The DWN Market Report: An Appreciation

Around four years ago, a close friend of mine who is not only a very successful businessman but a passionate coin collector made the following comment to me while we were at dinner: "Doug, you need to start a coin blog. Collectors like me are starved for unbiased information, and there's nowhere on the web to find it." With this comment, the raregoldcoins.com DWN Market Report was born.

Around four years later, the number of DWN Market Reports now numbers over 150. At an average of 1500+ words per blog, that's more than 225,000 words or a decent-sized book. I don't think I've repeated too many topics, and I've tried really hard to keep fluff to a minimum. I'd like to think that for many coin collectors, the DWN Market Report has become the go-to source for those who want a high quality educational experience.

So...I'd like to take a few minutes of your time to let you know what the DWN Market Report is--and what it isn't.

About once a month, I get a comment that is somewhere along these lines: "I LOVE your blog. Its like a college course in coins." (or) "I learn more about coins and the coin market from your blog than anyplace else on the web." I love comments like these. To me, an educated collector is a collector who operates out of confidence; not fear. He buys more coins, I sell more coins; we're all happy.

What I try to do with each blog I write is to provide information that any gold coin collector, from beginner to expert, will find useful. Around one-third of the blogs deal with the how's and why's of the market: what to collect, where to find it, what to pay for it, how to grade it, why to sell it, etc, etc. The rest of the articles tend to address specific groups of coins and the collectors who love them: Civil War gold, San Francisco gold dollars, New Orleans double eagles, three dollar gold, etc.

At one time, I wrote blogs that recapped coin shows. I've more or less stopped doing these, except for FUN and the Summer ANA, because they are boring to write and read, and because they are self-serving and trite.

What the DWN Market Report isn't:

-Its not a recap of all the coins that I've sold in the last week. If you want to know what I've sold, look at my website on the day after a major show (when I have the most coins) and three weeks later (when I am nearly out of coins).

-Its not me bragging about how great business is. If you want to know, my business is doing just fine, thanks, but aren't you more interested in Charlotte quarter eagles than my new clients from Charlotte?

-Its not a recap of what I had for dinner last night or how my 45 minute stay in Phoenix was extended to 45 hours due to a thunderstorm.

-Its not an attack on the ANA, the grading services, the PNG, the auction houses or anything/anyone else that I'm feeling cranky about. My Mom always told me to say something nice or don't say anything at all. Mom, I'm pretty certain you were 95% right...

-Its not a lightning rod for controversy.

I've had a few people criticize my blogs for not being more in your face. If you know me at all, I'm not an in your face type or person. I'll teach you how to recognize originality and show you photos of original coins but I'm not going to "out" coin doctors or discuss the latest doctoring techniques. That's just not how I roll. I'll leave that to other coin bloggers...

You came to raregoldcoins.com expecting choice and rare United States gold coins that were fairly priced and for which an active two-way market is made. The DWN Market Report is a reflection of this: clean, concise and taut; the prose equivalent of a well struck, nicely toned early half eagle. And this is what I strive to provide to my readers.

A Baker's Dozen of San Francisco Gold Treats

Collector K.U. recently asked me to help him construct a compact, meaningful list of San Francisco gold coins to form the basis of his collection. The parameters were as follows: the dates selected must have historic and/or numismatic significance, they must be selected for being the best value grade for the issue in question and, where possible, they should be dated around the Civil War era or earlier. I gave this list some thought and tried to narrow down the list to a dozen or so coins. I eliminated the 1854-S quarter eagle due to financial considerations and the 1854-S five dollar due to realism. I then tried to include at least one example of each of the six denominations of gold coins struck at the SF mint and, because of the collector's taste, limited the set to those issues struck in the 19th century. (I might have included the 1920-S eagle and a rare date Saint or two if the list had been longer...)

As I've pointed out before, San Francisco gold coinage of the Liberty Head design can basically be divided into two groups: the "golden era" issues struck from 1854 through around 1878 and the other issues made from 1878 until the new 20th century designs were incorporated in 1908. I personally find the former much more interesting due to their low mintages, the fact that they tended to be actively used in commerce and are thus often exceedingly rare in higher grades and their low overall survival rates.

Without further ado, here is the list:

1. 1854-S Gold Dollar: In my opinion, one of the ways in which to make this set more interesting was to include as many first year of issue coins as possible. The 1854-S is an ideal choice for inclusion in this set given its first-year status. With a mintage of 14,632 this is not really a scarce coin but it is not really easy to locate in higher grades. I am fond of the 1854-S because it tends to be much better made than the other branch mint gold dollars of this era and I find it to be quite undervalued. A nice Uncirculated example could be located in the $5,000-7,500 range and for the collector on a more limited budget, it is possible to acquire a really solid AU 1854-S dollar for less than $2,000.

2. 1856-S Gold Dollar: I wasn't originally going a second gold dollar in the set but the numismatic significance of this issue is hard to overlook. The 1856-S is the only Type Two gold dollar from this mint and it is also the only Type Two from any mint that was made in 1856; a transitional year in which the new Type Three design was struck at the Philadelphia and Dahlonega mints. The 1856-S is fairly easy to locate in lower grades and becomes rare only once the MS62 to MS63 level is reached. Many examples show a dramatically double punched mintmark which doesn't add value but which does increase the "coolness" factor exponentially. A choice circulated example can be purchased for $3,000 to $5,000 while a nice Uncirculated piece has become a bit pricey at $7,500-15,000 and up.

3. 1862-S Quarter Eagle: The obvious picks for quarter eagles are not so obvious. The 1854-S is out of the question due to its hefty price and the next few "early dates" (the 1856-S and 1857-S) aren't that interesting. So, given the collector's interest in Civil War issues, I selected the rarest Civil War quarter eagle from this mint: the 1862-S. Only 8,000 were produced and I have found the 1862-S to be a tough, elusive coin that is still not entirely recognized by rare date gold collectors. I've only handled one Uncirculated 1862-S in 25+ years of buying choice SF gold (the finest known PCGS MS63+ I purchased in the February 2012 Goldberg sale for $43,250) and know of just one or two others. A nice EF example, when available, is still affordable (in the $2,500-3,500 range). A mid-range AU is hard to find but still not priced at more than $5,000-7,500.

4. Scarcer Date 1870's Quarter Eagle in Uncirculated: You can't have just one quarter eagle in this set, right? But there really isn't a date from the post-Civil war era that stands out to me so my suggestion is to buy a better date issue from the 1870's (such as the 1871-S or 1872-S) in MS62 or MS63. These coins are legitimately scarce in this grade (with on order of five to ten known) but are not that expensive with prices ranging from around $4,500 up to $7,500 and more. What I like about these types of coins is that they tend to be well made, attractive and there are very few known in grades higher than MS63. A few sleeper dates are known and these include the 1870-S, 1873-S and 1876-S but even these aren't terribly expensive...yet.

5. 1855-S Three Dollar: To be varied and complete, this set needs a Three Dollar gold piece so why not include the first-year-of-issue 1855-S? Only 6,600 examples were made but this issue is generally available in EF and AU grades. And prices remain very reasonable for this issue, despite its numismatic significance. I recently sold a choice, original EF45 with CAC approval in the mid-3's and also sold a decent PCGS AU55 in the low 10's. In high grades, the 1855-S becomes very rare and I am aware of only three to five Uncirculated examples as well as a unique branch mint proof which is now in an East Coast specialist's complete set of Proof Threes.

