Goe said that he unsuccessfully bid on this coin at Heritage’s Pittsburgh ANA (American Numismatic Association) sale in August 2004. At that time, the coin was in an NGC MS-63 holder, designating that its grade (or condition) rated 63 out of a possible 70 points. Thirteen months later, in September 2005, at an Ira and Larry Goldberg Pre-Long Beach (Calif.) auction, this same coin (now upgraded to 64 points on the grading scale by NGC) failed to meet the consignor’s reserve price of approximately $400,000.

Market conditions have radically changed in the two-and-a-half-year period between the Goldberg’s sale in 2005 and now, said Goe. “Carson City gold coins are on more want lists than ever,” says Goe, “especially low-population examples.”

The 1871-CC (mintage: 17,387) is the second rarest date in the “CC” gold double eagle series, and Goe estimates that no more than 260 – 270 examples (not including damaged pieces) have survived. The combined population in all grades (number of coins professionally certified) between PCGS and NGC is 264, although Goe points out that resubmissions (repeat submissions) of the same coins account for a least a small percentage of that total. Only the 1870-CC date (only 3,789 struck) is scarcer. Goe says that no more than 65 to 70 examples of the 1870-CC date exist, and that the minimum price for a low-grade piece is $225,000.

In Mint State (or Uncirculated) condition the 1871-CC is extremely scarce, with none in this range graded by PCGS, and only five specimens listed in NGC’s census report. Of NGC’s Mint State total, two are listed as MS-60; two are MS-61, and one is MS-64.

Goe says that “CC” gold double eagles in general are extremely scarce in the MS-64 grade. Only six examples have received this rating (none higher) between PCGS and NGC (1 – 1871-CC, 2 – 1875-CC, 1 – 1876-CC, 1 – 1889-CC, and 1 – 1893-CC).

A combined original mintage of 864,179 coins spanned 19 dates (1870 – 1893, with none minted in 1880, 1881, 1886, 1887, and 1888) in the “CC” double eagle series, and Goe estimates that no more than 25,000 to 27,000 of the original total have survived. “When you contemplate these quantities and you realize that only six coins from this series are rated as high as MS-64, the rarity of such pieces as the 1871-CC boggles your mind,” reflects Goe.

He believes that this special coin will easily top the $1 million mark some day. This “will probably occur sooner than later,” predicts Goe.

Goe and his wife Marie own and operate Southgate Coins on South Virginia Street in Reno. Rusty Goe is the author of The Mint on Carson Street, and James Crawford: Master of the Mint at Carson City. He is the founder and president of the Carson City Coin Collectors of America.

Rusty Goe (mariesgate@sbcglobal.net)
Southgate Coins
5032 South Virginia Street
Reno, NV 89502
Phone : (775) 322-4455
Rusty Goe — Professional Numismatist and Carson City Coin Expert Contact Rusty Goe

Related posts:

1. Some Further Thoughts on Carson City Double Eagle Gold Coins
2. The Evaporation of the Premium Factor in the Carson City $20 Gold Coin Market
3. Carson City Double Eagles Gold Coins: An Introduction and Overview

The term coin dealer evokes about as many images as does the terms car dealer, hardware dealer, book dealer, or just about any other avocation with which the word dealer is associated. There is no one-description-fits-all for the label of coin dealer. Just as in any profession there are different degrees of separation between those coin dealers at the top of the competency chain and those at the bottom.

Consider for example the computer industry. If a person tells you he’s into computers; is he at the level of Bill Gates or Steve Jobs, or is he an assistant on the Geek Squad at Best Buy? Likewise, when you consider 2008’s crop of presidential candidates, do Barack Obama, Hillary Clinton, John McCain, Mitt Romney and Mike Huckaby seem to be on equal footing with Dennis Kucinich, Mike Gravel, Fred Thompson, Ron Paul and Bill Richardson?

So it is in the world of professional (or semi-professional) coin dealers. Some are front-runners, some are consistently solid performers who will always deliver, but never sit on top of the heap, and some are perpetual wannabes.

In this vast universe of coin dealerdom, there are no stringent rules determining who can claim membership. There are no tests administered to see if a person qualifies, nor are there licenses one must obtain to be accredited. It’s simply a matter of announcing to the world that you are now a coin dealer. And, as far as anyone is aware, these self-appointments are for life. Once you claim dealership status you can include it on your résumé for as long as you so desire?even if other members of the dealer fraternity refuse to recognize your stature.

If you are familiar with the old adage “you can’t tell the players without a scorecard,” you might appreciate the following characterizations of different categories of coin dealers. Please keep in mind that it is impossible to pigeonhole every type of coin dealer and that this brief study in no way encompasses every category under the sun. For instance, my focus will be primarily on dealers specializing in the U.S. coin market, although many of them do cross over into the foreign coin market. I think it’s safe to say that demand for U.S. coins is greater than that of any other country’s coins. Although, if the Chinese, with their enormous population, get bit by the collecting bug, gold miscals, silver taels, and panda yuans could give U.S. Indian gold pieces, Morgan silver dollars, and Buffalo nickels a run for the money.

