By Q. David Bowers | 02-19-13
Article first published in March 04, 2013, Expert Advice section of Coin World

The “errant” Mint mark on a 1975-D Jefferson 5-cent coin, left, published in the Dec. 24, 2012, “Reader’s Ask,” and those on another 1975-D coin and a 1973-D piece, illustrate some possible variations of Mint mark placement in the past.

A Weekly CoinWeek Column by Greg Reynolds
News and Analysis regarding scarce coins, coin markets, and the coin collecting community #153 …..

While it is true that much of my research and analyses relate to very expensive coins, I also write about coins that are not so expensive. My discussion here is about U.S. coins that cost in the range of $250, or substantially less. Here in the first part, I put forth general commentary and I discuss Indian Cents, Lincoln Cents, large cents and classic quarters. In part 2, I will discuss silver dollars, half dollars, dimes, and nickels.

I. Introduction & Commentary

I am not now reviewing basic concepts for absolute beginners. Early in 2011, a column provided advice for true beginners. (As always, clickable links are in blue.) In September 2010, I covered some U.S. coins in the $250 to $1000 range. While I would like to cover inexpensive coins more often, coins that ‘make the news’ tend to be very expensive. Moreover, since I was a kid, I have always been fascinated with truly rare coins and with epic collections. I enjoy learning about coins that I cannot afford.

I have spent a good deal of time over the years, for example, examining the Carter-Cardinal-Legend 1794 silver dollar, which recently sold for more than $10 million. I honestly believe that all collectors should learn about the rarities, values and traditions that are central to the culture of coin collecting in the U.S.

I realize that less expensive coins, and the people who collect them, are important parts of this culture, too. Further, it is not my intention here to discourage anyone from acquiring coins that cost much less than $250, including those that cost less than $25 each. John Albanese has repeatedly emphasized that desirable representatives of most dates in the series of Mercury Dimes, Walking Liberty Half Dollars and silver Washington Quarters “are obtainable for slightly above melt” (silver content) values.

In the future, I will write about coins that cost less than $100 each, perhaps those that cost less than $10 each. I do point out now that relatively poor collectors may wish to collect Wheat Cents (pre-1959 Lincolns), Jefferson Nickels or “State Quarters” out of change. By obtaining coins at face value, a collector has little to lose. On many occasions, I have found pre-1950 cents and nickels in change. Also, a complete set of regular issue State Quarters may be completed out of change and/or by searching through rolls obtainable at banks for face value.

To budget minded collectors who spend significant amounts on coins for their own personal collections, I advocate classic U.S. coins, not modern U.S. coins, as moderns can easily be collected for face value or for very small premiums over face value. Further, silver modern U.S. coins are often available for only a small percentage over their respective silver content (“melt value”). Proof moderns, which are more than five years old, can often be obtained for little more or less than the respective original issue prices by the U.S. Mint.

I address modern coins in an article on collecting modern coins. Additionally, I refer collectors to my two part series on why 1933/34 is the true dividing line between classic and modern U.S. coinage (part 1; part 2).

How much is a ‘significant’ sum or ‘a lot of money’? An amount that an individual collector regards as “a lot” is significant to him or her. This discussion is aimed at collectors who regard $250 as an especially significant expenditure for one coin, an amount that may serve as a limit per coin.

Of course, there are many appealing, naturally toned, pre-1934 coins that are available for less then ten dollars each, sometimes for less than one dollar. The topic here, though, is U.S. coins priced in the $250 range, or less.

II. Indian Cents & Lincoln Cents

Flying Eagle Cents (1856-58), Copper-Nickel Indian Cents (1859-64), Bronze Indian Cents (1864-1909), and various Lincoln Cents (1909-present) are all ‘small cents.’ Since most people have never seen a large cent, the size of a Lincoln Cent is the size of a one cent coin in the views of most U.S. citizens, and Lincolns are typically called “pennies” not “small cents.”

For around $250, a collector could obtain a PCGS or NGC certified AU-55 grade Flying Eagle Cent. From a logical perspective, such a purchase is a good deal. Since I was seven years old, I have have liked Flying Eagle Cents and I am not alone. Most collectors think of them as being really neat.

I still remember, when I was ten years old, two friends and I encountered some of my classmates, who we were not expecting to see, at a local coin show. A main topic of conversation was Flying Eagle Cents. Two of these classmates had each obtained one and they were very excited about them. The design, texture and natural color of Flying Eagle Cents have longstanding appeal, across generations. Even at meetings of coin clubs in the 2000s, I have heard adults, young and old, talk about Flying Eagle Cents, with enthusiasm.

As for Indian Cents, except an 1877 and a 1909-S, a whole set could be assembled for far less than $250 per coin. Indeed, most dates in MS-63 and higher grades could be obtained for less than $250 each. Furthermore, more than a few different dates in this series are available for less than $250 each in MS-65 grade. For a type set, a PCGS or NGC certified ‘MS-65 Red & Brown’ Indian Cent, with a CAC sticker of approval, could be found for less than $250.

A Fair-02 or AG-03 grade 1909-S Indian Cent maybe could be purchased for a price under $250. A 1909-S Indian that is not gradable due to serious problems, though still somewhat attractive, could certainly be obtained for less than $250.

The true key to the series of Indian Cents is the 1877 and these tend to be relatively expensive. There would be no point in even trying to acquire an 1877 cent for less than $250.

