The Market for New Orleans Gold

In many respects, I was one of the primary creators of the market for New Orleans gold. As recently as two or three years ago, I was one of the few dealers who maintained a good inventory of choice and rare gold from New Orleans and was certainly giving this market a bigger “push” than my compatriots. So how has the market fared for New Orleans gold in the last few years? Without a great deal of fanfare, I’d have to say that I did a very good job of helping to jumpstart this market. In some ways, it was maybe too good of a job. By this, I mean that I now have a lot of competition on the wholesale side of the market when interesting New Orleans gold becomes available at a show or at auction. The days that I could negotiate for these coins using the strategy that “no one else cares about this O Mint gold coin so you better sell it to me at my number” are long gone. If I pass on a neat coin, there are three or four other dealers in the wings waiting to swoop.

This is probably both good and bad for collectors as well. If you listened to my pleas to buy New Orleans gold a few years ago, you were probably able to purchase some coins at levels that could not be duplicated today. The bad news, though, is a sudden lack of availability.

If you look at what’s been available at major auctions this year in the area of important New Orleans gold, it’s been pretty slim pickings. There were some important half eagles and eagles in the January Stack’s sale and Heritage has sold its share of Condition Census pieces but impatient collectors have probably found 2007 to be a trying year.

I made a strong effort to purchase New Orleans gold at the recent 2007 ANA show in Milwaukee and came home with little to show for my efforts. What’s really frustrating is that I could have sold about ten times the number of New Orleans gold coins that I bought.

Unless I overlooked some hidden stashes of New Orleans gold, the only items that seemed to be available at the show were either common issues such as 1851-O eagles in grades up to and including AU55 or low-end Uncirculated examples of such uninspiring dates as 1893-O half eagles.

Another thing I noted is that price reporting for New Orleans gold is really out of whack right now. Neat coins tend to bring considerably more than CDN Bid or Trends. Examples? In the recent Heritage ANA sale, an 1882-O eagle in PCGS MS63 brought nearly $38,000. CDN Bid is $14,250. In Bowers and Merena’s pre-ANA sale, a PCGS AU55 1854-O double eagle realized nearly $500,000. Trends is $350,000 in this grade.

Prices are also too low for less spectacular New Orleans coins than these two. Examples? I would be very happy to buy multiples examples of eagles such as the 1849-O, 1852-O, 1855-O, 1856-O and 1857-O in EF40 and EF45 at levels near their current Trends valuations.

Would an increase in values bring some good New Orleans coins out of the woodwork? It might shake a few coins out but I’m guessing that the answer is a resounding “no.” I think the reason for this is that there really aren’t many old-time specialized collections of New Orleans gold that were being formed five, ten or twenty years ago. If someone was collecting branch mint gold in years past, the chances were pretty good that they were focused on Carson City, Charlotte or Dahlonega and they ignored New Orleans issues.

What do I see as future Trends for New Orleans gold coins? Let’s take a quick look at each denomination.

Gold Dollars are becoming more and more popular and the upcoming Dave Bowers book on this denomination is certain to create new collectors. Given the brevity of the New Orleans series, I think we’ll see more collectors putting together sets. I personally like the idea of buying Finest Known or Condition Census examples of any date as well as nice, solid examples of the key 1850-O and 1852-O.

The New Orleans quarter eagle series is seeing some increases in popularity. Collectors are probably misled by inflated populations of Uncirculated and About Uncirculated coins. This is a series that $2,000-4,000 per coin still goes a long way. At the ANA I sold a gorgeous 1852-O in NGC AU58 to a collector for $2,000. I think you’d be hard-pressed to find better value in this series than coins like this. I still like the value level of the key 1845-O in EF and AU grades and also like issues such as the 1847-O, 1850-O, 1851-O and 1852-O in accurately graded MS61 and MS62.

1854-O Three Dollar Gold Pieces seem to be all over the place and most of the coins I see are poorly struck and vastly overgraded. That said, I will still buy an AU50 and better piece I see that I truly like. At the Milwaukee ANA I passed on a really nice NGC MS62 at $52,500 that quickly sold to the next person who saw it (I made a mistake and should have bought it...) In Stack’s pre-ANA Milwaukee auction, an NGC MS63, which is the single highest graded 1854-O $3.00, brought a record $115,000.

It’s become very difficult to find interesting New Orleans half eagles. I handled just one really significant piece at the ANA (an 1842-O in NGC AU58 which I sold almost immediately to a collector) and can’t recall any exciting examples in any of the pre-ANA or ANA sales. My guess is that there are a number of collectors actively working on New Orleans half eagle sets and that the demand for interesting coins far exceeds the supply. I strongly suggest buying nice examples of any of the key issues (1842-O, 1847-O, 1855-O, 1856-O and 1857-O) and I like nearly any choice, original No Motto piece from this mint graded EF40 or better.

