In the second part of this series, I reveal my answers to the final question from the Rosen 2007-2008 Crystal Ball survey. There are some very interesting questions asked here and some controversial answers so read on for my insights into the current State of the Market. For the following six (6) questions I ask you for your Best Buy selections in a number of series. Please detail why you made your picks and the potential you see for them.
10. Your Best Buys for U.S. Type Coins.
a. Seated Dimes, Quarters and Half Dollars in Mint State-64 to Mint State-66. I think you will see significant appreciation in this area in the coming year or two. b. Barber Dimes, Quarter and Half Dollars in MS64 to MS66 and PR64 to PR66. They aren’t the most attractive coins in the world from the standpoint of design but they are very cheap right now. You can buy a pleasing MS65 Barber Dime for less than $500. c. Gem Trade Dollars. I just never seem to see true MS65 Trade Dollars. Current Bluesheet bid for MS65’s is something like $7,000. They are great deals at double to triple this price. d. Large Size Bust Dimes and Quarters in just about any grade from VF and up. For every one of these you see, there are about ten Bust Halves. If I were going to start collecting coins I think I’d do a date set of Large Size Bust Dimes and maybe expand it to include all of the Redbook varieties. Most of the dates can be bought in nice VF and EF for less than a few thousand dollars.
11. Your Best Buys for Gold Coins.
a. Any Charlotte or Dahlonega gold coin that hasn’t been scrubbed in EF and AU grades. There are fewer of these remaining than people realize. b. Better date $5 Indians and $10 Indians. In the former I really like the S mint dates in MS64 and MS65. In the latter I like virtually any P mint not dated 1911, 1926 or 1932 as well as the tough mintmarked dates in MS64 and MS65. c. Affordable Proof gold. I find that whenever I have an interesting piece of Proof gold in stock for less than $20,000 it sells quickly. d. Gem Matte Proof gold that hasn’t been conserved. Does any exist outside of museums or old-time collections? e. MS66 $2.50 Libs. Seems like they should have a greater premium over MS65’s than they currently do. This is a reflection of the fact that today’s 66’s are not much nicer than most 65’s. If grading tightens on this series, I think the 66’s have real upside.
12. Your Best Buys for Silver Dollars.
a. Semi-Key Morgan Dollars in MS65. I like dates like the 1898-S,1899-S and 1900-S. b. Rare date Peace Dollars in accurately graded MS65. If someone would ever take the time to write a really good collector guide to this series and promote them half as well as Morgans have been, these coins would really take off. They are a great value.
13. Your Best Buys for U.S. Commemoratives.
I’m not enthusiastic about any Commems but if I had to pick any, I’d stick with the issues from the 1910’s and 1920’s in MS66 with attractive light to medium color.
14. Your Best Buys for 20th century collector series.
a. Peace Dollars in MS65, as mentioned above. b. Non Full Head Standing Liberty Quarters. I don’t know this series very well but the non-FH’s seem cheap compared to the FH coins. c. Any Proof Barber coins which are decent looking and priced under $1,000. Good value!!
15. Your Best Buys for any other area of your choice.
a. One year type coins or coins with a good story. In the area of dated gold this entails issues like 1861-D gold dollars and half eagles, 1838-C&D quarter eagles and half eagles, 1839-C&D quarter eagles and half eagles, 1838 eagles, etc. As people move more towards type collecting within the dated series, we are seeing a huge premium paid for significant one-year type, first-year-of-issues, etc. b. Pretty coins that don’t command stratospheric premiums. I look through thousands of coins at every show at auction and am amazed at how few are pretty. If you can buy, say, an MS66 Barber Quarter with lovely color for a 10-15% premium over a dipped-out, mediocre example I think this is great value. c. Some ultra-rare coins are still good deals. I think the 1876-CC Twenty Cent Piece has the potential to be a $750,000-1,000,000 coin in the not-so-distant future. d. Proof Bust coins are still fair value, especially in the PR64 and PR65 grades. But beware of examples in slabs that are not Proofs. As a smart dealer recently told me, “if it doesn’t look like a Proof...it ain’t!” e. Colonials and Early Americana. This is an area that shouldn’t be tackled without an expert’s help but how can you not love coins like New Jersey or Connecticut Coppers in attractive middle grades for less than $1,000 per coin? I wouldn’t necessarily look at this area as an “investment” but I think it is one place where a comparatively small collecting budget can still go a long, long way.
16. The sheer scope and market value of Modern Coins has grown greatly over the years such that Classic U.S. coins are facing increasingly strong competition for collector interest. A) What does this mean for the future of the Classic Coin market?
There are always going to be collectors who prefer classic coins but I would expect that a sizable number of the new collectors who enter the market in the coming years will focus on moderns. Many younger collectors just don’t “get” classic coins and they vastly prefer modern issues. I’ve personally learned to accept this as a fact, just like I’ve come to accept the fact that there are at least two generations who barely know what a vinyl record is and who get all their music via MP3’s and online downloads.
B) What does it mean for the potential of the Modern Coin marketplace?
