By Doug Winter – www.RareGoldCoins.com

If you collect a set (or sets) and are competing in the Set Registry, the chances are good that you’ve struggled with the Dilemma of the Placeholder. Let’s examine the Pros and Cons of buying a placeholder coin and try to decide whether this is a smart collecting strategy or not.

First off, let’s define what a “placeholder coin” is. I view a placeholder coin as one that you buy as a stop gap. As an example, say that you are assembling a set of Indian Head eagles. One of the few dates that you are missing is a 1911-D. One comes up for sale at auction in a grade lower than what you really want. You decide to buy it anyway because of the fact that it a) fills a gaping hole in your set and b) gives you a sufficient number of Registry Set points that you move up a notch and pass Collector X. Was this is a smart purchase or not?

Let’s look at the pros of buying a placeholder coin. The first is the measure of satisfaction that filling a really nagging hole can give. There is nothing more frustrating for our hypothetical collector than seeing a big ol’ ugly blank every time he looks at his set inventory – especially if he has a nice date run before and after the missing coin. Coin collecting is a very emotional hobby and the Karmic Value of filling a hole is hard to put a value on.

Another pro is the fact that a Placeholder coin might grow in appeal on the owner. I’m going to assume that as a collector you are smart enough to not buy something truly hideous and to at least hold out for a moderately attractive placeholder. You might learn that your placeholder is actually so rare that it represents the only coin that you are likely to have a shot to buy.

For some collectors a placeholder coin represents a practical decision. Let’s say for example that you are assembling a gold type set from the 19th and 20th centuries and that you don’t have the ability to spend $100,000+ on a nice 1808 quarter eagle. In this case, a decent looking coin in, say, an NCS holder with EF sharpness but with signs of an old cleaning at $40,000-50,000 might be a savvy purchase; especially given the fact that an uncleaned 1808 quarter eagle in this price range might take years and years to locate.

For every pro there is a con, so now let’s look at the cons of buying placeholder coins. To my way of thinking, the biggest con about a placeholder coin is the fact that you know you are going to have to replace it. Unless the market goes up in your series, you are probably going to lose money on it when you sell it. Let’s say, for example, that Collector Z buys the mythical 1911-D eagle we discussed above. He purchases one for $10,500 that’s decent but not really a great looking coin due to the presence of some marks on the obverse. A year later he finds the right coin and it’s going to cost him $27,500. Unless Collector Z has a buyback or “trade up” agreement with the dealer he bought it from he’s probably going to take a 10-15% hit on the coin. Let’s say he’s sells it at auction and nets $9,250; a loss of $1,250. This brings the actual cost of his new coin to $28,750. (more…)

By Steve Roach – Rare Coin Market Report

When gold hits record levels, coin shows get a bit more press and attendance than they normally do, and in the next two months four major shows and hundreds of local shows will cater to a public curious about how they can buy into or cash out of gold at $1,300 an ounce.

After the American Numismatic Association World’s Fair of Money in August, there is a typical lull in the market and an absence of major shows until the Long Beach (Calif.) Coin, Stamp & Collectibles Expo in September, this year held Sept. 23 to 25 with an official auction by Heritage Auction Galleries and a pre-Long Beach auction by Ira and Larry Goldberg.

Then, the following weekend on the East Coast is the Whitman Coin and Collectibles Philadelphia Expo, Sept. 30 to Oct. 2, with an official auction by Stack’s and an official pre-auction by Bowers and Merena Auctions.

While the three-times-a-year Long Beach Expo is well established, the Philadelphia Expo (held just once before) has provided an alternative to dealers who wanted a major early-fall show but did not want to set up business in California for tax nexus issues.

Next on the big show calendar is Coinfest, in Stamford, Conn., from Oct. 28 to 30. With a New York City area location, the show has quickly grown in influence, perhaps evidenced by Heritage Auctions’ sale there.

Following Coinfest is the Whitman Baltimore Expo, Nov. 4 to 7, which like the Long Beach Expo is also held three times annually. It has an official sale by Bowers and Merena Auctions.

The continued vitality of these shows is a sign that they are viewed as useful by both dealers and collectors, and continue to be profitable for the sponsors.

On the auction results front, at Bonhams and Butterfields Sept. 20 coin auction, an uncertified 1889-CC Morgan dollar sold for $87,750 against an estimate of $27,000 to $30,000 (pictured above).

It was cataloged as “Brilliant Uncirculated,” but the price realized suggested a coin between Mint State 64 and MS-65. With MS-64 coins bringing $60,000 and an MS-65 possibly worth as much as $350,000, it will be interesting to see where the coin ends up.

By Jim Fehr – The Winning Edge

Coins disappearing as collectors and investors buy rarities
Hello, all. This article has be updated with new PCGS and NGC census and pricing information as of September 2010. Hope you enjoy.

There are over one hundred and fifty new purchases in this issue of The Edge, so take a close look at this listing. There should be plenty to choose from whether you’re buying rare dates for your set or just starting out.

The market is good – stable prices and strong demand for rarities along with an expanding collector base. In fact, an 1804 Class 1 Draped Bust Dollar just traded for $3.7 million at the Central States Numismatic Society coin convention in Rosemont, IL. It was a record breaking price for this particular 1804 dollar. It last traded for $475,000 in 1993!

The Carson City Dollars

Politically, the pro-silver factions in this country have always been very strong. The Bland Allison Act and Sherman Act in the late 1800’s required the U.S. Government to purchase large quantities of silver and coin it into silver dollars that, at the time, were not being used in circulation. Therefore, Morgan silver dollars flooded into the treasury vaults. In 1918 the Pittman Act was enacted in part, to sell off the excesses holdings of silver in the treasury vaults, not more than 350 million silver dollar pieces were to be melted. But pro-silver factions helped convolute the Pittman Act.

Due to their influence, one provision of the Pittman Act required the U.S. government to buy domestically one silver ounce for each silver dollar ounce the Pittman Act required be melted and sold. The silver was sold to England at $1 per ounce. In other words, as the government was buying up all the silver dollars in circulation and melting them, along with what was stored in the treasury vaults, they were also forced to replace the melted dollars with domestically bought silver bullion – which they then coined into the new 1921 Morgan silver dollars.

Yet, because of the domestic silver purchase provision in the Pittman Act, many of the silver dollars were never melted and in this way the government unintentionally kept a hoard of about 155 million silver dollars for over 40 years. Since silver dollars during the early 1900’s were used frequently only in Montana, Idaho, Nevada, Colorado, and Wyoming, circulating Morgans dried up quickly.

Fast forward to Kennedy. From 1960 to 1964, the government suddenly released over 152 million silver dollars, at face value. The government was the last to learn that many of these coins were worth more than face value because they were prized by collectors. Three years later in 1967, silver prices were up enough to make any silver dollar worth over face value in bullion alone. Afraid to let go of any more too cheaply, the government held back 2.8 million of the lower mintage Carson City dollars.

Sen. Key Pittman – Nevada

On the last day of 1970, President Nixon signed into law the Bank Holding Company Act Amendments. The act authorized the General Services Administration to sell the 2.8 million Carson City dollars in any suitable manner, and thereby created the modern market for Carson City silver dollars. The treasury chose to market the CC dollars via several mail bid sales. There were five sales from 1972 to 1974, then two more in 1980. Minimum bid on 1882-CC, 1883-CC, and 1884-CC was $40-$42; minimum bid was $180 for 1880-CC, 1881-CC, and 1885-CC. (more…)