Some Recent Trends in the Rare Coin Market

If you are a reasonably long-term participant in the rare coin market, you may not have recognized the fact that the market has changed in a huge way in the last five to ten years. Walking around the  floor at a show, you may not notice this (many of the same dealers are buying and selling coins) but the collectors and dealers who are really "in the know" are aware that things are irrefutably different.

How 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.

How a Coin Gets Bad Karma--And How It Can Regain Its Mojo

I recently sold an interesting coin (details to follow) and the entire process, which was reasonably quick  and painless for both myself and the buyer, got me to thinking: can a coin get bad karma and if it does what does it take for it to regain its mojo? The coin in question has to remain anonymous but it was a very rare silver piece, dated in the 1820's, which was both a condition rarity and an absolute rarity. The trouble with the coin was that a few factors had combined to give it a bad reputation within the specialist community. Was this reputation deserved? Partially; but not really because of the coin itself, more because of a number of external factors. The collector who bought the coin from me saw through its bad karma to realize that, at its new price level, it would be a great addition to his set. And I have to say, I think it was a pretty savvy move on his part.

So how exactly does a coin get bad karma?

I can think of at least five ways and I'm sure that other dealers/collectors can double the size of this list.

1. A Coin Is Perceived To Be Overgraded.

Grading is subjective but there are some big-ticket coins in third-party holders which have acquired a reputation for being overgraded. I can think of a certain 1804 dollar whose grade has inflated many times over the years. I'm not certain that the concept of "grade" applies to a seven-figure rarity like an 1804 dollar but the perception that it is more-than-fully graded has circled this coin for years and it might scare off a few potential buyers.

Why would a coin be overgraded by one of the services? It could have been part of a fresh deal that excited the graders and the final grades were on the high side. It could have been the "right" coin submitted at the "right" time and it acquired a grade during the submission process that probably would never be equaled again if it were to be re-submitted. Or perhaps it was doctored and a substance which was applied to the surfaces changed the appearance and the coin is now overgraded. There are many coins in holders which simply don't look properly graded (even though they might be) and their slab is an albatross.

If the coin in question has a value of $100 and the perceived grade is off by a point, it isn't saddled with bad karma. If the coin is worth $10,000 or $100,000 or $1,000,000 than the perception of whether or not the grade is accurate is very important. In the case of the coin I sold, the grade was probably off by just a point. But with an expensive coin, a point can equal tens or hundreds of thousands of dollars.

2. A Coin is Overexposed.

This is not something new. While doing pedigree research on branch mint gold coins, I have found specific pieces which appeared in four or five Thomas Elder sales during a five year period in the 1920's or five Stack's sales within five years during the 1970's. The problem was Tom Elder's sales weren't on-line and the PCGS auction archives doesn't list all the Stack's sales from the 1960's and 1970's as they do with today's auctions.

For a number of reasons, a coin can be overexposed and become tired. It might go unsold in three consecutive Heritage or Stacks Bowers auctions before it finds the right buyer. Or, it might bounce around between three or four major dealers and be advertised on different websites. An internet-related phenomena is when the same coin appears on five different dealer"s websites over an extended period. It's only one coin but to the new collector, it looks tired.

In the upper end of the coin market, the perception of freshness is incredibly important. For many of the top buyers, be they dealers or collectors, if a coin is not perceived as being fresh, its can become extremely hard to sell; even if the coin is accurately graded and reasonably fairly priced. For these buyers, nothing can kill a sale faster than finding out that not only are they not getting first shot but the coin recently went unsold in two consecutive Heritage auctions.

3. A Coin is Overpriced.

As a buyer of high end, rare coins I am sometimes offered pieces which are so insanely priced that they almost immediately are Bad Karma Candidates. I'm not talking a $50,000 coin which s priced at $55,000; I'm talking about a $50,000 which is priced at $100,000 or more. This sounds hard to believe but it happens more often than you think.

I'd like to think I'm a pretty savvy buyer and the owner of a great coin is certainly entitled to take an epic shot at me when he is pricing it. I try not to take this personally and I try not to hold it against the coin if it mysteriously is offered to me again later at a show for a number which is more in line with what I'm thinking.

Collectors tend to be more emotional and if a $50,000 coin which is priced to them at $100,000 might no longer be worth $50,000 if it is reoffered under different conditions.

