Quality Reigns This Fall; Cash And Carry - Coins On A Budget

Now that the fall season is officially upon us, it is time, especially for those of us lucky enough to reside in New England, to enjoy the spectacular autumn foliage. Ah, yes, the vibrant reds, deep golds, and flaming orange leaves are splendid to embrace, yet they are a pain to rake up. A few wild turkeys are also adding to the atmosphere, as they make a regular afternoon appearance in my yard. However, regardless of the season, whims of the metals markets or recently promoted series of choice, the true collectors, those who are loyal hobbyists, remain unwavering to this great institution and continue to perpetuate our fabulous pastime.

In my travels, on a daily basis, I come in contact with scores of collectors, many of whom belong to smaller regional clubs. They are all so excited to learn about numismatics and the history of our US coinage as well as world issues. The comradery, experience and the ability to impart and share their knowledge to their associates and newcomers is what drives this hobby. The time spent educating oneself is priority, especially for the newer numismatists. At its core, this, after all, is a hobby. I know this could be somewhat of a shock to some big-time dealers, but the reality is numismatics, the collecting of coins, currency, medals and tokens, is still a hobby. With that said, major auctions continue to dominate headlines and rake in millions of dollars in sales, seemingly on a monthly basis. And, while the average high profile dealer’s well-designed websites or newsletters do not cater to the collector that is paying $25-$100 for a coin, it is precisely these, the average collectors who are truly the backbone of the numismatic business.

I’ve talked to numerous veteran collectors that have a budget of under $200 per month allotted for coin acquisitions, and they are as excited as the big-time investor who has unlimited coffers. Yet, when an opportunity surfaces for either to attend a regional or major show, the task of self-controlled salivating begins. The goals for both factions are inherently similar: to ferret out the best possible coins that he or she can afford for their collection.

Although most of the news generated from the bourse or auction is usually catered towards six-figure coins and above, there are numerous opportunities for collectors looking to acquire high-quality scarce and rare coins on a limited budget; we just don’t hear about them all that often. Reports of a collector or dealer extolling the virtues of a great, but unheralded, $100 coin conquest are virtually non-existent. From a monetary standpoint, this, of course, is very understandable. The sale of a single six-figure coin, for example, brings an auction house a sizable commission; the same auction catalog would have to sell upwards of 1,000 lots in the hundred dollar hammer price range to generate the same profit. However, I can personally attest to the excitement of a collector (me) reeling in a special or exciting coin on a calculating, yet limited, purse string.

Just today, Jeff, a novice collector from Portland, Maine, shared with me a recent purchase. The coin, an 1881 Indian Cent graded NGC PF 62 BN. This otherwise relatively common coin was endowed with radiant red, amber and lavender toning which was just electrifying in appearance. This proud acquisition cost Jeff only $190. Certainly, for the assigned grade I can argue the eye appeal and surfaces are superior to any late date Indian Cent that I have seen. Furthermore, here’s a Proof coin that has an original stated mintage of 3,575 pieces yet only a little over 10% of that mintage (386 according to the NGC US Coin Census population) in all color combos have been graded by NGC to date. Certainly, this isn’t a true rarity, and the NGC Census doesn’t totally reflect that fact. Interestingly though, according to the NGC US Coin Census there are only 3,374 coins for the entire Indian cent series that are designated as “Proof Brown”.

It is precisely a coin such as this 1881 Indian Cent that is so exciting to numismatists: a coin which harbors a low population, is from a very popularly collected series, and is endowed with a superior eye appeal to boot. Although the more commercially coveted grade designations for the Proof Indian Cent would be Red and Brown or full Red, with a little bit of legwork the collector can find some extremely attractive and colorful examples such as the coin Jeff located which are merely designated as Proof Brown!

For the budget yet quality-conscious numismatist, a quick review of a few of the electronic trading networks this past week revealed numerous offerings in the $200 and under price point; several are rivaling the finest known!! Certainly, it’s not really that early to start salting away a couple of holiday gifts for the numismatist on your list.

