Factors That Influence Coin Prices: The Not-So-Obvious

Coin prices are impacted by a number of factors. The most obvious of these are supply and demand. Simply put, if a coin has a greater degree of demand than available supply, the price is going to be strong. But what are some of the not-as-obvious factors that impact coin prices? Here are some observations. 1. Quality of Demand. There are different levels of demand for any rare coin. There's "I'm sort of kicking tires and I'm wondering if you might have the following D Mint quarter eagle," and there's "I've been looking for a nice 1840-D quarter eagle for five years, its the last coin I need to finish my set and I have to have it!" The latter is, obviously, a higher quality of demand and this buyer would be willing to pay a significantly higher price than the lukewarm, casual buyer.

While this example is deliberately extreme in its contrast, there are clearly different levels of demand that impact coin prices. Another factor is venue.

I am very interested in marketing and branding and one of the things that interests me is creating demand for new products. Brands now do "mash ups" where a hot young designer of furniture, as an example, designs a limited edition sneaker design for Adidas or Nike. Only 500 might be released and collectors will pay a significant premium for this because of its perceived scarcity. And, it might be offered only at a "pop up" venue where you have to wait for an hour to just see the sneakers and where's there is no time to sit and ponder if you will or won't make the purchase. You are pre-sold and you represent a high quality of demand.

I see this sort of collector behavior for coins at auction. The major firms do a great job of creating an environment that fosters competition and turns a coin purchase into blood sport. As an example, how many times have you, as a bidder, placed an on-line bid and received an outbid notice only to say "I know I shouldn't this but I'll be damned if I'm going to let myself get outbid on this D Mint quarter eagle?" At a live auction, it is even easier to lose control when bidding (which is why I suggest hiring an agent, but that's another story...) and I can recall numerous incidents when bidding has turned into a ego-fest between collectors or dealers.

2. Promotions. A decade ago, when large-scale telemarketers seemingly controlled the coin market, having information about the next coin or series that was going to be promoted could make or break a wholesale dealer. As an example, I can remember at least a few times that Commemorative Gold coins were about to be pushed, and quietly buying coins at pre-promotional levels so that I could sell into a potential rising market.

This isn't the case so much in the 2012 coin market due to the Democratization of Information as a result of widespread web access. But rare coins are still being promoted and this can be a subtle factor in price increases.

In December 2010 I wrote a blog entitled "Which Civil War Gold Coins Will Be Promoted in 2011," which represented my unbiased opinion(s) that the upcoming 150th anniversary of the beginning of the Civil War was a good opportunity for someone to promote Civil War gold coins. It seems that at least a few people read this blog, as I know of two marketers who, perhaps as a result of my suggestion, began promoting the exact coins I suggested in the article. Plus, said article inspired me to become a more active buyer of high end Civil War gold coinage and to write a major four part series in 2012 about collecting these coins:

Part I Part II Part III Part IV

3. Registry Set Collecting: In many series of coins, the passion of Registry Set collectors results in amazing prices for the right coin(s). This hasn't impacted 18th and 19th century gold coins all that much as there is little Registry Set collecting for early gold and Liberty Head issues (although I wouldn't be surprised if we begin to see serious registry collecting in popular areas like CC double eagles or Dahlonega half eagles in the very near future).

The areas in the better gold coin market that seem most likely to be impacted by Registry Set collecting in the immediate future are 20th century issues. I find it very surprising that dealers or marketers who specialize in series like $2.50 Indians haven't seriously promoted the Registry as a way to impact the demand on rarer dates in high grades. For a while, there were a small but dedicated number of Registry Sets in the St. Gaudens double eagle series that were highly competitive and which greatly influenced the prices of high grade better date PCGS encapsulated Saints. My guess is that this will happen again in the not-so-distant future.

