By Louis Golino for CoinWeek

A quarter century after the establishment of the first professional coin grading companies, many coin collectors remain skeptical of the benefits of third party grading. For many of them buying raw, ungraded coins is a kind of badge of honor that shows they have not succumbed to the mania for plastic holders. They rely on their own ability to grade coins and believe third party grading is a waste of money.

There is no question that the grading companies are not perfect. Sometimes they make mistakes, giving a grade that is clearly too high or too low for a coin. But overall, they perform useful functions by authenticating coins, protecting consumers from subjectively graded coins, adding market value in many cases, and generally facilitating the buying and selling of coins.

The grading of modern U.S. Mint coins has become a huge cottage industry for the grading companies and a major source of revenue for them, especially with all the large bulk orders they receive from dealers. But the grading of these coins continues to be especially controversial for a number of reasons. Some collectors feel slabbing reduces the value of coins, no matter what grade they receive. They think slabs are like caskets and prefer to be able to view the coin more closely. Others are convinced their coins are mishandled during the grading process, or that Mint capsules offer better protection than slabs. I am doubtful of both propositions.

In addition, the labeling of coins delivered to third party grading companies within 30 days of their release as “first strikes” or “early releases” remains controversial. There is no way to prove those coins were actually struck first. But some coins were hard to obtain within 30 days of their release because of delays in processing Mint orders, such as the 2009 Ultra High Relief double eagle, and UHR’s with the first strike or early release labels do bring higher premiums than coins without the label.

Perhaps most importantly, there is a growing preference among collectors and dealers for modern coins in their original government packaging (OGP) over the same coin in a slab of any grade or grading service. Some people view modern coins which are graded MS69 or below as “damaged goods.”

Modern coins which receive the top grade of MS70 are viewed with skepticism by some collectors and dealers. That is because the Mint tends to produce collector coins to very high standards, for the most part, and virtually any coin submitted for grading will receive either MS or PF69 or 70, although once in a while one gets a coin back with a 68 grade or lower. There are some exceptions to this general rule. The bullion versions of the five ounce America the Beautiful coins, for example, have not received grades higher than MS69 from PCGS and NGC, but the collector versions have produced plenty of MS70 coins.

The main problem with modern MS70 coins is that their market value is largely a function of the population numbers for the coin in question in the top grade, and those numbers change all the time as more coins are submitted and come back as 70′s. A lot of collectors of modern U.S. coins make the mistake of paying a high premium for a 70-graded coin when it is relatively new to the marketplace, and over time the value of their coin declines substantially as the population numbers in that grade continue to increase because more people submit their coins.

So the first recommendation I would make is if you are not submitting coins yourself which come back as 70′s, and you are buying previously-graded coins which received the top grade, wait until the coin is no longer new to the market. Track how the premium for that coin in 70 evolves over time before purchasing one. There is no set amount of time, and clearly one can wait too long, but it is a good rule of thumb with modern coins not to get too caught up in the hype that tends to surround recent releases.

In addition, shop around. There are times when one can purchase 70′s for a very small premium over raw coins. For example, last year I was able to purchase a 70 of a certain precious metal coin for virtually the same price the Mint charged for a raw coin. In this case, I acted sooner rather than later because I knew the coin was a great deal. Today it carries a nice premium.

Third, if you collect top-graded modern coins, I would suggest avoiding those from companies other than NGC and PCGS. There are certainly other grading companies which are reputable such as ANACS and ICG, but they tend to use different standards when assigning grades to modern coins than do the two top companies.

Fourth, even experienced collectors and dealers have difficulty telling the difference between a 69 and a 70. Examine your coin from the Mint for possible flaws, and if possible obtain the opinion of a local dealer who has more than likely seen a lot more coins than you have. Grading fees, especially at NGC and PCGS, are costly, especially if you add fees for first strike coins, and in most cases, if you do not receive a 70, you will have overpaid. Dealers send in lots of coins at once and can be assured of getting some 70′s that will recoup a lot of their grading fees, but most collectors are not submitting large numbers of coins at once, so it is a gamble. In addition, the competition for registry sets sometimes drives the prices of very common coins in perfect grades to levels that do not make any sense such as MS70 Lincoln pennies that have sold for more than $10,000.

Finally, the market for MS70 coins as opposed to those in OGP is evolving. I recently attended the Baltimore Expo and had the opportunity to discuss this issue with John Robinson of Edgewood coin store in Florida. He told me that his company pays more for modern coins in their OGP than for slabbed versions, including MS-70′s, which surprised me. In his view thirty party grading is really only suitable for classic coins.

