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Undervalued coins/coin series
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246 posts in this topic

1 hour ago, GoldFinger1969 said:

Well...for the last 10 years, the Gold & Silver Commemorative subindex of the PCGS 3000 Index has been the 2nd-worst performing sub-index, down 40%

Is this index meaningful?

  1. Is it reliable?

Test-Retest Reliability

                   Internal Consistency

Inter-rater Reliability

2. Is it valid?

Face Validity

                  Content Validity

Criterion Validity

Discriminant Validity

3. What published evidence supports the index?

Edited by RWB
Really despise this formatting....
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1 hour ago, GoldFinger1969 said:

https://www.pcgs.com/prices/coin-index/silver-and-gold-commemorative

Commemoratives went up 60-fold from 1970-1990.  That's 22% a year -- double what would be an unsustainable rate of return for 99.99% of individual investments, let alone an entire class.

The index sits about 85% below the 1989-90 all-time peak.  Looking at the 50-year chart, it's clear that the bubble into 1980 for precious metals did NOT slow down the Commemorative Bubble over the next 10 years.  No wonder folks are reluctant to throw in the towel.

I have seen the data before and I agree with you.

One of the points I was making with this series is that it is an artificial one.  It's "hole filling" at its finest.  What reason is there to buy so many disparate coins other than because someone else arbitrarily defined this grouping as a "collection"?  Just buy the ones you like and forget the rest which is what most collectors already do.

I was using the Hawaii as an example.  Collectors like it a lot, but I see no basis to claim it is "undervalued" other than because it's so much cheaper than the prior bubble price.  It's hard to compare it to most other coins but going by the current price and number of survivors which is all we have, it's still very expensive and not remotely cheap.

The Lafayette dollar and Isabella quarter are somewhat different as the only ones for the denomination but the first one isn't even close to being cheap either.  Is the Arkansas centennial or any other commemorating an obscure anniversary cheap?  Why?  Why would anyone really want it for a lot more?  The gold dollars are even worse, very common yet still expensive for what it actually is as a collectible.

There is a lot more reason to believe that, other than future speculation or a temporary promotion, most of these coins are going nowhere.  Like other US coins, all have the benefit of better liquidity but as a collectible, none are competitive versus comparably priced world and ancient coins.  As an "investment", it's obvious most collectors prefer modern world NCLT.

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8 hours ago, cladking said:

You and tens of millions of other collectors stepped out when clads were introduced. The mint and federal government hated coin collectors and did everything possible to discourage it.  They didn't really need the date freezes and other contrivances because just debasing the currency was sufficient for most collectors.  Millions  got out and the ones who didn't had no interest in setting aside rolls of clad coinage.  This is one of the things World colonial simply can't grasp. In his defense he believes that if there are more than a few hundred of a coin then it is "insignificant" and will never be collected  and there are a lot more of most moderns than this.  And to cap off this belief he also believes that varieties and high grade coins don't count even if they are scarce.  

I sure missed a lot here.  I am replying to this extract but it's to your entire post.

There is nothing in your claims I "fail to grasp".  I disagree with you, period.

Where I have primarily disagreed with you is that this coinage will ever attain the preference and prices you claim.  My perception isn't just based on the current size of the collector base and I have never said more won't collect it or it won't be worth somewhat more.

Do you remember our last exchange on the PCGS Forum in the thread "Raw Moderns"?  Do you remember the one post where you replied to my request for a price forecast?

Well, your reply is why I did, do, and will always disagree with you.  As an example of your claim, you told me that you think a modern with 20,000 survivors in some unnamed quality should be worth hundreds, either right now or in comparably valued money.

Since your opinion reflects a total detachment from reality, obviously I am never going to agree with it.  The number of coins with anything close to this number of survivors is very low outside of gold coinage where the price is predominantly from the metal content.  How many, I do not know but I do know that every single one have a lopsided collector preference over the coin you described.

With high grades, any common condition census coin is already overpriced given the collectible merits.  That US moderns are a lot cheaper than even more overpriced common US classics doesn't change this conclusion. 

Practically every single coin is "rare" in some quality.  This "distinction" is the equivalent of a "participation trophy".  It isn't one at all when hundreds, thousands or even more "essentially identical" (outside of exaggerated US criteria) also exist which is the reality for any common coin.

With die varieties, there is nothing unusual in the scarcity, US modern or otherwise.  If there are over 250,000 coins since 600BCE, there are millions and a noticeable proportion are scarce or rare.  So what?  

