MPF For St. Gaudens Double Eagles

One of the consequences of the soaring gold market is the evaporation of the Market Premium Factor (or "MPF") for certain semi-scarce dates in the St. Gaudens double eagle series. This scenario presents the savvy collector with what appears to be an interesting short-term opportunity. The term Market Premium Factor was invented, as far as I can tell, by my friend the newsletter writer/publisher Maurice Rosen. It refers to the premium that a better date coin sells for versus a common date. If a common date in a series is worth $1,000 and a slightly better date sells for $1,200 it has an MPF or 20%.

In the wake of the Great Saint Malaise, some dates that were formerly accorded market premium factors of 10-30% are suddenly selling for generic prices or just a bit more. There are a number of reasons why the generic double eagle market is currently as weak as it has been in recent memory. With gold blasting through the $1,000 mark, the gold content of a $20 Lib. or a Saint is enough that it becomes a sizable outlay of cash for the typical collector or investor; especially if being purchased in bulk quantities. Many new collectors and investors who are purchasing gold are buying modern U.S. mint products and eschewing older American gold. And many of the large-scale marketers who sold vast quantities of $20’s in the past are turning their focus to areas of the market where the profit margins are greater. These are the coins that, it seems to me, are good value right now.

Let me give you some examples of semi-better date Saints that are selling for the same price as generics but which are a lot scarcer (and, by the way, just in case you think I happen to have a double row box of these sitting in the back of my safe, I don’t...)

The 1910 is a date that I’ve always thought was pretty tough to find in properly graded MS64 and it is genuinely scarce in MS65. According to the most recent PCGS population figures, there are 1,057 graded in MS64 and 158 in MS65. Compare this to the common 1924 that has a current population of 60,451 in MS64 with 38,752 in MS65. In theory, the 1910 is 57 times scarcer in MS64 than the 1924. I’m not saying that the 1910 should sell for an enormous premium over the 1924. But in stronger markets, I can remember getting a decent premium for this date in grades as low as MS62.

Some of the other semi-better dates that have had good MPF’s in the past but which are currently selling for generic price levels (or close to generic levels) include the 1907 No Motto, 1908-D No Motto (in MS63 and below), 1909-S, 1910-D, 1912 and 1913 (in the lower Uncirculated grades) and 1920 (again, in MS63 and below).

Before you run out and buy a bunch of these, I have a caveat for you. One of the reasons that the MPF has evaporated many Saints is because of loose grading. I’m guessing that if you can find CAC approved 1910 double eagles in MS64, they ARE going to sell for a premium; as well they should. If you look at the price structure for many of the more common Saints graded between MS61 and MS64 you’ll note very small price spreads. One of the major reasons for this is that there is often very little difference in quality between these grades (!).

That said, I still like the idea of buying a group of 1910 Saints in PCGS MS64 for common date prices if you have the opportunity. At these levels, you have very little downside other than the price of gold dropping and with the current state of the United States economy I don’t foresee this happening anytime soon.

Market Premium Factor (MPF)

Although I can’t take credit for inventing the concept of Market Premium Factor (MPF), it is something that I have discussed before and find very interesting. The basic concept of MPF is that in a specific series of coins, certain dates trade for premiums over the common (or basal) issues. An interesting series to explore the concept of MPF is Indian Head eagles. In this series, basically any coin not dated 1926 or 1932 (the two basal issues) is considerably scarcer than a basal issue. However, until very recently most of these dates sold for little more (if any) than the two common issues. A date like the 1912 with a PCGS population of fewer than 500 in MS63 and fewer than 175 in MS64 and above did not command much of a premium over a 1932 with a population of over 10,000 in MS63 and over 5,000 in MS64 and above.

Why could dates like the 1910, 1910-D, 1911, 1912, 1914 and 1915 be purchased for virtually no premium over the common dates like the 1926 and 1932? Because until recently, the Indian Head eagle series was not seeing many collectors putting together date sets. These coins were trading primarily as type coins and this meant that no one really cared about what date they were purchasing.

The MPF for a series changes when it becomes popular. Suddenly, Indian Head eagles have become more popular. There are not necessarily a ton of new collectors putting complete sets together. But there is enough new interest in the series that even a neophyte can recognize the fact that a 1910-D eagle in MS64 is much scarcer than a 1932 in the same grade. When this occurs, the premium factor between the basal issues and the slightly scarcer issues increases. Suddenly a coin like the 1910-D eagle is now bringing 10-20% more than a 1932.

There are still a number of series that do not have fully developed MPF’s. In the St. Gaudens double eagle series, there are at least a dozen issues which sell for “type coin” prices which are considerably scarcer than the basal issues such as the 1924, 1925, 1926, 1927 and 1928.

For the savvy collector or investor a key to making a good return on your investment is to identify coins that are scarce but which do not sell for a significant premium. If and when this series becomes popular and collectors start paying attention to specific dates, you might well have some nice profits.