Why Are Some Rare Coins Undervalued?

Why are some coins clearly undervalued? I could answer this question existentially and say “because some have to be.” But the answer to this question is worth a little more exploration. Here are some things to consider about the valuations of coins. First and foremost, many of the areas of the rare coin market are thinly traded. In some cases, published prices for coins are speculative due to no examples having ever traded or they represent older price levels that have not been updated in many years. There are times when I am trying to figure what to bid for a very special rare coin at auction and I’m not sure I can scientifically pinpoint the exact price level. This can even be the case with coins that aren’t all that special but which haven’t traded in a long enough period of time to make their current value baffling.

Coin values are predicated by a supply and demand ratio. I have used this scenario enough times that it is now a semi-cliché but consider the following. If there are ten examples known of a certain coin but only three people care, it has an oversupply and its value is probably not very high despite its rarity. But if the same coin has thirty avid collectors than it will probably have a strong level of value.

This supply vs. demand situation is why some truly rare coins remain undervalued. As an example, look at a coin like the 1867 quarter eagle. Only 3,200 were struck and the most recent PCGS population figures show that just twenty-four have been graded. Despite this fact, the current value in AU55 is a whopping $1,500 or so. Shouldn’t this be a $3,000 or even a $5,000 coin? In theory, yes it should. But practical experience dictates that the level of demand for 1867 quarter eagles, which is virtually non-existent, keeps the price low. Advocates of the 1867 quarter eagle will counter with the argument “well, if this were an Indian quarter eagle with a population of twenty-four in all grades, it would be worth 10x in AU55.” In theory, this argument has merit. My counter-argument would be that the Indian Quarter Eagle series is many times more popular with collectors and that this is essentially an apples to oranges comparison.

The coin market is clearly becoming more and more researched-based as time goes by but I think the entire pricing system we have is antiquated. Let’s get back to the point I made in the second paragraph, about the market having thinly traded areas. These infrequently traded series are often compounded by a lack of good pricing information. I am always impressed by collector-dominated series like early Large Cents or Bust half dollars that have databases of pricing information available to collectors. The rare gold coin market doesn’t have this (yet) and I think it would be a real shot in the arm if someone were able to produce a price guide that helped dealers and collectors accurately determine values.

What I’d like to see even more is for an appearance-specific price guide to exist for these coins. Collectors of early Large Cents classify coins by three categories: choice, average and “scudzy.” Let’s say collectors are offered a certain die variety of 1796 Large Cent. A choice coin may be worth $5,000, an average coin $3,500 and a very low-end coin might only be worth $2,000. I’m not certain that these variations would be as extreme for, say, an 1854-C quarter eagle in slabbed AU55 but I do personally think a nice coin for the grade is already worth considerably more than an ugly one.

Getting back to my original point: why are certain coins undervalued? As I stated earlier, the major reason for this is that they are just not that popular. Another reason--one that is harder to give an explanation to--is that in any long series, it is inevitable that a percentage of the coins are “sleepers.” I previously mentioned that the lack of accurate pricing information in the market means that it is always going to be inevitable that a number of coins fall through the cracks. The value of being a specialist is that you will learn what coins are the sleepers before they become more widely known.

Opportunities for Collectors in a Generic-Oriented Market

After I left what was, for me, a very productive Baltimore coin show, I was sitting in a restaurant at BWI airport, eating a crab cake. As I was finishing up, a dealer who I don’t know that well but who I respect for his knowledge and his connections came up and asked if he could join me before our respective flights left. As you can no doubt guess, our conversation almost immediately turned to the market. As this dealer was quick to point out, as far as gold coins go, we are currently in one of the more confusing market segments that either of us could remember. He made a comment that I thought was really profound. He said something along the lines of “the market is so strange right now, that if I had a fresh deal of Saints or $20 Libs it would probably get other dealers more excited than if I had a group of fresh Proof gold coins.”

At first, I thought this comment was sort of odd. But the more I thought about, the more it made sense. The market is so oriented right now towards generics and “stuff” that many dealers have all but overlooked rare coins. And I think this presents a few really interesting opportunities for buyers who have some extra cash.

Generic gold is on fire for a number of reasons. The “guns and gold” crowd is buying gold because they have a fundamental distrust of the dollar and don’t like the direction that the U.S. economy is headed. Investors are buying American Eagles and other issues to put into their IRA’s in the hope that this year’s contribution outperforms last year’s stock purchase. And large-scale telemarketers are selling the heck out of double eagles to new buyers who have left more traditional investments and like the idea of owning some physical gold.