With US moderns given the usual huge mintages, there are at minimum dozens if not up to thousands of die varieties for each and every date/MM combination and most are so minor, you'd need a magnifier or a microscope to tell the difference.  So no, obviously I see no distinction in any scarcity here either.

Edited by World Colonial
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Questions like this inevitably end up discussing preferences rather than market value. In a free market, I'm not sure one can argue that anything is undervalued, although we all have opinions about which series is underappreciated. Differences in collector preferences are healthy and expected. BTW I think coins in general are undervalued compared to pop art, baseball cards, and designer purses, to name a few crazy (IMO) money magnets, but the market speaks. Most of the time I don't listen but just shake my head. 

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[Aside:  Is it just me, or is anyone else aware these two members have been at each other's throats -- for nearly 12 years!  I wish I could say more but the very last exchange between CladKing and World Colonial was so incendiary its intensity scalded my left palm and scrolling right thumb. Hard to believe there are animated emojis waving to viewers since 2008. More later, after I treat my injured member. Almost forgot, anyone see the OP, lately?  Great thread!]

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10 hours ago, cladking said:

You and tens of millions of other collectors stepped out when clads were introduced. The mint and federal government hated coin collectors and did everything possible to discourage it.  They didn't really need the date freezes and other contrivances because just debasing the currency was sufficient for most collectors.  Millions  got out and the ones who didn't had no interest in setting aside rolls of clad coinage. 

Why do you say that the Mint hated coin collectors ?  They sure wanted to sell them lots of high-priced product, that's for sure.

I never heard about coin collectors leaving the hobby once the government phased out precious metals backing our coinage -- but maybe it's true to a small extent.  Anybody got more stories to tell of the 1960's and 1970's, when the metal compositions were changed ?

Edited by GoldFinger1969
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2 hours ago, World Colonial said:

Well, your reply is why I did, do, and will always disagree with you.  As an example of your claim, you told me that you think a modern with 20,000 survivors in some unnamed quality should be worth hundreds, either right now or in comparably valued money.

It all boils down to supply -- AND demand.  I do believe there are some very vaulable ASEs -- the 2019-S comes to mind -- where the mintages were low and they sold out in 10 minutes.  Those coins sell for hundreds of dollars (OGP was ~ $70), $1,500 or so in PF69 or PF70.

The question is not only supply, but demand.  The demand for Mickey Mantle's Topps rookie card is through the roof which explains why the price has continued to rise over the decades.  No such equivalent demand exists for his contemporaries rookie cards, despite equal or better HOF careers, like Willie Mays or Hank Aaron, and those cards have simply not gone up over the years and decades.

Edited by GoldFinger1969
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10 minutes ago, GoldFinger1969 said:

Why do you say that the Mint hated coin collectors ?  They sure wanted to sell them lots of high-priced product, that's for sure.

I never heard about coin collectors leaving the hobby once the government phased out precious metals backing our coinage -- but maybe it's true to a small extent.  Anybody got more stories to tell of the 1960's and 1970's, when the metal compositions were changed ?

He's referring to the late 60's when most collectors used to collect out of circulation.  He is correct that many did, though I was not around to have any idea of the proportion.

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3 hours ago, RWB said:

Is this index meaningful?  Is it reliable? Test-Retest Reliability Internal Consistency Inter-rater Reliability 2. Is it valid?  Face Validity  Content Validity  Criterion Validity Discriminant Validity 3. What published evidence supports the index?

Roger, unlike financial indices -- where I am well aware of all the backtesting biases and games companies play -- I think that these indices were all designed without any intentional or inherent bias.  I think they capture pretty much what has happened to coin prices over the decades, though we can quibble with inclusions or exclusions here or there.

For instance, if someone came up with a Saints-Gauden Coin index and only included rare and super-rare coins, the declines for that index would be much less than if you included semi-scarce and generic commons.  That would be an example of a clearly biased index.

I have tried to find out what specific coins are in each sub-index, but can't find the right link.  I can find ALL the coins in the PCGS 3000 Index, so I can guess which coins belong to which sub-index that way.... but that isn't very helpful.  If anybody knows how to find out what's in each of the sub-indices, let me know.

