Coin Collecting News » Stacks

LOOKING FORWARD TO A BIGGER 2011 – IS BIGGER BETTER?

Laura Sperber — Mon, 27 Dec 2010 16:36:42 +0000

Hot Topics by Laura Sperber – Legend Numismatics

Consolidation in reverse! I expected a few firms to fold and smaller dealers to shut. Out of the blue comes the mega merger of Stacks and Bowers and Merena. I was not so shocked because for the last 3 years it had been no secret I tried to talk the owners into selling Stacks to Legend. The apparent loss would have been too great and doing a deal this way, they get a shot at some stock that could go up. Regardless, I feel it was a tragic end to once powerful and glamorus dealership.

It is my strong opinion, in this mergers case, bigger is NOT better for the coin market. Why? We already have one mega monster firm who obviously has reached their limits-Heritage. They know they can’t expand any more with in coins, so they did the smartest thing, branched out into other areas. I give them tons of credit for that because it seems as they grow, they do not forget their roots and promote coins to this new crowd.

To satisfy two large auction companies with huge staffs, where are all the coins going to come from? These firms need expensive coins to generate large fees. If these firms on their own were not getting much prior, where are the coins going to come from after the merger? Think about how big each firms overheads are. Will fees rise? Will coin values artifically inflate because of excessive tiny demand with each auction?

This new mega merger concerns me. My goal in going after Stacks was not to make it bigger-just better. In my opinion, the potential of Stacks combining with Legend was huge. I believe it would have greatly benefited collectors. I do admit, I was nervous about where the consignments would come from, but Legend has sold OVER $600,000,000.00 RETAIL so we have some contacts. I have always viewed owning an auction company as a natural extension for us and our customers. Unfortunately, I do not have the time or energy to try again to enter the auction field from scratch. I saw the demise of Stacks as inevitable. I would have loved to have fixed it. It is frustrating to me ownership decided to end the misery this way. When I was told about it I was angry for one second and have moved on. Now I just wonder if bigger is really better? And how will it effect the marketplace?

I do wish The B+M team good luck in their merger. Greg Roberts, CEO of Spectrum is one of the sharpest executives in this business.

FUN

My prediction is that FUN will be a good show. Out of the clear blue, collectors were buying strong in December-a time when they normally fade away. Yet again, only supply was the problem. So if nothing else, dealers will need to replenish at FUN.

Gold coins are still screaming crazy hot. Prices are NOT moving up, but collectors do want them. We think 2011 will be the tell tale year for gold. It will be interesting to say the least.

The Heritage Sale will be insane-espcially the RARE PROOF GOLD. The best way to determine how the market is-watch what the really FRESH material does. The B+M Sale has the Malibu Collection. I predict strong prices for that too. The demand is clearly bigger than the supply of great coins right now. Thats why I am so perplexed at how TWO HUGE auction houses can survive and thrive. Maybe I just do not know economics.

LEGEND AND THE MARKET

2010 was a surprisngly good year for us. Legend was profitable. We sold $45,000,000.00 worth of coins to collectors. That figures does NOT include our auction representation. I am also extemely proud to say we sold over 10,000 INDIVIDUAL McClaren coins (that is a ton of coins!). Those ranged from $100.00 to $2,000.00 each. Our market is really the highest graded rarities, but with McClaren, we sold as many smaller coins as anyone. We are NOT just a dealer who sells expensive coins! Legend definately was a market leader in most catagories.

In 2011, I can promise Legend will NOT look to get bigger. I have turned down requests to grow. Our formula is perfect or close to it. We will probably add a person, but our plans are to be BETTER, not bigger. I really do not see the room to grow. I had trouble supplying coins to collectors in 2010, so I have no idea where I would find additional coins to cover a larger overhead.

Financially, we are as big as anyone. Maybe thats why we buy tens of millions of dollars from the public each year quickly and quietly. If any size deal comes up (try us on a $100 million), Legend can easily buy it. We are one of the biggest market makers of CAC coins. We are no nonsense when it comes to how we deal. We are also loyal as heck to people who are the same to us (we have MANY customers who date back to the late 80’s still active with us). Unlike other firms, George and I have been partners since 1986, and Bruce since 1997. If you notice, most other firms are revolving doors trying to act stable. There is something to be said for longevity of a partnership in the coin field. The only thing we lack, the ablitity to make up good stories to fool people. Sorry, thats just not our style. Also, you can find a copy of our Mission Statement on our web site.

My point, the beginning of 2011 you will see many changes with dealers. Currently, there are a few bigger retail dealers who are operating pretty much dead broke. You WILL see them fail, so do NOT be surprised. There will be a consolidation-which will be healthy. I was just stunned that an expansion (Stacks and B+M) could try and happen in this enviornment.

Back to looking out the window. Since I started writing this over 4 inches of snow have piled up (an hour and half) ! The winds are now easily 40 MPH plus. Can’t see the beach. Nothing like a good blizzard to stimulate me to write a Hot Topics!

Everything said in this article is the sole opinion of the author and not any other member of Legend Numismatics.

Any comments or questions please feel free to email me at: lsperber1@hotmail.com.