For the last few years, I was literally begging people to buy significant New Orleans eagles. It appears that at least a few people listened to me as there now appears to be a number of people building No Motto and With Motto date sets. I still strongly recommend just about any better date No Motto coin and just about any common date With Motto in MS63 and higher grades.

Last but not least: the double eagles from this mint. I’m pretty conflicted at this point in time about New Orleans Twenties. As someone who repeatedly touted what a great value these coins were as recently as a few years ago, I’m happy that I was able to help drive this market upwards. But I wonder how much further it can go. As I mentioned above, an 1854-O in PCGS AU55 just brought close to a half million bucks at auction. That’s a whole lot of money for a fairly esoteric coin. I guess what it boils down to is the number of collectors who are putting together sets of these coins. If there are many very wealthy collectors assembling sets of New Orleans double eagles than I guess I can see basal values for the 1854-O and the 1856-O staying at their currently sky-high levels. But if there aren’t more collectors waiting in the wings to fill these holes in their sets than I wonder what the levels will be like in a few years. One last caveat: if you are working on such a set you absolutely positively need to be working with a knowledgeable dealer. At these kinds of prices, you don’t want to be making many mistakes.

2007 Milwaukee ANA Show Review

I went to this summer’s ANA Convention expecting a good but not great show. I left the show having had one of my better ANA’s in many years and I think most other dealers can honestly say the same. On the DWN grading scale, I’d have to give the 2007 ANA a solid A-. I decided not to do any of the pre-show activity. In my opinion, doing the extra three or four days leaves me too tired during the regular ANA week and this isn’t fair to my customers who are anxious to meet with me. Plus, to be perfectly honest, I just don’t have the unlimited energy I had when I was in my 30’s and could work for days at a time at an ANA level of intensity.

I arrived on Monday and attended the pre-PNG set-up for a few hours. My major goal for the week was to buy and I had decided to focus my energy on the bourse floor as opposed to the Heritage auction where I knew prices on the DWN-caliber material would be extremely high.

PNG day was Tuesday. I generally hate PNG day. It starts absurdly early (8 a.m.) and seeing other dealers in suits scares me. Plus I find this to be a generally lackluster day with little of interest going on. This year’s edition started slowly but it seemed to really pick-up steam after a few hours and by the end of the day, things were very active. I literally ran from table to table searching for interesting coins and was able to buy a number of really neat items. I had hoped to find at least one interesting deal and was disappointed that this didn’t really pan out but I was very pleased with what I did find; albeit one or two items at a time.

Wednesday was a little bit of a let down. There was not a very good turn-out as far as collectors went, so I continued to do quite a bit of wholesale business. I can’t recall a show where it was easier to sell nice coins than at this year’s ANA. And here’s something surprising: a number of formerly “dead” areas of the market are suddenly coming to life. There were numerous dealers looking for type coins, especially items like Proof-64 and better Liberty Seated silver, scarcer date Liberty Seated and Barber coins and even such perennially overlooked items as Liberty Nickels and Three Cent silvers.

What else was hot? Everyone (and I do mean everyone) was looking for coins that were either very pretty, very rare or very interesting. And early coins (i.e. those dated prior to 1835) were in huge demand. I bought and sold a number of interesting early gold coins; mostly in the $7,500 to $15,000 range.

Thursday was the best—and longest—day of the show. I started answering emails at 6:30 a.m. and didn’t finish until I left the Heritage Platinum Night sale at close to 11 p.m. I stayed busy the entire day meeting with clients, preparing coins for submission to PCGS/NGC, buying coins from other dealers, figuring bids, etc. I typically had two to four people at my table all day and I could definitely sense a real buzz in the room and from what I could tell, most other dealers were quite busy as well.

So what were some of the more interesting items that I bought and was able to bring home? A few include the following:

An incredible original 1865 Proof set in an original presentation box, graded PR65 to PR67

A glorious 1795 half dollar in NGC AU55

A choice 1802 half dollar in PCGS EF45

An Uncirculated 1861-D gold dollar (which is currently being graded at PCGS)

An 1832 quarter eagle in choice original PCGS AU55

A superb original 1844-C quarter eagle in PCGS MS61

A select group of Carson City gold coinage

Some choice Liberty Head double eagles including a nice PCGS MS60 1861-S

One of the more interesting things that happened at the show involved a Midwestern investor/collector who brought a number of rare coins with him for sale. He placed his coins on display on Wednesday and there was a complete feeding frenzy as numerous dealers in upper-end coins descended on him. He sold well over $5 million in coins in two days including a number of very rare double eagles, choice early gold and a great group of choice early dollars. I was intrigued that this individual decided to forego the auction route and it didn’t seem to hurt him any as he got excellent prices for his coins.

