News and Analysis regarding scarce coins, coin markets, and the coin collecting community #10

A Weekly Column by Greg Reynolds

After writing about two collections in the Boston ANA auction to be held in August, I will address the topic of ‘overpricing.’ A vocal U.S. Congressman has called for government regulation of rare coin and bullion businesses. He has attacked one prominent seller of bullion and modern coins as having overpriced some of their coins and he seems to imply that the Federal Government should combat overpricing, presumably with price controls. In my view, while such overpricing of bullion coins and of other common coins occurs, his approach is flawed and counter-productive. Moreover, government regulation of prices would make trading less efficient and would not substantially lessen the extent to which careless, or mentally incompetent, coin buyers are harmed. Please see my discussion below.

I. The Collection of Dr. Davis

Please read last week’s column for general remarks regarding upcoming events in Boston and prior columns for discussions of very rare coins that will be auctioned. Furthermore, I will soon write about Dr. Duckor’s collection of Barber Halves, which is, indisputably, the all-time best collection of this series. Duckor’s halves will be auctioned during Heritage’s Platinum Night event on Wed. August 11, as will many coins from the collection of Dr. and Mrs. Claude Davis. In my column of July 7th, I discussed a few of the coins in the Davis collection. There are many more in the ANA auction.

Todd Imhof, Executive Vice President of Heritage, relates that Dr. Davis “started collecting coins in the 1930’s!” Further, Imhof remarks that Dr. Davis “is perhaps best known for putting together the famous Foxfire Type Collection that sold intact a number of years ago.” My (this writer’s) impression is that the Foxfire type set consisted mainly of coins that were (and mostly still are) NGC graded from MS-65 to MS-67. Indeed, some or all of these were placed by the NGC in holders with the name ‘Foxfire’ on the respective inserts. I have seen only copper and silver coins that are pedigreed to the ‘Foxfire’ collection. I remember the “Foxfire” NGC graded MS-66 1818 quarter, for example, that Heritage auctioned in Feb. 2008 and, again, in May 2009.

Dr. Davis has consigned a much more extensive type set and other coins to the upcoming Boston ANA auction. Imhof reveals that “Dr. Davis, after completing and selling the Foxfire collection, went back into collecting Type coins in a more moderate grade range. He loves high-end AU specimens and felt that grade often represented super value.”

There are many coins in the Davis collection that are graded AU-55 or -58 by the PCGS or the NGC. One example that imaged well is an 1829 half dime that is PCGS graded AU-58 and has a sticker of approval from the CAC. Likewise, the Davis 1815 quarter is PCGS graded AU-58 and CAC approved. The online images of this quarter look marvelous. It is necessary, though, to view a coin in actuality, or have an expert do so for you, to draw firm conclusions about its physical characteristics.

One of the most important coins in the Davis collection and in this ANA auction overall is the Atwater-Hawn 1797 half dollar. The Draped Bust obverse (front), Small Eagle (reverse) halves of 1796 and 1797 are the rarest silver type coins. The William Atwater collection, which B. Max Mehl sold in the mid 1940s, is one of the twenty greatest U.S. coin collections of all time.

The eminent collector Reed Hawn assembled landmark collections of several series, especially quarters and halves. The 1913 Liberty Nickel that was auctioned in January was previously owned by Reed Hawn. (Please click here to read my article about it.) Hawn’s halves were auctioned by Stack’s in 1973. Like the two Davis collection coins just mentioned above, this 1797 half is PCGS graded AU-58 and has a CAC sticker.

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Part One of a Three Part Series on the state of the Rare Coin Market. by Greg Reynolds

In early August, while attending the recent ANA Convention in Los Angeles, I spent considerable time interviewing dealers and checking out coins that were being offered. Coin markets are very healthy in that there are plenty of buyers for scarce and rare coins at the current price levels, and there were a substantial number of serious collectors buying at the Convention or being represented by dealers. Certainly, collectors are more active now than they were in March or April, or even in June. Quite a few dealers and collector-sellers refuse to sell many of their coins at the current levels.

Some categories of rare coins have maintained their values or fallen only slightly over the past year; other categories have fallen 20% to 45%. My impression is that markets for scarce and rare U.S. coins, on average, are down 18% to 25% over the last twelve months, though many great coins have held their value.

There has always been a gap between the prices for coins that are mid range to high end for their respective PCGS or NGC assigned grades and those that are low end or have substantial negative characteristics. As is analyzed in my companion article, the price gap between the high end and low end for coins of the same type, certified grade and date (or equivalent date) has widened over the past twelve months and was especially evident in trading at the ANA Convention.

John Feigenbaum, president of David Lawrence Rare Coins, declares that, at the ANA Convention, he “found the market to be a lot more vibrant than expected with many of [his] contemporaries ready to do deals. The key remains that one has to price coins at current market prices, which are generally down from six months ago. But the difference between [the ANA Convention] and say the Central States show was that people were looking to do business. The last nine months have been lethargic at the wholesale level.”
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