Old-Line Coin Companies

Throughout the first seven decades of the twentieth-century a collegiality of influential coin dealers practically dominated the market in the United States. They used their own names, or simply their surnames, or occasionally a catchy adjective for the names of their businesses. The most prominent dealers among these old-line firms conducted auctions as one of their many services to clients.

Coin grading, not nearly as intricately evolved as it became in the last two decades of the twentieth century, took a backseat to other aspects of a dealer’s repertoire. Background information on every coin minted in the U.S. was essential. Memorization of mintages, proficiency in pedigree information, knowledge of rarity factors, familiarity with varieties, and a keen awareness of current and historical coin values were foundational elements of a dealer’s expertise.

For the most part, these dealers showed up to work every day wearing suits and ties. They displayed a professional and courteous deportment and generally catered to their customers’ needs. Although travel factored into their business schedules, these dealers concentrated their efforts in their own backyards. The strenuous national coin show circuit had not as yet emerged.

A handful of these prestigious rare coin companies survived into the final decades of the twentieth century. More often than not, the founders of these firms had passed into the next life, leaving their operations in the hands of their descendents. In some instances, only the firm’s name survived, with no family members involved in the business at all.

The descendents who carried on these families’ traditions acquired new skills never imagined by their ancestors, such as Internet technology and a more highly sophisticated system of coin grading. New collectors entering the hobby in the first decade of the twenty-first century are often unaware that these descendants are not the original owners of these old-line firms. Yet commonsense suggests that if a company boasts of being in business for seventy to eighty years, the founder or founders are probably long gone. With the exception of one or possibly two of these “dinosaur” coin companies, which originated in the first half of the twentieth century, none of the rest has survived, unless you include one or two that remain in name only.

Modern-Age Dealers?The Industry Giants

From the legacy left by the old-line coin companies has emerged a plethora of dealer categories, almost as diverse as the types of coins available to collectors. There is one mega-company, which if it continues its exponential growth, could produce gross revenues equal to all of the other coin dealers combined. This is due in large part to the large percentage of this company’s revenues which is derived from its diverse auction business.

Another firm, which emerged in the late 1960s and early 1970s, might resemble as much as any the family dynasties from the old-line companies. Whether its founder’s descendents will maintain the dominant position it experienced in its niche market for more than three decades remains to be seen.

High-Profile Independents

Securing a healthy segment in the next position on our descending scale are the highly visible dealers with annual revenues of $50 million to $100 million (or more in some cases). It appears as if the majority, if not all of these dealers, are backed by wealthy individuals or investor groups. These dealers, for the most part, are knowledgeable in their fields of expertise, but obviously hold significant advantages over their less fortunate peers because of the seemingly bottomless wells of capital at their disposal. They are in many ways living every coin collector’s dream by having access to blank signed checks allowing them to purchase whatever rarities their hearts desire.

Then there are the upper echelon independent dealers whose annual revenues at times approach the levels achieved by the highly visible dealers backed by large infusions of cash. These very successful independents can be classified into two categories: old wave and new wave. Dealers in the old-wave group made their bones during the 1960s and 1970s, and have maintained their status as key players to the present date. The new-wavers emerged in the 1980s and 1990s and have risen like cream to the top in the more sophisticated market environment fueled greatly by the Internet. Old- and new-wave upper-echelon independent dealers are seen at most major coin shows, generally operate out of an office, service a diverse clientele, maintain inventories valued between $2 million and $10 million (in 2008), are usually experts in one or more series of coins or currency, possess sufficient to superior grading skills, and utilize advertizing to promote themselves in trade periodicals, as well as hosting their own websites.

The Coin Shop Owners

Coin shop owners represent another segment of the dealer community. These independent operators are found in hundreds of cities across the country. Some of them run small mom-and-pop operations, with gross annual revenues of between $100,000 and $1,000,000. While others joined in either partnerships or perhaps employing larger staffs, maintain a sizable market presence. Coin dealers that operate shops can offer a wide variety of services to collectors, including want-list researches, providing appraisals, purchasing collections, and education in basic fundamentals. A small percentage of coin shop owners set up at shows as well.

Since there are no exams administered to determine a person’s qualifications, anyone can operate a coin shop, or declare himself to be any kind of coin dealer for that matter. Thus, you will encounter some coin shop owners who barely know more (or sometimes less) about the hobby than the collectors frequenting their stores. On the other hand, many coin shop owners are advanced numismatists and possess a vast wealth of knowledge, as well as acumens in categories such as coin grading, rarity identification, investment counseling, and research work.

While a large segment of the coin collector community will rarely, if ever, encounter dealers in some of the other categories described in this article, most, if not all collectors will come into contact with a coin shop owner at one point or another. Coin shop owners are in many ways the links between collectors and the hobby.

The Telemarketers

Another category of coin dealer is the telemarketer, a rather pervasive segment of the industry, which includes the boiler-room salesperson who is hawking numismatic items at exorbitant prices, and the operator of a huge and sophisticated sales force, whose prices are not necessarily considered fraudulent, but whose high-pressure marketing tactics could easily be construed as unethical. There are a handful of rather large and elaborate telemarketing companies that sell millions of dollars of rare coins every year. And while not all members of these firms’ sales staffs can be considered coin dealers in the strictest sense of the term, there is usually at least one recognized numismatic authority connected to the company.