As is always the case when an area of the coin market gets hot, other areas are forgotten. When you go to a coin show now, it is very interesting to observe what some of the very savvy major buyers are doing. I know of at least two very smart, A-level dealers who have virtually stopped buying anything numismatic and are focusing almost exclusively on ten dollar and twenty dollar gold pieces. As I mentioned above, I think this has created some great opportunities for more numismatically-oriented dealers like me and for serious collectors.

One opportunity for rare coin buyers right now is for PQ coins. With so many traditional buyers of PQ rare gold coins focused on generics I have noticed that many really nice coins are bringing almost no premium over many really schlocky coins. This is especially the case with Charlotte and Dahlonega gold. At the Baltimore show I was able to purchase a few exceptional PQ coins for literally no more than a 5% premium over the usual crappy dipped-n-stripped stuff that I saw all over the bourse floor and in the auctions.

Another opportunity right now for a more select group of buyers is expensive coins. Most dealers (myself included...) are having a hard time selling coins priced at $10,000 and up. If you follow my website you will probably note that while, as recently as last year, I might have had ten or even twenty coins priced at $10,000 or more, right now I have very few.

If you have the money and you are a collector of five and six figure coins, I think you call the shots. Unlike in 2006 or 2007 when dealers had an easy time selling big coins, dealers are far more aware today of the difficulty inherent in selling these coins. My guess is that if your favorite dealer has a $15,000 coin in stock that you’ve had your eye on since December he’s probably more willing to sell it for $13,000 now than he was a few months ago. (And if he’s not, this is a good sign that your favorite dealer may be doing something else besides selling coins in the near future).

As I mentioned before “real coins” are currently out-of-favor with many dealers and some collectors as well. What does this mean for the serious collector? It may not translate to saving money on the coins you want (although it is likely that this is true). More likely, it means that you will actually get a chance to buy some of those hard-to-find issues that might have been causing you grief in years past. Let me give you an example. At the Baltimore show, I was able to get second shot at a group of interesting double eagles. The dealer who got first shot would have ordinarily bought every coin as they were interesting, not unreasonably priced and pretty choice. Instead, he passed on about half the coins and I bought everything that was left over. Why did he pass? My guess is that some of the coins were above the price level that he is currently selling well and that much of his focus is on generics as opposed to rare coins.

There is one other opportunity for collectors right now that I think deserves a quick discussion and that is selling some of the generics that everyone seems so focused on right now. If you bought Saints or Libs more than a year ago you are probably in a good profit position right now. Let’s say you have a bunch of MS65 Saints that your average cost is $1,200 and you can sell them today for around $2,000. It seems like a smart move to me to sell your position at an $800 per coin profit (not a shabby rate of return for a one-year investment during an economic meltdown...) and use the profits to buy a rare coin or two that you have your eye on.

Varities of Type One Double Eagles

In my opinion, Type One double eagles have become popular enough with collectors that it is time for some of the more interesting varieties in this series to come into their own. I am beginning to notice that these varieties are growing in popularity and that prices are beginning to appreciate as well. What are the most significant varieties in the series, how rare are they and what sort of price premium do they merit? 1852/1852 Double Date: This variety is one of the most obvious double dates that I have seen on a United States gold coin. It can easily be detected with the naked eye due to the heaviness of the date. The original date was punched slightly too high and then corrected with a second full punch placed slightly below.

In the last three years I have looked at over one hundred 1852 double eagles and fewer than ten have been of this variety. Nearly all have been in lower grades (EF45 and below) and I do not believe that I have ever seen an 1852 double date double eagle in Uncirculated.

This variety is recognized by NGC but it is not currently recognized by PCGS. I think it should sell for a 25-50% premium over a normal date 1852 and the premium in AU55 and higher grades should be even more than this.

1854 Large Date: This variety uses a date logotype from the silver dollar. The same anomaly occurs on 1854-O eagles. The 1854 Large Date is easy to recognize as the date is significantly larger than on the Small Date. I have spoken with collectors who have been confused by these varieties and I think it might be a bit easier to think of the Small Date as a Medium Date. In addition, remember that on the Large Date the 1 in the date in the date nearly touches the truncation; on the Small Date it is distant.

This variety has become widely accepted with collectors in the last five years and it is recognized by both PCGS and NGC. Prices have risen considerably and a nice AU now sells for close to $10,000 when available. The finest that I am aware of was the NGC MS64 sold by Heritage as Lot 2010 in their 2007 ANA auction. It brought an impressive $80,500.

It is still possible to cherrypick this variety despite its relative popularity. I have seen at least five or six in older NGC or PCGS holders without designations.

1858-O Blundered Die: This is probably the least well known of the varieties listed in this article but it is among the more visually impressive. Under magnification it is possible to see another 8 protruding from the bottom of the left part of the lowest curl into the field below. One of the reasons that people do not know about this variety is that it was not well-described by Breen when he mentioned it on page 565 in his Encyclopedia. Another reason is that yours truly has not done a good job publicizing this variety in his New Orleans books and his Type One book.

