Winter's Law of Numismatics

I was recently having a conversation with a long-time client about coin investing and our discussion turned to one of Winter’s Laws of Numismatics. Which basically says that the typical coin investor almost never makes money while the typical collector, often in spite of himself, tends to do just fine from a financial standpoint. At DWN, I tend to regard “investing” with a raised eyebrow. If someone who I do not know calls me up out of the blue and starts talking about coin investment, I give him a lecture which basically states that coins are not good investments and that if he insists on looking at coins strictly as investments, he probably should be dealing with XYZ Coins instead of my firm.

But this isn’t totally true. Coins CAN be a good investment. Let’s say that as a knowledgeable collector you went to the Pittman sale in 1997 and spent $50,000 on some nice lots. The chances are pretty good that you would have done just fine from a financial standpoint.

Before we go further, I suggest you re-read the last paragraph. Notice that I said if you had “gone to the Pittman sale in 1997.” This presumes at least three important points. First, that you knew enough about the coin market that you (or an advisor) were able to determine that the Pittman sale contained good coins. Second, you were able to hold on to your coins for a long period of time (hard to believe that the Pittman sale was ten years ago, isn’t it?). And thirdly that you were able to select nice enough coins for them to be “investment quality.”

The trouble with coin investing is that virtually all coin investors buy the wrong coins from the wrong people at the wrong point in time.

When I look at the typical “rare coin portfolio,” I am usually struck by a few things. The coins tend to be very common and very boring; things like common date Walkers in MS66 or common Saints in MS65. Coins like this will never be good investments because they are too common. The second thing I am struck by is that the coins in these portfolios (the very word “portfolio”, when it comes to coins, makes me cringe...) are invariably overpriced. Even coins like MS66 common date Walkers or MS65 common date Saints which have a well-known buy/sell spreads tend to be dramatically overvalued in these portfolios. Another thing I notice is that these common coins are usually bought at exactly the wrong time; usually when a common series is in the midst of a promotion.

Getting back to the point I was making earlier, collectors often make excellent investment decisions even though, many times, they don’t really know they are making them. The smartest things collectors can do are to buy coins that are pretty, coins that are rare and coins that are in demand. An investor is not likely to know which coins qualify as such and the “advisor” that he speaking to likely does not know either.

So as an investor, what can you do to improve the chances that you will actually make some money? My answer is simple: learn to think like a collector. Learn something about the coin market. Realize that coin collecting involves a lot more than checking “past performance” charts and analyzing statistics.

State of the New Orleans Gold Coin Market

I was discussing the State of the New Orleans Gold Coin Market yesterday with a collector and he pointed out something very interesting to me. In the calendar year of 2007, there were probably fewer important high grade New Orleans eagles sold than any other gold denomination from this mint. This got me thinking and the more I looked into this statement, the more I realized that it was true. 2007 began with a bang for New Orleans eagle collectors when Stack’s sold the Morgan collection. Included in this collection were coins such as the only Uncirculated example of the 1879-O (an NGC MS61 that I purchased as an agent for a California collector for a record $52,900) and the third finest known 1880-O (also graded MS61 by NGC; I purchased this for the same collector for $16,100).

After the strength of this sale, I expected the proverbial flood gates to open and a number of important, high grade New Orleans eagles to become available.

Shortly thereafter, I was able to offer the magnificent Pinnacle Collection of New Orleans gold which contained a number of Condition Census pieces in all denominations. With the exception of double eagles which were never a focus of the original owner, the eagles in this collection were probably the weakest denomination, at least from the standpoint of grade. There were some truly lovely eagles in this collection but unlike the quarter eagles and half eagles (which were virtually all MS60 and better and which included numerous coins high in the Condition Census) the eagles were mostly nice, original AU55 and AU58 coins.

After this flurry of activity in January, the New Orleans eagle market was very dry until Heritage offered a small but interesting group of pieces in the ANA sale. Of particular note were the second finest 1882-O (a PCGS MS63) that sold for a record $37,375, one of the finest known 1897-O (a PCGS MS64 that realized $14,950)and the third finest known 1899-O (an NGC MS64 that went for a reasonable $12,663). Another important piece in this sale was a very high end PCGS MS63 1892-O that sold for a record-setting $10,350.

And then...nothing. The year ended with virtually no important New Orleans eagles appearing at auction and this trend appears to be continuing into 2008. Having just reviewed the FUN offerings from Bowers and Merena, Heritage and Stack’s I noticed a virtual absence of any significant New Orleans eagles.

So where are all the coins and why are they not coming up for sale? These are good questions and while I do not have definitive answers, there are a few reasons that I suspect are the root cause.

The first is pretty obvious. Many New Orleans eagles (especially the No Motto issues) are very rare in high grades. When you are talking about a coin like an 1842-O eagle in properly graded Uncirculated, you are looking at an issue with maybe three or four known. Coins that are this rare do not trade with a great degree of frequency.