But remember that some coins graded MS70 are worth a lot more than raw or MS69 examples. A case in point is the rare, proof-only 1995-W silver eagle, which has a value in MS70 that is ten times its value in OGP or MS69. In addition, if you are trying to get a good price for an MS70 coin, sell it to a company that specializes in modern coins such as John Maben’s Modern Coin Mart.

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. He writes a bi-weekly column for Coin Week called “The Coin Analyst.” 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 Dan Duncan

Pinnacle Rarities is proud to announce the purchase of the San Diego Collection of Seated Dollars, an amazing grouping featuring fourteen of the sixteen possible dates from 1858 to 1873. Selected by an astute California numismatist, each example is an exquisite treasure.

Collectively, this accumulation is one of the finest assembled collections of this scarce proof type. All the specimens are at or near the top of the PCGS population report, with every date chosen for premium eye appeal attributes and original patination.

The Seated series is from a captivating period in both the nation’s history and the Mint’s. The series in all its denominations saw at its inception a budding nation pushing west, and during it’s midlife, the Civl War. The Seated coin’s demise came as we had grown industrially to a nation whose monetary concerns were focused on international trade. The demand for silver as a unit of foreign trade caused much of the mint state examples to be exported to the Orient.

Many of the proof survivors are more plentiful today than their mint state counterparts. However, with most mintages under a thousand coins and 150 years of attrition, choice examples of the proofs are quite elusive.

The design was born from desire for new designs that implemented the technological changes the Mint had undergone. Steam presses had been employed and new machinery made the processes to create the dies from plaster models greatly improved. The new Mint Director Robert Patterson and Chief Engraver William Kneass both envisioned a new uniform design that would take advantage of the new machinery and ease production restraints for faster production with better quality output. Design work done previously by Kneass was rejected. Patterson commissioned Thomas Sully, a renowned painter, to create renderings of a seated motif similar to the Britannia coinage circulating at the time. Kneass suffered a stroke in 1836 and the Mint turns to Christian, employing him at first as the second engraver.

Gobrecht prepared dies and dollars were struck for the first time since the early 1800′s. For the obverse of this dollar (now called the Gobrecht dollar), he used Sully’s seated rendering. He modeled the reverse after a sketch by Titan Peale. This “onward and upward” eagle was replaced for minor coinage and the subsequent dollars that the mint began producing in 1840.

The numbers produced of the early Seated coins were remarkably low (most in the 15 to 25 coins range). However, beginning in 1858, proof sets were produced for distribution to the public for the first time. Mintages rarely got above 1000 sets and most years production was under 600. Proof dollars are tough in lower grades for most dates starting in 1858, but lower grade examples appear in auctions and on the bourse floor with some frequency. The higher end and gem plus examples remain extremely scarce and usually trade hands privately.

The Collection:

1858 S$1 PCGS PR64+CAM 1858 S$1 PR64+CAM

Proof sets were offered to the public for the first time in 1858. Previously dated proof coins were struck and sold individually. Mint records are quite clear as to mintage figures for the subsequent years, but the exact number of coins struck in 1858 remains a mystery. Estimates have the total mintage between a hundred and three hundred examples. 145 combined total show on the population reports of both PCGS and NGC. While a number of these are regrades or duplicates, the estimate of 100 – 125 known examples is not far off. In cameo this proof only issue is increasingly scarce with PCGS and NGC only grading four coins each with the cameo designation (no deep cameos are known at time of writing).

1861 S$1 PCGS PR64CAM 1861 S$1 PR64CAM

Mintage figures show 1,000 silver dollars were struck for inclusion in proof sets in 1861. Demand had been overestimated and eventually over six hundred sets were melted along with some sets from earlier years. So distribution numbers and a high rate of attrition makes the 1861 quite elusive in all grades. With only 200 coins certified (undoubtedly many of these regrades) only a ten percent sampling display cameo contrast. This example is one of a dozen PR64Cameos graded by PCGS with only one lone example grading finer within the cameo designation. There are a handful of gems graded higher without the CAM grade.

1862 S$1 PCGS PR65 1862 S$1 PR65

The Civil War had begun in full earnest and the branch mints of the south had been seized by the Confederates. While coinage continued at the Philadelphia mint, mintages were decreased, and many of the smaller silver coins were being hoarded. The west coast was less affected by the ravages of the Civil War, and while circulation of coinage slowed on the east, the west saw a rise in silver coinage in use for commerce. 430 proof sets were sold by the Mint, and individual proof coins were no longer available. The low number of Mint State examples keeps date pressure on the 1862, combined with the already inherent scarcity of this issue. Rarely seen in auction, and one of only eleven coins so graded by PCGS, this proves an excellent opportunity to obtain this tough date.