There are some in the dealer community who extol the telemarketers?at least the so-called legitimate ones?for the large volume of coins they sell each year. Yet, while it might be true that this stimulates the coin market, the dynamic tension created by the propaganda employed by many telemarketers is cause for concern. Sales pressure and frivolous claims should never be used to coax potential retail customers to purchase rare coins. While caveat emptor is the battle cry proclaimed by telemarketers to justify their questionable methods, collectors should be educated and never be forced into situations in which they must beware of their decisions.

The Advertisers

Still, there is another group of coin dealers of which collectors must be on guard. These are the “advertisers,” who year in and year out saturate numismatic periodicals with multi-full-page ads, featuring what appear to be great deals on coins. The problem is, the majority of the time, buyers do not receive coins in the grades advertized. For example, a silver dollar might be described as “Brilliant Uncirculated,” when in reality it is what is referred to in the hobby as a “slider.” In other words, a coin in Almost Uncirculated condition, which has probably been dipped in a solution to make it appear brighter.
These “advertisers” don’t sell coins which have been certified by top-tier third-party grading services, such as PCGS and NGC?at least not many such coins. Instead, they sell “raw” or uncertified coins, for which they can employ their own subjective?often very liberal?grading standards. Yet their ads appear like clockwork year round and constitute a major portion of numismatic periodicals’ advertizing revenues.

How do these dealers survive, you ask, especially in an age of more sophisticated grading practices? There’s a slithery loophole that allows them to continue foisting their brand of hucksterism on an unwitting public. As long as a return privilege is offered on every over-graded, misrepresented item they sell, the “advertisers” are free to do as they please. Once again, caveat emptor is invoked, placing the burden of responsibility on the collector. And, there must be enough susceptible people out there, since there appears to be no subsiding of these kinds of ads in the numismatic press.

The Graders

While you will probably not see the “advertisers” submitting large groups of coins to the third-party grading services, our next category of coin dealers thrives on this practice. These dealers are referred to as the “graders,” since their modus operandi is to get as many coins graded at either of the two (PCGS and NGC) grading services as possible. They scour bourse tables at coin shows and travel from coin shop to coin shop across the country searching for coins which might be undergraded, for the purpose of scoring upgrades upon resubmission. The most talented of these “graders” generate big profits at times and consistently bang out good livings.

They sell to other dealers for the most part, as they are not usually interested in cultivating relationships with retail clients. After all, this might consume too much of their time, which would be better spent looking for more coins to submit to the grading services.

The Coin Doctors

A subset of the “graders” group is a category known as the “coin doctors.” These dealers employ many of the same strategies as the “graders,” as they are constantly searching for more coins to submit to the grading services. Yet, their techniques diverge from those employed by the “graders,” primarily because of their practice of altering the surfaces of coins in an attempt to outfox the grading services.

These “coin doctors” will apply artificial toning to cover hairlines and abrasions on coins; they will use putties and other substances to conceal wear or fill in nicks or gouges; and they will rub the oil from their noses or foreheads across the surface of coins to hide contact marks.

Supposedly, as the grading services have gotten wiser, the coin doctors have grown less successful. There is no quantifiable way to prove this however, but one thing is certain, these quick-change artists have left a slagheap of artificially enhanced coins in the marketplace.

The Authors and Experts

A small percentage of coin dealers have carved out niches in specialized areas of the hobby and comprise the next group on our list, known simply as the “authors and experts.” Members of this category have emerged from any of the other aforementioned categories, having developed a penchant for their area of expertise. They write books on their favorite subjects, many of which become recognized as the foremost authoritative references in their respective categories. Most writers and experts are actively engaged in trading numismatic items, although some are simply observant bystanders. Those that do deal in coins for a living, often have keen insights from their experiences in the trenches to share with their readers.

It appears as if there has been a proliferation of numismatic literature published over the past decade. This is welcome news for members of the coin collecting community, especially those interested in furthering their numismatic education. The dealers who write books are making a lasting contribution to their hobby.

The Vest-Pocket Dealers

Before a person becomes a full-fledged coin dealer he or she will often transition from the collector ranks to a part-time participation in the business, known as a vest-pocket dealer. The term stems from the inference that such a person maintains a portable store, carrying his inventory in his pockets so to speak, rather than operating out of a bricks and mortar location. Many vest-pocket dealers have tried and failed; but a small percentage of them have passed the test and entered into respectable full-time status.

The Cyber-Dabbler Dealers

As the Internet has pervaded our culture, increased numbers of what might be referred to as “cyber-dabbler dealers” have emerged. Online auction platforms such as eBay offer these “cyber-dabblers” the ultimate in portable peddling, and require much less accountability than is required from the face-to-face transactions conducted by their counterparts, the by vest-pocket dealers. Only the future will reveal how rampant these Internet numismatic novices are. One thing’s for certain, buyers pursuing coins in these online auctions will need to be doubly sure of whom the sellers are.