6. 1855-S Half Eagle: Even if this collector had unlimited funds, he wouldn't be able to buy an 1854-S half eagle. So, for all intents and purposes, an 1855-S is the first-year-of-issue for the half eagles from this mint. As you might expect with a coin that had 61,000 struck, this isn't a real condition rarity and decent EF's are reasonably plentiful and very affordable. Lower end AU's remain a good value in the $2,000-3,000 range but properly graded AU55 to AU58 examples are rare and undervalued. I can only recall having seen one Uncirculated example (a PCGS MS62, ex Bass II: 1077). A piece of advice about 1855-S half eagles: be patient. There are a lot of crummy examples out there but a few nice ones do exist and with prices still so reasonable for this issue it pays to be selective.

7. 1864-S Half Eagle: This formerly obscure issue is becoming famous and well it should; it is the second rarest Liberty Head half eagle and a very rare issue in all grades with around two dozen or so known from the original mintage of just 3,888. Despite this coin's great rarity, it is not yet priced at the level that I believe it should be. I recently sold a PCGS VF30 for $21,500 which seems like a lot for a coin graded VF30 but, when you consider this date is far rarer than a number of coins that sell for six figures. I don't often say this but here is an issue that you should throw caution to the wind and be very aggressive if one becomes available. I think the 1864-S half eagle has great upside potential and as San Francisco gold grows more and more popular, this has the potential to be a six figure coin.

8. 1876-S Half Eagle: This has been a favorite "sleeper" date of mine for years. Only 4,000 were struck and it is an issue that exceeds the better known Civil War issues from the 1861-1863 era in terms of overall rarity. I regard it as the second rarest collectible half eagle from this mint (after the 1864-S) and I believe that there are fewer than fifty known in all grades. It is an easy issue to identify as all known examples have a dramatic ring-like punch in Liberty's earlobe. There is one known in Uncirculated: the Garrett I: 487 coin that sold for $34,000 back in November 1979 and which I think is one of the single most desirable (and least well known) Liberty Head half eagles of any date or mint. From time to time, EF's are available and they still can be had for less than $5,000 (cheap!!) while a decent AU will cost two to three times this amount.

9. 1854-S Eagle: The 1854-S is not even close to being the rarest early date SF eagle of this denomination but as the first-year-of-issue its certainly the most historic and a great Gold Rush artifact. The 1854-S has a high original mintage of 123,826 and there are certainly 500+ known in all grades (making it arguably the most available coin in this collection). But it has a coolness level that is off the proverbial charts and it is affordable. I sell nice AU's in the $2,500-3,500 range and I recently sold a great-looking PCGS AU58 for $5,750. Most examples are very abraded and few have original color; hold out for pieces that are relatively mark-free and nicely toned. I have only seen or heard of one Uncirculated 1854-S eagle, an NGC MS61 that was sold privately by a West Coast dealer around six years ago.

10. 1864-S Eagle: I've written extensively about this issue so I won't flog a dead horse. But I will say, for the dozenth time, this coin is rare, rare, rare. It is the second rarest Liberty Head eagle after the 1875 and it is certainly a coin that would sell for six figures if it were in almost any series other than the Liberty Head eagles. I just offered a lovely PCGS VF30 with CAC approval on my website and was surprised (but not really surprised) to get multiple orders for it within the first day it was listed. I would offer the same comments with this issue as I would with the 1864-S half eagle: if you get the chance to buy one that you can live with, act quickly and decisively.

11. 1854-S Double Eagle: The 1854-S is an odd coin. It seems like it shouldn't be that rare (over 140,000 were made) and the population figures aren't all that low. But the survival rate is astonishingly low with just a few hundred known. And what PCGS or NGC figures won't tell you is that nearly all the Mint State 1854-S double eagles are from the S.S. Yankee Blade shipwreck. This means that examples in any grade with original surfaces are rare and I have only seen two examples in Uncirculated (a PCGS MS60 and an NGC MS61) that didn't have seawater surfaces. After years of being inexpensive, the 1854-S got discovered a few years ago and it has probably tripled in price in the last three years. I still think its not a bad value and, in fact, just sold a PCGS AU50 for less than $9,000.

12. 1857-S S.S. Central America Double Eagle in MS64 to MS65: I wasn't going to put this issue in the proposed San Francisco collection but after some thinking, I just had to add it. How can you collect San Francisco gold from the 1850-1880 era and not own a nice SSCA 1857-S? They are big, beautiful, historic coins that beg to be included in any set. My parameters are pretty straightforward on this issue: buy a coin in the original gold foil SSCA PCGS holder, get the original bells and whistles that came with it and avoid a piece that has turned in the holder. That leaves probably over a thousand available coins in the $10,000-15,000 price range.

13. 1861-S Paquet Reverse Double Eagle: The thirteenth--and final--coin in the set is probably the most expensive but certainly among the most interesting. The story of the Paquet has been told many times before but I think the important things to remember about this issue is that it was virtually unknown until examples were found in Europe in the 1950's. It jumped dramatically in price a few years and mid-range AU's were topping out at over $125,000. Prices have receded since then but I note that demand for this issue is coming back. It is extremely hard to find examples with good eye appeal and many of the "real" EF's have been scrubbed into AU50, AU53 and even AU55 holders. My advice: if you see a good looking Paquet and the price isn't goofy, get aggressive. I'd budget at least $75,000 for a nice Paquet.

Do you need help devising a collection of United States gold coins? Email me at dwn@ont.com and perhaps I can answer your questions with a blog just like this one.

Why I Made Collector X Mad

The phone rang early Saturday morning. It was a collector calling. The conversation went something like this: "Hi Doug, this is "collector X" (the names have been changed to protect the innocent) and I'm getting ready to enter the convention hall. I want to see your coins. What's your table number again?"

"Ummm...it was Table 201 but I left the show last night and I'm currently in my office working up my new purchases so they can be on the website this afternoon."

"You what?!? You left?!? Isn't the show on Saturday? You HAVE to be there. That's not right..."

"I'm really sorry, sir, but I arrived in Schaumberg on Tuesday and I thought three and a half days was enough time to spend at the show. I was around all day Thursday and much of Friday."

"But I work and can't get the time off."

We talked back and forth for a few more minutes. I felt bad that Collector X had driven a few hours to the show and he was about to discover that some of his favorite dealers (not just me) had left on Friday.

Which brings us to the major question at hand: why did I leave early and why will I continue to leave shows (with one or two exceptions) on Friday?

The short answer: most coin shows are too long. Many open on Wednesday and go through Saturday or even Sunday. If you ask ten dealers if they need a coin show to be four or five days, I'm guessing that nine (or more) will say "no." Exceptions to the rule: The January FUN show and the Summer ANA show which are busy enough that most dealers are OK with attending them for the extra day or two.

Here's my take on shows: not only are they too long, there are too many of them. I look at shows as a necessary evil. I have to go to them because this is where I buy a lot of my coins. But if I could figure a way to reduce my show schedule to, say, three or four a year, I'd do it in a heartbeat.

As Collector X was quick to remind me, coins shows are important for him. He gets to see coins, he gets to schmooze with his favorite dealers, and he can buy some stuff. I see his points but I'd offer the following retorts:

1: Most dealers don't put their good coins out at shows, choosing instead to offer them to selected clients via want lists or placing them on their websites.

