By Steve Roach | 02-18-13
Article first published in March 04, 2013, Expert Advice section of Coin World

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A Mint State 66 1882-S Morgan dollar is a fairly common coin, but when from a great collection it enjoys a modest bump in value. This example which was once part of the Eliasberg Collection realized $373.75 when offered in 2010.

By Doug Winter - RareGoldcoins.com
CoinWeek Content Partner ………

Stacks Bowers auctions made numismatic history last night by selling a PCGS SP66 1794 silver dollar for $10,106,875. This amount is by far an auction record for a single coin and it is very significant for many reasons. And it’s also time to fess up: I thought the coin would bring considerably less money than it did.

Do I think this was a savvy purchase? Yes I do and I find some of the comments that I have read and heard about the sale to be amusing and poorly considered.

I didn’t attend the auction in person but I’ve watched the on-line video of the auction and a potentially controversial moment occurred when the successful bidder “jumped” the increment from $5.5 million to $8.5 million. It later turned out that this wasn’t the result of the agent representing the interests of two collectors (the buyer, who is smart and experienced, was never going to be bidding for multiple clients on this one lot) but it was the decision of the buyer to induce a “shock and awe” response that would make the competition quickly fold.

So, think about this. A few weeks from now, no one is going to remember how the 1794 dollar was jumped from $5.5 million dollars or why it was jumped. There are going to remember what it sold for and that it was the first coin to ever sell for $10 million dollars or more. And the eventual new owner of the coin, in a few months or years? I guarantee you he will care less about how it was jumped, if he knows at all.

Was this a good strategy? Its easy to be a Monday morning quarterback and over-analyze this move. Personally, I wouldn’t have done it this way and it is possible that this decision cost the buyer some money. But here’s my analysis and why, in the long run, I think that the act of buying the coin was a lot more important than what it actually sold for.

This coin was either going to be a sensational bargain (which is what I expected; something in the $5 million-6 million range was my pre-sale guesstimate) or it was going to be a home run. If it got anywhere close to the old auction record of $7,590,000 (set by the 1933 double eagle in July 2002) or the private treaty record of $7,850,000 (set by the same 1794 dollar a few years back) it literally had to leapfrog over this amount.

Let’s say the coin was stalling at the 7 million dollar mark. If you were serious enough to be player at $7 million, you’d be crazy not to pay $8 million and immediately have the coin set the all-time record. But if you were at $8 million, why not pay $10 million? Yes, I know this sounds odd but hear me out.

When you are talking about really great collectibles items no one remembers what coin or what car or what painting is the second most expensive or the third most expensive. What people want to know is what is THE most expensive? What is the single “greatest” coin? While I do not personally think the 1794 dollar is the single “best” coin there is, it is the best that was available in late 2012/early 2013 and this is a period in which, in its short duration, we are seeing epic prices for the best of the best in all fields.

So put yourself in the buyers position. He is the owner of a firm which specializes in super high end rarities and in order to cement his position as the source for seven (or eight!) figure coins, he has to buy the 1794 dollar. And he has to pay a record price for it. But as a smart businessman, he knows that $10 million sounds a lot more robust than $8 million or even $9 million. If he wants to catch the attention of a hedge fund multi-billionaire, he is more likely to do it with a coin which is “the first 10 million dollar coin” than one which is the “first 8 million dollar coin.”

So what impact is this likely to have on the coin market? Probably none in the near future. But I can see some ripples that will occur sooner than later.

1. Stack’s Bowers gains some strong momentum in the rare coin auction market. As recently as a few months ago, I would have expected Heritage to set the record for the highest priced coin and suddenly Heritage has to be thinking, “maybe we need to step up our game a little bit.” Heritage is still the force to be reckoned with in the auction market but clearly, they can’t just assume they are going to be getting all the big deals from here on out.

2. I have always believed that the most valuable American coin is the Childs 1804 silver dollar graded PR68 by PCGS. This coin sold for $4.1 million in August 1999. I am not a great fan of 1804 dollars but I can make an easy case for it being the one coin that someone like Bill Gates would buy if he was going to buy just one coin. The Childs coin is the “best of the best” and I think that its suddenly a $15-20 million dollar coin, maybe even more.

3. Gem early type is likely to see a shot in the arm from the sale of the 1794 dollar. If you own a nice fine 1796 dime, it isn’t suddenly worth 10-20% more. But if you own a Gem 1795 half dollar or a superb 1799 dollar, you can make the case that your coin(s) seem cheap compared to the $10 million dollar 1794 which just sold. I’m thinking that all Gem/Superb early type in all metals just went up at least 10-20%, if not more.

4. I was sort of surprised that all the players for the Specimen 1794 dollar were known collectors. Frankly, I thought there was a good chance that the buyer would be someone like the individual who bought the 1933 double eagle in 2002: a mystery man who had never bought another coin and who, it seems, have never again bought a coin. It will be interesting to see who the next owner of the 1794 dollar will be. If someone wants to start a great collection of early silver coins, in anticipation of the upcoming Newman sale(s), what better place to start than with the 1794 dollar?

5. The next great trophy coin that will hit the market is the famous Walton specimen of the 1913 Nickel which Heritage is offering as part of the Central States sale this spring. Will it eclipse the $10 million dollar mark set by the 1794 dollar? I would guess not as it isn’t a Gem coin like the 1794. But I’m thinking it will set a record price for the issue.

6. You should be seeing a lot of feel-good stories about coin investments in the coming days and weeks and stories about the $10 million dollar 1794. I’m assuming that this story will get picked up by Forbes and by Bloomberg and that a few ultra-wealthy people could possibly have rare coins suddenly appear on their investment radar screens. And if you are reading this, Carlos Slim , I can be reached at dwn@ont.com and am happy to discuss coins with you in English or Spanish!

My most heartfelt congratulations to the new owner of the 1794 dollar. Great purchase, Bruce, and one which puts you in the pantheon of the all-time great collectors. I also would like to congratulate Stacks Bowers and a great job of selling the 1794 dollar, from the cataloging to the marketing to making it through the nerve-wracking days leading up to the sale itself.

By Steve Roach | 01-14-13
Article first published in January-2013, Market Updates section of Coin World

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This Mint State 63 1908 Saint-Gaudens $20 double eagle with a Certified Acceptance Corp. gold sticker realized what an MS-66 example of the same coin would bring when it was offered at a November 2012 auction.

A Weekly CoinWeek Column by Greg Reynolds
News and Analysis regarding scarce coins, coin markets, and the coin collecting community #134 …..

When I wrote about 1904 Philadelphia Mint Half Dollars two weeks ago, I pointed out that a 1904 half in Good-04 grade costs less than $18, while the finest known Duckor coin, which is PCGS graded “MS-67+” and CAC approved, was auctioned for $51,750 on Aug. 11, 2010. Such a difference in price does not only relate to 1904 halves. Since there is often a wide range in prices for U.S.coins of the same issue, important questions relate to which grades collectors should choose and why?

For different collectors, there are very different correct answers to the same questions. Nevertheless, the reality that higher grades are sometimes worth dramatically more than lower grades is certainly worth discussing. Frequently, beginners, and collectors who change directions, need to decide upon coin types and grade ranges that are best suited for them, respectively. The fact that one or two grade increments may amount to a very large difference in price should not be ignored.

As the topic of grading is complicated in all contexts, I am limiting this discussion to business strike, pre-1934 U.S. coins. The collecting and grading of modern coins is a whole different matter, which I have addressed before. (Clickable links are in blue.)

In the future, I will discuss grade ranges and corresponding values for Proof coins. Furthermore, premiums paid for prooflike coins or Specimen Strikings need to be addressed separately. Market values of Proofs, prooflike coins and Specimen Strikings are all beside the point that even one grade increment may result in a tremendous difference in price. It is beneficial to focus on business strikes while discussing the concept that higher grades are often worth much more than lower grades.

I. Accepted Standards

As the present discussion relates to differences in the values of coins of the same issue though of different grades, lessons in grading are not included. For clarity, I mention the grading terms that are employed by experts in the mainstream of the coin business and the coin collecting community in the United States. While thousands of Europeans and Asians are coming to accept U.S. standards in coin grading, it remains true that many collectors around the world continue to use other grading criteria.