Conclusion

In conclusion, I want to remind you that this brief sketch does not encompass every category of coin dealer. For instance, I could have mentioned the coin brokers; individuals that never own inventory, but simply act as mediators between two parties. And then, there are the employees of large firms, who often begin as novices and gradually move up the ranks to become distinguished coin dealers in their own rights. Sometimes, they even branch out and start their own companies.

Finally, I would be remiss if I didn’t make a passing comment about the principles and the graders at the third-party grading services. For the most part, these individuals came from one or more of the categories aforementioned (some are still active in their respective categories, while others are committed to only working for their third-party grading company). They are proficient in one of the integral components of coin collecting: grading.

In theory, these third-party graders exist to keep honest the players in all the other categories mentioned in this article?In reference to accurately rating coin conditions, anyway. And while the two major services (PCGS and NGC) have been commendably successful in their mission, there is no better advice for any collector to follow than, “know your dealer.”

I hope this top-to-bottom glimpse into the world of coin dealers has been enlightening and that you will be better equipped to evaluate the ones with which you choose to do business.

Rusty Goe (mariesgate@sbcglobal.net)
Southgate Coins
5032 South Virginia Street
Reno, NV 89502
Phone : (775) 322-4455
Rusty Goe — Professional Numismatist and Carson City Coin Expert

Related posts:

1. New dealers join MA-SHOPS and expand its extensive offering
2. PCGS’ Paris Office Grand Opening: Dealers Praise Easy Access to Coin Grading
3. What’s It Worth? How dealers determine the value of a Rare Coin.

Most of the coins and pieces of paper money which will find their way under the Christmas tree or next to the Hanukkah menorah will not be the break-the-bank variety. Yet, some fortunate numismatists, perhaps in the Bill Gates or the Oprah Winfrey families, just might be surprised by an extremely valuable coin or two presented to them by a generous relative.

In the case of the less expensive category of numismatic fare, the concern over price versus value is not a major concern. This is not to say that purchasers of low-priced hobby items in the under–$100 range, for instance, welcome getting ripped off. After all, it’s only human nature to desire good deals during shopping experiences. No one would argue this point. But it understandably requires significantly more contemplation to decide if a coin priced at say, $50,000, offers good value, than it does to decide if a $50 coin is worth the money. Either way, the purchaser doesn’t want to overpay. But, the risk of this occurring obviously increases as costs rise.

Yet, before we even reach the point of decision when purchasing collectibles such as coins, we might ask how the values are determined in the first place. How are prices established and who is involved in this process? First, it must be pointed out that the dynamics involved are complicated and cannot be capsulized or put into a nutshell. As tangible as these collectible assets might appear, evaluating them requires many intangible considerations. Coins and other collectibles are not, for instance, similar to staples of life such as food and clothing. College marketing students, for example, quickly learn the fundamentals involved in producing, pricing, and promoting consumer goods. Established guidelines used to bring products to market are universally employed by businesses around the globe. It is a relatively simple task to calculate the costs of raw materials, manufacturing, and marketing, and add on a standard mark-up to determine the retail price of most consumer goods. But with coins, it’s not so straightforward.

In the first place, with the exception of modern gold, silver, and platinum issues tied to the spot price of precious metals, the cost of raw materials isn’t factored into the price of most coins. And obviously, there are no manufacturing costs involved, since the coins are already in existence. There are, however, marketing costs factored into the prices of rare coins, which can fluctuate from one seller to another. And, of course, acquisition costs are part of the equation, unless the seller received his coin or coins as a gift, that is. Yet, long before sellers determine what a fair rate of return would be for their holdings, price histories of their particular coins are usually reviewed. But what do these price histories reveal?

Well, in simplest terms, price histories are just what the term implies: a compilation of prices which collectors have paid in the past for the coins in question. Extending as far back in time as existing pricing data allows, we can trace the earliest prices paid for these coins. At one point in history even the rarest coins traded for prices very close to their face values. As unfathomable as this might seem to collectors in the early years of the twenty-first century, who have observed coins selling for hundreds of thousands or even millions of dollars, these mega-rarities once traded for fractions of the prices they sell for today.

Yet, regardless of whether a rare coin once sold for a mere double or triple its face value, or if it brings $1 million in 2007, someone, somewhere, had to set the price, and someone else?the buyer?had to agree with that price. But what criteria does the one who sets the price use in his evaluation of a coin? If we could crack this code we could perhaps remove much of the mystery surrounding the prices of rare coins.

Unfortunately, there are no set rules governing the dynamics of coin pricing. If there were, then buyers and sellers might possibly always agree, and price resistance would vanish.

Let’s examine the price history of one of the classic rarities in U.S. numismatics, the 1913 V nickel, to illustrate several ambiguities inherent in evaluating rare coins.

We are told that at least one employee at the Philadelphia Mint in late 1912 or early 1913 (perhaps Storekeeper-Clerk Samuel W. Brown or Chief Engraver Charles E. Barber, or both), arranged to have five 1913 V nickels struck, even though 1912 was the last year of issue for this design. Subsequently, in December of 1919, Samuel W. Brown, who had retired from the mint six years earlier, placed a series of ads offering to pay $500 for a 1913 V nickel. Of course, at that time he alone (perhaps there were co-conspirators) knew of the existence of these coins. To the rest of the collecting community the only nickels dated 1913 displayed the Indian and the bison. A few months later, Brown upped his offer to $600 per piece, and later that same year (1920) he exhibited one of his 1913 V nickels at a national coin convention.

