I’ve discussed many times the process in which how nice coins are assigned price levels. But how are problem coins valued? This is an interesting question and one which is becoming a bit easier to answer since NCS coins have become a well-accepted part of numismatics.

(Before I begin, I should state here that NCS or Numismatic Conservation Services is a division of NGC that certifies and encapsulates “problem coins” which NGC does not see fit to put in their regular holders. This includes coins that are harshly cleaned, polished, heavily scratched, rim filed, etc. NCS only uses adjectival grades—i.e., they would call a coin “AU details” as opposed to “AU55 details.”)

The reason why non-problem coins are easier to value than problem coins is, well, because they don’t have problems. There is a greater degree of consistency of appearance between an 1830 half eagle in PCGS AU55 (or NGC AU55) than there is with this same issue when it has the details of an AU55 but it has been cleaned.

Let me explain what I mean by this. If you were to call me up and offer me an 1830 half eagle in PCGS AU55, I would have a decent idea of what to expect. I’m figuring that it has light wear, a decent amount of remaining luster, maybe a few scattered marks in the fields and probably a pretty good overall appearance. But if you call me an offer me an 1830 half eagle in an NCS holder that states the coin has “AU details” but has been “cleaned,” I’m not sure what to expect. Has it been lightly cleaned or harshly cleaned? Does it have an acceptable appearance or does it look overly shiny from having been polished or perhaps whizzed?

From my experience with viewing NCS coins, there is a very wide range of coins in these holders.

I’ve seen coins that NCS has called “cleaned” that look pretty acceptable to me; not very different, in fact, from coins encapsulated by both NGC and PCGS. I’ve also seen coins placed in NCS holders that had planchet flaws or mint-made surface that, in my opinion, could just as easily be in “normal” NGC or PCGS holders.

But back to cleaned coins and how to value them. As a general rule of thumb, I think that if a coin has been lightly cleaned it is worth around half of what a non-cleaned example would be worth. The NGC or PCGS AU55 1830 half eagle that I mentioned above is a $60,000 coin if it has a decent, original appearance. In an NCS “AU details—cleaned” holder it’s more likely worth $30,000 or so. And if it’s a very harshly cleaned AU coin with some damage as well it is more likely worth in the area of $15,000-20,000.

This brings me to a philosophical question. Would I, as a collector, want to own a very rare but very ugly coin that costs $20,000 or $30,000? I do not personally like problem coins even though I can understand their value and why certain collectors would want, say, an “affordable” example of a desirable coin like an 1808 quarter eagle. But I would rather spend my $20,000 or $30,000 on a coin that was less rare and more aesthetically pleasing. If my budget for a very rare coin like an 1808 quarter eagle was only $20,000-30,000 I would re-examine the “need” for this issue to be in my collection and would spend the money on something nicer.

Remember what I said above about the varying degrees of “cleanedness” or damage seen on NCS coins? I might actually not mind owning an NCS encapsulated 1808 quarter eagle with VF or EF details that had been lightly cleaned and which had a good appearance. The thing to consider, though, is that many other collectors feel the same way and such a coin might actually sell for a value level not much less than a VF or EF that was in a regular NGC or PCGS holder. The real question is would I want to own an 1808 quarter eagle that looked like it was run over by the proverbial train. And if I did, what would I pay for it?

Related posts:

1. Pricing Controversy with New 5 oz. “America the Beautiful” Bullion Coins
2. COIN PRICING GUIDES – Commentary by Laura Sperber
3. Doug Winter Market Report – Lack of Accurate Pricing

A continuation of a Weekly Column by Greg Reynolds

Usually, this column is published each Wednesday morning and not at other times. I came to believe, however, that this week’s topic is of tremendous importance and warrants two parts. [Click Here to View Part One] My survey of sophisticated collectors and expert dealers, shockingly, indicated that, while most realized that 1933/34 is the traditional dividing line between classic and modern U.S. coinage, few remembered or ever knew the primary reason. U.S. coins minted before 1934 are much scarcer than U.S. coins minted after 1934. Indeed, though there are a few exceptions, regular issue U.S. coins minted after 1934 are common.

From the perspective of a collector, this is the most important and clearest dividing line in the whole history of U.S. coinage. As the basis for this dividing line is not well understood, I feel compelled to explain and prove its importance. I presented logical points and evidence in part 1, and I provide more evidence herein. I then discuss one major reason why it is imperative to emphasize this dividing line now; many people are spending substantial or even vast sums for very common coins, usually without really understanding the factors involved and the traditions of coin collecting in the U.S.

IV. Walking Liberty Half Dollars

As the somewhat recent sharp rises in the price of silver has affected the values of circulated Walking Liberty Half Dollars, it makes sense here to consider those that grade AU-50 or higher. As no Walkers were minted in Philadelphia that date from 1922 to 1933, it may not be suitable to analyze comparative values for Philadelphia Mint halves in terms of the 1933/34 dividing line. Therefore, I refer to Denver and San Francisco Mint halves. Of all the Denver Mint Walkers minted prior to 1934, the 1929-D is the least expensive and the least scarce.