To view a nice blow-up image of the 1858-O Blundered Die double eagle, I suggest going onto Heritage’s website and looking at the close-up that provided for the example they sold as 12/08: 2256.

There are probably fewer than ten 1858-O Blundered Die double eagles known and the Heritage cataloger was able to account for just four. The finest appears to be Heritage 12/04: 6843, graded MS61 by NGC.

This variety is very high on the coolness scale of Type One double eagle varieties but the rarity and current high price of the 1858-O make it the least likely of the varieties that I’ve mentioned so far to begin to sell for a premium. It is not currently designated by either PCGS or NGC.

1859-S Double LIBERTY. This variety has been known for at least a few decades but it remains reasonably unheralded. It is among my favorite Type One varieties and it is very easy to see with light magnification. The final five letters in the word LIBERY show pronounced doubling.

NGC designates this variety while PCGS does not. The current NGC population includes five coins (the finest of which grades MS60) and another six from the S.S. Republic.

I have personally looked at close to two hundred 1859-S double eagles and I’ve seen around five or six with the double LIBERTY. I think this variety is very impressive visually and it should command a significant premium in all grades. I would suggest around 50% in EF40 to AU55 grades and as much as a 100% premium in AU58. It is hard to figure what this coin is worth in Uncirculated given its rarity.

San Francisco Mintmark Variations: The final group of Type One varieties is less likely to catch on with collectors given the fact that these varieties are not as impressive. This could change if either NGC or PCGS were to start designating them but even if this were to happen, I doubt if they will catch fire collectors.

The 1857-S is known with a Medium S mintmark and with a Large S. The latter is much scarcer.

The 1863-S is known with a Medium S mintmark and a Small mintmark.

It is possible that other mintmark varieties will be discovered as time progresses.

As I’ve mentioned in other blogs, collecting gold coins by variety remains a reasonably obscure area of focus for most numismatists. But I could really see some of these Type One varieties becoming readily accepted in the coming years (as the 1854 Large Date already has) and their values rising accordingly.

The Warehouse Theory of Coin Collecting/Investing Revisited

A few years ago, I wrote an article entitled “The Warehouse Theory of Coin Investing.” The gist of this article was that there are certain coins that remain in such demand with collectors that a sound investment theory might be to stockpile attractive examples of these and work with a specialized dealer who could then, over the course of time, resell them to other collectors. A coin that I used as the Poster Child for this was the 1854-D $3.00. If you had listened to this advice, you probably outperformed the market. There are clearly a small but definable group of coins that have been in strong demand over the last few years and their price levels have risen accordingly. Even in the now-weaker market of early 2009, I think many of these remain in demand and their overall level of value has stayed higher than other, “non-essential” coins.

What are some of the coins that I would suggest collectors put away multiples of in 2009?

I remain a big fan of any coin that has multiple levels of demand. What I mean by this, is a coin that is sought-after by collectors who might not normally be interested in this series. An example is the 1861-D gold dollar. Because of this issue’s association with the Confederacy, there is demand for it from collectors who are likely to never buy another Dahlonega coin of any date or denomination. But this coin is also sought by gold dollar specialists, last-year-of-issue collectors, Dahlonega specialists and collectors who like cool, historic coins, regardless of when or where they were produced.

What are some of the other coins that I would suggest collectors might be clever if they owned a few decent examples? Let’s look at this on a mint-by-mint basis. (Please note that this assumes that any duplicate coins purchased for “warehousing” meet the following criteria: choice for the grade, fairly priced and good overall eye appeal).

Carson City: Any 1870-CC gold coin is desirable and they always sell quickly for me when I have them in stock. Because of its currently high price I might not want to own two or three 1870-CC double eagles. I would be most likely to want multiple examples of the 1870-CC eagle in VF and EF grades as this issue remains a good value at current levels. I wouldn’t be opposed to owning multiple examples of any relatively affordable half eagle or eagle from the 1870’s that was totally original with great color and choice surfaces, especially if it were priced below $15,000.

Charlotte: The one Charlotte issue that comes to mind as being a great warehousing candidate would be the 1838-C half eagle in Very Fine to About Uncirculated grades. This issue’s status as a one-year type and a first-year-of-issue makes it extremely popular with collectors. My other two choices would be an 1838-C quarter eagle and an 1839-C half eagle. I might also suggest stockpiling any $3,000 or lower coin from this mint that was 100% virgin original.