1863 S$1 PCGS PR66 1863 S$1 PR66

1863 was another low mintage year within the Seated dollar series, for both mint state and proof coins alike. The Civil War had caused the suspension of paper specie payments in 1862, and many of the dollars of the era (both proof and business strikes) were hoarded. While obtaining sets from the Mint was cumbersome, many collectors (mostly north easterners) cherished the examples they plied from the Mint. The result, despite the low mintage, is a good survival rate in the near gem and better grades for the date in relation to other dates, despite low mintage figures.

Higher end examples are infrequently traded in the open market or at auction, and this date is seemingly readily available in PR64 and lesser grades. But superb gem examples are exceedingly rare and the present example resides near the top of the population reports with only 8 coins so graded by PCGS and one example deemed finer.

1864 S$1 PCGS PR65 1864 S$1 PR64

Similar in many aspects to the 1863, this Civil War issue was one of low mintage figures, date pressures from scarce mint state examples and a subject of hoarding in the mid to late nineteenth century. China was buying up all available silver coinage especially the piece of eight. The greenbacks had devalued to be worth only a fraction of face value in silver coin, so hoarding of such coins was commonplace. The examples of proof dollars obtained from the mint came through the sale of sets and as many as 470 sets were sold.

An amazing example and surely one of the finest with only sixteen coins so graded and one lone example deemed finer by PCGS.

1865 S$1 PCGS PR65CAM 1865 S$1 PR65CAM

1865 was the last year of the Civil War, and the mint continued to scale back production of the dollar coinage, but continued work in earnest on the other denominations including the new two cent coinage from 1864 and the first nickel coins, which began the following year. 500 proof dollars were produced and delivered in lots of 100. These were sold alongside the other denominations in silver proof sets. While lower grade examples from this date frequent the auction block, gem and cameo examples remain quite elusive.

This Cameo example is one of only eight coins so graded by PCGS, with nothing graded finer within the designation and only a lone 66DCAM with no 65DCAMS.

1866 S$1 “Motto” PCGS PR66CAM 1866 S$1 PR66CAM

This was the first year that the motto “In God We Trust” was added to the dollar coinage. With only a couple 1866 “No Mottos” known, collectors have to settle for one type of this year. Being the first year for the type, this dollar gets collector pressure from both type collectors and date collectors who find the MS examples extremely scarce. With the mintage of only 725, the coin remains scarce in the gem plus grades, especially with cameo and deep cameo designations.

The present example is one of only four coins so graded with a lone 68CAM better. A number of deep cameos have been graded, with nothing achieving a numerical grade higher than six. With that, and the spectacularly original appearance it is no stretch to place this example near finest known.

1867 S$1 PCGS PR66+ 1867 S$1 PR66+

During the middle of the nineteenth century much of the silver dollar production was not used to circulate commercially. Rather many of the commercial strikings were exported for their silver content mainly to China. Despite jockeying the alloy weights, which stimulated the need and use of the smaller coinages and circulating gold denominations, the Orient and other places abroad absorbed most of our nation’s silver dollar production. This scarcity in mint state examples pressured the availablility for the date in proof condition. By 1867, demand for proof sets had risen slightly, but mintages remained fairly low with only 725 sets produced in 1867. The dollars again were only distributed through these silver proof sets.

This is the highest numerically graded proof example for the date with a lone non-plus six having the DCAM designation, technically making this the coveted finest graded, barre none. Examples of this quality are often sold via private treaty with few superb gem example reaching the auction block.

1868 S$1 PCGS PR65+ 1868 S$1 PR65+

Our dollar traded in the Orient at a discount to the other coinage that was circulating internationally at the time – namely the Spanish milled dollars. Newly appointed director Dr. Henry Richard Linderman realized our dollar was not accepted by Chinese merchants except at a discount. He began to push for a new dollar. A number of individuals had begun a push for international currency and bimetallic coinages. Regardless, proof sets continued to be produced by the Mint with 600 silver sets being coined in 1868. As with previous years, the bulk of the mint state examples were gobbled up (albeit at a discount). The phenomenon again puts date demand pressure on choice proof examples from type and seated date collectors alike.

This is an amazing example with a small population of only one example with four coins grading finer. No cameos are graded by PCGS better than PR65.

1869 S$1 PCGS PR65 1869 S$1 PR65

Previous decades had seen the United States import nearly all of the silver used in production of the nation’s coinage. This changed with the discovery of the Comstock Lode. A new tax on the Mexican peso spurred a renewed demand for silver dollars. The Mint again upped their mintage figures, but despite increased foreign demand and increased supply, newer coined dollars often found their way into government vaults as a practical way to store silver. However, even with the higher mintage, the date as a whole remains quite scarce in both mint state and proof.