In AU-50 grade, a 1929-D half is worth about three to more than ten times as much as any Denver Mint half dating from 1934 to 1945, with one exception, the 1938-D. The 1938-D is the only regular issue exception, of the half dollar denomination, to the 1933/34 dividing line between relatively scarce U.S. coins and relatively common coins. The 1938-D half is scarce, much more so than any other Denver Mint half dollar issue in the 1930s or later.

In regard to San Francisco Mint halves, there is no such exception. In AU-50 or higher grades, any pre-1934 S-Mint Walker is worth substantially more, usually from two to more than ten times as much, than any San Francisco Mint Walker from 1934-S to the last S-Mint Walking Liberty Half, 1946-S. In relative terms, pre-1934 San Francisco Mint halves are ‘very scarce’ and post-1934 San Francisco halves are quite common.

V. Buffalo Nickels

Buffalo Nickels were minted from 1913 to 1938. As Type 1 Buffalo Nickels were only minted in the first part of 1913, these are not really relevant to the present discussion. Among Type 2 Buffalo Nickels minted in Philadelphia prior to 1934, the 1929 is the least valuable. There are only four dates of Philadelphia Mint Buffalo Nickels minted after 1933. (As the 1937 3-leg variety falls into a special category, it is not relevant the 1933/34 dividing line.) Dating from 1934 to 1937, the scarcest and most valuable Philadelphia nickel is the 1934.

Strangely, in two to four grade levels, the 1934 nickel is more valuable than the 1929 nickel. In every other grade, however, the 1929 is more valuable. The 1929 is worth a little more than the 1934 in EF-40 grade and more than twice as much in MS-65 grade. From MS-60 to MS-63, however, it seems that the 1934 Buffalo Nickel is worth more than the 1929. To some extent, this is an exception to the rule of the 1933/34 dividing line. Besides, coins struck in 1934 are almost on the dividing line and some may be viewed as transitional issues in this context. All Philadelphia Mint Buffalo Nickels dating prior to 1934 are worth more than all Philadelphia Mint Buffalo nickels dating AFTER 1934, in the same respective grades.

There is a similar anomaly among Denver Mint Buffalo Nickels. While the 1928-D and the 1929-D are each clearly scarcer than the 1934-D overall, the 1934-D is worth more in a few grades. In Very Fine and Extremely Fine grades, and in MS-64 and higher grades, the 1928-D and the 1929-D are each more valuable than the 1934-D. From MS-60 to MS-63, though, the 1934-D seems to be worth more than either a 1928-D or a 1929-D nickel. Denver Mint Nickels minted prior to 1934 are certainly much scarcer and more valuable, however, than D-Mint nickels minted AFTER 1934. (Die varieties and Mint Errors are separate topics.)

In some grades, 1929-San Francisco Mint nickels are similar in value to 1935-S nickels. Overall, the 1929-S is much scarcer and considerably more valuable. There are no 1932-S, ‘33-S or ‘34-S nickels. Pre-1934 San Francisco Mint Buffalo Nickels tend to be worth more than twice as much as any post-1934 S-Mint nickel.

VI. Coins Beside the Present Point

Generally, business strikes dating after 1934 are much more common than corresponding business strikes dating before 1934. It does not follow, however, that all U.S. coins dating from before 1934 are scarce.

There are some very common coin issues that were struck before 1934. These are exceptions to the rule, but they do exist. There are hundreds of thousands of Morgan Dollars dated 1921. Morgans dated 1881-S also exist in very large quantities, even in MS-64 and MS-65 grades. Additionally, there are several pre-1933 gold issues that are very common, including 1926 Eagles ($10 coins), 1932 Eagles, 1924 Double Eagles ($20 coins) and 1928 Double Eagles. Undoubtedly, some pre-1934 Buffalo Nickels and Lincoln cents are very common in grades less than Fine. There are other exceptions to the rule.

Commemoratives are not regular issue U.S. coins and this topic is complicated. Commemoratives constitute only a small percentage of all the coins minted in the U.S. during the 20th century. Vintage commemoratives were minted at times from 1892 to 1954, and only a few of these issues came after the mid-1930s. Modern Commemoratives have been minted since 1982 (or starting in the 1970s if Ike dollars and/or bicentennial coinage are considered commemoratives.) Some modern commemoratives are scarcer than a few vintage commemorative issues.

Mr. Kris Oyster states that modern commemoratives are often “a flash in the pan, when people are hot and heavy collecting new issues. The fervor dies down as the issue ages. That has happened with the Jackie Robinson [commemorative] and the [Library of Congress] bimetal coin. It has happened with several modern commems already. These are popular after they come out, prices go up fast, and they fizzle. After they lose their fervor, prices fall,” Oyster says.” Kris is managing director of numismatics for DGSE.

Vintage 1892 to 1954 commemoratives, in Oyster’s view, “have so much more going for them than modern commemoratives. Pricewise, they do not cost that much more than modern commems cost. They are better values. Most of the old commemoratives have already been PCGS or NGC graded, while a lot of the modern commemoratives have not been [submitted]. Potentially, there are lots more 67s, 68s, and 69s out there.”