In the United States, there are a few honest dealers and a small number of collectors who, in good faith, employ alternate grading criteria, sometimes their respective homemade grading systems that few others, if anyone, truly understand. More importantly, for every honest coin dealer who employs alternate grading criteria there are at least ten coin sellers who unethically, carelessly, and/or fraudulently employ alternate grading criteria. In all the years that I have been researching and writing about coins, including attendance of numerous coin shows and major auctions, plus innumerable conversations with collectors and dealers, I have found that most (though not all) of the people who employ alternate grading criteria are incompetent, extremely careless, and/or very dishonest.

Generally, U.S. coins are assigned grades that are, at a minimum, consistent with how experts at the PCGS or the NGC have or would grade the same respective coins. Yes, officials at the PCGS and the NGC have mistakenly graded thousands of coins; yet, they have graded millions in total. If experts at the PCGS or the NGC would grade a specific, individual coin MS-60 at most, it is questionable for others to represent it as grading ‘MS-65’ or as being ‘Gem Brilliant Uncirculated (BU)’!

In other contexts, I have mentioned that there are maybe thirty ‘coin doctors’ who have, on many occasions, managed to deceive experts at the PCGS or the NGC into grading coins that are not gradable or that merit much lower grades than those assigned. The abilities of a small number of coin doctors to deceive graders at the PCGS and the NGC are really beside the point in this passage, which relates to the representation of non-certified coins.

For many U.S. coins that are valued at less than $250, it is not financially efficient, from a dealer’s perspective, for these to be submitted to the PCGS or the NGC. Grading, shipping and insurance fees, in many such cases, will amount to a substantial percentage of the value of the coin, sometimes more than 100%. So, there are special concerns relating to the sale of coins that are valued at less than $250 each. Also, by tradition, most colonial coins and some circulated early U.S. copper coins are not encapsulated.

As for U.S. coins, other than generic gold coins, that cost MORE than $250 each, I am continually surprised and concerned that many of these, which are publicly offered, are not certified by the PCGS or the NGC. Indeed, advertisements in leading, respectable, coin publications sometimes list U.S. coins, valued at more than $250 each, which are not certified. I hypothesize that most of these, if submitted, would be assigned grades by the PCGS or the NGC that are lower than the grades represented by the sellers, respectively. Some such coins would probably be determined to be not gradable, because of serious problems, by experts at the PCGS or the NGC.

I wholeheartedly recommend that, when collectors seek to buy pre-1934 U.S. coins for more than $250 each, only coins certified by the PCGS or the NGC should be considered. Suppose that a coin that costs $500 and is said by the seller to grade “MS-64,” though is not certified. Further suppose that this same coin is submitted to the NGC on five occasions and to the PCGS on five occasions, after being ‘cracked out’ in between subsequent submissions. In most (though not all) such cases, neither the PCGS nor the NGC would assign a grade of MS-64 or higher to such a coin. Maybe it would be graded MS-62 or MS-63, or just MS-60. Indeed, many not certified pre-1934 U.S. coins would, if submitted, fail to receive numerical grades from the PCGS or the NGC, because of serious problems.

Yes, there are cases where a $500 ‘not certified’ coin is represented as grading “MS-64” and later is PCGS graded MS-64. These cases are exceptions, not consistent with the rule that, when not certified, pre-1934 U.S. coins (other than generic gold), are priced above $250, these are usually overgraded, in terms of widely accepted grading criteria.

I am not implying that all PCGS or NGC certified coins are desirable. I have seen PCGS and NGC certified coins that are terrible.

I am insisting that, for U.S. coins valued over $250 each, only PCGS or NGC certified coins should be considered. Of course, each collector should reject some PCGS or NGC certified coins and accept others. On average, though not always, I find CAC approved coins to be more desirable than PCGS or NGC certified coins that are not CAC approved. It is important, however, to not make generalizations and to evaluate each coin as an individual, in my view. Collectors should learn at least a little about coin grading and should often ask questions of experts.

Collectors who are buying coins that cost ‘a lot of money’ should seek the counsel of an expert before finalizing each purchase, if practical to do so. As for the amount that constitutes ‘a lot of money,’ this depends upon the assets, income, and financial responsibilities of each individual collector.

The same amount of money may be honestly regarded as ‘small’ by one collector and ‘large’ by another. Indeed, this is often true. Each collector should be careful about spending an amount that he or she personally regards as ‘large’ and consult an expert before doing so.

A collector who has $100 million, no children and no debt, could rationally spend $100,000 on a single coin without thinking much about it. A collector who has $1 million, five young children, and a hefty mortgage payment due every month, may wish to seek the advice of an expert before spending $10,000 on a coin. Many others may wish to ask questions of experts before even spending $100 on one coin.

I am very much aware that not everyone can afford to pay $250 for a coin. I am not ignoring relatively poor buyers. Collectors who cannot afford to pay as much as $250 for one coin, or who acquire many coins that cost less than $250 each, have even more of a reason to think about the issues that I am raising and to consider grading issues, for these collectors will often have to rely upon themselves to grade ‘not certified’ coins.

II. The Grading Scale

Collectors who are already familiar with the grading scale may wish to skip this section. As the scale used for coin grading is so unusual in the realm of art and collectibles, I maintain that it is necessary to publicly repeat it from time to time. Many coin collectors do not quite remember this scale, and it is not intuitively obvious.

Business strikes that grade less than 60 have wear that can be seen without magnification; these are often thought of as being ‘circulated’ though wear may come about in circumstances other than circulation in commerce. The following grades are traditionally used for “circulated” coins: Poor-01, Fair-02, Almost Good-03, Good-04, Good-06, Very Good-08, VG-10, Fine-12, F-15, and then there are four increments of Very Fine, -20, -25, -30 and -35.

There are two Extremely Fine grades, -40 and -45. Regarding some grades of -40 and above, a half-increment denoted by a plus (‘+’) sign is sometimes assigned by experts at the PCGS, the NGC or elsewhere. So an ‘EF-45+’ grade is between an EF-45 grade and an AU-50 grade. The use of plus grades by the PCGS and the NGC did not commence until the spring of 2010.

Experts at the CAC refuse to consider, or even recognize, plus grades assigned by the PCGS or the NGC. John Albanese, the founder and president of the CAC, states that “we ignore their plus grades and just consider [each already assigned] number grade.”

I am not sure whether to say that there are four AU grades or eight, as a plus may sometimes be found after any of them: AU-50, AU-53, AU-55 and AU-58. For reasons that will be further defended in the future, I maintain that ‘Extremely Fine’ is correct and the oft-used substitute ‘Extra Fine’ is wrong. A coin that grades more than Very Fine and less than AU does not have an ‘Extra’ element of fineness, it is, regarding the overall detail of the coin, extremely rather than very, fine.

Uncirculated coins are said to be ‘Mint State.’ While I have never been thrilled about the term ‘Mint State,’ in one important way it is logically superior to the term ‘uncirculated’ as a business strike that was never intended for circulation can be ‘Mint State’ even if it cannot logically be uncirculated.

As I mentioned in a recent column, most business strike Morgan Silver Dollars were never intended to circulate. Also, there numerous patterns relating to Indian Cents that are not Proofs and were never intended for circulation. Many of these are ‘Mint State,’ though not conceptually uncirculated.

Business strikes that have no wear are graded on a scale from 60 to 70. Not only are all eleven points used, plus grades from 62 to 68 are sometimes assigned by graders at the PCGS or the NGC. While I am not certain about the NGC policy on this matter, graders at the PCGS never use the plus grades of 60+, 61+ and 69+. For pre-1934 coins, the grade of 70 is not applicable.

Coins that grade MS-60 or -61 are very ‘banged up’ from contact with other coins and/or have other very noticeable issues, such as discoloration, severe U.S. Mint caused defects, substantial scratches, etc. The MS-62 grade is one of the hardest to even begin to explain.

Coins that grade MS-63 are considered to be ‘Choice Uncirculated,’ 64 grade coins are ‘Very Choice.’ Coins that grade 65 or higher are gems. A 67 grade coin is often referred to as a ‘Superb Gem,’ though this term is sometimes used to refer to MS-66 grade coins as well. Years ago, I publicly suggested that 66 grade coins be called ‘Pristine Gems’ and 68 grade coins be called ‘Phenomenal Gems,’ though these terms never became widely accepted.

Coins that grade 63 or higher, ‘Choice’ coins, will often be brilliant, glittering, and/or colorfully toned. Coins that grade EF-45 or higher, especially coins that grade MS-63 or higher, will tend to have readily apparent luster. Collectors seeking coins that are lustrous or coins that are colorful will tend to prefer higher grade coins, rather than coins that grade less than EF-40.

