What You Need To Know: One Numismatist's Experience with the Toning Premium
0

24 posts in this topic

11,425 posts

This topic was originally inspired by discussions regarding the ANA Summer Course, and by questions that touch upon the weight given to toning in relation to a coin's overall grade. This topic also appears to come up in threads quite often and the framing of the statements or questions suggests many times that the author has a particular distaste or misunderstanding of this niche market. Monster toning is a numismatic hot button that has been the center of discussion, debate and argument. Often, the questions or statements are rhetorical, usually debates are impassioned and occasionally the arguments put forth may even be logical. Keeping the former in mind, and using the previously mentioned discussions and questions as a backdrop, I would like to state why, in my opinion, we see an "additional" premium on toning.

 

First, some parameters are required as background to the current premise. This is about the type of toning that makes people say a coin is attractive without regard to marks, hits or nicks; the type of toning that makes people ignore the grade of a coin; the type of toning that elicits a strong urge to possess the piece. In essence, the type of toning that makes people pause when looking at coins and that veritably drags out a response based more on emotion than on reason. Unfortunately, although I own many “monster toned” coins, I have precious few images suitable for inclusion in this thread. Therefore, the thread will be populated with images of coins that I own, and that will hopefully serve to illustrate some of the points to be written about.

 

Toning of this caliber is not the norm. In my estimation, based upon years of specializing in this numismatic niche, I would say that close to 80% of toning on coins is both grade and eye appeal neutral, while the balance is split between attractive and unattractive. Of the 10% delegated to the attractive pool, I would further state that extremely attractive pieces make up perhaps 1-2% and only a very small percentage, on the order of 0.05%, are true monsters. Additionally, please note that this thread is not about how the grading services grade toned coins or the relative weight that they give to such a subjective topic, which could truly encompass a chapter of a book.

 

1266036-H1917DN66FH.jpg

An attractively toned SLQ; this series is notorious for being difficult to find nicely toned.

 

The first edition of the PCGS Grading Guide states that marks, luster, strike, toning and eye appeal are the criteria used for grading, however, I do not recall a precise breakdown of weight per attribute explained in the guide. In the third edition of Scott Travers' book The Coin Collector's Survival Manual the author gives a precise table that purports to be the method used by PCGS and NGC to grade coins. I find the table bulky and cumbersome for real world grading and doubt that the services actually use such a formalized method. They most likely use a reckoning system based on their considerable experience, and the rigid table cut-offs serve only loosely as a guide for coins with a particularly low-end attribute. The Travers book gives only four criteria for grading. Presumably, the component of grade for eye appeal would include any toning factors in this format.

 

1266040-CopyofF1859N65obva.jpg

A nicely toned Seated dime; this series is known for having attractive coins, though they are more frequently found as PF.

 

Currently, a shared conundrum faced by many numismatists is that very attractively toned coins may receive a boost in their TPG-assigned grade because of their toning. However, upon sale of the coin, a surcharge on top of the TPG-assigned grade takes residence in the price. The rationale for this surcharge is that the coin in question has superior eye appeal. Therefore, the coin has received a premium for toning by both the TPG and the seller. In this case, there are at least three discrete steps in the grading and pricing algorithm, while ignoring the greed possibly found in any numismatic deal.

 

1266038-B1912P65BN.jpg

A monster toned matte proof Lincoln; this is a huge coin.

 

The first is that the grading step performed by the TPG is an initial, independent estimation of the coin's properties. That is, the graders are looking at the coin and their assigned grade reflects that this coin, on balance, is an MS66 (or whatever grade) in their opinion. Granted, a wonderfully toned coin can boost an otherwise MS65 to an MS66 grade, and can even boost an otherwise MS64 to an MS66 grade. Therefore, the subjective component of the desirability of toning is already resident in the TPG-assigned grade. This does two things; it gives the component grade in the abstract and helps to nail down the price to a certain generic, predetermined range in a concrete manner.

 

1266056-E1858N66rev.jpg

An attractive Seated half dime; this series is similar to the Seated dime series with respect to toning.

 

The statement that an MS64 can get a boost to MS66 because of toning is in contrast to what some instructors at the ANA Summer Course state, who infer that "great toning can add a point to the slabbed grade" and that wonderful reverse toning can do little to help a grade. In the real world, it can add more than a single point to the TPG-assigned grade. Reconciliation of this apparent dispute occurs by acceptance that 15-20% of coins are "liners", according to the instructors, and that the precision and accuracy of human graders is finite, which allows a two-point upswing due to eye appeal. What is not consistent, however, is a statement made by an instructor that "the color was so good it was worth two points" in relation to a WLH with supposedly knockout color. I do not want to get into the minutia of what the instructors said because what they said may not have been exactly what they meant and, even if it were; how I interpret these statements might not be. The assertion that the reverse of a coin can do little to raise the final grade does not always hold true. An example is a 1952-S Washington quarter that has an obverse no better than MS64, yet resides in a PCGS MS66 holder because of its awesome reverse toning.