Collectors who focus on classic U.S. coins are generally not enthusiastic about modern commemoratives or regular modern issues that are certified as grading “69” or “70.” The field of modern U.S. coinage tends to consist of extremely common coins and/or coins for which thousands exist in “66” or higher grades (in terms of PCGS and NGC criteria for modern coins.)

VII. Implications of the Dividing Line

For regular issue, business strike U.S. coins, the 1933/34 dividing line is not an opinion, but is based upon logic and fact. It divides coins that are scarce from those that are relatively much more common. Yes, there are few exceptions. Of course, Proofs and Mint Errors are in separate categories, as are unusual die varieties. Most importantly, there is a recognized, objective way of distinguishing classic, regular issue U.S. coinage from ‘modern’ much more common U.S. coinage. This dividing line is based upon BOTH tradition and truth.

Why is it imperative to focus upon the dividing line in the current era? There has been a trend, over the last two decades, for people, especially new collectors, to spend substantial sums on condition rarities of very common coin issues. Yes, condition rarities have always had considerable value. Even in auctions of famous collections conducted from 1904 to 1915, superb gem coins realized multiples of the prices that respective coins of the same issue, in lower grades, were worth at the time. Consider a distinction, however, between a condition rarity of a coin issue for which a few thousand (or even 20,000) exist in all grades and a condition rarity of an issue for which fifty thousand to more than one million in exist in all grades.

Consider market prices for MS-67 and higher grade State Quarters. For 1999 Delaware State Quarters, the PCGS price guide values a Philadelphia Mint issue in MS-67 grade at $90 and at $2350 in MS-68 grade. The mintage is more than 373 million, considerably more than the human population of the United States. Denver Mint Delaware quarters are priced higher, $150 in MS-67 grade and $8750 in MS-68 grade. The mintage for these is more than 400 million!

In Kris Oyster’s experience of managing coin purchases and sales in stores run by DGSE, Kris finds that “there are rolls and bags of State Quarters everywhere. There are guys who went out and bought all the Delaware quarters they could buy [in 1999]. People often bring in rolls of State Quarters. Of course, there are lots more 67s and 68s that have not been sent to PCGS or NGC,” Oyster concludes.

Although Washington Quarters from the 1950s and early 1960s are not as common as State Quarters, for decades, people have hoarded them as bullion investments because of their silver content. In April 2008, I wrote about some auction records for Washington Quarters. A PCGS graded MS-68 1954-S then sold for $10,350. In Jan. 2007, a PCGS graded MS-67 1954-S was auctioned for $1495. A PCGS graded MS-65 1954-S is worth around $30 and one that is not certified is worth perhaps $15. Prices of Good-04 to AU-50 grade 1954-S quarters are largely based upon their silver bullion value, though some of these are attractive coins.

There is a good chance that there are hundreds of thousands of 1954-S quarters in existence. More than ten million were minted! There could be many that currently grade (or would be graded) MS-65 or MS-66 and some of these will naturally tone in the future. Maybe many 1954-S quarters have nicely naturally toned already and have never been submitted to the PCGS or the NGC? Some of these may eventually be graded as MS-67 or higher. Of course, 1954-S quarters that grade MS-67 or higher should be worth more than silver bullion value. It is questionable as to whether these should be each worth more than one thousand dollars, let alone more than $10,000!

On April 15, 2008, the lone PCGS graded MS-67 1961-D quarter sold at auction for $18,975! The mintage of 1961-D quarters is more than eighty-three million. Further, Brilliant Uncirculated (Mint State) rolls of new coins were avidly, frequently and wildly traded in the coin business in the early 1960s. Although this is (or was) the only 1961-D quarter that is PCGS graded MS-67, it may be likely that more will be so certified in the future. Surely, many people possess rolls of 1961-D quarters, usually without even realizing that these may be worth more than bullion (silver) value. Anyways, the PCGS price guide values a 1961-D at $25 in MS-65 and at $210 in MS-66 grade. There are probably many thousands of 1961-D quarters that would qualify for a MS-65 grade. It may not be worth the cost of submitting them to the PCGS for grading. Furthermore, MS-65 grade quarters may naturally tone in the future. It is likely that the grades of some of them will legitimately rise.

Does it make sense to pay even $210 for a quarter if millions of the same coin issue are likely to exist? Even if just three percent of the mintage of eighty-three million survives now, there would be more than two million 1961-D quarters in existence. There are hundreds of thousands, or even millions, of many individual U.S coin issues minted since 1934. Does it make logical sense to collect AND pay substantial sums for coins that are extremely common?

©2010 Greg Reynolds

Related posts:

1. Coin Rarities & Related Topics: Coins Minted After 1934 tend to be Very Common, 1793 to 1933 is the Classic Era – Part One
2. Coin Rarities & Related Topics: 1793 Half Cents, Chain Cents, Wreath Cents, 1808 Quarter Eagles — one-year type coins in general
3. Coin Rarities & Related Topics: Collecting Modern Coins

A Weekly Column by Greg Reynolds

Last week’s column was about dealer recommendations for new collectors who seek coins valued at $250, more or less, with consideration of a few that are valued at more than $1000. Among the experts that I interviewed, no one suggested buying coins minted after 1934. This column is devoted to an exploration of the topic of the 1933 to 1935 time period being a dividing line between classic and modern U.S. coins. This is not my opinion; it is an objective reality. Conclusive evidence will be provided herein.