Dahlonega: There are five very obvious warehouse choices from this mint: the 1855-D and 1861-D gold dollars, the 1854-D three dollar and the 1838-D and 1861-D half eagles. The first, third and fifth coins are one-year types while the second and the fourth have Confederate association(s). Another issue that I would give consideration to is the 1855-D quarter eagle. This has the lowest mintage of any Dahlonega coin and it is the single rarest issue produced at this mint. I would remind the potential warehouser of any or all of these coins that damaged or low-end examples need not apply. The same comment that I made for sub-$3,000 Charlotte coins applies to those made in Dahlonega as well.

Denver: Your basketball team is doing well this year but I don’t see many warehouse possibilities. With the possible exception of the scarce 1911-D eagle. Oh, and I like LoDo a lot...

New Orleans: There are five distinct one-year types from this mint: 1855-O gold dollar, 1839-O quarter eagle, 1854-O three dollar, 1909-O half eagle and 1879-O double eagle. I find all five of these to be popular and liquid, although I’m not sure that I consider all of them to be warehousing candidates. As an example, I wouldn’t suggest that anyone own multiple examples of the 1909-O in Extremely Fine. But I like this date in properly graded AU55 and above and I certainly would encourage a warehouser to salt away a few.

The New Orleans issues that I would be most inclined to suggest that someone own multiples of are the key issues that are still not fully valued. Some of these include the 1845-O quarter eagle, the 1847-O half eagle, the 1841-O, 1879-O and 1883-O eagles and the 1855-O double eagle.

Choice, original No Motto coins from New Orleans that are priced at below $3,000 seem like a good area to warehouse as well; especially half eagles.

Philadelphia: One of the problems about discussing gold coins from this mint is that you are looking at a lot of denominations (gold dollars through double eagles) and a long, long time of issuance (1795-1933). For the sake of this article, we’ll focus briefly on the early issues (pre-1834) and the Liberty Head issues (1840-1908).

There are lots of early gold coins that make sense as warehouse candidates. Most people are going to guess that I suggest famous issues like the 1796 No Stars quarter eagle. Actually, the coins I’d be more likely to want to warehouse are the Fat Head half eagles from the late 1820’s/early 1830’s. These coins are expensive and could certainly decline in value if the economy gets more uncertain but they are incredibly rare and, after many years of neglect, are now appreciated by many levels of collectors.

The Liberty Head issues that would make interesting warehouse candidates include the classic rarities from this mint: the 1841 and 1863 quarter eagles, the 1875 and 1876 three dollars, the 1887 half eagle and the 1875 eagle. I would also suggest a small number of very rare issues that, while not extremely popular (at least yet...) appear to represent good value relative to their rarity. These include the 1863 gold dollar, 1864 and 1865 quarter eagles, the 1863 and 1865 half eagles and the 1863, 1873, 1876 and 1877 eagles.

San Francisco: The obvious issues to warehouse from San Francisco would be the mega-rarities: 1854-S quarter eagle, 1864-S half eagle and 1864-S eagle. Even though there are a lot of undervalued and very rare issues from San Francisco, this mint’s comparative unpopularity leads me to believe that warehousing coins from the Barbary Coast might not be a stellar idea.

If you do decide to warehouse a specific issue (or more) my advice is to be under the radar. Let one dealer with who you have a good relationship know about it. I wouldn’t suggest you broadcast to the world that you own five 1838-D half eagles. If you are discrete about what you own, it will be to your advantage when it comes time to sell.

I currently know a number of collectors who warehouse certain gold issues and it is enjoyable for me to work with them. If this is something that intrigues you, please feel free to contact me via email at dwn@ont.com.

The 2009 Portland Spring ANA Show

I’m guessing it’s been close to twenty years since there was a major coin show in a city in which I lived. That’s why I was really excited about this year’s Mid-Winter ANA being held in my home town of Portland, Oregon. Even if the show was crummy, I’d be able to sleep in my own bed. Plus, I could show off my Portland Expert status to friends and acquaintances and rattle off a list of obscure restaurants (Peruvian? Check. Malaysian? Do you want Northern or Southern?) without having to pull out a Zagat’s. Portland doesn’t have a reputation as a Great Coin Town and to be honest I had very little in the way of expectations for this show, other than it being well run. That’s why I was so pleasantly surprised that it turned out to be quite good.

I have to give some kudos to the ANA. There were articles in the paper about the show, ads on TV; even my neighbors knew there was a coin show in town. This excellent publicity meant that the attendance would probably be good and it was. More on this in a second.

The first day of the show was devoted to wholesale trading and, for me, the action was a little less than my last few shows. The main reason for this was that I didn’t have much generic gold and generic gold remains incredibly hot.