1870 S$1 PCGS PR65 1870 S$1 PR65

By 1870 a number of bills were introduced to either suspend the dollar coinage or readapt the denomination either with more or less silver content. Arguments were from a number of angles, but in a nutshell they are based on the fact that four quarters wasn’t equal to the silver in a dollar, and the silver in a dollar coin wasn’t equal to that of a gold dollar. The greenbacks still circulated, but not on par with their gold and silver counterparts. There was a hue and cry to rectify this. The new mints in Carson City NV, and San Francisco CA had begun churning out coinage including a limited number of silver dollars. Dollars from both branch mints remain extremely scarce today. Proof mintage was upped to 1000 examples, and Philadelphia produced 415,000 dollar meant for circulation.

Only a handful of examples have been graded Proof 65 with four non-cameos grading higher. There are a few gem cameos and DCAMs, with a lone PR66DCAM at the top of the population report.

1871 S$1 PCGS PR65+CAM 1871 S$1 PR65+CAM

Proof sets were becoming increasingly popular and the dollars were issued in both minor and silver proof sets. 1871 was the second highest proof mintage for the motto series. The flurry of patterns continued to pour out of the mint toward the ultimate demise of the seated coinage in the coming few years.

This date is not as available with cameo designations as the previous few years.

1872 S$1 PCGS PR65+ 1872 S$1 PR65+

Business strike mintage figures had swollen to 1,105,500 coins, a record for dollars to the date. While some were exported as with earlier decades, many found their way into domestic commerce channels. The proof mintages were only slightly lowered with 950 coins for sale in sets delivered throughout the year, indicating a demand for the silver, and minor sets which included these coins.

This example has some of the doubling in the letters IN GOD, that is mentioned by Walter Breen in his Encyclopedia of U.S. Coins, and by Bowers in the first of his Silver Dollar tomes. With only a couple cameo designated examples in 65 and 66, it is hard to believe any coin available is much nicer than the present example. This is spectacular gem with electric colors residing at the top of the pop report.

1873 Seated S$1 PCGS PR66 1873 Seated S$1 PR66

By 1873 the seated dollar had finally worn out its welcome. The approval of the Trade dollar design and weights caused the dollar to loose any usefulness and was discontinued by the Act of 1873. This act also removed the two-cent piece, the three cent silver and the half dime from the mint’s obligations. The weights of the other minor coinages were changed. Undistributed examples were melted as were 2,258 proof dollars of unspecified years (including 1873).

This specimen was struck using the same reverse dies as in 1872 and 1871, showing a doubling of the letters IN GOD. The present example is an uncannily beautiful coin and is among the finest with only one deep cameo grading higher than PR66.

The proof seated dollar series is one that spans a historical period where the west was won, a civil war was fought, and the United States went from a fledgling nation to a international industrial power. Seated dollars are scarce today, but were also scarce during the times in which they were supposed to circulate. Many business strikes were melted overseas, and most dates remain elusive in both proof and mint state gem and better grades. We are exceptionally delighted to have the opportunity to purchase this outstanding collection of one of America’s most storied series.

Click HERE To View A Slideshow of the Collection

The Coins will be posting to the Pinnacle website inventory page beginning June 6, 2011.

By CoinLink on Monday, September 20, 2010

Coin Rarities & Related Topics: The rise in the number of collectors of rare U.S. coins and the importance of the PCGS & the NGC

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By Greg Reynolds on Wednesday, August 25, 2010
Filed Under: Column: Coin Rarities, Commentary and Opinion, Featured, General Collecting, US Coins

News and Analysis regarding scarce coins, coin markets, and the coin collecting community #15

A Weekly Column by Greg Reynolds

Today’s topic relates to the number of people who collect rare or scarce U.S. coins, and, at least once in a while, spend more than $1000 on a single coin. The number of such collectors has grown tremendously since around 1998.

At various times since Sept. or Oct. 2008, a substantial number of collectors have stopped buying, not because of lack of interest, but rather because of their own personal financial circumstances. After all, in the middle of 2008, a rather severe recession began that negatively affected almost everyone. Further evidence of my point regarding the increase in numbers and in interest of coin collectors is found in the fact that rare U.S. coins went down in value to a much lesser extent than almost all other categories of assets.

There has only been a modest amount of attrition since coin markets peaked during the first seven to eight months of 2008. (Please see my remarks about coin markets in the following articles: O’Neal’s Eagles – Part1, Part 2; Queller’s Patterns; August 2009 Market Report – Part 1, Part 2, Part 3; and my Review of the Jan. 2010 Platinum Night event.)