A review of coin related publications in the 1960s, ’70s, ’80s and ’90s would suggest this dividing line. Indeed, quite a few dealers in classic U.S. coins used to include a statement relating to the years ‘1793 to 1933′ in their ads and pricelists. Almost always, leading auction firms emphasized coins in the 1793 to 1933 time period and still do so.

Why discuss this dividing line now? I am concerned about the amounts paid for condition rarities of the post-1934 era. I do not have a problem with a collector paying a large sum of money for a condition rarity if the coin issue in general is at least moderately scarce. It is wonderful that someone paid $138,000 for the Duckor 1904-S half dollar, which is PCGS graded MS-67. (Please click to read my two part series on Dr. Duckor’s halves, part 1 or part 2.) A low grade 1904-S half could be obtained for less than one hundred dollars. The 1904-S date, though, is scarce in general. The PCGS and the NGC together have certified less than two hundred different 1904-S halves, and probably more than two thousand uncertified 1904-S halves exist. Certainly, there are fewer than five thousand in existence, in all grades. For post-1934 coins, however, people often spend vast amounts for superb gem quality coins when hundreds of thousands or literally millions exist of the same respective coin issue.

If millions of a coin issue exist overall or thousands in MS-65 grade, how much should a MS-67 or higher grade representative of the same coin issue be worth? There is not an easy answer to the question. Of course, supply and demand determine prices in relatively free markets. I am not challenging the truthfulness of current price levels for supergrade modern coins. I am wondering whether the buyers have thought carefully about their demands. I am also wondering whether many sellers of post-1934 coins are, sometimes implicitly, misleading buyers, or are ignorant themselves. Anyone who can afford an inventory may become a coin dealer. In any event, in order to understand the distinction between classic U.S. coins and modern issues, there is a need to learn about both and about the dividing line between classic coins and modern issues.

I. The 1793-1933 Tradition

Referring to U.S. coins minted from 1793 to 1933 as classic coin issues is not arbitrary and it is not an accidental tradition. When polling dealers and collectors, I became aware that everyone seemed to remember the tradition of referring to 1933 or 1934 as a dividing line, but no one recollected the origins or meaning of the tradition. The true reason is that pre-1934 coins (with few exceptions) are much scarcer than post-1934 coins.

I am not referring to mintages; I am referring to the number of coins that survive. Of course, no one can know precisely how many survive. It makes sense, however, to rely upon the forces of supply and demand and resulting price levels to demonstrate this point, which I will prove herein. Indeed, one leading dealer informs me that demand is actually greater for post-1934 coins than for pre-1934 coins. Furthermore, for Lincoln Cents, Buffalo Nickels, Mercury Dimes, and Walkers, I am assuming that a substantial percentage of the collectors who demand coins in these series are seeking to complete sets and would thus demand both pre-1934 and post-1934 coins of the same respective series. Therefore, showing that prices are substantially higher for pre-1934 coins clearly proves that many more post-1934 coins survive and are in the marketplace. I aim to carefully select pre-1934 and post-134 issues to provide fair and meaningful comparisons.

Yes, it is true, as John Albanese and Ira Goldberg emphasize, that coin albums often separated pre-1934 coins from those that came afterwards. Ira points out that “Lincoln Coin albums that were in two parts: 1909-1933 and 1934 and on.” John recollects Walker coin albums that considered 1916-33 the early set, 1934-40 the middle set, and 1941-47 the late set” and thus separated these into three distinct albums. I (this writer) maintain that such albums were designed because pre-1934 coins are scarcer than post-1934 coins.

Beginners could easily handle Lincolns minted from 1934 onwards because these are so common. Until recent years, there was no need to buy them from coin dealers, these could be found in change or from rolls obtained at many banks. For Walking Liberty Half Dollars, an “early set” from 1916 to 1933 was (and still is) a serious undertaking that requires considerable money and/or patience. A “middle set,” 1934-40, is much easier because most of the coins are extremely common. In terms of difficulty and sophistication, there is a very dramatic difference between collecting pre-1934 Walkers and those that were minted later.

“It seems to me that pre-Barber coinage is where coins really get scarce,” John Albanese asserts. It is true that pre-1892 coins are usually much scarcer than those dating from 1892 to 1933. Nonetheless, the difference between pre-1934 and post-1934 U.S. coins is of a much higher degree. Moreover, between 1892 and 1933, there are regular issue rarities and many condition rarities of coin issues that are scarce overall. Except for some Mint Errors and/or sharply unusual varieties, and maybe 1938-D halves, there are no scarce regular issue business strikes that were minted after 1934.