Especially when we look at reason number two. The New Orleans eagle market is still in its infancy in terms of development and the “players” in this market tend to be buyers at this point as opposed to sellers. This means that many of the really cool pieces that exist are in tightly-held collections and are not likely to be sold at any time soon.

Another not-so-obvious reason is what I call the “spillover effect.” New Orleans eagles have a number of specialized collectors and these individuals are often competing with Liberty Head eagle specialists when important coins come up for sale. I know of at least three collectors who are working on completing high grade sets of Liberty Head eagles. This means that if, for example, a high grade 1846-O eagle were to become available, the New Orleans eagle specialists would be duking it out with the Liberty Head eagle specialists (not to mention the generalists who like interesting coins) creating an unusual amount of competition.

One other reason for the lack of available coins has to do with poor price reporting. I would contend that a coin like the aforementioned high grade 1846-O eagle is worth a lot more today than it was in, say, 2003. But Trends and CDN Bid levels are essentially the same as they were five years ago. Since this very rare coin shows no “paper profit,” what motivation would its owner have to sell it unless he needed money? Until Trends and Bid show accurate values for coins such as high grade 1846-O eagles, the people who own them have no real motivation to sell.

There were a few other interesting New Orleans eagles that sold privately in 2007. I sold Condition Census examples of dates such as 1843-O, 1849-O, 1859-O, 1881-O, 1883-O, 1894-O and 1904-O. I would assume that some other pieces were sold by dealers who specialize in rare gold coins as well.

It will be interesting to see if these market conditions continue for New Orleans eagles in 2008 and beyond. I see a strong new level of demand for this denomination and expect some deep-pocketed new collectors to focus their attention on New Orleans eagles. I just wonder if they will be able to find enough coins to satisfy their hunger.

Charlotte Half Eagle Rarity

As I’ve been working on the updated third edition of my Charlotte book, I’ve had the chance to make some interesting observations regarding the rarity of Charlotte half eagles. The overall rarity of most Charlotte half eagles has changed. In nearly every instance, this has meant an increase in the total number known for a specific issue. As an example, I estimated in the second edition that 70-80 examples of the 1840-C half eagle existed. My revised estimate, in the third edition, is 80-100.

The increased populations are a result of a number of factors. After nearly twenty years of grading Charlotte coins, the PCGS and NGC populations represent significantly large percentages of the known total for every specific issue. So, these population figures carry more weight with me than they did ten years ago (and, yes, I have figured regrades/resubmissions prominently as a factor of total populations from both services).

I believe that my second edition estimates were also a bit on the low side when it comes to lower grade coins. While I knew of nearly every high grade 1840-C half eagle that exists (now or when the last edition was written) I tended to underestimate the low grade coins. My new estimates try to take into account these pieces.

There are changes in the population estimates for EF and AU half eagles because, let’s face it, the EF45 of ten years ago is, in most cases, an AU50 (or higher) today. I’ve tried to factor in gradeflation into my estimates and I tend to discount some of the slabbed AU50 or MS60/61 coins as, in my opinion, they do not meet my personal grading standards.

One thing my updated research has reinforced is that really choice Charlotte half eagles (MS63 and better) remain genuinely rare. While many of the coins listed in the Condition Census of my second book have changed owners and, in many cases, holders, they remain coins with pedigrees that I am able to trace back to the 1990’s or earlier. I’ve also noticed that the grading services have done a good job (most of the time) at holding the line on higher grading Charlotte half eagles. While a few MS63’s have become MS64’s or MS64’s have become MS65’s, many of the coins that were grading MS64 or MS65 back in the mid-to-late 1990’s have remained consistently graded.

The Bass sales, held from 1999 to 2001, had a huge impact on the third edition of the book. Many of the coins that I speculated about in the first two editions but were unaware of their location/grades were in the Bass collection. They now appear in the third edition; complete with accurate pedigrees and current grades.

What are a few other things that I have learned about Charlotte half eagles that will be reflected in the new third edition of the book?

* I’ve learned that some of the die variety information for issues such as the 1849-C, 1850-C, 1853-C and 1854-C was wrong and it has been corrected.

* I’ve learned the value of good pictures and the crappy old black and white images that appeared in the first two editions will be replaced by useful color plates.

* I’ve learned that people generally liked the format and design of my second edition of the New Orleans gold book that I published last year and so this format will be adapted to the upcoming Charlotte book.

* Finally, I’ve learned that Charlotte coinage for me is like the numismatic equivalent of “home cooking” and when I’m feeling cranky or burned-out, nothing is more numismatically soothing than a dose of Charlotte half eagles.

The 1854-S Type One Double Eagle

One of the more interesting and most misunderstood Type One double eagles is the 1854-S. This is an issue whose seemingly high population of Uncirculated coins belies the fact that it is actually extremely rare in higher grades. Read on for some more information about this interesting issue. The 1854-S double eagle is a historically significant coin as it is the first double eagle produced at the new San Francisco mint. Unlike the quarter eagle and half eagle of this year, it is a relatively obtainable coin as one would expect from its original mintage of 141,168. PCGS has graded a total of 148 while NGC has graded a total of 158. In my book “An Insider’s Guide to Collecting Type I Double Eagles” I suggested a total population of 325-425+. I believe that this figure remains accurate.