2: At most shows, dealers are highly stressed-out and a relaxin' chat with a collector isn't practical. If a collector wants to speak to a fully focused, well-rested dealer, he'd do much better speaking to that individual on the phone a week or two after a show, when the dealer is decompressed and relaxed.

3: As a collector, wouldn't you rather make a buying decision in the comfort of your own home, using your own lighting (at most shows the lighting is abysmal...) and not being pressured to make a quick "yes or no" decision?

If you ask ten dealers what they go to shows for, I'm sure you'd get ten different answers. I go to shows primarily to buy. I believe that the excellence of my website means that I have a better delivery method for coins than putting them out in a showcase once per month. That's the reason why when you go to my table at most shows, you see around eight coins laid out in the case. Where are the rest of them? Put away in my safe, waiting for me to image and describe them and place them on my website.

As I mentioned above, I feel that my website is excellent and my inventory is best served by the good images and descriptions found on www.raregoldcoins.com. In order for me to buy coins at shows, I have to get there early.

I told Collector X that the problem with a show like Central States is that it's "front-loaded." By this, I mean that, as a dealer, if you arrive on Wednesday afternoon, you've probably blown your chance to get an early shot at the fresh coins other dealers have for sale. If I had a staff, I'd have them come in the day I was departing in order to man the table while I went home and processed the new purchases. The problem is, most collectors, like Collector X, want to talk to me and not a staff member. Which sort of leaves me between a rock and a hard place.

The ideal solution to this problem is to start shows first thing on a Thursday and end them in the mid-afternoon on Saturday; lean and efficient, please. And I like the idea of having "day tables" where I might be able to vacate my space at the front of the room on Friday and have a smaller dealer from the back of the room move up to my spot.

Collector X, when you read this blog please realize that I feel your pain. Taking the time to drive to a major show and then having many of your favorite dealers not there is no fun. Please know that I was hard at work all day on Saturday (and much of Sunday) on the two nicest days of the year so far in Portland (you have no possible idea how much I wanted to go hiking...) so that you and other DWN customers would be able to have a shot at over fifty new coins by late morning Saturday. Next time I'm in your neck of the woods, let's go have a cocktail, let's go talk about gold coins and let's bury the hatchet.

Sincerely,

Doug Winter

First Quarter 2012: A Quick Recap

My take on the first quarter of 2012 was if you ask ten different coin dealers how their business was, you'd get ten different answers. "Isn't this always the case," you ask? "Not really," I'd answer, explaining that depending on the business model of the dealer in question, the response you'd get might be vastly different. Confused? Let me explain. As I have written many times in the past, the coin market has become highly bifurcated in the last decade. But just as the market has changed, so has the way(s) of doing business. Ten years ago, you were a "coin dealer." Today, you can be an "online" dealer or a "brick and mortar" dealer; a "classic coin" dealer or a "modern coin" dealer; a "bullion-oriented" dealer or a "rarities-oriented" dealer...the variations are seemingly endless. And with these endless variations comes potential conflicting answers to the "how was your first quarter" question.

To simplify things, if you are a dealer who sells mostly moderns or generic or bullion-related products, your Q1 of 2012 was not very good. Metals prices were mostly trending downwards during this period and prices were weak as a result. If you are an Old School coin dealer with a good following, a good website and a good supply of interesting coins, you probably had a quarter that ranged from very good to excellent. My own experience for the quarter was excellent.

Here are a few observations that I have about the current state of the market.

1. Rarity Is En Vogue: I noticed a subtle change in the rare gold market around two or three years ago. Coins that I formerly couldn't give away were suddenly in demand; not necessarily in overwhelming demand but at least they could be sold. During Q1 of 2012, it was all about rarity.

Let me give you an example. An 1863-S half eagle in nice EF40 has always seemed like a pretty neat coin to me. It certainly has alot going for it: Civil War date of issue, low original mintage figure (17,000), low survival rate (probably no more than 60 or so known), proven rarity in high grades and overall affordability. But until recently, this is a coin that I might have liked conceptually but the reality was that it was a hard sell. Plain and simple.

This has clearly changed. The rare gold market has become more about rarity than at any time I can remember and suddenly a coin doesn't have to have a C or a D on the reverse (or, in some cases, the obverse!) to be popular. Formerly hard-to-sell coins like San Francisco half eagles and eagles from the 1850's and 1860's and Philadelphia issues of the same era aren't necessarily flying off the shelves but they are newly-popular and certainly enough so that I am embracing them and offering them on my website as often as possible.

2. The Littlejohn Effect. If you collect dated gold, you know about the not-so-secret sale of the Littlejohn Estate that was held in San Francisco in February. It contained oodles of interesting, seldom-seen dated gold issues and it was interesting from a number of standpoints. I've already written about this sale and don't want to beat a dead horse but what I think this sale did was convert some former non-believer coin dealers. It's hard to say if they'll be in the rare gold market after they sell their Littlejohn purchases (especially if they don't get the grades they expected or if they learn they paid too much...)

3. Pricing Hits a Wall. I've expressed my dismay before about current pricing guides and how inaccurate they have become. For me, guides like CDN and Coin World Trends have gone from being essential parts of my business to virtual afterthoughts.

Something happened to me at the recent Baltimore show that illustrates my dismay with pricing guides and made me have a "this is crazy, I need to do something about this" moment. I was able to buy a lovely 1864-S eagle in PCGS VF30. If you are not familiar with this issue, it is a major rarity; the second rarest date in the Liberty Head eagle series after the 1875. I paid over $30,000 for it and was thrilled to do so. I based this on the sale of a much inferior VF30 example in the Littlejohn auction for $34,500 as well as some other transactions (auction and private treaty) that have occurred within the last five years.

And yet...when I went to check Trends on the coin, just for grins really as I had already written a check for it, I saw that this date was "valued" at $5,500 in VF20 and $12,500. In a word: stupid! Yes, I understand that the Littlejohn price record was too fresh to have made it into Trends. But I would have paid more than Trends for this date twenty frickin' years ago, let alone today. Grrr.....

4. The Low Hanging Fruit Theory of Coin Dealing: As gold and silver raced up and up the last few years and people fell all over themselves to buy modern coins, I had this thought on more than one occasion: am I an idiot for stubbornly remaining a dealer in "real" coins? I have coin dealer friends making Monopoly money selling modern junque, why not me?

Well, I'm just fine with my no-moderns policy. But many coin firms who formerly sold large numbers of scarce and semi-scarce gold coins remain modern coin or semi-numismatic dealers. What this has done, in turn, is to evaporate the premiums on many coins, especially in areas like MS63 and MS64 St. Gaudens double eagles. This trend was never more clear than it was during Q1 of 2012. And I would expect it to remain so in Q2 and Q3 if not beyond. The larger coin firms will continue to sell the easy-to-understand moderns and semi-numismatic items as long as they can ride this horse.

5. Good Coins Remain Hard to Find: In spite of a few fresh rare gold deals hitting the market during Q1, it remained hard to locate good coins. And for every neat coin like the aforementioned 1864-S eagle that I was able to buy, I could have sold more. Many more, in the case of the 1864-S.