In regard to the 1933/34 dividing line, both Ira Goldberg and Doug Winter cite the issuance of an executive order in 1933 by President Franklin D. Roosevelt that required that gold bullion and common gold coins be “turned in” to the U.S. Treasury Dept. FDR also put an end to the production of U.S. gold coins.

Winter says, “For most collectors/dealers [Winter's] age, the 1933 cut-off has to do specifically with the end of gold coinage. But ‘modern’ coins could just as well be 1941 and on, 1950 and on [due to] the re-introduction of Proof coins, or even 1964 and on, the end of silver. The cut-off has more to do with the age of the person you ask.” I (this writer) strongly believe that Winter’s point here is wrong.

The age of the coin enthusiast asked has nothing to do with the reason why 1933/34 is the dividing line. Likewise, the age of currently active coin enthusiasts is not related to the longstanding popularity of all types of 1793 large cents, of Flowing Hair silver dollars, of Morgan dollars, of 1796 quarters, or of 1856 Flying Eagle cents.

I agree with Winter’s points that the ending of gold coin production in 1933 and the ending of silver dollar production in 1935 are significant reasons for a dividing line circa 1933/34. These reasons, though, are secondary to the primary reason that the 1933-34 ‘cut-off’ has to with the difference between coins that are at least scarce and those that are very common. The ratio of still existing pre-1934 coins to surviving U.S. coins that came later is very small.

II. Mercury Dimes

The point of 1933/34 being the dividing line may be illustrated with any coin type that was minted prior to 1934 and afterwards. There are four such types, Lincoln Cents, Buffalo Nickels, Mercury Dimes, and Walking Liberty Half Dollars. I am excluding silver dollars from consideration here, as these ended in 1935 and thus were minted for just one year after 1934. As Ira and Doug emphasize, regular issue gold coinage ended in 1933. The U.S. never again minted gold coins for circulation. Plus, ‘90% silver’ dollars were never minted AND released at face value, after 1935.

As a collecting kid, John Albanese recollects, “1933 always seemed like an ‘early’ Lincoln and 1934 seemed modern, same with Walkers, the 1933 is classified as ‘early’ and 1934 is not.” To John when he was a kid, “1934 Washington Quarters were no big deal, but 1932s were always a find. [Similar points were] true with Mercs and Buffalo nickels.”

Mercury Dimes were minted from 1916 to 1945, though not in each Mint during each year. As common dates in Good to Very Fine grades are or may be affected by the recent, tremendous increase in the price of silver bullion, I am avoiding these here. Also, the market for choice and gem uncirculated Mercs is complicated and beside the current objective.

Please see my estimates for prices of Philadelphia Mint Mercury dimes from 1928 to 1937 in four grades, Extremely Fine-40, Almost Uncirculated-50, AU-53 and MS-60. No Philadelphia Mercury Dimes were dated 1932 or 1933. It is clear that the dimes minted before 1934 are worth substantially more than those minted in 1934 or later. Considering still earlier and still later dates would further prove this point.

No 1930-D, 1932-D, or 1933-D dimes were minted. All pre-1934 Denver Mint dimes are worth substantially more than all 1934 and later Denver Mint Mercs. As all these are needed to complete a set of Mercs, it follows that the number of 1934-45 Denver dimes in existence must be much higher than the number of pre-1934 Denver Mint Mercury Dimes in existence. An anomaly is that a 1929-D in MS-60 grade is worth less than a 1935-D in MS-60 grade.

San Francisco Mint dimes that were minted prior to 1934 are worth much more than those minted after 1934. None were minted in 1934. I am almost certain that all widely accepted price guides would substantiate my point that in Very Fine and higher grades, pre-1934 Mercury Dimes are worth much more than post-1934 Mercury Dimes, not including overdates or Mint Errors. In terms of scarcity, 1933/34 is a clear dividing line.

III. Lincoln Cents

There is just no doubt that Philadelphia Mint Lincoln cents dating from 1928 to 1933, and earlier, are each worth considerably more than Philadelphia Mint Lincolns that were minted from 1934 onwards, in each respective grade. (Mint Errors and other unusual varieties are a different topic.) In EF-40 grade, for example, 1928 to 1933 Lincolns range in value from $1.50 to $5.00. In the same grade, no regular Philadelphia Mint Lincoln from 1934 to date has a retail value of even one dollar in EF-40 grade.

I compared prices for Denver Mint Lincolns from 1925-D to 1933-D to the respective values of 1934-D, ‘35-D, ‘36-D, ‘37-D and ‘38-D Lincolns. Not one post-1934 Denver Mint issue in the later group is worth anywhere near as much, percentage-wise, as a pre-1934 Denver Mint Lincoln, assuming the grade is the same. The 1934-D, though, is an exception in that it is worth more than the 1930-D in several grade ranges and more than the 1929-D in one or two grades. When researching the 1933/34 dividing line, I found that coins of the year 1934 can sometimes be exceptions, or transitional issues from classic to modern.