4. Pushing Hot Buttons. Most collectors of high(er) dollar coins are Baby Boomers. And I believe that a major part of the strong, strong market in key date American coins in the past decade has been the ability of these coins to push the hot buttons of buyers. Let me explain:

Just the other day, I got back a coin from PCGS that hit my nostalgia button as hard as any has in some time. It was a perfect, even-brown VF30 1877 Cent. When I was a wee lad, I collected Indian Cents and the 1877 was a mythical rarity that I could only dream of owning. Today, this is a coin that I can easily afford and the $1,500-1,750 that this coin would cost me, as a collector, would exorcize some of the oh-why-can't -I-fill-that-1877-hole frisson that haunted me when I was eight or nine.

There are, of course, other hittable hot buttons for gold collectors as well. Cool design? That's an affirmative, High Relief double eagle. Great background story? Hello, Carson City double eagle! The "neatness" factor of owning an 18th century issue? That would be you, 1799 eagle.

5. Historical Significance. As numismatics becomes less about investors and more about collectors, I am finding the historic significance of certain issues are becoming more available because of their historic significance. This includes a number of factors, a few of which include the following:

-Background Story: I don't think its a coincidence that coins like 1861-D gold dollars and half eagles or 1861-O double eagles have become much more in demand due to their fantastic background stories. -Provenance: This may not be the case for all collectors but for some of us (and you know who you are...) the allure of an Eliasberg or Norweb pedigree is a definite factor that influences the price that we pay for a neat coin. -"The Look:" As the internet has (re)proven, numismatics is very visual. Coins that have a great appearance (such as wonderful deep coloration or lots of dirt clinging to the recessed areas) are pieces that a certain type of collector will pay a premium for.

There are other not-so-obvious factors that influence what collectors will pay for a coin. What are some of the ones that went undiscussed in this blog that impact you?

Pricing "Difficult" Coins: A Real World Model

I have written a number of blogs in the past few years about how I price rare coins. Despite this, I still get many questions from new and experienced collectors about pricing. I'd like to share a specific coin that I recently handled and explain how I came up with buy/sell prices. As I have written, I find many of the published price guides to be of little or no use when it comes to complex, infrequently traded coins. When I make decisions at shows, in my office, or in the auction room on what to pay for a coin, I tend to put a lot more credence in auction records. So, if you'd like to play at home, I suggest that you follow along with the PCGS auction archives on pcgs.com as this is a major source of information for me when I make pricing decisions. Here is a "real world" model and the thought process(es) that went along with my pricing decision.

1863 Half Eagle, Graded MS60 by NGC and CAC approved

This is a coin I handled earlier this year and it is one of the first pieces in a while that, as soon as I saw it, I said "I have to own this." Before I discuss my thoughts about how to price it, let me discuss a little about the issue and about the coin itself.

Only 2,442 business strikes of this year were made and my experience is that the 1863 half eagle is rare in all grades, especially in AU50 or better. I jogged my memory and couldn't recall having seen an example I thought was better than AU53 to AU55 in more than a decade. And, I remembered that this was an issue that typically comes with zero in the way of eye appeal. A quick look online showed me that the PCGS population was none for Uncirculated coins and five for AU58; NGC had graded two in Uncirculated (an MS60 and an MS61) and five in AU58. At the time, CAC hadn't approved a single 1863 in any grade; a good indication that the eye appeal of the typical example was not good.

(How can you, even without my experience, make the same conclusions? Look at the pictures of the 1863 half eagles sold at auction during the last ten years. Are the coin fresh and original or are they bright, abraded and processed? Then, look at the number of auction records. A quick scan of the PCGS archives showed a total of 30 records since 1941. What was immediately impressive to me about this figure was that the highly-regarded 1864-S half eagle had 32 auction records in that time period!)

Of course, all these statistics are just gobbledygook if the coin itself isn't "all there." As you can see from the photo above, this coin had really good eye appeal. In fact, my first question was "why is this only in a 60 holder?" (I recently overheard heard a wholesale dealer, who I regard as one of the top three graders in the world, refer to the MS60 grade as "dumb" and that he "hated it." I tend to agree with him but, in this case, I was smitten with the coin; even it was in the funkiest of all Mint State grades.)

So, at this point I was sold. What would I pay?