Natural toning usually comes about when coins are properly stored. Please see my three part series on Appreciating Naturally Toned coins. It is not practical to discuss toning at length here.

The Duckor 1904 half that I wrote about last week has wonderful green toning, along with other colors. An early 20th century silver coin that grades less than EF-40 is likely to exhibit shades of gray, though could certainly feature some green or blue hues. Circulated silver coins, however, tend to tone gray and/or brownish-russet.

III. Avoid AU-58 to MS-62 grade coins?

For U.S. coins minted from 1838 or so to 1934, I suggest that beginners and intermediate-level collectors avoid those that grade MS-60, -61 or -62. These just have too many issues, causes for concern or unsightly characteristics. For some advanced or well experienced collectors of pre-1838 U.S. coins in general or pre-1880 gold rarities, there may be compelling reasons to buy coins that grade from 60 to 62, depending upon the collecting plans of individual buyers, respectively.

Additionally, I suggest that beginning and intermediate collectors stay away from coins that are certified as grading “AU-58.” While I understand why many collectors conclude that PCGS or NGC certified AU-58 coins are great values, there is often more to the stories of those coins that are certified as grading AU-58. In theory, an AU-58 grade coin has just a touch of wear and thus is nearly ‘Mint State.’ In reality, the “AU-58” grade is much more complicated.

A coin that just has a touch of wear will often be PCGS or NGC certified as grading MS-61 or MS-62. Yes, I realize this sounds illogical. It too, though, is a topic for another discussion. Indisputably, however, it is a reality that a large percentage of the pre-1934 U.S. coins that were once fairly labeled “AU-58” or “Borderline Uncirculated” are now certified as grading MS-61 or MS-62. It is also true that, before the PCGS was founded in 1986, many of these were represented as grading MS-63 or MS-65 by incompetent or unethical dealers.

There are also many coins, especially very weakly struck coins that are not very original, for which it is debatable as to whether they should be graded AU-55+, AU-58, MS-61 or MS-62. If these are certified as grading AU-58 or higher, it is probably not a good idea for beginning or intermediate collectors to buy them. The characteristics of some of these are just too ambiguous for most collectors, or their respective expert-advisors, to be sure about them.

There are also many coins that are graded “AU-58” even though these each have the detail that would be expected on an AU-53 or AU-55 coin. Why are these graded “AU-58”?

Suppose that a collector took a MS-64 to MS-66 grade coin and carried it around in a pocket, with no other metal objects. Further suppose that it was carried around until it wore down to the point that it has the details of AU-53 to AU-55 grade coin. If it was then submitted to the PCGS or the NGC, there would be a good chance that it would be graded AU-58. After all, if it has much of the surface quality and technical characteristics of a MS-64 or even a MS-66 grade coin, it is something ‘special.’ So, it would be likely to grade “AU-58” even if it has the detail of an AU-53. So called ‘net grading’ often occurs, which leads to ‘compromise grades.’

Many such certified “AU-58” grade coins are very attractive and stand out from general AU grade coins of the same type. Moreover, a coin that has the detail of an AU-53 grade may likewise be certified as grading “AU-58” if has very attractive toning or if it scores high in the category of originality. Conversely, an AU-55 grade Morgan Dollar that is dipped bright white, in an acidic solution, may be certified as grading “AU-58” or even “MS-61”!

In general, certified “AU-58” coins should be acquired by knowledgeable collectors who understand why they are each graded “AU-58.” There are several reasons as to why a coin that has the details of AU-53 or AU-55 grade may be graded “AU-58.” In other cases, uncirculated coins with significant problems sometimes receive an “AU-58” grade as a compromise. Moreover, there are instances where an AU-58 grade coin really just has a little bit of wear. It may take a good deal of skill and knowledge to determine why a particular coin is certified as grading “AU-58.” Generally, beginners should not buy coins that are certified as grading “AU-58.”

IV. Choice Coins

Here, I sometimes use Barber coins, especially Barber Half Dollars, as examples. The same concepts apply to many other series of pre-1934 U.S. coins. Usually, circulated Capped Bust Half Dimes, Liberty Seated Dimes, Barber Dimes, Capped Bust Half Dollars, and most dates in the series of Liberty Seated Half Dollars are not particularly expensive. Mercury Dimes and Standing Liberty Quarters are relatively low priced, except for a few key dates and gem coins with special characteristics.

For classic U.S. copper, nickel and gold coins, too, there are often dramatic differences in prices due solely to grades, for coins of the same date (and Mint location) of the same type. Regarding all 19th and early 20th century series of U.S. coins, collectors may wish to consider the points that I raise in this discussion.

As for whether 63 or higher grade coins, “Choice” coins, are worth their respective premiums over coins of the same type that grade below AU-58, this notion of worth really relates to the tastes and artistic preferences of the buyer. A naturally toned, VF-30 or EF-40 grade, classic U.S. silver coin is likely to be gray. It may be brownish-russet or it may have touches of blue. It could even be a military green color. It, though, is not brilliant and/or colorful in the ways that classic silver coins that grade above 64 often turn out to be.

While a common date, Very Fine-20 grade Barber Half Dollar retails for less than $100 and an EF-40 grade Barber Half may retail for around $185, an especially attractive MS-63 or MS-64 grade Barber Half will certainly retail for well over $1000. A MS-65 grade Barber Half, which is a condition rarity for any date, may retail for more than $3000, especially if it has toned very colorfully.

An NGC graded MS-65 1915-D half, with a CAC sticker, was auctioned by Heritage in August, for $2530. Auction prices, on average, are a little less than retail prices.

A true, mid range to high end MS-66 grade coin of this type likewise would sell for more than $5000. On Sept. 7, 2012, Heritage auctioned a PCGS graded MS-65 1912-D half, with a CAC sticker, for $5581.25. This is a common date. Also, a CAC approved MS-67 grade Barber Half would retail for more than $12,000.

There is really no way to generally explain the physical characteristics of choice or gem quality coins. They have to be seen, carefully examined, and discussed with experts to be understood. Barber Half Dollars were David Akers’ favorite series of silver coins and Akers taught Dr. Steven Duckor about them. Duckor eventually assembled the all-time best set of business strike Barber Half Dollars.

Beginning collectors should not expect to immediately perceive the importance and physical characteristics of business strikes that grade MS-65 or higher. Some will appreciate these over time; other will not find them to be as exciting as I do.

It is important for collectors to not be talked into buying gem quality coins by salespeople. Collectors instead should reflect upon their own tastes and artistic preferences, while considering their own respective budgets.

In April 2005, Spectrum-B&M auctioned the Eliasberg 1845-O Liberty Seated Dime for $161,000. It is PCGS graded “MS-69.” The PCGS price guide values a Good-04 grade 1845-O dime at “$35.”

In 2004, Spectrum-B&M auctioned a PCGS graded EF-45 1845-O dime for “$1064.” My impression from the online images is that there is a good chance that this is an attractive, naturally toned 1845-O Dime. Is the Eliasberg 1845-O worth 150 times as much? To some collectors it is worth such a premium, to others it is not at all!

Regarding 19th century series in general, John Albanese and I are both surprised that more collectors do not acquire coins in the VF-30 to AU-53 grade range. Albanese points out that these “have most of the detail of uncirculated coins and cost much less.” Dr. Duckor, in contrast, really does not like to obtain coins that grade less than MS-65, as he particularly enjoys “looking at gems.”

V. A Group of Super Coins

Some collectors do not seek to complete sets and instead seek a small number of coins that are really special, because of rarity or super grades for their respective issues. In the 1990s, Jay Parrino championed the concept of a “box of twenty rarities” rather than some kind of a set.

Collectors who wish to treasure a small number of coins are more likely to spend megabucks for gems. They may also with to acquire coins that are the first or second finest known representatives of their respective issues, even if these are not gems.

I understand, and identify with, the notion of cherishing a small number of coins. A collector who has a ‘box of twenty’ may visit his safe deposit box at his bank once a month and enjoy viewing his coins. It takes less time to view twenty coins than it does to view one thousand. Even so, my impression is that most collectors like to complete or nearly complete sets of some kind.

VI. Sets

In 2010, when I was reporting recommendations for U.S coins in the $50 to $2000 range, John Albanese focused upon “sets of EF to AU Barber Dimes, Quarters and Halves.” John adds that he would “prefer original matched sets of EF-40 to AU-53 coins, rather than sets with some AU-58 to MS-64 [grade] coins.”