A whole set of classic (1909-34) Lincoln Cents could very easily be finished for less than $250 per coin, assuming that a not gradable 1909-S VDB is tolerated and the 1922 “plain” is excluded. Although the 1922 “plain” is typically collected ‘as if’ it is a distinct date, it is really a U.S. Mint error that is not needed for a set of business strike Lincoln Cents.

Many classic Lincolns could be purchased in VG-08 or Fine-12 grade for less than one dollar each. Within the last ten years, I found 1910 and 1913 Lincoln Cents, in Good-04 or higher grades, in change.

For around $250, a key 1914-D in Fine-12 grade could be bought. It is extremely unlikely that anyone will find a 1914-D cent in change, unless one is deliberately placed into circulation as part of a promotion for a coin convention. Modern (post-1934) Lincoln Cents are beside the theme on this discussion.

U.S. Mint Errors are sometimes very costly and really constitute a different subject. It makes sense to collect and learn about regular U.S. coins, for years, before focusing upon errors. Also, I am excluding die varieties from this discussion, as these are of interest to small groups of specialists.

III. Large Cents

Large cents were minted from 1793 to 1857, and are approximately the size of quarters. In my last two columns, I discuss early large cents in the set that was owned by the Cardinal Collection Educational Foundation. Although the Cardinal coins realized vast sums at auction, a lot of money is NOT needed to collect large cents.

Personally, I find the idea of acquiring ‘Early Dates,’ which are pre-1815 large cents, for less than $250 to be very pleasing. A certified 1794 or 1795 large cent in AG-03 grade could be found for around $250, maybe. A not gradable 1794 or 1795, with the details of an Almost Good (AG) or Good grade coin, could certainly be acquired for less than $200.

Among Draped Bust Cents with 18th century dates, some that grade AG-03 or Good-04 can sometimes be purchased for prices below $250 each. Standard price guides, however, tend to underestimate retail values for these.

A ‘not gradable’ 1800 cent with the details of a VG-08 or VG-10 grade coin could be obtained for less than $100. A PCGS or NGC graded VG-08 1800 may be found for a price in the range of $250, if the collector seeking such a coin is fortunate.

An 1805 in VG-10 or Fine-12 grade could probably be purchased for around $250. This might be a pleasing choice to represent the Draped Bust Cent type in a type set of copper coins.

Classic Head Cents were minted from 1808 to 1814. Several dates of this type could be easily found in VG-08 grade for much less than $250 each.

As for Matron Head Cents (1816-35), most of the dates in the series could be quickly obtained for less than $250 each, in Very Fine-20 to Extremely Fine-45 grades, depending upon the individual issue and the characteristics of specific coins. An 1819 that is PCGS or NGC graded Extremely Fine-40 grade would probably retail for a price in the range of $250. A Very Fine-20 grade 1819 would certainly cost less than $250.

As for the ‘Head of 1835-39’ type, the second type of ‘Middle Dates,’ a certified EF-40 to AU-50 grade 1837 could be obtained for $250, more or less. Most of the varieties of the 1835-39 type could be obtained in Very Fine grades for less than $100 each.

Among Braided Hair (1839-57) Cents, so called ‘Late Dates,’ AU-55 grade representatives of most dates would be easy to find for prices below $250 each. A complete set of all major varieties of ‘Late Dates’ in grades above VF-20 could be assembled for less than $250 per coin. A neat set of ‘Late Dates,’ consisting of carefully selected coins, could be built without too much difficulty.

IV. Classic Quarters

Although a not gradable or Fair-02 grade Draped Bust, Heraldic Eagle Quarter (1804-07) could probably be found for less than $250, I suggest that collectors with a $250 limitation ignore Draped Bust Quarters and buy at least two Capped Bust Quarters. Those of the first type (“Large”) date from 1815 to 1828, and Capped Bust Quarters of the second type (“Small” or “Reduced Diameter”) were minted from 1831 to 1838.

An 1819, 1820 or an 1828 ‘Large Size’ Capped Bust Quarter in VG-08 or higher grade should not be too difficult to find for less than $250. Other dates in the series in VG-08, or at least Good-06, probably also could be obtained for less than $250 each. This is a scarce and perennially popular type. Assuming the coins chosen are relatively problem-free and are naturally toned, I would recommend these.

A whole set of “Small” Capped Bust Quarters, those of the second type, could be obtained, in Very Fine-20 grade, for less than $250 each. I have always found the aesthetics of coins of this type to be particularly appealing. Such a set would consist of eight coins (1831-38).

It is probably best for a beginner or intermediate level enthusiast to collect Liberty Seated Quarters ‘by type,’ rather than ‘by date.’ For the 1838-40 ‘No Drapery’ type, it would be fun to select an 1840-O in Very Fine-20 grade for around $250 each. It is the only Branch Mint issue of the first type of Liberty Seated Quarters. Indeed, these are the first U.S. quarters that were not minted in Philadelphia. If a suitable 1840-O cannot be found, then an 1838 or 1839 Philadelphia Mint, Liberty Seated Quarter could easily be acquired for less than $250.

Of the 1840-65 ‘No Motto’ type, there are many issues that are available for less than $250 each in AU grades. The motto, “In God We Trust,” was added to the reverse (back) of quarters, half dollars and silver dollars, plus some gold denominations, in 1866. Certainly, a naturally and pleasantly toned, AU-50 to -55 grade quarter of the ‘No Motto’ type could be acquired in for a price below $250.