With no auction records for an Uncirculated coin, I looked at AU58's. The two most recent sales were $14,950 by Stacks Bowers in August 2012 and $14,375 by Heritage in May 2010. A quick look at images for both coins showed two pieces that were no better, in my opinion, than AU53 to AU55. So, after digesting this, I decided that I would pay at least $17,500-20,000 for a coin that was a real, CAC-quality AU58 (the last "real 58" I had seen was the Bass II coin which sold for $13,800 back in 1999...).

Having concluded that a "real" AU58 was worth as much as $20,000, I figured it would be OK to pay at least $30,000 for a really nice MS60. I wanted confirmation and then decided to see if there were comparable coins that had recent auction records in this grade. Back to the archives I went.

I didn't really find any good comparables for the 1864-P and 1865-P, two dates that I regard as somewhat similar to the 1863; at least in terms of overall desirability. I then looked at the 1863-S; an issue with 17,000 struck but a low survival rate. I believe that this date is about twice as available as its Philadelphia counterpart but, like the 1863-S, it is extremely rare in AU58 and above.

In their June 2011 auction, Stacks Bowers sold a nice NGC AU58+ 1863-S for a remarkable $25,875. This was the single best example of the date that I had seen in years and I thought the price realized would be strong but I was clearly not expecting a winning bid of over $25,000. But this was as good a comparable as I could find and it made me think that if a "gem slider" 1863-S half eagle was worth nearly $26,000 then a somewhat nicer example of a decidedly rarer date (the 1863-P) had to be worth at least $30,000-32,500.

After negotiations, I was able to purchase the 1863 half eagle in this price range. I sent it to CAC where it was approved, thus becoming the first and only stickered example of this date. I listed it for sale in the mid-30's and within a few hours I sold it to a specialist who had been looking for a high grade 1863 half eagle for many years.

And what exactly does this all prove? Here are a few thoughts that I gleamed:

1. With CDN Monthly Summary showing a "bid" of $20,000 for this date in MS60, I knew that I wasn't going to get any help from published price sheets. But that's not a surprise, given that no MS60 coin had ever traded.

2. A few things convinced me to stretch on this coin: its true rarity in all grades, its Civil War date of issue and its great eye appeal. But if I had been offered an 1863-P half eagle in MS60 that was ugly and processed, I might not have figured it for much more than the $20,000 or so that I decided a properly graded, attractive AU58 was worth; maybe even less, in fact.

3. When you are contemplating a purchase of a coin such as this 1863 half eagle, you have to be prepared to stretch. My quick analysis made me think it was a great deal at $25,000 and probably too much of a stretch at $40,000. So, at $30,000 I was still all in and at $35,000 I probably would have been as well but not without some complaining to the seller.

4. How effective is the comparable method I mentioned above for determining value? It can be very effective but it is fraught with potential landmines. Let's say there was just one comparable and it was from over a decade ago--would that be effective? Or what if there were three records and one was 100% higher for a comparable coin) than the other two--would you, as an informed buyer, know the circumstances behind this sale? Is it effective to compare a coin like an 1863 half eagle to, say, an 1863 eagle? Or is this too much of an "apples to oranges" scenario.

5. The bottom line is that no matter how pseudo-scientific we as dealers or collectors try to make pricing, a lot of the numbers that get placed on really rare coins are instinctual. If you are knowledgeable, you'll have a gut feeling that the price is "right" or its "wrong."

Would you like to read more about my thoughts on coin pricing? If so, feel free to email me at dwn@ont.com and fire away with some off your questions.

10 Ways to Become a Better Collector

As a dealer who works with collectors who range in experience from total beginners to full-on experts, I have a fairly good idea what separates the masters from the wanna-bes. Experience, obviously, is part of the equation; but some of the best collectors I have ever seen are fairly new to the game and their skill is largely intuitive. Here are some suggestions and observations I'd like to share with you that might just make you a better collector. 1. Don't Spread Yourself Too Thin: I've seen this happen many times before: a newbie gets bitten hard by the coin bug and becomes a collector of everything. You can't fault a bright eyed and bushy tailed collector for being overly enthusiastic, but this is certain to be a pocketbook drain, and it is likely to result in a confused mess of a collection. It's likely that your first choice (or choices) of what you collect will change over time but try to reign in your "I must have it all" sentiments and replace them with a little more control. If you can't stand the down time between purchases, choose a secondary collection that is inexpensive (paper money, tokens, circulated Liberty Seated silver) to fulfill your compulsion to make a purchase.