Albanese is referring to sets that are complete or nearly so. Three key Barber Quarters cost more than $2000 each in EF-40 grade, though no Barber Halves do, except one die variety of interest to specialists. There is only one business strike Barber Dime, the 1895-O, that would retail for more than $1000 in EF-40 grade. Many Barber Dimes sell for less than $30 each in EF-40 grade, and for around $3 in AG-03 grade.

As for the three key date Barber Quarters, I recently wrote an article concerning prices for these in Fair-02 to VG-08 grades. (Please remember that clickable links are in blue.) For series of interest, not just Barber coins, collectors should carefully examine coins in various grades, perhaps from Poor-01 all the way to MS-67, and think about the types and grades that are desirable from a personal perspective.

For modest amounts, nearly complete sets of some series of Liberty Seated coins are viable. Many collectors may be surprised to learn that truly rare coin in Fine to Extremely Fine grades are available for less than $1000 each, sometimes for less than $250 each. Many very scarce coins in series of Liberty Seated coins may be acquired for less than $150 each. A coin is truly rare, in absolute terms, if fewer than five hundred exist, in all grades.

A coin is very scarce if fewer than one thousand exist in all grades, including the ungradable. In my opinion, acquiring very scarce coins is more fulfilling than collecting common coins, and acquisitions of very scarce coins are ‘in line’ with the culture and traditions of coin collecting. Collectors, though, should be inclined to collect coins that they really enjoy obtaining and can afford to collect. Above all, coin collecting should be fun.

©2012 Greg Reynolds

by Louis Golino for CoinWeek ……

By the end of October the U.S. Mint plans to complete the process of fulfilling orders for the 2012 San Francisco two-coin American silver eagle proof set. Sometime after that it will announce the final mintage for the set, which will play a key role in shaping premiums for the sets.

As of July 6, the day after the last orders were taken, a total of 251,302 set were ordered. That number is expected to change as a result of order cancellations, expired credit cards, and related issues. The Mint has not been providing updated figures since then in its weekly sales reports and is waiting until the last sets have been shipped.

Because the number is so close to the 248,000 mintage of the 2006 20th anniversary silver eagle sets, collectors are eager to see what the mintage of the San Francisco sets will be. The 2006 sets sell for about four times issue price today.

From the time it was first announced a lot of buyers tended to downplay the aftermarket potential for these sets because they were minted to demand. That seems to have ended up lowering demand for the sets and sales of them while they were available from the Mint.

But in recent weeks a very interesting situation has developed. On the one hand, raw sets and those graded PF-69 are not bringing a very strong premium. Plenty such sets are available and many dealers are offering discounts on them. That could change depending on the final sales number.

But sets graded PF-70, specifically those graded by PCGS and with the first strike designation, are selling for very strong premiums. And very few first strike 70 PCGS sets are available on the retail or wholesale market.

Two factors are at play here. First, the number of sets grading 70 is much lower than it was for similar silver eagle sets, especially at PCGS, where approximately 32% of the 2012 sets have received the top grade. Most collectors and dealers report receiving an even smaller percentage of 70 sets than that.

Second, the cut-off date at PCGS for first strike sets was August 25. The Mint fulfilled orders for these sets in batches, and not many of them were received in time to be first-strike eligible because of delays in processing the Mint’s orders.

Unopened boxes that are postmarked by or before August 25 are also eligible to be sent in for first strike designation, but news of the low percentage of coins receiving the top grade appears to have deterred many people from sending their sets in for grading.

The PCGS 70 first strike sets are now fetching between $500-645 on e-Bay, and to my knowledge only one major coin dealer has the sets in stock, Goldmart , which is a subsidiary of Legacy Precious Metals.

Nick VanderLaan , a manager at Goldmart, posted a market report on the PCGS discussion board on September 9 that alerted collectors to his views on the scarcity and market potential for PCGS 70 first strike San Francisco sets.

In his report and subsequent e-mails to clients, Mr. VanderLaan made the case that these versions of the sets were underpriced because in his view only about 3500-3800 such sets existed at the time out of a tentative mintage of about a quarter million sets.

He explained that unopened, first strike-eligible sets are almost impossible to find at the moment on the wholesale market. Second, he agreed with the view I expressed in this column when the sets were first released that the mint-to-demand approach ended up discouraging a lot of collectors and dealers from paying enough attention to these sets.

I recently spoke to Mr. VanderLaan. He noted that the key reason the PCGS 70 first strike sets are doing so well and are likely to continue to perform well is their scarcity compared to raw sets and NGC-graded sets.

As of October 1 there were only a total of 4,025 such sets compared to over 13,000 NGC early release 70 sets. The NGC sets are selling for $370-400. He also pointed out that by comparison there are 7,800 PCGS 70 25th anniversary sets. He also thinks the final number of San Francisco sets minted will come in under a quarter million.

In addition, he points out that the 2012 sets include the second rarest reverse proof silver eagle after (in theory) the 2011 coin, and the second rarest proof silver eagle (including those in the Making American History coin and currency sets) after the 1995-W proof coin. In fact, among reverse proof coins graded PF-70 with the first strike designation, the 2012 coins are so far twice as scare since the 2011 reverse proof coins, which have a population of 8,156 and are listed on the PCGS price guide for $625.

Mr. VanderLaan discusses these sets with fellow dealers who also believe they have more upside potential, though it is of course impossible to put a hard number on it. The holiday gift-giving period will also be a factor, and may lead to increased demand as well.

On October 3 a PCGS set sold on e-Bay for $470, and two days later, the same set sold for $540. More recently some sold for $645. I have only seen a handful of sets for sale on e-Bay recently.

The PCGS first strike sets that are in highest demand and which bring the highest prices are those with a special label signed by silver eagle reverse designer John Mercanti, whose new book on silver eagles co-authored with Miles Standish will be published by Whitman in November. The Mercanti labels are only available to bulk submitters

A review of the PCGS discussion board at Collector’s Universe confirms what I have heard from other collectors and the information from Mr. VanderLaan. Submitter after submitter lamented the unusually low number of 70 coins they received back from PCGS. That is true of smaller submitters and of larger ones.

One poster said he wanted to know what results large dealers received. John Maben noted on September 7 that of 51 two-coin sets submitted, he only received 6 70 sets back. He also noted that his best result was in the 30% range. Mr. VanderLaan of Goldmart said his company’s PCGS submissions were mostly in the 24-28% range, and only 21% for the first batch of submissions.

In addition, Mr. Maben’s Modern Coin Mart has sold out of PCGS 70 first strike sets. That confirms how few are available, especially since Mr. Maben’s company is the major market maker in these kinds of coins.

Goldmart still has sets available and is selling them for $450, which is slightly above wholesale. Mr. VanderLaan said his company tries to price coins as competitively as possible, usually just a notch above wholesale.

Buyers and submitters have speculated that either quality control at the San Francisco Mint was poor on these sets, or that PCGS was unusually tough in grading them. Whatever the real reason, those who bought already graded 70 sets, especially those from PCGS, when they were first available are doing very well.

In light of the factors discussed above, I would not be surprised to see the value of the PCGS first strike sets continue to increase, whatever the final overall mintage of these sets.

It appears that dealers and investors snatched up the limited supply quickly, and that they are waiting for higher prices before putting them on the market.

There may be lessons here for those who adamantly refuse to have their modern U.S. Mint coins graded, and who believe that first strike designations mean nothing.

Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

By Charles Morgan and Hubert Walker for CoinWeek …….

It goes without saying that certain modern issues benefit tremendously from having only a few examples certified by TPGs in high MS grades. As we’ve written here and here, there are coins where a buyer can make the reasonable assumption that high-end coins are truly scarce, and the likelihood of too many new pieces entering the market at the high-end is low. On the other hand, there are also coins that the market has deemed unworthy for submission, which means that the top pop numbers may not clearly reflect scarcity – even if realized prices at auctions or in price guides point to these coins as having tremendous value.

The key for collectors of quality moderns is not to get caught up in what population numbers say but to focus instead on what you see in the wild. Where collectors get the most burned, we feel, is when they read into population reports what is not there – a thoroughly-vetted census. A totality where there is none.

Sussing out instances where the market is wrong is a critical skill to develop if you don’t want to get burned in the long run. This is especially true in instances where the vast proportion of a coin’s value is derived by the plastic holder it’s housed in. A good test case to illustrate our point is the first of the Modern commemorative coins, the 1982-D Washington 250^th Anniversary half dollar.