The 1853 ‘Arrows & Rays’ issue is a one-year only type. A PCGS or NGC graded Extremely Fine-40 grade 1853 quarter would probably retail for less than $250; an EF-45 grade 1853 may sometimes as well.

Liberty Seated Quarters without a motto and without rays, though with ‘Arrows,’ were minted for just two years, 1854 and 1855. A PCGS or NGC certified 1854 in AU-50 grade may retail for around $250. An EF-40 or EF-45 grade 1854 would be very likely to retail for less than $250.

Liberty Seated Quarters ‘With Motto’ were minted from 1866 to 1891. PCGS or NGC graded AU-55 representatives of some of the least scarce dates should be readily available for well under $250 each. A naturally toned coin of this type in AU-50 or -53 grade is frequently an excellent value.

In 1873 and 1874, arrows were again added to the obverse (front) design. Each collector should be able to find an 1873 or an 1874 ‘With Arrows’ Liberty Seated Quarter in EF-40 grade (or even EF-45) for less than $250. Surely, a VF-30 grade coin of this type would cost much less than $250.

Barber Quarters were minted from 1892 to 1916. There is only one design type of Barber Quarters and there are no subtypes. A PCGS or NGC certified MS-61 or -62 Barber Quarter could be acquired for less than $250. I suggest, though, buying a nicely toned, AU-50 to -53 grade representative of this type for less than $200. Barber coins that are PCGS or NGC certified as grading 61 or 62 tend to have significant, negative issues and/or considerable friction.

If the three keys are excluded, a ‘set’ of Barber Quarters could easily be completed for less than $250 per coin. Indeed, most dates could be obtained in Very Good grades for less than $20 each and in AU grades for less than $250 each, sometimes for less than $100 each.

Even 1895-O Barber Quarters probably each retail for less than $250 in AU-50 grade. A semi-key 1896-O in VG-10 or Fine-12 grade will typically retail for well under $250. The 1897-S issue is scarcer than the 1896-O and an 1897-S in VG-08 or -10 grade is likely to be obtainable for less than $250. A PCGS or NGC certified 1904-O may retail for around $250 in EF-40 grade.

In regards to Standing Liberty Quarters (SLQs), except for the 1916 and the 1918/7-S overdate, a set could easily be completed for less than $250 per coin. A 1923-S in Good-04 grade should be obtainable for around $250, though finding a decent one may take months. A 1919-S in Fine-12 or better grade should be easier to find than a sound Good-04 grade 1923-S. A key 1921 in VG-08 grade is likely to cost significantly less than $250.

The 1920-S is one of the keys, though it is definitely a ‘better date’! An AU-50 or AU-53 grade 1920-S, with at least half a head, could be acquired for a price below $250. An EF-40 grade 1920-S, with considerable head detail, would cost less than $85 and may be a better value, for some collectors, than an AU grade 1920-S. SLQs tend to be struck with faint head detail, and those with a well defined head of Miss Liberty are considered to be especially desirable.

Although the least scarce SLQs could be found in mint state grades for less than $250 each, collectors who do not wish to pay more than $250 for a single coin should probably avoid ‘mint state’ (MS) grade SLQs. (Please click to see my article on choosing grades, which is relevant to my point here.)

AU-50 to AU-55 grade SLQs with around two-thirds head detail are not expensive and are good values for collectors. A PCGS or NGC graded AU-55 1918-D, for example, would be likely to be priced below $250. The 1918-D is a scarce date, in my view, and buying an attractively toned AU-55 1918-D for $250 may make more sense to some collectors than spending $1500 for a MS-65 grade 1918-D. After all, some PCGS or NGC certified MS-65 1918-D quarters have been artificially brightened via having been dipped in an acidic solution.

In general, for less than $250 a coin, coins of various (though not all) types from the 1790s to the 1930s are available. While gold coins in general and pre-1808 silver coins may not easily fit into a collection with a $250 per coin limit, there are a wide range of options and many wonderful choices for such a collection. I discuss silver dollars, half dollars, dimes and nickels in part 2.

©2013 Greg Reynolds

By Peter Mosiondz, Jr.

Link to Part 1

The grade of a coin is the single most important ingredient to its value.

Before proceeding with this installment, I’ll repeat what I said last time. Make sure that The American Numismatic Association’s Grading Standards for United States Coins, now in its sixth edition, is the first book you buy. In fact buy this book before spending any money on coins. It’s that important. Its modest price for the wealth of information contained in its pages makes it an absolute “best buy” in the coin hobby. And make sure that you read the introductory section.

When we stated that the coin’s grade is the single most important component in determining its value, we were not ignoring the supply and demand factors. When we talk about grading being vital to a specific coin we are referring to the grades within a particular date and denomination. For example, we have the 1884-S Silver Dollar which is not a scarce coin. Over three million were minted. It is readily available in grades ranging from Very Fine to About Uncirculated. But it is a comparative rarity in Mint State, or Uncirculated grades. You might spend about $50 or so for a nice Extremely Fine specimen, however if MS-65 is your game, I hope you have about a quarter of a million dollars available for the coin. Now we can understand why the grade of a coin is the key ingredient to value. Without knowing the intricacies of grading and what constitutes a given grade, it is easy to be fleeced by an unscrupulous seller who over-grades by raising the coin’s true grade up a notch or two. In the case of the 1884-S Silver Dollar the unwary may be tricked into accepting a nice bright AU-58 coin for a Mint State example.