2. Become A Student Of Your Series: The collectors who impress me the most are the ones who have become specialized in a certain series and who have studied it to the point that they are as knowledgeable about it as possible. This study can take many forms. Some collectors are interested in the history of the coins they collect, while others are more interested in rarity and availability of coins. A collector might select a series to specialize in where there is little written and become the author of a book or a web-based guide. My take on studying a series is that for every hour you put into this, your reward is many times the effort.

3. Establish A Good Relationship With At Least One Or Two Dealers: I don't think I've ever seen a really great collection that wasn't the result of a joint effort between a collector and a dealer. If you collect something like Dahlonega half eagles in crusty About Uncirculated grades, or varieties of Type One Liberty Head double eagles, you just aren't going to have access to enough good coins unless you have a solid relationship with a dealer. Sure, you can find most of the coins that you need on E-Bay, or bidding sight-unseen at a Heritage sale, but my guess is that when you are done you are going to have a set of coins with more problems in it as good pieces. If you collect something like modern coins you don't really need a dealer; this is as close to be a self-service area as there is in numismatics. But if you are a new collector who thinks he can build a complex set without some help...

4. If You Are An Investor, Think Like A Collector: One of the oldest Doug Winter cliches: numismatic investors almost never make money but good collector often makes money in spite of themselves. Think about this for a second: coin investors inevitably buy the wrong coins at the wrong time from the wrong people. Typically, they buy high and sell low. Collectors, on the other hand, buy coins because they love them, hold them for a long period and often see a fairly good return on their "investment" even though they weren't buying to make money. If you are someone buying coins who has no interest in them...stop immediately. Sell what you have and switch to bullion. You'll save yourself a headache or three when its time to liquidate.

5. Buy With Eye Appeal In Mind: Unless you are a specialist who has to buy a certain coin because it is so rare that he can't pass on it, never buy coins that aren't good looking. There are relatively few exceptions to this rule. I would still buy an ugly 1864-S half eagle as this is an in-demand issue that seldom is found at all, let alone with good eye appeal. But if we're talking an issue like an 1864-S double eagle (a reasonably available coin that can be found with good eye appeal if the collector is patient) it is a huge mistake to jump at a coin that is just so-so. This harkens back to #2 listed above: by learning about the coins you collect, you'll learn which can be found nice and which are almost never seen with good eye appeal. Here's a word to the wise: ugly coins are hard to sell unless they are very rare and even then, prepare to steel yourself to a lot of "that's ugly but..." comments.

6. Pay Up For Quality: Another numismatic cliche: "good coins aren't cheap and cheap coins aren't good." In this day and age, it is certainly possible to get fair value when you buy a coin. But with a real shortage of good to great coins in the market right now, it is very unlikely that you are going to be able to buy good coins at auction with low-ball bids or from cash-strapped dealers who have to sell the best pieces they have to pay the bills. The laws of supply and demand have become pretty simple in the coin market in the last five or so years. For every really nice coin, there tends to be multiple buyers. If you aren't willing to step up to the plate, you will not only miss out on them, you probably won't be offered any. I'm not implying that you grossly overpay for coins. Just consider your opportunity costs and consider if your stretch at the time of purchase will be rewarded when its time to sell.

7. Trust Your Instincts: Nearly every numismatic mistake I've made has been the result of not trusting my first instinct. If you have to force yourself to like a coin, it is probably not the right coin for you. If, after doing your research, you think a coin is well overpriced, don't buy it (you might make an exception for that choice 1864-S half eagle you've been looking for since 1998...). Another instinct to trust has to do with a potential dealer. If the guy offering you coins over the phone makes the little hairs on the back of your neck stand up, don't deal with him.

