Jim Bisognani: Type Coins and Toasters

Bob and his son Mikey (who goes by Mick) just attended their first ANA World’s Fair of Money in Pittsburgh. Bob is 50 and Mick is 16. They made the journey in their family car from eastern Ohio. Bob’s first comments on the show: “Exploring the huge bourse was fantastic. I have attended a few shows in my hometown, where maybe 30 to 40 dealers set up... It was a shock and so exciting. The exhibits and rarities on display were awesome.” Mick, who is fond of Buffalo Nickels, had only attended a few shows with his dad before they made the sojourn to Pittsburgh. He just said, “WOW!”

A nice little herd

With a budget of $150, Mick was able to purchase a nice 1913 Type 1 Buffalo Nickel graded NGC MS 63 and a 1938-D graded NGC MS 65. With about half of the cash left after these purchases, the young man was then able to accumulate a nice mixture of raw circulated Buffalos averaging VG-F. “He has a nice little herd there,” his dad quipped.

Bob has been a true US type coin collector for years and had recently completed his 20th Century Minors type set in MS 65. However, he hadn’t bought any US gold coins.

“For sure,” Bob said. “I was attracted to gold coins for years, but hadn’t had the finances to build a type set — until just recently, that is. Getting a complete US gold type set is still out of my budget, but I came to the show wanting to start with a four-piece set in MS 64. That would encompass the $2.50 and $5 Indian Heads, the $10 Indian and the Saint-Gaudens $20 Double Eagle.”

CLOCKWISE FROM TOP LEFT: These four coins are an example of gold type set: a 1928 Quarter Eagle1909-D Half Eagle, a 1928 Double Eagle and a 1926 Eagle, all graded NGC MS 64 Click images to enlarge.

A golden experience

Before the show, Bob had done his homework. “I had studied the price guides and auction data on NGC’s website. It certainly helped me get a feel of what I should expect to pay.” Bob was also happy to see a slight dip in gold spot prices leading up to the show.

Just before opening day, Bob scouted six major dealers online. Based on his findings, he said that the most inexpensive price he had found for the four-piece gold set at MS 64 would have totaled $6,035. “Hey, really the prices were all very close, with only about a 10% swing between the high and low prices listed, but that 10% came out to nearly $675 more,” Bob said. “I could have used that money toward a Type 1 Gold Dollar in MS 64.”

Ultimately, Bob said that he was able to get his four-piece gold set for $5,900 in Pittsburgh. “It was fun,” he said. “I have my sights on acquiring a few other gold coins before the year is out.”

QR codes are cool!

Another collector, Jayson, touched on the new QR codes on NGC’s holders.

“They are cool,” he said. “I saw a few at a dealer’s table, and when I scanned the code, it brought up the coin info. It was like magic — price guide, value and everything!”

The young Tennessee man said he was mildly interested in buying the coin because it was in a new slab, but he noted that the dealer had priced it higher than the NGC Price Guide. With that knowledge, Jayson was able to negotiate the price down before buying it.

I advised Jayson that that ploy may not always work, but it is certainly worth a shot. The NGC Price Guide — and any other price guide — is just that: a guide. While third-party grading designations are consistent and reliable, retail pricing does fluctuate. Market value may move rapidly before we are privy to newer sales data and bids placed by dealers.

I have touched on this many times, yet it bears reiteration. Third-party grading was meant to, and has, eliminated much of the subjective nature of grading for the newbie, veteran or dealer coindexter.

Prior to the advent of NGC and other third-party grading organizations, any dealer or collector could claim a coin was, within reason, any grade they chose. A Mint State coin could be referred to as BU (Brilliant Uncirculated), Gem or even MS 70. The collector (and dealers, too) had to make their buying decisions based on experience in trading for that coin or series.

Rigid standards have been placed and adhered to by third-party grading companies. These standards have made the “numismatic product” highly transparent. This is especially true for generics (or type coins), as in most every series for common type the “bid” on electronic trading networks is virtually the same for Sight Seen or Sight Unseen NGC coins.

Things do necessarily get more sophisticated for higher-tier coins, regardless of the grading service. The old adage “buy the coin, not the holder” rings very true here.

From my long-ago days at Coin Dealer Newsletter (The Greysheet), it was easier to track wholesale and retail pricing. Normally, we would assume that most dealers would sell to retail customers at about 15% over their dealer ask prices on generics, like MS 64 Morgan Dollars. As an example, if the bid was $80 for a common coin and the ask price as $95, then one could expect a dealer to sell to his retail clientele for around $110.

Of course, any dealer can ask whatever they want for a coin; it is their right. Yet, for those of us who maintain and update retail price guides, we take all of these factors into consideration. If the coin is common, it will trade within a slight margin. If it is scarcer, such as a rare date within a series, or traded very infrequently, it may demand a higher retail price.

The concern I hear from collectors is that they see and hear many offerings or deals for common type coins from dealers on cable or online with prices that are, quite often, much higher than one would expect to pay. This is an outlier.

Buying 20th century type coins is like buying a toaster

My advice for the coindexter wanting to build a US type set is to consider a nice 20th century type set in Mint State, like Bob did. These were quite popular to assemble when I was a young collector, and they are making a comeback in some circles. They usually end up in a nice Capital plastic holder for display too — ah, such memories!

I suggest Indian Head Cents through Morgan and Peace Dollars — this also includes the Barbers (Dimes, Quarters and Half Dollars). This is highly doable. In MS 63, with the biggest expenditure slated for the Barber Half Dollar, you’re looking at $800. Remember, you should be targeting “common” type coins for this venture.

Do your homework and you should be able to ascertain what a fair retail price is. So track current auction data, and if you’re participating in an online auction, good luck to you. If you miss out on an online auction, you could assume — after the hammer price and fees — to expect to pay around 30% above that as a retail sale. Again, these are an estimate for “type” coins. Don’t worry, there will always be thousands of coins available in the NGC Census in MS 63!

Terry, a friend of mine, shared this with me recently: “Jim, for me, buying 20th century type coins is like buying a name brand toaster. They are in stock everywhere. Should I buy it at Target or Walmart for $50, or pay $75 from a retailer like Nordstrom’s? Who would you buy from?”

The analogy nearly holds true for coins. While all MS 63 coins are not going to look alike, they have all been determined and guaranteed at that grade’s designation. So, my fellow coindexters, you can feel confident knowing that your NGC-graded coins (or toaster) will be of the same technical quality regardless of the dealer. Just perform your due diligence and, in many instances, you may be able to buy coins below a price guide’s listed value. Please let me know how the hunt goes!

Until next time, be safe and happy collecting!

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