Speaking of auctions, the Stack’s, Bowers & Merena and Heritage sales were all very strong. I attended only the Platinum Night session at Heritage and was amazed at the strength of the prices. I expect great coins to bring strong money at these sales but what surprises me these days is what the mediocre material sells for. As recently as two years ago, I could buy “product” at a Heritage sale and flip it to other dealers for a 15% profit the next day. Now, these same coins bring more than what I would sell them for. Clearly, auction prices now represent the new retail price levels for most series and I am convinced that, at least for me, I’d rather try my luck buying on the bourse floor.

My book “Gold Coins of the New Orleans Mint” was given an award for “Extraordinary Merit” in the field of United States coin books by the Numismatic Literary Guild. I wasn’t able to receive my award in person (I was too busy working!) but had it in my case for the majority of the show.

All in all, it was a tiring but very rewarding ANA. I think the strength of this show will carry over into the late summer/early fall months and we will continue to see a good market for the immediate future.

2007 Milwaukee ANA Show Forecast

Needless to say, the upcoming ANA Convention in Milwaukee is a major topic of conversation among dealers and collectors this week. How do I think this show will turn out and what are some of the trends I expect to see? Read on for some of my thoughts. 1. My gut feeling is that this will be a good but not great ANA show; probably something like a B or maybe even a B+ on the grading scale. I think part of the reason it won’t be a screaming success is the simple fact that the market is good right now but not as great as it’s been during the last few ANA shows. The second reason is the location. I know at least a few serious collectors who are not attending because the thought of a few days in Milwaukee isn’t as enticing as going on vacation somewhere exotic. And, of course, some people need to stay home and make enough money to pay for the new coins they will be buying after the show is over.

2. I can just about guarantee that every post-ANA market report you read is going to include a complaint about the lack of available material. I tend to approach major coin shows with a realistic approach these days. If I’m really lucky and all the stars align just right, I’ll be able to buy some really nice coins. If things don’t work out that well, I will buy a decent number of nice coins but not as many as I could have used. The bottom line is that nice coins are very hard to buy and even the number one show of the year isn’t necessarily going to pry them out of the strong hands they tend to be in these days.

3. The auctions are going to be strong. I spent a few hours yesterday looking through the Heritage sale on-line and compared the current bids to the numbers that I am willing to pay. My impression is that while a few interesting coins will sell semi-reasonably, many of the best lots in the sale are going to sell for exceptionally strong prices.

4. It will be interesting to see if certain dealers will be buying coins specifically in anticipation of the upcoming CAC launch. My guess is that the only dealers who will be able to create any significant positions are those with excellent cash flow. Most dealers do not have enough extra cash lying around that they can put away substantial numbers of coins for six months to a year in anticipation of a market swing. Plus you need to remember one thing about most dealers: we like the action of buying and selling and we need a continual supply of coins to sell in order for our businesses to be a success.

5. In terms of what will be in demand at the show, I think it’s safe to say that nice early gold will be actively sought and that most of the available pieces will be subpar for the grade. Better date 20th century gold will be active, especially in the Indian Head eagle series. I think the demand for branch mint gold will be pretty series-specific. By this, I mean the participants in this market will be on the lookout for better dates (such as 1861-D gold dollars and half eagles) or choice, original pieces in the $2,000-7,500 price range. New Orleans gold should continue its increased level of demand and I wouldn’t be surprised if Three Dollar gold pieces show greater activity than earlier in the year. Any coin that is extremely rare and which has a high “coolness factor” will be extremely easy to sell (hopefully I can buy a few coins like this!). But this, of course, is no surprise.

What Constitutes Originality?

The term “original” gets thrown around a lot these days. I should know; I probably use (and overuse) this term as much as anyone. But as much as this term is used, I think there is considerable confusion and disagreement over what original actually means. As it applies to 18th and 19th century United States gold, the concept of originality fits just a small percentage of actual coins. Unless you can trace a complete history of a coin, it is essentially impossible to state with certainty that it is truly original—i.e., it has never been cleaned or in anyway enhanced.

So what exactly do I think constitutes originality? I think it’s easier to explain what “isn’t original” than what “is original.”

A coin that is original has the right color for the issue. On rare gold coins, a give-away that a coin has “bad” color is when it is a bright orange or intense reddish-gold hue. This bad color tends to be artificially applied and it is generally done in an attempt to hide hairlines or surface problems. Original color tends to be a medium to deep green-gold or rose-gold hue. In all of the books that I’ve written, I’ve mentioned the color(s) that I’ve observed on specific gold issues. I highly suggest that you read these books when you are making a purchasing decision.

