News and Analysis regarding scarce coins, coin markets, and the coin collecting community #28

A Weekly Column by Greg Reynolds

On March 25, 2010, David Hall and Don Willis, the top officials at the Professional Coin Grading Service (PCGS), announced and explained the PCGS SecurePlus™ program, known for weeks before as “The Big One”! For most grades between EF-45 and MS-68 inclusive, the PCGS begin assigning plus grades when warranted, such as 45+ or 63+. As the rival of the PCGS, the NGC, incorporated plus grades into their system two months afterwards, and the PCGS later allowed for standard submissions to be eligible for plus grades, not just coins submitted via the SecurePlus tier, plus grades now seem to be a secondary aspect of the program. In my view, the emphasis should always have been, as it is now, on the ‘Secure’ aspects of the SecurePlus program, which are truly revolutionary and have tremendous implications for the future of markets in rare coins.

I hope that those who are not entirely familiar with the PCGS SecurePlus program find this column (part 1) to be very clear and educational. In my opinion, the explanation of the PCGS SecurePlus program on the PCGS website is not extremely clear and, over the past six months, I have found that many collectors are confused about this program.

Collectors who are already very familiar with the PCGS SecurePlus program, and with PCGS policies in general, may wish to wait for part 2, next week. In part 2, Don Willis, the president of PCGS, responds to my explanation and a proposal for the reform of PCGS submission policies is put forth. The views of John Albanese, Mark Feld and Ira Goldberg are included.

In the first section, I provide a definition of the SecurePlus program. In the second section, I explain the benefits of the coin identification part of the SecurePlus program. In Section III, I emphasize that submitters of coins to be graded by the PCGS may choose between the SecurePlus program and standard submission options.

I. The PCGS SecurePlus Program

The SecurePlus program brings three new technologies to coin grading. (1) The introduction of a new technology for scanning and coin identification, through the use of CoinAnalyzer devices that are produced by Richard Haddock’s CoinSecure firm. An image and data from each scanned coin is entered into a database, and, if the same coin is scanned at the PCGS in the future, it will be identified as a coin that was previously scanned.

(2) The use of ‘Sniffer’ technology to detect added foreign substances and changes in the surfaces, the metal, on coins that have been deliberately harmed by coin doctors for the purpose of deceiving experts and others into believing that doctored coins merit higher grades than were (or would have been) assigned before such coins are doctored. Additionally, the adding of metal to the surfaces and/or the deliberate heating of the metal on the surfaces of a coin will, hopefully, be detectable by ‘coin sniffer’ technology as well. The PCGS has already begun using ’sniffer’ technology to an extent, and will be phasing additional sniffer applications into the PCGS SecurePlus grading program over time. I will devote a future piece to coin sniffer technology. The subject is so complicated that it must really be treated in a long article.

To gain some understanding of coin doctoring and the urgent need to contain the coin doctoring problem, please read five previous pieces of mine. Last year, I devoted a series of three articles to the reasons why naturally toned coins are preferred and the topic of coin doctoring is discussed at length therein (part 1, part 2 and part 3). This year, I wrote two columns that address the PCGS lawsuit against alleged coin doctors, on June 3rd and on Sept. 8th. In these two columns, coin doctoring is defined, the lawsuit is analyzed, and the seriousness of the matter is emphasized.

(3) The third ‘Security’ issue relating to the PCGS SecurePlus program is the anti-counterfeiting technology incorporated into the new inserts. In each PCGS holder, there is a paper insert that provides information about the coin contained therein. A gold eagle with a shield is pictured on an insert in the PCGS holder that houses each coin that has been graded under the PCGS SecurePlus program. Unethical businesses in China have produced forgeries of PCGS holders with misleading grades printed on fake inserts. New anti-counterfeiting features are important, though less so than the coin identification and sniffer technologies that constitute the core of the PCGS SecurePlus program. (more…)

News and Analysis regarding scarce coins, coin markets, and the coin collecting community #27

A Weekly Column by Greg Reynolds

I. The Malibu Collection

In Baltimore, on Thursday, Nov. 4, 2010, B&M auctioned the ‘Malibu’ collections of Standing Liberty Quarters (SLQs), Liberty Seated Halves and Liberty Seated Dollars. Though I have a strong affinity for Liberty Seated coins, I will focus here on this collector’s Standing Liberty Quarters (SLQs), as his set of SLQs is phenomenal.

Since the collector who formed the Malibu collection wishes to remain anonymous, Malibu will be employed here as the code name of this collector and of his collections of specific series. All the Malibu collections auctioned in Novembers were of business strikes. In January, B&M will auction the Malibu collections of Proof Liberty Seated Quarters and Liberty Seated Halves, in Tampa, just prior to the winter FUN Convention.

II. Malibu SLQ Registry Set

Among the collections that Malibu has formed so far, the Malibu set of Standing Liberty Quarters (SLQs) is the most famous. In the category of “Basic” sets of Standing Liberty Quarters with Full Heads on Miss Liberty, the Malibu collection is the second “All-Time Finest” in the PCGS registry.

All of the quarters in Malibu’s set have a ‘Full Head’ designation from the PCGS, and the FH indicator is best referred to as part of the grade, though it is technically a designation that is considered separately from the numerical grade. An MS65FH SLQ is generally considered to be ‘of a higher grade’, so to speak, then an MS-65 grade SLQ of the same date with a weakly struck head, which is typical for most dates of SLQs. For some SLQ issues, only a very small percentage of those struck have a full head (FH).