I think there are great opportunities for marketers and dealers in the modern coin market. It’s going to be interesting to see if this market is structured like the classic coin market or if it gets an entirely new structure. My guess is that there is some young guy out there who is going to become the Sean Fanning of the modern coin market—he’s going to develop the “killer app” that makes him a fortune and which revolutionizes the way modern coins are collected and bought/sold. I think collectors should be encouraged to specialize in whatever turns them on and if happens to be modern coins then more power to them!
17. Do you think rare coins are priced too cheap in relation to other investment areas? Compare to art, antiques, stocks, real estate, you name it.
As someone who is extremely interested in art, I find coins to be absurdly cheap. To be a serious player right now in an area like Contemporary Art, you are looking at spending $1 million++ for something that’s good but not great. I personally love 15th and 16th century Italian art but no matter how rich I was, I couldn’t buy any great works—they are essentially all in museums. But in the coin market you can buy museum quality rarities for $20,000. You need to remember, though, that there is one critical difference between art and coins. When you buy art, you hang it on the wall and impress your friends with your taste and high degree of sophistication. You can’t hang a coin on the wall and even if you could it’s way too small to make you the envy of your town’s Swanky People. I wouldn’t compare coins to real estate or stocks as that’s way too “apples to oranges” in context.
18. A) What one series strikes you as particularly undervalued?
There are lots of series I like but two that come to mind are Liberty Seated half dollars and New Orleans eagles. Both are big, both are relatively attractive from a design standpoint and both offer collectors an area where $5,000-10,000 will buy you something really special.
B) What dates and grades in that series make the most sense for an investor to buy?
In Seated half dollars, I like the No Motto New Orleans coins in MS63 and better, especially those with attractive light to medium natural color. The survival rate of these issues is very low and most are very rare in Uncirculated, despite being priced at less than $7,500 per coin for the most part. In New Orleans Liberty Eagles I like the No Motto coins in original, unprocessed AU and above and I like the With Motto coins in MS63 and better.
What is their upside potential?
I think many of the Seated half dollars that I mentioned above that currently trade for $5,000-7,500 could double within the next five years, especially if more people start collecting Seated half dollars by date. The good quality New Orleans eagles are already bringing well over CDN Bid when they sell at auction but the price reporting for these issues is about a year or two behind the actual market.
19. What are your one, two, or three most favorite coins in all of numismatics that you would qualify as "sleepers," very undervalued?
a. Truly original, accurately graded C&D mint gold coins in About Uncirculated. I wouldn’t be surprised if coins like this start bringing huge premiums over their scrubby counterparts in the near future. b. Just about any No Motto Seated quarter or half dollar in MS64 or better. Forget the original mintage figures of these coins as they are very rare. You can also forget the current pricing guides as they typically bring multiples of Bid or Trends at auction when they are offered for sale. c. Pre-1834 quarter eagles in nearly any grade. With the exception of the 1796 No Stars and the 1808, these are much undervalued. In fact, they are far rarer than early half eagles or eagles of this era but still sell at a discount because of their reasonably small size. Coins with unadulterated original surfaces are really hard to find! d. Proof Bust coinage. There have been very few Proof bust coins that have traded since the market started shooting upwards five+ years ago but, in my opinion, the few Proof bust coins that have sold have not brought nearly enough of a premium relative to their pre-2001 price levels. You can still buy a pretty nice Proof bust half dollar for under $50,000. That’s just too cheap for a coin as rare as this. e. Proof half cents and large cents from the 1830’s, 1840’s and early 1850’s. Here’s another area where many prices have been flat for the past decade or so. I love coins like Proof half cents from the 1840’s in PR64 Brown or PR64 Red and Brown for under $7,500. While I am not necessarily touting them as an investment, I think they are a terrific value.
20. A) Where are the young coin dealers? We remember hot-shot young turks of the past whose brilliant minds and trading skills were the envy of veteran dealers.
I think there are actually more people working in the coin business who are in their 20’s than most of us Old Dudes realize but very few of them standout as being the next Jason Carter or Ryan Carroll (the two best young coin dealers from the 1990’s and 2000’s, respectively). I think it’s very hard being a dealer in this day and age given the cost of starting a business and maintaining an inventory. When I started my own firm in 1984 I had less than $50,000 in capital. This wouldn’t get a young kid very far today. That said, this is a great business for young entrepreneurs. The typical successful coin dealer is now in his 40’s or 50’s and doesn’t want to work as hard as 10 or 20 years ago. There are a lot of A-level dealers who are going to retire or semi-retire in the next decade and I wonder who is going to take their place. If I had a 16 year old kid, I would certainly encourage him to take over my business as I start to wind things down in the next few years.
B) What's the future of being a coin dealer?
I anticipate that the coin dealer of the future is going to be valued more as a conduit of information or as a broker than anything else. I would expect that margins will continue to decrease. I think the days of the brick and mortar coin shop is just about history but I do expect there to be a continued need for highly competent, specialized dealers. I think you will also see a few mega-dealers emerge who become dominant forces in the market; as Heritage is currently on course to becoming right now (if they haven’t already done so...) I’m happy I’m not a young, struggling kid just coming up in the business although I see a lot more opportunity for mentorship and guidance than when I was coming up in the early 1980’s and things were A LOT more cut-throat.