An original coin has surfaces that lack obtrusive hairlines. When a coin is cleaned, it tends to show hairlines. But here’s where a sticky subject comes up: what about a coin that was cleaned 75 or even 100 years ago and which has now naturally retoned in deep hues atop these hairlines. Is it original? Strictly speaking, no. Is it desirable? If the coloration is attractive and the hairlines are not too dense, absolutely. One has to operate under the assumption that virtually all 18th and 19th century United States gold coins have been cleaned at one time and light, unobtrusive hairlines can’t be considered as a detriment when calling a coin “original.”

An original coin also has luster that has not been significantly impaired (assuming, of course, that it does not have enough wear that the luster has been lost). When a coin is cleaned or processed, the luster is changed. Non-impaired luster has a circular or “cartwheel” pattern. When it is disturbed, the luster no longer rotates in a circular pattern. It becomes irregular and it appears to “jump” as opposed to spinning.

A coin that is original also does not have any sort of putty or “gunk” that has been applied to the surfaces in an attempt to hide imperfections. This can usually be determined by the presence of dull or whitish areas that can be seen when a coin is viewed in a good light source.

In summary, a coin that is original is none of the following:

It has not been recolored.

It is not unduly bright or shiny.

It does not have an abundance of hairlines, especially on both sides.

It does not have any foreign substances on the surfaces that were applied in an attempt to hide imperfections.

Given the fact that so few coins meet these stringent criteria, can the collector who favors original coins actually ever expect to find anything for his collection? I would say that the answer is yes.

There are still a decent number of coins that are either original or which have an “original appearance.” (Perhaps this last term is actually more accurate, given the fact that no one can state with absolute certainty that a 150 year old coin has or hasn’t been completely untouched in its long and winding road through numismatics and/or commerce).

Coins that have a good provenance tend to have an original appearance more often that coins that just happen to show up on Ebay. I think we can state with relative certainty that collectors like Mrs. Norweb and Louis Eliasberg were not sitting at home doctoring their gold coins.

Is original always best? That’s an interesting subjective question. There are gold coins with coloration that I refer to as “Euro” which have very dark hues caused by years and years of sitting undisturbed in bags in European vaults. This color is clearly natural but it can be pretty ugly; even to a purist like me who loves coloration on coins. In the case of a coin with dark Euro-grime on it, I could certainly see washing it in soap and water to remove the top layer of dirt. Once this is done, is the coin technically “original?” Or has it been processed? A smart dealer I know once told me that if a coin has been processed in a solution that isn’t lethal to humans upon drinking it is still natural. As you can see, this becomes a matter of semantics that is very difficult to answer.

The bottom line is that there IS clearly a “look” that coins that are perceived to be original do have. This look is appealing to sophisticated collectors and dealers and few coins display it.

The 1838 Eagle

One of my absolute favorite United States gold coins is the 1838 eagle. Here are some impressions I’d like to share about this fascinating issue. The ten dollar gold denomination was abolished in 1805, along with the silver dollar denomination. I’ve read in various coin books that the reason for this was “extensive melting by bullion dealers.” I’m a bit skeptical about this as a reason and would personally think that for Eagles, the reason had to do more with a lack of demand and/or available gold bullion.

After a thirty-four year hiatus, the eagle denomination was resurrected in 1838 and the task of designing the new coin fell to Christian Gobrecht. The new design featured a bust of Liberty facing left on the obverse and an eagle on the reverse. Liberty’s neck on the 1838 eagles is distinctly curved and the back of the neck ends in a curious, abrupt triangle. Another identifying factor is strands of hair over the ear which are swept-back in appearance and which cover much of the ear. The portrait is positioned quite a bit differently than on other Liberty head eagles. On the 1838 (and some of the 1839), the tip of the coronet is placed below the outside of the sixth star while the back of the neck is below the outside of the thirteenth star. On the later issues, the tip of the coronet is placed between the fifth and sixth stars while the back of the neck is located past the inside of the thirteenth star.

In 1838, only 7,200 eagles were struck. I estimate that 50-75 are known today and break these down as follows:

Very Fine and below................15-25

Extremely Fine.....................23-31

About Uncirculated.................10-15

Uncirculated........................2-4

Most examples of this date grade VF30 to EF40 and show clear evidence of considerable circulation. The surfaces are generally very heavily abraded with clusters of marks seen most often in the left obverse field. This issue has better luster than one might expect and higher grade pieces are sometimes quite reflective. Most show enough wear, however, that the luster is considerably impaired. The natural coloration tends to be a medium to deep greenish-gold hue. I have not seen many examples that have original color as most have been dipped or cleaned at one time. The strike tends to be reasonably sharp with good overall detail at the centers; some examples have weakness on the radial lines of the stars.

