Rarity Wins In The Long Run

The recently announced sale of the Pogue collection brought back memories of the 1982 auction sale of the Eliasberg gold coin collection. Several of the most spectacular pieces in the Pogue collection were bought at that sale. The extremely rare 1822 and 1854-S Half Eagles were acquired by the family in the sale. No others have been sold since. The Eliasberg sale was truly a once in a lifetime opportunity to purchase incredibly rare coins. I recently viewed someone’s collection and had the opportunity to examine the 1894-S Half Eagle from the Eliasberg collection. The coin, graded by NGC as MS 69, is one of the most stunningly preserved gold coins in existence. It is a testament to the incredible breath and quality of the coins that were sold in October, 1982.

I personally attended the Eliasberg sale in New York City in the fall of 1982. The rare coin market had recently been on its knees that summer and was only beginning to recover. The sale sparked the market from its doldrums, and coin prices continued to rise for several years afterwards. Bowers and Merena conducted the auction, and a bank letter of credit was required to participate as a bidder. This was understandable, as the recent sharp drop in bullion prices had left quite a few rare coin dealers in difficult financial positions. Unlike today, in the 1980s, most of the rare coins sold at auction were purchased by rare coin dealers.

I recently found a copy of the 1982 Coin Dealer Newsletter (a.k.a. The Greysheet), which featured a cover story on the sale of the Eliasberg gold coins. The article described prices realized as "very, very strong" with fierce bidding in all sessions. The following are just a few of the coins mentioned in the article:

• 1821 Quarter Eagle PF 67 $46,000 (now $1,000,000+)
• 1833 Quarter Eagle PF 67 $50,600 (now $1,000,000+)
• 1879 Coiled Hair Stella PF 67 $101,750 (now $750,000)
• 1818 Half Eagle MS 67 $39,600 (now $250,000+)
• 1829 Half Eagle MS 67 $82,500 (now $500,000+)
• 1854-S Half Eagle AU 55 $187,000 (now $2-3,000,000)
• 1861-D Half Eagle MS 65 $37,400 (now $500,000)
• 1894-S Half Eagle MS 67 (now MS 69) $19,800 (now $300,000+)
• 1795 Ten Dollar MS 65 $57,200 (now $750,000+)
• 1864 Double Eagle PF 67 $44,000 (now $500,000)
• 1907 Ultra High Relief PF 67 $242,000 (now $3,000,000)
• 1927-D Double Eagle MS 65 $176,000 (now $2,000,000)

Thirty years later these prices seem like incredible bargains. Many of the above coins would easily sell for million dollar plus prices, and most have increased at least ten times or more. Unfortunately we cannot go back in a time machine to make these wonderful purchases. We can, however, use the Eliasberg sale as a lesson for collecting. As mentioned, the above information was obtained using the November 5, 1982 edition of the Greysheet. This edition contains quite a bit of fascinating information about coin prices at the time. Gold was trading for $428 per ounce and silver was pegged at $10.52. Below are the wholesale bids for some commonly traded coins in November, 1982.

• Indian Quarter Eagle MS 63 $550 (now $500)
• Liberty Ten Dollar MS 63 $640 (now $825)
• Saint-Gaudens Double Eagle MS 65 $1,300 (now $2,000)
• Panama Pacific Gold Dollar MS 65 $1,675 (now $1,280)
• Morgan Dollar MS 65 $110 (now $175)
• Three Cent Nickel PF 65 $600 (now $475)

It is hard to believe that these commonly traded issues have performed so poorly as an investment. The above list is not an aberration or just a selection of the worst performing issues. A careful study reveals that nearly every issue with large numbers of known examples did poorly over a 30 year period. Coins that were very or extremely rare saw tremendous prices increases. This can probably best be attributed to supply and demand. As the number of collectors increase, the demand for rare or extremely rare coins increases as well. The same can be said for common issues, but the supply seems to always be large enough to meet demand. It would take a huge increase in demand for common date Saint-Gaudens Double Eagles to make them rise in price significantly. It would not require very many new collectors of the series to see prices rise for 1908-S Double Eagles in MS 64. The same can be said for common date Morgan dollars versus rare issues.

Not every collector can afford to purchase the rarest of the rare in top condition. Everyone can, however, focus on buying the best they can afford and concentrate on rarity whenever possible. This strategy has proven successful for the last 30 years and my guess is that it will work for another 30 years!

Questions about the rare coin market? Send them to wmr@ngccoin.com.

Jeff Garrett bio