4. The Coin Has an Evil Owner.

As a dealer, I find myself buying coins from people who I don't really care for. They may be Red Sox fans or they might have political views that don't mesh with me.  But collectors are able to be a little more discriminatory.

Funny story. The upper-end Dahlonega gold market is small and when a new player enters the market, the other big fish tend to approach the new player with suspicion. Around 20+ years ago, a new Dahlonega collector burst on the scene and he was, to put it kindly, lavish with his spending and harsh with his criticism of other people's coins. After he had pissed off one of my other Dahlonega clients for the third or fourth time, I got a call which basically told me to "never, ever offer me a coin again which Collector X has owned, even if it's a great deal."

Today, in this internet-driven world of numismatics, I think this is still the case. Don't you have a nemesis who you dislike and whose coins you don't want despoiling your collection?

5. Bad Pedigree

I've written a number of articles about coins with good pedigrees. But there are coins with bad pedigrees.

I'm not going to slam any specific collections here; that's not a cool thing to do. In my many years of specializing in branch mint gold, I've come across collections which had bad reputations. They may have been filled with overgraded coins or they might have had a number of recolored/doctored pieces. Perhaps they were assembled by a dealer with a bad reputation and the perception, deserved or not, was that the collection became a burial ground for some unfortunate individual.

So, there you have some of the ways a coin can acquire bad karma. How can a good coin shed this bad energy and get back its mojo?

1. Time Heals Most Wounds

Most dealers and some collectors have great memories. But its funny how some coins which were perceived as being overgraded ten years suddenly don't look so bad today. Stories about a "bad" coin can be forgotten or conveniently lost/overlooked and the Bad Karma 1847-D quarter eagle of the late 1990's becomes a decent coin in the market environment of 2013. Trust me, it happens more than you think...

2. Coins Are De-Pedigreed and Re-Holdered.

You take a coin with a bad pedigree in a scratchy holder and make a few changes...send it to the grading service of your choice, remove the pedigree and put it in a spiffy new pronged holder. Voilà, new coin. Well, maybe not a "new" coin but one whose bad karma might suddenly go away.

3. The Right Owner Buys the Coin.

I saw plenty of sketchy coins in the Bass sales but once you slapped that Bass pedigree on the coin and put it into a PCGS holder, I didn't mind that Bass bought the coin from a dealer I know was a sleaze ball or that it was in six Stack's sales between 1968 and 1973.

4. Downgrade the Coin. 

You see a coin in an MS67 holder that pretty amazing but your perception is that its just an MS66 at best. If you run the numbers and it makes financial sense, why not send it to PCGS or NGC and downgrade it a point? Sounds crazy, I know, but it is a trend which is rapidly gaining traction amongst smart dealers and collectors.

5. Keep the Coin Off the Market For a Generation.

Every collector makes mistakes. But as I said in #1 above, time heals most wounds. I guarantee you that Bass, Norweb and Eliasberg made plenty of mistakes but they overcame them by holding the coins they bought for many years.

Do you think a coin can get bad karma? If you do, how can it get back its mojo? Add your comments below or contact me by email at dwn@ont.com.

Factors That Influence Coin Prices: The Not-So-Obvious

Coin prices are impacted by a number of factors. The most obvious of these are supply and demand. Simply put, if a coin has a greater degree of demand than available supply, the price is going to be strong. But what are some of the not-as-obvious factors that impact coin prices? Here are some observations. 1. Quality of Demand. There are different levels of demand for any rare coin. There's "I'm sort of kicking tires and I'm wondering if you might have the following D Mint quarter eagle," and there's "I've been looking for a nice 1840-D quarter eagle for five years, its the last coin I need to finish my set and I have to have it!" The latter is, obviously, a higher quality of demand and this buyer would be willing to pay a significantly higher price than the lukewarm, casual buyer.

While this example is deliberately extreme in its contrast, there are clearly different levels of demand that impact coin prices. Another factor is venue.

I am very interested in marketing and branding and one of the things that interests me is creating demand for new products. Brands now do "mash ups" where a hot young designer of furniture, as an example, designs a limited edition sneaker design for Adidas or Nike. Only 500 might be released and collectors will pay a significant premium for this because of its perceived scarcity. And, it might be offered only at a "pop up" venue where you have to wait for an hour to just see the sneakers and where's there is no time to sit and ponder if you will or won't make the purchase. You are pre-sold and you represent a high quality of demand.