What is especially interesting about this date, however, is its population in Uncirculated. Looking at the PCGS and NGC populations, one might think that the 1854-S is only moderately scarce. After all, PCGS has seen 52 in all grades of Mint State while NGC has recorded 68.

But the population reports fail to explain an important fact about the 1854-S double eagle: virtually every coin in a PCGS or NGC Uncirculated holder has matte-like surfaces as a result of exposure to seawater.

Seawater Uncirculated 1854-S double eagles come from no less than three sources:

The wreck of the Yankee Blade which sank off the coast of Santa Barbara in October 1854. It is believed that somewhere between 100 and “a few hundred” coins with Uncirculated sharpness were recovered.

The wreck of the S.S. Central America which sank in 1857. It is believed that 20 or so 1854-S double eagles were salvaged from this ship and this includes some with Uncirculated sharpness.

The wreck of the S.S. Republic which sank in 1865. There were eight 1854-S double eagles salvaged from this ship including five that were graded by NGC and three which were “no grades” due to problems. Seawater Uncirculated 1854-S have a matte-like surface texture due to exposure to the oceanic environment in which they rested for over a century. But there are also a few other interesting tell-tale signs that they show.

As mentioned above, the majority of the seawater 1854-S double eagles are from the Yankee Blade shipwreck. These coins (as well as the ones that I have seen from the S.S. Central America) have die cracks on the obverse and the reverse which are easily identifiable. On the obverse, there is a crack to the left of the 5 that runs from the rim to the truncation and which branches off to the right over the 4. Another crack begins at the left side of the coronet and runs up to the space between stars six and seven. The reverse shows a large crack from the first T in STATES out into the field below the UN in UNITED. I have never seen a seawater 1854-S double eagle in any grade that did not have these cracks.

What’s interesting about the non-seawater coins is that they do not show any of the cracks described above.

There are some other minor diagnostic differences between the seawater and non-seawater coins as well. On the former the 54 in the date are very close and the top of the mintmark is firmly embedded in the tail feathers. On the latter, the 54 appears to be less close and the mintmark is a bit lower.

I first learned about the rarity of high grade 1854-S double eagles with original surfaces around fifteen years ago and have searched for Uncirculated pieces for many years. The finest that I have ever seen is a piece that was recently sold as Lot 61779 in Heritage’s November 2007 sale where it brought $21,850; it had earlier been in the Bass collection and it sold for $10,925 when offered as Bass III: 781 in May 2000. The only other example I can recall having seen with claims to an Uncirculated grade was Heritage 1/05: 9473 ($5,175). This coin was in an old holder and it might grade MS60 or better by today’s standards. It is now owned by a collector in Connecticut.

So where are all of the high grade 1854-S double eagles without seawater surfaces? My guess is that a considerable number were melted. This seems more likely when one takes into account the fact that the vast majority of the 325-425+ pieces known lack original surfaces. My best estimate is that only 25-50 are (currently) known from non-shipwreck sources. It is my opinion that these should command a strong premium over seawater coins in all grades.

What Will It Take To Jumpstart The Charlotte Gold Market?

In the last few months I’ve been asked a similar question by at least three collectors: what will it take to jump start the Charlotte gold market? This is an excellent question and I’d like to raise a few points that I think will explain what possible scenarios could affect these coins and the impact that they might have. Before delving into these specific points, I think a little background is in order. Charlotte gold coinage has been in a price and popularity slump for the last five or so years. I attribute this to the following reasons:

There are a lot of really low quality coins in PCGS and NGC holders on the market. When one sells for a low price at auction it tends to drag down the nice examples of this issue along with it.

My book on Charlotte gold coins is out of date and scarce. An updated third edition should be ready by the spring of 2008.

A few of the larger marketing firms who traditionally have sold Charlotte coins (both high end and low end pieces) have shifted their focus to other areas of the rare date gold market.

There haven’t been any really interesting collections of Charlotte coins that have come onto the market for a number of years. Often times, when a neat, fresh collection is offered for sale at auction, this generates new collector interest.

Many of the long-time specialists in this field have completed their sets and are not currently in the process of upgrading. This fact, combined with a relative lack of new collectors, has caused the supply of Charlotte coins to outstrip the demand.

I do not mean to give the impression that the Charlotte market is totally dead because it isn’t. I have personally had a good amount of success selling Charlotte coinage in the past few years but I have become extremely selective with what I buy. I will only purchase choice and original coins and I am probably less willing to make a slight allowance for “off quality” as I am in a more popular area such as Dahlonega gold or New Orleans double eagles. I know for a fact that there are a number of collectors working on VF-EF date sets in all three denominations and I have had a relatively easy time selling any very high quality (MS63 or better) pieces I find which have great color and eye appeal and/or which have a great pedigree.

