Unless you spent the last two weeks in deep space you have no doubt read about/discussed/dreamt about the fabulous Saddle Ridge hoard. Enough has already been written about the background of this hoard that I won’t repeat it here. (NBC News, BBC, CNN, Yahoo, etc.) The scope of this find has truly captured the fancy of the collecting and non-collecting public alike, and I have been asked about the coins dozens of times; from people ranging from good clients to my doctor to my barista who chatted me up about the “stolen coins” while making me a pour over macchiato today at my local coffee joint. This is a story with legs.
What I find fascinating about this story is that it is the first great “treasure “ to be found in the day of Web 2.0. When the lost 1913 Nickel was rediscovered a few years ago, it certainly made the rounds on the web, but stayed mainly in numismatic circles. And when the greatest find of them all, the S.S. Central America, was discovered oh so many years ago, there wasn’t even an internet around for the story to go viral; it had to build its momentum over the course of months; not moments.
As I mentioned above, I have been asked a lot of questions about these coins; enough so that I thought it made sense to blog about them so I could just say “read my blog” the next time someone asks me the following.
Here are some thoughts about the Saddle Ridge hoard that I’d like to share.
1. As I mentioned above this is the first truly viral story involving numismatics and the all new (and not necessarily improved) interwebs.
Much of the information I read online about the source and origin of the coins was seemingly invented by reporters who never bothered to check their source(s), and some blatantly wrong numismatic information was written by “news” sources who should have known better. Stolen coins…uh, I don’t think so. Special presentation piece made to commemorate the death of President Lincoln…? Nope.
Wrong information aside, the coins provided the gold coin market was the type of exposure you’d have to spend millions of dollars to generate. It was a true viral buzz and any coin story that doesn’t involve a Long Island telemarketer swindling a little old lady for her life savings is a good story in my book.
2. I’ve known Don Kagin for a long time (he tried to hire me a billion years ago when I was a high school student) and I was glad to see this deal being handled by a firm that is both reputable and knowledgeable.
Often times, deals like this wind up with the wrong people. This time it didn’t.
David McCarthy, the senior numismatist at Kagin’s, is a close friend of mine and he deserves kudos for a host of reasons: treating the owners fairly, properly conserving the coins, making savvy marketing decisions, and just generally doing the right thing. David is one of the good guys in the business and I am really happy for him and his 15+++ minutes of fame. And damn if he didn’t clean up nicely for TV. (Sadly the Good Morning America clip is not currently available online, but CoinWeek has a nice short piece on YouTube.)
3. When I first read that much of the deal was going to be sold online at Amazon.com my first reaction was “wow, that’s ballsy.” My next reaction was “wow, that’s incredibly smart.”
Amazon.com has flirted with entering the coin market before, but for a number of reasons they couldn’t find the best way to enter the market. So why not enter the market with a deal worth millions of dollars and with scads of good publicity?
But this deal could really be win-win for the owners and for Amazon. With all the publicity these coins have garnered, they are clearly worth a premium. Who better to possibly reach the ultimate audience of non-collectors who might be willing to pay the sort of premium which might (or might not) seem too high to dyed-in-the-wool collectors than a company who gets more traffic every minute than I probably do in a month? Well, you might say, the traffic you get is more established and (most) everyone on the raregoldcoins.com site is a likely buyer. But as the owners of the coins - wouldn't you rather have them exposed to millions and millions of people worldwide than an audience of a few thousand established collectors? And if doesn’t work on Amazon? The coins are still great and still can be sold through more established numismatic channels. If Amazon does well and becomes a player in the coin market, it’s great for everyone. If it doesn’t work? No harm, no foul…
4. As the World’s Most Jaded Coin Dealer (OK, maybe not the most jaded but certainly in medal contention) it takes a lot to get me excited.
When I heard that the coins were going to be on display at the Atlanta show I was skeptical. Would they be bright, shiny, and obviously conserved? Would PCGS get carried away with the grading ? Would the coins themselves mostly be common date double eagles in slightly uncommon grades?
The 50 or so coins that were on display at the show were impressive to say the least. Many were the best examples of their specific issue that I have ever seen, and they look fresh and original; not overly conserved. I think PCGS did a nice job grading them and I really liked the special gold labels which PCGS prepared for the coins. I arrived expecting to be unimpressed and left impressed. And my guess is that most collectors are going to feel the same; at least with the top 10-20% of the coins in the hoard; I can’t speak for the remaining examples.
5. How will the Saddle Ridge coins affect the market?
Ah…the $10 million dollar question. Since the majority of the coins were Type Two and Type Three double eagles from San Francisco, the scope of the hoard is narrow and series specific. I haven’t seen a list of all the coins, but I assume that the majority of them are dated in the mid to late 1870’s and the 1880’s. One area that will be greatly impacted are slightly better date SF Type Threes, like an 1887-S or an 1888-S. If there are 100 MS63 1887-S double eagles, this date could drop in value by 20-50% . And the biggest loser is likely to be the guy who owns the current finest known 1877-S or 1879-S (to pick two random dates) who might see his $50,000+ population one/none better coin become a population two/one better coin.
The Condition Census and Finest Known coins could easily be absorbed by the market as long as they are fairly priced. From some of the preliminary numbers I’ve seen thrown around (such as “a million dollars” for the new finest known 1866-S No Motto) it feels that the asking prices might be extremely aggressive. If the coins are priced “right,” they will sell easily. My guess is that these are not the coins that will be sold on Amazon and will, instead, be offered via private treaty by Kagin’s and/or other specialist dealers or via auction.
The market for San Francisco gold coins has heated up in recent years after near-permanent dormancy. The Saddle Ridge hoard can only do good things to this area of the market. Will it make an 1859-S half eagle in AU50 more valuable? Not directly, but it will focus more attention on SF gold and it is likely that a few deep-pocketed new collectors who buy a Saddle Ridge knick-knack will be compelled to focus on other gold coins from this mint. The Type One double eagle market back in the 1990’s was jumpstarted by the availability of the SS Central America 1857-S double eagles and this market has been in hyper-demand ever since.
6. What sort of premium are these coins worth?
My gut feeling is that a less expensive (sub-$5,000) SF Type Three double eagle in average Uncirculated grades is going to have an ultimate premium of 10-30% for its saddle Ridge provenance. I would assume the original premium will be much higher and, as with the SSCA double eagles, it will evaporate over the first few years only to come back as the coins are absorbed. The numismatically significant five figure coins probably won’t be accorded a big premium. The finest known 1877-S double eagle is a valuable, desirable coin but it won’t be worth an extra $5,000 or $10,000 because it is from this hoard.
One thing that will be interesting to see is how the collectors who focus on shipwreck coins view this hoard. As an example, “unique” coins from the S.S. Central America (i.e., coins which were one of a kind from the shipwreck) now bring a huge premium due to their collectability; something which was not the case even six or eight years ago. What sort of premium will the only Dahlonega half eagle from this hoard be accorded? My guess is that the premium will be quite significant, and that these coins will be collected alongside the S.S.Central America, Brother Jonathan and S.S. Republic shipwreck coins.
The Saddle Ridge Hoard is certainly a topic which could be discussed endlessly, and I have the feeling that this is not the last time you will read a DWN Blog on the subject. I look forward to your comments and, hopefully, to selling a few of the neater coins from this group later in the year.
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