Bowers and Merena Auctions and Stacks Announce Merger

Bowers and Merena — Thu, 23 Dec 2010 00:23:46 +0000

BOWERS AND MERENA AUCTIONS TO JOIN FORCES WITH STACK’S TO CREATE STACK’S-BOWERS NUMISMATICS

Spectrum Group International, Inc. (SPGZ.PK) announced today that its subsidiary Bowers and Merena Auctions, one of the world’s pre-eminent auctioneers of rare coins and currency, has entered into an agreement with Stack’s, the oldest rare coin retail and auction company in the U.S., to combine their operations.

The new company, which will be known as Stack’s-Bowers Numismatics, with a world coin division to be known as Stack’s-Bowers and Ponterio, will be owned 51% by Bowers and Merena Auctions and 49% by Stack’s. The closing, which is subject to the satisfaction of customary conditions, is expected to take place in early 2011.

Greg Roberts, president and chief executive officer of Spectrum Group (SGI), commented, “We believe that this combination, once consummated, will create a major player in the coin industry. Stack’s had over $65 million in aggregate sales in 2010 and between them, the two companies have handled many of the significant coin collections that have sold at public auction, including the Eliasberg Sales, the Norweb Sales and the Ford Collections.”

Bowers and Merena Auctions president Chris Napolitano, who will serve as president of the combined company, said, “I am honored and excited to lead this new venture, which combines two of the leading names in our industry. We consider Stack’s to be the crown jewel of coin auction houses and with this partnership, we have assembled a numismatic team that we believe to be unequaled in the industry. We look forward to continuing and expanding Stack’s auction and retail locations in mid-town Manhattan, which serve not only the greater New York metropolitan area but also the entire east coast.”

Added Mr. Roberts, “A significant factor for SGI in pursuing this merger was the opportunity to partner with Charles, Joel and Harold Anderson and the rest of the Anderson family, who own a controlling interest in Stacks. For years I have enjoyed a strong personal and professional relationship with the Andersons and now look forward to a long-lasting association with the family through Stack’s-Bowers Numismatics. We intend to continue the long tradition that the Stack family developed over many decades in New York. For years it has been a goal of ours to have a presence in NYC. With this partnership, we will achieve that goal at one of the most famous and prestigious addresses in the numismatics industry: 123 West 57th Street, New York, New York.”

Joel Anderson commented, “We are looking forward with great enthusiasm to the successful combination of these two fine companies. Both have rich histories of service with integrity to the numismatic community and together their combined resources and talents will bring new levels of service and value to the numismatic market. In addition, Charles, Harold and I have assembled some nice collections and we are pleased that Stack’s-Bowers Numismatics will be there for us when the time comes to sell.”

Concluded Mr. Roberts, “Consistent with our goal of creating long-term value for our shareholders, we have made the decision to focus our energy on growing our core trading and numismatics businesses, and this transaction is a key part of that strategy. For those same reasons, we have entered into an agreement to sell our arms and armor auction company, Greg Martin Auctions, back to Greg Martin and his partners, following its January auction in Las Vegas. Under Mr. Martin’s leadership, we have every expectation that Greg Martin Auctions will continue its tradition of providing expert appraisal and auction services to collectors of antique firearms.”

ABOUT SPECTRUM GROUP INTERNATIONAL, INC.

Spectrum Group International, Inc., named to the Fortune 500 list in 2010, is a global trading and collectibles network. We are a trader of precious metals and an auctioneer of coins, stamps, wine, and antique arms, armor and historical memorabilia, serving both collectors and dealers. We are also a merchant/dealer of certain collectibles. Our collectibles offerings span the price spectrums from modest to ultra-high end. Furthermore, we offer loans to coin dealers, collectors and investors back by their precious metals, rare coin and other collectibles as collateral.

Our Trading business is conducted through A-Mark Precious Metals, Inc. and its subsidiaries. A-Mark is a full-service precious metal trading company, and an official distributor for many government mints throughout the world. A-Mark products include gold, silver, platinum and palladium for storage and delivery in the form of coins, bars, wafers and grain, and our services include financing, leasing, consignment, hedging and various customized financial programs. A-Mark’s subsidiary, Collateral Finance Corporation, which is the official Numismatic Lender of the American Numismatic Association, provides financing on a wide array of bullion and numismatic products.

Our Collectibles business operates as an integrated network of leading companies concentrating on numismatic (coins) and philatelic (stamps) materials, and rare and fine vintage wine. We have offices and auction houses in North America, Europe and Asia. In addition to traditional live auctions, we also conduct Internet and telephone auctions.

Our Collectibles companies in the philatelic field are auction houses H.R. Harmer Global Philatelic of Irvine, California, Corinphila Auktionen of Zurich, Switzerland, Heinrich Köhler Auktionshaus of Wiesbaden, Germany, Corinphila Veilingen B.V., Amstelveen, Netherlands, and John Bull Stamp Auctions, Ltd of Hong Kong. Spectrum Group’s Collectibles companies in the numismatics field include Bowers and Merena Auctions (rare coin and currency auction house), Ponterio & Associates (world and ancient coins and currency auction house), Teletrade (online coin auctions) and Spectrum Numismatics International (wholesale rare coin dealer), all based in Irvine, California. Spectrum Wine Auctions is engaged in the sale by auction of rare and fine vintage wine.