Though not a single example of these mysterious coins had ever traded hands (at least to anyone’s knowledge), Brown had elevated their value from five cents to six hundred dollars?Their perceived value anyway. Yet even this value was not etched in stone. For in 1923 and 1924, a Philadelphia coin dealer named Augustus Wagner advertised the five nickels for sale, but apparently did not sell them for his reported asking price of between $400 and $500 apiece. At this time, another coin dealer, named Stephen K. Nagy, reported to have been involved with the nickels from the beginning, sold all five of them to Edward H. R. Green, the boorish, freewheeling son of the “Witch of Wall Street,” Hetty Green. Mr. Green (or Col. Green to some people) died in 1936 and noted collector Eric P. Newman subsequently purchased his five celebrated nickels in 1941 for an approximate average price of $400 apiece.

Did Mr. Newman pay a fair price for the nickels? No one could have known for sure since the coins had not exchanged hands often enough to gauge their market value. During the next few years Newman’s purchase prices for the nickels proved to be bargains, as one of the highest quality specimens traded for $900 in 1942, escalating to $3,750 in 1947. Another piece, considered to be inferior in quality compared to the finest specimens, sold for $1,000 (or $2,450 depending on the source) less than a year after Newman purchased it, and then for $3,750 around 1945.

These early transactions paled in stature compared with sales yet to transpire over the next six decades. After a rather lackluster period from 1945 through the mid 1950s, in which the price level for 1913 nickels struggled to break the $4,000 barrier, market exuberance catapulted the value first to $25,000, and then to the $40,000 to $50,000 mark by 1961.

Collectors apparently had difficulty in assimilating this sudden surge in value, however, as one of the more publicized examples failed to meet the consignor’s reserve price of $50,000 at an auction held in Los Angeles in March 1961. But, who really knew if this reserve price was too steep? It’s not as if someone could have looked up the price of 1913 V nickels in a coin values guide similar perhaps to the Kelly Blue Book for automobiles. Oh, there were price guides for coins to be sure; but none of them in 1961 ventured so much as an estimate as to how much a 1913 V nickel was worth. The only citations found in either of the two most popular price guides of that era informed readers that only five 1913 V nickels existed. So it was left up to numismatic experts and advanced collectors to determine the values of recognized rarities such as 1913 V nickels.

Six years after the unsuccessful auction attempt to sell one of the higher condition-rated 1913 V nickels, Nebraska coin dealer Aubrey Bebee chunked down $46,000 to purchase the poorest quality specimen. Two years later, in 1969, Bebee rejected an offer of $75,000 for his nickel. Three years after that, in 1972, the specimen which had failed to bring $50,000 in the 1961 auction, gained notoriety for being the first coin to ever sell for $100,000. Five years later, in 1977, this same piece sold for $200,000 and subsequently fetched $350,000 in 1985, $962,500 in 1993, $1.84 million in 2002, and a staggering $3 million in 2004.

Considering that ninety-one years earlier, the aggregate value of all 1913 V nickels in existence was twenty-five cents, the prices paid by collectors to own just one example over the past nine decades are incomprehensible, to say the least. I think it’s fair to say that no one, at any point along the way, could have predicted what these coins would eventually sell for. Although, credit must be given to World-Wide Coin Investments, Ltd., of Atlanta Georgia, the company that purchased the $100,000–specimen in 1972, for having prophesied way back then that 1913 V nickels would eventually bring $1 million. World-Wide Coin was just a little off in its projection of when this would occur, however, as it suggested that the million-dollar mark would be reached by 1980, when in fact, this did not happen until 1996 (It came close in 1993 with the $962,500 price realized).

Along the way, two 1913 V nickels were forever removed from the market; when the Norweb family donated their prized specimen to the Smithsonian Institution in 1978, and Aubrey and Adeline Bebee presented their piece, purchased for $46,000 in 1967, to the American Numismatic Association in 1989. The whereabouts of a third example, known as the Walton specimen, remained unknown for decades. And then, in 2003, in response to a massive media blitz focused on 1913 V nickels, the heirs brought this specimen out of hiding, triggering a fireworks explosion of publicity when it was displayed with the other four specimens at an ANA convention in Baltimore. As far as anyone knew, this was the first time the five nickels had been together in one place since 1942. Although hounded by auction companies, the heirs of this heretofore-missing specimen announced that it was not for sale. Even if it was, who could tell the heirs unequivocally what their coin was worth?

Throughout the long history of evaluating rare coins this has always been a challenge (Please keep in mind that we are talking here about truly rare coins, not those common issues passed off as rarities by home shopping networks, and by deceitful telemarketers). An incisive case in point can be illustrated by continuing the saga of 1913 V nickels.