A $12 Coin That Regularly Sold for $500+

Nearly thirty years had passed before Congress, at the urging of Donna Pope, resumed the production of commemorative coins. The classic period, which reached its height during the Great Depression, was deeply missed by collectors, despite the fact that the series was plagued with scandal and greed. By 1982, most commemorative coins were priced well out of the budgets of many collectors. This created a pent-up demand for new coins, especially by those who thought (erroneously) that the new series would produce scarce issues on par with the classic series. The demand was so great, that the 1982-D half dollar would achieve a record mintage for a U.S. commemorative coin: over seven million coins, including proofs, which accounted for more than 2/3 of the total mintage – or more than five million more coins than the 1952 Washington Carver half dollar, the previous title holder for most common commemorative coin.

The key difference between the modern and classic commemoratives, collectors would soon discover, is that the classic coins were usually sold for only a small surcharge (often double face value, but sometimes a little more depending on the sales strategy of the distributors). Modern commemoratives would be sold at a much higher cost, with the Federal Government taking a large surcharge and either keeping it or paying it to a third party to fund whatever project the coin commemorates. The lower pricing premium for the classic series meant that some portion of those coins wound up in circulation – especially issues like the Washington Carver and Stone Mountain half dollars, which had little to no numismatic value above face for several years after issuance.

The modern commemoratives, on the other hand, tend to be so costly that it’s hard to imagine someone trying to redeem a $12 or $15 half dollar, or $40 silver dollar, for face value. This, coupled with the better handling and packaging on the part of the Mint, means that most modern commemoratives will survive in the same Mint State that the coin was in when it left the Mint, far into the future.

So how do we go from $12 a coin to $500+ dollars? In a word: Ignorance. The following three charts show MS grade dispersal for typical type coins. The first is a 1921 Morgan, the most common Morgan dollar struck; the second is the 1972-D Eisenhower dollar, which has a mintage of 92,548,511 coins, although most in the raw are below MS-65; and finally the 1982-D Washington half dollar.

[1]

With a huge sample size, one can safely say that the typical MS 1921 Morgan is going to fall in the MS-63 to MS-64 range, with gems being scarce.

[2]

… and the PCGS grade dispersal for the 1972-D Ike. Denver Ikes always come nice. Cherry-picked for quality, we see that the typical Mint State 1972-D in the wild is going to be MS-64 or below, with plenty of gems available but few in MS-66 and nearly no examples higher.

[3]

… and finally, we see the grade dispersal of the submitted 1982-D Washington half dollar commemoratives. We must assume based on the value proposition, that a majority of these coins were cherry-picked for quality.

Looking at the grade dispersals of these three coins (honestly, you can pick nearly any common circulation strike coin and get the same result), it’s clear that the 1982-D Washington half dollar is different. Obviously, it was a coin struck for collectors and was better handled during its production. So why, then, would consumers, seeing a coin that’s readily available in grades MS-67 through MS-69, feel compelled to pay steep premiums? Here, we have two words: Dealer Promotion.

When digging through old auction results and TPG submission data, we discovered numerous instances where multiple PR70DCAMs (1982-S) and MS-69 (1982-D) Washington half dollars were made as the result of multi-coin submissions. One submitter scored a string of Proof 70s (PCGS cert# 656449-6566453) and made as much as a thousand dollars per coin at the height of the certified modern proof craze of the early 2000s.

So how did these perfect proofs and nearly flawless uncirculated examples get made? Was it the result of numismatic magic? Hardly. In all likelihood, most of the high grade proofs and MS coins were made by dealers with access to large quantities of these coins. Their easy access and trained eye meant that the easily discernible, high grade coins could be pulled aside for submission, while the typical, lesser grade coins would be passed over. 16% of the time they chose right and got a MS-69 coin. 55% of the time they just missed and got a MS-68 coin. MS-69 and MS-68 coins accounted for 71% of all 1982-D Washington half dollars submitted. With percentages like these, the assumption a collector should make is this: the typical 1982-D Washington half dollar is nearly perfect. As this is the case, a collector paying hundreds or thousands of dollars for a coin that is typical for the type when the coin is readily available is either an easy mark or not paying attention.

Of course, the population landscape for the ’82-D in 2002-03 was much different than it is now. With fewer coins submitted and fewer dealers specializing in certified moderns, the total number of coins available in TPG plastic was understandably low. We could also contend that TPG standards have softened over the years. For some series, that may be the case. But we’d say it’s not the case with moderns by and large. If anything, the grading of moderns has gotten tighter in recent years. Still, this coin is so abundant that you can’t visit a coin shop without tripping over a dozen of them. Collectors caught up in high grade coinage could have done themselves a huge favor by making their own high-end coins.

The 1983-P Washington Quarter: Key to the Clad Series

So far, we’ve discussed and compared only common-type coins. Let’s take a look at 1982-83 period quarters, which, unlike the 1982-D Washington half dollar, was not sold to collectors-at-large by the Mint but instead released into circulation. These coins offer a clear contrast to the 1982-D in terms of expected quality and market behavior. We argue that, in this case, population reports – while unreliable on their face – offer sufficient insights to allow an informed collector to make a smart buying decision.

The counterpoint to the 1982-D, at least for the sake of this column, is the 1983-P Washington quarter, considered by dealers and collectors alike as the key date clad era quarter. Why the 1983-P was picked over the 1982-P or –D, or the 1983-D for that matter, is anyone’s guess. Perhaps a greater number of rolls were saved from the other dates and mint marks. Taking a look at submissions, we see that dealer and collector behavior reflects the assumption that the ’83 is the important coin, one worthy of submission.

[4]

The most available coin (in PCGS plastic) is also the most expensive one- the 1983-P

Now, check out completed eBay auctions for RAW and certified uncirculated 1983-P quarters in the past 90 days:

The highest prices for “RAW” 1983-Ps came in those tacky basement-slabbed SGS holders as MS-70.

What we see here is a healthy market for a popular clad era coin. MS-62, a low Mint-State grade coin sells for $20.50. A raw coin with good photography sells for $30 – $40, but taking all auctions into account, averages at around $25.88. A PCGS MS-64 coin for the everyman collector is a step up at $31.55, and a gem example graded MS-65 by PCGS commands more than double at $68.89. MS-66 coins, being scarce, have not been offered in the past three months and are not on offer at the time of this writing. Unlike the 1982-D, which comes nice and is abundant, the 1983-P Washington quarter, which is an easy sell at twice the submission price in 64, four times in 65, and more than 14 times at 66, is not being submitted en masse like the preceding commemorative.

Judging by the total number of submissions, we can assume that the vast majority of BU Washington quarters have not been graded (obviously), but that there are no great hoards of high-end coins being submitted to take advantage of a strong market. It could be that dealers and collectors are holding on to coins in hopes that the market will continue to gather strength; that we are not at the top yet. However, those dealers and collectors would also worry that they are not alone in their holdings or behavior.

The truth of the matter is that the 1982-D Washington half dollar came nice. Maybe not as consistently nice as a commemorative of recent mintage, but nice enough to pose no serious challenge to get them certified as MS-69 or PR70DCAM. The 1983-P Washington quarters are typically weakly struck from overused dies, scuffed, and by now mostly circulated. Most of the BU quarters that exist are likely in collections, dispersed around the hobby. Original rolls sell for $600 or more when they come available.

A savvy collector should take pause when looking at the populations for this coin, as these totals will increase dramatically. But they should also be able to look at the dispersal of grades and the demand for the coin in all MS grades and have a good idea where the market is and where the market is going. Simply put, nobody is clamoring for raw 1982-D Washington half dollars, but collectors place due significance on the 1983-P quarter. One coin has crashed in value since 2000, the other has held steady and is still strong (despite the fact that clad coinage isn’t in vogue as a mainstream collectible… yet).

Fellow collectors, Population Reports are critical to our understanding of how the market works. Taken without consideration of other obvious factors, however, and they can be deceiving. The smart money looks at market behavior outside of the plastic holder as indicative to the underlying strength of the value proposition of a coin’s grade. If people want the coin in its raw form, odds are people want the coin in its higher grades (especially if we aren’t talking about populations of less than 100 coins). If the raw coin is only worth melt, as in the case of the 1982-D, or seen as completely banal just one grade lower than the highly priced, top pop grade, then you have to wonder who on Earth would pay a large sum of money to take that coin off of your hands.