Coin Rarities & Related Topics: The Henry Miller Collection

Greg Reynolds — Wed, 22 Dec 2010 05:32:37 +0000

News and Analysis on scarce coins, coin markets, and the coin collecting community #32

A Weekly Column by Greg Reynolds

I. FUN Auctions

Two weeks ago, I wrote about Jim O’Neal’s set of Indian Head Half Eagles ($5 gold coins), which will be auctioned during the Jan. 6, 2011 FUN Platinum Night auction in Tampa. During the FUN Convention, Heritage will auction a wide variety of items, including the Henry Miller collection. Miller specialized in Proof gold coins and many of his coins will also be sold during this Platinum Night event. He also had business strikes. The topic here is the Henry Miller collection.

To attain some understanding of FUN Platinum Night events, please see my column two weeks ago and my articles concerning coins auctioned in Jan. 2009 and 2010: The Jan. 2010 Platinum Night, $3,737,500 for a nickel, the O’Neal Collection of Indian Head Eagles, and Jay Brahin’s $20 gold coins.

II. Henry Miller

Henry Miller collected coins for decades before passing in 2009. He lived and worked in New York City. Miller collected Proof Liberty Head Double Eagles ‘by date’ and gold coins from many other series mostly ‘by type.’ Though Miller had a few pre-1834 Half Eagles and some early 20th century gold coins, he generally focused on U.S. gold coins of the second half of the 19th century. Additionally, he had an accumulation of ‘not rare date’ Liberty Head and Saint Gaudens Double Eagles. Also, Miller had a complete 1887 Proof Set, copper, nickel, silver and gold, which Eric Streiner regards as “a fantastic set.”

Eric Streiner remembers Miller’s coins though he has not seen any of them for more than a dozen years. Streiner “knew the guy quite well. Miller really liked his coins. He spent a lot of time looking at his coins,” Streiner recounts. Eric emphasizes that Miller was an enthusiastic collector.

Eric reports that “Miller bought most of his coins in the 1970s from dealers in the New York area, many from Stack’s. He bought some at auction, but mostly he bought coins privately,” Streiner says. “He bought a few coins in the mid 1990s,” Eric adds.

Streiner relates that, “in the late 1980s or early 1990s,” Eric arranged for Miller’s coins to be submitted to the NGC for grading and encapsulation. Streiner remembers that Miller contacted him through Stack’s. At the time, Eric was a very young dealer who had a reputation as a grading wizard. I (this writer) heard many stories, some clearly verifiable, of Eric spotting coins that were undergraded, or not clearly graded, by other coin dealers.

John Albanese recollects that, “a long time ago, probably in the late 1980s, [he] had lunch at a seafood restaurant with Eric Streiner and Henry Miller, who was a really nice guy.” Albanese is glad to have had the opportunity to view Miller’s Proofs again. Recently, Heritage sent many of Miller’s Proof coins to the CAC.

John Albanese was the sole founder of the NGC in 1987. Mark Salzberg, the largest current shareholder in the NGC, joined Albanese as a partner in 1988. Ten years later, Albanese sold his shares in the NGC to Salzberg. In 2007, John founded the CAC, which evaluates the quality of coins that are already graded and encapsulated by the PCGS or the NGC. Submitted coins may be approved or rejected. Approved coins receive a CAC sticker.

Both Albanese and Streiner were very impressed by the quality of Miller’s coins. Streiner, “even around twenty years later,” recalls Miller’s coins “as great pieces, nice original stuff, mostly gem, definitely good eye appeal.” Indeed, John and Eric separately emphasized that Miller’s Proof gold coins tend to be “original,” meaning that these have never been dipped, substantially cleaned, or doctored.

Though Streiner “hates to say it,” Eric is concerned that “some of these coins might lose their original surfaces, after the auction”! Some dealers will dip or doctor them in efforts to get higher grades assigned.

I (this writer) suggest that collectors bid on many of Miller’s coins at the auction for several reasons, one of which would be to prevent dippers and coin doctors from buying them. Proof 19th century gold coins with natural toning and mostly to fully original surfaces are wonders to behold. In addition to Proof Double Eagles, the Miller collection contains a wide variety of gold type coins, some of which are not expensive.

III. 1823 $5 Gold Coin

An 1823 Half Eagle ($5 gold coin) is expensive and is the leading business strike in the Henry Miller collection. It is a prized type coin. Capped Head Half Eagles are the most difficult series of all U.S. coins to even 80% complete. Though the 1823 is one of the least rare dates of the whole type, there may be fewer than eighty known in all grades, including those that are ungradable.

It is my belief that there are fewer than forty true gems known for the whole Capped Head, Large size type, which was minted from 1813 to 1829. The data published by the PCGS and the NGC include some multiple counts of individual coins. The Miller 1823 may be the second finest known 1823 Half Eagle. It is the only 1823 Half Eagle that is NGC graded MS-65 and none have been assigned a higher grade by the PCGS or the NGC.

Miller’s 1823 has a CAC sticker of approval. Albanese remarks that “I [John] remember really liking the coin; it is mostly original and just beautiful. One of my favorite early gold coins seen over the last few years,” Albanese declares.

IV. Type Coins

While his 1823 Half Eagle is the most important, Miller had many gold type coins. The Miller collection, according to Heritage cataloguers, contains high grade business strikes of all three types of One Dollar Gold pieces, plus several Proof Gold Dollars of the third type. The most newsworthy of Miller’s One Dollar Gold pieces is his 1864, which is NGC certified Proof-64 Cameo and has a CAC sticker. (Please see last week’s column for a brief discussion of ‘Cameo’ designations.) Albanese was very impressed with this 1864.