The market is collector-based right now and that's clearly good. But what's not so good is that collectors tend to hold on to their best coins and this means that once something like an 1864-S eagle is sold, you won't see this coin again for years. So we have a classic "be careful what you wish for scenario." The market is strong, coins are being sold to informed buyers and the overall fundamentals are solid. The one glitch in the equation right now is there is an inadequate supply to meet the increased demand. Its something that I have always said would happen.

What do I expect for Q2? If metals prices remain weak, I don't think the market will be all that robust. However, the economy is clearly rebounding and there is more discretionary income available for things like gold coins. I'm not certain that my own business will be quite as good in Q2 as it was during the first quarter but I think the immediate future of the rare date gold market is very good and it is likely to stay good for a while.

Coins That I Never See With Good Eye Appeal, Part Three: Three Dollar Gold

In the third installment of this multi-part article, I'm going to delve into a series that has its share of issues that are not often seen with good eye appeal: three dollar gold. As a series, there are not many individual issues that are rare from an absolute sense. But I can think of a number of issues that are hard to find with a good overall appearance. I. 1854-O and 1854-D: These two issues are inexorably linked due to their status as the only three dollar gold pieces made at southern branch mints. The first is a common coin in nearly all circulated grades with a relatively high mintage figure of 24,000. The latter is regarded as among the rarest issues in the series with only 1,120 produced.

The 1854-O has a reputation among collectors as a condition rarity. There are hundreds and hundreds of pieces known in the VF-EF range and even a decent quantity in the lower AU grades. It becomes rare in properly graded AU55 to AU58 and it remains a very rare issue in Uncirculated with probably no more than five or six known.

But of the hundreds and hundreds of examples known, very few have good eye appeal. This is for a number of reasons. The first has to do with the fact that most 1854-O threes are struck from a late state of the dies that show lapping and re-polishing. This has removed some detail and made the reverse appear to be weakly struck, even on higher grade coins. In addition, the vast majority of 1854-O threes have been cleaned or dipped. It is possible to find a reasonably nice, original EF40 to EF45 example but choice, natural AU coins are quite scarce.

The 1854-D is another issue that is not well made. While this might add to the charm of the issue, it also makes it frustrating for collectors who seek well-detailed, "fresh" appearing coins. This is compounded by the fact that the vast majority of surviving 1854-D threes have been cleaned or dipped and many have been repaired or subtly altered as well. My best estimate is that out of the 125 or so examples that exist, less than 10% are "original" in the strict sense of the word. These coins should command a significant premium versus the typical quality for the issue. In my opinion, a choice, original 1854-D three dollar gold piece with good color and choice surfaces should command at least a 20% premium.

2. 1855-S and 1860-S:

With the exception of the 1856-S, none of the San Francisco three dollar gold pieces are frequently encountered with good eye appeal. This is due to a number of factors. The first is that none of these issues had especially high original mintage figures and the survival rate is low. Secondly, these issues were used in commerce in Gold Rush era San Francisco and as a result were not handled with care. A lack of collector interest meant, of course, that there was no one around to save coins and even the usual "save a few for souvenirs" scenario doesn't apply to them.

The 1855-S is comparable to the 1854-D from the standpoint of overall rarity. It is extremely scarce in properly graded AU55 to AU58 and extremely rare in Uncirculated. I think that no more than three or four Uncirculated examples are known. The finest appears to be the PCGS MS62 in the Great Lakes collection; the second is the ex Pittman 2: 1889 coin, graded MS61, in the South Texas collection. Despite the rarity of this date with good eye appeal, it is surprisingly affordable. I have sold two nice EF examples this year for around $3,000.

The 1860-S is an interesting issue for a number of reasons. It is the last obtainable three dollar gold pieces from this mint and it is rarer than the original mintage figure of 7,000 suggests; it is believed that as many as 2,592 were found to be underweight and later melted. I believe that only 100-125 are known today and examples with original color and surfaces are really hard to find.

The 1860-S is actually a tiny bit more available than the 1855-S in Uncirculated with as many as five or six known. The best of these include Eliasberg: 285, Bass II: 672 (graded MS62 by PCGS) and the Great Lakes coin which is in a PCGS MS61 holder. Most of the AU coins that I have seen are bright, heavily abraded and not appealing. The few Choice AU's that have sold in recent years have not realized significant premiums over typical examples and the savvy collector should consider this the next time he sees a pleasing 1860-S three dollar gold piece.

1865 and 1877:

One of the things about collecting this denomination is that the Philadelphia issues tend to be well made and they are generally available in relatively high grades. But there are clearly a few issues that are not only rare from the standpoint of total known but which are seldom seen with good eye appeal. In my experience, the two that stand out are the 1865 and the 1877.

The 1865 has a tiny mintage of 1,140 and it is likely that not more than 75-100 are known. This date tends to come two ways: really nice or really not nice. The finest known is a superb NGC MS67* from the Jewell Collection that sold for $57,500 in May 2005. Two PCGS MS66's exist as well. The five or six Gem 1865 three dollar gold pieces have great color, luster and eye appeal and are among the nicest Civil War era gold coins of any denomination. But these are locked away in tightly-held collections and the typical example is apt to grade EF45 to AU55 with very abraded semi-prooflike surfaces and clear signs of recent cleanings and/or processing.

The 1877 also has a small mintage; just 1,468 in this case. It is a bit more available than the 1865 in terms of overall rarity but it is harder to find in high grades. The finest known is a PCGS MS64 in the Great Lakes collection that is ex Heritage 6/11: 4602 at $80,500; it was earlier ex Bass II: 696 where it went reasonably in 1999 for $32,000. This is the only really choice 1877 three dollar gold piece known. There are an additional five or six coins in the MS60 to MS62 range This date is generally seen with prooflike surfaces that are very abraded and frequently show hairlines from mishandling.

There are other dates that I certainly could have added to this list. The 1858, 1867 and 1869 are three issues that are seldom found with good eye appeal. And the 1873 Closed 3 is an extremely hard date to find in any grade, let alone with natural color and surfaces.

For more information on three dollar gold pieces that are seldom seen with good eye appeal, please feel free to contact me at dwn@ont.com.

An Interesting Collecting Idea

As I was getting ready to post a coin that will be for sale in today's DWN E-Special (an 1846-D/D half eagle in PCGS VG8), it dawned on me that this piece could be the impetus for an interesting specialized collection: a grading set of Dahlonega half eagles. This set would consist of one Dahlonega half eagle of each grade between AG3 and AU58. In total, this is seventeen different coins. Figuring an average cost of around $2500 per coin, you'd be looking at something like $42,500 for a set.

The coins in the set would encompass the following circulated grades:

About Good 3 Good 4, Good 6 Very Good 8, Very Good 10 Fine 12, Fine 15 Very Fine 20, Very Fine 25, Very Fine 30, Very Fine 35 Extremely Fine 40, Extremely Fine 45 About Uncirculated 50, About Uncirculated 53, About Uncirculated 55, About Uncirculated 58

In theory, this set could be expanded by another few coins, if coins with plus or star grade modifiers were available. I would leave this up to the discretion of the collector.

Why would this be a good set for a collector? Would it be hard to assemble and how long would it take to complete? What are some of the pitfalls that the collector might encounter in working on this set? And what are a few bells and whistles that could be added to make it even more interesting?