In another words, for any grade chosen, a pre-1934 Denver Mint Lincoln will be worth more than a post-1934 Denver Mint Lincoln. Post-1934 Lincolns are much, much more common than pre-1934 Lincolns. The differences in value are just as dramatic, or more so, for San Francisco Mint Lincoln Cents, with one exception. Generally, in comparison to pre-1934 Lincolns, post-1934 Lincolns are incredibly common.

Part Two of this article will be Posted on 10-21-10 – Click Here to View

Related posts:

1. Coin Rarities & Related Topics: Coins Minted After 1934 tend to be Very Common, 1793 to 1933 is the Classic Era – Part 2
2. Coin Rarities & Related Topics: Collecting Modern Coins
3. Coin Rarities & Related Topics: 1793 Half Cents, Chain Cents, Wreath Cents, 1808 Quarter Eagles — one-year type coins in general

How are rare coin prices determined? Often the question dealers will ask is: “I know what Greysheet (Coin Dealer Newsletter bid) is, but what can I ‘really’ get for it?”

In this month’s Rare Coin Market Report, I will explain how I determine the value of an individual coin. Most often I will use a variety of different pricing sources to determine the value of a coin.

The most utilized source of rare coin pricing information among dealers are the variety of Coin Dealer Newsletter publications including Greysheet, Bluesheet, Monthly Summary, and the Quarterly Supplements. Dealers also use CCE, which is the Certified Coin Exchange. Coin World Trends, Collectors Universe prices, Redbook, and Coin Prices are also utilized.

In the last several years auction prices realized have become one of the most useful and often misunderstood sources of pricing information. Let me explain a little bit about all of these different sources before I explain how I use them.

CDN’s multiple publications include the Greysheet, Bluesheet, Monthly Summary, and Quarterly price sheets.

The Greysheet and Bluesheet are weekly publications and list many of the most frequently traded U.S. rare coins, BUT the values they list vary significantly.

Basically Greysheet lists sight seen bids for attractive coins. Bluesheet lists sight unseen bids for coins that might not be that attractive although they are graded correctly. Because I am looking for attractive coins, I often have to pay Greysheet bid or more for an attractive coin. If someone offers me a coin I don’t particularly like I am going to check the ‘bid’ on Bluesheet to see what the ‘basal’ value really is.

Depending on the particular coin the difference between the Greysheet and Bluesheet can vary as much as 70%. Yes, 70%!

CDN Monthly Summary is published each month and includes more of the frequently traded U.S. rare coins by date and grade including the early twentieth century gold series and most of the classic twentieth century collector series.

One of the three different CDN Quarterly issues come out every month and the three include all the other U.S. rare coin series by date. The Quarterly One issue contains half cents through quarters. The Quarterly Two contains halves through $3 gold coins. The Quarterly Three contains prices for $5 Liberty through $20 Liberty Gold Coins.

All prices for the Monthly Summary and Quarterly price sheets are for sight seen coins. There is also a supplement included with each month’s Quarterly Supplement that has prices for Proof coins not listed in the Quarterly Supplements.

Certified Coin Exchange is a dealer to dealer network owned by Collectors Universe/PCGS. Dealers pay a monthly service charge to actively bid or access the bidding information on this system. The bids are ‘live’ during the main business hours, roughly 11 to 4, Monday through Friday depending on what time zone you are in. These live bids are either S, sight seen or U, sight unseen. CCE also includes a couple of other marketing areas as well as the newer variation of the old dealer ‘teletype’ network.

Much of the information for CDN/Coin Dealer Newsletter bids comes directly from CCE. S-Sight seen bids are for coins that can be returned if the buying dealer feels they aren’t nice for the grade. U-Sight-unseen bids are for anything in the proper grade in the designated holders with no return privilege. Bids for PCGS and NGC coins are predominate although there are bids for ICG and ANACS coins.

Coin World Trends, Coin Universe prices, and Coin Values are all ‘retail’ pricing guides. Although the prices listed are GENERALLY what one would expect to pay for a NICE collector coin, I as a dealer often pay more than these supposed ‘retail’ prices for especially scarce or elusive coins.

Many of the more modern items are listed, but the values are quite subjective. Information updates are often neglected in these price sources. Many times, especially in rising or falling markets, the prices are just wrong. The Redbook or Guide to United States Coins is a fantastic source of information, BUT it is published ONCE a year and the values are geared towards the casual collector.

The last and most misunderstood source of pricing information are the ‘Auction Prices Realized’. The biggest U.S. rare coin auction houses sell thousands of coins each year at public auction. These prices most often include a 15% buyer’s fee. The information is incredibly valuable, but misinterpretation is really a problem. For a fee, you can access APR information on the PCGS website. PCGS compiles and lists coins by date and grade and has APR numbers for coins going back roughly fifteen years. Heritage Auctions have sold the most certified coins at auction and therefore their database is the largest individual auction company source. I use both the PCGS APR listings and the Heritage APR listings especially when determining an infrequently traded coin’s value.

Are you confused yet? You should be-HA! Many full time dealers don’t really understand the nuances that come with determining a coin value. If they can buy it at Bluesheet-sight unseen bid-they feel ‘safe’ because they haven’t paid any premium over the basal value. If they are only willing to pay Bluesheet numbers they are invariably going to get a high percentage of ‘ugly’ sight unseen coins. The problem with buying bargain basement material always comes down to this: YOU GET WHAT YOU PAY FOR!