Quarter Eagles ($2½ gold coins) are not really well represented in the Miller collection. His one business strike is worth noting. It is an 1848 with the ‘Cal.’ imprint on the reverse (back). For one year only, and only on Quarter Eagles, the Philadelphia Mint identified a relatively small number of gold coins as having been made from gold that was mined in California. The ‘California Gold Rush’ had just begun. Miller’s 1848 is NGC graded MS-64 with a star for eye appeal

All of Miller’s Proof Quarter Eagles have CAC stickers. He had at least five Proof Liberty Head Quarter Eagles and one Proof Indian Head Quarter Eagle, a 1913 that is NGC certified Proof-65.

Miller’s 1875 is NGC certified ‘Proof-64 Cameo.’ In fact, the Heritage website suggests that the Miller collection contains two such 1875 Quarter Eagles, lot #5035 and #5036, though the ‘print’ catalogue indicates that only one of these two is from the Miller collection. Either way, there seem to be two Proof 1875 Quarter Eagles in the upcoming Platinum Night event.

Proof 1875 Quarter Eagles are particularly important, as these are not only extremely rare in their own right, corresponding business strikes are very rare. As fewer than fifty business strikes survive with hardly any in choice condition, collectors of high quality business strike Quarter Eagles often demand Proofs.

A ‘64′ grade business strike 1875 would be much more difficult to obtain, if one could be obtained at all. Miller’s Proof 1864 Quarter Eagle is even more important than a Proof 1875.

Business strike 1864 Quarter Eagles are even rarer than business strike 1875 Quarter Eagles. While Proof 1864s are not quite as rare as Proof 1875s, the combined business strike and Proof total of 1864s is less than the respective combined total of 1875 Quarter Eagles. Most collectors are not aware of the extreme rarity of 1864 Quarter Eagles. The number known of Proofs and business strikes combined is less than forty-six, maybe substantially less.

Generally, Albanese has a high regard for Proof 1864 Quarter Eagles, which, he says, “come really nice. They were made very well, as good as any current Proof Gold coin that you will see. Collectors very much like them, they come with amazing contrast. They are similar to Proof 1896 and 1897 Quarter Eagles,” John explains. “For a Proof Liberty Head Quarter Eagle for a type set,” a collector may wish for an 1864, an 1896 or an 1897. Albanese emphasizes that Proofs of these dates tend to be special, with “great contrast and a lot of cool frost.” Also, Albanese mentions that 1864 Quarter Eagles are “popular as a Civil War date.”

Albanese finds that the Miller Proof 1864 Quarter Eagle is exceptional for its NGC assigned grade of “65.” It received a coveted CAC ‘Gold’ sticker. Typically, CAC stickers are green.

Miller made considerable progress towards a set of Proof Three Dollar Gold pieces, though I am not sure that he ever planned to complete such a set. As already noted, he had a complete 1887 Proof set. It may be true that Miller, at one time, planned to build gold Proof sets of certain dates, like 1861, 1863, 1864 and 1873. He has Proofs of multiple denominations of some of these dates.

In any event, Three Dollar Gold coins were minted from 1854 to 1889. The Miller collection contains Proofs of the following dates: 1858, 1861, 1863, 1864, 1868, 1870, 1876, 1881 and 1887.

As for Proof Half Eagles, Miller may have obtained his 1873 to serve as a type coin. I hypothesize that Miller’s Proof 1881 Half Eagle was part of an 1881 Proof gold set, though this set is not mentioned as such in the Heritage catalogue. Miller had a Proof 1881 One Dollar Gold piece, a Proof 1881 Quarter Eagle, a Proof 1881 Three Dollar gold coin, a Proof 1881 Half Eagle, a Proof 1881 Eagle and a Proof 1881 Double Eagle. Clearly, he had a set.

As for Eagles ($10 gold coins), Miller had four Proof Liberty Head Eagles and one Proof Indian Head Eagle, a 1914. His 1887 Eagle, NGC PF-65 Cameo with a CAC sticker, is part of his 1887 Proof set. As just mentioned, his 1881, NGC PF-65 with a CAC sticker, is part of an 1881 Proof gold set.

His Proof 1861 Eagle is PCGS graded Proof-65 and also has a CAC sticker. It is extremely rare as a Proof, though business strike 1861 Eagles are not rare. As best as I can tell, Miller has just one business strike Eagle, a 1908.

Most of the coins in the Miller consignment are Double Eagles. He had numerous business strikes from the 1850s, including some important New Orleans Mint issues. His two 1852-O Double Eagles have received much attention, as has his 1857-O, which is NGC graded MS-62 and has a CAC sticker.

The Miller collection contains numerous Liberty Head and Saint Gaudens Double Eagles of common dates and slightly better dates, mostly in grades from MS-61 to MS-64. These do not seem to fit into Miller’s collecting strategies, and may have been impulse purchases. Streiner insists that Miller was not collecting such coins and may have bought them “on whim” or “for bullion” related purposes.

The most important Philadelphia Mint business strike Double Eagle in the Miller collection is an 1881 that is NGC graded AU-55 and has a CAC sticker of approval. Tentatively, I suggest that there are less than fifteen 1881 Proofs and fewer than eighty-five business strikes, for a total of less than one hundred 1881 Double Eagles in existence.