Some readers of this blog are going to think that a grading set of Dahlonega half eagles is a hokey idea and would wonder why any collector would waste time or money on it. I disagree.

I like this set for a number of reasons. The first and most important is that it will teach a collecor how to grade circulated half eagles. I am often asked the question "how can I learn to grade coins" and the best answer I can give a collector is that you learn from what you buy. Being able to tell the difference between an EF45 and an AU53 half eagle is an important skill for the collector.

Having third-party graded coins available is, of course, going to make it easier to do this kind of set. In the pre-third party grading days, it would have been nearly impossible to assemble a set that had all the various circulated grades as there would have been so little agreement on the grades among collectors (and dealers).

Would this set be hard to assemble and how long would it take? One of the fun things about choosing an interesting collection is that by its very nature its impossible to race through. This is especially true if the collector is picky and wants coins that are not only accurately graded but which are choice and original with good color and eye appeal. My guess is that a set of seventeen different graded Dahlonega half eagles could take a few years to assemble. It will teach a collector patience and it will teach them how to search for the "right" and "wrong" coin.

Ironically, the higher grade coins in the set are probably easier to find than the lower graded ones. Dahlonega half eagles didn't typically see that much ciruclation and undamaged, naturally worn coins that grade below VF35 or so are not easy to find. Coins that grade AG3, G4, G6 and VG8 are likely to be be very hard to find, especially if eye appeal is an important factor.

My guess is that the collector will encounter some anomalies as he works on the set. As an example, a coin in a VF20 holder might actually be nicer in appearance than a coin graded VF25 or even VF30. Some funny situations might occur when a collector buys, say, a VF25 1845-D half eagle which is nice but a bit overgraded and attempts to downgrade it to a VF20 in order to get it into the set(!)

To make the set even more of a challenge, it might be fun to have all the coins graded by one service (either PCGS or NGC). And finding them all nice enough that they will eventually be approved by CAC would make the set even harder.

Would it be possible to do this set with one specific date of Dahlonega half eagle? I guess this is possible but it might not be realistic. I haven't checked the PCGS or NGC population reports but I'm sure some dates don't have any coins slabbed in the lower grades and many have just one or two in AG3 or G4, making the search for these sort of the proverbial needle in a haystack.

I have a few "bells and whistles" suggestions for collectors thinking about this set. First, choose a "look" you like for your coins and try to remain as consistent as possible throughout the course of buying. Remember that some Dahlonega half eagles come with reddish-gold or orange-gold hues while others come with green-gold color. Remember, as well, that some dates are virtually impossible to find in lower grades. As an example, the half eagles from 1855 through 1861 didn't tend to circulate as extensively as the coins from the early to mid-1840's. It is highly unlikely that you will find an 1858-D in VG10, so focus on dates that are more realistic. As you reach the end of the set, don't get silly trying to fill holes. Just because you need a very low grade coin, as an example, don't pay a big "low ball" premium for an AG3 or a G4.

I have a great idea for a collector who wants to work on this set and who is internet savvy. Buy the domain name www.gradingdahlonegahalfeagles.com and put together a website that shows examples of each coin in each grade and which explains how Dahlonega half eagles are graded. A bit nerdy, yes, but it sounds kind of fun to me.

In my opinion, this collection is best looked at as a secondary pursuit. It might work great for someone who collects something like early half eagles by date and who is at the point in his collection when he is lucky to find one or two coins a year. It is a fun collection that is not absurdly challenging, not too expensive and really educational.

For more suggestions on how to assemble a Dahlonega half eagle grading set or other collections in general, please feel free to contact me at dwn@ont.com

The Great RYK/DWN Mashup Redux: Two Numismatists, Nine Questions, Eighteen Answers

One of the most popular blogs that has appeared on this website was entitled "The Great RYK/DWN Mashup" and it appeared around two years ago. In it, I volleyed back and forth with collector Robert "RYK" Kanterman and discussed gold coins, the coin market and more. After much pleading from our respective fan clubs (OK, actually from me pleading with him to help me come up with another popular blog...) we've decided to agree to disagree, 2012 style. And away we go!

Note: For each answer, "RYK" represents Robert Kantertman while "DWN" represents Douglas Winter Numismatics.

1. If you could own any shipwreck gold coin, which would it be?

RYK: I have a strong preference for the SS Central America coins. In my opinion, they were the best preserved and best conserved. Even though I am a "dirty gold" guy, I would choose the nicest 57-S $20 I could afford, and these are available in a range of price points. I would be tempted to find one of the branch mint gold specimens, a territorial piece, or even a 55-S or 56-S $20, if I wanted to get a little more exotic.

DW: Agreed. I've become a fan of nice, natural-appearing 1857-S SSCA double eagles in the MS64 and MS65 grades. But, and this is a big but, I caution buyers to be highly selective and stick with PCGS coins in original gold foil holders that haven't changed. The coins were conserved; some very successfully and some not so successfully. Take a look at any Heritage sale and you'll see coins caked with white gunk from conservation gone awry. Yuck....

2. Should established US gold coin collectors consider territorial gold?

RYK: I would say a resounding "Yes!" A nice Bechtler piece or set complements a southern gold collection nicely, and some of the California private mint or assay gold pieces go well with any set that includes early San Francisco gold. The Colorado, Oregon, and Utah gold pieces are also a good fit for 19th century gold enthusiasts. One drawback is that they are generally fairly expensive, and might burn coin money required for the big hole in the set.

DW: I like Territorials but am not sure that I share RYK's enthusiasm for them in a rare date gold set. Now, if you are collecting Charlotte gold dollars than a C. Bechtler and A. Bechlter dollar makes sense. Or, if you collect Liberty Head double eagles from the No Motto era a Moffat double eagle makes sense. But I'm not sure how an Oregon or a Mormon piece fits into a regular issue set. And as RYK said, the big bucks that such a coin costs might take away needed funds from a regular issue that is more integral to your set.

3. What is your favorite Dahlonega coin for someone wanting just one for their collection?

RYK: In the sub-$2500, an original, choice VF or XF quarter eagle or half eagle from the mid-1840's would be my choice. They are generally well-produced, nearly 170 years old, and made from gold mined in the southeast.

At the next price level, there are two choices that I see: going up in grade from my lower price point selection or choosing a more interesting coin. I would do the latter, like an 1839-D $2.50, 1838-D $5 or 1839-D $5 in original XF-45.

If money is unlimited, I would wait for on of the super high-grade pieces that come on the market once a year or so. The most recent was the 1855-D quarter eagle in 63.

Overall, unless I was a half dime or trime collector, I would avoid the gold dollars as a consideration.

DW: For a first purchase in the $1,750-3,000 range its hard to argue with a nice EF half eagle. Look for an original coin with nice surfaces and color. They still only command a 15% premium over the junky coins I see daily.

For a "tier two" coin, I like Robert's idea of buying something snazzy like a one-year type or a first-year issue. Coins like this have become very popular and the value isn't quite as good as it used to be but the liquidity of, say, a nice EF45 1838-D half eagle is better than ever.

If you are lucky enough to have the budget for a five figure "exotic" issue, I'd look for a high grade example of something really rare, not a high grade example of a common date. I like coins like 1856-D quarter eagles, 1854-D threes, 1842-D Large Date half eagles, etc because they are so seldom seen in high grades.