I see this sort of collector behavior for coins at auction. The major firms do a great job of creating an environment that fosters competition and turns a coin purchase into blood sport. As an example, how many times have you, as a bidder, placed an on-line bid and received an outbid notice only to say "I know I shouldn't this but I'll be damned if I'm going to let myself get outbid on this D Mint quarter eagle?" At a live auction, it is even easier to lose control when bidding (which is why I suggest hiring an agent, but that's another story...) and I can recall numerous incidents when bidding has turned into a ego-fest between collectors or dealers.

2. Promotions. A decade ago, when large-scale telemarketers seemingly controlled the coin market, having information about the next coin or series that was going to be promoted could make or break a wholesale dealer. As an example, I can remember at least a few times that Commemorative Gold coins were about to be pushed, and quietly buying coins at pre-promotional levels so that I could sell into a potential rising market.

This isn't the case so much in the 2012 coin market due to the Democratization of Information as a result of widespread web access. But rare coins are still being promoted and this can be a subtle factor in price increases.

In December 2010 I wrote a blog entitled "Which Civil War Gold Coins Will Be Promoted in 2011," which represented my unbiased opinion(s) that the upcoming 150th anniversary of the beginning of the Civil War was a good opportunity for someone to promote Civil War gold coins. It seems that at least a few people read this blog, as I know of two marketers who, perhaps as a result of my suggestion, began promoting the exact coins I suggested in the article. Plus, said article inspired me to become a more active buyer of high end Civil War gold coinage and to write a major four part series in 2012 about collecting these coins:

Part I Part II Part III Part IV

3. Registry Set Collecting: In many series of coins, the passion of Registry Set collectors results in amazing prices for the right coin(s). This hasn't impacted 18th and 19th century gold coins all that much as there is little Registry Set collecting for early gold and Liberty Head issues (although I wouldn't be surprised if we begin to see serious registry collecting in popular areas like CC double eagles or Dahlonega half eagles in the very near future).

The areas in the better gold coin market that seem most likely to be impacted by Registry Set collecting in the immediate future are 20th century issues. I find it very surprising that dealers or marketers who specialize in series like $2.50 Indians haven't seriously promoted the Registry as a way to impact the demand on rarer dates in high grades. For a while, there were a small but dedicated number of Registry Sets in the St. Gaudens double eagle series that were highly competitive and which greatly influenced the prices of high grade better date PCGS encapsulated Saints. My guess is that this will happen again in the not-so-distant future.

4. Pushing Hot Buttons. Most collectors of high(er) dollar coins are Baby Boomers. And I believe that a major part of the strong, strong market in key date American coins in the past decade has been the ability of these coins to push the hot buttons of buyers. Let me explain:

Just the other day, I got back a coin from PCGS that hit my nostalgia button as hard as any has in some time. It was a perfect, even-brown VF30 1877 Cent. When I was a wee lad, I collected Indian Cents and the 1877 was a mythical rarity that I could only dream of owning. Today, this is a coin that I can easily afford and the $1,500-1,750 that this coin would cost me, as a collector, would exorcize some of the oh-why-can't -I-fill-that-1877-hole frisson that haunted me when I was eight or nine.

There are, of course, other hittable hot buttons for gold collectors as well. Cool design? That's an affirmative, High Relief double eagle. Great background story? Hello, Carson City double eagle! The "neatness" factor of owning an 18th century issue? That would be you, 1799 eagle.

5. Historical Significance. As numismatics becomes less about investors and more about collectors, I am finding the historic significance of certain issues are becoming more available because of their historic significance. This includes a number of factors, a few of which include the following:

-Background Story: I don't think its a coincidence that coins like 1861-D gold dollars and half eagles or 1861-O double eagles have become much more in demand due to their fantastic background stories. -Provenance: This may not be the case for all collectors but for some of us (and you know who you are...) the allure of an Eliasberg or Norweb pedigree is a definite factor that influences the price that we pay for a neat coin. -"The Look:" As the internet has (re)proven, numismatics is very visual. Coins that have a great appearance (such as wonderful deep coloration or lots of dirt clinging to the recessed areas) are pieces that a certain type of collector will pay a premium for.

There are other not-so-obvious factors that influence what collectors will pay for a coin. What are some of the ones that went undiscussed in this blog that impact you?

How Does DWN Prices Rare Coins?