 

1266046-H1952SP66R.jpg

A PCGS MS66 graded 1952-S Washington; the coin has an MS64 obverse yet is graded MS66 because of the reverse toning.

 

The second discrete step to a beautifully toned coin's price is relative demand for the coin. This is not the same as demand for the particular issue, such as the well-known demand for 1909-S VDB Lincoln cents; rather, this is demand for the eye appeal caused by the toning. Attractively toned coins are extremely limited in numbers, but the pool of willing buyers is relatively large. The pool of willing buyers is also apparently expanding rapidly with the advent of high quality images on the internet. This leads to willing, aggressive buyers chasing these few pieces. This is similar to the 1909-S VDB Lincoln cent in that even though it is far more common in MS grades than many other early Lincolns it still sells for more money than its more scarce counterparts because of inordinately high demand. The demand is not only greater but it is more consistent.

 

1266034-B1914Obv.jpg

A very attractive matte proof Lincoln; these are much more difficult to find than a 1909-S VDB, yet less expensive because demand is lower, too.

 

The final component is essentially two-fold and this is the ability to find a replacement combined with that replacement's cost. It is one thing to have a high demand coin such as the 1909-S VDB Lincoln cent, where one may sell a piece and then find another relatively quickly and with minimal effort. In those cases, you can be certain there will be a supply of coins as long as you are willing to pay a more or less well established market price. It is an entirely different thing when you do not know when or where you will find the next monster coin for sale and, even if you are fortunate enough to find one or more, what the cost level will be to acquire them. Five times Greysheet bid is not unheard of and even fifty times bid is a bargain at times. The lack of certainty in replacement and cost makes this niche market less predictable.

 

1266047-new-1.jpg

A monster toned Mercury dime; perhaps one of the finest Mercury dimes extant.

 

In short, the boost to the coin's grade for superb toning is in one respect simply a reflection of the attributes of the coin. As such, it should not hold sway over other individual criteria. Even if the previous view is rejected, the idea that the price differential of a one-grade boost should, in general, be appropriate compensation for a very high demand item that also has extremely unpredictable cost structure and availability might not be universally accepted. In these cases, the grade lays a very basic framework and the market's demand, personified by the individual numismatist, serves to drive the final price higher when viewed in the context of uncertain supply and cost. As always, buy what you like with money you can afford to lose.

Share this post


Link to post
Share on other sites
8,304 posts

Great article....I read part of it on your site last night and I agree completely.........

 

I think for me the most important aspects in determining whether I buy a nicely toned piece is as you put it.......can I find another one like it or replace one I own if I sell it? The answer is usually no or at least it might take quite a bit of time and energy hunting down the next piece 893scratchchin-thumb.gif

Share this post


Link to post
Share on other sites
1,824 posts

Very insightful post that will help me intelligently pursue better quality toned coins. Those are some very delightful coins that you have shared Tom 893applaud-thumb.gif893applaud-thumb.gif893applaud-thumb.gif

Share this post


Link to post
Share on other sites
358 posts

What a great article. Thank you. I never considered the ability to find a replacement aspect. Even though I'm not confident in buying a beautifully toned raw coin, you have convinced me to pursue some certified toners. Yours are just beautiful.

 

Thanks again,

Regis

Share this post


Link to post
Share on other sites
4,564 posts
Five times Greysheet bid is not unheard of and even fifty times bid is a bargain at times.

 

Tom, great article as always. Thanks so much for taking the time! I was actually going to ask about the above quote. I wasn't sure what the appropriate premium for a nicely toned coin should be.

 

Thanks again, Winston

Share this post


Link to post
Share on other sites
11,425 posts

The appropriate premium for nice toning might be best thought of as what a knowledgeable buyer is willing to pay for the piece from a knowledgeable seller. The multiples of bid will be highly dependent upon what bid is. In other words, for a coin with a bid of $1 it isn't difficult to cough up $15 for a wonderfully toned piece, however, if bid were $1,000 then it would be mighty tough to pay $15,000 for the coin, yet these are the same multiples of bid.

 

If you decide to get into this niche market I would suggest to go slow and to look at hundreds or thousands of coins first. Until about 2000 this market was not hot, but it has become extremely competitive in the last few years. From about 1998-2001 I was one of the most aggressive buyers for wonderfully toned coinage, but in the last five years I have found myself increasingly unwilling to pay the highest prices. This isn't because I necessarily think these coins are bad, it is more because I view other niche markets, that I am also interested in, as better values.

 

Lastly, be aware that NGC, PCGS, ICG and ANACS all slab AT coins to one extent or another. In other words, simply because a coin is in one of these holders does not mean that it is entirely original or that other collectors in this market will eagerly buy it from you. Good luck.

Share this post


Link to post
Share on other sites
4,564 posts

Lastly, be aware that NGC, PCGS, ICG and ANACS all slab AT coins to one extent or another

 

Tom, with the above being true, it will be difficult for me to learn the difference between AT & NT. I'm wondering, do you know of a picture book that lays out a large number of AT & NT coins and explains their differences? I don't know that I would want to be exclusively in this niche, but I would like to have at least some knowledge of it. BTW - the articles and coins on your site are terrific, but I agree with you that it would be good to look at hundreds or thousands of coins.