Here's EVERYTHING in the 3000 Index:

https://www.pcgs.com/prices/pcgs3000

Edited by GoldFinger1969
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5 minutes ago, GoldFinger1969 said:

It all boils down to supply -- AND demand.  I do believe there are some very vaulable ASEs -- the 2019-S comes to mind -- where the mintages were law and they sold out in 10 minutes.  Those coins sell for hundreds of dollars (OGP was ~ $70), $1,500 or so in PF69 or PF70.

The ASE is an entirely different situation from contemporary US circulating coinage.  The series as a whole is at least much bought for "investment" as collecting. 

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1 hour ago, LINCOLNMAN said:

Questions like this inevitably end up discussing preferences rather than market value. In a free market, I'm not sure one can argue that anything is undervalued, although we all have opinions about which series is underappreciated. Differences in collector preferences are healthy and expected. BTW I think coins in general are undervalued compared to pop art, baseball cards, and designer purses, to name a few crazy (IMO) money magnets, but the market speaks. Most of the time I don't listen but just shake my head. 

Stamp collectors would say stamps are cheap, too. :)

But I get your valid point. (thumbsu

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On 7/21/2008 at 11:52 AM, cladking said:

It's not clad coins that are "junk" it's the metallic composition. You might think this is a fine distinction and in 1965 it was. In 2008 it is no longer a fine distinction it makes all the difference in the world. It's no longer reasonable to expect small change to be made of precious metal. Imagine bringing back CA fractional gold to circulate! It would be little bigger than gold dust.

 

Clad coins are really high tech. Now days the strip isn't so difficult to make but in 1965 they didn't have the ability to squeeze the constituent layers hard enough with rollers to make them adhere so they pushed them together hydraulicly and detonated dynamite above. I keep telling people there's a 45 year garauntee on the product and soon they'll start failing explosively. ;)

 

They've really served their function pretty well over the decades. Those early ones which survive are almost universally well worn as proof. A collection of them isn't a collection of junk, it's a collection of coins made of a high tech and highly wearable "junk" metal. It's kind of like the modern version of copper nickel indians but with far more versions and a slightly higher face value.

Glad I took the time to go back and re-read this (which never would have happened had the thread self-destructed instead of re-igniting).  Never thought of clad coinage as being high-tech; unfamiliar with the fact that they were so difficult to make initially.  Still don't like them and probably never will, but in light of your explanation, which I accept wholeheartedly, can no longer regard them as junk.  I wonder though whether high-tech plastic, used by some countries in the production of currency, may someday be used to make coins. Nah, come to think of it with the creep toward a cashless society, they just might dispense with the whole kit and kaboodle.

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10 hours ago, Quintus Arrius said:

in 1965 they didn't have the ability to squeeze the constituent layers hard enough with rollers to make them adhere so they pushed them together hydraulicly and detonated dynamite above.

Cladking's comment (above) is incorrect. Also, explosive bonding was tested, not adopted. See the book Pattern and Experimental Pieces of WW-II for details.

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41 minutes ago, RWB said:

Cladking's comment (above) is incorrect. Also, explosive bonding was tested, not adopted. See the book Pattern and Experimental Pieces of WW-II for details.

That part of CladKing's comment I dismissed outright. It is his view [now going on 12 years] of clad coinage as "high-tech" I found interesting. Matter of fact, this is the first defense of clads I had ever heard of since their introduction over fifty years ago.

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31 minutes ago, Quintus Arrius said:

That part of CladKing's comment I dismissed outright. It is his view [now going on 12 years] of clad coinage as "high-tech" I found interesting. Matter of fact, this is the first defense of clads I had ever heard of since their introduction over fifty years ago.

Well, I can add one more positive comment -- according to archive sources employees of the Coining Department claimed clad was easier to work than 900 fine silver-copper. It certainly took much less work to strike coins - there was no melting, rolling or annealing involved. Just cut out the cookies and stamp with a smiley face.

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7 minutes ago, RWB said:

Well, I can add one more positive comment -- according to archive sources employees of the Coining Department claimed clad was easier to work than 900 fine silver-copper. It certainly took much less work to strike coins - there was no melting, rolling or annealing involved. Just cut out the cookies and stamp with a smiley face.

I will never bad-mouth a clad coin again.  Now, any positive things to say about today's Lincolns with their copper mascara smiling faces?  Or are these pathetic excuses for coins above reproach?  Which of the billions made thus far in the 21st Century are undervalued? (Har har hardy har har.)

