As I’ve written before, I like coins with what I call “multiple levels of demand.” What this means is a coin that is sought by a number of different sorts of collectors. As an example, the typical Dahlonega half eagle is likely to appeal mostly to a Dahlonega specialist whereas a coin like an 1838-D half eagle might appeal to a broader range of collectors due to its status as a one-year type and a first-year of issue. There are not all that many gold coins that have such widespread appeal that they might be tempting to, say a Lincoln Cent specialist. But the coins that I am going to list below are pieces that in my experience have strong cross-collector appeal. I have sold a High Relief, as an example, to collectors who have never bought another St. Gaudens double eagle and probably never will. But I have never sold a rare date Saint (let’s say a 1929 in MS65) to a collector who specialized in Charlotte gold and wanted a rare date like the 1929 just “for grins.”
There are a number of rare gold coins with multiple levels of demand. For the sake of brevity, I am going to just list five. I can think of another five very easily. I’d like your input in case I decide to write another of these articles, so please feel free to list your five and send them to me by email at firstname.lastname@example.org.
Without further ado, here’s my Fave Five Rare Date Gold Coins with broad levels of demand.
1. 1861-D Gold Dollar: This is a coin that I could probably sell a dozen of if I had them available. The 1861-D gold dollar appeals to a broad number of people for many reasons. It has a great historical perspective as it was issued by the Confederacy. It appeals to Dahlonega collectors as a key issue and to gold dollar specialists as well. It is rare in all grades and it has a crudeness about it that appeals to collectors who like “neat” coins. I’ve never had a hard time selling one and it is a coin that I would buy in nearly any grade, providing it wasn’t damaged or harshly cleaned.
2. 1845-O Quarter Eagle: Every coin dealer (and collector) has a few “pet” dates and, for me, the 1845-O quarter eagle is very high on the list. It probably doesn’t have the high level of demand among non-specialists that the other four coins in this group have but I think this issue is so rare, so undervalued and so historic that it belongs in any favorite’s list that I write. What do I like most? How about the mintage of just 4,000? The fact that this date was essentially unknown until the 1890’s? That a presentable VF to EF can be purchased for less than $5,000 makes it seem even more cool to me.
3. 1854-O Three Dollar: This isn’t a really rare coin and that’s one of the things that appeals to me about the 1854-O. I recently sold a nice, evenly worn EF for less than $3,500 and I’ve sold examples that cost over $50,000. What I like about this issue is the fact that it is the only three dollar gold piece from New Orleans. Unlike the 1854-D (another one-year issue) it is inexpensive enough that a collector who has no interest in Three Dollar gold pieces would buy one; unlike the 1854-D that is expensive and which might cause many collectors to think twice before an impetuous purchase.
4. 1838-C Half Eagle: This is another first-year of issue. It is traditionally linked with the very popular 1838-D half eagle (another first-year issue that is a one-year type as well). What I like more about the 1838-C is while it is probably a bit less scarce than the 1838-D in terms of overall rarity, it is far rarer in high grades. I regard the 1838-C as an extremely scarce coin in properly graded AU50 to AU53 and it is genuinely rare in choice, original AU55 to AU58. In all my years of specializing in Charlotte gold, I’ve only handled two legitimately Uncirculated 1838-C half eagles and only four or five that I regarded as true AU55 to AU58 pieces. Despite this coin’s rarity, it is still affordable in VF and EF grades.
5. 1838 Eagle: Here’s another first-year-of-issue that has gone from mostly unknown to very popular in the past few years. It is the first eagle produced after a thirty-four year hiatus and it is a rare, low mintage date with just 7,200 struck. It isn’t technically a one-year issue (a number of 1839 eagles have the same design) but it is a coin that is held in very high accord by collectors who do not care for the Liberty Head eagle series on the whole. Unlike the other dates listed above, the collector contemplating an 1838 eagle will have to consult various pricing sources as both Trends as the Greysheet do not reflect the levels that this date has brought at auction and via private treaty of late.
