Collectors often ask me about my thought process(es) when I make coin purchases. Why do I buy certain coins and pass on others? Why do I stretch for some coins, and make others based solely on a favorable price? These are great questions and I think they are worthy of a blog.
Most coin purchases involve some sort of compromise. Very few coins are “perfect” from an appearance standpoint. A coin may have been cleaned at one time or it may have some weakness of strike or more marks in prominent locations than you would hope for. When should you compromise your standards, and when should you hold fast and true?
A lot of the answers that I would give to these questions depend on what sort of coins you are buying and whether you collect by type or by date. If you are a type collector, it is much easier to, as an example, wait for the perfect AU55 Capped Bust Right Heraldic Eagle ten dollar gold piece than it is to wait for an 1804 eagle in AU55 which is well struck and which has natural color.
Let’s look at some specifics for compromise vs. non-compromise, and use some real world examples.
1. Very Rare Coins Should Be Held to Lower Standards than Common Coins
Intuitively, you would think that the exact opposite should be true in numismatics, but it’s not.
The rarest Dahlonega half eagle is the 1842-D Large Date. It’s the only issue in the series which is genuinely hard to find in EF and higher grades with really good eye appeal. I haven’t handled a truly nice one in years, and I have numerous want lists for this date in nearly any grade. If someone offered me a marginal quality in a 45 holder tomorrow, I would invariably buy it unless it was grossly overpriced or it had some flaw that I just couldn’t get past.
The most common Dahlonega half eagle is the 1854-D. It’s kind of a blah issue, but I seldom buy this date unless it is outstanding for the date for one of the following reasons: it's 100% original, it has great color, or it is exceptional eye appeal. In other words, I’m not going to buy an 1854-D (or any other very common Dahlonega half eagle) unless there is something really exceptional about it.
If I hold the 1842-D Large Date to the same standards that I hold the 1854-D to, I’m never going to buy an example. And this is a trap that many collectors fall into.
There are a number of very rare coins that just don’t come nice. A classic example is the 1870-CC double eagle. I’ve seen or owned probably half of the surviving examples and I can’t recall more than two or three that I would regard as “choice.” The typical example is not only well-worn but it lacks original color and has numerous abrasions. As a buyer who loves original color and tends not to like abrasions, the 1870-CC is problematical for me. Which is why I hold it to an entirely different set of standards than, say, an issue like the 1890-CC double eagle, which I can easily locate with good eye appeal.
2. If You Don't Lower Your Standards on Certain Coins, You'll Never Buy Any
Around a year ago, I began selling coins to a new collector who decided that he wanted to specialize in rare to very rare Liberty Head eagles. His collecting background was with more modern issues such as Walking Liberty half dollars and he was used to big, bright, shiny coins which were just about perfect. I warned him that he would have to use an entirely different set of standards with a coin like an 1860-S eagle; an issue which is not only extremely rare but is one with which rigorous buying standards have to be thrown out the window.
The first two transactions I had with this gentleman were disasters. He returned one very scarce coin (in a PCGS holder and with CAC approval) for having a tiny “scratch” hidden on the reverse, and another rarer one for not being as “dark and dirty” as he thought the photo and description on my website indicated. I don’t have many coins returned due to quality issues, and two have two returned by the same individual in the space of a few weeks…well, let’s just say this doesn’t happen much at DWN.
We spoke on the phone and this is what I learned: since these coins were expensive (high four figures in one case and low five figures in another) he expected them to be superb. I tried to explain to him that what constitutes “superb” in the realm of rare date eagles is entirely different than what constitutes “superb” when looking at MS66 and MS67 late date Walkers. He was using a set of standards that were totally inapplicable to rare date 19th century gold coins that were both conditionally rare and which had very low survival rates. I think we parted friends, but to this day I have never sold him another coin and don’t think he is likely to buy anything from me.
This blog is not meant to be an apology for compromising your standards. In the field of rare date gold collecting there are many coins that you can take a firm stand and not waver from it.
3. When You Want One of Something, You Can Be Fussy
More dated gold collectors are collecting by a type or by “best available neat coin” strategy and wandering from the previous standards of collecting series by date.
Let’s say you’ve decided that you like Charlotte quarter eagles but you want just two examples: a Classic Head and a Liberty Head. You are more limited with the former as there are just two Classic Head issues; the Liberty Head series offers much more flexibility with 18 different issues to choose from.
You’ve saved up and have $3,500 to spend on a really nice quarter eagle. You are someone who really values good strikes and you hate coins which are made on inferior planchets. This automatically eliminates around half to two-thirds of the possible Liberty Head issues from this mint (due to budget constraints, strike problems, or poor method of manufacture) and you can focus on the issues which make sense. The chances are good that the “right” $3,500 coin will show up in a few months; a coin with excellent striking detail, nice surfaces and the original color and surfaces that collectors now crave. It might be a “common” issue such as an 1847-Cl or it might be a scarcer issue such as an 1840-C.
Or you can just buy assorted neat coins in your price range. Let’s say you love dirty, original coins and your price point is $2,500-5,000. It doesn’t theoretically matter if you buy a PCGS AU58 1857-S gold dollar or an NGC AU50 1846-D/D half eaglel as long as the coin has character and its eye appeal “speaks” to you.
4. Be Picky on the Keys (if you collect by date)
I’ve discussed this more than once but most collectors overbuy the common dates in their chosen set(s) and underbuy the keys.
Let me give you an example of the right way to form a set. A very good client of mine has been working on a Dahlonega quarter eagle set for five or six years now. His motivation to begin this set was when I had just bought a great collection of D mint quarter eagles and was breaking them up. It just so happened that the key 1855-D and 1856-D in this collection were wonderful quality for the date: comparatively high grade, nice and original, and well-pedigreed. He realized that by purchasing both coins, he would be off to a great start and that he might not have a chance to purchase such nice examples again.
After buying these two key issues, this collector decided that the other rarities in the set (1840-D, 1841-D, 1842-D, and 1854-D) had to be special coins. And over the course of the next five years, I was able to purchase beautiful AU55 to AU58 examples of each.
As picky as he was on the keys, he was discriminating on the common dates in the set. He bought nice AU examples but resisted the temptation to spend $15,000 on a common 1843-D when he could own a perfectly presentable example for $4,000 and funnel the savings towards another key date, or two to three more nice commons.
5. Be Picky When You Have Options
Let’s say you are a collector for whom strike is a key factor in determining whether or not you buy a coin. On some issues, you are out of luck as all known examples are found with weakness of strike (an example of this would be the 1859-C and 1860-C half eagles). Other issues are found with varieties which are well struck or poorly struck, depending on the die state (examples of this include the 1844-D and 1848-C quarter eagles).
To be a good collector in the area of rare date gold, you have to learn about each issue’s appearance. This is why the books I have written explain factors such as typical strike in great detail.
You are surfing the web and you happen on a nice, crusty 1844-D quarter eagle in a PCGS AU55 holder. It has your “look” and is priced in your wheelhouse, but the strike is very poor. If you know the intricacies of this issue, you know that around 50% of all 1844-D quarter eagles show central weakness. This means that you still have a good chance to find a well-struck example and that you should probably pass on the coin, even if you need it for your date set.
Knowing when to be picky and when to compromise is an important part of the strategies used by sophisticated collectors of all coins; not just dated gold. Do you have any stories to share about being picky or not being picky when you bought a coin? Please share them in the comments section below.
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Contact me, Doug Winter, directly at (214) 675-9897 or by email at email@example.com.