Now, for some answers.

There is absolutely no question that the Charlotte market is not being helped by the existence of some really piggy coins in holders. I think this problem will be helped by the CAC stickering of nice coins which will generate new interest by collectors and dealers alike. New collectors will be helped by the fact that they can determine which coins are believed to be nice for the grade.

From my experience, a new (or updated) book on any subject generates a lot of interest. I can’t imagine that an improved and easily available Charlotte book won’t get a few new collectors interested. It will probably also motivate a few marketing firms to start selling Charlotte coins as they will have a guide to send collectors and to assist their sales force in making presentations.

The combination of CAC stickers, a new book and available product would certainly be good motivation for said marketing firms to sell Charlotte coins again. This might help remove some of the lower end and very high end pieces from the market which will leave the middle to upper middle end coins for collectors. When the Charlotte market was at its healthiest stage in the 1990’s, strong interest was seen not only in the collecting segment of the market but in the mass marketing segment as well.

In their January 2008 FUN sale, Heritage is going to sell a wonderful, fresh group of Charlotte coins called the Carolina Circle collection. This will be one of the first really important groups of Charlotte coins to be offered at auction since the incomparable run of collections sold at auction between 1995 and 2002 (Pittman, Bass, North Georgia, Miller, etc) and I would not be surprised if this creates a few new collectors.

The economics of any market are very simple. If the demand exceeds the supply, prices go up. Prices for nice EF40 and EF45 Charlotte coins have doubled in the past five or so years because there is a strong collector demand for these. Prices for overgraded, unattractive AU55 and AU58 coins have actually dropped (in some cases considerably) in the past five years because collectors do not want them and demand is—rightfully—very low for said items.

Personally, I think the sweet spot of the Charlotte market right now is nice AU55 and AU58 coins. These are, in most cases, very scarce but premiums are much lower than in the past. As an example, around five years a common date Charlotte half eagle in EF was worth around $800-1,000 while a common date in AU55 was worth $3,000-4,000 (or approximately 4x the price of an EF). Today, the EF is worth around $2,000-2,500 while the AU55 is still worth $3,000-4,000 (or approximately 1.5-2x the price of an EF).

New Orleans Double Eagles: An Update

As double eagles are clearly the most popular and highest priced gold coins produced at the New Orleans mint, I thought it would be interesting to update each issue and see what has transpired since the publication of my book "Gold Coins of the New Orleans Mint, 1838-1909" last year. Taken as a whole, the market for these issues remains extremely strong. There are clearly a number of wealthy collectors who are assembling sets and when the "stoppers" become available for sale, they inevitably bring record prices. It is interesting to note that virtually every date in this series has set a new auction price record since my book was published in 2006. It is also interesting to note that, despite the strength of this market, auctions are not flooded with interesting New Orleans double eagles. The supply/demand ratio for these coins seems to be working just fine.

1850-O A new auction record was set in December 2006 when Heritage sold an NGC MS60 for $49,444. In addition, an auction record was set for an AU58 when Heritage sold a PCGS graded example for $40,251 in June 2007 (interestingly, the exact same coin had brought $34,500 in Heritage’s May 2007 sale). These prices show that demand for high grade, choice 1850-O double eagles is currently very high and if a really nice Mint State piece were to become available, I think it would easily set a record price. I have noticed some price resistance for lower end 1850-O double eagles in the EF45 to AU55. Collectors realize that they can afford to be reasonably fussy when it comes to this date and if the surfaces of a specific example are heavily abraded, the coin will sell at a discount.

1851-O I set a record price for an 1851-O double eagle when I paid $48,875 for a beautiful PCGS MS62 in the Heritage 2006 ANA sale. Interestingly, this is the only high grade 1851-O that has traded publicly since the release of my book in 2006. Until a few years ago, I used to see fairly high grade (AU55 and above) examples of this date with some degree of regularity. This does not seem to be the case anymore which leads me to conclude that either this issue is scarcer than I once believed or that most of the better pieces are in tightly held collections. The 1851-O has a similar Trends value to the 1852-O in higher grade but I feel it should sell for a 10-20% premium.

1852-O I set another record price at Heritage’s 2006 ANA sale when I paid $48,875 for a choice PCGS MS62 1852-O double eagle. Another high quality coin (this piece was graded MS60 by NGC) realized a strong $34,500 in the Heritage October 2006 sale. For a point in time between 2005 and early 2007, it seemed that unattractive, overgraded AU55 and AU58 1852-O double eagles were everywhere. These were selling for levels up to $12,000-14,000 for 58’s which, if you ask me, is a lot of money for a not very nice and not very rare New Orleans double eagle. I believe that nice, accurately graded AU55 and AU58 examples are still scarce but they seem fully valued at current levels. In Uncirculated, the 1852-O is clearly a rare and very desirable coin.