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16 hours ago, Quintus Arrius said:

Is it just me, or is anyone else aware these two members have been at each other's throats

After ya been around a while ya won't even notice it.  You should have been here in Fall/Winter 2003 when HRH of ATS threw a curve ball at our Host.  All Hades broke loose after that.  :makepoint::slapfight::baiting:

The boys are just being themselves and they have agreed to disagree.

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16 hours ago, LINCOLNMAN said:

BTW I think coins in general are undervalued compared to pop art, baseball cards, and designer purses, to name a few crazy (IMO) money magnets, but the market speaks. Most of the time I don't listen but just shake my head. 

Never commented on this but I agree with you.  I do believe that coins are "fairly valued" or "under valued" in the aggregate versus other mass produced collectible segments.

I don't extend this though to unique or near unique objects as I occasionally read on coin forums, auctions descriptions, or the numismatic press.  Claiming some high profile rare coin is "under valued" versus nine figure paintings or another prominent art object is illogical.

The most expensive coins aren't remotely "undervalued" but "over valued", as art or as a collectible.  That's why I have used Faberge eggs and St Guadens' artwork in recent posts when discussing the 1933 Saint.  These coins have better liquidity but will never have the cultural significance to a comparably priced artwork.

In making this comparison, most coin collectors seem to ignore that eight and nine figure art is a tiny segment of the art market and not representative at all.

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1 hour ago, Alex in PA. said:

After ya been around a while ya won't even notice it.  You should have been here in Fall/Winter 2003 when HRH of ATS threw a curve ball at our Host.  All Hades broke loose after that.  :makepoint::slapfight::baiting:

The boys are just being themselves and they have agreed to disagree.

Love those emojis.  Very appropriate for this thread.

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2 hours ago, RWB said:

Well, I can add one more positive comment -- according to archive sources employees of the Coining Department claimed clad was easier to work than 900 fine silver-copper. It certainly took much less work to strike coins - there was no melting, rolling or annealing involved. Just cut out the cookies and stamp with a smiley face.

A couple of random observations. Is anyone surprised that a guy who goes by the handle “CladKing” has a thing for clad coins? I’ll wait here whilst you consider that one. Yes, clad coins have become painfully easy to deal with, but one needs to wonder why so few nations went the clad approach, and instead went with plating, often over steel, rather than messing with cladding. Canada, U.K., call your office. Also, the baseball Hall of Fame HALF DOLLAR won for International Coin of the Year in early 2016, precisely for having mastered the inherent difficulty in creating a curved clad coin.

 

By the way, Keith Haring’s street art? The very epitome of over-valued. And I say that as someone who once wooed his sister. She’s a great lady. 

Edited by VKurtB
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26 minutes ago, ronnie stein said:

Don't mean to interrupt, but I think several different years of AU58 $3 golds are a steal, considering known survivors.

What dates do you think are cheap?

I'd describe it as a series with a not particularly high collector preference predominantly bought for type sets.  If this is true, the comments I previously made for Barber proofs earlier in this thread apply to it also.

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20 hours ago, GoldFinger1969 said:

 Anybody got more stories to tell of the 1960's and 1970's, when the metal compositions were changed ?

I think the safest answer to this question is the simplest one:  you could no longer collect coins from change. And instead of judging individual coins on their respective merits, suddenly the term "melt value" was introduced and emphasized so much that it merited a page of its own in the Red Book when bullion value exceeded numismatic value, and the more common dates began to vanish.  Coin collecting as we knew it ceased to exist.  This had a decisive impact on collectors of [35%] silver war-time nickels, [90%] silver dimes, quarters, halves, dollars (still available at local banks) and copper cents, later on. Now you had no choice but to buy coins. Investors, and scamsters, took notice.  The rest is history.

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34 minutes ago, Quintus Arrius said:

I think the safest answer to this question is the simplest one:  you could no longer collect coins from change. 

It's not that no one could collect from change anymore, it's that whoever no longer did so chose it.  I am quibbling with your post but actually agree with your sentiments.

Why did it happen?

Well, shocking and dismaying as it may seem, people actually disliked having their currency debased.  They didn't like it then and they still don't usually like it now.  It's no different than having your pocket picked or being victimized by burglar.

That's why gold and silver still sell for far more in the commodity markets and why coin collectors still overwhelmingly prefer both over current base metal circulating coinage.  It's also why as long as gold and silver continue to priced much higher in the commodity markets, this preference will never change.