Why is there is a reason to put forth such points now? After all, I could, and had planned to, write more about the terrific coins that I saw at the ANA Convention in Boston. (Please click to read last week’s column.) Unfortunately, very recently, in a print publication (CW), a widely recognized commentator (QDB) has put forth a theory that most “serious” collectors are well over fifty years old and that the number of coin collectors has not been increasing. This poorly reasoned theory needs to be addressed.

I. Young Adults and Coin Conventions

Without research, it can be logically deduced that most young adult collectors do not have the time to attend many first tier coin conventions or expos. Further, because of the growth of the Internet and other advances in technology, there is less to be gained, than before, by attending major conventions, though I still recommend attending them. If a majority of the collector-buyers at major events, like the ANA and FUN Conventions, are over the age of fifty, this does NOT prove that a majority of collectors who are seriously interested in expensive U.S. coins are over the age of fifty.

It should be obvious that most collectors between the ages of seventeen and fifty just do not have the time to attend ANA or FUN Conventions, or Long Beach Expos. Surely, many young adults in their twenties, thirties and forties, are busy with their careers and/or busy running their own businesses. A lot of people work ten hours a day to further their business or occupational pursuits, especially many of those collectors who spend more than $1000 per coin. It is also true that collectors in their twenties or thirties may be focused on their respective families.

In general, it is unrealistic to expect a thirty-three year old entrepreneur to be staying up at night thinking about locating a Draped Bust, Small Eagle half dollar, completing a set of Three Cent Nickels, or assembling a type set of Proof Liberty Head gold coins. Of course, there is an occasional thirty-three year old, very affluent collector who devotes ten to twenty hours a week to studying coin related materials and to building his coin collection. Clearly, though, few thirty-something collectors will have the time to attend ANA or FUN Conventions. Therefore, QDB and also Doug Winter are correct in that collectors in the fifty to eighty year old range are more likely to engage in BOTH spending on rarities and extensive travel to coin events. It is indisputable, however, that there are many unseen coin collectors in their twenties, thirties and forties.

In an article here on CoinLink, Doug Winter states, “ever since coin collecting became popular in the United States, in the late 1850’s [to] early 1860’s, [it has] been a hobby that mainly attracts older people. Think about it: coins are expensive and people in their 20’s and 30’s have never had enough discretionary income to be making impulsive non-essential purchase. When you are 27 years old, you are thinking about buying a house and saving money for your child’s education; not deciding what series of 19th century gold coin to specialize in.”

In response to Winter, two points come to mind. My first point is consistent with Winter’s analysis. Many of the people who spend large sums on coins when they are over age fifty were interested for years or decades. They just did not earlier have the money and/or the time to devote to buying many coins that cost more than $1000 each. Secondly, in opposition to Winter, I strongly believe that there are thousands of U.S. coin collectors in their twenties and thirties who actively buy rarities.

I maintain that there are a substantial number of people in their twenties and thirties who do acquire four figure coins (and quite a few of them have purchased six figure coins). I have met or otherwise heard about quite a fair number of them. Old timers may be startled by the incomes of some young adults, particularly in major metropolitan areas.

Many relatively young adults involved in finance, banking, certain areas of international business, and technologically advanced industries, among other fields, continue to earn seven or sometimes eight figure incomes, even during the recession. Besides, someone who has an income in the low six figures, especially if he or she does not have children, can often afford to buy many coins that are valued at more than $1000 each. The suburbs of most major cities are home to a large number of relatively young adults who have incomes in the low six figures or more.

II. False Conclusions from True Data

To support his hypothesis that “the vast majority of people seriously interested in coin collecting today are on the long side of fifty years old,” QDB emphasizes the decline in: the number of physical coin stores, the number of subscriptions to one coin newspaper (CW), and the total membership in the American Numismatic Association (ANA). QDB also concludes that the total number of coin collectors has not significantly risen in a very long time. While the three sets of numbers that he cites have truly declined from peaks or not substantially increased, his conclusions are illogical.

I am here reminded of the title of an unrelated book by Ben Wattenberg, The Good News is the Bad News is Wrong. Physical coin stores, the ANA, and CW all have much less significance to collectors of rarities than these did decades ago. Innovations in the coin collecting community coupled with advances in technology have changed coin markets such that relatively new collectors seek almost all of their information via the Internet, or by way of telephone conversations with those who they meet via the Internet. Plus, most proprietors of coin stores, the management of the ANA and the contributors to CW have not focused on PCGS and NGC certified coins to the same extent that serious collectors of rarities focus upon them.

