Is it worthwhile for the collector to purchase PQ coins? I think it most assuredly is but my answer is tempered by two major “buts.” Namely: are the PQ coins you are buying really PQ and are you going to hold your coins long enough for their “PQ-ness” to matter. If you scan the ads in Coin World, you will note that many coins are given a PQ designation by their owners. It is my belief that nearly every coin listed in a retail ad in a publication like Coin World is not PQ. In fact, most of the coins in these ads are very low end for the grade.
As a dealer who prides himself in selling very nice coins, I do handle a number of pieces that I consider to be PQ for the grade. What exactly is my definition of a PQ coin? I view a PQ coin as one with very good eye appeal for the date and grade. It is a coin that is nice enough that I might have tried a few times to upgrade it. Any dealer who claims that his PQ coins are a “lock” to upgrade is either a liar or a fool. If they are so confident that their coins will upgrade then why aren’t they already in a higher grade holder? But there could be a legitimate reason why a certain coin does not work for a certain dealer. As an example, he might not be submitting it with the right coins or to the right service. I am good at getting coins to upgrade but I have seen, more times than I care to admit, a PQ coin that I sold to another dealer because I couldn’t get it to grade properly in a higher grade holder in someone else’s inventory.
Most smart dealers do one of two things with their really PQ coins. They either put them in auction and hope someone else pays too much money for it or they sell them to their best and most loyal customers. I have handled a number of coins three or four times over the past decade and each time I pass it forward to a collector who I like and who will, hopefully, sell it back to me when it comes time to move it.
As a collector, how much extra should you pay for a coin that you think is really PQ? This depends on a number of factors. How rare is the coin, especially in the next grade up? What is the price spread between the current grade and the next grade? Let’s say you are being offered a really nice coin in an AU50 holder that is worth $5,000 in this grade and $9,000 in AU55. If the coin is being priced to you at $8,000 this is clearly too much. At $6,000 the coin is a no-brainer. I’d say that $7,000 is probably an ideal price.
I mentioned above that PQ coins need to be looked at as long-term holds. Generally speaking, if you buy a PQ coin, do not expect to flip it to another dealer in a year for a big profit. If it were that easy, the dealer who you bought the coin from would have done it himself. The best strategy is to put your really PQ coins away for five years and then consider getting them regraded. Whether PCGS and NGC choose to admit it or not, grading standards do change over the long haul and a nice group of fresh-looking PQ coins could do very well if submitted at the right time.
If you are a bargain hunter or are the type of collector who is not loyal to one or two dealers, the chances are remote that you will buy PQ coins. The really nice PQ coins you see at auction are going to sell for more than you think they are worth (they’ll wind up being bought by a “crackout” dealer who is much better at grading then you are). And the really nice PQ coins that the dealer you shop with are going to be sold to the customers they regard as the most loyal. You’ll wind up with a bunch of pseudo-PQ coins that will not garner the enthusiastic response you hoped for when you try to sell them to the next generation of collectors.