The 1838 eagle is scarce in all grades and it becomes truly rare in properly graded AU50 or better. Most AU examples are in the low end of this range and a solid AU55 to AU58 is very rare and extremely desirable. I have personally seen only a handful of nice examples in the last few years, the best of which is a PCGS MS63 that sold for $63,250 in the April 2002 Heritage auction.

There are also three Proofs known. One is in the Smithsonian and it grades PR63, one is in a private collection (ex: Cardinal Spellman) and is graded PR65 by PCGS and the final example is also graded PR65 by PCGS and is ex: Pittman. This coin last sold for $550,000 in 1998 and it would sell for considerably more than this if made available.

Pricing for the 1838 eagle is currently very inaccurate. Coin World Trends shows values for this date at $2,900 in EF40, $4,025 in EF-45, $6,250 in AU50 and $11,000 in AU55. If you can purchase a problem-free 1838 eagle in these grades for prices anywhere near these levels, you’ve found yourself an incredible bargain. I’ve noticed that in the last few years, lower and medium grade examples that have been offered for sale at auction have brought levels far, far greater than Trends.

So what is it exactly about this issue that I found so intriguing? I can think of a number of reasons. It is a first-year-of-issue coin and the first Eagle to be struck after the denomination was resurrected after a three-and-a-half decade hiatus. It is a low mintage coin that is scarce in all grades and very rare in higher grades. It is a unique and very different design that was used on this denomination for just two years. And last but not least, it is exceptionally undervalued at current price levels.

State of the Market: Carson City Gold Coins

For our next State of the Market Report, we’re going to take a look at Carson City gold coinage. How have the half eagles, eagles and double eagles from this ultra-popular western branch mint fared in the past few years? I. Overview

The number of serious Carson City gold coin collectors appears to have increased in the last few years. At the same time, at least three major collections have been sold (Old West, “Morgan” and the Washington D.C. collection that I sold privately in 2006). This has meant that some fantastic quality individual coins have been available with some record prices having been achieved. This has been slightly tempered by the fact that a group of significantly overgraded Carson City half eagles (and eagles) have been offered for sale at a number of auctions beginning in 2005. Until the bulk of these are removed from the market, Carson City gold in general will remain highly bifurcated and marked by huge value differences in similarly graded issues. This is truly a market where one AU55 1876-CC half eagle can be worth $17,500 while another can be worth $12,500.

II. Half Eagles

Of the three Carson City gold denominations, I would say that half eagles are probably the least popular right now. Prices for many Carson City half eagles have stayed fairly flat—or even dropped—in the last few years. There are certainly exceptions: choice, high grade examples of nearly any pre-1890 date are strong and even lower grade examples of the key issues (such as the 1870-CC, 1873-CC and 1878-CC) are in great demand in the VG to VF range. With coins that are priced at $20,000 and up, collectors are very fussy and will not generally purchase a coin which they or their trusted advisor(s) do not feel lives up to its stated grade.

I think that the market for Carson City half eagles will remain spotty over the next few years. My gut feeling is that exceptional coins will continue to do quite well and that many of the key issues from the 1870’s will see across the board demand. In my opinion, the most underrated Carson City half eagles right now are the 1877-CC, 1878-CC and the 1881-CC.

III. Eagles

Spectacular Carson City eagles have brought spectacular prices during the last few years. As an example, the finest known 1870-CC, graded AU55 by PCGS, sold for $115,000 in ANR’s August 2006 auction while a PCGS MS64 example of the more common 1890-CC was bid to $80,500 in Heritage June 2006 sale. But results for mediocre or low-end Carson City eagles have been quite soft in the past few years. This is mostly attributable to a group of overgraded, low-end coins (mostly valued in the $15,000-35,000 range) which an investor has had mixed success selling at auction during the last two years. I personally know of at least four or five collectors of high quality Carson City eagles and they are all looking for essentially the same type of coins right now: choice and original with good eye appeal.

I feel that once the last of the inferior quality Carson City eagles mentioned above are finally sold, the market for these coins will heat up. For collectors who enjoy a challenge (and who have an appropriate budget) this is a great series to collect. In my opinion, the most undervalued dates in this series are the 1870-CC, 1873-CC, 1877-CC and the 1883-CC.

IV. Double Eagles

If you had asked me a few years ago if Carson City double eagles were overvalued I would have probably said yes. If you ask me the same question today I would still probably say yes but with less reservation than in the past. When compared to half eagles and eagles from this mint, Carson City double eagles appear to be overvalued. But (and this is a big, big “but”) the double eagles from this mint have a sexiness factor that is greater than nearly any other series of United States coin. Let’s face it: even if you don’t really care about coins, it is pretty hard to resist the allure of a big, attractive gold piece that saw duty in the most romantic era in the history of this country. And because of this fact, Carson City double eagles will always be very, very popular.

