How To Become A Coin Kingpin

Deciding what to collect can often be a case of deciding what not to collect. This zen-like statement actually makes a lot of sense once you get over the initial "huh?" Let me explain. Anyone with a more-than-casual interest in coins wants to be a force within the series he collects. By this, I mean he wants to be known as "the CC half eagle guy," or "the face of the Ten Indian market." So how do you get to be "the man" or, better yet, "the kingpin" of the area that you have chosen to specialize in? I think the answers aren't necessarily as intuitive as you might think they are.

1. Suss Out the Competition: Let's say that you've decided to collect Carson City eagles in very high grade. You research the market and determine that these coins are very rare and even though they are expensive they seem within your budget. You still need to find out who your competition is and how far along they are.

Let's say that your major competition in this series is a Texas billionaire with a virtually insatiable demand for the finest known. And he still needs many coins in the set. In this case, you have a problem unless you, yourself, are a billionaire and you are content with knowing that every coin you purchase is probably going to break a record for the date/series. This is discouraging.

But let's say that your major competition--said Texas billionaire--is virtually complete with this particular series and he has shown that he isn't likely to upgrade his Carson City eagles unless they are very, very special coins. In this case, you might not be as discouraged.

Or, you can be creative and look at it this way...

2. Be Adaptable: Just because the series you want to collect has a roadblock like a super-wealthy collector at the top end of the market, this doesn't have to stop you. Instead of buying the finest known Dahlonega half eagles or Charlotte gold dollars, what about a "gem slider" set of choice, original AU58 coins? Or what about putting together a set that features pedigreed coins? Or a set with nicely matched colors? Or a "sharp strike set" in which every coin represents as sharp a strike as possible for a specific issue? The options can be nearly limitless.

3. Timing is Everything: I'm not a huge fan of Gem Saint Gaudens double eagles as I don't think that they necessarily offer the same degree of value as much rarer 19th century gold issues do. But they are currently a comparably good value because of a unique set of circumstances. As recently as five years ago, there were a number of wealthy collectors in this arena and many of them needed the same six or seven rare coins in order to finish their set. When any of these coins came up for sale, it was going to be a Clash of the Titans and a bidding war was certain to erupt.

But just like magic, nearly all of these collectors went poof at the same time. Some lost interest, some completed their set, and some were hurt by the Financial Meltdown of 2008 and had to sell their coins. What this means, a few years later, is that there is now an excellent opportunity for a new collector to become a Kingpin of Saints.

Let me give you two examples. In the Saint series, the 1921 is recognized as one of the ultimate condition rarities. In November 2005, a beautiful PCGS MS66 example sold at auction for $1,092,500. The same coin sold for $747,500 in January 2012. In September 2007, a PCGS MS65 example of this same date sold at auction for $1,012,000. In August 2012, another PCGS MS65 sold for $587,500. Why did these coins--both were very rare and all were very nice--sell for such discounts? Because the top of the Saint Gaudens double eagle market lacked the multiple buyers that it had in 2005 and in 2007. But if you add two or three big players into the mix, I can just about guarantee you that the next nice quality PCGS MS65 or MS66 1921 double eagle that is offered will sell at levels close to--if not at--previous market highs. It has happened before and it is inevitable that it will happen again.

4. It's All About the Relationships. Unless you are willing to devote almost all of your free time to studying about coins and pursuing what you need, you are going to have to establish a relationship with a dealer (or two) who is a well-connected specialist within your intended field of Kingpin-dom.

Let me give you a pertinent example. I recently handled an extremely rare No Motto New Orleans half eagle. This is a coin that I could have sold to a number of collectors. But I chose to sell it to a collector who has nurtured a close relationship with me over the years. He's a terrific guy; sophisticated, well-read on the subject of New Orleans gold, and always ready to buy an important coin that will improve his collection. Because he has been such a pleasure to deal with over the years he was able to purchase a coin which gave him a complete set of New Orleans half eagles in Uncirculated; quite possibly the first such set ever completed.

There's something else about our relationship, though, that transcends coins. A few years ago, someone very close to me was sick and needed immediate care. I called this collector for a reference and within a few minutes I was able to make an appointment with a specialist who was very difficult to see due to his busy schedule. Like I said, it's all about relationships...

5. What's Old is New Again. If you want to be the Kingpin of your series or collecting area(s) you can focus on coins that are traditionally obscure and lack collector interest as a result. Or you can focus on coins that have traditionally been popular but for some reason are currently out of favor. (And, yes, this point is fairly closely related to point #3, above).

For many years, Charlotte gold was as popular as Dahlonega gold and it was certainly far more popular than New Orleans. But Charlotte gold has become the least popular of the three southern branch mints. Lower prices and availability of some great coins in the past five to ten years have meant that at least one or two collectors could have put together fantastic, world-class set; and at comparably reasonable prices as well.

My point here is this: just like with the Gem rare date Saints that I discussed above, Charlotte gold is a proven area of the market with a good reference book and a long collecting history. Values peaked for these coins around 1999-2000 and, in some cases, Condition Census coins are selling for less than they were nearly a decade and a half ago. These seem to be a surer bet than something like high grade With Motto San Francisco eagles from the 1880's and 1890's that have never really been popular and possibly never will be.

What are some areas of the numismatic market in which it is still possible to be a kingpin? A few of my suggestions are as follows:

1. Gold Dollars: There are two or three collectors competing for finest known coins at the very top end of the market but this series offers a lot of opportunity for the kingpin-in-training.

2. Better Date San Francisco Gold Coins, 1854-1878: There are pockets of strength in this market but there is no one collector who I'd consider The Man when it comes to very high end SF gold.

3. Type Two Liberty Head Double Eagles: This is an area of the market that remains pretty calm after being in the spotlight for much of the 1990's and early 2000's. When really special coins become available (which is not all that often) they seem to bring considerably less than I think the are ultimately worth.

4. Indian Head Half Eagles: This is a series that tends to have periodic flares in popularity but then it grows dim for years. There is currently some rumbling in the higher end but The King of Five Indians seems to still be waiting to claim his crown.

Do you need help to become a Coin Kingpin? If so, please contact Doug Winter by email 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