The realities of the new coin market are such that I have refined and revised my buying strategies for 2009 and, most probably, beyond. I think my “dealer strategies” can be easily applied to “collector strategies” and they are useful for most people. My first strategy isn’t so much “new” as it is a refinement of an existing strategy. I have always considered myself to be a fussy, critical buyer with what I believe is one of the better eyes around when it comes to originality. Well now I’m even fussier than before. If a coin isn’t all there, I don’t want to buy it; even if it is a special date that I have a soft spot for.
Let me give you an idea of how this strategy works. At the recent FUN show, I saw two comparably high grade examples of the 1856-O half eagle. This is a scarce issue that I really like and it has always been a good seller for me. I generally would have no problem with owning two (or even three) pieces simultaneously. The first example I saw was an NGC AU58. It was priced fairly but it really wasn’t very nice for the grade with little of its originality intact. This is a coin that I might have bought a few months ago, given that it was fairly priced and really rare in this grade. A few hours later I saw an NGC AU53 example of the same date that was choice and fully original. I bought it without hesitation. In this market, it pays to be a fussy buyer. If I were a collector of New Orleans half eagles, I would personally rather have a choice, original AU53 than a not-so-choice and not-so-original AU58. Even though the holder says that one of the coins is five points “better” than the other, my eyes told me that the lower grade coin was aesthetically superior.
My buying guidelines have always been that I want a coin that is in the top 5-10% for the grade with choice, original surfaces, nice color and good eye appeal. I want the sort of coin that will get a sticker when I send it to CAC. In the new coin market of 2009, I am repeating this to myself every time I look at a coin (be it at auction, in another dealer’s inventory or when a collection is sent to me by a specialist-collector). I’m being ultra-careful not to slacken on my quality standards and neither should you.
Another thing that I am focusing on is a lower price point. Some dealers are still able to sell coins priced at $10,000 and up. I find these pretty hard to sell right now unless they are extremely special. Generally speaking, I’d rather have ten interesting $5,000 coins in stock than one not-as-interesting $50,000 coin.
There are exceptions to this. Obviously, if I want to participate in the early gold market, I’m not going to go very far if I limit myself to $5,000 coins. And I would without a doubt be a buyer of a $25,000, $50,000 or even $100,000 early gold coin if it met the following parameters: really choice, really original, really rare and really saleable. But expensive “product” is an area of the market that has already begun a significant downwards correction and I think such coins could go a lot lower in the coming months.
How does this apply to you? If you are a high-end collector who purchases expensive coins I am certainly not telling you to stop (in fact, I’d be thrilled to sell you all the expensive coins you’d like right now...just call me on the phone to discuss this!). What I am saying is that the expensive coin market has shifted from a seller’s market to a buyer’s market. You might be able to buy a coin that was $35,000 a few months ago for $30,000 today; maybe even a hair cheaper. If this is your price point, though, I think it is more important than ever to be hyper-critical about every potential new purchase you contemplate making.
Which brings me to another point: buying the right coins. When the market is on an unstoppable upwards course, you can make sloppy decisions and the greater fool theory will inevitable rescue you. How many collectors made poor buying decisions in 2005 or 2006 and were saved by putting lemons in an auction and having their mistakes become lemonade? This is unlikely to happen in 2009, 2010 and beyond. You want to be really careful with what you buy. Collectors with short attention spans are going to find it hard to get rid of pieces that they lose interest in after a few months because something else has captured their fancy. My suggestion is to buy every coin like you are going to keep it for five or ten years.
Another decision that I am going to try to rigorously adhere to in 2009 involves over-expanding my numismatic horizons. In years past, I dabbled in areas that I really didn’t know that well because they “seemed cool” or I “thought they were good value.” In 2009, I am going to stick with what I know best. That doesn’t mean that I’m going to stop buying bust silver coins or rare date Seated quarters and half dollars. I like these coins and I know these areas of the market well enough not to make dramatic mistakes. But I am definitely establishing a stronger “comfort level” this year and will likely coinslap myself anytime I am tempted to stray from it.