III. Old Fashioned Coin Stores

The decline in the number of physical coin stores, which are distinct from offices for mail-order sales or online Internet stores, is NOT indicative of a decline in the number of coin collectors. There are other reasons for this decline.

(1) Since the 1960s, the cost of insurance has risen, in real terms. (2) In the 1960s and 1970s, and to some extent in the 1980s, violent crime was a terrible problem, much more so than it was before 1960 or after 1990. Some of the proprietors of coin stores were killed, assaulted or just scared to the point of being emotionally scarred. The crimes of the past have discouraged dealers in later years, and in the present, from opening coin stores. (3) From the 1960s to the present, there has been a tendency for sales taxes to increase. In many circumstances, coin collectors can legally avoid sales taxes (though not necessarily legally avoid ‘use’ taxes) by receiving coins in the mail from sellers in States other than their own. (4) Coin dealers usually do not have the time to spend five or six days a week in a coin store. In the decades since the 1960s, there became more of a need for coin dealers to travel to buy coins and trade with other dealers. (5) The advent of the PCGS and the NGC resulted in lower profit margins on coins and thus some small coin stores were replaced by larger mostly ‘mail order’ coin dealerships that can feasibly operate with smaller ‘buy-sell’ spreads. (6) The last and strongest reason is that most information regarding coins being offered is disseminated over the Internet. A collector may ‘browse’ many listings of coins on the Internet in the same period of time that it would have required to drive to a local coin store, if there is one nearby, and it is unlikely that a local coin store would have an inventory that matches the inventories that could be found via the Internet in just a few minutes.

IV. Subscriptions to One Publication

It is nonsensical to argue that the decline in subscriptions to one newspaper or magazine indicates that there is a decline in the number of coin collectors. Obviously, since the late 1990s, coin related websites have blossomed and there is a tremendous amount of worthwhile information available for free on the Internet. Consider the good (though far from perfect) free price guides at PCGS.com and Numismedia.com. The Heritage Auction Archives constitute an incredible resource. The NGC and ANS websites deserve honorable mention. The PCGS and Stella Coin websites include electronic versions of quality books that may be read for free.

Coin collectors find hundreds of articles on PCGS and NGC certified coins, and related markets, that are available for free on CoinLink.com. I am not here referring only to my own columns and analytical articles. I recommend articles by Doug Winter, Laura Sperber and others.

I could understand why someone who was a dealer in the 1960s may think now that one coin (print) publication (CW) and the ANA are crucial to collectors. In the 1960s and the 1970s, this newspaper and the ANA were leading sources of information regarding rare U.S. coins. These were the mainstream information sources, along with an array of Krause publications, including Numismatic News weekly. Of course, the ANA and the print newspapers are still important as sources of information, but they no longer hold the same kind of central positions that they did in the past.

V. The PCGS and the NGC

The most revolutionary transformation in the history of coin collecting is the emergence and acceptance of the PCGS and the NGC in the mid 1980s. These are the two leading services that authenticate, grade and encapsulate coins. Previous efforts to standardize coin grading, even with encapsulation, were not entirely successful. The PCGS and the NGC rapidly became very successful.

For scarce or rare U.S. coins valued at more than $1000 each, in any grade, more than 90% of the honest and/or highly qualified dealers will sell only those that are certified by the PCGS or the NGC. Of course, some of these same dealers may sell low priced coins that are not so certified. For example, it is not cost-effective for a dealer to submit a 1914-D dime in Good-04 grade to the PCGS or the NGC.

For conditionally rare (and thus not generic), pre-1964 U.S. coins that grade 64 or higher, the threshold is less than $1000. For any such coins valued at more than $250 each, over 85% of the legitimate and/or highly qualified dealers limit their offerings of such coins to those that are certified by the PCGS or the NGC. Put differently, dealers who sell such coins that are not certified by the PCGS or the NGC are usually (though not always) suspect or are clearly engaging in practices that most experts would regard as wrongful.

Of course, there exist honest, qualified dealers who sell raw (not certified) U.S. coins for more than $1000 each or very choice uncirculated raw condition rarities for more than $250 each. Such dealer-exceptions, though, are scarce. For coins in these two categories, legitimate mainstream dealers sell coins that are certified by the PCGS or the NGC. While this point may seem obvious to most of those collectors who read my columns and articles, it would not be obvious to all those who read only the print publications and thus do not read mainstream coin material on the Internet. Someone who reads only CW and the ANA’s monthly magazine may not understand the role of the PCGS and the NGC in markets for rare U.S. coins.