1853-O If there is one New Orleans double eagle that needs a major adjustment in Trends, it is the 1853-O. Current Trends values are $2,000 in EF40, $2,500 in EF45 and $4,500 in AU50. These numbers were probably accurate in 2000-2002 but they are long out-of-date. In 2007, Heritage sold two EF45 1853-O double eagles in their auctions. The first was an NGC EF45 that brought $4,025 in August. The second was a PCGS EF45 that sold for $5,750 in February. Both were decent but neither were PQ or nice enough that they were purchased by dealers as potential "crackout" candidates. I would suggest that Trends be raised to at least $4,000 in EF40 and $6,000 in EF45. A new auction price record for this date was set in August 2006 when an NGC MS61 realized $34,626 in Heritage’s ANA sale. I personally think the 1853-O is a tougher coin in AU55 and higher grades than I once believed and I would not be surprised to see values continue to rise for this issue.

1854-O I’ve come to a pretty major revelation as far as the 1854-O goes. For many years I believed the 1854-O was actually the second rarest double eagle from New Orleans, both in terms of overall and high grade rarity. After carefully observing these two dates for the past few years I now believe that the 1854-O is very slightly rarer in terms of overall rarity and unquestionably scarcer in terms of its high grade rarity. In looking at auction records, it is interesting to note that since 2002, a total of ten 1854-O double eagles have sold in comparison to nine 1856-O double eagles. In this same period, I know of another three or four of each date that have sold via private treaty. I feel that my estimate of 25-35 known for the 1854-O may be a bit on the high side and that the total number known is possibly as low as 20 or coins. In higher grades (in this case AU50 and above) the 1854-O is clearly a rarer coin than the 1856-O. PCGS shows a total of nine coins in AU but only three grade AU55 with none better. I have seen the majority of the 1854-O’s graded AU50 by PCGS and almost all of them are underwhelming, to say the least. I know of only one relatively choice 1854-O (the Dallas Bank Collection coin now owned by a prominent Midwestern collector and graded AU58 by NGC) and only one or two others that, by my standards, grade AU55. (NOTE: I have never seen the NGC AU58 from the S.S. Republic so I do not feel qualified to comment on its quality).

A new auction price record was set for the 1854-O double eagle in August 2007 when a PCGS AU55 sold for $494,500.

1855-O Something odd has happened with this date in regards to its availability. As recently as a few years ago, 1855-O double eagles were seen fairly regularly in higher grades. In fact, at one point (around 2002?) I owned two very nice PCGS AU55’s at the same time and right after I had sold the second of these, I bought yet another. But in the last few years, the supply has almost totally dried up. Heritage’s auction archives shows a total of 17 having been sold since 2002 but I am certain this includes a number of re-offerings plus at least a few lower grade or problem coins. The strong demand for higher grade 1855-O double eagles was clearly seen a month ago when a PCGS AU55 brought $57,500 at auction which is a pretty impressive price when one considers that Trends is only $40,000. This amount is an all-time auction record and I think if a nice AU58 were to become available in the next few months it could bring close to six-figures.

1856-O As I mentioned above, I am now of the opinion that while very similar in overall rarity to the 1854-O, I think my original estimate of 20-30 remains accurate with the total number known probably somewhere in the low end of this range. In AU50 and better, the 1856-O is more available than the 1854-O and there are definitely a few more "nice" examples known than for the 1854-O.

In my book, I think I did a poor job of providing Condition Census information for the 1856-O and here is a listing of the best pieces of which I am currently aware:

1. Private collection, ex: Heritage 6/04: 6372 ($542,800). Graded SP63 by NGC. 2. Midwestern private collection. Graded AU58 by PCGS. Probably ex: Eliasberg: 889. PCGS shows a second coin having been graded AU58. I am reasonably certain that it is not coin #2 but am not aware of its pedigree. NGC also shows two coins graded AU58. One is listed below; the other is not listed as I am not yet certain which example it is. 3. New England collection, ex: Doug Winter 12/07. Graded AU55 by PCGS. 4. Arlington collection, ex: Heritage 7/05: 10399 ($431,250), Bowers and Merena 10/99: 1711 ($105,800; as PCGS AU53), Harry Bass collection. Graded AU55 by PCGS. There are two other coins listed as AU55 by PCGS. I am not certain that these exist but it is possible that coin #6 below may have crossed from an NGC holder to a PCGS holder. 5. Private collection, ex: Bowers and Merena 3/07: 5597 ($356,500; as PCGS AU53). Graded AU58 by NGC. 6. Heritage 7/02: 9472 ($132,250), ex: "Midwestern collection." Graded AU55 by NGC. One of the coins listed above may be the example from the Amon Carter collection listed in the first edition of my New Orleans book.

1857-O No new Condition Census quality examples of this date have turned up in the last two years. There have been a few nice AU55 and AU58s that have sold at auction and I can recall at least one MS60 coin trading privately. I have yet to see any of the Uncirculated coins from S. S. Republic and would be very interested to know how they compare to the non-salvaged high grade pieces that exist. In my opinion, Trends in lower grades needs to be raised significantly. The current listings show $2,500 for an EF40, $4,000 for an EF45 and $5,500 for an AU50. Given the fact that examples in these grades bring way over Trends when they are sold at auction, I would suggest that levels be raised to $5,000 in EF40, $7,000 in EF45 and $10,000 in AU50.