Similar comparisons can be made in just about every series of coins. The basic rule of thumb is that the higher the grade, the higher the value. Expanding upon this thought we can say that the higher the grade, the higher the demand. But oftentimes that demand does not emanate from the coin collector. It stems in large measure from the investor who cares solely about future appreciation in value. Add to this the many pension plans that are adding rare coins in high grades to their portfolios and the picture becomes clearer. As for me I prefer the circulated grades. But it’s what matters to you that is important. It is also important to reiterate that the higher grades demand higher expenditures. That is why learning how to grade is so critical.

Now comes the time to talk about the actual grading process. We can not go into each circulated grade for each series and denomination spelling out just what constitutes acceptance for every grade. To do so would require a book length feature. The ANA book handles this extremely well. I could not add anything to their clear and concise descriptions of each grade for each series. Instead we’ll focus on the development of grading standards, their nuances and some generalities of the various circulated grades. Then in our next segment we’ll talk about the various uncirculated grades.

Basically a coin is either circulated or uncirculated. Sounds simple doesn’t it? There can be no other determination. We are referring to coins struck expressly for commerce, or to circulate as a medium of exchange. Our discussion on coin grading omits Proof coins. Why is that? Glad you asked. Proof is not a grade. It is a method of manufacture. These coins are made specifically for sale to collectors and never

intended to be released into ordinary channels of commerce. For someone to state that “My coin grades Proof-65” would be a misnomer. The correct statement would be “I have a Proof-65 example of that coin.” There are differences in Proof coins that are results of blemishes or handling.

If a coin is a circulated example, one that is worn to some degree from being in circulation, there are several grading descriptions to apply dependent on the amount of wear that is exhibited. These representations include;

About Good (AG-3) – A coin that is very heavily worn. The date may be barely noticeable, showing perhaps two or three digits, and portions of the lettering are worn smooth.

Good (G-4) – Although heavily worn, the date and lettering are visible but details may be flat in certain areas.

Very Good (VG-8) – A well worn coin whose main features are clear and bold, although somewhat flat.

Fine (F-12) – The wear is moderate and even and the entire design is bold. Exhibits an overall pleasing appearance.

Very Fine (VF-20) – Moderate wear on the high points of the design. All details are clear.

Choice Very Fine (VF-30) – Light even wear on the surfaces and the highest points of the design and surfaces. The lettering is sharp. Years ago I was not in favour of this grade but I have come to accept it and understand its need.

Extremely Fine (EF-40) – Light wear throughout. All design features are sharp and well defined. A trace of mint luster may be present.

Choice Extremely Fine (EF-45) – Very light overall wear on the very highest points of the design. All features are very sharp. The lettering is crisp. Some mint luster should be evident.

About Uncirculated (AU-50) – Traces of light wear are evident on the very highest design points. At least one-half of the mint lustre should be present.

Choice About Uncirculated (AU-55) – Slight evidence of friction (rub or handling) on the very highest design points. Most of the mint luster is present.

Very Choice About Uncirculated (AU-58) – The barest evidence of friction (rub or handling) on the very highest design point. All of the mint luster is present.

You will encounter several other “in-between” grades such as Good-6 (G-6) or Fine-15 (F-15) to mention just two examples. Personally I can not subscribe to these subtle differences. The choice is yours however.

Now what do all of these numbers mean and how were they developed?

A numerical grading system for United States Large Cents was developed by Dr. William Sheldon slightly more than 60 years ago. The doctor was an aficionado of early copper coins. His system was intended to indicate the value of any Large Cents in the various grades. For example, each date and variety was assigned a “basal value” or what the piece may expect to be sold for in the worst possible grade, or Poor-1. Based on his system, if a coin had a basal value of $2 then a Good (G-4) example would sell for $8; a Very Fine (VF-20) example would fetch $40 and so on. The system worked surprisingly well during its inception but in a year or two became severely outdated. As more and more emphasis was being placed on the Uncirculated (or Mint State) grades the system went by the wayside only to be resurrected again about ten years after its introduction.

Some dealers, led by the venerable Abe Kosoff began using the grading system and terminology in their auction catalogs and fixed price lists. It was thought that when describing a coin that was clearly better than a typical Very Fine specimen, for example, that the grade of Very Fine (VF-30), or Choice Very Fine, made much more sense in their efforts to convey a clearer image of the coin to a prospective buyer. In a few years the system caught on throughout North America and was eventually adopted for all United States coinage despite the fact that the numerical valuation multipliers are meaningless today.

Why not a system employing a scale of one to 100? By the time that the Sheldon system caught on universally many tens of thousands of coins resided in holders that were graded according to the Sheldon scale. If such a renumbering project would have taken place complete chaos would have reigned. More to the point, the actual number being used is not the issue. It is the grade that really matters. So the Sheldon system, already in use for a few decades, was to remain in place.

Collectors have grown fond of saying VF-20 as a slang term for typical Very Fine. No matter what we call the coin we must know how to arrive at the coin’s proper grade.

In our concluding installment of learning how to grade we’ll talk about the components that we use in arriving at the grade we assign an uncirculated coin. These include wear, marks, surface blemishes, luster and other factors.

Originally Appeared in Canadian Coin News

By Peter Mosiondz, Jr.

