Smart Collecting 101: Is It Ever Right to Buy the Wrong Coin?

In the first installment of Smart Collecting 101 I discussed the "coin churn" and how to avoid it. One reader made a great suggestion for the second topic and I'm going to discuss it at length here. The topic involves buying the "wrong" coin and if there is ever a right time to buy a coin that you clearly know is not optimal for your collection. The brief answer is yes. It depends on what sort of coins that you collect and what your ultimate goals as a coin collector are. Let's look at a few scenarios.

If you are a die variety collector there will probably be a number of instances that you'll be offered a coin that is a major rarity but which is either ugly or damaged or harshly cleaned or maybe even a combination of all three. But you may still have to buy the coin. Let's say you collect die varieties of early quarter eagles. There are a few varieties that are exceedingly rare and might literally be available once per decade; even once in a generation. In this case, if you aspire to have a truly complete collection, you'll buy whatever becomes available for the extreme rarities; even if the coin is damaged. And you'll probably be thrilled just to have the chance.

Let's say that you are a date collector and you are focusing on a series with major rarities in it. If the series that you are pursuing has some incredibly rare issues (say Fat Head half eagles) it certainly wouldn't be "wrong" to purchase a decent looking but cleaned example of a coin that you know might not be available again for years or which may exist in decent condition but which might be ungodly expensive if ever offered. My feeling here is that if you are someone who likes high grade coins you should avoid specializing in a series that has certain issues that almost never come in high grades.

This leads me to another scenario. Let's say you are a person who hates flatly struck coins. You have waited many years to fill a hole in your set and the date in question finally becomes available. The only problem with the coin, and let's say it's fairly decent in terms of overall quality, is that it is flat as a pancake at the centers. What should you do?

I'd suggest that you research the series and learn what percentage of the issue in question comes with this sort of strike. If every known example is weakly struck, then you just need to buy it. If some examples do exist with decent strikes, I'd say that you pass and wait for a sharper example.

There are some issues that are just so rare or so popular that I will compromise my standards and purchase problem coins now and then. As an example, if I saw a decent looking but cleaned 1870-CC eagle for sale I think I'd buy it; as long as it were priced fairly. It's rare, its in demand and its a cool first-year-of-issue. Plus I think its undervalued in comparison to other high profile Carson City issues. But I wouldn't buy most of the other CC eagles with problems. The reasons for this are simple: they would be hard to sell, they aren't in great demand and nice examples are available with enough frequency that the wrong coin makes no sense. I would take this even further with scarce but not overly rare issues. I'd be patient and wait for the exact coin I wanted.

My high degree of standards would also slacken on great rarities (notice I didn't say "expensive coins." I said "great rarities.") I would have no interest in a damaged ex-jewelry Stella but I would consider an 1864-S half eagle or an 1875 eagle if it were cleaned, very well worn or heavily abraded. In fact, these two issues are rare AND undervalued so I would probably not only buy one "wrong" example, I'd buy as many as I could find.

In the case of truly rare coins like the 1841 quarter eagle or the 1854-S quarter eagle, appearance is almost not an issue. Take the case of the 1854-S. There are around a dozen known with three of these actually being "nice." But in this case, "nice" means EF or AU. The others range from very heavily worn (the discovery coin, ex Eliasberg, is a Good 4) to "not as worn but very messed up from scratches or other non-mint damage." You don't get to be fussy with an 1854-S. You see one, you don't hate and you can afford buy it.

Let's say you are one of those collectors who doesn't really have a super narrow focus and your strategy is "best available coin." You don't aspire to finish any series although you might have a preference for San Francisco half eagles or Philadelphia eagles. In such an instance there is really no reason to buy coins that are not right. If a specific issue is too expensive, just pretend it doesn't exist; you aren't completing a set of Liberty Head quarter eagles so don't sweat it if an ugly but rare 1842 Phildelphia becomes available. Sure, it's rare but another will come along and wouldn't you rather pay $8,000 for a really nice example than $3,000 for one that looks like it was gnawed on by numismatic rats?

The "best available" collector may just want to focus on branch mint issues that grade MS60 and above. This might eliminate a host of issues that do not exit in Uncircuated. It might take other issues that are exceedingly rare in Uncircuated and make "compromise coins" very important. Let say there is an issue like the 1859-S half eagle of which just two or three are known In Uncirculated. If the one nice Uncirculated example is sold (which it was, last year, by DWN) this leaves one or two marginal MS60 to MS61 coins in NGC holders that are the best out there. They may not be "new" in the strictest sense but are a good degree better than the coins that exist in AU55 or even AU 58 grades.

In series like the gold coinage from Charlotte, Dahlenega and New Orleans, there are very, very few coins that are rare enough or ones that come ugly enough that a major compromise must be made. The 1849-C Open Wreath dollar is extremely rare with just five known and I would be happy to own one of the two lower grade pieces at the right price. There is really no Dahlonega issue that is so rare that buying the wrong coin might be right although I'd lower my standards on the 1861-D dollar, the 1854-D three dollar and the 1861-D half eagle given their great demand. In the New Orleans eagle series, I would be willing to buy "wrong" examples of the 1841-O and 1883-O because they are relatively inexpensive and because even the "right" coins have eye appeal related problems. Two others that would cause me to compromise would be the 1854-O and 1856-O double eagles. Sure, I'd want my set to contain lovely Choice AU examples and if you have the $1,000,000 to $1,500,000 it will cost to purchase Condition Census or Finest Knowns of this pair than I'd say go for it. If you have budget constraints a lower grade coin or an example that is genuine but cleaned might make sense. But not for the more common 1857-O and 1858-O. Catch my drift?