1858-O The all-time auction price record for this date was tied in February 2007 when an NGC MS61 sold for $50,600. This is the same amount that Bass III: 795 brought when it was sold back in May 2000. The difference in quality between these two coins is very significant, however, as the Bass piece is extremely choice. A fair number of nice AU55 and AU58 1858-O double eagles have been available in the last two years and these have brought nearly full Trends (or in some cases over this amount). In EF40 and EF45, Trends seems low ($3,500 and $4,500, respectively) and these values need to be increased.

1859-O The 1859-O has remained an extremely scarce coin in higher grades and the last two choice pieces that have sold at auction (an NGC 55 and a PCGS 55) brought $54,625 and $66,125, respectively. My guess is that the current auction record of $92,000 (set in January 2005 with the sale of a very high end PCGS AU58) will probably be broken within the next year or two; or whenever a Condition Census example becomes available. The certified populations of this date seem to have become somewhat inflated. PCGS shows a total of 42 graded but 26 of these (or almost 62%) are in the various AU grades. My guess is that both AU50 and AU53 populations are inflated plus these include some pieces that are enthusiastically graded. The NGC populations in the higher AU grades are, as expected, a disaster. The current census shows ten in AU55 and eleven in AU58. The less said about these figures, the better.

1860-O A new auction record was set in November 2007 when a PCGS AU58 sold for an astonishing $83,375. But as high as this price seems, when one considers that there are only four 1860-O double eagles graded AU58 by this service, you have to figure that the demand level for high grade 1860-O double eagles will continue to soar. Interestingly, in January 2004, Heritage sold another PCGS AU58; it brought $48,875. The finest known 1860-O remains the PCGS AU58 in a Midwestern collection that is ex: Eliasberg and Atwater. I hate to harp on NGC and their population figures, but here is another date where the current figures from this service are ridiculous. 16 coins graded AU58? I don’t think so...

1861-O The previous auction record of $37,375 has been broken no less than six times since the publication of my book. The current auction record is $51,750 set by Bowers and Merena in March 2007 for the sale of a coin graded AU55 by PCGS. Auction records for AU examples have been fairly plentiful in the past few years. I attribute this to a few factors. The first is that prices have raised enough that a few choice pieces have come out of hiding and onto the market. Secondly, a few of the AU53 to AU55 coins have bounced around from auction to auction; in some cases morphing from NGC to PCGS or upgrading. Finally, I believe that grading standards have loosened more for this particular date than probably any other New Orleans double eagle.

1879-O A very important newly discovered 1879-O was handled by myself and dealer John Dannreuther at the 2006 ANA. This coin was conservatively graded MS60 by NGC and it was notable for having lovely original color and surfaces as well as uncharacteristic satiny luster. It was sold to a New England collector. There are now four or five Uncirculated 1879-O double eagles known to me. Price levels for this date have skyrocketed in nearly all grades in the last few years. In the not-so-distant past, you could buy a decent VF 1879-O double eagle for $3,000-4,000, an EF40 for around $5,000 and a nice EF45 for $7,000 or so. Today, marginal quality VF’s are bringing $20,000-30,000 at auction while EF’s are now worth $30,000+.

New Orleans double eagles have become one of the more popular areas in the current coin market. They are also clearly one of the more challenging and expensive coins to collect. There are only thirteen issues in the series but virtually all of them are hard to find in higher grades and nearly all are expensive as well.

What does the future hold for this area of the market? I wouldn’t be surprised to see prices for marginal quality coins begin to drop as I find it hard to imagine that collectors will, for example, continue to pay $25,000 for a not especially attractive VF example of an 1879-O. But I would not be surprised to see prices continue to rise for the very rare issues (1854-O and 1856-O) and further price increases for the second-level rarities as well (1855-O, 1859-O, 1860-O).

How are problem coins valued?

I’ve discussed many times the process in which how nice coins are assigned price levels. But how are problem coins valued? This is an interesting question and one which is becoming a bit easier to answer since NCS coins have become a well-accepted part of numismatics. (Before I begin, I should state here that NCS or Numismatic Certification Service is a division of NGC that certifies and encapsulates “problem coins” which NGC does not see fit to put in their regular holders. This includes coins that are harshly cleaned, polished, heavily scratched, rim filed, etc. NCS only uses adjectival grades—i.e., they would call a coin “AU details” as opposed to “AU55 details.”)

The reason why non-problem coins are easier to value than problem coins is, well, because they don’t have problems. There is a greater degree of consistency of appearance between an 1830 half eagle in PCGS AU55 (or NGC AU55) than there is with this same issue when it has the details of an AU55 but it has been cleaned.