I disagree with RYK about gold dollars. Don't hate on the little guys, RYK. Gold Dollars are a great series to collect and the 1849-D is a wonderful first coin for the collector. Plus its hard to not like rare dates such as the 1855-D, 1856-D, 1860-D and, most of all, the coveted 1861-D.

4. Is New Orleans gold more popular than Charlotte gold?

RYK: Ten years ago, I would have said that Charlotte gold is more popular, but today, I would say the opposite. One thing that favors New Orleans gold over Charlotte including is that more denominations are available, including the immensely popular $20 Liberty gold and the increasingly popular $10 Liberty gold. I think that the desirability of the New Orleans quarter and half eagles has increased and the scarcity of some of these issues is now more widely appreciated. In Charlotte, there is just not much new, and there appears to be a relatively steady march of coins on the market.

DW: RYK, you ignorant slut...Oh wait....

I'm afraid Robert is correct. As someone who has really helped to "create" the New Orleans market, I'm wowed at how popular these coins have become and much they have appreciated price-wise since, say, the late 1990's. And how Charlotte hasn't.

Charlotte gold is somewhat in the dregs although collector-quality coins are strong. I put an 1841-C half eagle in nice PCGS EF45 on my website the other day and got seven orders for it in less than a five or six hours. But, that's the exception and not the rule. There are alot of good Charlotte coins available right now and if a few heavy hitters decided to get serious, they could put together great sets over the course of a few years.

5. What gold coin or coins is/are currently in greatest demand from rare date gold collectors?

RYK: I think that the single coin that is in greatest demand among rare date gold coin collectors is the 1861-D $5. I recently told Doug that if he had a dozen XF-45s, he could quickly sell them all and for strong money. Honorable mention would go to the 1861-D $1, better date $5's and $10's from the 1860's, 1870-CC $10, and the 1861-O and 1879-O $20's.

DW: Ah, Grasshopper, you have learned well. Oh and where are those dozen 1861-D half eagles?

The market is very rarity-oriented right now and people are looking to buy sexy, low mintage coins with alot of "oomph." Other coins I would add to RYK's list include the 1855-D dollar, 1854-S quarter eagle, 1864 quarter eagle, nearly any pre-1800 half eagle, 1864-S half eagle, 1875 half eagle and eagle, 1841-O eagle, 1883-O eagle, etc.

6. Is collecting San Francisco gold on the rise/falling/stable?

RYK: San Francisco gold is, in my opinion, gaining in popularity. The market demand for the better date coins was evident in th e recent Littlejohn sale, and there was a very interesting San Francisco gold collection in the Heritage FUN sale that did very well, too. It would be great if a rare date gold specialist (ahem) or Western gold specialist would publish a book on SF gold (1854-1880) as I think that this could give these coins some much-needed publicity among potential collectors.

DW: Hey, thanks RYK. Make me do another book, huh?

Actually I have thought about doing a book on SF gold for many years and if I could get a partner to assist me I would (ahem, potential partner, you know who you are...). I think this would help the market for these coins. For years and years, this was a dead area. The popularity of SF double eagles, brought on by the shipwreck discoveries of the last two decades, has spurred demand for smaller denomination coins as well.

I think you have to look at SF coins as two distinct markets: the 1854-1879 coins and the post-1880 cons. The first group is suddenly doing pretty well and I personally am selling alot more interesting SF coinage today than I was two or three years ago. The second group seems dead but I can see the potential for coins like an 1888-S eagle in MS63 (to pick a random date in a random grade) with premiums so low over generic issues.

7. Should coin collectors bother with coin shows?

RYK: Absolutely! Aside from seeing lots of coins, the ability to view auction lots in person, view exhibits at the bigger shows, meet other collectors, and network with dealers makes any coin show worthwhile. I have often said that even if I were broke and had no coins to sell, I could have a great time at a coin show.

DW: To me, coins shows are somewhat of a necessary evil. With the exception of FUN and Summer ANA, most coin shows are too long and aren't always productive. But I'm jaded and have been going to 15-20 shows a year for nearly three decades.

For the collector, shows are great. You can't beat the ability to look at coins, to view auction lots, to look at exhibits, etc. I'd say you have to fine-tune your BS detector as you are going to hear alot of Newspeak.

8. Are auctions good venues to buy in?

RYK: Yes, with an asterisk. It depends a lot on factors including specifically which auction venues, have you viewed the coins, are you using an agent, are you bidding live or by proxy, etc. If you are playing sight-unseen with proxy bids over the internet, you are going to get burned a lot. If you are bidding in person or with a specialty dealer, there may be some opportunities.

I would add is that some coins that are purchased at auctions could be bought outside the auction venue for less money, less risk, and less hassle. If you are considering a 1901-S $10 in 64 in an auction, it makes no sense to bid sight-unseen and compete with others for the coin. If it is lovely and undergraded, someone smarter who has seen the coin will know that and outbid you. If the coin is a pig, you will win it. It's a classic "heads-I-win-tails-you-lose" situation.

DWN: The whole auction market has changed so much in the last five years. The simple way to put this is that they have transitioned from wholesale environments to retail environments.

Many new collectors feel safe buying at auction as they figure that "if there was an underbidder, I'm safe having paid just 5 or 10% more." This is wrong on many levels. And it is even more wrong when you consider that most collectors are bidding at auction on a sight-unseen basis and relying on images.

It's just a matter of time before buyer's premiums at sales rise to 17.5% or even 20% and at that point, I'd say that auctions might not be the best venue to buy in. You have to take this with a grain of salt coming from a dealer who is essentially competing against the auction firms both for product and for buyers but I know that I am now much less reliant on auctions both as a buyer and and a seller than I was a few years ago.

9. What makes a coin desirable?

RYK: This is a very personal thing, and if you ask ten collectors, you will get eleven different answers (because at least one collector will change his mind). The factors that go into desirability include, but are not limited to, design, condition, value, metallic composition, age, scarcity, history, provenance, originality, and market demand. I tend to rank scarcity, numismatic history potential for price appreciation and originality in the more important category, and design, condition, and value in the less important group.

DWN: As a dealer, my answer is bound to be different from RYK's. I am looking for coins that I think will sell well and that I will be excited about handling again and again down the road.

To me, the factors that make a coin desirable include: its level of value (is it a good deal or a bad deal?), its degree of absolute rarity (is its price predicated solely on its grade?), its degree of originality (has it been cleaned, processed or dipped in recent years?), its eye appeal (is it pretty?) and its level of liquidlity (if the market pulled another 2008 contraction, could I sell this coin in 30 days or less?).

Robert and I will be taking our show on the road and expect to see us at a Holiday Inn near your town sometime soon.

Do you more questions that you would like to see answered by the RYK/DWN mashup team? If I can persuade RYK to take some time away from his busy Fantasy Baseball schedule, perhaps we can have a Round Three of the Great Debate sometime soon. Email your questions to me at dwn@ont.com

Current Availability of Rare Date Gold

If you are a collector of rare date gold, you have probably noticed that there are distinct patterns of availability. In other words, certain coins may go from very unavailable to available over the course of time due to a number of reasons. How available are certain types of coins right now? Knowing the availability of a specific series is important when making a decision to collect it. If the coins aren't there, you can't buy them. Let's take a look at each denomination and conclude if now is a good time to start (or not to start) a collection.