So, in summary, I'd say that buying the right or the wrong coin is not necessarily set in stone but is, rather, dictated by the collectors needs and circumstances. Just remember that if you buy an expensive problem coin for your set at some point down the road you'll need to convince another collector that he, too, can't wait for the right coin and that he needs to pull the trigger on this "coin with an asterisk."

Varities of Type One Double Eagles

In my opinion, Type One double eagles have become popular enough with collectors that it is time for some of the more interesting varieties in this series to come into their own. I am beginning to notice that these varieties are growing in popularity and that prices are beginning to appreciate as well. What are the most significant varieties in the series, how rare are they and what sort of price premium do they merit? 1852/1852 Double Date: This variety is one of the most obvious double dates that I have seen on a United States gold coin. It can easily be detected with the naked eye due to the heaviness of the date. The original date was punched slightly too high and then corrected with a second full punch placed slightly below.

In the last three years I have looked at over one hundred 1852 double eagles and fewer than ten have been of this variety. Nearly all have been in lower grades (EF45 and below) and I do not believe that I have ever seen an 1852 double date double eagle in Uncirculated.

This variety is recognized by NGC but it is not currently recognized by PCGS. I think it should sell for a 25-50% premium over a normal date 1852 and the premium in AU55 and higher grades should be even more than this.

1854 Large Date: This variety uses a date logotype from the silver dollar. The same anomaly occurs on 1854-O eagles. The 1854 Large Date is easy to recognize as the date is significantly larger than on the Small Date. I have spoken with collectors who have been confused by these varieties and I think it might be a bit easier to think of the Small Date as a Medium Date. In addition, remember that on the Large Date the 1 in the date in the date nearly touches the truncation; on the Small Date it is distant.

This variety has become widely accepted with collectors in the last five years and it is recognized by both PCGS and NGC. Prices have risen considerably and a nice AU now sells for close to $10,000 when available. The finest that I am aware of was the NGC MS64 sold by Heritage as Lot 2010 in their 2007 ANA auction. It brought an impressive $80,500.

It is still possible to cherrypick this variety despite its relative popularity. I have seen at least five or six in older NGC or PCGS holders without designations.

1858-O Blundered Die: This is probably the least well known of the varieties listed in this article but it is among the more visually impressive. Under magnification it is possible to see another 8 protruding from the bottom of the left part of the lowest curl into the field below. One of the reasons that people do not know about this variety is that it was not well-described by Breen when he mentioned it on page 565 in his Encyclopedia. Another reason is that yours truly has not done a good job publicizing this variety in his New Orleans books and his Type One book.

To view a nice blow-up image of the 1858-O Blundered Die double eagle, I suggest going onto Heritage’s website and looking at the close-up that provided for the example they sold as 12/08: 2256.

There are probably fewer than ten 1858-O Blundered Die double eagles known and the Heritage cataloger was able to account for just four. The finest appears to be Heritage 12/04: 6843, graded MS61 by NGC.

This variety is very high on the coolness scale of Type One double eagle varieties but the rarity and current high price of the 1858-O make it the least likely of the varieties that I’ve mentioned so far to begin to sell for a premium. It is not currently designated by either PCGS or NGC.

1859-S Double LIBERTY. This variety has been known for at least a few decades but it remains reasonably unheralded. It is among my favorite Type One varieties and it is very easy to see with light magnification. The final five letters in the word LIBERY show pronounced doubling.

NGC designates this variety while PCGS does not. The current NGC population includes five coins (the finest of which grades MS60) and another six from the S.S. Republic.

I have personally looked at close to two hundred 1859-S double eagles and I’ve seen around five or six with the double LIBERTY. I think this variety is very impressive visually and it should command a significant premium in all grades. I would suggest around 50% in EF40 to AU55 grades and as much as a 100% premium in AU58. It is hard to figure what this coin is worth in Uncirculated given its rarity.

San Francisco Mintmark Variations: The final group of Type One varieties is less likely to catch on with collectors given the fact that these varieties are not as impressive. This could change if either NGC or PCGS were to start designating them but even if this were to happen, I doubt if they will catch fire collectors.

The 1857-S is known with a Medium S mintmark and with a Large S. The latter is much scarcer.

The 1863-S is known with a Medium S mintmark and a Small mintmark.

It is possible that other mintmark varieties will be discovered as time progresses.

As I’ve mentioned in other blogs, collecting gold coins by variety remains a reasonably obscure area of focus for most numismatists. But I could really see some of these Type One varieties becoming readily accepted in the coming years (as the 1854 Large Date already has) and their values rising accordingly.

Die Varieties of Gold Coins

Will die varieties of gold coins ever be popular? For years I have tried to drum up interest in what I regard as major varieties of U.S. gold coins. By “major” I mean varieties that are significant and readily visible to the naked eye. Minor varieties do not interest me. The fact that that a mintmark is slightly further to the left on one coin versus another is mundane. But I am interested in an issue that has, say, two distinctly different mintmarks. We are in a golden age of numismatic research. This generation of collectors has access to greater information than ever before. One of the few areas that has not had really fertile die variety research is United States gold. Some upcoming books will change this.

As an example, Harry Bass’ research on early gold coinage has been improved by John Dannreuther and a book about the varieties of early gold is expected to be published soon. It will be interesting to see what effect this has on the market for rare varieties in this area.

Given the high average cost of most gold coins, my guess is that this will never be an area that becomes wildly popular with variety collectors. But certain expensive coins like Bust Dollars and early Large Cents have avid variety followings and perhaps gold will follow suit someday.

At this point I regard Liberty Head gold varieties as an area that really does not merit a premium but which has some potential. I wouldn’t pay a premium for more than a handful of these varieties but it’s nice to know you can buy something with possible added value for essentially no premium.