From a stack of recent CW issues, I arbitrarily selected the March 1, 2010 issue. Other than in advertisements, I did not see any mention of the PCGS or the NGC until page 20. Even then, the PCGS was mentioned in the caption of an image of a coin that was not specifically mentioned, or even alluded to, in the article that this image accompanied, which did not mention any grading service. Finally, on page 24, in the second to last paragraph of Ken Potter’s article on some Lincoln Cent varieties, there is mention, in passing, of a Lincoln Cent that was certified by the PCGS. Elsewhere in this issue, there is a long article on the new Shield reverse 2010 Lincoln Cents.

Later, on p. 46, Steven Roach mentions an NGC certified coin in the second to last paragraph of his market report and a PCGS certified coin in the last paragraph. The NGC certified coin that Roach mentioned is a very famous and extremely rare, 1849-C ‘Open Wreath’ Gold Dollar, which, I suggest, should have merited a distinct, long article. On page 54, selected prices realized for an auction are presented in paragraph form; this piece looks like it came from an auction firm’s press release. There is no analysis or discussion of the rarity or importance of the coins auctioned. All the coins listed are PCGS or NGC certified, and their respective assigned grades are cited.

In the June 28th issue, other than in ads and in two or so letters to the editor, I did not notice a mention of the PCGS or the NGC until page 82 in another example of auction coverage that seemed to be a reformation of a press release from the auction company. As I am not a perfect reader, it is entirely possible that I missed a mention of the PCGS or the NGC, here or there, in one or both of these issues of CW. As best as I can tell, there is not one real discussion of a PCGS or NGC certified coin in either of these two issues of CW, which is not unusual. An absence of such discussions is typical of CW.

I maintain that collectors who spend thousands of dollars on PCGS or NGC certified coins would like to read articles that would assist them in evaluating, interpreting or at least further understanding valuable PCGS or NGC certified coins. How could one commentator conclude that the fact that CW had more subscribers in the past means that there are fewer collectors in the present? Could it be true that serious collectors of rarities were much more likely to subscribe to CW in the 1960s and 1970s than they are in the present?

As for the monthly publication of the ANA, The Numismatist, it is entertaining. Other than the columns by experts employed by the NGC (some of which are excellent), few of the articles in this publication would help readers evaluate, interpret, or further understand PCGS or NGC certified coins. Is it true that joining the ANA is very beneficial to collectors who spend large sums on rare or scarce U.S. coins and seek to learn more about grading, natural toning, coin doctoring, interpreting population reports, condition rarities, pedigrees, and auctions? Instead, it may be true that such information is more likely to be found on the Internet than in the ANA’s publications.

I am not aiming here to criticize CW or the ANA’s publications. I am asserting that it is not logical to equate changes in the number of subscribers to CW or changes in the number of ANA members to changes in the number of collectors of expensive PCGS and NGC certified coins. Moreover, it is logical to conclude that many new collectors are not subscribing to CW and not joining the ANA. Even so, I am not discouraging anyone from subscribing or joining. The ANA’s publications and CW have plenty of interesting articles and cover a wide variety of numismatic topics.

Certainly, there are many articles in both CW and The Numismatist regarding the connections between overall history and coins. I am skeptical, though, as to whether most collectors who are focused on buying rarities (or very scarce U.S. coins) are really interested in reading about history. I suggest that the ANA may be able to expand its membership if the ANA takes positions on controversial issues and offers more material that is of educational value to collectors who spend a lot of money on PCGS and NGC certified coins.

VI. The Growth of Coin Collecting

Before reading recent arguments, I did not realize that the recent growth of U.S. coin collecting is a controversial point. I am almost certain that, from 1998 or so to some point in 2008, the number of new collectors of rather expensive U.S. coins kept increasing to a substantial extent.

From 2002 to 2008, U.S. coin prices, in several categories, tripled or quadrupled. Prices for almost all scarce or rare U.S. coins went up. During this period, the number of coin collectors who signed up on the Heritage website increased from less than 50,000 to more than 250,000! Heritage auctions more than $250 million a year of just coins, mostly to collectors who bid over the Internet or to their dealer-representatives. Of course, some of the people who sign up on the Heritage website do not buy a large number of coins priced at more than $1000 each. Thousands do. Many have bought coins for more than $100,000 each. Please see my review of the Jan. 2010 Platinum Night event or many of my weekly columns over the past two months.

Generally, an 1856-O Double Eagle that was worth $30,000 in the early to mid 1990s could easily be worth more than $400,000 now. Compare the prices in the auctions of (a large part of) the Harry Bass collection in 1999 and 2000 with the prices many of the exact same coins realized during the past five years. The same coins, just a few years later, tended to realize, from two to ten times as much. Though it is not the best example as it has since been given a Specimen designation by the NGC, I recently wrote about the Bass 1853-O Eagle that sold for less than $20,000 in 1999 and for $316,250 in a Stack’s auction in Boston on Aug. 7.