During the latter half of 2006, the collector community buzzed with eager anticipation over the announcement that the finest known example of a 1913 V nickel would appear in an auction in early January 2007. This piece, reverently referred to for decades as the Eliasberg specimen, held the distinction of being the first coin to ever sell for $1 million, when an auction buyer paid $1.485 million for it in 1996. Within seven years it traded hands a couple times, more than doubling its value from 1996. Then, in 2005, it set yet another price record when Washington-state businessman Bruce Morelan acquired it for $4.15 million. After a year of ownership, Morelan felt it was time to pass it on to the next collector (He had previously owned the specimen which had failed to meet the consigner’s reserve of $50,000 in 1961. Morelan paid $1.84 in 2002 for that one.)

The question was, what kind of reserve would Morelan place on his prestigious consignment? Of foremost consideration was the $4.15 million investment he had in the coin. Knowing that by the time he received payment from the auction company he would have owned the nickel for one and a half years, he needed to calculate the time value of his money. At a simple six percent rate of interest over a period of eighteen months, $4.15 million would earn approximately $375,000, which would bring the break-even total to $4.525 million. Then, of course, Mr. Morelan expected to earn a profit above that amount, and in the rapidly evolving bull market in rare coins, this seemed like a no-brainer. A reserve price of $5 million was set, and no doubt the auction company (Stack’s) afforded Morelan other special-client comps for the privilege of handling such an illustrious coin.

No doubt, Morelan and Stack’s had their sights set on a much higher price realized anyway. The five-million-dollar reserve would serve only as a catalyst for loftier bids to transpire. It was not as if there were no precedents for numismatic items exceeding the $5-million barrier. After all, a 1933 $20 gold piece had sold for $7.59 million in 2002 and there were rumblings that certain coins could possibly bring $10 million to $15 million if offered on the market.

In some ways, the pre-sale hype focused on Mr. Morelan’s nickel, was reminiscent of the auctioneer’s publicity campaign for the 1913 V nickel that did not meet the consignor’s $50,000 reserve back in 1961. In that sale, the cataloguer declared that from all inclinations, the nickel would in all probability exceed the $50,000 mark. But, as you are now aware, the coin was not destined to break that barrier at that time.

With cameras rolling and news reporters standing by, Morelan’s nickel hit the auction block. Euphoria suddenly dissipated into disenchantment as the auctioneer closed the bidding, with not one person willing to raise his paddle for the $5 million reserve price (the total price would have actually been $5.75 million after the auction company’s 15 % commission was factored in). Once again, the coin market, as represented this time by auction participants, did not agree on the price asked for an unquestionable rarity. Would someone have paid $4.5 million (plus the buyer’s fee) for the nickel? Probably. How about $4.75 million? Maybe. But why not $5 million? Who knows? Who in that crowd of numismatic experts attending this auction could have emphatically declared that Morelan’s 1913 V nickel was not worth $5 million, or $5.75 million, or even $6 million?

These same questions are applicable for any rare coins, not just those of the million-dollar variety. Time after time, collectors have rejected a rare coin based on price resistance, only to regret their decisions later on when the coin is no longer available, or when the coin’s price rises high above the original asking price. This is not meant to imply that collectors should remove all restraints when faced with purchasing decisions. The 1913 V nickel offered at auction in 1961, for example, might not have been worth $100,000 at the time, but certainly $50,000 or even $60,000 seems reasonable, especially for well-heeled collectors who might have been interested. Of course, we have the advantage of hindsight when evaluating coin prices from the past which often makes us seem like experts, at least in our own minds.

Yet, regardless of what we might learn from evaluating price histories, there is one essential lesson that can be taught from reviewing collector experiences from the past. Ownership is key. In other words, those collectors that owned the choice rarities that we all drool over today, are the ones that reaped the dual rewards of pride of ownership and profiting from their passion. But ownership often requires stepping out and paying in excess of what everyone else is willing to pay. To reiterate, this only applies to the rarest, most desirable coins, the coins that are only offered infrequently, the ones that every collector would love to own. You need to make sure that you know which coins this refers to before you follow this advice.

Noted collectors from the past knew what these coins were and only the most resolute ones acquired them. Still, even the most successful numismatists have experienced lock-lobe at times, refusing to pay another dollar for a rarity which they so desperately desired. In the event that this happens and the collector gets a second chance, usually the mistake is not repeated, and he gladly pays whatever the cost.

The truth is, no one really knows what a truly rare coin is worth. You can speculate, you can perform mathematical analysis, you can compare price histories, you can consult an expert, and you can refer to price guides. Yet, regardless of which method you employ, in the end you will never get a clearer answer to the question regarding the value of a rare coin than this: A rare coin is worth whatever price a seller and a buyer agree on. What might seem like exorbitant prices today might cause collectors ten years from now to turn green with envy.

In light of all the choices from every category of collectibles which are available to hobbyists, few seem to offer more value than rare coins and paper money. Stamps, art, old comic books, old movie posters, old LPs, old dolls, old baseball cards, Old West memorabilia, old bottles, old firearms, and old casino chips all attract serious enthusiasts. Yet none of these fields appear to have the following that rare coins do. This trend seems destined to continue for as long as people have a passion to collect things and have money to purchase them.