8. Learn How To Price The Series You Collect: Most new collectors either dramatically under-price or overprice coins they are offered. With the online auction prices realized archives that PCGS, NGC and Heritage offer, there is no excuse for most collectors to not have a decent idea of how to price frequently traded coins. Really rare coins, like our friend the 1864-S half eagle, are a different matter and this topic has been discussed by me in previous blogs; read them to see what my thoughts are on this topic.

9. Be Patient! Let me give you a true-life example that illustrates why patience is a numismatic virtue. I met a collector about a year ago who was wanting to collect early gold. I sold him a coin or two and he was hooked. He sent me coins to sell for him to raise money for another purchase. He was self-admittedly impatient and was used to collecting coins that could be found with relative ease. It took me over six months to find him the "right" coin but when I did, it was a total home run; a coin that exceeded his expectations and made him realize that his patience had been more than rewarded. If you want to collect really rare and/or really nice coins, you have to be patient, especially in this market.

10. Don't Bother Learning To Grade: When I had kidney stones two months ago, I didn't take a crash course in how to become a urologist, I just went to the best available doctor and was treated. And it isn't likely that you are ever going to have the time to really learn how to grade; certainly not to the point that you can tell an MS62 from an MS63. But, you can learn how to determine if a coin has real color, if the surfaces are original, if it is well-struck for the issue, if it is new or not new, etc. I used to think it was a good idea to tell collectors to learn to grade and now I realize that it is naive. You can learn to grade to a point but, mainly, learn how to choose coins that are in the top 5-10% for the grade.

If some of these suggestions hit home a little bit hard, don't fret. This blog wasn't written with any specific people in mind and these are mistakes that I have seen made by beginners and sophisticated collectors alike. If you can follow a few of these from time to time, you are likely to enjoy rare coin collecting more and to become a better long-term numismatist.

20 Popular 19th Century US Gold Coins Priced Below $10,000

There are dozens of United States gold coins that are accorded a high degree of value for various reasons: first-year-of-issue, low mintage figures, beautiful design, strong collector appeal, etc. These are not always the "rarest" coins in a series and when the value-conscious collector looks at the numbers they don't always make sense. But coins like the ones listed below are great additions to any collection. Let's look at a list of 20 gold coins from the 19th century priced below $10,000 that would be welcome in any collection. 1. 1849-D Gold Dollar: The first gold dollar from this mint and an affordable, well-made issue. An easy coin to obtain in the $2,500-5,000 range.

2. 1855-O Gold Dollar: The only Type Two gold dollar from New Orleans and the final issue of this denomination from this mint. $3,000-5,000 will buy you a nice piece.

3. 1875 Gold Dollar: Just 400 business strikes were made, yet this issue is affordable.

4. 1838-C Quarter Eagle: The first quarter eagle from Charlotte and a popular two year type. Becoming harder to locate for less than $7,500 but be patient and you'll find one.

5. 1839-D Quarter Eagle: The mate to the 1838-C and an issue that is both first-year-of-type and a one -year emission. Another coin that is becoming hard to find at under $10,000 but not impossible.

6. 1845-O Quarter Eagle: Only 4,000 were struck and this is by far the scarcest quarter eagle from this mint. Still available for less than $10,000 but getting more expensive every year.

7. 1875 Quarter Eagle: If you own the dollar, why not the quarter eagle? Another super-low mintage issue; just 400 struck. Decent pieces can be had for $7,500-10,000.

8. 1854-O Three Dollars: A first-year issue and a one-year type in one affordable package. $5,000-7,500 will buy you a very pleasing example.

9. 1881 Three Dollars: Just 500 business strikes were made and this is a scarce coin in all grades. This date always sells quickly for me. $7,500 will buy you a nice one.

10. 1813 Half Eagle: One of the more common coins on this list but its the most affordable example of the legendary Fat Head type. Nice pieces can still be hard for less than $10,000.

11. 1838-C/1838-D Half Eagles: Both are first year issues and one-year types. Both are very popular and becoming increasingly hard to find at under $10,000. These have great appeal beyond branch mint specialists.

