a fairly hard denomination to choose a single coin from because there aren't a lot of truly rare gold dollars and the most famous issues (the 1849-C Open Wreath and the 1861-D) don't have a single really memorable survivor. So with some thought, I chose a coin that I actually had in my hands the other day and which was sort of an impetus for this article: the Brand-Akers 1863 gold dollar, graded MS68 by PCGS.
The 1863 is the single rarest Philadelphia gold dollar despite a mintage of 6,200 business strike. There are a number of branch mint gold dollars with lower mintages but they not to be found in supergrades. There are 14 Philadelphia gold dollars with lower mintages than the 1863 but these tend to have been saved in higher grades. A few of the dates have incredible individual coins known (the 1864 in PCGS MS69 quickly comes to mind) but they are not as rare, overall, as the 1863.
The Brand 1863 gold dollar was purchased by famed dealer-collector David Akers as Lot 29 in Part One of the Virgil Brand auction, held by Bowers and Merena in November 1983. It sold for $15,400. Akers kept this coin as part of his personal collection until a few years ago when he sold it via private treaty to a West Coast collector who is forming an incredible, high grade set of gold dollars.
The Brand 1863 dollar is a true "wonder coin" with amazing surfaces that literally drip with luster. When I was looking at it the other day, my first comment (made out loud) was "wow, what a coin! I'd be impressed with this if it was an 1880's date, let alone an 1863."
As I recall, this was Dave Akers' favorite gold dollar and that's saying something given that he a) saw, owned or sold nearly every great gold dollar in existence and b) personally loved gold dollars and collected them with an unbridled passion.
I love this coin for many reasons. First is the fact that it is one of the most aesthetically pleasing gold dollars that I've ever seen and it just happens to be a rarity. Second, it is the finest known by a long shot. I have personally handled an NGC MS66 and currently own a PCGS MS65 but neither of these is even on the same planet as the Brand 1863. Third, it has a great pedigree. Virgil Brand is probably the most underrated coin collector of all time. He has a reputation today of having been a hoarder and he certainly was happier owning ten of something than just one. But as his notebooks show, he put together a wonderful, sophisticated set that was one of the greatest ever. Brand's legacy has been further diluted by the fact that most of his coins were sold privately after his death but even the small fraction that was sold by Bowers and Merena from 1983 to 1985 was worth millions and millions of dollars. It is staggering to think what his complete collection would be worth today.
2. QUARTER EAGLES
This was an easy, easy choice for me. The most valuable quarter eagle in existence is the Gem 1796 No Stars that sold for $1,725,000 in Heritage's 2008 FUN auction. It's old, beautiful, rare and gorgeous. But it still isn't my ultimate dual rarity quarter eagle. That honor belongs to....the Byron Reed 1864 quarter eagle.
Depending on whether you think the 1841 was struck in non-Proof format or not, the 1864 is either the first or second rares business strike Liberty Head quarter eagle from the Philadelphia mint and the second rarest issue of this design after the 1854-S. There are a few dozen known 1864 business strikes with most in the EF40 to AU50 range. There are exactly three known in Uncirculated which actually makes it more available than the 1865 quarter eagle but (and this is a big but) the 1864 in question is graded MS67 by NGC.
I first saw this coin in the Spink's October 1996 sale where it brought $132,000. I desperately wanted to purchase it and even offered to do it with no commission for my two biggest clients at the time but I had no luck. It was purchased by a West Coast dealer for his client who was, at the time, putting together an absurdly cool type set with as many dual rarities included as possible. It was graded MS67 by NGC many years ago and, by today's standards, I could easily see it in an MS67+ or MS68 holder.
You see great quality 1900-1907 quarter eagles from time to time. Not that long ago, I had a PCGS MS68 common date in stock that was an amazing coin. But it was a common date in an uncommon grade and a coin that I wouldn't have thought twice of buying in MS67. The Byron Reed 1864 is easily the finest quality early date Liberty Head quarter eagle that I've seen. It is nearly perfect with lovely rich yellow-gold color, razor sharp details and that certain "look" that you only find on very, very special coins.
There are so many reasons to love this coin. Its a Civil War rarity that is a big deal even in EF grades. It has amazing eye appeal. Its pedigreed to the famous Byron Reed collection and has been sold at auction only once since Reed acquired it in the 19th century.
This coin is owned, like many of the pieces in this article, by a major collector who understands the importance of it and considers it to be among the best of his many major rarities.