FLIP OF A COIN

6^th Chief Justice of the United States Salmon P. Chase, who just years before served as the Secretary of the Treasury, most famously adopting the motto IN GOD WE TRUST on the two cent piece, spoke for the Court in Hepburn v. Griswold (1870), when he said that the government did not have the power to make paper currency legal tender as this power was not granted in the U.S. Constitution. The dissent argued that the government had that power because it was waging a war and that printing money was necessary. The case was overruled one year later. Curiously, Chase oversaw the issuance of greenbacks as Treasury Secretary.

That’s one pricey 1921 Morgan: This most common date Morgan dollar typically sells for a slight premium over its intrinsic value, unless it’s a high grade specimen. That is, unless it was pulled out of the pocket of the notorious Clyde Barrow. The dollar, which was previously held in a private collection sold for $32,000 at a New Hampshire auction in September.

Coming Attractions: America’s first commemoratives? Certainly a case can be made on behalf of So-Called Dollars, which for more than one hundred years commemorated all sorts of civic accomplishments and public personalities. Hubert and I will take a look at some of the series’ most interesting pieces next in the coming weeks!

by Louis Golino for CoinWeek ……

One of the most hotly contested issues in the modern coin realm concerns third party certification and MS70 coins.

A lot of people love slabbed coins, while many others hate them. But at the end of the day, two points matter above all. First, having your coins graded or buying graded coins is clearly a personal decision based on your own preferences. Second, no matter how you may personally feel, the marketplace has its own changing way to value to such coins.

My own view is that certification and grading is essential for most U.S. classic coins worth more than $100 each, unless you really prefer raw coins and have found one of the few trusted dealers in classic raw coins. And in certain cases having your modern American and world coins graded can add substantial value, if you are good at identifying high-quality coins likely to get the coveted 70 grade. But caution is in order when it comes to grading moderns, as it is not always worth having them graded, or even buying graded examples, unless one pays only a modest premium over a raw coin and has a preference for holdered coins for display or storage purposes.

In some cases, such as the 2009 Ultra High Relief double eagle, an MS70 is worth substantially more than a 69. Another example is the First Spouse gold series where coins from 2008 to present in the top grade are usually worth quite a lot more than ungraded examples or 69’s, especially if the coin has been available for several years and few coins have received the top grade. In other cases, the difference in value is smaller.

Recently when the Perth Mint released its 2013 bullion coins, a U.S. coin dealer named Paradise Mint (www.paradisemint.com) began selling graded examples of the first 1,000 and 2,500 coins struck. The coins have NGC labels that make those claims. I wonder how they made that determination, unless Perth has some way to track the first coins struck. I will ask Perth officials next time I am in touch with them if they have a way to do that.

It’s worth noting that even if you could actually prove that they were the first coins struck, why would that really matter in terms of the coin’s value? Some collectors are clearly willing to pay more for such coins, but what really makes them better than the ones struck later if they look exactly the same?

Hundreds of years ago when coin production was much more primitive, it was probably the case that the first-struck examples of a coin were of better quality than the ones made later after dies had been used repeatedly. And there could be historical reasons why early first strike coins, if there is paperwork to prove they are the first coins made, are clearly more valuable. For example, the first coins struck of certain issues were often given as gifts to important people, so it makes sense those would have greater value because of their special pedigree.

But today the situation is very different.

Modern coins made by most major mints, such as those of the U.S., Canada, Australia, and other countries, use advanced technologies that help produce much higher quality coins than was possible in the past. However, in the past couple of years an increasing number of people who buy numismatic releases from the U.S. Mint have been reporting that they received coins with significant quality issues that they had to return. That applies more to some series than others. On the 2011-W burnished $50 American gold eagle, it is a major issue because most coins had some surface problems.

At the same time, values for MS70 examples of the bullion versions of the widely collected American silver eagle have been coming down, as more coins are graded and receive the top grade. 70 coins that brought $100 and more just a year ago, now sell for $75-80. And the general quality of bullion silver eagles is way up compared to years past when coins with milk spots and other problems were common.

If, for example, someone is building a graded set of 70 eagles and wants a top-quality example of the 2012-W burnished eagle, they can purchase one from a competitive dealer for $75, which is the same or less as they cost of buying a raw coin for $45.95 from the Mint, and having it graded.

Within the area of the limited-edition collector versions of these coins, such as those in the 2006, 2011, and 2012 anniversary eagle sets, the number of 70 coins was higher with last year’s sets than with the 2006 coins, but much lower for the coins from the 2012 San Francisco sets, which for reasons the Mint has not explained, seem to often have quality problems. So far, roughly one-third, or 35% of the 2012 set coins are receiving the top grade at PCGS (www.pcgs.com), for example.

Another aspect to the 70 issue that has changed in the past couple years is that the difference in value between PCGS and NGC-graded modern coins has been narrowing, and in many cases no longer exists. In fact, a growing number of collectors have expressed a preference for NGC (www.ngccoin.com) coins, which they feel tend to have fewer imperfections and a more crisp look.

Many collectors also say they prefer NGC holders because they prefer the white background, or like the ability to see the rim of the coin, as is possible with newer NGC slabs. And some even allege that PCGS treats their coins with a lack of care while in their possession, and even adds some kind of material that makes the coin tone over time. I have come across this criticism numerous times, but I cannot say I have personally experienced it, so I do not know what to make of it.

So what exactly does a grade of 70 mean? Is it really a perfect coin with no imperfections or blemishes of any kind? Are all 70’s created equal, even from the same grading service and in the same coin series?

These questions are not easy to answer, but from my own study of the issue and experience with such coins, I agree with the view that 70’s are not actually perfect and that they can vary in quality.

I consulted the just-published third edition of Coin World’s Making the Grade: Comprehensive Grading Guide for U.S. Coins, which is published by Amos Press and was the last major project of recently-retired Coin World editor Beth Deisher. It refers to MS70 eagles as “perfect” and “free of defects.” In the section on the five-ounce America the Beautiful silver coins, it says a 70 coin is “flawless” and has “pristine surfaces with a full strike.” But PCGS and NGC have yet to grade a single ATB coin as a 70 because the very large surface area lends itself to marks and abrasions.

My understanding is that to the naked eye a 70 should look very close to flawless, but depending on the level of magnification used when examining the coin, a couple very minor flaws can almost always be found.

John Maben of ModernCoinMart, made this point in July 2011 in an article written in response to my first column on this issue . Mr. Maben stated explicitly that perfect coins just do not exist and that a trained eye using a magnification device can generally find some kind of flaw on any coin. And he is a former professional grader.

As far as modern world coins, I would be very cautious about spending a lot for 70-graded pieces.

The world coin market has grown dramatically in recent years, but it is still a less liquid market in the U.S. than overseas, and low population numbers can be misleading. Some modern world coins have tiny populations, but that is usually just because very few people have submitted the coins for certification, and there may not be a lot of demand for top-graded examples of the coin. Moreover, I have a personal preference for modern world coins, which often are what I call “coin art,” in their original packaging because I prefer to hold the coin in capsule in my hand, or to display it in the original box rather than what some collectors refer to as the “tomb” of a third-party slab.

Finally, remember that 70 coin values change over time, particularly as more coins are graded and receive the top grade, especially for more common coins. And as those who are skeptical of the value of 70 coins often say, who knows how the collector of the future will value those same 70 coins worth so much today?

Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

By Charles Morgan and Hubert Walker

Note: A copy of this letter has been forwarded by the authors to CAC’s President John Albanese.

Mr. Albanese,

Over the past few years, CAC has distinguished itself by its ability to consistently recognize quality coins. The green and gold CAC stickers have become synonymous with quality, and as a recent article by CoinWeek’s Mark Ferguson demonstrates, CAC stickers carry a premium in the marketplace as collectors and institutional buyers trust CAC to identify quality in an oversaturated grading market.

The service that CAC provides is peace of mind. It’s an assurance that not only did the grading company get it right in terms of their evaluation of a coin, but that the coin is actually a desirable example for the grade. In a grade-driven, eye-appeal-driven and price-driven coin market, this service is a significant factor for collectors who do a large percentage of their buying electronically.

The CAC sticker is also a “do-over” of sorts. Grading standards have shifted over the years as the market has developed. Simply put, we understand series better now than we did in the ‘80s and ‘90s. Coins also have a tendency to physically degrade over time. Many collectors assume that a holdered coin is safe and somehow guarantees the current grade, but in reality it‘s most definitely not safe and doesn‘t guarantee anything. The CAC sticker reassures a buyer that new eyes have taken a fresh look at the coin, and that it’s still a quality investment.