12. 1839-C/1839-D Half Eagles: Two more one-year types. Neither are really rare (except in high grades) but they are well-made, oh-so-popular and can still be purchased in the $5,000-10,000 range. A four coin set that had the 1838-C, 1838-D, 1839-C and 1839-D half eagles would be a great addition to a collection.

13. 1861-C Half Eagle: Final year of issue, possible Civil War issuance and cheap...what's not to love about the 1861-C half eagle? I just sold a nice EF40 for a shade over $5,000 and received multiple orders for it on my site.

14. 1870-CC Half Eagle: You can't buy a really nice example of this date for less than $10,000 anymore but if you stretch a bit you'll own a true piece of history. By a large margin, this is the most affordable first-year CC gold coin.

15. 1838 Eagle: This is another formerly affordable coin whose levels have shot up in the last five years. It's scarce in all grades (only 7,200 were made) and it is the first Liberty Head eagle.

16. 1854-S Eagle: The first San Francisco eagle and a true Gold Rush artifact. Very affordable with very nice pieces still available for around $5,000.

17. 1857-S SSCA Double Eagle: I thought twice about adding this to the list but how can you not love a coin with this much history and cosmetic appeal? MS63's at $9,000 or so seem like fair value right now.

18. 1874-CC Eagle: To me, the thought of owning a Carson City eagle from the early 1870's is pretty exciting and the 1874-CC is the most common. Nice coins can be had for $6,000-8,000.

19. 1861 Double Eagle: An affordable Civil War double eagle that is well made and available. A great starter coin for the collector and always an easy coin to sell. You can buy nice examples for $3,000-5,000 and up.

20. Carson City Double Eagle: I didn't mention a specific date as I am viewing this as a type purchase. What could be more popular than a big, pretty coin like this? You can still purchase an excellent example for $4,000-7,000.

So what coins did I leave off the list that you have in your collection and which do you agree with? Email me at dwn@ont.com and let me know!

The DWN Favorites List

As I update my website the morning of Long Beach set-up, it got me to to thinking what are some of my numismatic favorites: shows, series, books, sales, etc.? Indulge me as I attempt to entertain you... Favorite City for a Coin Show: New York, by a significant factor. Yes, rooms are expensive and, yes, space is at a premium at any exhibit hall where a show is held. But the last two ANA shows held in New York were by far the two best coin shows I ever had. Not only is New York the financial capital of the world (for now...), it is the epicenter of American coin collecting with thousands of serious, deep-pocketed buyers within a few hundred miles. If it were up to me, I'd have a major coin show in Manhattan at least once year.

Favorite Coin Series: My favorite series seems to change on an annual basis. Obviously, I'm a dealer who favors gold and, equally as obvious, I tend to favor early gold and Liberty Head issues. Right now, I find myself especially intrigued by No Motto half eagles. But I am also very intrigued by Type One double eagles, early quarter eagles, New Orleans eagles and so much more. That's what makes my job fun.

Favorite Coin Book: I would vote for S.S. Crosby's Early Coins of America as the best book on coins ever written and the Garrett/Guth 100 Greatest U.S. Coins as the book that has had the biggest influence on the market in the last decade. But for me, the single best coin book has always been the Redbook. It has everything I need in one neat, simple package and it is the book I refer to more than any other; even my own.

Favorite Coin Website: Based on the amount of time I spend online, I'd have to vote for the PCGS and Heritage sites; the former for its auction prices realized and the latter for its elegant design and unrivaled technology.

Favorite Coin Show: For me, this is a pretty easy one: the FUN show in Orlando, held every year in January. From an economic standpoint, I think the tables are a good value. From a symbolic standpoint, I like the fact that it represents the beginning of the year and seems to offer a Karmic Cleansing (or something like that...). The show is well-run, it's nice to go to Florida in the middle of winter, it's well-attended, and it's a show that has to be considered one of the very best of the year for retail sales. I find the atmosphere more laid-back than the Summer ANA (which is my runner-up for best show) and its a show that, after all these years, I still look forward to attending.