Edited by World Colonial
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This thread went crazy since I last posted. WC I previously mentioned Barber Halves because of an "educated hunch" but your points are valid. Basically it has to do with the fact that the coins were heavily used so high quality or even decent survivors are more difficult to come. Add in the fact that mintage #s were not in the stratosphere compared to just about anything else from the 20th Century. 

The BCCS is alive and well and Halves are big enough for "large coin bias" (I've heard it's a thing). 2nd Edition of the Barber Coins Guidebook was printed not long ago. The series is over 100 years old and 90% silver. 

Basically it's hard enough for a good challenge but has no true "stoppers" in circulated condition ("Micro o" 1892 being the most difficult if you think it's necessary).

Also a time where lots of people are spending more time at home and a Fed that can't stop creating $ out of thin air = significant interest in silver, especially "junk silver" and you have yourself a hobby with a floor of inflation protection. 

I don't expect WC to agree and that's fine. I just think the series needs a lot less than most of the other US Coinage to tip the supply/demand scale in favor of higher prices.

One other weird thought I had was high-quality "details" slabbed coins being undervalued. Just a thought though...

A little old but on point: https://www.pcgs.com/news/barber-coins-great-collector-coins-at-a-bargain-price

Edited by 80s Kid
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1 hour ago, World Colonial said:

It's not that no one could collect from change anymore, it's that whoever no longer did so chose it.  I am quibbling with your post but actually agree with your sentiments.  Why did it happen?   Well, shocking and dismaying as it may seem, people actually disliked having their currency debased.  They didn't like it then and they still don't usually like it now.  It's no different than having your pocket picked or being victimized by burglar.

It's almost like you are saying (some) Americans liked collecting SILVER and GOLD coins only, right ?

Well, there's always Morgans and Saints. xD

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[I was a thirteen year old kid in 1964.  Like many teenaged boys, we bought blue Whitman coin albums for Indian Head cents (which may have included Flying Eagles, 1856 or 1857 and 1858) 1859 - 1908-s; Lincoln cents, 1909 - 1960's;  Buffalo Head nickels, 1913 - 1937; Jefferson Nickels, 1938 - 1960's; Mercury dimes, 1916 - 1945, Roosevelt Dimes, 1946 - 1960's, and so on.

Well into my teens, the coins you could collect from change disappeared, the coin albums were shelved uncompleted until I discovered coin shops in Manhattan whereupon I discovered the key coins that had eluded me in my youth.

I am 70 now. I don't know what the median age of coin collectors is today but I suspect those older than me who enjoyed collecting in its heyday are few and far between. As far as the reason(s) why they "chose" to leave the hobby, you would have to ask them.  I would guess their experience mirrors my own.

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1 hour ago, GoldFinger1969 said:

It's almost like you are saying (some) Americans liked collecting SILVER and GOLD coins only, right ?

Well, there's always Morgans and Saints. xD

I think you might be onto something but just a guess. :)

Edited by World Colonial
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I don't have time now to address everyone's points but;

Quote

With US moderns given the usual huge mintages, there are at minimum dozens if not up to thousands of die varieties for each and every date/MM combination and most are so minor, you'd need a magnifier or a microscope to tell the difference.  So no, obviously I see no distinction in any scarcity here either.

It always comes full circle; you start and stop by saying all moderns are common and were saved in large numbers.  Neither statement is true.   Even if either were true in point of fact quality tends to be horrendous so high grades would still be elusive.  You believe moderns are unimportant and insignificant but you don't speak for every coin buyer.   Many people find some or all moderns to be exciting and significant.  If I were a young man I'd be buying instead of selling. If my heirs knew how to liquidate them I'd leave the coins for them.   It's a far better time to buy than sell.   Such is life.  

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On 4/7/2021 at 6:44 PM, GoldFinger1969 said:

Why do you say that the Mint hated coin collectors ?  They sure wanted to sell them lots of high-priced product, that's for sure.

I never heard about coin collectors leaving the hobby once the government phased out precious metals backing our coinage -- but maybe it's true to a small extent.  Anybody got more stories to tell of the 1960's and 1970's, when the metal compositions were changed ?

The mint might not have hated us as much as the federal government but there was certainly animosity.   Collectors were blamed for the coin shortage and were being punished with a series of laws and procedural changes.   These laws crashed the coin hobby in 1965 and drove millions away from coin collecting.  Then the direct fallout of lack of valuable coins or silver in circulation drove millions more from the hobby.   There was even a bill (Bible bill) before Congress that would effectively illegalize all coin collecting other than valuable old US coins and foreign coins.   

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