This is a good time to go off on a mini-tangent. With the almost total focus of the gold market on generics right now, this seems like a good time for people who care about legitimately scarce and rare coins to be buying. I had a few dealers comment to me at the show that they are so focused on generics that they are slowing down their “real coin” business. That means less competition for me when I buy and I can focus on coins like New Orleans half eagles and Dahlonega quarter eagles when many of my usual competitors are busy making MS63 Liberty Head double eagles.

The second day of the show was when the public was let in and I was amazed at the stampede of collectors that came through the door around 10AM. Yes, there were sixteen hundred Boy Scouts and Brownies playing the Numismatic Trivia game but there were also real collectors with real want lists looking for real coins. Unlike the recent Long Beach show where I don’t think I could have sold a collector a Saint Gaudens double eagle for $16, I was able to sell a number of coins in Portland. More importantly, I met a lot of collectors from the Northwest who I either didn’t know or who I knew only through emailing.

The weekend was a bit less active but there were still collectors at the show on Saturday. For the first time since I had a fade haircut and wore a jacket with big shoulders, I stayed until closing on Sunday and was able to do some business until the bitter end.

I’d like to thank everyone who stopped by and chatted and everyone who bought coins. And, no, I will not recommend any more places to eat in Portland.

So, how does the market look now that we are in mid-March?

In my opinion, things continue to be better than I would have expected. No, the market isn’t “hot” (with the exception of generic gold). But nice coins are definitely selling, albeit at new levels. I would expect that with all the money dealers are making right now with their generic gold business, some of this will spill into rare coins. I also think that some of the new people buying MS62 and MS63 Saints and $20 Libs could possibly start buying rare coins in the coming weeks or months. I’m not extremely optimistic right now but I am less pessimistic than I was as recently as mid-January.

The end of March will see an interesting test of the market with the Baltimore show and a number of auctions all occurring. My guess is that Baltimore should be pretty active. I will be very curious to see how the auctions do.

I’ve mentioned generic gold a few times and before I close, I’d like to strongly suggest that if you own any, you might take some profits and sell out of a part of your position now; especially if you own double eagles. The premiums for these right now are as high as I can ever recall seeing. As an example, MS64 Liberty Head double eagles are now selling for $2,700-2,800 (or more, in some cases). Last year you had to beg people to buy them for $1,500. If I had a bunch of these put away right now (and I wish I had been smart enough to do so...) I would take some of my profits and move onto more undervalued areas.

If you do want to sell any generic gold, I would be happy to assist you. Please email me at DWN@ONT.COM and I can make offers on your coins and suggest a strategy for the coming months.

Cleaning Up Your Collection

As I write this, there is a real disconnect in the coin market. Simply put, despite what is very probably the worst economic year since the height of the Depression, the coin market remains comparatively vibrant. I think this represents something that many collectors are overlooking: this could be a great opportunity to clean up some of the messes in your collection and come out without taking a nasty financial hit.

This statement is making a big assumption: that the financial mess we are in now will impact the coin market more intensely than it has so far. Who knows; maybe it won’t. But my guess is that we will see a further drop in prices on coins that aren’t really exciting, either off-quality, not rare or a combination of the two.

If you are like most collectors, you’ve probably made some mistakes over the years. And if you are like most collectors you may have hidden your mistakes in the back of your safety deposit box and figured “out of sight, out of mind.” As I mentioned above, this might be a really good time to consider trimming the fat.

I have long been an advocate of the “quality trumps quantity” school of numismatics. In my experience, most collectors own too many coins. Some collectors own way too many coins and they have a considerable amount of money tied-up in “stuff” that has little relevance to their current collection. I think it’s a great idea every few years to weed out some of the stuff that has accumulated in your collection.

The coins that are most likely to lose value in the coming year are coins that have either gone up too much in value in the last few years to sustain their market or coins that have a limited amount of demand. You might want to include these along with the “what was I thinking when I bought that...” coins.

When you look through your collection, you should use what I called the “ahhh.... test.” Coins that you like are going to make you go “ahhh...” when you view them and you can probably remember the exact circumstances in which you purchased them. Coins that don’t speak to you or which don’t tweak your memory haven’t passed this test and they might be candidates for a purge.

You might own coins that you don’t really care much about but which are still strong. A great example of this is generic gold. Many collectors have salted away a few St. Gaudens double eagles or Liberty Head eagles over the years. They might not care at all about these but they might also be able to make a nice profit if they sell them at the currently-high premiums in the market. If I had a decent position of generics in my collection, I’d seriously consider taking a few and selling them right now.

I’d be even more interested in selling these Misfit Coins in my collection if I had an alternative coin coming down the pike that seemed like it was too good a deal to pass up...and I didn’t necessarily have the ready cash to make this deal happen.