This is one of the primary reasons why press releases about the sales of expensive coins will always find sufficient space in headlines, both in print and online, and will always receive adequate coverage on TV news broadcasts. Bruce Morelan is no stranger to such publicity. Witness for example the sensational coverage of his firm’s (Legend Numismatics) recent brokering of a $30,000,000 rare coin deal.

And, whatever became of his 1913 V nickel which failed to meet his reserve price in the January 2007 auction? Apparently, a Southern California collector, who may or may not have participated in the bidding, could not get the coin out of his mind and wound up paying $5 million for it three months after the auction in a private sale. So Morelan managed to sell the second 1913 V nickel pedigreed to him, recover the interest on his investment capital, and still earn a tidy little short-term profit. Curious observers will be eagerly waiting to see if he might buy one of his 1913 V nickels back in the future. And, the new owner of the rarest nickel in the world will be waiting to see if perhaps the next stop for the coin might be at the $10-million level.

Meanwhile, all of us bystanders will be trying to figure out what this coin is really worth. But will anyone other than its owner ever know its true value?

Author of this article: Rusty Goe
For more information about the rare coin market please contact Southgate Coins in Reno, Nevada, at (775) 322-4455. Ask for Marie or Amy. For information about the Carson City Coin Collectors of America club, please visit www.c4oa.blogspot.com.

Rusty Goe (mariesgate@sbcglobal.net)
Southgate Coins
5032 South Virginia Street
Reno, NV 89502
Phone : (775) 322-4455

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It would indeed be difficult for a person outside the hobby of coin collecting to comprehend why anyone would pay so much for small discs of metal, with numbers, letters, and images imprinted in relief on them. Those individuals inside the hobby view the upward trend in prices as a long overdue phenomenon. For it has always been acknowledged by those who call themselves numismatists, that rare coins tend to appreciate in value over time. But for a period of approximately twelve years, between 1990 and 2001, the faith of these diehard coin collectors was severely tested. Now, however, their patience has been rewarded, and rare coin prices are ascending at a rate comparable to Alex Rodriguez’s rising popularity. But why is this occurring? What awakened the sleeping coin market out of its decade-long slumber? There are reasons; and in this brief report I will mention the most significant of them.

From 1990 through 2001, the rare coin market, also referred to as the field of numismatics, experienced a severe bearish environment, which resulted in plunging values, tapering off into a lengthy plateau period, in which coin sales were sluggish. The recent rebound, which began around 2002, is a normal cyclical reaction to this bear market. Prices had declined to the point that many buyers who had been sitting on the sidelines decided that the deals were too good to pass up. This, along with a variety of factors, triggered the market we are now experiencing. Here are a few of the more obvious causes to consider:

1.Combined with the market turnaround in the early years of the new millennium, was an influx of new collectors who were at first attracted to the statehood quarter program launched in 1999, as well as the massive advertising campaign conducted by the U. S. Mint showcasing its huge offering of individual coins and sets.

2.Publicity about the sales of a few classic rarities such as the 1913 Liberty nickel, the 1804 silver dollar, and the 1933 $20 St. Gaudens gold piece, also aroused much interest during this period.

3.During the past five or six years, there has been a broad wave of interest shown in collectibles in general, almost as if Americans have rediscovered the joy of collecting things, some of which are quite expensive (Witness In 2004, for example, the sale of Eric Clapton’s “Blackie” guitar which sold for $959,500). Rare coins just happen to be one of the main areas targeted in this recent wave of collector-mania.

4.Coinciding with the renewed interest in coin collecting has been an emphasis on the investment aspect inherent in this field. This has attracted a large number of individuals who have grown more disenchanted with more customary investment mediums such as stocks and bonds. These invested-oriented individuals for the most part have learned the finer points of coin collecting, and are typically relying on the advice of experienced numismatic consultants.

5.Fueling this interest in rare coins as investments has been the hidden rise of inflation as witnessed in higher oil prices, as well as higher prices of other commodities. Gold, silver and platinum are beneficiaries of this kind of economic environment, and rare coins have always performed well when the price of precious metals is on the upswing.

6.One key factor intermingled with all of the above is the large number of Baby Boomers controlling vast amounts of capital (some estimates putting this aggregated wealth at $16 trillion). This generation is the wealthiest generation in history, possessing more discretionary cash than ever imaginable. After they have put their kids through college, paid off their mortgages, and provided for the care of their parents, they find themselves with loads of money to spend as they please—At least many do. There are only so many things on which people can spend their disposable money: vacations, second (and third) homes, entertainment, hobbies, etc. It appears as if under the hobby category, rare coins are attracting a lion’s share of the loot. Many of the Boomers, who at earlier periods of their lives, dabbled in coin collecting, are now returning to the hobby. This time not with penny albums and inexpensive Proof sets on their want lists, but rather the rare dates they once could not afford. This has resulted in tremendous demand placed on legitimate rarities.

7.The best part about this new bull market is that collectors desiring truly rare coins—rather than just the common dates and generic brands which so dominated the last bull market in 1986 through 1989—are driving it. Today’s collector, for the most part, is savvier than was his counterpart of fifteen to twenty years ago. And today’s collector has the collective strength of mature grading services (PCGS & NGC), almost assuring that no major purchasing mistakes will be made, at least as far as the grades are concerned. Not to mention the wealth of information available on the Internet.