I’ve been asked a few times recently how I price the coins that appear for sale on my website. No, the answer does not involve dart boards, a small man behind a curtain or invoking the spirits of coin dealers past. I have a system that is partially observational/deductive and partially intuitive that allows me, I think, to price coins in a consistent, coherent fashion. Obviously, my cost basis is a factor in pricing. But I don’t just apply a standardized mark-up to every coin I purchase. And don’t giggle when you read that last remark because I know a number of dealers who simply apply a 15%, 20% or 25% mark-up (or more) to virtually any coin they purchase, whether it’s a 1911 quarter eagle in MS62 or a 1911 quarter eagle in PR68.

When I am pricing my new purchases from a coin show, I generally take a few factors into consideration. The first is current auction prices realized. In some cases, auction prices are really helpful. Let’s say I have a certain Charlotte half eagle in AU58. There have been four separate auction transactions this year and they have ranged in price from $4,250 to $4,750. If my coin is average quality for the grade, I’m probably going to price it at the lower part of this range. If it’s what I regard as a high end coin for the grade, I’m going to price it at the high end of the price range.

I also check to see what I’ve sold the last example(s) of a certain coin for. If it’s something like an 1855-O gold dollar in AU58 (a coin that I handle on regular basis) I’m going to use my last sale(s) as a guidepost. If it’s a really rare coin like an 1855-O half eagle in MS61 (a coin that I have handled only twice in the last decade) than I will have to take other considerations into account: have other 1855-O half eagles in MS61 been graded since I sold my last coin? How is the overall strength of the New Orleans half eagle market? How many collectors are actively looking for this coin at this point in time?

What about a coin that is rare enough that none have appeared at auction since, say 2005? Or a coin that only one or two auction appearances have occurred but at least one of them is considerably higher than the other? This is where my knowledge of the coin market and coin pricing comes into play.

Let’s say the coin in question is a PR65 gold dollar with an extremely low mintage. The coin is attractive for the grade and truly rare. I would use a few criteria in this instance. First, I’d look to see if there were auction records for other Proof gold dollars with comparable mintages and comparable survivors. Second, I’d try to figure what percentage over “basal value” this coin was worth (in this case, “basal value” means what is the most common date of the type worth in this grade). Thirdly, I use the “gut check” theory of pricing. I’d ask myself, “if this coin walked-up to my table at a major coin show and I was thinking of buying it purely ‘on spec’ what would I pay?”

The two published guides for coin prices that I use most often for pricing remain Coin World’s Trends and the CDN or “Greysheet.” However, due to the fact that they are not updated as much as they should be, these two guides are beginning to become less relevant to me and the PCGS on-line guide, which is updated on a much more regular basis (and by a pretty knowledgeable dealer named David Hall) is now more of a factor in influencing my pricing of certain coins.

The knowledge part of pricing comes into play as far as coins that are undervalued by published price guides. Let me give an example. If I were to price an 1838 eagle in EF45 at 75% of Trends (which is a pretty standard pricing percentage of this series by DWN) I would be offering it around $3,100. I’m guessing if I did this, I’d have twenty orders for the coin in a day. Why? Because the coin is worth over $10,000 and all the published pricing guides (except for PCGS’, I should note) fail to reflect an accurate value. As someone who knows the Liberty Head eagle series very well, I know that the 1838 is worth far in excess of published values and will price it accordingly.

There are a few other pricing questions that I get asked frequently. Here are a few of them:

1. How do I price PCGS coins vs. NGC coins? I am a pretty strong believer in the old “look at the coin and not the holder” argument. If an NGC EF45 Dahlonega half eagle is very choice and original and I agree with the grade, I’m going to price it at the same level as a nice, original PCGS example. If an NGC AU55 Dahlonega half eagle seems overgraded to me and I think it’s really an AU53, I am going to price it at a lower percentage relative to Trends than a coin that I think is solid for the grade. But the exact same statement is true with a PCGS coin. One instance where a so-so PCGS coin might get an unfair price advantage versus a nicer NGC coin is where the PCGS population for the coin is decidedly lower. As an example, let’s look at an 1844-O eagle in AU58. The PCGS population is six in this grade with three better while the NGC population is forty-nine with thirteen better. By virtue of its much lower population, I’d price a PCGS coin at a 10-20% premium by virtue of its significantly lower population.