Here’s another circumstance where you might have coins that are no longer useful to your collection. Let’s say you started a collection but lost interest and now you have a 50% complete set lying around. If the coins are nice quality and price levels aren’t way off on the series in question, it might not be a bad idea to sell the coins you have and use the money on coins in the set(s) you are actively collecting.

What is the best way to clean up your collection? You have a number of options and these options depend, at least in part, on the type(s) of coins that you own. If you live in a town with a reputable brick and mortar coin shop and you have pounds and pounds of “stuff” then selling this material outright or on consignment might be a good idea.

If what you have fits more into the specialist category, choose a specialist dealer to make an outright offer or to take the coin(s) on consignment.

And, of course, you can always go the auction route if you are thinking of selling very high-powered or highly specialized material.

In conclusion, this might be a good time to get rid of some of your less-exciting material at levels that aren’t going to insult your sensibilities. For what’s its worth, this is exactly what I’ve been doing with my own inventory for the last four to six months and even though I’ve had to make a few decisions that were painful at first, I’m very glad that I sold some of the coins I did at the prices they went away at.

The Bass 1855-C Quarter Eagle

2009 isn’t even two months old and I’ve already had the good fortune to handle some pretty special coins. I’d have to say that one of the very best that I’ve handled so far is the Bass 1855-C quarter eagle, graded MS65 by NGC, which is shown below. Let’s take an in-depth look at this specific coin and analyze where it fits into the Pantheon of Great Charlotte Quarter Eagles.



I regard the 1855-C as the second rarest Charlotte quarter eagle, trailing only the 1843-C Small Date. Of the 3,677 coins originally produced, an estimated 85-105 are known. This date tends to be found in the EF-AU grade range and it does not appear to have circulated with the intensity of other dates from this era which are more often found with considerable wear. At one time, the 1855-C was exceedingly rare in Uncirculated and when I wrote the first edition of my Charlotte book back in the 1980’s I was not aware of a single Mint State piece.

Due to gradeflation and new discoveries, the 1855-C has become a more available coin in Uncirculated and today there are as many as six or seven known. There are two really great pieces accounted for: the Bass coin and an example in a private collection graded MS64 by NGC and owned by dealer Harry Laibstain back around 2000-2001.

The Bass 1855-C is unquestionably the finest known 1855-C quarter eagle and it is one of just a handful of Gem quarter eagles from this mint (more on this later...). I had no idea that this coin even existed until I saw it when I viewed the Bass III sale in October 1999. Bass had supposedly obtained the coin via private treaty on August 31, 1977. When it made its initial auction appearance it was graded MS64 by PCGS but, according to my comments in the catalog, I graded it MS65 and described it as follows: “GEM!!!” After the sale, the owner cracked it out of its PCGS holder and sent it to NGC where it, rightfully, was upgraded to its current MS65 holder.

When viewing this coin, there are a few things that really stand out. The first is this coin’s amazing luster. I doubt that the image above will capture the subtleties of this coin’s incredible hybrid frosty/reflective texture. This issue is sometimes seen with good luster but on this example it is so dynamic that it gives the coin a unique “crisp” appearance that very, very few branch mint coins of any era possess.

There is some weakness of strike seen on the stars at the top and on the eagle’s right leg. This weakness is typical for the issue and, in fact, the overall detail seen is better than average. The surfaces are exceptionally clean with a virtual absence of marks. There are some raised die striations in the obverse fields and some mint-made roughness around the eagle on the reverse that add character to the overall appearance. Both sides have some light to medium rose and orange-gold color that is attractive as well.

When this coin was last sold at public auction in October 1999, it realized $41,400. It was later sold to a North Carolina collector and it has been off the market for close to a decade. I just sold it to an anonymous collector who specializes in Charlotte coins and it is regarded as one of the current highlights of his collection.

There are four Charlotte quarter eagles known to me that are decidedly better than all the other surviving examples from this mint. These are the only four Charlotte Liberty Head quarter eagles that I regard as Gems and it is pretty remarkable to think that out of the 217,833 pieces produced between 1840 and 1860 that only three Gems exist.

The Charlotte quarter eagle that I regard as the unquestionable finest known of any date is the Elrod 1842-C, graded MS65 by PCGS. This piece sold for $90,850 back in February 1999 and it is now owned by a Southern collector who is well-known for his discerning eye. The coin has also been graded MS65 by NGC. What is even more impressive about this coin is the fact that the 1842-C is an extremely rare coin in high grades and the Elrod coin is the finest of just three known in Uncirculated.