3. THREE DOLLAR GOLD PIECES
This was a hard denomination to choose. I was leaning towards the Bass collection's 1854-D but this is a raw coin that I have never actually held in my hands (I've just seen it behind display glass) so I don't know if it is as great as I think it is. So, I'm going to cast my vote for a coin that is a bit more esoteric but which is easily the most valuable three dollar gold piece known: the unique branch mint proof 1855-S. This coin was last sold for $1,322,500 (as an NGC PR64 CAM ; it was recently crossed to a PCGS holder at the same grade and designation) in Heritage's 8/11 auction.
When examining any branch mint proof, you have two ask two basic questions: is the coin really a proof and is there a compelling reason why the issue would exist as a proof. In the case of the 1855-S three dollar, the answers are both resoundingly "yes."
I first saw this coin back in the mid-1980's and even then, knowing a fraction of what I know today, I was totally convinced the coin was a proof. It looks just like a Philadelphia proof of this era and, if you didn't flip it over and see the "S" mintmark on the reverse, you'd swear it was made at the Philadelphia mint. And there is a very compelling reason for this coin to exist as it is the first year of issue for three dollar pieces from San Francisco and there are known proofs for the quarter dollar and half dollar of this date.
The grade of this coin is not as absurdly high as most of the other coins on this list but, in the case of Proofs, I don't think this is as important. Proofs are either nice or not nice; there is little aesthetic difference between a PR64 and a PR66. What really matters about the 1855-S is that it is totally unique and it has a multiple level of demand that no other three dollar gold piece, with the possible exception of the 1854-O and 1854-D, possesses. And given the fact that there are no "wonder coin" 1854-O or 1854-D threes currently known, I give the dual rarity prize for this denomination, in a rout, to the Proof 1855-S.
This coin is currently owned by an eastern collector who added it to his set of Proof Three Dollars. It is almost certainly the most comprehensive set of proofs for this denomination ever assembled and quite likely the finest as well.
4. HALF EAGLES
It took me about two seconds to choose the dual rarity that I felt was the "essence" of this denomination. It's a coin that I have written about in glowing terms more than once and, in my opinion, it is one of the single greatest 19th century coins of any denomination. The coin is the Bass/Norweb 1864-S half eagle.
First a little background about the issue. The 1864-S is the second rarest half eagle from this mint after the excessively rare 1854-S and it is the third rarest half eagle of this design after the 1854-S and the 1875. There are around two or three dozen 1864-S half eagles and most are in low grades; typically in the VF-EF range. There is nothing even remotely close to Uncirculated for this date...with one exception and, boy, is it ever an exception.
While first attracting attention back in 1956 in Abe Kosoff's "Melish" sale, the 1864-S half eagle really came to light when it was sold as Lot 875 in the Norweb I auction, held by Bowers and Merena in October, 1987. At the sale, Harry Bass, knowing this was a "have to have it" coin, paid a strong $110,000. It was then sold in Bass II, by Bowers and Merena in October 1999, for $178,250. Since that time, it has been off the market and, as far as I know, it is still in a southern collector's set.
Back in 1999, this coin was graded MS65 by PCGS and I thought, even then, that the grade was very conservative. Other than some weakness of strike, I recall the Norweb/Bass 1864-S half eagle being nearly perfect and other than some later date S mint coins of this type, I also remember it being among the best Liberty Head half eagles of any date that I've ever seen. I'd have to think this coin would grade at least MS66 to MS67 today and with barely any other 1864-S half eagles known in grades above AU50.....well, you get the point. Dual Rarity!!!
5. EAGLES
I'm not ashamed to admit that I have bias towards pre-1900 issues when it comes to all American coins. As you've no doubt noticed in this article, all the coins--so far--have been dated in the 1850's and 1860's. Well, I'm going to go outside my comfort zone with the ten dollar denomination, especially because there is really no single Liberty Head eagle that stands out to me as a classic dual rarity (although the Eliasberg Gem Uncirculated 1850-O would be the closest thing to this...). I'm going to go into the 20th century with this denomination.
In their March 2007 auction, Heritage sold a PCGS MS67 example of the 1920-S eagle for a record-shattering $1,725,000. This coin was not only one of the single best Indian Head eagles of any date that I've ever seen, it was one of the two or three rarest dates in the entire series and clearly the finest known.
The 1920-S eagle is a much different issue than the other dates listed in this article. It is far more available than, say, the 1864-S half eagle and far more available in Uncirculated than all of the other issues that we are discussing. There are a few hundred 1920-S eagles and a few dozen Uncirculated pieces exist, including at least four or five Gems. But you have to approach 20th century coins differently than 19th century coins as the former tends to be more condition rarity in nature while the latter tends to be more absolute rarity. To me, the 1920-S eagle comes closest to being a true dual rarity as it is a comparably tough issue in all grades and is recognized as one of the keys within this popular series.