Gold Dollars: This is a good time to start a collection of gold dollars. In the past year or two, I have noticed a number of choice, interesting examples of all three types for sale in grades ranging from Extremely Fine to Gem Uncirculated.

The demand for Type One gold dollars has increased in the last few years but there still seem to be some interesting coins on the market. Philadelphia examples are plentiful in all grades. Charlotte and Dahlonega issues are less available and a few dates (1850-C and 1850-D, 1854-D) remain extremely hard to locate above AU55.

Type Two dollars seem to be in abundant supply but this is misleading as most of the available coins are Philadelphia issues from 1854 and 1855. I find that high grade branch mint Type Two dollars are less available than in the past but not enough so to dissuade a collector for starting to collect them.

Type Three dollars also seem plentiful right now with some very interesting coins having been available (or coming available). But a few of the tougher issues are hard to find right now; most notably the 1861-D which is more popular than I can ever remember. I've also noticed a real shortage of San Francisco Type Three dollars in MS63 and above. Again, this shortage would not be enough to dissuade my from recommending a Type Three set right now.

Quarter Eagles: The availability of this denomination depends on what you are looking for.

Early quarter eagles have always been hard to find but I can't remember a time when the supply has been more dry than it is now in the Winter of 2012. As someone who is a major buyer in this area, I can tell you that the coins just aren't there right. I still love early quarter eagles but the lack of availability is a little frustrating for me and the collectors who I supply.

A few years ago, you could find semi-available early quarter eagles easily; coins like an 1830 in AU55. Now, these seem to be extremely hard to find. I don't attribute this to them being many times more popular than they were a few years. Where are these coins? I'm not certain that I know the answer.

If a deep pocketed collector wished to have begun a Finest Known or Condition Census collection of Liberty Head quarter eagles, he could have purchased some great coins in the past year. I have personally purchased at least ten finest known or close-to-finest examples in the last year and know of other coins that have been offered privately that would make great additions to great collections.

But this series has been well represented in collector grades as well. There are a few better dates that have not been available of late but I'd still say that it remains an excellent time to be a collector of Liberty Head quarter eagles.

Three Dollars: If you were thinking of collecting this series, your timing is great. There are some wonderful Threes on the market right now and many are at price levels that haven't been seen since the early 2000's.

There are still some dates in this series that haven't been readily available. Some of the ones that come to mind are the 1855-S, 1857-S, 1860-S and 1865. And the rare Proof-only 1875 actually seems a bit less available right now than it was a few years ago.

Bottom line: if you like high quality Threes, this is a good time to begin a set.

Half Eagles: The current availability of early half eagles is very odd. There is a real lack of coins in the VF-EF range and the reason i obvious: they are scarce to begin with and the few nice coins tend to be bought by collectors who will own them long-term. The AU graded early half eagles that used to be plentiful (I could count on buying three or four a month) now seem very hard to find, especially if they are CAC-quality. In Uncirculated, early half eagles remain relatively available but the quality is spotty. Non-CAC coins in the MS60 to MS63 range tend to be available at auction but nice, original examples that are realistically priced sell quickly and are hard to find right now.

The availabilty of Liberty Head half eagles has been helped by the fresh Helem and Littlejohn deals that entered the market in February. I doubt if many of the better coins will hit the secondary market and collectors remain starved for nice examples of rare issues from Philadelphia and San Francisco.

The market for Charlotte and Dahlonega half eagles is good with the latter clearly being stronger than the former. Are good coins available? If you are searching for nice pieces in the collector grade range, I'd say "yes." If you are are looking for finest known or high quality Uncirculated pieces I'd say "not often" for Dahlonega and "from time to time" for Charlotte. I'd certainly recommend beginning a collection now of either mint's half eagles given the current availability.

New Orleans half eagles are another story. Condition Census examples have become exceptionally hard to find and it would be very frustrating beginning a high grade collection right now. Dates like the 1846-O, 1851-O, 1855-O and 1856-O have become extremely hard to find in nice AU grades, let alone in Uncirculated.

Eagles: Of the seven denominations of gold coins struck by the U.S. mint (not including Stellas) the ten dollar gold piece or eagle is probably the most challenging to collect. It's never been easy to put together a set of Liberty Head eagles. Right now, it's tougher than I can ever remember with prices for the rarer issues shooting upwards.

I felt like a dinosaur at the recent Littlejohn sale as I sat through lot after lot of rare ten dollar gold pieces and was blown away by the prices. This isn't all that much different from a decade+ ago when double eagles increased in price dramatically in what seemed like a short period of time. I see the same thing happening with eagles right now.

The issues that appear to have increased the most are the ones that appear for sale the least. This seems obvious but formerly hard-to-sell coins like Philadelphia eagles from the 1860-1877 era and nearly any pre-1880 San Francisco eagle suddenly appear to have gained some popularity as long as they are high end for the grade.

Would I suggest that a DWN client begin a set of Liberty Head eagles right now? I would but it would be with hesitation. I'm not certain if the next EF-45+ 1873 eagle that becomes available will be worth over $40,000 and I wouldn't feel comfortable suggesting to a client of mine that one is worth anywhere near this. But there are still good values in this denomination. The collector of eagles will have to be more careful now than before to make certain he is getting good value.

Double Eagles: Despite a strong collector base, the availability of good Type One double eagles has been excellent in the last year or so. This holds true for both the relatively common dates and the rarities. In fact, other than the 1854-O, I have handled every rare Type One issue multiple times during the last year and have seen at least three or four 1856-O double eagles sell in the last year or two. The issues that still do not turn up that often in higher grades include the 1854-S (with non-seawater surfaces), 1859-O, 1860-S and 1866-S No Motto.

The Type Two market seems to have picked up in the last year and I think that part of the reason for this is the availability of good coins. I've been pretty surprised at how many 1870-CC double eagles have been available since, say, 2010. I can think of at least five or six that have been available and the finest known was discovered (and then stolen) within the last year.

If a collector wanted to begin a collection of Type Three double eagles, I believe he would find good examples of many better dates. But the Big Five Philadelphia issues (1881, 1882, 1885, 1886 and 1891) remain very hard to locate with good eye appeal and surfaces.

If you have any more questions about the availability of what you want to collect, please feel free to contact me via email at dwn@ont.com

How Do You Price Really Special Coins?

In the recent Schuyler Rumsey coin auction, there were a number of coins that I would define as "really special." After the sale was over, I thought about the prices they brought and was initially pretty stunned. Upon further reflection, I still think that these coins brought strong prices but the numbers now make a little more sense . Let's take a look at some of these specific coins and then ask (and answer) a bigger question: how do you price a really special coin? This was not a condition-related sale and there were only a few coins that brought a tremendous amount of money because they were high grade for the issue. Examples of such coins include the 1852-O eagle in PCGS AU55 (Lot 982) that brought $18,400 and the 1870-CC eagle in PCGS EF45 (Lot 1030) that sold for $97,750. In both cases these coins sold to savvy dealers who clearly believed that the coins would upgrade significantly. If they don't upgrade, both coins will prove to be bad deals for their buyers.

But the coins that were of real interest to me in the sale were the still-slightly-under-the-radar rarities like the 1864-S eagle, the 1873 eagle and the 1876 eagle. These aren't coins that condition is solely relevant. They are what I call "fundamental rarities" or coins that are rare in all grades.