In general, it is inconceivable that the same collectors decided to spend more than five times as much for the same coins. There must have been thousands of new collectors joining the coin community from 2002 to 2008.

Walter Husak’s PCGS graded AU-55 1793 Liberty Cap large cent was auctioned for $632,500 in Feb. 2008. A decade or so earlier, in Feb. 1998, the exact same coin realized $90,750 at auction, about one-seventh of its Feb. 2008 price. (Please see my article that focused on this coin.) This is not an isolated example; large cents, gold coins, many bust silver coins, and a vast array other U.S. rarities rose in value to multiples of their previous respective price levels, from 2002 to 2008. On July 31, 2008, Heritage auctioned an 1804 dime for $632,500, well over three times as much as the exact same coin (though in a different holder) realized in a Jan. 2007 Heritage auction. Furthermore, auction companies and dealers had many more customers in the 2000s than they did in the 1990s. In the early to mid 1990s, major conventions were characterized by wholesale trading and few dealers had retail customers. Dealers were speculating in regard to expected changes in market prices. By 2003, hundreds of dealers had many retail collector-clients. A rejuvenation in coin collecting occurred.

Since the mid 1990s, prices for circulated pre-1934 U.S. coins have risen as well. An 1896-S quarter in Good-04 grade was probably worth around $250 in 1998 and is worth around $1000 now. A 1908-S Indian Cent in the same grade has approximately tripled in retail price during the same time period, from $23 or so to around $69 now. Yes, there are some circulated coins that did not rise in value as much as these, and the prices of others have slid downward since the middle of 2008.

In conclusion, for almost all pre-1934 U.S. coins, and for many dating from 1934 to 1964, the number of collectors has risen dramatically since 1998. A substantial percentage of the number of serious collectors of U.S. coins are NOT over the age of fifty and circumstantial evidence demonstrates that the total number of buyers of U.S. coins valued at more than $1000 each had at least tripled from 1998 to 2008.

Related posts:

 

1. Coin Rarities & Related Topics: Upcoming LB Auctions, PCGS Secure Plus & NGC Metallurgic Analysis
2. Coin Rarities & Related Topics: Great Coins at the ANA Convention in Boston
3. Coin Rarities & Related Topics: The PCGS Lawsuit Against Alleged Coin Doctors
4. Coin Rarities & Related Topics: 1794 Silver Dollar, 1795 Reeded Edge Large Cent, and selected coins in the Summer FUN Auction
5. Coin Rarities & Related Topics: 1793 Half Cents, Chain Cents, Wreath Cents, 1808 Quarter Eagles — one-year type coins in general
6. Coin Rarities & Related Topics: Bowers & Merena auction, Proof 1876-CC dime, and $150 million for the CAC
7. New Weekly Column: Coin Rarities & Related Topics
8. Coin Rarities & Related Topics: Collection of Carson City Half Eagles, WPE Classic Commemoratives & Summer Coin Shows
9. Coin Rarities & Related Topics: 1794 Silver Dollar sells for $1,207,500, and More Auction News
10. Coin Rarities & Related Topics: Collections of Claude Davis and Brandon Smith, Coin Pricing and Government Regulation

Tags: coin collecting, Coin Collectors, Coin Publications, greg reynolds, NGC, PCGS, rare coins, US Coins

 

About the Author

Greg Reynolds is a numismatic writer, researcher and analyst. Greg has examined almost all of the greatest U.S. coins and most of the finest type coins and patterns, He has extensively researched the pedigrees of important numismatic properties, and he has written about and analyzed numerous auctions, private sales and collections.

1 Comment(s)

1. Tom | Aug 26, 2010 | ReplyIn absolute terms there were far more people fitting the coin-collector demographic born in the 50s and early 60’s then in years hence.
   That means fewer people hitting the collecting-age sweet spot down the road. Birth rates plummeted in the 70’s and this group will start hitting 50 in 10 years. If people do wait to 50 to really start their coin spending in earnest this does not bode well for the hobby. On the other hand if as the author suggests there is an unseen wave of Gen-X and Gen-Y collectors that collect incognito, then there is hope.

   Well I am a gen X-er and my anecdotal observations cast serious doubt on the “underground young collector” hypothesis. That is very difficult to prove with physical evidence severely to the contrary. More is to be learned by the evidence we have actauly have to go by… #1 for me is coin show attendance, and that skews dramatically toward the older folk. Once a collector attends a show, he knows instictively that it is a superior method of trading, even to the internet.

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