Favorite Coin Auction: That would still have to be the Bass II sale, conducted by Bowers and Merena in October 1999. There were thousands of lots with nearly every single one containing a coin (or coins) that I wanted to bid on. And the coins were fresh, fresh, fresh with an incredible array of depth and quality. What's really remarkable about this sale is that although it was conducted just 13 years ago, in some ways it seems like a hundred; what with no internet, sparse attendance and prices that now seem cheap, cheap, cheap. It is scary to think what this sale would bring in 2012.

Favorite Auction Firm: Given the fact that the coin auction business is essentially a duopoly at this point, it's a lot easier to point to a favorite firm today. Due to their transparency and great customer service, the clear favorite for me is Heritage. I love how Heritage provides me with all the information I need to help me bid and I love how, despite their size, Heritage is willing to go the extra mile when it comes to things like having someone stay late after a long day at a coin show to let me view lots.

Asterisk: Had ANR been able to survive the contraction of the auction business, this firm would probably have been my favorite. They had great people working for them, got nice consignments, produced exceptional catalogs, and were building a first-class website. Their demise was sad for the numismatic auction business.

Favorite Regular Issue Coin Design: This would be a toss-up between the so-ugly-its-charming Capped Head half eagle design of William Kneass (especially the Reduced Diameter issues of 1829-1834) and the cool, elegant Indian Head eagle design produced by Augustus St. Gaudens.

Favorite Pattern Issue Coin Design: Judd-1776. If you don't know what this design looks like, Google it.

Favorite Coins I've Handled In 2012: While not yet half over, this has proven to be a watershed year for DWN in terms of cool individual coins. A few stand-out so far: the finest known MS63 1855-D quarter eagle I bought in the Goldberg's February sale, the NGC MS60 1863 half eagle I recently sold to an eastern specialist, the PCGS F12 1854-S quarter eagle I bought at the "secret" auction in San Francisco, and the group of three Gem Charlotte gold coins I just finished selling over the weekend. I can only hope the second half of 2012 turns out to be as full of great coins as the first half was!

What are some of your numismatic favorites? Let me know by contacting me via email at dwn@ont.com.

Good Values in Type Three Liberty Head Double Eagles

If you collect rare United States gold coins, you'll notice that certain series have extremely compressed values. As an example, a common date Dahlonega half eagle grades EF45 might trade in the $2,300-2,600 range while the same date in AU50 often sells for a small premium; maybe as low as 10-15%. The reason for this is pretty simple. The market has decided that there is not much of an aesthetic difference between a Dahlonega half eagle in EF45 and one in AU50 and the formerly high price premium between the two grades is no longer merited. But there are some series where one small point on the grading scale can make a significant financial difference. One of these is Type Three double eagles.

The Type Three double eagle series dates from 1877 through the adoption of the new St. Gaudens designs in 1907. Type Three double eagles range from ultra-common to ultra-rare and they have proven to be quite popular with collectors over the last decade.

The grade distribution for most Type Three double eagles dictates their current rarity. By this, I mean that many dates were extensively melted and the surviving coins tend to have been shipped loose in bags to overseas sources. There are many Type Threes that are virtually unknown in grades below AU55 and virtually unknown in grades above MS63. When available, they tend to be heavily abraded due to poor handling and grade in the MS60 to MS61 range.

The exact point on the grading scale where availability and non-availability in this series tends to intersect is at MS63. There are numerous Type Threes that are fairly scarce in properly graded MS62 but are still affordable and, in my opinion, are very good values. These same coins might double, triple or even quadruple in price at the next grade up and I question the value of these MS63 coins. This is especially true when a nice, high end MS62 is often virtually indistinguishable from a typical quality MS63.

There are a number of "secret" and "not-so-secret" dates in the Type Three series that I think make for interesting analysis. Let's look at a few of these and determine what the best grade is for the collector seeking good value.

1. 1877-S There were three different Liberty Head double eagles issued in 1877 and the 1877-S is the most common of these. It is a numismatically significant date as it is the first San Francisco Type Three double eagle but it is very common in the lowest Uncirculated grades. As I was doing some basic research for this blog, I was very surprised to see the third-party population figures for MS62 examples of this date: 258 graded as such at PCGS and 163 at NGC. Even factoring in extensive resubmissions, this is still well over 100 examples graded MS62 between the two services.