V. Proof $20 Gold Coins

The Henry Miller collection will be best remembered for its awesome run of Proof Liberty Head Double Eagles. “A lot of Proof coins in the Miller collection have their original skin,” Albanese found. John remarks that the Miller Proof Double Eagles from the “1860s were fantastic.”

The following is a list of Proof Liberty Head Double Eagles in the Miller collection that are NGC graded and have CAC stickers: 1860 (64), 1863 (64), 1864 (65), 1865 (64), 1867 (65+), 1870 (64), 1874 (64), 1880 (63), 1881 (65), 1882 (64), 1885 (66), 1886 (64), 1888 (64), 1892 (65).

I am here omitting designations of ‘Cameo’ as many of these were certified before NGC introduced the ‘Ultra Cameo’ designation and because I strongly maintain that a Proof with a cameo designation is not necessarily superior to a Proof of the same grade without such a designation. Buyers are placing too much weight on Cameo and Ultra Cameo designations. When evaluating or just appreciating a Proof coin, there are several other factors to consider besides the extent of the contrast between the devices and the fields. A coin WITHOUT a strong cameo contrast may be more attractive and/or of higher quality than a coin of the same date, type and certified grade, with a cameo designation.

Miller’s 1887 is NGC certified “Proof-67+*” and does not have a CAC sticker. Most of Miller’s Proof Double Eagles are in holders that are more than fifteen years old. This 1887 Double Eagle is in a holder that was issued within the last few months. It has been upgraded by the NGC. It is an important coin because 1887 Double Eagles are a Proof-only date and are extremely rare. There are no business strike 1887 Double Eagles. So, a collector who wishes to own an 1887 Double Eagle must buy a coin that was struck as a Proof.

Henry Miller seems to have had the best collection of Proof Liberty Head Double Eagles that has ‘come to light’ in a long time. The upcoming Platinum Night event will probably be very exciting.

Argentine Rarities to the Fore!

Stacks — Mon, 22 Nov 2010 14:01:38 +0000

by Greg Cohen – Stacks

One of the many highlights of Stacks upcoming New York International Sale is a lovely and rare 1830 RA P 8 Escudos of Argentina. This is a key date example of the classic Sunface design, the second rarest date in the series.

This piece hails from the Porteño Collection, a small but high quality offering of Argentine coinage, and displays pleasing original gold surfaces with only light wear. This specimen was uncertified when offered in Heritage’s January 2007 sale, and was recently submitted to NGC for encapsulation where it was graded EF-45.

In his 1962 work, Argentine numismatist and researcher, Jorge Ferarri was able to track fewer than 10 examples of this date. In Calico’s “Onza” book, it is simply described as “Extremely Rare.” Even in the current information age, we can only positively identify two examples that have traded at auction in the past five years.

These include: the example in the October 2008 Spink-Smythe sale (which later appeared in the Ponterio New York International 2010 sale) and this example (ex Heritage NYINC 2007). Curiously, this date was missing from our (ANR’s) sale of the Eliasberg World Gold Collection, Goldberg’s sale of the Millennia Collection, our Kroisos Collection Sale, and other important recent sales of quality Argentine coins. While there are probably examples in museums in Argentina, the number available to the collecting public is quite small indeed.

Another stunning Argentine rarity offered as part of the Porteño Collection is an 1836 Rosas portrait 8 Escudos struck in silver. Called an “ensayo” or essay in Hector Carlos Janson’s book, research conducted by our consignor shows that the 1836 8 Escudos was supposed to be an 8 Soles piece, and thus the silver strikings (which are nearly as rare as the gold) are the officially struck coins.

There are four known examples struck in gold, including the Eliasberg-Clapp coin we offered in the Eliasberg World Gold Collection in 2005. Regardless of whether these are official strikes or essay pieces, they are extremely rare. The last silver specimen to sell at public auction was the AU-50 (NGC) that appeared in the Millennia Collection sale. The Porteño Collection example is sharper than the Millennia coin; unfortunately, it has been polished, and is now residing in an AU Details (NGC) holder.

Stack’s is proud to be able to offer these rarities to the collecting public—for the advanced Argentine coin collector, this is an opportunity not to be missed.

Coin Rarities & Related Topics: Stack’s auction of the W. L. Carson Collection of Proof Coins

Greg Reynolds — Wed, 10 Nov 2010 14:38:21 +0000

News and Analysis regarding scarce coins and coin markets #26

A Weekly Column by Greg Reynolds

The current topic is the W. L. Carson collection, which features Proof U.S. coins. It was auctioned by Stack’s in Baltimore last week. B&M also conducted a major auction in Baltimore, which included the Malibu Collection. Next week, I will discuss the Malibu Collection. This ‘Malibu’ collector formed one of the all-time best collections of Standing Liberty Quarters. He also had an excellent run of Liberty Seated Halves, as well as some important Liberty Seated silver dollars.

Some may wonder why I am focusing on collections rather than on the most expensive coins in these two auctions. I write about a wide variety of coins, not just expensive ones. For discussions of modestly priced coins, please see some of my recent columns: Advice for Beginning Collectors, The 1933/34 dividing line and Collecting Modern Coins.