2. How much of a premium do CAC coins get? In the generic market(s), this is a pretty easy question to answer. John Albanese typically posts his bids for CAC-stickered Morgans, Walkers, higher grade 20th century gold, etc. and they are at premium prices over non-stickered coins. In the rare date gold arena this is a harder question to answer. When I offer a Dahlonega quarter eagle in AU55 with a CAC sticker I don’t (yet) ask any premium for it. But if I have an early half eagle in MS63 or a Proof quarter eagle in 66CAM, I charge at least a 10% premium for a CAC coin. This is due to the fact that John himself is willing to pay premiums in these markets for coins that meet his standards.

3. How do I price OOG coins? I define an OOG coin as “original but overgraded.” An example would be a nice, dirty 1838-C half eagle in an EF45 holder that faces-up well but, in my opinion, is really just a nice VF coin. My typical solution to this problem is to offer a coin like this wholesale at fair market value and to offer the coins that I have that I agree with the grades to my retail clients.

Coin pricing remains difficult, especially in a market such as this but I believe that well-informed coin dealers (and collectors) can apply published information and their personal knowledge to establish reasonably accurate levels.

Heritage's Charleston Collection Sale

In my last blog I wrote about the Husky sale conducted by Stack’s and how a number of early quarter eagles gave a good representation as to the strength in that market. Another recent auction, this one conducted by Heritage, contained an impressive set of Classic Head quarter eagles. This grouping, I feel, serves as a good look at the current state of the high-end market for this short-lived but increasingly popular type. The collection that was sold by Heritage was called the Charleston Collection. It was not complete (it lacked an 1838-C) and it was a little inconsistent as to grade (the common 1836 was only an MS61 and the 1839-C was an AU58 that could have easily been improved while the collector was actively buying). Nevertheless, there were some impressive coins in this group.

In higher grades (i.e. MS63 and above) the 1835 is rare and very underrated. The Charleston coin was graded MS64 by PCGS. I wasn’t totally wild about the quality but it was in an old green label holder and it is one of just two graded MS64 by PCGS with none better. The last PCGS example to sell at public auction was Superior 5/06: 996 which brought $18,975. Given the fact that the Classic Head quarter eagle seems much stronger today than it was in 2006, I expected this coin to bring around $22,500. It sold for $19,550. Had it been a better quality for the grade, I think it would have brought more.

Perhaps the most interesting Classic Head quarter eagle in the sale was an 1837 in PCGS MS64. This was a very attractive coin for the grade and a condition rarity to boot with a PCGS population of three in this grade and only one better (NGC hasn’t graded a single example higher than MS63).

This exact coin had been sold twice by Heritage within the last few years. In the 2004 ANA auction it brought $18,975 and in the January 2007 sale it realized $26,450. Given these prior records and the interest that I felt certain this coin would generate, I was expecting a very strong price; perhaps as high as $35,000-40,000. The final price realized was an exceptional $48,875; a record price for a business strike of this date. Interestingly, the finest known 1837 (the amazing PCGS MS65 Bass II: 305 coin) had only brought $37,950 back in 1999.

Another interesting Classic Head quarter eagle in the sale was an 1839 graded MS61 by PCGS. This date is a major “sleeper” in high grades and it is actually rarer in Uncirculated than such heralded branch mint issues as the 1838-C and the 1839-D. The Charleston: 1806 coin was attractive for the grade with the eye appeal of an MS62/63 but with some old wipe lines on the surfaces. The last PCGS MS61 example to sell at auction had been the B&M 6/03: 1510 coin that went very cheaply at $6,038. Given the fact that the population of the 1839 in PCGS MS61 is just two (and only one coin, an MS62, is higher) I expected that this coin would bring at least $10,000 and probably a touch more.

The 1839 quarter eagle wound-up selling for $12,650 which is a record price for a business strike of this date but which, in the big picture, is pretty cheap for a Classic Head quarter eagle that is as rare as this. The finest known remains Bass II: 309 (graded MS62 by PCGS) that sold for a very reasonable $10,925 back in 1999.

Another Classic Head quarter eagle of interest in this sale was an 1839-D graded MS62 by PCGS. This is an exceptionally popular coin given its status as the first year of issue from the Dahlonega mint and the fact that it is a one-year type. I did not care for the Charleston: 1808 coin as I thought it had funky color and a dull, lackluster appearance. Nevertheless, I anticipated that this coin would see some strong bidding. The final price realized was $34,500.

In January 2008, Heritage had offered another 1839-D quarter in MS62; this one graded by NGC. I didn’t care much for this coin either but it brought $34,500. Clearly, this is now the standard for this coin in this grade as the Charleston coin brought the exact same amount.