One last strategy I am zealously adhering to seems like a no-brainer but I think it’s important enough to bear repeating. I am going to try very hard to have an inventory that is full of popular “bread and butter” coins like nice 1854-O three dollar gold pieces and 1839-O quarter eagles. These aren’t necessarily the rarest coins but they are very popular and have multiple levels of demand. Liquidity is a key factor for collectors and dealers alike in the New Market.
Are there coins that I haven’t really specialized in the past that I will be buying more of in 2009? I anticipate buying and selling more No Motto Philadelphia half eagles and eagles in the AU55 to MS63 range because I think they are great values. I’ll probably buy more non-New Orleans Type One double eagles because this is an active market and a number of the dates are still undervalued, in my opinion. And I think I’ll start moving back into the Three Dollar gold piece market again because I like these coins at current levels.
A reader recently asked me an interesting question: “…can you name some currently popular gold coin rarities that might suffer the same fate as the (once popular but now forgotten) 1858 $10?” This is an excellent question and it got me thinking. I have identified a few potential popular-now-but-potentially-forgotten-in-the future gold issues. Type Two Gold Dollars, MS63 and better. Another dealer (someone whose abilities I really respect) told me an interesting story. Back in the 1970’s, when he was handling every conceivable rare United States gold coin, he never saw nice Type Two gold dollars. Today, they seem to be everywhere. Open any major auction catalog and you’ll see a number of Type Two gold dollars in the higher Uncirculated grades.
Despite the relative availability of these coins (PCGS has graded nearly 500 examples in MS63 and nearly 400 in MS64) prices for these issues remain high. In the most recent issue of Coin World Trends, the suggested price levels for 1854 and 1855 gold dollars are $15,000 in MS63 and $20,000 in MS64. Given the fact that there are nowhere near 900 people assembling sets of high grade gold type coins, I would contend that the supply of MS63 and MS64 Type Two gold dollars far exceeds the supply. Unless this type is actively promoted again, as it was back in the 1990’s, I would not be surprised if price levels dropped appreciably.
1842-C Small Date Half Eagle. The 1842-C Small Date is the key date Charlotte half eagle. It became popular in the 1970’s and prices rose considerably through the 1980’s and the early 1990’s. But the 1842-C Small Date half eagle hit the wall a few years ago. I think there are three reasons for this.
The first is that Charlotte coinage has (temporarily) fallen out of favor. The second is that this coin is, in all honesty, well overvalued in current price guides. Coin World Trends shows values of $55,000 for this issue in AU50 and $100,000 in AU58. A quick perusal of recent sales at auction will show that a number of 1842-C Small Date half eagles have sold for less than half of Trends value. The third is that this date can be filled in a set of Charlotte half eagles by an 1842-C Large Date which is considerably cheaper (around $5,000 for a nice AU). I would not be surprised to see prices and collector interest for this issue to continue to fall in the coming years.
1887 Half Eagle. This is one of a handful of Proof-only 19th century issues. Unlike some of its counterparts like the 1883, 1884 and 1887 double eagles, it suffers from being a member of a relatively unpopular series that lacks the strong collector support of Type Three double eagles.
Despite the fact that only 87 examples of this date were struck there are enough Proofs to go around that the few collectors who focus on Proof Liberty Head half eagles are able to easily locate an example of this date. The 1887 currently has a premium of close to 5x in PR63 and 4x in PR64 (i.e., it sells for around four times the price of a common date Proof Liberty Head half eagle in this grade) but I don’t personally see it having anywhere near four or five times the demand level or collectability of a common date Liberty Head half eagle. I personally like this issue but wouldn’t be shocked if it attains “forgotten rarity” status in the coming years.