Importantly, the most expensive coins in an auction are sometimes consigned by dealers or non-collecting speculators. In the grand scheme of the history of coin collecting, consignments from collectors (or the beneficiaries of deceased collectors) have much more significance than dealer-consignments. Moreover, collector-consignments tend to realize higher prices at auction, especially in instances where the coins consigned have been ‘off the market’ for seven years or more, and thus constitute ‘fresh material.’ Bidders become more enthusiastic about coins in very good collections than about coins that are consigned by dealers or entirely unknown parties. Noteworthy collections are central to the culture of coin collecting.

I. W. L. Carson Collection

Most (or all) of the coins in the W. L Carson collection have been ‘off the market’ for decades. This collection contained more than six hundred coins, including, but not limited to, early copper, circulated key-date Lincolns, and choice vintage commemoratives. The core of the collection, however, is Carson’s Proof sets dating from 1856 to 1915.

As best as I can tell, all of the pre-1916 Proofs in the Carson collection are PCGS certified. Most are PCGS graded and a large number have stickers of approval from the CAC, which approves or rejects coins that have already been graded by the PCGS or the NGC.

I hypothesize that Carson aimed to assemble Proof sets, from 1856 onwards, in copper, nickel and silver. Three of his sets included gold, 1888, 1906 and 1913.

Unfortunately, Carson’s level of knowledge was not great, at least not when he started buying Proof coins, and he bought some problematic coins, including non-Proofs that were probably represented to him as Proofs. I further hypothesize that he learned a good deal, received advice from an expert advisor and/or purchased many coins from honest, knowledgeable dealers, as he did obtain a large number of choice or gem Proof coins dating from the 1860s to 1915. Though Carson also had Proof sets dating from 1936 to 1942, and from 1950 to 1964, these are beside my discussion of the core of his collection. At the center of the core is a complete 1888 Proof Set.

II. 1888 Proof Set

Yes, W. L. Carson had a complete 1888 Proof Set, with copper, nickel, silver and gold coins. The Indian Cent is in a PCGS Genuine Holder. Carson probably did not know that it had problems when he acquired it. After all, other coins in the set are choice. (Coins that grade 63 or higher are termed ‘Choice.’ Coins that grade 65 or higher are gems.)

“As a whole,” Matt Kleinsteuber declares, the Carson 1888 Proof set “was incredible, especially the gold. The coins were filmy and original, just like they were supposed to be. The coins were conservatively graded, in [Matt's] opinion. The gold all had the same matched, creamy surfaces, never dipped or enhanced, virgin surfaces that were amazing. [Kleinsteuber] loved the set.” Matt is the lead grader and a trader for NFC coins, and he is an instructor at ANA grading seminars.

The ungradable 1888 Indian Cent sold for $276, which is obviously a strong price. A gradable Proof-60 1888 cent is worth less than $100. Even a Proof-64 1888 would sell for less than $276, unless it has a great deal of original Mint Red color.

The Carson 1888 Three Cent Nickel is PCGS certified Proof-64 and has a CAC sticker of approval. This Three Cent Nickel went for $322, which is not a weak price, yet it is not one of the stronger prices in the auction. It may be a good deal for the buyer.

The Carson 1888 Liberty (Five Cent) Nickel is certified Proof-64+ and also has a CAC sticker. The CAC approves (or rejects) coins that are already graded by the PCGS or the NGC. A coin is approved if CAC experts find that its grade is in the middle or high end of the range pertaining to the grade that the coin has already received from the PCGS or the NGC. (Please see a past article, The Widening Gap, for discussions of the terms low end, mid range and high end. )

This 1888 nickel sold for $402.50. This price is in the retail range. When an auction price surpasses the wholesale range and enters the retail range, it is usually considered to be a very successful auction result. Of course, there are exceptions to this rule, and there are coin issues for which wholesale and retail price ranges are relatively more ambiguous.

The Carson 1888 dime is PCGS certified as Proof-66 with a Cameo designation (“CAM”). It also has a CAC sticker.

In regard to Proof coins, a cameo involves the contrast between design elements that are frosted (upon striking) and the mirrored fields. Frosted design elements tend to be whitish in appearance. Frosted devices may tone a variety of colors though the original whitish frosting will still be evident. Though I never agreed that a Proof with a cameo contrast should always (or even usually) be worth more than a Proof without any cameo features, my opinion is in the minority on this issue. In coin markets, cameo Proofs are worth more, and “Deep Cameo” or “Ultra Cameo” Proofs are worth even more than Proofs with just moderate Cameo contrasts, regarding Proofs of the same type of equivalent rarity with the same numerical grades.

The Carson 1888 dime sold for $4312.50. The PCGS price guide values this piece at $2750. “The 1888 dime was really, really special,” Kleinsteuber asserts. Matt “was not surprised by the price realized. [This dime has] beautiful fresh color, watery fields, and nearly no imperfections to be found.”

The Carson 1888 Quarter, Proof-63 with CAC, sold for $776.25. This result is closer to a wholesale price than to a retail price, and may have been a good value. It is important to remember that each coin is different, and it is often not a good idea to draw firm conclusions from auction results without actually examining the coins in question. Even so, this price seems reasonable to me.

The Carson 1888 half, Pr-64 CAM with CAC, garnered $3,737.50. Indisputably, this is a very strong price. It is well above prevailing retail levels for Proof-64 CAM halves of 1884 or equivalent dates. In auctions over the past five years, several 1888 halves with this same PCGS Pr-64 CAM certification brought between $2000 and $3000.