Originally Appeared in Canadian Coin News

My biggest pet peeve about our wonderful hobby of coin collecting is the over-grading of coins. I see this all too often when I am called in to appraise a collection or make an offer on some coins that the collector has for sale at that moment. The Mylar® 2×2 holders or brown coin envelopes carry the dealer’s grade. Most times the collector cannot remember from whom a particular piece was purchased. Oftentimes the supposed grade as originally sold is blatantly out of reach. What to do about this situation? The collector must learn how to grade for very own protection. We are directing these comments to the “raw” or unencapsulated coins that one frequently encounters. But the caveat still applies to those coins graded by third-party services as we’ll see later.

Of course things have improved considerably with the advent of third-party grading services which have been with us now for nearly a quarter century. But there are still many enthusiasts, myself included, who like to collect the raw coins; coins that are not graded by a third-party service and are not encapsulated in a rigid piece of plastic. I enjoy holding the coin by its edge as I contemplate the history and romance associated with it.

Who is to blame for the over-grading of coins? In my opinion dealers and collectors share the blame. The dealer who knowingly over-grades his coins is doing nothing less than stealing money from the unknowing collector.

Stealing is the apt word in this situation for the simple fact that the higher a coin’s grade, the higher the price attached to it. Worse yet is the dealer who does not know how to grade coins. Hard to believe? Yet many such so-called dealers abound. This type of “dealer” should take it upon himself to learn and do it quickly for the betterment of the hobby.

I am not speaking about the majority of dealers; especially not the larger trustworthy firms who have been in business for many years and who have built stellar reputations in the process. However there are many newer dealers and some smaller operators who either deliberately over-grade or do not know how to properly grade their coins.

The collector takes responsibility as well. Certain precautions should be taken. The simple answer, as already stated, is to learn how to grade coins. The American Numismatic Association has a splendid course every summer on coin grading. Contact The American Numismatic Association at 818 N. Cascade Avenue, Colorado Springs, CO 80903. Or visit their web site at http://money.org/. The cost of their grading course is worth every cent. Needless to say every serious collector should be a member of the ANA.

Once the collector learns how to properly grade coins he will no longer have to depend on someone else to do the job for him. He will no longer have to accept a coin as being in Very Fine grade merely because the seller stated that it was indeed at that grade level. Now that he is comfortable with his resultant prowess in grading he knows exactly what constitutes a very fine grade for that particular series. He can then accept the coin or reject it with complete confidence.

Then we have the lazy collector; and they do exist – trust me. This is the individual who prefers to think that the dealers from whom is he is buying really know their business, know how to properly grade coins and will always make an honest sales presentation. This is wishful thinking at best. The owner of the firm who has been in business for a long period of time and his long-term numismatists on staff usually can be trusted to do so. But what about the newer employee who has just graded that coin you are contemplating to buy. Perhaps the coin was graded with all good intentions and without any desire to deceive the buyer. The individual just did not have enough professional experience in coin grading. Anyone can make an honest mistake. That is why they put erasers on pencils. Then again we encounter the so-called dealer who intentionally over-grades. The best advice is to be your own expert in this matter.

A splendid and very inexpensive book is available to help you along the road to grading competence and confidence. The American Numismatic Association’s Grading Standards for United States Coins, now in its sixth edition, is a great publication. Both deserve a place on every collector’s library shelves.

Here is my favorite definition of grading. The late (and great) dealer Abe Kosoff stated that “Grading may be defined as the determination of the state of preservation by an experienced numismatist without prejudice as to ownership”.

What does this mean? It is human nature to feel that the coin may not look so hot when it belongs to the other fellow. But my how it improves with age when it comes into our possession. In other words we should not wear rose-colored glasses when buying and selling coins. A coin that is purchased as an Extremely Fine-40 (EF-40) coin must be sold accordingly and not “bumped up” or elevated to an About

Uncirculated (AU) grade when it is offered for sale at a resultantly higher price.

Remember that we are talking about unencapsulated or “raw” coins here. The collector who focuses his attention to the collecting of coins that are graded and encapsulated by third-party grading services should have much fewer problems, however he must still learn how to grade and not to accept solely someone else’s opinion on the coin’s grade. And we must also state that grading is not and never will be an exact science. It is merely a matter of opinion. Make sure that it is your opinion that is the important one when spending your hard-earned money.

By Laura Sperber – Rare Coin Market Report

No, Legend is not having a clearance sale or anything like it. However, after reading some very interesting articles we have come to the conclusion (actually reminded ourselves) how cheap rare coins really are. They are so cheap relative to other “collectible” areas it seems like they are forever “on sale”. What makes this even more baffling to us, is rare coins enjoy one of the largest collector bases of anything.

After reading Christies Great Estates magazine, we took a deep breath. They listed six “collectible” items they sold last year including:

Patek Phillipe Watch: $6,501,849.00
Andy Warhol painting: $18,330,000.00
Gustav Kumt Painting: $18,801,250.00
A bronze Statue: $43,185,000.00
Picasso painting: $106,482,500.00
14.23 Pink Diamond: $179,860,000.00

The fact any of those items sold for what they did is mind boggling to us. Further, reading the magazine you see a hundred pages of houses listed for $10,000,000.00 and higher. Granted, houses are not to be compared to coins and comparing the art market to coins is weak, but it should serve as a reminder how much money there is out there in the world. This is just one magazine!