Lot 1809 in the Heritage sale was an 1839-O graded MS64 by NGC. This coin is tied for the highest graded with four others at NGC and four at PCGS. This was an attractive coin with good luster and color and it had been sold by Heritage as Lot 406 in their April 2006 auction for $34,500.

Given the new strength in the market for high quality New Orleans gold (as well as the interest in choice Classic Head issues) I expected that this coin would sell for at least $35,000-40,000. It brought $40,250 which is a record auction price for this date.

So what did I learn from this sale in regards to the Classic Head quarter eagle market? As I expected, the high end of the market is very strong. I thought the price realized by the 1837 in PCGS MS64 was pretty remarkable and I thought the mintmarked coins described above were strong to very strong. My guess is that we will continue to see strong prices in this series for a while although I wouldn’t be surprised if we start to see some softening for the more common dates in higher grades as the levels for these have really shot up.

U.S. Coin Pricing Guides

When someone really, truly figures out how to properly compile and market an accurate, real-time pricing guide for United States coins, they are going to become very wealthy and very popular. Because, at this point in time, the pricing mechanisms for most rare United States coins are a mess. Let me explain what I mean. Let’s say you want to buy an 1858-C half eagle graded AU55 by PCGS or NGC. You do not have the coin in hand but you have seen an image of it on a dealer’s website or in an on-line auction. What’s your next step?

You’ll probably do one of two things. If you are a specialized collector you’ll look up its valuation in Coin World Trends or in the CDN Quarterly Summary. The former shows its value to be $5,000. The latter, unfortunately, does not list values for AU55 coins—only AU50 and AU58, so in this particular case it is essentially useless.

What, you ask yourself, does this value of $5,000 actually mean? If you read the fine print in a copy of “Coin Values” you will see that Coin World considers its publication to be a retail price guide. It also states “values are listed for coins that are strictly graded in each grade category according to current market standards.” So does this mean that the collector should expect to pay $5,000 for an 1858-C half eagle in AU55? Unfortunately, Trends is not really clear in explaining this.

The next step for most collectors is to search an on-line database of prices realized at auction. The Heritage Auction Prices Archives, as I have pointed out many times before, is an incredible resource with over 1,125,000 auction lots listed.

In looking up the 1858-C half eagle in AU55, a few things become apparent. The first is the frequency with which this date appears at auction. There were a total of nine different auction appearances in 2006 plus another five in 2005. Even if we assume that some were the same coin(s) sold more than once, fourteen appearances in two years is a high degree of frequency. Thus, we can make the assumption that this coin isn’t really that rare from the standpoint of total number known and it should, therefore, sell at a discount relative to Trends. The fact that it is not a terribly popular or “important” issue (like the 1838-C or 1839-C half eagles) probably would increase this discount relative to Trends.

The next thing I would look at is the most recent auction records for AU55’s. They are as follows: $3,220, $2,990, $5,750 and $5,175. Clearly, this is a huge range and this is where I think using auction price data without proper interpretation can be very misleading for the collector.

Looking back at my catalogs for each of these four AU55 coins, my notes stated the following. For the coin that brought $3,220 I felt it was decent for the grade and I think the buyer got a pretty good deal on this. The coin that sold for $2,990 was “very ugly” in my opinion and even though this was very cheap, it is a case of getting what you pay for. The coin that sold for $5,750 was in an old green label PCGS holder and I graded it “58+,” meaning I thought it had a good shot to grade Uncirculated if resubmitted. And the coin that realized $5,175 was, I felt, “very choice and original” and would upgrade to AU58.

Four coins, same date, same grade...but prices that range from a low of $2,990 to a high of $5,750.

What pricing sheets do not help the collector with is the diversity of quality within a specific grade. These prices tell me that a really lousy 1858-C half eagle in AU55 is probably worth around $3,000; or 60% of Trends. A coin that is decent for the grade (not spectacular but not something that you look at and go “yuck”) is worth around $3,250. A coin that is very nice for the grade (not an upgrade candidate but a piece that has attractive natural color and surfaces) is worth $3,750 or so. And a really high end coin (one that is a seeming candidate to upgrade to AU58) is worth anywhere from $4,500 to $5,500.

Confused yet?