This reassurance is sorely needed when it comes to moderns, which belong to a historic moment that’s as much a part of the past as any classic coin. And while CAC has built its business certifying the classics, now is the time for CAC to take a bold step and provide their much-needed service to collectors of modern coinage.

CAC’ed IKES

Recently, we worked together to establish the Eisenhower dollar as a CAC-accepted coin. In the three months since, CAC has reviewed hundreds of Ikes and only stickered 287 of them. What’s clear is that CAC doesn’t believe that many top population coins meet its demanding standards.

Consider: one of four MS-66 1972 Type Ones stickered; one of five MS-66 1972 Type Twos stickered; three of seventeen MS-66 1972-Ps stickered; and only two top-pop MS-66 1973-Ps got stickered.

How much more value will the “green bean” add to these coins? The Ike collectors I talk to tell me that if a top-pop coin doesn’t have a CAC sticker or look exceptionally nice in hand then they won’t even consider it anymore.

These are savvy buyers whose own coins predominately stickered when they sent them to you to help establish grading guidelines, and they’ve seen more than their fair share of over-graded coins in expensive plastic.

For these collectors, a CAC sticker is not only a value proposition for when it’s time to sell, but it also serves as insurance for the prospective buyer that the coin is indeed accurately graded. Sellers want to get full value for their coins, and buyers don’t mind paying more for premium product. When the difference between grades at the top is often thousands of dollars, it goes without saying that CAC-stickered Ikes are the alpha coins of the marketplace.

A MODERN APPROACH

The hobby badly needs to change its attitude towards moderns. CAC is in the best position to make that happen. By opening up to modern submissions, CAC would be putting coins in front of politics. This approach won’t lead to a glut of worthless CAC stickers because there’s no real incentive for a company or individual to keep investing in the appraisal of low-value coins.

What we think would happen, should CAC accept modern business strikes, is an elevated appreciation for coins at the top end, leading to a more concerted effort to preserve quality pieces for future generations. And naturally, it would be good for those already ahead of the curve and assembling superior quality modern sets.

This will also provide immeasurable comfort to the buyer considering a high-end 1972 Doubled Die Lincoln cent, an MS-66 1983-P quarter, or the only MS-67 graded 1981-S Susan B. Anthony dollar.

Clearly, a CAC sticker alone won’t change everyone’s mind. Some in the hobby still nurture a bias against moderns on a number of grounds. This sentiment has more to do with the anxiety and fear created by changes in our economy and money’s place in it than any serious argument.

One unfortunate side-effect of such a prejudice is the assumption that, due to the high mintages of modern coins, quality pieces are available in abundance. As modern specialists can tell you, this is not the case. Yes, over 176 million 1969 Philly quarters were struck, but in order to find one in MS-65 or higher, you’ll have to dig through mint sets, which exponentially reduces the pool of possible quality pieces to 1.8 million.

And the problem with finding quality coins in mint sets is that every experienced modern collector knows about it, which means you’ve got a lot of competition – and some of them have been at it for over 30 years.

Fresh mint sets are still out there, but the herd is thin. If demand for those high-end 1969 quarters took off, then collectors are going to find themselves with just a few highly expensive options. Will they be worth buying? A CAC sticker would make all the difference.

The following table illustrates what we think is a reasonable way for CAC to enter the modern marketplace:

We feel CAC’s approach to Ikes should serve as a template for the rest. Post-SMS proof coinage is a different animal altogether than silver-era proofs. As such, we’d lay off of those, at least for now. The argument can certainly be made that both PCGS and NGC could tighten up their standards for what constitutes Deep or Ultra Cameo and which coins truly are one step below “perfect”. We completely understand CAC’s reluctance to split hairs over proofs and personally, we wouldn’t bother.

Business strikes are another matter. Again, the typical coin CAC would see from the modern period would be high-end or top-pop. Accepting moderns wouldn’t let loose a river of dreck, but it would help separate the wheat from the chaff. For Lincoln cents, 1982 is a logical cut-off date as the end of the copper cent. For the nickel, dime, quarter and half dollar, it makes sense to use 1983 – the second year of the two year mint-set sabbatical – as the cut-off point. Of course, you can make arguments for any number of dates. But by moving the marker from 1964 to 1983, CAC would send a valuable and much-needed message to the hobby. The time for ignoring clad coinage has ended.

Mr. Albanese, you have a long and distinguished career as a numismatist and shaper of the market. Collectors have put their trust in you over the years because of the quality of your work and your character. The time has come for the modern market to mature and we are asking you to stand with us. Will you?

Respectfully Yours,

Charles Morgan and Hubert Walker

FLIP OF A COIN:

The only Treasury Secretary immortalized on a United States coin is also one of a select few individuals to appear on one while still alive. Carter Glass, who served during the Wilson administration (1913-21), is best remembered today for being one of the co-sponsors of the Glass-Steagall Act, the law that, among other things, regulated the banking industry and created the Federal Deposit Insurance Corporation (the FDIC). Look for him on the 1936 Lynchburg Sesquicentennial half dollar.

2012 marks the thirtieth year of the copper-plated zinc cent, referred to irreverently as the “zincoln”. The series has a number of exciting varieties, the most notable of which may be the 1992-D Close AM (a cent with closer than normal spacing between the AM in AMERICA). One known example is in a PCGS holder, and five have been attributed by NGC.

Question: Where was the first Bicentennial half dollar released into circulation? Philadelphia? Denver? Boston? Yorktown? If you guessed Minneapolis, Minnesota, then you know your numismatic history. At a presentation held on July 7, 1975, Mint Director Mary Brooks honored contest winner and Minneapolis native Seth G. Huntington, whose Independence Hall design was selected for the reverse of the Bicentennial Kennedy half dollar, by releasing the first ones into circulation. The Bicentennial Washington quarter and Eisenhower dollar were released later.

By Mark Ferguson for CoinWeek – MFRareCoins.com …….

Market Study Background

It’s common knowledge that CAC verified coins have been selling for premium prices since the inception of CAC on November 1, 2007. But until now, collectors, investors and dealers haven’t had a resource to find out how much those price premiums amount to by series and grade for PCGS and NGC graded coins that have the CAC “green bean” sticker of approval versus those without CAC stickers.

I’ve just concluded a comprehensive market study that does just that. It reveals the amounts of price premiums CAC verified coins are selling for, by series and grade, as compared to non-stickered PCGS and NGC coins.

The concept for this exhaustive market study , which analyzes recent auction sales of more than 5,500 type coins – from one cent coins through $20 gold coins, originated with the author and CoinWeek. The study was performed independently of CAC, but was commissioned by and conducted in cooperation with CoinWeek and CAC – Certified Acceptance Corporation respectively.

This analysis is not a random sample. It’s a complete market study that compares auction sales prices of like-kind CAC-stickered coins versus non-stickered NGC and PCGS graded coins. Major coin auctions between January 1, 2010 and June 30, 2012 have been thoroughly examined by series and grade. For very common coins, like Morgan and Peace Dollars, Walking Liberty Half Dollars, and $20 Saint-Gaudens gold coins, where there was enough data to analyze, auction prices realized were reviewed for a more recent timeline – between January 1, 2011 and June 30, 2012.

Importantly, auction price trends indicate that the coin market, for the coins and grades analyzed in this market study, has generally been steady and stable since the beginning of 2010 for the types and grades of coins studied. It’s the market segment for scarcer and rarer issues for which prices have been appreciating during that time. After the financial meltdown of 2008, most coin buyers took a cautious wait-and-see attitude during the following year, 2009, finally starting to open their wallets during the fall and winter of that year. Therefore, coins sold during 2009 were not included in this market study.

This study focuses on common high grade, Mint State “Type Coins” – those issues which are the most common coin issues of a specific design type in a particular denomination. Proof strike issues were not included in this market study. Additionally, sales of coins from series with an element of scarcity are too difficult to track in quantity, for obvious reasons, so there are many series that could not be examined. Examples of such coins are “early” coins, like Flowing Hair and Bust material, and early gold coinage – all minted prior to about the 1840 time period. Additionally, CAC does not review or sticker “modern” coinage, with the recent exception of Eisenhower Dollars; so modern coinage is also not a part of this market study.

Because of the amount of historical sales data available, and the capability of its search functions, Heritage Auctions was used as the source for all of the data analyzed. However, major auctions conducted by other companies were considered and looked at, but at this time, no other auction company provides such a comprehensive range of coins sold for which the sales data is so easily accessible by computer searches on the company’s web site – an important consideration for this market study.