To illustrate how I determine the value of a coin I am going to give you two examples. The first is for a frequently traded coin that exists in relatively large quantities, but has a huge demand. The second coin I am going to use as an example is a rare coin that might only come on the market once or twice every couple of years. Determining the value of the first coin is easy. On the second coin I will utilize virtually all the pricing sources I have mentioned previously. From that data, I will then determine both a price that I am willing to pay for that coin as well as a price I feel is fair to my customer.

Coin Number One: 1885CC Morgan Dollar MS65 PCGS. Although the 1885CC Morgan Dollar in MS65 is roughly a $1000 coin in MS65, it isn’t particularly rare but it is scarce and it has a huge demand. Not only do people love Morgans, but Carson City Morgans sell like ‘hotcakes’. Nice CC Morgans are out there, but the difference between an average coin and sight unseen coin is easily 20%. Let’s look at the bids and then I will make some observations.

Coin One:
1885CC Morgan Dollar MS65 PCGS. Mintage: 228,000. PCGS/NGC total population MS65: 5366

• G/S $900
• B/S $830
• CCE Sight $890
• CCE Sight-unseen $830
• C/W Trends $1250
• Coin Universe $1200

The prices vary as much as 33%. A pretty sight seen coin will cost me between $875 and a $950 to purchase in the wholesale market. To make a profit, I will charge between $1025 and $1100 for a NICE coin. If you want a sight unseen coin, I can probably sell you one for about $925 or less.

Don’t make the bargain hunter mistake. Yes, you can save $100 to $175 buying a sight unseen coin, but someday you are going to want to SELL that sight unseen coin. Sight unseen coins don’t magically become nicer sight seen coins. Both dealers and collectors are looking for NICE coins with eye appeal. Don’t settle for average. You will PAY for it in the long run.

Coin Two
1866 $3 Gold AU58 PCGS. Mintage: 4000. PCGS/NGC total population for AU58: 77.

• Greysheet Bid (for a common $3 Gold type coin): $1475
• Greysheet Quarterly Bid (for the date): $2575
• Bluesheet Bid: N/A
• Coin World Trends: AU55: $2500 MS60: 4000
• Coin Universe price: $3700
• Auction Prices Realized (last two years): $2875, 3450, 3450-N, 3910-N, 3565, 3450.

The prices listed vary significantly especially between the Greysheet ‘date’ bid and the Greysheet ‘type’ bid. The ‘type’ or common bid price is for the most common date in the series while the ‘dated’ CDN Quarterly bid reflects the price for a coin with a tiny original mintage with true scarcity. The ‘type’ bid does provide a basal value, but for this illustration is not pertinent.

Both Coin World Trends and Coin Universe prices are supposed ‘retail’ prices for the date, but for a low population coin with a mintage of only 4000 they are actually a little low. The Auction Prices Realized are all over the place. How do I determine the value?

After looking at the ‘bids’ for the date I refer to the APR-Auction Prices Realized. First I see how many have sold at auction in the last several years. If the prices realized fall into a tight range, my job is easier. If several have sold for roughly the same price and this price range fall between the ‘dated CDN Quarterly bid and the Coin World Trends or Coin Universe prices, then there is a good chance that the coin is worth roughly what they have sold for at auction. Basically an ugly coin will be worth less and a pretty coin will be worth more.

If the prices realized have both a wide range and don’t fall between the CDN Quarterly bid price and Trends Coin Universe prices, then the price determination becomes more difficult. Several questions should be asked that may or may not be answerable.

First, did one or two examples fall significantly out of the price range?
Second, did several sell during the same time period or in the same auction? Lots of factors drive the bids in an auction, but the biggest factor is whether the buyer paid a premium because they thought the coin would grade higher.
Third, if several coins are sold in the same auction that possibly came out of a little hoard or collection, an ugly coin could bring significantly less. In addition, several examples of the same scarce coin coming on the market at the same time can depress the price realized.

Here is what I see when I examine the Auction Prices Realized. The $3910 was an exceptionally nice coin or a potential breakout. The $2875 coin was an ‘ugly’ example. The other four prices all fall within a tight range. CDN Quarterly bid is $2575. Collectors Universe price is $3700. Coin World Trends is somewhere between $2500 and $4000. The four coins in the mid price range are probably attractive coins for the grade. An attractive example is worth somewhere between $2700 and $3100 wholesale and, if priced fairly should bring $3400 to $3800 for an attractive coin.

Remember ‘bids’ are just numbers on paper or a computer screen. This is a coin I just purchased recently. I paid $2800 and ‘flipped’ it to another dealer for $3000. Both myself and another dealer were willing to pay more than CDN Quarterly bid ($2575) for this coin.