Now comparing really rare coins to the items listed above, we’ll discuss more two more valuable ones we know well: the $10 1907 Proof NGC PR67 we purchased in the 2011 Heritage FUN Sale for a stunning $2,185,000.00. Sure, for coins it brings a gasp. But when compared to these other areas, its a bargain. Like everything on the Christies list, this coin has sex appeal. It was minted by order of the Mint Director and kept in his family until last year. It is gold. It is a coin that universally agreed to have one of the most beautiful designs. It is unique. It is one of the FINEST $10 Indians that exists. So why did it sell for ONLY $2,185,000.00? Or, the 1C 1793 Ameri Chain Cent PCGS Specimen 65 our partner bought for $2,000,000.00 (and did turn down an immediate $2.5 million offer). Shouldn’t one of the unquestioned FIRST strikes ever from the US Mint (certainly the first struck regular issue coin) be worth far more? We can see this coin being easily worth $15,000,000.00 in 10 years. If it were a watch (the Patek Phillipe we listed above was from 1943), it probably would have sold for that today. These two coins are just stupid cheap. Why? Because rare coins are on sale!

WHY ARE COINS STILL SO CHEAP

We are not sure why coins are so cheap. We do know the market for US Rare coins is definitely world wide and growing (thank you Internet). We do know there are now at least 150 coins worth OVER $1,000,000.00 that have actually traded hands or have ready buyers should they ever sell. Last week we sold a coin for $1,600,000.00-and we are not going to do any major announcement (we have sold SEVERAL coins OVER $1 million dollars in the past year with no fanfare). Third party certification has its moments, but it has been proven successful and is now in its 25th+ year. Rare coins have unparalleled liquidity. You can’t take ANY antiquity, lamp, or even painting to a dealer and sell it for an immediate check-even if its just $10,000.00. We can keep adding to this list and still be scratching our heads at the end as to why the numismatic marketplace is so undervalued.

One last conspiracy theory we do have is that the lack of supply is so severe, new money thinks the coin market is too small for them to spend in. That is a HUGE possibility as we do admit Legend does millions of dollars per month in sales unless we cannot find coins. Any losses Legend has suffered in the past few years have ONLY been because of lack of supply. Demand in our eyes has only grown (we can prove that by how much we sell). The scary part, even if coins prices were to double, many coins are in the hands of real wealthy collectors who would simply continue to hold. This theory applies for coins valued as low as $500.00!!!

What this all could be leading up to is one wicked boom. Rare coins simply are NOT available like they were 10-15 years ago. There are no 1894S 10C for sale, no 1804 $1′s (yes, dealers used to inventory them), or Ultra High Reliefs. The supply side has become so thin you can’t even find GEM PR $20 Gold, better Morgan dollars in GEM, enough GEM PR 67 Lib Nickels to build more than one set, or MS66-67 Bust halves more than once a year (if even). Its not just the big rarities either that will OVER TIME benefit should the demand finally break the price resistance.

Holding your coins for 5 years just does not bring you hyper returns. Look at the greatest collections with the greatest returns. Especially Pittman. He was not a millionaire and struggled with every purchase. He had bought the BEST QUALITY and greatest RARITES he could and held his coins 20-35 years. His % return was not nominal-it was staggering, averaging in some cases 500-1000%! The rare coin market is definitely poised for this type of return. You will be able to take advantage of the ride assuming you buy the right coins.

SO DOES THIS HYPE AFFECT ME?

What we have written here is NOT hype. Its what we see. We deal with collectors ranging from billionares to ones who can only afford a MS65 Morgan. We see the other areas they inhabit as well. If you keep an open mind and work with a smart and capable dealer, you WILL find incredible deals in just about ALL areas of the market today.

We strongly suggest you not be so afraid of all the “buy rights” in front of you. Do not be whimpy and only buy out of an auction because you need the security of an under bidder. Right now coins like PR Seateds (all denominations+grades), PR Barbers (all denominations+ grades) are selling for a song. You can buy a GEM PR 65 1913 25C (mintage only 613) for just UNDER $2,000.00. Or, you can build an entire set of PR66 Barber Quarters for about $50,000.00. GEM PR Gold, any PR65 or higher with a mintage of LESS then 50 and a price of LESS than $50,000.00 sure sounds like a sale price to us. Try and find these coins, you can’t. Of course when seeking tremendous bargains, always try and buy the highest grade you can afford and the rarest coin as well.

Even MS67 Morgans are a steal. Hand pick a dozen great looking pieces and put them away for 10 years. We can’t see them at $800.00 forever (with these quality especially counts)!

All its going to take is $50,000,000-$100,000,000.00 of new money to come into coins in a matter of a few months to force the market to rise significantly. Even the notoriously wrong and slow to react CDN won’t be able to hold back coin pricing. Prices at coin auctions will go thru the roof like we have never seen. The amounts we mentioned are NOT a ton of money. Watch every time a major “old time” collection hits the block from this point on-you ALWAYS get “moon money” record prices.

LONG BEACH-NOT

Sorry folks, we are taking a much needed breather from Long Beach. We have been on the road and have already made the ultimate status on air miles for the year! Legend will be set up at our regular table (555) in Baltimore.

We are working harder than ever to find fresh and high end rarities. Luckily we have purchased a small deal that includes some magnificent Superb GEM Bust Dimes and GEM Proof Two Cent pieces. We are also working on several other deals as we speak (we much prefer to see coins from collectors vs having to go through dealer retreads any day). Legend does not care for quantity, we look for serious quality.