There's some pretty cool background information about this coin. Steve Duckor purchased it in the June 1979 Stack's auction for $35,000 which was alot of money for him back then and alot of money for an Indian Head eagle. He held it for nearly three decades and his timing was just right as when he sold in in early 2007, the coin market was very strong, the economy was still rolling along and, most importantly, at least three very wealthy collectors needed this specific coin for their set. I was sitting next to Steve when the coin sold and I can still remember the look on his face after it hammered. To say he looked stunned is an understatement.
Today, this coin is in the Bob Simpson collection where it is part of the finest known set of Indian Head eagles. It is now graded MS67+ by PCGS and it remains one of the most amazing coins of any denomination that I have ever seen.
6. DOUBLE EAGLES
You're probably thinking I'm going to choose the 1933 double eagle, aren't you. But here's why I'm not: besides the fact that the coin isn't theoretically legal to own (at least yet), I have the sneaky suspicion that the group that was "discovered" a few years ago in Philadelphia might not be the only ones known. Just a hunch but...
The coin I chose as my dual rarity double eagle may very well be the most valuable double eagle in existence but it is probably the least well-known single piece of the six that are featured in this article. The coin I've selected is the 1861 Paquet Reverse that was struck in Philadelphia. There are exactly two examples of this issue known to exist. One, graded MS61 by PCGS, sold for $1,610,000 in the Heritage 8/06 auction. The other, graded MS67 by NGC, was last sold at auction in the Norweb III sale (all the back in 11/88) for a then-strong $660,000.
This coin has an interesting back story. It features a one-year redesign by Anthony Paquet that was created in an attempt to improve the quality of strike for this issue. It failed and most of the Philadelphia strikings were melted; the San Francisco pieces of this design were actually released and over 100 are known today, mostly in lower grades.
The one thing that hurts the 1861-P Paquet double eagle is that it is a slightly obscure issue that could be considered a pattern. My argument against this is that it is widely known enough that the vastly inferior MS61 (mentioned above) brought over $1.6 million in a market that was less appreciative of rarities (and double eagles) that what we are seeing in late 2012/early 2013.
And then there is the coin itself. It is an absolutely smashing Gem that would be a great coin even if it were a common date. It is nearly flawless with the sort of naked-eye appearance that most of the other coins on this list all have and what makes it, in my opinion, so special.
I am virtually certain that when this coin does finally sell, it will set a record price for any coin ever produced. It is currently in strong hands but when it does sell, look out for some fireworks in the auction room.
So there you have it: my list of the ultimate dual rarities. Every coin on the list is a great piece for a variety of reasons and every piece is something that a sophisticated, wealthy collector would love to own. These coins combine grade and rarity like no others do.
When I'm at shows or talking to collectors and dealers over the phone, I hear a common refrain: nice coins are very hard to find. This appears to be the case in nearly all strongly collected series, be it Indian Cents, Civil War era gold or Morgan Dollars. I have a few theories about this which I'd like to share. The first is simple: not everyone has the same concept of what is a "nice" coin. I like dirty, original 18th and 19th century gold and a coin with the aesthetics that I find appealing is clearly not going to be the same for someone who likes coins that are bright and shiny.
I don't think the moaning about a lack of nice coins is new and I'm guessing that collectors in 1912 were complaining in some of the same ways that collectors in 2012 are.
Let me share a theory with you that is basically speculative but which I think has some real merit. As I have stated many times, grading is a continuum. A "grade" is actually a range which can be expansive. As an example, let's look at the MS63 grade.
Assuming that you agree that grading is a continuum, you'll agree with me that MS63 is actually a series of grades that begins with MS63.0 and ends with MS63.9. I would further describe these ranges as follows:
63.0-63.3: coins that are low end or which barely qualify as this grade. I estimate that for the typical series, around 40-45% of the MS63's fall into this range.
63.4-63.5: coins that are decent and which would easily re-grade as a 63 if resubmitted to PCGS or NGC. I estimate that for the typical series around 30-35% of the MS63's fall into this range.
63.6-63.8: coins that are high end for the grade and which are now (sometimes) designated as "+" or "*" coins by the services. I estimate that for the typical series maybe 10-15% of the MS63's fall into this range.
63.9: coins that are exceptional for the grade and which are almost assuredly going to upgrade to MS64 at some point. I estimate that for the typical series maybe 5% (and probably less) of the MS63's fall into this range.
