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All Posts Tagged With: "Absolute Rarity"

Coin Collecting: Condition Rarity vs. Absolute Rarity

by Doug Winter –

In numismatics, there are essentially two types of coins. There are coins that are condition rarities and there are coins that are absolute rarities. A condition rarity is a coin whose value is primarily derived from its high degree of preservation. An absolute rarity is a coin whose rarity is based more on the total number known to exist than its grade. As a long-time participant in the coin market, I tend to prefer coins that are absolute rarities.

dw_condition_rarity_010310Let’s take a look at a few specific coins that easily fall into one of the two categories. Then, let’s take a look at another category (and for my money the most interesting): a coin that is not only an absolute rarity but a condition rarity as well.

Most new collectors buy coins based on condition. This makes sense. They are introduced to coins through mass marketers or they buy modern coins directly from the United States mint. Mass marketers can’t sell absolute rarity for an obvious reason: there isn’t a large enough supply and mass marketing entails selling products on a large scale.

Certain mass marketed coins aren’t strictly condition rarities in the truest sense of the word. A coin that most people would consider to be a condition rarity would be a common date St. Gaudens double eagle in MS65. But this really isn’t the case. A damaged, virtually destroyed Saint has a current market value of around $1,200 while an MS65 is worth $2,500. The 2x value ratio for a Gem is low when compared to the basal value.

A coin that I would consider a classic condition rarity is an Indian Head half eagle. This is a coin that is worth just a bit over $300 in very low grades but over $15,000 in MS65. That’s a 300x value ratio. I appreciate the fact that a true MS65 Indian Head half eagle is a reasonably scarce coin. But I have a hard time attributing this much value to a high grade example, especially based on the fact that the series is not terrifically popular with date collectors. (more…)