In the PCGS registry, the Malibu Collection of Standing Liberty Quarters (SLQs) has a weighted grade point average of “67.92.” Relatively scarce SLQs are weighed more than relatively less scarce dates. The rules of the PCGS registry provide for “bonus points” that are awarded to SLQs with FH designations.

The sixth “All-Time Finest” Basic SLQ set in the PCGS registry was formed by Pat McInally, who was the lead punter for the Cincinnati Bengals during the football seasons from 1976 to 1985. In 1977, 1978 and 1980, he caught a significant number of passes. In the NFL, it is very unusual for a punter to also be a regular receiver. McInally’s SLQ set had a “Weighted GPA” of “67.59.” While “67.59” not nearly as high as the “Weighted GPA” of the Malibu SLQ set, “67.92,” it is impressive. Also, Malibu’s set is the #2 SLQ set in the NGC registry as well, though Malibu did not fully update his listing in the NGC registry and some SLQs that were just auctioned are not listed.

Both the PCGS and the NGC registries provide the most weight to the scarcest dates. Generally, the 1916, the 1918/7-S and the 1927-S are the queens of the SLQ series, closely followed by the 1923-S and then the 1921. The 1919-D and the 1919-S are very rare with a FH, but not rare without. The 1920-S SLQ issue is also relatively rare with a FH.

In the PCGS registry, the “Basic” SLQ sets do not include the 1918/7-S overdate, though the ‘variety’ SLQ sets do. It seems that, according to the PCGS, the 1918/7-S is the only ‘major variety’ in the SLQ series. In my view, the 1918/7-S is an overdate that has the status of a distinct date; it should not be referred to as a ‘major variety.’

In any event, Malibu’s set is ‘100% FH’ in accordance with the rules for ‘Basic’ sets of SLQs in the PCGS registry. The #1 SLQ set is ‘91.89% Full Head’ because three SLQs in the set, including a 1927-S, lack a FH. The Malibu SLQ set is thus the “All-Time Finest” in the PCGS registry that is ‘100% FH.’ Indeed, on the PCGS ‘all-time’ list of Basic sets of SLQs, the Malibu set is one of only five sets that are both ‘100% Complete’ and ‘100% FH’! (more…)

News and Analysis regarding scarce coins and coin markets #26

A Weekly Column by Greg Reynolds

The current topic is the W. L. Carson collection, which features Proof U.S. coins. It was auctioned by Stack’s in Baltimore last week. B&M also conducted a major auction in Baltimore, which included the Malibu Collection. Next week, I will discuss the Malibu Collection. This ‘Malibu’ collector formed one of the all-time best collections of Standing Liberty Quarters. He also had an excellent run of Liberty Seated Halves, as well as some important Liberty Seated silver dollars.

Some may wonder why I am focusing on collections rather than on the most expensive coins in these two auctions. I write about a wide variety of coins, not just expensive ones. For discussions of modestly priced coins, please see some of my recent columns: Advice for Beginning Collectors, The 1933/34 dividing line and Collecting Modern Coins.

Importantly, the most expensive coins in an auction are sometimes consigned by dealers or non-collecting speculators. In the grand scheme of the history of coin collecting, consignments from collectors (or the beneficiaries of deceased collectors) have much more significance than dealer-consignments. Moreover, collector-consignments tend to realize higher prices at auction, especially in instances where the coins consigned have been ‘off the market’ for seven years or more, and thus constitute ‘fresh material.’ Bidders become more enthusiastic about coins in very good collections than about coins that are consigned by dealers or entirely unknown parties. Noteworthy collections are central to the culture of coin collecting.

I. W. L. Carson Collection

Most (or all) of the coins in the W. L Carson collection have been ‘off the market’ for decades. This collection contained more than six hundred coins, including, but not limited to, early copper, circulated key-date Lincolns, and choice vintage commemoratives. The core of the collection, however, is Carson’s Proof sets dating from 1856 to 1915.

As best as I can tell, all of the pre-1916 Proofs in the Carson collection are PCGS certified. Most are PCGS graded and a large number have stickers of approval from the CAC, which approves or rejects coins that have already been graded by the PCGS or the NGC.

I hypothesize that Carson aimed to assemble Proof sets, from 1856 onwards, in copper, nickel and silver. Three of his sets included gold, 1888, 1906 and 1913.

Unfortunately, Carson’s level of knowledge was not great, at least not when he started buying Proof coins, and he bought some problematic coins, including non-Proofs that were probably represented to him as Proofs. I further hypothesize that he learned a good deal, received advice from an expert advisor and/or purchased many coins from honest, knowledgeable dealers, as he did obtain a large number of choice or gem Proof coins dating from the 1860s to 1915. Though Carson also had Proof sets dating from 1936 to 1942, and from 1950 to 1964, these are beside my discussion of the core of his collection. At the center of the core is a complete 1888 Proof Set.

II. 1888 Proof Set

Yes, W. L. Carson had a complete 1888 Proof Set, with copper, nickel, silver and gold coins. The Indian Cent is in a PCGS Genuine Holder. Carson probably did not know that it had problems when he acquired it. After all, other coins in the set are choice. (Coins that grade 63 or higher are termed ‘Choice.’ Coins that grade 65 or higher are gems.) (more…)