The Morgan silver dollar in Carson’s 1888 Proof set, Pr-64+ CAM with CAC, went for $8625. Without actually seeing this coin, I am not prepared to explain this price, which is apparently very high. It is worth noting that the PCGS has probably only designated twenty or so different 1888 Morgans as having a ‘cameo’ contrast. There are hundreds of collectors of Proof Morgans. Perhaps some of them are just not satisfied with a Proof 1888 that does not have a Cameo contrast, though I would be. Another possibility is that at least two bidders were almost certain that this coin was undergraded and really deserves a higher grade. Many Internet bidders probably expected this coin to sell for between $4750 and $5600.

The Carson 1888 Gold Dollar, Pr-64 CAM with CAC, brought $9200. I am certain that this is a very strong price. My guess is that most of those Internet bidders who are familiar with coin markets, were probably expecting a price around $6000. Surely, though, experts who viewed the coin may have had different expectations. I wish that I had seen it.

The Carson 1888 Quarter Eagle ($2½ gold coin), Pr-65+ CAM with CAC approval, was purchased for $27,600. This is certainly a retail price and a fairly strong auction result, though not extremely high.

Note that the CAC does not approve (or reject) plus grades, just whole numerical grades. So, in the case of this 65+ grade Quarter Eagle, CAC experts determined that this coin’s grade is in the middle OR high end of the 65 range, while PCGS experts determined that, in their view, it is in the high end of the 65 range.

The Carson 1888 Three Dollar Gold piece is in a ‘Genuine’ holder and thus has been judged not gradable. It was certainly salable for the sum of $9775! This sum could be used to buy a certified Pr-62 or Pr-63 1888 Three Dollar Gold piece.

The Carson 1888 Half Eagle ($5 gold), Pr-64 CAM with CAC, brought $19,550, which is a moderately strong auction result. It is above or in the far upper reach of the wholesale price range for this coin issue.

The Carson 1888 Eagle ($10), Pr-65 CAM with CAC, brought an impressive $54,625. Matt Kleinsteuber emphasizes that this is an “original” and “amazing” coin, and he was “not surprised” by the price realized. Legend Numismatics was the buyer, for a collector. The Carson 1888 Double Eagle ($10), Pr-64 Cam with CAC, was auctioned for $69,000.

There were not many Proof gold coins in the Carson collection. He had ‘all metal’ Proof sets of 1906 and 1913 as well. In regard to these 1913 Matte Proof gold coins, originality is an extremely important factor. A conservation service has been changing the color of numerous Matte Proof gold coins and many of these ‘conserved’ Proofs receive grades of 64 to 68 from a leading grading service. In other cases, the color of Matte Proof gold coins has been changed by past cleanings or dippings.

Greg Cohen, who is a staff numismatist at Stack’s, notes that “there were many beautiful coins in the Carson collection, but the most interesting pieces in [Cohen's] opinion were the 1913 Matte Proof gold coins.” Cohen may not be experienced enough to have seen a large number of Matte Proof gold coins with original surfaces. These are an endangered species.

My (this writer’s) understanding is that the Carson 1913 Matte Proofs possess completely original color and texture. It is thus not surprising to me that these realized prices that were higher than the auction prices of corresponding Matte Proof gold coins in the recent past.

Laura Sperber reports that her firm bought the Carson 1913 Eagle for $80,500 and the Double Eagle for $103,500, and thus “saved them from the coin doctors”! Unfortunately, ‘coin doctors’ modify coins in ways that are even more harmful than light cleanings or dippings. (Please see my three part series on collecting naturally toned coins, Part 1, Part 2 and Part 3; and my September column regarding allegations of coin doctoring.)

The Carson 1913 Half Eagle and Quarter Eagle are each PCGS certified Pr-65+ with a CAC sticker. The Quarter Eagle realized $34,500 and the Half Eagle, $43,125.

It is curious that a collection with so many choice or gem Proofs would also contain a substantial number of coins, from the same time periods, in PCGS “Genuine” holders. Curiously, some of these were ‘doctored,’ decades ago.

III. Ungradable Coins

The Carson 1856 Flying Eagle cent has serious problems and resides in a PCGS Genuine holder. It brought $10,350.

I find it to be interesting that, given the emphasis upon quality in the current marketplace, that non-expert collectors are willing to pay substantial sums for coins that are judged by the PCGS to be not gradable. Of course, I realize that, sometimes, coin doctors buy these for the purpose of modifying them such that graders at the PCGS or the NGC can eventually be deceived into believing that the modified coins never had the problems that used to be readily apparent. In most instances, however, coins in ‘genuine’ holders are purchased by collectors who just like the particular coins or are unwilling to pay the sums demanded for choice, premium representatives of the same respective types and dates.

The PCGS price guide values a Proof-60 1856 Flying Eagle cent at “$15,000” and perhaps a collector wished to save a few thousand by acquiring this one for $10,350. Besides, Proof-60 coins are often not attractive at all. This non-gradable coin may have been aesthetically appealing to two or more bidders, perhaps more so than a gradable Proof-60 1856 Flying Eagle cent would be.

The Stack’s cataloguer suggested that the Carson 1837 dime has been doctored. It is in a PCGS genuine holder and it realized $402.50.

The Carson 1865 Three Cent Nickel is also in a PCGS Genuine holder. The cataloguer said that the “surfaces have been chemically etched and toned back with bright yellow and gold hues, but the devices and fields show roughness today. The process resulted in false luster appearing in the fields.” It sold for $80.50.