I also want to repeat…this market study is not a random sample. It analyzes all sales of the coin issues and grades studied during the time periods reviewed. In other words, all sales of CAC-stickered examples and all sales of NGC and PCGS non-stickered examples of like-kind coins were tallied and analyzed for each coin type and grade examined in this market study. The full CAC market study report provides detailed lists of the specific dates and issues of each coin type and grade analyzed. All auction prices examined in this study include buyers’ fees.

Major Conclusions

Among the general conclusions found in this market study is that, in all series and all grades, CAC-stickered coins are selling for higher prices, on average, than those same-grade PCGS and NGC encapsulated coins that are not CAC-approved. No exceptions were found for any series or grade studied. A dominant trend observed throughout the series and grades is that the higher the grade, the higher the CAC price premium realized over non-stickered PCGS and NGC coins. There were a few exceptions found to this trend, however, for reasons that are speculative, but most likely due to a lack of larger sales data for those particular coin types and grades analyzed.

Because CAC-approved coins appeal to buyers of high-grades, those rare coins grading Mint State 64 and higher are generally the grade range of coins submitted to CAC for its endorsement. This is borne out by statistics observed on CAC’s Population Report, found at www.CACcoin.com. However, this is not always the case, and for very rare coins, or coins of the “early” years, such as those U.S. coins struck between the 1792 and 1835 to 1840 period, for example, lower grade coins are frequently submitted. But because of the popularity and availability of data for CAC-stickered coins grading MS 64 and higher, this is the grade range primarily focused on in this market study.

In reviewing the results of the complete CAC price comparison market study you’ll see some surprising results. Price premiums for CAC-stickered PCGS and NGC encapsulated coins versus non-stickered NGC and PCGS graded coins ranged from single digit percentiles to a staggering 92.87%!

You can find out the exact price premiums CAC-stickered type coins have been selling for at auction, by series and grade, as compared to like-kind, non-stickered PCGS and NGC encapsulated coins, in the complete CAC market study report.

Fill in the Form at the bottom of the page and we will send you the PDF File

Mission of CAC

What makes CAC-approved coins so special? Many buyers and sellers, including some dealers, still don’t understand what CAC’s mission is by affixing its “green bean” stickers to NGC and PCGS encapsulated coins. Here’s an explanation…

“CAC” stands for Certified Acceptance Corporation. It’s an independent numismatic coin authentication service, which is not connected or affiliated with any other numismatic coin encapsulating and/or grading service, and is owned by some of the top dealers and collectors in the country. CAC began operations on November 1, 2007, and was founded by numismatist John Albanese, who was also involved in the start-ups of PCGS and NGC during the mid-1980s.

CAC was created out of concern that market prices for solid-for-the-grade and premium-quality coins were being held down by the sales prices of below average quality coins for their grades, including coins that just barely make the grade. CAC’s ultimate mission is to recognize and liberate solid-for-the-grade and premium-quality rare coins from such price restraints.

CAC uses an analogy to describe its verification process by considering levels within a coin’s grade. This analogy equates these levels to “A,” “B,” “C” and “D” quality coins in which CAC verifies and stickers only the “A” and “B” quality coins, which are considered to be solid to above average quality for their grades. Grading considerations taken into account by CAC are such qualities as the attractiveness of a coin’s luster and its eye-appeal, originality of surfaces, lack of outstanding blemishes, strong strikes, and attractiveness of toning. Coins that have unsightly abrasions, “grungy” toning, overly soft strikes, distracting spots, streaks, or other outstanding blemishes, for example, are not stickered by CAC.

However, CAC does not necessarily consider coins that it doesn’t sticker to be over-graded. CAC stickers solid-for-the-grade and premium-quality coins only. Founder John Albanese remarked, “We’re not going to please collectors who want their coins to look like costume jewelry.” In other words, CAC will not sticker coins that have been overly dipped, or even lightly cleaned, to make them look shiny and flashy.

Vintage coins with original, un-tampered with surfaces, all exhibit some degree of surface toning, even if it’s just a hint, that came from contact with their storage containers, whether those were paper bank rolls, cloth mint bags, coin envelopes, or old coin albums, for example. To the best of its ability, CAC wants the rare coins it endorses with its green stickers of approval to be unquestionably solidly-graded to premium-quality examples, and the company backs its seal of approval with “sight-unseen” market bid prices for CAC-stickered coins through CoinPlex, its dealer trading network.

Market Study Guidelines

Importantly, for consistency in this market study, coins that were described as having proof-like fields, cameo devices, over-dates, or similar kinds of attributes, were excluded from analysis. However, sales prices of specific coins that may have been attractively toned and frequently sell for higher than average prices, especially for Morgan silver dollars for example, were used in the data because it would be a subjective judgment call to toss them out. It is believed that such toned examples were evenly dispersed between the results found for CAC-stickered examples and NGC and PCGS non-stickered examples.

However, a few obvious outliers, which have sold for overly high prices as compared to typical price range trends for a specific series and grade, were tossed out. A great example of this is found in another popular series – $20 Saint-Gaudens gold coins, in which the sales prices of MS 67, CAC-stickered examples, ranged from $12,650 to $17,250. One common-date CAC-stickered outlier, which sold for a whopping $54,625, was tossed out of the mix so it wouldn’t skew the results.

In comparing price averages of CAC-stickered coins to non-stickered NGC and PCGS encapsulated coins, the total prices of all sales of the non-stickered coins as a group, for each coin type and grade analyzed, were tallied, then averaged. In other words, the average prices of non-stickered coins are not “averages of the averages” of coins graded by each separate service – PCGS and NGC. And in fairness to both PCGS and NGC in this market study, one grading service was not favored over the other, if prices for coins graded by either service dominated those of the other for a particular coin type and grade studied. There were examples from both services that sold for much higher prices than the averages of those of the other service.

Another factor taken into consideration is the matter of “Plus” graded coins by NGC and PCGS and NGC “Star” designated coins. Because CAC evaluates coins based just on the merits of each coin’s numerical grade, not factoring in those other designations used by PCGS and NGC, this market study followed the same standard as CAC, and those designations were not considered. However, in special cases, CAC affixes “Gold” colored stickers to some PCGS or NGC encapsulated coins that exceed CAC’s standards. In fairness, sales prices for those coins with “Gold” stickers were tossed out of the analysis.

Concluding Remarks

When I began this market study I didn’t know what I would find as I went through each series. But after having been a professional coin dealer since I was a teenager, a former professional coin grader for PCGS, and the Market Analyst for Coin Values magazine between 2002 and 2009, I had some common sense expectations, as most of my professional numismatist friends from around the country would also have. However, the statistics revealed some remarkable conclusions that not everyone could envision.

Many of us remember the coin market days during the 1960s and 70s, which could be compared to the “Wild West,” so to speak, when coins were bought and sold “raw,” without the backup of third-party grading opinions. During those days, “Let the buyer beware” was the law of the land. But in this day and age, there is no question that since the mid-1980s, PCGS and NGC have given consumers, and even coin dealers, enormous confidence in buying and owning rare coins, especially as market prices have continued to appreciate over the years.

And by recognizing solid-for-the-grade and premium-quality coins that are without question, CAC has contributed even more to that consumer confidence. The benefits of the CAC concept have also been recognized by PCGS and NGC when both services followed suit by adding their “Plus” grade designations to select coins. But marketplace popularity has proven that advanced rare coin buyers want the additional third-party endorsement of the “green bean” CAC sticker of approval on the encapsulated PCGS and NGC graded coins they buy. A quick look at advertisements and auction catalogs show that rare coins stickered by the CAC brand are given added attention, and buyers regularly pay higher prices for coins that have been given the CAC endorsement.

The full study is available as a PDF. Just fill out the form below and we will send you the link

Mark Ferguson has been dealing in high-end rare coins and precious metals since 1969. He has graded coins professionally for PCGS and was the Market Analyst for Coin World’s Coin Values magazine between 2002 and 2009. He has written feature articles and regular columns for Coin World, Coin Values magazine, The Coin Dealer Newsletter, Numismatic News, The Numismatist, ANA Journal, Coin News – a British publication, and currently writes a weekly column for CoinWeek. He is a recognized authority in appraising rare coins and a recognized expert on the 1804 silver dollar, which is known as “The King of American Coins.” Mark can be reached at Mark Ferguson Rare Coins, LLC (www.MFRareCoins.com).