In the Liberty Head eagle series, the 1864-S, 1873 and 1876 are three of the rarest collectable issues. In fact, the only eagle that is rarer is the 1875 which is, for all intents and purposes, nearly impossible to find.

The 1864-S eagle in the Rumsey sale (Lot 1017) was graded VF30 by PCGS. It was a coin that I thought was accurately graded and, in spite of a scratch on the reverse, it was evenly worn and rather handsome for the grade. This coin sold for $34,500; by far a record price for the date in this grade. I know the buyer of this coin; he is a very sophisticated collector. The underbidder was a knowledgeable dealer. Were these two individuals crazy or were they savvy?

Before we can accurately answer that question, some background information about the 1864-S is in order. And after this, we need to look at ways in which really special coins (which any 1864-S eagle is) are priced.

The 1864-S is the second rarest Liberty Head eagle after the 1875. There are probably no more than 20-25 known to exist. In my experience, the opportunity to purchase one occurs maybe once every three to five years. This is verified by the fact that only one piece (Bowers and Merena 7/06: 1640, PCGS EF45 at $50,600) had sold in the last five years. To find a piece that was comparable to Rumsey:1017 you had to go all the way back to the Richmond I: 2074 example (graded EF40 by NGC and selling for $10,350 but a coin which, as I recall, was really no better than the PCGS VF30 being offered).

Using comparable auction prices to help determine the price of a rare coin has become commonplace in the last few years. In the case of the 1864-S, this was not a good method for at least two of the following reasons:

The number of auction records for VF30 1864-S eagles is virtually nonexistent. The last coin sold at auction as "VF30" was a raw, cleaned example in July 1997 that brought $8.050. Clearly, this is of no help.

Since the Richmond I: 2074 coin was sold back in 2004, the market for this issue has totally changed. This is proven by the $50,600 that an EF45 brought just two years later. But that was six years ago and, if anything, the number of collectors who want an 1864-S eagle in any grade has at least doubled--if not tripled.

Since we can safely state that using auction comparables to price an 1864-S eagle isn't going to work, then how about checking a published price guide like Coin World Trends? According to the most recent edition, values for the 1864-S eagle are $5,500 in VF20 and $12,500. These were probably accurate in 1992 but in 2012 they are clearly completely and utterly irrelevant in 2012 (but that's another story...)

Before I render my verdict on whether the 1864-S in the Rumsey sale was a good deal or a bad deal, I think there are two other points to touch on.

The first is opportunity cost. If you are a deep-pocketed collector and you are particpating in a challenging series with a number of really special issues included (Liberty Head eagles are a poster child for this) you always have to determine how often will you have the chance to buy an acceptable example. In the case of the 1864-S, it's been pretty well established that its going to be once every three to five years if you are lucky. So the chance to buy a decent one represents an exceptionally important opportunity for the serious collector.

Second is the fact that any really special coin is part of what I refer to as a transaction-driven market. What I mean by this is that when you buy an 1864-S eagle in PCGS VF30 for $34,500 you have essentially created a new market. Yes, this market is considerably higher than it was the last time that one traded. But the reality of the market is that since a VF30 just traded for $34,000 in a public transaction, all the geniuises that live by comparable auction prices realized are now going to see this $34,000 trade. Even if Trends ignores this transaction and keeps their estimated value at 1992 levels, the bar has still been raised.

Let's take a less involved look at the other two really rare date eagles that I mentioned above.

The 1873 eagle in the sale (Lot 1040) was graded EF45 by PCGS. It sold for $43,125.

While not as rare as the 1864-S, the 1873 eagle is still a seriously rare issue with an estimated three dozen or so known from an original mintage of just 800. I have handled two or three in the last five years and actually had a reasonably hard time selling them as I found this to be an issue that lacked the rarity recognition that other issues in the series have.

The last EF45 to sell at auction (an NGC EF45 coin) brought $11,212 in Superior's 9/08 auction. The last transaction of any sort was an NGC AU58 sold by Heritage in June 2010 that realized $27,600. Based on these two transaction and on my knowledge of the series, I figured that the 1873 in the Rumsey sale would bring somewhere in the $15,000-20,000 range.

Why did it sell for so much this time? I think there are a few reasons. First of all, at least two people really wanted this coin. Even though the opening bid was a very strong $24,000, these two bidders slugged it out until the final bell rang at $37,500. Strong price? Yes! Crazy price? Maybe not...

As I thought about the 1873, I had the following realization. For years, this was an absurdly undervalued date. The NGC AU58 that sold for 28 grand in 2010? Even though it wasn't a cosmetically appealing coin, even then I knew it was really cheap. And here's why. For years, the quartet of very rare business strike Type Three Philadelphia double eagles traded in the $5,000-10,000 range for decent EF examples. But after they suddenly got hot, prices rose to $20,000, then to $30,000, then even higher. An 1873 eagle is just as rare as any of the Big Five Philly Type Threes. Why should it sell at such a discount? Especially now that Liberty Head eagles have some strong collector support?

The 1876 eagle in the Rumsey sale (Lot 1047) was graded AU53 by PCGS and it also sold for $43,125. To me, this was a very surprising price.

I find the 1876 to be less rare than the 1873, despite a lower mintage of 687 coins. There are around forty to fifty known and I can recall having owned at least three in the last two to three years. Like the 1873, they were not an easy sell even with the fact that the mintage figure is the second lowest in the whole series after the 1875.

Heritage 10/10: 4892, graded AU53 by PCGS, was a good comparable to the Rumsey coin and it sold for $14,950. I figured the Rumsey coin might bring as much as $20,000 and it opened at just $13,000. Again, two bidders slugged it out and this time, the match lasted longer.

Good deal or bad deal? I liked the coin better than the 1873 (I thought it migt upgrade to AU55 if resubmitted) but I didn't think that the 1876 carried as much opportunity cost. In other words, I would have told a collector that if this one doesn't work out, it's possible that another decent coin will turn up in a year or so; maybe even less. So, on this one, I'm going to have to vote more towards the "not a bad deal but probably not a good deal" camp.

As is so often the case in my writing (and my thinking!) I've gotten a bit off track and still don't feel that I've totally answered the original question in this blog: "how do you price really special coins?"

I've mentioned above that published price information is not a good indicator for really rare coins. And while sometimes helpful, auction price data has to be very subtly interpreted to be truly helpful.

Ultimately, the price of a really special coin boils down to what your gut feels that it is worth. If you are willing to pay $25,000 for a decent 1864-S eagle and you've been waiting four years for the chance to buy one, shouldn't you be willing to pull the trigger at $30,000 or even $35,000?

What I find most helpful is knowing the series in question very well. As I mentioned above, the Liberty Head eagle series has become more popular in the last two or three years than at any time I can remember. So pre-2010 auction prices often have to be taken with a grain of salt. And it helps to know that certain other rare issues, like the 1883-O, have a number of recent auction trades and private sales in the $40,000-70,000 range. The 1883-O is more popular than the 1873 and the 1876 but it is of comparable rarity. If an AU50 example of this date is worth $50,000-60,000 then shouldn't an 1876 in AU53 be worth at least half this?

These are the sort of questions that make numismaics such an enjoyable pasttime to me. Do you have questions or comments regarding the values of really special rare coins? If so, please feel free to email me at dwn@ont.com