Katrina's Power: Can't Slow Market

Posted on 9/1/2005

Our hearts and prayers go out to those suffering from the devastating Hurricane Katrina. While the numismatic community will mourn with millions of others who have to rebuild their lives, we are finding many numismatists willing to offer help to those who are unfortunate enough to have been distressed by the hurricane and her aftermath.

A guest article from NumisMedia

Our hearts and prayers go out to those suffering from the devastating Hurricane Katrina. While the numismatic community will mourn with millions of others who have to rebuild their lives, we are finding many numismatists willing to offer help to those who are unfortunate enough to have been distressed by the hurricane and her aftermath. There are people who care.

Despite the massive destruction and loss of life left in the wake of Hurricane Katrina, the coin market continues to show many advances to the FMV.

Summer is over and school is back in session; the coin market seems to be moving back to normalcy as the last few months of the year typically find major coin shows very active. There are several major auctions on the docket in the next couple of months and these should produce some thrilling acquisitions for the winning bidders. The Internet appears to be creating an enormous amount of sales as dealers and collectors are using the information-super-highway to initiate transactions. With the ability to send bigger-than-life photos, even expensive coins can be sold without much concern. However, dealers and collectors need to be somewhat apprehensive with unknown buyers. If you are dealing with previous customers, then sales can be safe. If the buyer is someone you do not know and has not been in business very long you should definitely get adequate references.

There are many areas of the coin market continuing to attract collectors. The key dates in nearly every series are strong and dealers can usually receive premiums of the current Fair Market Value because there is so much competition for these elusive coins. This is one of the major areas that currently fuels this market. We are going to list some examples of key date issues with their grades and do a comparison of FMV from just one year ago.

Denomination Grade Sept. '04 Sept. '05
1877 Indian Cent XF40 $1,620 $2,160
1877 Indian Cent AU58 $2,400 $2,940
1877 Indian Cent MS63 $3,120 $4,050
1909 S VDB Cent MS60 $1,190 $1,330
1909 S VDB Cent MS64 $3,630 $4,190
1914 D Cent AU50 $960 $1,180
1914 D Cent MS63 $2,000 $2,690
1922 Strong Cent MS60 $5,610 $7,380
1913 S TII Buff AU50 $425 $530
1913 S TII Buff MS63 $780 $1,030
1916/16 Buff AU50 $23,130 $29,380
1918/17 D Buff MS63 $44,380 $51,880
1916 D Mercury VF20 $1,980 $3,330
1916 D Mercury MS60 $5,640 $10,200
1921 Walker MS60 $3,090 $3,870
1921 Walker MS63 $7,280 $8,320
1921 D Walker MS60 $3,480 $4,260
1921 D Walker MS63 $8,780 $10,400
1921 S Walker XF40 $4,140 $4,620
1893 S Morgan $ XF40 $7,200 $9,420
1893 S Morgan $ MS60 $60,630 $78,130
1894 Morgan $ XF40 $1,320 $1,980
1894 Morgan $ MS63 $4,910 $5,720
1911 D $2 ½ Gold AU50 $1,380 $3,450
1911 D $2 ½ Gold MS60 $5,190 $7,810
1909 O $5 Gold AU50 $2,550 $4,200
1909 O $5 Gold MS60 $6,810 $15,630

These are just some examples by grade and are by no means the exception; there are many other key dates within these series and other series as well that have advanced rather nicely. Most of these issues have seen nearly every grade advance within the last year. Also, with the FMV advancing as it has you might think that there would be more coins available as profits are taken; this has not been the case overall. We are not finding larger quantities of these coins available even as the FMV has risen. Keep in mind that the FMV prices that we report are for sight-seen coins. These are the coins most collectors acquire as they pursue their dreams. We do not allow the low-end coins to dictate the value of the majority of coins graded within a particular series and grade.

One of the more interesting aspects of collecting key dates in better grades is that the higher you collect, the lower the potential for acquisition. This goes hand-in-hand with another method of collecting that has forced the coin market to even higher FMV levels -- the collector who pursues low-pop coins based on the census reports from the major grading services. This can be very important information and allows the collector (and dealer) to learn how many coins of a specific grade have gone through the certification system. This knowledge helps with potential availability and can be a determining factor in evaluating a coin. Any grading service that does not perform this method of record keeping and does not make it available to the public is doing a disservice to the numismatic community. NGC and PCGS both maintain these census reports for use by dealers and collectors alike.

Many collectors, using the census reports to determine specific coins they would like to collect, are trying to acquire those issues that have very low population figures. That is, they are collecting coins that are not easy to locate and when the coins are available, the cost is usually above current FMV levels. However, many of these collectors are becoming specialists in these areas and they are quite aware of this catch-22. Moreover, they believe that most of these low-pop coins are the ones that have the most potential for future growth.

One dilemma we face is the fact that low-pop coins obviously do not appear very often. So FMV levels can be somewhat disconcerting to the numismatist trying to determine a buy price for a coin that has not traded for a few years. If you use, for example, a mintage rarity coin of the late 1800s, with a population of three coins at the highest grade level and the last one traded at $50,000 five years ago, you might see a new trade at anywhere from $100,000 to $500,000 depending on the degree of demand. With the market the way it is now, the demand is more likely to continue as more collectors gain further knowledge. There is one contradiction to this example: the modern issue coinage where the collectors pursue the perfect coin in 70. The first coin certified by the grading services becomes quite rare and the price can be somewhat irrational. As more coins are graded, the value typically comes down to earth. Obviously, these coins will eventually seek their true value. Unlike the old-fashioned true rarities who seek their true value at higher levels of FMV.

NumisMedia is the NGC Official Price Guide.

This article is a guest article written by:
NumisMedia

The thoughts and opinions in the piece are those of their author and are not necessarily the thoughts of the Certified Collectibles Group.