Let me explain what I mean by this. If you were to call me up and offer me an 1830 half eagle in PCGS AU55, I would have a decent idea of what to expect. I’m figuring that it has light wear, a decent amount of remaining luster, maybe a few scattered marks in the fields and probably a pretty good overall appearance. But if you call me an offer me an 1830 half eagle in an NCS holder that states the coin has “AU details” but has been “cleaned,” I’m not sure what to expect. Has it been lightly cleaned or harshly cleaned? Does it have an acceptable appearance or does it look overly shiny from having been polished or perhaps whizzed?

From my experience with viewing NCS coins, there is a very wide range of coins in these holders.

I’ve seen coins that NCS has called “cleaned” that look pretty acceptable to me; not very different, in fact, from coins encapsulated by both NGC and PCGS. I’ve also seen coins placed in NCS holders that had planchet flaws or mint-made surface that, in my opinion, could just as easily be in “normal” NGC or PCGS holders.

But back to cleaned coins and how to value them. As a general rule of thumb, I think that if a coin has been lightly cleaned it is worth around half of what a non-cleaned example would be worth. The NGC or PCGS AU55 1830 half eagle that I mentioned above is a $60,000 coin if it has a decent, original appearance. In an NCS “AU details—cleaned” holder it’s more likely worth $30,000 or so. And if it’s a very harshly cleaned AU coin with some damage as well it is more likely worth in the area of $15,000-20,000.

This brings me to a philosophical question. Would I, as a collector, want to own a very rare but very ugly coin that costs $20,000 or $30,000? I do not personally like problem coins even though I can understand their value and why certain collectors would want, say, an “affordable” example of a desirable coin like an 1808 quarter eagle. But I would rather spend my $20,000 or $30,000 on a coin that was less rare and more aesthetically pleasing. If my budget for a very rare coin like an 1808 quarter eagle was only $20,000-30,000 I would re-examine the “need” for this issue to be in my collection and would spend the money on something nicer.

Remember what I said above about the varying degrees of “cleanedness” or damage seen on NCS coins? I might actually not mind owning an NCS encapsulated 1808 quarter eagle with VF or EF details that had been lightly cleaned and which had a good appearance. The thing to consider, though, is that many other collectors feel the same way and such a coin might actually sell for a value level not much less than a VF or EF that was in a regular NGC or PCGS holder. The real question is would I want to own an 1808 quarter eagle that looked like it was run over by the proverbial train. And if I did, what would I pay for it?

Carolina Circle Collection of Charlotte Gold Coinage

I recently completed cataloging the Carolina Circle Collection of Charlotte gold coinage for Heritage. This collection, which was primarily formed in the 1970’s and 1980’s, is going to be sold by Heritage during their 2008 FUN auction. It is a virtually complete collection, missing only the 1849-C Open Wreath gold dollar and it contains some of the nicest—and freshest—coins from Charlotte that I have seen in some time. I have known the owner of this collection for a number of years and when he made the decision to sell, I suggested that he place the coins in the 2008 FUN auction. About 40% of the collection is housed in very old PCGS and NGC holders and I suggested to this individual that he keep the coins in these old slabs; despite the fact that many of them appeared to be significantly undergraded by today’s standards.

What I really like about this collection is the originality of many of the coins. Almost all of them are in the EF40 to AU58 range and a number are notable for their superb original color and unadulterated surfaces. There are a few individual coins that I think rank as among the most attractive Charlotte gold coins I have ever seen; regardless of date or denomination.

My two favorite gold dollars in this collection are an 1849-C Closed Wreath and an 1850-C. Both are in old PCGS AU58 holders and both, in my opinion, grade considerably finer by today’s standards. I think both coins have great eye appeal and would make excellent additions to a date or type set. I also like the AU55 1857-C gold dollar in this collection. It, too, is in an old green label holder and it seems very choice for the date and grade.

The quarter eagles in the Carolina Circle Collection are outstanding and include a number of Condition Census pieces. Even though it “only” grades NGC AU53, the 1839-C Repunched Date is a lovely original coin and is housed in an old “fatty” holder certain to attract attention. There are PCGS AU55 examples of the 1840-C and 1844-C, both in old green label holders, that are also extremely choice for their designated grade levels. The 1846-C and 1849-C quarter eagles are both also graded AU55 by PCGS.

There are two quarter eagles in this collection that I think are absolutely wonderful coins. The 1852-C is in an old green label PCGS AU58 holder but it appears far choicer than this. I absolutely love this coin’s coloration and I personally regard it as the third finest known for the date, trailing only the Bass II and Elrod coins.

I also really like the 1855-C in this collection. I had never seen or heard of this coin before I went to examine this group a few months ago and I’m sure I let out a big gasp when I first saw it. It is currently in a PCGS MS61 holder but I personally feel it is nicer than this. What I like best about this coin is its freshness as evidenced by its glowing frosty luster, lovely rose-gold color and extremely clean surfaces. It is probably the third finest known example of this rare date and it is the nicest 1855-C I have seen since the incomparable Bass coin was first sold in 1999.