8.You can’t emphasize the point about collectors rather than investors dominating the current market enough. This removes a certain element of volatility from the coin market since in many instances the end users, so to speak, are not influenced by the fickleness so often prevalent in investors.

As long as the conditions described above remain in place, the bull market in rare coins appears to be unstoppable; at least for the foreseeable future. Even if Baby Boomers earmark just a fraction of the $16 trillion they possess for coins, the market should remain well capitalized. And, then there’s always the possibility that the coin-collecting bug will bite Generation Xers, which would certainly vitalize an already robust market: especially when members of this generation begin receiving their inheritances from their Boomer parents.

We can summarize the above conditions as follows: Recovery-cycle dynamics, publicity-inspired interest in coins in general, a shift from securities-based investments to tangible asset investments, affluent Boomers returning to their childhood passions, and savvier, more protected collectors in the marketplace.

Rusty Goe is a rare coin consultant and the owner of Southgate Coins in Reno, Nevada. He has authored two full-length books on the subject of the Carson City Mint and the coins produced there. For more information concerning the rare coin market, liquidation of rare coin portfolios, “CC” coins, or scheduling interviews with Rusty Goe, please contact Southgate Coins at 5032 S. Virginia St., Reno, NV 89502, or by phone (775) 322-4455, or email to mariesgate@sbcglobbal.net. Please ask for Marie or Amy.

Rusty Goe (mariesgate@sbcglobal.net)
Southgate Coins
5032 South Virginia Street
Reno, NV 89502
Phone : (775) 322-4455

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“It is one of only 18 or 19 examples known,” says Goe and it “is one of the most celebrated coins in the history of coin collecting in the United States.” So, why is this particular coin so special, and what makes it so valuable? The answer to both questions says Goe, is “the increasing popularity of the Carson City Mint.”

Collectors are obsessed with coins from this legendary Nevada mint, primarily says Goe, because there are just enough of the coins to make a game of it, but not so many as to ever flood the market. Additionally, the Carson City Mint operated during what is referred to as America’s Gilded Age, evoking romantic sensations of nostalgia.

The mint is also associated with Nevada’s historic Comstock Lode, one of the greatest mining discoveries of all time, and also the Old West era, with its images of stagecoaches, Ponderosa ranches, Mark Twain, and gunslingers.

Goe operates Southgate Coins in Reno, Nevada, located just one half hour from the site of the old Carson City Mint.

The historic building was purchased by the state of Nevada in 1939 and converted into a museum which opened in October of 1941. Colorful and interesting artifacts from Nevada’s past are always on display, including some of the most valuable Indian baskets in existence, and a re-creation of mining operations from nearly 140 years ago.

Tops on visitors’ lists of exhibits to view are the old coins on display, including one extremely valuable set consisting of 109 examples of the 111 different date/denomination combinations produced at the Carson City Mint. Goe estimates the value of this particular set, which was originally assembled by Nevada legend Norman H. Biltz, at $3 million.

It would be difficult for a collector today to replicate this set, says Goe. “Even if a person had all the money in the world,” says Goe, “the coins are simply not available.”

Occasionally one of the rare issues appears in an auction, like the 1876-CC twenty-cent piece mentioned earlier, but “the opportunities are far and few between,” says Goe. This is what gives “thrill to the hunt,” according to Goe.

Lack of availability, though discouraging to collectors craving to fill in their collections, also “adds to pleasing satisfaction when the conquest is finally made,” says Goe. “I have clients who have had many of these coins on their want lists for years,” says Goe. “I tell them to remain patient and in the meantime enjoy the coins already in their possession.”

Every time one of these “CC” rarities crosses the auction block, the value of the Nevada State Museum’s collection increases in value. We asked Goe if the museum owned an 1876-CC twenty-cent piece in its collection. “Yes it does,” answered Goe; “in fact, it is one of the finest specimens of this date known to exist.”

Goe says that the former owner of the coin, Norman Biltz, who died in 1973, purchased it at an auction in 1966 for $12,750. Biltz would undoubtedly have been skeptical says Goe, “If someone had predicted in 1966 that forty-one years later the coin would be worth $300,000 or more.” Actually, reflects Goe, the coin is probably greatly undervalued even at today’s price level, when compared to other rarities in the field of coin collecting.

“The 1876-CC twenty-cent piece will definitely be a $1 million coin in the not-too-distant future,” predicts Goe. The way “CC” coins are skyrocketing in value, according to Goe, other dates from this mint will also be included in the “Millionaire Club,” which already boasts of a rare dime dated 1873, which Goe says he sold for seven figures in 2004.

High resolution images of rare “CC” coins and other items related to the topic are available upon request. Rusty Goe may be reached for interviews or book signings by contacting Marie Goe at 775 322-4455, or email at: mariesgate@sbcglobal.net

Rusty Goe (mariesgate@sbcglobal.net)
Southgate Coins
5032 South Virginia Street
Reno, NV 89502
Phone : (775) 322-4455

Editors Note: See Rusty Goe’s New Book “James Crawford: Master of the Carson City Mint” in the Books Channel of CoinLink

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