 

Thanks again, Winston

Share this post


Link to post
Share on other sites
3,649 posts

Thank you for this inspiring post. Some things I didn't know about and a stimulus in perception. Thanks.

Share this post


Link to post
Share on other sites
14,725 posts

I look forward every week to these WYNTK posts. They are usually very rewarding, educational, and exciting. This one is no exception. I love toned coins, even though they are out of my price range for the most part.

 

I wanted to say that I agree with winstonware, there is a need for a book on toning. NT vs AT. Causes, etc. With many, many large color pictures.

Share this post


Link to post
Share on other sites
8,304 posts

There isn't a book becuase a coin image and the coin in hand can look quite different and it is impossible to judge luster and how the color sits on the coins surface which are major components to identifying AT vs. NT. Colors and color patterns common to certain denominations is also a big tell when buying toned coins.........if you see a peace dollar with rainbow Textile bag toning ....it could be one in a million but most likely it's AT so knowing how certain series where packaged from the mint and stored by banks and collectors alike is critical.

 

Here is a like to an AT coin gallery I created over on the TCCS website. I will keep adding more coins to it so you have a nice reference of what properties can make a coin considered AT thumbsup2.gif

 

TCCS AT Gallery

 

If anyone has any requests for pictures of AT'd coins from their favorite series and you don't see any examples in the gallery......let me know and I will try to find some example for you and post them. Also keep in mind that if you have questions about the legitimacy of toning on a particular coin.....you can always post pictures or links to auctions and some of us should be able to assist you. 893scratchchin-thumb.gif

Share this post


Link to post
Share on other sites
4,564 posts

you can always post pictures or links to auctions and some of us should be able to assist you

 

Thanks for that offer. You guys are always very generous with your time and expertise - I really appreciate it. I have at least quadrupled my knowledge since I started reading these posts only a few weeks ago.

 

Shane, did you move your images in that AT post? They aren't showing up for me.

 

Thanks again Winston

Share this post


Link to post
Share on other sites
8,304 posts

Nope they are all they're and are uploaded to the TCCS server so you should be able to see them unless something on your PC is preventing it???

Share this post


Link to post
Share on other sites
241 posts
Lastly, be aware that NGC, PCGS, ICG and ANACS all slab AT coins to one extent or another

 

Tom, with the above being true, it will be difficult for me to learn the difference between AT & NT. I'm wondering, do you know of a picture book that lays out a large number of AT & NT coins and explains their differences? I don't know that I would want to be exclusively in this niche, but I would like to have at least some knowledge of it. BTW - the articles and coins on your site are terrific, but I agree with you that it would be good to look at hundreds or thousands of coins.

 

Thanks again, Winston

 

I have an ANA video - "how to detect artificial toning on coins" that I lend out occasionally to other board members. It can get you started on understanding the difference between AT/NT. If you are interested in borrowing it, just PM me your address.

 

 

Tom - great post by the way thumbsup2.gif

Share this post


Link to post
Share on other sites
238 posts

I've seen the ANA video on dectecting AT coins---No one will have any significant doubts when viewing coins after seeing it. 99% of the arguements here are between those who haven't viewed the hundreds of images in the video.

Share this post


Link to post
Share on other sites
4,564 posts

Hey thanks for the kind offer. I decided to go over there and buy it. I thought I might want to reference it in the future as well. Thanks for pointing out that this video existed. I didn't know.

Share this post


Link to post
Share on other sites
2,969 posts
thumbsup2.gif

Share this post


Link to post
Share on other sites
8,304 posts

Are you guys logged in? Maybe that's the problem as they are all there when I look and they are not linked to my harddrive??

 

Here is an example of the first image.....let me know if you can see it over here....

 

attachment.php?id=2121

 

Well obviously as you can see....it only works if you are on the TCCS servers....very strange but I attached the link over here and it's a no go. Can someone else who is a TCCS member follow the link and see if they can see the images when they are logged in??? 893scratchchin-thumb.gif

 

I could upload all of the images to my server and start a thread for folks to see over here but that's going to take some time and bandwidth!

Share this post


Link to post
Share on other sites
8,304 posts

I was starting to question my sanity.............my wife of course already does that daily 27_laughing.gif27_laughing.gif27_laughing.gif

Share this post


Link to post
Share on other sites
120 posts

Thanks for sharing, also enjoyed your website.

 

I would like to recommend a good article in the Grey Sheet last year. Anyone who is interested in toned coins can obtain a copy from the Grey Sheet, entitled "The Price of Color" by H. Robert Campbell. It is the feature article of the CDN Monthly supplement dated July 14th, 2006, and though he talks primarily about exceptional natural rainbow Morgans for advanced collectors, it is worth the $4.00 even if you are into Frankies or Seated or anything else really cool. Those of you that subscribe have already put it in a safe place.

 

One tidbit he talks about;

 

"Solid greens and reds seem to be the hardest coins to find with green being the money color (no pun intended).

 

Mike - toned coin lover

 

link to mikesartifacts

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
0