The 1843-C Large Date is among the more available Charlotte quarter eagles in Uncirculated and there are two Gems known. The first is currently graded MS66 by NGC and it was earlier in a PCGS MS65 holder. What is remarkable about this coin (besides its grade) is the fact that it was once in an ANACS MS64 holder and it sold at auction for a paltry $5,500 back in September 1997. The second Gem 1843-C Large Date is a PCGS MS65 that is currently owned by a North Carolina specialist. I have had the chance to view this coin and it is a bona-fide Gem with superb luster, color and surfaces. The fourth and final Gem Charlotte quarter eagle is, of course, the Bass 1855-C.

Are there other Gem Charlotte quarter eagles known? It is possible that a few pieces might exist in shipwrecks, hoards or old collections but I would be surprised if many turn up in the coming years. It is more likely that one or two of the very nice MS64’s will “morph” into MS65’s.

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The Half Eagles of 1818

There are just a handful of Capped Bust Large Diameter half eagles produced from 1813 through 1829 that are not very rare. This type includes some of the rarest United States gold issues ever produced so the type collector is left with essentially four dates that are sometimes available: 1813, 1814/3, 1818 and 1820. In my opinion, the 1818 is one of the most interesting of these four issues and it is certainly one of the most misunderstood.

The original mintage for this year is believed to have been 48,588. As with all of the half eagles produced during this decade, a significant percentage of these coins were melted between the year they were produced and the mid-1830’s. This is, of course, due to the fact that the half eagle denomination had its weight reduced in 1834, making the “old style” pieces worth more than face value. For most dates, well over 95% were melted and in the case of the 1818 there are probably no more than 200-250 examples known.

Given the fact that this issue saw little circulation domestically, the majority of the surviving 1818 half eagles tend to be in Uncirculated grades. The small number of circulated examples that do exist are often in the AU53 to AU58 range and these may not have much in the way of wear but tend to show light cabinet friction or signs of numismatic mishandling.

There are three distinct varieties of 1818 half eagle known. All are recognized by PCGS and NGC and each is considered to be an integral part of a date set of Capped Bust half eagles. Let’s take a quick look at each of the three varieties.

1. Normal Dies (Bass Dannreuther-1). The obverse of this variety has a unique feature that is not seen on any other 1818 half eagle. Each star shows a “notch” which is believed to be a signature used by John Reich to indicate that this die was his work. But the obverse is not the side of this coin that specialists use to determine its BD number. This is the only one of the three varieties of half eagle for this year that has a “normal” reverse. The words STATES OF are properly spaced and there is no recutting on the value.

Bass and Dannreuther estimate that between 10,000 and 15,000 examples of this variety were struck and that 50-65 exist. I tend to agree with these estimates. This variety is generally seen in the AU55 to MS61 range and is often characterized by softness of strike at the centers. The coloration is typically a distinctive orange-gold and most have been lightened or processed. The finest I am aware of is Goldberg 2/01: 4009 ($51,750), ex: Superior 2/99: 3184 ($52,900) which has been graded MS65 by PCGS.

The 1818 Normal Dies is the second scarcest of the three varieties known for this year and I think it is an underappreciated issue.

2. STATESOF variety (BD-2). This variety has a different obverse than the Normal Dies but it is immediately recognizable by having virtually no spacing between the words STATES and OF.

Bass and Dannreuther estimate that between 25,000 and 35,000 examples of this variety were produced and that 100 to 125 survive. I think this estimate may be a touch on the low side but the actual number known is almost certainly less than 150.

This variety is the least scarce of the three 1818 half eagles and it is typically seen in Uncirculated grades. I can’t recall having seen more than a handful that graded lower than AU55 and this suggests that the 1818 STATESOF saw little use in circulation. Most examples are better struck than the other varieties for this year and original, untampered with pieces may show excellent frosty luster that is complimented by light to medium lemon-gold hues.

The finest known 1818 STATESOF half eagle is a remarkable PCGS MS66 that was once part of the Norman Stack type set. It is one of the finest half eagles of this type that I have ever seen or am aware of. The current auction record for this variety is held by Heritage 5/07: 2289 that brought $109,250. It is graded MS64 by PCGS.

3. 5D/50 variety (BD-3). The obverse of this third and final variety is different than that seen on BD-1 or BD-2. But it is the blunder on the reverse that gives this variety its notoriety. The D in the denomination was originally cut over a zero; not because the engraver thought this was a half dollar. This reverse was reused in 1819 with the Wide Date obverse.

Bass and Dannreuther believe that between 7,500 and 10,000 were struck and that there are 35-45 survivors. Given the rarity of this issue, these figures seem accurate. This is a rare coin in all grades and most are in the lower Uncirculated grades. There are a few Gems known including a PCGS MS66 and a PCGS MS65 that was last sold as Goldberg 5/01: 1351, where it realized $71,875.

I’ve had the good fortune to handle all three varieties in the past few months and was able to quickly sell each. These 1818 half eagles are some of the more interesting early half eagles and it would be a fun but not overly-ambitious challenge to acquire all three in reasonably comparable grades.