The half eagles in this collection are complete and include a number of important and choice pieces. One that is certain to capture a lot of viewer attention is an 1838-C in PCGS AU58. While reasonably common in lower grades, this date is rare in AU and the current PCGS population is just three in AU58 with a single example higher.

The 1840’s half eagles in the Carolina Circle collection are, for the most part, very nice coins and this includes solid AU examples of the 1840-C, 1841-C, 1844-C and 1846-C. There is an 1842-C Large Date in an old green label PCGS AU55 that seems extremely choice for the grade, in my opinion.

The half eagle in this collection that will probably generate the most interest is the 1842-C Small Date. It is currently housed in an old ANACS AU50 holder but it appears to be considerably nicer than this. As you may or may not know, this is the rarest collectible issue from this mint and the typical piece is well worn with poor eye appeal. The example in this collection is lightly marked, well struck and original with good color and a very pleasing naked-eye appearance.

There are other less glamorous but very attractive half eagles in the Carolina Circle collection as well. An 1847-C in an older PCGS holder has superb color and great eye appeal. The 1851-C, graded AU50 by PCGS many years ago, seems to be way undergraded and it has an exceptional strike for the issue as well as superb deep yellow-gold color. The 1853-C, housed in a green label PCGS AU58 holder, is also attractively toned in rich, natural shadings.

If you follow the rare gold coin market you know that Charlotte coinage has been somewhat out-of-favor for the last few years. I predict that this collection will help to jumpstart this market. It’s been a number of years since this many fresh, attractive pieces have been offered for sale and, typically, when collection like this are sold, new collectors become interested in getting a set started.

For more information on this collection, feel free to contact me and I also suggest that keep an eye on Heritage’s website. I expect that the lots for the FUN sale will be posted sometime around the middle of December.

November 2007 Whitman Baltimore Coin Expo

Even though it involves a schlep of Biblical Proportions, I really enjoy the tri-annual Whitman Baltimore Coin Expo. I can count on three shows each year that will be professionally run, well-attended and extremely active from both a wholesale and retail perspective. In many ways, Baltimore is the new Long Beach. Prior to the beginning of the show, Stack’s conducted an impressive 3,800+ lot auction. I made the decision not to attend this sale in person as I did not want my Baltimore Experience to stretch into a nearly one week marathon. I did have a Trusted Agent look at a small number of coins for me and I placed a group of what I thought were strong bids. And I proceeded to get blown out of the water. While I can’t comment on the entire auction, the coins that interested me went for numbers that were pretty insane, to say the least.

The first day of the Baltimore show (Thursday) is dealer-only and, to tell you the truth, I like this very much. Having only wholesale business on this day let’s me get more done and it lets me focus strongly on buying.

But because of the fact that I had some interesting fresh coins with me, I spent most of Thursday selling. And selling. And selling some more. I had around fifteen CAC-stickered type coins and with the exception of two that I was asking very strong prices for, they all sold quickly. I can’t say for certain that it was because of the CAC stickers or because type coins are suddenly in demand. My guess is that it is a combination of the two.

So what sold? As I mentioned above, type coins that were attractive or scarce dates or, better yet a combination of the two were in great demand. I would look for this to be a very strong area of the market in 2008. I sold a number of great Carson City coins at the show including two nice AU 1870-CC half eagles, a Condition Census 1871-CC, a solid AU 1875-CC and a really cool secret coin from the 1880’s that I promised the dealer I sold it to that I wouldn’t tell anyone. I also sold a few big-time early gold coins, two proof gold coins and a group of New Orleans gold including some scarcer date eagles.

Generic gold was very active at the show. From what I could tell, demand was high but prices were quite volatile. As an example, at the beginning of the show on Thursday, MS65 Saints were bringing $1,400. But after a few people were short, prices slowly climbed and by the end of the show they were bringing $1,475.

The doors opened to the public on Friday and a Thundering Herd of Serious Collectors stampeded through the doors as the clock struck 10:00. OK, maybe it wasn’t a stampede but the room crowded up quickly and I ran into a majority of the serious collectors from the East Coast that I know by the early afternoon. People at this show definitely come to buy and not to tire kick and I sold a number of very interesting coins.

I typically leave a Baltimore show on Friday but business was so brisk that I rebooked my flight and stayed for the rest of the day. I continued being busy right up until the end of the day and left the bourse floor tired but very satisfied.

The good news about this show, as I mentioned, was that my sales were pretty exceptional. The not-so-good news is that my buying was good but not great. I loved what I bought but I would have liked to have spent a lot more money.

For me, the year is essentially over. I will still be buying and selling coins but my travel is done with the exception of a quick trip to Dallas before Christmas to view Heritage 2008 FUN sale auction lots.

My guess is that from now until the end of the year, things will be reasonably slow in Coin Land although if gold continues its upward ramble towards the $1,000 mark we might see some surprise rare coin activity.