If my theory is correct, this mean that at least 70-80% of all MS63 coins are below-average to average in quality. The best of these "average" coins (a coin that I regard as being a solid, commercial example) is likely to get strong consideration for approval at CAC but the majority of them will not be stickered. These not-so-great or just-OK coins are the ones that are generally seen on E-Bay or in Heritage sales, and these are what many collectors are exposed to on a regular basis.
So what about the 20-30% of the MS63's that range from being really nice to exceptional? Where are they and why are they so hard to find? I think the answer(s) are simple.
In many series, there is huge financial motivation to upgrade an MS63 to an MS64. As an example, an 1812 half eagle in MS63 is worth around $22,500-25,000; the same coin in an MS64 holder is worth $35,000-45,000. If I own an 1812 half eagle that I regard as a 63.7 or a 63.8, doesn't it seem obvious that I'm going to go to great lengths to get the coin in a 64 holder and possibly have a $10,000 to $20,000 pay day?
Which brings me to this point: virtually all the high end MS63 coins are in MS64 holders or trying to get there. The MS63+ coins (which translate to the 63.6 to 63.8 pieces described above) are therefore the best available coins and they are typically sold by good retail dealers to their best clients. The typical collector either never gets to see these PQ coins or if he does, often in an auction environment, he has to compete with sophisticated buyers of high end coins.
Another point: I think there are more high end coins around than most collectors (and dealers) realize. It's just that we don't see them as often and much of what we do see on a day-by-day or show-by-show basis is uninspiring.
Now that you've mulled over that theory, I have another one to share with you. Next time you wonder "where are all the nice coins" consider the following fuzzy math.
If a coin is 150 or so years old, it has been collectible for 100 or so years. If the typical coin is owned around five years (and yes I am aware that there are many coins that are in "strong hands" and don't trade until they are held for fifteen or twenty years) that means that the coin you just bought may have had as many as twenty previous owners.
Think about this: that means some or maybe even all of these twenty owners have shipped the coins through the mail in flimsy holders/cleaned the coins/mishandled the coins/stored the coins in PVC flips/stored them loose in cabinets/dipped them and forgot to rinse them/etc. For a coin in nearly any grade to have survived generations of overzealous collectors without having had something bad done to them...well, that just about boggles my mind. And that, in a nutshell, is another very good reason why nice coins are so hard to find.
Are you in the market for nice coins? Send me an email at dwn@ont.com and I will try to hook you up with some very nice coins for your collection!
It's always nice when old friends come home and this wonderfully crusty 1845-O half eagle is a coin that I first offered for sale about two years ago. I re-acquired it at the Long Beach show and, if anything, I like it even more than I did then. The 1845-O half eagle remains a very rare issue in Uncirculated with an estimated eight to ten known. The NGC population for MS61's is inflated and at least one or two of the pieces I have seen in said holders have been marginal at best. This example has lovely deep green-gold and russet colors, in slightly different configurations, on the obverse and reverse. The strike is sharp and the surfaces are free of significant marks. For the sake of identification, there is a patch of dirt near the top of star seven on the obverse and a few natural copper spots on the reverse. Since 1995, only five MS61 examples of this date have appeared at auction. The last sale is Heritage 6/11: 4631 (graded by NGC) that realized $10,350; in March 2010, Heritage sold a PCGS graded coin for $12,650. An impressive coin for an advanced collection of New Orleans half eagles.
A very visually impressive example with lightly abraded, slightly Prooflike fields that are accentuated by rich yellow-gold color. The strike is really hammered for the date with many of the hair strands showing full, individual definition. It is likely that this coin never entered circulation and it is terrific eye appeal. The next jump up in quality for the 1853 double eagle will result in at least double the price and it is doubtful that many of the slabbed MS61 examples will have the appearance that this gem slider does.
Even though the population figures have increased over the years, the 1854-O quarter eagle is still a scarce and undervalued issue in Uncirculated. Of the few dozen accounted for in this range, most grade MS60 to MS61 and few show the rich luster and natural green-gold hues that this piece possesses. A few scuffs can be seen in the fields and the strike is slightly weak at the centers. In the last five years, only seven examples graded MS61 have appeared at auction.
PO Box 4383 Portland, OR 97208 | 214.675.9897
DWN collects all applicable sales taxes from HI, KY, ME, MN, MS, NV, NJ, NM, NY, TN, VT, WV, WI, DC.
© Douglas Winter Numismatics 2012-2024 | All Rights Reserved.
Photography by Jenna Van Valen.
Site design by Sarah Moon.