If you have any questions about what this article means for you, feel free to email us (lsperber1@hotmail.com) or call. No, we’re not saying coins are going to explode tomorrow and you must buy, we’re just pointing out the huge possibility we do see. It drives us nuts when collectors pass up coins because they think they are 20% too much-yet you’ll never see the coin again for 5 -10 years.

News and Analysis on scarce coins, coin markets, and coin collecting #45

A Weekly Column by Greg Reynolds

In the recent auction in Sacramento, two 1881-S Morgan Dollars with eye-catching toning realized sums that caught my attention. While the prices realized for these two silver dollars are not huge in the realm of auctions, these two brought super premiums over the market values of relatively untoned coins of the same date, type and certified grade. (Morgans are silver dollars that were minted from 1878 to 1904 and then again in 1921. “Mint State” coins are graded on a scale from 60 to 70.)

I. An 800% Premium for an 1881-S

For a PCGS graded MS-66 1881 San Francisco Mint Morgan silver dollar, the Numismedia.com retail value is $331 (on March 22nd) and the PCGS price guide value is $325. One just sold by Heritage in Sacramento for $2,990, about nine times the supposed retail value for a coin of the same date, type and PCGS certification.

Although this coin has been approved by the CAC, a green sticker could not explain an 800% premium in this case. Indeed, on the CoinPlex trading network, there are bids of $235 per coin for MS-66 graded 1881-S Morgans with CAC stickers. Undoubtedly, these typically trade among dealers for more than $235. I emphasize here is that the CAC sticker could not account for this 1881-S selling for $2,990. A likely explanation would relate to at least two collector-bidders being very attracted to the particular toning on this specific coin.

II. $1,667.50 for an MS-65 1881-S

A PCGS graded MS-65 1881-S in the same auction sold for $1,667.50. It does not have a CAC sticker. As of March 22nd, the Numismedia.com retail value is $194 and the PCGS price guide value is $195 for an MS-65 grade 1881-S Morgan. In a Heritage Internet-only sale in late January 2011, another PCGS graded MS-65 Morgan sold for $149.50. Prices for common date Morgans, in general, increased in February and in early March.

Unfortunately, I did not attend the recent auction in Sacramento and I never saw these two coins. One thought that occurred to me is that the buyers or other leading bidders were planning to ‘crackout’ these coins and re-submit them to the PCGS or the NGC in hopes of receiving higher grades. While it is possible that crackout artists were the leading bidders, it is unlikely.

An MS-67 grade 1881-S Morgan has a retail value of only around $800. In recent Heritage sales, two PCGS graded MS-67 Morgans, with CAC stickers, sold for more than $800, though less than $900 each. On CoinPlex, sight unseen bids by traders tend to be in the range of $600 for MS-67 grade 1881-S Morgans.

A PCGS graded MS-68 1881-S Morgan, in contrast, could be worth anywhere from $2500 to $7500, depending upon the characteristics of the individual coin. Most probably would currently retail in the range of $4000 to $6000 each.

Could the bidders have pegged these two as eights? While this is plausible, I doubt that leading bidders graded both of these as MS-68. Morgan Dollars are not extremely difficult to grade. If these two did not have significant contact marks or hairlines, or other relevant imperfections, a very high technical rating would probably have been noticed by experts long ago. Typically, attractive silver coins have more imperfections than white silver coins with the same respective certified grades. Very attractive natural toning adds to a coin’s grade, and frequently offsets grade reductions stemming from contact marks and hairlines.

Although Kris Oyster did not see either coin, he often trades Morgan Dollars and has sold many with very colorful toning. Oyster maintains that, in most cases, toned Morgans sell for large premiums “because of the toning, the buyers are usually not trying for upgrades. They want pretty coins.”

In Oyster’s experience, a “MS-62 to MS-65” grade, “common date Morgan” with “real pretty toning will sell for “$500 to $1000 more than a white one.” The 1881-S issue is certainly a common date. For the most part, Rich Uhrich agrees with Oyster, “for MS-65 common dates, very attractive bag toners often sell for $500 more, sometimes even for a $1500 premium. A very attractive MS-64 1881-S toner could sell for a $600 to $800 premium, though some toners will sell for a lot less. A monster six could sell for $1500 over the price for a white [MS-66 grade] 1881-S Morgan,” Rich explains.

Oyster states, “better date Morgans with real pretty toning usually do not bring as much of a premium. They can bring $1000 more or they can bring zero” more. Most such better-date Morgans in MS-63 to MS-65 grades will, Oyster says, “bring a premium from $200 to $400 over a white one”!

Oyster is the managing director of numismatics for DGSE. Kris has bought and sold millions of dollars worth of Morgan Dollars.

Oyster finds that most “collectors of toned Morgans do not care about the dates and are not much interested in the grades.” The numerical grade seems to be a secondary issue for such buyers. Typically, such a collector wishes to acquire a group of silver dollars with varying colors, Oyster has learned. It seems to Kris that such collectors wish to have toned Morgans that look different from each other.

Rich Uhrich also figures that some collectors of “bag toners” seek a group with varying color-arrangements. Uhrich suggests, though, that more often that the buyers of Morgan “bag toners” are collecting by design type, and want colorfully toned coins of other denominations as well. A few buyers, who Rich knows, are assembling sets of more typical looking Morgans and regard a “bag toner” as an addition or a complement to such a set.