No commercial pricing sheet is going to be able to give you four different quality levels for each grade. We’d be talking about a massive undertaking and a project that few people are qualified to undertake. But it can be done. Collectors of Large Cents rely on a pricing guide called CQR which gives three price ranges for a host of grades for every die variety from 1793 to 1814. This is clearly a labor of love (I can’t imagine that the publishers are getting rich publishing CQR!) but it provides advanced collectors with a set of pricing applications that, within a highly specialized series, makes sense.

What if this specialized pricing were to be applied to various other series? What if some clever entrepreneur got together a group of leading experts and had them be in charge of detailed pricing for a highly specialized market segment? As an example, you could have Stewart Blay, David Schweitz and Andy Skrabalak collectively create and maintain a database for Mint State and Proof Lincoln Cents. If I were a collector of these coins, I think I would pay $100 per year to have access to this pricing that might not be available anywhere else. By charging this amount, the owner of the pricing service could at least defray some of his expenses.

I would expect that as the coin market evolves in the future, we will start seeing some experiments with specialized pricing. I could see this idea working very well for popular series like Bust half dollars and Indian Head cents and I don’t think it would be hard to create categories of quality for popular series such as Morgan dollars (by this I mean an “A” level for extremely nice coins, a “B” level for average to above average coins and a “C” level for below average coins). Most experts, myself included, already grade coins by category and quantifying this information would be relatively simple.

New Orleans Gold Coinage

Since I reopened Douglas Winter Numismatics (DWN) in February 2006, a primary focus of mine has been New Orleans gold coinage. I have focused on this area for a number of reasons. The most obvious is, of course, the fact that my new book on New Orleans gold coinage is expected to be released this summer and it seemed like a natural to drum up interest for the book by selling the appropriate coins. But there are other reasons I have focused on these coins. After twenty years of intense focus on Charlotte and Dahlonega gold, I am a bit bored with these coins. Now don’t get me wrong. I love C&D gold and these will always be a “bread and butter” item in my inventory. But there are many issues that I have seen over and over and, unless a specific coin is very nice, very rare or very interesting, it doesn’t get me all that excited.

But New Orleans coinage is fresher to me at this point in time. I have always handled nice O mint gold but it seems that in the past, I might have handled three Dahlonega half eagles to every New Orleans half eagle.

New Orleans gold also seems like the best value in the 19th century gold coin market. In most cases, New Orleans pieces are quite a bit scarcer than their Charlotte and Dahlonega counterparts and are often priced at twenty or thirty or even fifty percent less.

Another thing I like about New Orleans gold is the great variety. You’ve got coins from the 1840’s and you’ve got coins from the 1900’s. You’ve got tiny gold dollars and you’ve got massive double eagles. You’ve got No Motto and you’ve got With Motto coinage. This level of variation simply doesn’t exist with the other Southern branch mints.

So what’s happened with the New Orleans market in the past three or four months? There are clearly some aggressive new collectors who have entered the market, including a small number who are buying all of the really rare and very high grade pieces they can find. I have had the good fortune of handling at least a dozen Finest Known or Condition Census New Orleans gold coins in the past ninety days and every one of them has sold quickly to long-term collectors.

Prices have started to show some long-overdue appreciation. In the recent Heritage Central States auction, a dealer paid $86,250 for a PCGS MS61 1854-O Three Dollar gold piece which is, by a huge margin, a record price for this date. In the Heritage April Atlanta auction, an NGC MS64 1839-O quarter eagle sold for $34,500 which is also a record price for this date. I have also noted some very strong prices being paid at auction for coins such as high grade (MS63 and better) New Orleans eagles from the 1888-O to 1906-O era.

My overall take on the New Orleans market is that higher grade, affordable pieces are currently in great demand and will show good price appreciation in the coming months. The very high end material is also in strong demand as I wouldn’t be surprised to see Trends and CDN Quarterly being adjusted upwards to reflect these new prices. The areas that I see the greatest potential growth are the “in between” coins: pieces in the $2,500-7,500 range that are not necessarily very rare or super high grade but which are well above average for the date and which are cosmetically appealing. It also appears to me that the medium sized coins (half eagles and eagles) are attracting the most interest with the new generation of New Orleans collectors.

It will be interesting to see if my New Orleans book has the same affect on this market as my Three Dollar gold pieces book had on that market (prices for Threes have doubled in the past two years). If this is the case, I would suggest that people who are buying New Orleans gold coins now are clearly ahead of the curve and might have some nice returns down the road.