A few better Morgan Dollars I found on the various networks include:

• 1886-O S$1 NGC AU 53 at $100
• 1894-O S$1 AU 50 at $180
• 1899 S$1 NGC MS 60 at $190

A nice selection of NGC MS 64 Morgan’s at $59 yielded the following dates:
1883-O, 1885-O, 1887, 1889, 1899-O, 1901-O

I also spotted a nice grouping of New Orleans Mint NGC MS 65 Morgan Dollars at $155 each:
1883, 1884, and 1885

Several other popular higher-grade, lower population coins at moderate levels:

• 1851 Large Cent NGC AU 53 BN $120
• 1931-S Lincoln Cent NGC MS 62 RB $160
• 1935 Lincoln Cent NGC MS 67 RD $150 (tied for highest graded)
• 1913-S Type I Buffalo Nickel NGC MS 62 $110
• 1932-S Washington Quarter NGC AU 55 $165
• 1938 Washington Quarter NGC MS 65 $145
• 1951 Washington Quarter NGC MS 67 $200 (only 1 graded higher)
• 1951-S Washington Quarter NGC MS 67 $225 (only 7 graded higher)
• 1956 Washington Quarter NGC PF 69 $58 (tied for highest graded within this designation)
• 1947-S Roosevelt Dime NGC MS 67 FT $180 (only 2 graded higher)

Quality and variety are certainly available for the budget conscious. Just take time to scope out the offerings and that special coin can be yours. As an associate of mine recently stated, “With all the surplus material available in many dealers' inventories, it is a great time to cash and carry, but quality still reigns this fall.” The most important thing in a market like this is to continue cycling fresh material. The older coins get in inventories and the less interesting they become, but as people continue to offer nice, new coins, they certainly don't hesitate in selling.

As we head into October and 2014 prepares to wind down, a few well-known dealers were gracious enough to share their take on the current market. There is a common thread within the commentary: the precious metals slaloming and the constant requisite of fresh material. Both of these components always seem to be integral factors as to the direction and pacing of the market.

According to well-known John Brush, Vice President of David Lawrence Rare Coin Galleries, “It seems that the pure number of major auctions recently (and upcoming) has really slowed the market down for collectors. We still see strength amongst core collectors, but coins in the $10,000+ range are a bit tougher to sell. Of course, legitimately rare pieces and "fresh" coins are selling just fine, but we see many collectors in those categories waiting to see what is offered before they make a spontaneous purchase.”

Unfortunately, the same appears to hold true amongst many coin dealers as the bullion prices decline and have dried up some of the requisite cash flow of a few dealers. John also added, “I'm not sure how much to attribute to the fact that the market always slows down post-ANA, but unfortunately for the collectors with major collections in the upcoming months, the results may not look as good as if they held off until the beginning of next year.”

I also had the opportunity to chat with respected authority Ian Russell, President of Great Collections, “It's an interesting market at the moment, perhaps more focused than previously. However, we are getting into our October/November auctions, which are usually some of our most active. In the next few weeks, we are offering some impressive collections, including an extensive nickel collection. This collection contains the most varieties I've ever seen in a single collection and is being sold unreserved. I'm looking forward to the October New York City show, as well as Baltimore. On the modern front, the Kennedy gold half dollars seem to have bottomed out and have started to increase a little. There were obviously way too many on the market, and that depressed the prices. We're seeing demand for the Proof 70s.”

Bob Green, President of Park Avenue Numismatics, also imparted some words of wisdom, “After more than two months of steady declines in gold, we are seeing renewed interest in certified gold coins, as they seem to be a safe haven for those interested in buying at the recent lows of the market. Smart money comes in handy at times like this, and we’ve seen a surge in demand for generic gold coins. There are a lot of strong fundamental reasons for owning precious metals now, including worldwide geopolitical issues, as well as economic uncertainty. Rare coins offer buyers a long term hedge and stability that many other more traditional investments lack, including upside potential due to strong supply and demand. We recommend owning $20 Saint-Gaudens in MS 63 to MS 66 condition at current levels.”

I certainly concur with Bob’s assessment, especially in regards to $20 Saint-Gaudens, for a nice MS 64 grade, which I have seen offered at $1,450 as we go to press. The PNG New York Invitational show, October 9-11, featuring two exciting and varied sales presented by both Heritage and Stack's Bowers, should offer some definitive insight as to the market’s vitality, which I will address in the next installment.

Until next time, happy collecting!

Jim Bisognani has written extensively on US coin market trends and values and was the market analyst and writer for a major pricing guide for many years. He currently resides in Southern California and frequently attends major coin shows and auctions.