Classic Head Gold: An Update

I frequently write about the state of the market as it pertains to early gold and Liberty Head issues but I haven’t commented on Classic Head gold in quite a while. So how is the market for Classic Head quarter eagles and half eagles and what do I expect the coming months to look like for these coins? To answer these questions, we need to turn the clock back a few years. Classic Head gold was dormant for what seemed like an eternity. Everyone thought these coins had “potential” but there was never much demand for Classic Heads and they snoozed away in their own little niche-like corner of the market.

This began to change around 2004-2005. A dealer in the Southeast had been quietly building a large position of coins (primarily in the EF-AU grade range) and he carefully began to raise his buy prices. Within a year or two, he had accumulated an impressive number of coins and, on paper, the value of the position had increased.

I never really understood what he did next. Instead of slowly marketing these coins, one day they showed up in another dealer’s inventory (apparently on a consignment) and for many months, the secondary dealer toted hundreds and hundreds of Classic Head gold coins to every major show. It was hard to get excited about this deal when it seemed like every Classic Head gold coin that had ever been slabbed was for sale. At once.

So now you had coins that doubled in price and were readily available. Would the market be able to sustain the new levels? The answer was “no, not really” but in some isolated cases yes.

Had the market for Classic Heads been properly developed, there would have been collectors lined-up for all the EF and AU common dates that were available. As I’ve written before, I think this series is begging for a collecting guidebook. Most dates have a number of very interesting varieties, the sets are completable by collectors on a relatively limited budget, the designs are great and the number of pieces that make up a set are not overwhelming (as with Liberty Head issues).

At the height of the Classic Head market run-up, it wasn’t unusual to see a common date quarter eagle in AU55 trade for $1,750 or so. Today, these same coins have dropped down to $1,250. That’s still a relatively strong level considering that these were $750-1,000 in the earlier part of the decade. How have the common dates in higher grades done? The current market for a common Classic Head quarter eagle in MS63 is around $7,000-8,000. These had been as high as $9,000-10,000 but only if the coin in question was exceedingly nice for the grade. Considering that common dates MS63’s had been around $4,000-5,000 for many years at the earlier part of the decade, I think they’ve held their value reasonably well.

The part of the Classic Head market that has always been the most interesting for me has been the branch mint issues: namely the 1838-C and 1839-C quarter eagles, the 1839-O quarter eagle and the 1838-C and 1838-D half eagles. Unlike the Philadelphia Classic Head issues these five dates have the added demand level caused by branch mint specialists, first-year-of-issue collectors and individuals who just like “neat” coins.

Values for the 1838-C and 1839-C quarter eagles jumped to what I believe were unsustainable levels. This is especially so for the 1839-C. There were suddenly oodles of AU55 and AU58 examples available for sale in the $10,000-20,000 range but the demand for such coins couldn’t keep up with the prices. I think you’ll see levels for these two dates in AU continue to drop but they will remain strong in the “collector grades” (i.e., VF and EF).

The two Classic Head issues that continue to exhibit very strong demand in all grades are the 1838-C and 1838-D half eagles. In the last thirty days, I owned three (!) 1838-C half eagles graded between EF40 and AU50 and, remarkably, every one of them sold within a week of being listed on my website. If I were able to purchase three nice 1838-D half eagles I believe the results would be the same. These are coins where the demand exceeds the supply and I won’t hesitate to continue to buy nice examples whenever they become available.

What are my expectations of the Classic Head market in the coming months? I think you’ll see some continued drops in prices for common date coins graded AU55 to MS63 with the exception of pieces that have nice original color and choice surfaces. I wouldn’t be surprised if the schlocky, processed shiny examples drop another 10-20%.

At new, lower levels I think choice, original common date Classic Head quarter eagles and half eagles are a good value. If you can buy a nice AU55 1834 quarter eagle in the $1,250-1,450 range that seems like a good deal to me. Same goes with a nice AU55 1834 half eagle at, say, $1,500 or so. As I mentioned above, I still love the 1838-C and 1838-D half eagles and I think both of these issues have real upside at current levels.

I think the “secret” dates in the quarter eagle and half eagle series are probably worth exploring right now. I like the 1837 quarter eagle and have always thought that nice 1839 quarter eagles were highly undervalued. In the half eagle series, I think that the 1837 is a good value.

One final thing before I end this article. I’m not going to be the person who does this, but I’d sure like to see someone properly promote the Classic Head series the next time around. By this I don’t mean manipulate prices and demand, but help take a slightly chaotic market and make sense of it. Write a good book, get collectors interested in these coins and gently “push” the market in the right direction by actively buying and selling. That would be a beautiful thing...