My biggest complaint about this series is that while prices have shot up in the past few years, grading standards have decreased. I often see coins like 1871-CC double eagles in AU50 holders that a few years ago would have graded EF45; or even EF40. Given the fact the Trends for an AU50 1871-CC is now $40,000, I have a hard time spending this kind of money on an example for my inventory which has tons of bagmarks and/or a near-absence of luster. The same goes for dates like the 1872-CC, 1873-CC, 1878-CC and 1879-CC. These are now $10,000++ coins in AU50 and higher grades and if a new collector is going to be spending this kind of money on these dates, I would hope he is getting a nice quality coin.

That said, I think there is still some value to be had in this series. I will continue to buy nearly any attractive, original AU55 to MS61 Carson City double eagle I can find for under $5,000. I also like very choice and reasonably original examples of the key dates but, as I said above, I usually pass on examples that I think have inferior eye appeal.

Coin Buying "Tricks"

As a dealer who has spent over $100 million on rare coins, what are some of the “tricks” that I have learned that can help you when you are buying coins? Read on to see some of the ones that I think you will benefit most from. When I buy a coin I am looking to sell it immediately for a profit. This makes my needs as a buyer slightly different than yours as a collector. But your ultimate goal, I would hope, is to sell your coins for a profit. What are a few of the most obvious but most important parameters to consider each and every time you buy a coin?

1. Buy Coins That Are Pretty

Numismatics has always been a highly visual hobby. But the advent of the Internet has made the visual aspects of numismatics more significant than ever before. When I look at coins now one of the first questions I ask myself is: will it image well on my website? Coins that are pretty are very easy to sell.

The term “pretty” is somewhat semantic. I tend to like gold coins that are dark and dirty and find these to be aesthetically appealing. Not everyone agrees me. Some people like gold coins that have bright, dazzling luster while others prefer coins that two-tone contrast between the devices and the fields. But I think most people can agree that a certain percentage of coins are, for lack of a better term, “special.” This does not necessarily mean “expensive.” I have seen circulated $100 Bust dimes that I thought were really pretty. The bottom line is that you should try and have as many pretty coins as possible in your collection.

2. Buy Coins That Are Popular

There are many coins that no matter how many examples I have purchased over the years, I have never lost money on them. As an example, I have probably owned twenty 1838-D half eagles in the past decade, ranging in grade from VF25 to MS62. Every time I’ve owned one, it has sold quickly to a happy collector and I’ve made a decent amount of money on each transaction. It’s obvious to me why this date sells quickly: it’s a first-year-of-issue, it’s a one-year type, it has a neat design, it’s a Dahlonega coin and it is relatively affordable.

In the last few years, key date coins in virtually every series have shown dramatic increases in value. There is a good reason for this: they are very popular and this creates a constant level of demand for these issues. In some cases (like 1901-S quarters or 1907 High Reliefs) prices are now probably too high and these key issues are currently overvalued. But I would personally rather have a collection (or inventory) that was full of popular coins than ones that were too esoteric and hard to sell.

3. Buy Coins That Are Problem-Free

I’m pretty staggered at how unappealing most coins are that I see these days. As I look through other dealer’s inventories at coin shows or at auction lots, nearly every coin I pull out has some sort of problem. It has been dipped. It has funky color. It has hairlines from an old cleaning. That’s why when I see something that I really like, I try and aggressively pursue it.

In certain 18th and 19th century series, it is likely that 90-95% of all the coins currently on the market have some sort of problem. If you can patiently and carefully assemble a collection that focuses on the remaining 5-10% of the coins that are what I would call high end and choice, you will have a truly significant coin collection.

4. Buy Coins That Pre-Sell Themselves Every time I’ve made a big mistake purchasing a coin for inventory, it’s been a coin that I had to give myself a hard sell on. I’ve found that my first impression regarding a coin is inevitably correct. If I see a coin and it makes me gasp because it’s so pretty or it’s so above-average an issue that usually comes with bad eye appeal, I’m inevitably going to buy this coin no matter what. If my first reaction is “I don’t really like this” or “It’s OK except that spot in the right obverse field sort of bothers me” that doesn’t strike me as the sort of coin that is going to go flying out of my inventory when it is imaged and described on my website. As a rule, if you don’t like a coin the first time you see it, don’t buy it.