For this example the 15% buyer’s premium has to be taken into consideration also. Many folks don’t understand how this 15% or ‘juice’ affects the value of a coin. Often times this 15% is split between the auction house and the consignor. Often times a dealer consigning a coin to auction will actually get between 1.05 to 1.08 of the 1.15 that includes the hammer price and the 15% buyers fee. In other words, the consignor is actually getting a little more than the ‘hammer’ price. The auction house is willing to give up part of their 15% to secure nicer consignments.

Where does CAC fall into the mix? CAC was founded in 2007 to ‘sticker’ coins that met their requirements for both nice eye appeal and correct technical grade. Basically, they are grading the graders. CAC coins bring more money. Frankly, I feel they should. CAC has done an excellent job of ‘stickering’ coins that are not only nice for the grade, but totally original. CAC coins often bring between 5% and 50% more than current bid levels on a wholesale basis depending on the particular issue.

The information I have provided today is very subjective. A nice coin will generally bring more whereas an ugly or darkly toned coin will bring less. There are dozens of additional considerations to determining the value of a coin. My goal with this article has been to provide you the consumer with an insider look at how a dealer values a coin.

Comments and questions are always appreciated. My methodology isn’t ‘rocket’ science, but these procedures have served me well over the last couple of decades. When pricing a coin, the quality of the coin itself should be paramount. I often pay ‘WAY OVER’ bid levels for an exceptional coin. Don’t be afraid to pay extra for an exceptional coin. Most often those are the coins I sell first!

Bozarth Numismatics offers hundreds of rare U.S. coins on their website bozarthcoins.com or via eBay each month. We attend over 40 shows a year and write another column each month called Rare Coin Road Warrior. You can view either our Rare Coin Market Report or Rare Coin Road Warrior articles each month on our website bozarthcoins.com or at coinlink.com.

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3. How To Determine The Prices And Values Of Coins In Your Collection

If you have been collecting rare coins for more than a few years, there is a good chance that you have “found money” in your holdings. What I mean by this is that there are a number of things that you can do–often with little or no cost–that can significantly improve the appearance and value of your coins. Here are five suggestions:

1. Send Your Coins to CAC. CAC is now well established as an important factor in the high-end segment of the market. In certain areas, CAC coins trade for a nice premium and there is no doubt in my mind that a CAC sticker makes a coin more marketable. Submitting a coin to CAC is very inexpensive; typically just $10 to $20 per item. Another thing that’s nice about submitting coins to CAC is that you are getting an expert’s opinion (in this case John Albanese) for next to nothing. You might try sending a sample of your five best coins to CAC. If you get CAC approval on all five coins, you know you are doing something right. If only one or two get the coveted “green bean” then you can assume that the dealer you are buying from needs to be replaced.

2. Attribute Your Coins. Let’s say that you are a date collector of early half eagles. It makes sense to purchase the Bass-Dannreuther book on early gold to attribute all your coins to “BD” numbers. You might get lucky and find that one of the coins that you own is a very rare die variety. This isn’t necessarily an immediate financial upgrade, as it would be in a series like Bust half dollars or Large cents which are avidly collected by variety. But wouldn’t you rather keep the potential financial upgrade for yourself than to read on page three of Coin World how some lucky collector just cherry-picked an excessively rare variety of 1806 half eagle? Also, if PCGS or NGC attributes varieties in the series you collect and you find a good variety, have it marked on the slab.

3. Pedigree Your Coins. If you have a coin from a famous collection like Bass, Garrett, Eliasberg or Norweb, a pedigree can add value. Some coins from these collection are clearly marked on the PCGS or NGC insert. But there are hundreds of others that have “lost” their pedigree for one reason or another. I’d suggest that you purchase all of the major auction catalogs in the area that you specialize in and spend a few hours searching through them. Your coin(s) may have a different appearance than they did in an earlier sale, but if they have an obvious mark this will make it easy to trace them. If a great pedigree is easy to prove, send the coin along with a xerox of the catalog page to PCGS or NGC.

4. Reslab Your Coins. Please note that I didn’t say “regrade” your coins. That’s another subject entirely and one that, if you have coins in old green label or “fatty” holders, I do not necessarily think will add value to your coins. What I mean by “reslabbing” is that many coins are in holders that show severe scuffing, wear, or dullness. A great coin can look just so-so if the holder it’s in doesn’t present itself well. I know this sounds a little hokey but its no different than deep-cleaning your house when you get ready to sell it. If all of your coins are in pretty, fresh slabs it is going to make your coins look nicer.

5. Create a “Cult of Personality.” For a number of reasons, there are many collectors who become larger than life because of what they collect. Some of these individuals become famous because they buy seven figure coins. Others become famous because they write books or articles about the area(s) that they specialize in. And others become famous because they are “mensches” who endear themselves to collectors and dealers alike. A collector who has worked hard to establish himself as a leading authority on Charlotte gold coins is probably going to have an easier time selling his coins than a collector who is totally unknown; even if the mensch has inferior coins, the belief that he has high quality will typically outweigh the reality. The same holds true for collectors on the PCGS and NGC Message Boards. Creating the illusion of collecting greatness is a lot easier today than it was in the pre-Internet era.

These are just five suggestions. There are many others that I can think of, and I’d be interested in hearing your suggestions as well.

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