Matt Kleinsteuber was also curious about the contrast between the choice original Proofs in the Carson collection and the coins that had serious problems. “All the coins in the Carson collection were not nice,” Matt relates. “Some were pretty screwed up. The ones that were nice were really nice for their grades, appealing surfaces, not screwed with, often never dipped.”

IV. 1864 Two Cent Piece

Kleinsteuber was particularly enamored with the Carson 1864 ‘Small Motto’ Two Cent piece. This is certainly one of the rarest Proofs in the Carson collection, perhaps the rarest. The 1864 issue with a relatively small motto, “In God We Trust,” is much rarer than the 1864 large motto issue.

The Carson 1864 ‘Small Motto’ is PCGS certified Proof-64 with a designation of ‘RB’ meaning that it exhibits a significant amount of original Mint red color. Further, it has a sticker of approval from the CAC. I regard the $63,250 result as being very strong.

The Carson 1864 ‘Large Motto’ Two Cent piece has the exact same certification as the Carson ‘Small Motto’ piece, Pr-64RB with a CAC sticker. It realized $3220.

The Carson 1864 ‘Small Motto’ Two Cent piece “was incredible. It bought all the money, Kleinsteuber declares. Matt “tried to buy it personally. It brought more than [Matt] expected. This Proof is a classic rarity. It has got a real mintage of twelve to fifteen; this is not a skewed [mintage estimate] like you see [reported] for some other 19th century Proofs. The Proof 1864 ‘Small Motto’ Two Cent is a true rarity and [is] underrated,” Kleinsteuber maintains.

V. Selected Carson Proofs

An 1877 Twenty Cent piece is PCGS certified as ‘Proof-63+ Cameo‘ and has a sticker of approval from the CAC. The PCGS price guide values this piece at $5150. It realized $6325 at the auction. Kleinsteuber identifies himself as “the underbidder” and Matt states out that this coin is “beautiful original, crispy, and has a nice cameo”!

The Carson Proof 1879 quarter is PCGS graded “63+” and also has a CAC sticker. It sold for $1092.50, which I regard as a strong auction result. This is certainly a retail price for a PR-63+ 1879 quarter, though Matt points out that it may be undergraded.

Likewise, the Carson 1882 quarter sold for a fair retail price, $2530, which is a strong auction price. In this case, the PCGS price guide value of $2850 is a little high and is in need of adjustment. The Carson 1882 quarter is PCGS certified Pr-64+ and is CAC approved.

Similarly, the $4600 result for the Carson 1879 Morgan, PCGS certified Pr-64+ and CAC approved, is a retail-level price. “That’s a lot,” Kleinsteuber says. “That price was significantly higher than [Matt] expected. This sale brought very strong levels.”

As auction results are often at or slightly above wholesale levels, the auction of a coin is often considered successful if a retail price is realized. As bidders (or their agents) are able to carefully select coins that are particularly appealing, collectors and dealers benefit by participating in auctions. In a major coin auction, bidders may choose from large numbers of coins being offered. In my opinion, it is better to pay a strong price for an attractive mid range to high end coin than a slightly lower price for a low end coin. (See The Widening Gap.)

Another strong price is $4312 for the Carson 1883 half dollar, which is PCGS certified ‘Proof-65 Cameo’ and is CAC approved. Although this price is well above the listings in all leading price guides and above some recent auction records for similar coins, there is often a need to actually examine a coin before concluding that an auction result is ‘too high’. Some coins have special or characteristics or exceptional features that cannot be fully comprehended from viewing pictures or reading descriptions.

I would like to have seen the Carson 1887 Morgan silver dollar that realized $7475. By any measure, this is a strong price for a PCGS certified Proof-65 Cameo 1887 Morgan with a CAC sticker. Auction records from the recent past suggest that PCGS Pr-65 1887 Morgans, with or without “CAM” designations, tend to sell for between $4000 and $6325. “Nice coin,” Matt asserts that these “Proof type coins are worth a lot of more when they have CAC stickers.” Kleinsteuber’s hunch is that “this coin brought a lot more than it would if it didn’t have a CAC sticker.”

VI. Success of the Auction

The fact that many of the coins had CAC stickers is one reason among several as to why the Carson collection brought very strong prices. (2) Carson’s coins were ‘fresh’ in that these have been ‘off the market’ for more than seven years. (3) Carson formed a true collection that was recognized as such be collector-bidders. It was not a miscellaneous assortment. It was organized in a way that is consistent with the culture of coin collecting in the U.S. (4) Information about the collector and his collection was available. True named consignments tend to realize higher prices than anonymous consignments. (5) The auction house effectively promoted the sale.

(6) Matt and I are in agreement regarding the most important reason. “This sale proved that Proof type coins with original surfaces are bringing strong premiums. People are paying more for originality,” Kleinsteuber exclaims. Indeed, most advanced collectors, and many expert advisors to collectors, favor coins that have natural toning and mostly original surfaces. Moreover, coins that are entirely original are worth an additional premium over those that are mostly so. It is refreshing to see 19th century coins that have never been dipped, substantially cleaned, or doctored. If two coins of the same date and type are assigned the same grade by the PCGS, and one is mostly original with natural toning and the other is not so original, the mostly original coin will be much more strongly desired by sophisticated collectors and/or expert advisors to collectors.