5. Buy Coins That Have Been Pre-Screened

Never, never, never buy expensive coins sight-unseen or based solely on a mediocre quality image with no return privilege. It’s one thing if someone is trying to sell you a generic MS63 St. Gaudens double eagle sight-unseen; even if the coin is low-end it is essentially a commodity and what it looks like is not especially important. But I can’t tell you how many times I’ve had clients send me expensive coins that they have purchased sight-unseen out of an auction and how many times I’ve had to politely tell them that it is very low-end. If your dealer insists you buy coins sight-unseen, find another dealer. If you think you can buy nice coins sight-unseen out of auctions, swallow your pride and hire a trusted representative to view the coins in person for you.

Comparing PCGS & NGC Population Statistics

As a dealer, I hear a lot of comments about how PCGS and NGC grade rare gold coins. I thought it would be interesting to compare the population statistics for two commonly traded series, Charlotte half eagles and Dahlonega half eagles, using recent published population figures from the PCGS and NGC databases. Before I get into the numbers themselves, I think a few background tidbits are necessary. I chose Charlotte and Dahlonega half eagles because these are two branch mint series that do not have a lot of problematical issues that are extremely hard to grade (unlike, say, Dahlonega quarter eagles which are especially hard to grade). Also, the market accords relatively similar value levels to Charlotte and Dahlonega half eagles in either services’ holder (unlike, say, high quality Mercury Dimes which are clearly more valuable in PCGS holders). Finally, I chose these two series because they have comparatively high numbers of coins that have been graded, which makes the population sample we are looking at more relevant than more esoteric series that have had few coins graded.

A few more quick points. The Charlotte half eagle series consists of twenty-four coins, including the 1842-C Small Date and Large Date. For both services, I included only these twenty-four issues. For NGC coins only, I also included 1850-C and 1854-C which were designated by that service as “Weak C.” PCGS does not make this differentiation. The Dahlonega half eagle series consists of twenty-six coins, including both varieties of 1842-D, the 1846-D/D and the 1848-D/D. I also included coins designated by NGC as “Weak D.”

I. Charlotte Half Eagles

As of June 2007 PCGS had graded a grand total of 2,626 Charlotte half eagles in all grades. A breakdown of these is as follows:

Very Fine and lower, 636 (24.21% of the total graded)

Extremely Fine, 889 (33.85% of the total graded)

About Uncirculated, 930 (35.41% of the total graded)

Uncirculated, 165 (6.28% of the total graded)

As of June 2007 NGC had graded a grand total of 2,877 Charlotte half eagles in all grades. A breakdown of these is as follows:

Very Fine and lower, 288 (10.21% of the total graded)

Extremely Fine, 750 (26.06% of the total graded)

About Uncirculated, 1506 (52.34% of the total graded)

Uncirculated, 321 (11.15% of the total graded)

Before I analyze these numbers, I think there are a few very important points to make. Both PCGS and NGC have an inherent flaw with their population figures: these numbers are inflated (often severely) by resubmissions. PCGS does a recently good job of clearing the deadwood off their report and they offer submitters a “bounty” for each used coin insert that ensures that a decent number of labels will be returned. NGC, unfortunately, does not offer a bounty and this discourages certain large submitters from returning their old inserts. When I look at the NGC population figures for Charlotte half eagles, what strikes me is the large number of coins graded AU55 and higher. I think these numbers are greatly inflated due to resubmissions.

So, what do I deduct from these numbers? First of all, I am struck by the nearly equal number of total coins graded by PCGS and NGC; 2,626 for the former and 2,877 for the latter. I would have predicted that the total number would have been much higher for NGC and much lower for PCGS. Secondly, I find it very interesting that PCGS has graded around 42% of all the Charlotte half eagles submitted to them in AU and higher grades while NGC has graded slightly over 63% in AU and higher. I find it very hard to believe that over six in ten of all Charlotte half eagles grade AU50 and better, even factoring in gradeflation. One final statistic that I think is very interesting is that NGC has graded nearly twice as many Charlotte half eagles in Uncirculated than PCGS. Even factoring in the inflated population figures at NGC due to submitters not returning duplicate tags, I am still intrigued by this disparity.

II. Dahlonega Half Eagles

As of June 2007 PCGS had graded a grand total of 3,355 Dahlonega half eagles in all grades. A breakdown of these is as follows:

Very Fine and lower, 749 (22.32% of the total graded)

Extremely Fine, 990 (29.50% of the total graded)

About Uncirculated, 1329 (39.61% of the total graded)

Uncirculated, 261 (7.77% of the total graded)

As of June 2007 NGC had graded a grand total of 3,266 Dahlonega half eagles in all grades. A breakdown of these is as follows:

Very Fine and lower, 313 (9.58% of the total graded)

Extremely Fine, 781 (23.91% of the total graded)

About Uncirculated, 1824 (55.84% of the total graded)

Uncirculated, 338 (10.34% of the total graded)

In looking at these two sets of numbers, there are two areas where great disparity can be quickly noted: with coins graded VF and lower and with coins graded AU. What accounts for this?