Someone who collects Morgans ‘by date’ or a subset of Morgans, Carson City dates for example, would be less likely to pay a premium of more than 200%, much less 800%, for a very attractively toned better-date Morgan. Complete sets of very colorfully toned Morgans are difficult to assemble, and few collectors attempt to complete such sets.

III. Sunnywood Collection

An exceptionally accomplished collector, Doug K., who refers to his collections as “Sunnywood,” did complete a set of toned Morgans. “The goal of this endeavor was to show the [coin collecting] community that Morgans can be collected with originality and color,” Doug said in the PCGS registry. Colorful Morgans constitute a very small percentage of all Morgans that survive. “Because there are millions of white Morgans,” Rich Uhrich declares, “the bag toners really stand out!”

The Sunnywood set of colorfully toned Morgan Dollars was exhibited at the Jan. 2009 FUN Convention in Orlando and elsewhere. In Dec. 2009, Laura Sperber bought it from Doug K. and then sold most or all of it to the collector known as Simpson. While the Simpson set of Morgans currently includes a few coins that were not part of the Sunnywood set, most of Sunnywood’s Morgans, including the Eliasberg 1893-S, are now part of the Simpson set. Both the Sunnywood and Simpson sets of Morgans are listed in the PCGS online registry, with images.

“Each toned coin has a very distinctive appearance and personality that results from its decades of history,” states Doug K. The connection between toning and the history of a coin is discussed in my three part series on natural toning. (Please see part 1, part 2 and part 3. )

When a silver coin is dipped (in an acidic solution), part of the history of the coin is destroyed. There exist a few coins for which the benefits of a dip outweigh the harm done. The dipping of Morgan Dollars, however, is generally harmful. The fact that so many Morgans have been dipped is one of the reasons that naturally toned Morgans sell for premiums ranging from 30% to more than 1000% over the prices of white ones of the same respective dates and certified grades.

IV. Commonality of Morgans

Frequent sales of attractively toned, common date Morgans for prices in the $500 to $1500 range reflect, to an extent, the value of natural toning to knowledgeable coin collectors. An MS-65 grade common date Morgan has a retail value of around $200. As the 1881-S issue is one of the most common dates, and a MS-65 grade 1881-S in the recent Heritage auction in Sacramento sold for $1667.50, the commonality of the 1881-S issue is worth discussing here to further illustrate the value of natural toning.

In all grades, the PCGS has certified more than 200,000 1881-S Morgans and the NGC has certified more than 180,000. Of course, the total of more than 380,000 is a little misleading, as it may only be indicative of just 250,000 different coins. I doubt that the true total could be much less than 250,000, though, as, in most cases, there would be little to be gained by ‘cracking out’ an 1881-S Morgan from its PCGS or NGC holder. Indeed, over time, on average, ‘crackout’ artists probably have lost money on 1881-S Morgans.

It very likely that more than 35,000 different 1881-S Morgans are currently PCGS graded MS-65. Therefore, the 1881-S that just sold for $1667.50 is one of more than 250,000 certified 1881-S Morgans and one of some 35,000 that are currently PCGS graded MS-65. In addition to being very common overall, an 1881-S Morgan is not a condition rarity in MS-65 grade. An 1881-S Morgan becomes a condition rarity in MS-68 grade, as very few 1881-S Morgans qualify for a MS-68 or higher grade.

V. Bag Toning

For political reasons, millions of Morgan dollars remained in U.S. Treasury Dept. canvas bags for decades. In the late 19th century, people who were financially linked to the silver mining industry influenced the U.S. Congress and brought about laws that required the U.S. Treasury Department to produce and store many millions of Morgan Dollars that no one, at the time, wanted. Most Morgans were not made for commerce and were stored by the U.S. Treasury Dept in canvas bags.

Consequently, there came about a special kind of natural toning that is unique to Morgan dollars. This is typically referred to as ‘bag toning,’ as substances from a certain variety of canvas bags came into contact with the surfaces of silver dollars. Very colorful toning often resulted.

If such ‘bag toning’ were said to be found on a Liberty Seated Half Dollar from the 1880s or a Barber Half Dollar from the 1890s, any such toning would be correctly determined to be ‘artificial.’ Liberty Seated coins and Barber coins did not sit in such bags for many decades. In this context, ‘bag toning’ probably took a half century or more to develop. The U.S. government released millions of 19th century silver dollars in the 1960s and 1970s.

In the framework of the culture of coin collecting in the U.S., ‘bag toned’ Morgans have a special place. Indeed, ‘bag’ toning on Morgans is widely regarded as natural and similar looking toning on other silver coins would, in almost all cases, be widely condemned as ‘artificial.’

Therefore, the only way to acquire legitimate coins with ‘bag toning’ is to buy such Morgans. Personally, I find ‘bag toning’ to be awkward. Furthermore, I believe that beginning to intermediate collectors are often confused by it. Moreover, I prefer the blues, greens, and russet shades that are often found on 19th century silver coins of other denominations. While typical colors are usually not as flamboyant “bag” tones, natural colors on other 19th century silver denominations seem much more pleasing and historically important to me. Even so, I understand why many connoisseurs of U.S. coinage would desire to have at least one ‘bag toned’ Morgan in their respective collections. Bag toned Morgans are extraordinarily distinctive, and are fascinating in their own way.