In MS62, the 1877-S is worth around $4,000-5,000. This seems like a fairly high number for a coin that is more available than I would have thought but most 1877-S double eagles in MS62 are very low end. CAC has only approved four (with none higher) and this low number doesn't surprise me. I'd have to say that a choice, minimally abraded MS62 with CAC approval is pretty good value at, say, $4,500-5,000.

In MS63, this date is conditionally rare. PCGS has graded twenty five (with three better) while NGC shows only five with one better. An average quality MS63 is worth around $15,000 while a choice, high end piece could bring close to $20,000 at auction; more if it were CAC approved. Is this issue good value in MS63? I would have to say no, especially if the coin in question looks like the few slabbed MS63's that I've seen in recent years. My advice to the collector would be to patiently wait for a nice MS62 and pay a premium of as much as 10-15% if the coin has above-average luster and surfaces.

2. 1879 This is one of the more interesting years, numismatically, for Type Three double eagles. Four different issues were struck. The 1879-O is the rarest, followed by the 1879-CC. The 1879-P and 1879-S are condition rarities with similar overall profiles.

The 1879 is most often seen in AU55 to MS60 grades and it is very scarce in properly graded MS61. Nice MS62's are rare. PCGS shows a population of forty-five in this grade with twenty-one finer while NGC's figures are 32 with 19 finer. Only two MS62's have received CAC approval. In MS62, this coin has a current value of $4,500-5,000. This seems to me to be a great value in comparison to the above-referenced 1877-S.

In MS63 and higher grades, the 1879 is very rare. The combined PCGS/NGC population is twenty-five in this grade with fifteen finer. Factoring in resubmissions, this means there are perhaps a dozen known in MS63 or above. In the current market, such a coin would sell for $15,000 to $20,000. Do I think an MS63 is worth three to four times more than an MS62? Not really. Would I advise a collector to buy an MS63 example of this date? Doubtful, unless he was putting together a finest known/Condition Census set and he "had" to have a coin that graded at least MS63.

3. 1889. This date differs from the 1877-S and 1879 in that it isn't a total condition rarity. It has a reasonably low original mintage of 44,111 business strikes; a fraction of the number made for the 1877-S and the 1879.

This is an issue that didn't see a lot of circulation and it is seldom encountered in AU grades. But it is fairly easy to locate in MS60 and MS61. MS62 coins have a relatively high population (over 300 at PCGS and NGC combined) but many of the examples that I see in MS62 holders are not really all that special. This is evidenced by the fact that only five coins (as of 5/12) have received approval at CAC. An MS62 example of the 1889 can currently be purchased for $3,000-3,500.

MS63 and higher examples are another story. PCGS has graded 19 in MS63 with none better while NGC shows five in this grade with none better. We can assume the PCGS population is inflated and, in all likelihood, the number of properly graded MS63 coins is around six to eight. The value of this date in MS63 is in the $12,500-15,000 range. Is this is a good value?

In this case, I think that a really nice CAC-quality 1889 $20.00 in MS63 might be a pretty good deal at around $13,500. Here's my thought process. First of all, there are no coins currently graded higher than MS63. Secondly, with a reasonably low mintage figure you probably don't have to worry about extensive hoards being found. Thirdly, it is common in MS62 but few of the coins in this grade seem to be nice enough to upgrade, someday, to MS63. This makes it a reasonably "safe" condition rarity although, as always, there is some risk involved with a coin like this.

As you can see from the examples above, the "best value grade" for all these dates--and for many Type Three double eagles--is MS62. If you can find examples of these dates in high end CAC-quality MS62, at a fraction of the MS63 price, it is hard to argue with these levels of value.

The DWN Market Report: An Appreciation

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

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

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

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

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

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

What the DWN Market Report isn't:

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

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

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

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

-Its not a lightning rod for controversy.

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

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

A Baker's Dozen of San Francisco Gold Treats

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

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

Without further ado, here is the list:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why I Made Collector X Mad

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sincerely,

Doug Winter