In regards to the lower graded coins, my guess is that there are two major reasons. The first is that PCGS tends to be a bit more generous than NGC in terms of what they will or will not encapsulate in this grade range. PCGS will often net grade a lower quality Dahlonega half eagle while NGC will tend to either not grade such a coin or place it in an NCS holder. The second reason is that these lower grade coins tend to appeal more towards pure collectors than investors or speculators and these individuals often prefer to have their coins in PCGS holders.

How can the great disparity between NGC and PCGS for AU grade Dahlonega half eagles be explained? I think there are two important things to consider. The first is that the NGC populations for Dahlonega half eagles graded AU55 and (especially) AU58 are hugely inflated by resubmissions. If NGC were to clean-up their populations figures, I think the number of AU coins would be reduced by at least 200-300+. The second reason is probably due to the fact that the NGC grading line for AU Dahlonega half eagles is a bit looser than PCGS’. In my opinion, a number of AU50 Dahlonega half eagles graded by NGC would not qualify as such at PCGS.

The most important thing to remember about these numbers is that they are subject to any number of interpretations. If you are pro-NGC, you will form your own conclusions while if you are pro-PCGS you will, no doubt, reach another conclusion.

Where Have All The Nice Coins Gone?

If you talk to nearly any dealer or read nearly any numismatic newsletter you’ve no doubt heard a similar complaint for many years: it has become incredibly hard to buy “nice coins.” Clearly, this is true. But the reason(s) why nice coins have become so hard to buy are somewhat less obvious. I have a few theories as to where all the nice coins have gone and why it is so hard in today’s market to find others. The first reason has to do with the increased size and scope of the rare coin market. There are far more deep-pocketed collectors than ever before and certainly far more than most people realize. There are many reasons for this: the increased appeal of numismatics as a result of the Internet, the explosion of wealth in this country and around the world and the lack of good investment alternatives as in years past. Simply put, tens of thousands of very high quality coins have left the market as a result of new collectors.

The second reason is a little less obvious. It is my opinion that more formerly-nice coins have been ruined by cleaning and processing than we realize. Let’s take a typical common date Dahlonega half eagle as an example. Let’s say that there are 200-300 examples known of this date in all grades. Even before the mania for cleaning coins began, at least 75% of these coins had either been harshly cleaned, damaged or very heavily worn. This leaves us a pool of approximately 25-50 original or semi-original “nice coins.” Now let’s say that this number has been reduced another 50% in the last decade as dealers have given into the temptation of taking a crusty EF coin and turning it into an ugly AU coin. Now we are talking about maybe as many as 15-25 nice original examples of this supposedly common date. This number is further diluted by the fact that most of the choice examples of scarce, popular collector coins are off the market in tightly-held collections. At the end of the day, we are talking about a tiny pool of nice, original coins available for the new collector.

Here’s another theory of mine which we’ll call reason #3. Veteran observers of the rare coin market (like me) became jaded by the proliferation of great collections which came to the market in the 1980’s and the 1990’s. Eliasberg, Bass, Pittman, Norweb...the list goes on and on. We were spoiled by these great old collections and now that hardly any other great old collections await us, our reaction is that “there are no more nice coins left.” I find it interesting that the coin market of the 2000’s has become more democratized than the market(s) of the past. Instead of one person owning huge numbers of great coins (i.e., Harry Bass), there are now many collectors who own smaller numbers of the good stuff. Old School dealers like me are just going to have to get used to the fact that the auctions we will be attending in the future are not likely to be Eliasberg-esque.

One final reason comes to mind. The rare coin market has become watered-down by modern coins. As recently as a decade ago, no one collected coins made during their lifetime; let alone paid huge premiums for coins struck a year or two ago. A number of dealers (and collectors) who used to be active in the market for “nice coins” jumped ship and are now focusing on modern issues. Moderns also get a lot of publicity these days while the day-to-day trading of attractive classic issues is done with less fanfare. Ironically, there’s a whole new generation of collectors who are a lot more excited by a PR70 American Silver Eagle from 1999 than by a superbly toned PR67 Barber Quarter from 1899. As always, what is “nice” is a matter of perspective...

I think the bottom line is this: in 2007 we are seeing a lot more collectors competing for a lot fewer nice coins. It was never easy to buy nice coins. In some ways, I’d love to turn back the clock to 1987 but when I really stop and think about the market twenty years ago, nice coins weren’t growing on trees back then and when you did have them, they were a lot harder to sell.