Market Solid as Year Ends
Posted on 12/1/2006
We will be the first to admit that we are numismatic traditionalists. That is, we believe in the market for old numismatic coins more so than newly minted rarities, the difference being that traditional numismatic coins have a limited number of coins that can attain the highest grade for a specific date. Rare means rare. With modern coins, there is no end to the potential of highest-graded for a date. For most numismatists, it is difficult to tell the difference in the grade of the modern coins, unless of course, they look at the grade the certification service put on the holder. The U.S. Mint has taken over the coin business and we have let them do it. What we like about the Mint participating in the coin business is the fact that they have helped attract hundreds of thousands of new collectors to the world of numismatics. Thousands of those have become traditionalists and others will take the steps to become traditional collectors. These are all benefits to numismatics. At this time of the year, we are very thankful to be involved in this exciting profession. We would like to extend to all of you a very prosperous 2007.
The coin market may be selective, but it continues to be active for most major series. In our opinion, just about anything minted prior to 1950 is solid at today's FMV levels. What may not be as active are coins that do not have eye appeal for the grade or coins where the quantities available in the market are more than a handful. If you look around at the coins in demand at this time, they all have one characteristic in common – they have very active demand for a limited supply. In other words, there are not enough coins to satisfy demand at current FMV levels. This is why dealers can offer these types of coins at what appears to be a premium to FMV levels; the market is searching out the strongest buyers. Let me make this perfectly clear, there are many very strong buyers in today's market and it allows dealers to be very strong buyers themselves and offer these coins at correspondingly strong levels.
If you take any of the standard 20th century series such as Buffalo Nickels, Mercury Dimes, or Walking Liberty Halves you will find that there are a number of buyers for the semi-key and key date coins in just about all grades. Again, the coins cannot be ugly for the grade, but there are even buyers for the low-end coins today. Lately, we have seen the FMV advance for many coins within these series; a couple of examples are the 1926 D and 1928 S Buffalo Nickels in MS65 to $6,190 and $5,880, respectively. All mints of the 1921 Walker have always been popular. Lately, the 1921 in MS63 and MS65 advanced to $8,970 and $19,830; we are not even sure you could buy these at the current FMV. The 1921 D & S dates are higher in these grades and are even harder to find. These are but a few examples of how the FMV has increased over the last few years yet the number of coins certified has not increased enough to satisfy demand.
This past month, we did a lot of advanced research on Barber Dimes on a date-by-date comparison. You will notice that there have been numerous changes and most of them have seen the FMV advance. What is interesting is the fact that some of the high mintage dates have moved higher as well because the census reports indicate that they are not available above a specific grade level; this is usually MS65 or 66. In fact, some of the so-called common dates have a higher FMV in MS67 than dates with less mintage. This is because there are more coins certified in the rarer date. For instance, the 1909 Philadelphia in MS67 has a total pop of three coins and the mintage is over 10,000,000; the 1905 S in MS67 has a total pop of four with a mintage of nearly 7,000,000. However, the FMV is higher for the 1909 at $6,830 than the 1905 S at $6,050. The point being there is a lot more to valuations than looking at the mintage of a coin and trying to determine how it is ranked against all the other coins within the same series. Obviously, it is a matter of quality, eye appeal, census of the grade, and availability. When you throw demand into the mix, there is no telling how much a coin can be worth. Once you have more than one person vying for the same coin in an auction, we all know that the coin is worth at least what the under bidder was willing to pay.
We mentioned earlier about the $5 and $10 Gold Indians and how they have started to rebound after recent profit-taking. The $5 is showing advances to the FMV while the $10 looks more like it is solidifying at today's FMV levels. Last month, the MS63 $5 Indian was $2,780 and this month the FMV is $3,030. That is an increase of over 8% in one month. The MS64 rose from $3,880 to $4,430; an increase of nearly 15% over last month's FMV. For those who have the wherewithal to move into and out of markets, this seems like an area that has been chosen for this type of investment opportunity. This shows that there are many methods of buying and selling coins and the masses are using any and every approach to make money in numismatics.
A very specialized area of the market that has been moving much higher of late is Deep Mirror Prooflike Dollars. There are many collectors who are trying to locate and buy the highest grades they can afford for their collections. When you realize that some dates have very few coins that grade high-end and DMPL, then it becomes quite a chore to decide what quality is good enough for your specific taste. In some cases, the MS64 limits your choices; in others it is just a matter of how much you want to spend. In the past couple of months, quite a few FMV prices have risen in response to some higher buy prices by some of the country's top dealers in this area. For example, the 1888 S in MS65 DMPL has advanced to $12,690; the 1889 S in MS65 & 66 DMPL increased to $26,880 and $34,380, respectively; and the 1900 S in MS65 DMPL rose to $25,680. Moreover, a couple of prices were added where we previously had no information; the 1878 CC in MS66 DMPL is listed at $21,880 and the 1879 in MS66 DMPL at $20,630.
When new collectors eventually advance to the traditional approach and discover the Liberty Seated material, finding that the numbers of coins available are very minute compared to 20th century coinage, even the so-called common issues could make startling advances. When you see some of these early issues that have a combined census of NGC and PCGS of less than 50 coins within a grade, you will quickly realize that these coins under $1,000 have some great potential. There are lots of these issues that grade as high as MS64 and still have an FMV of under $1,000. The total market capitalization of various issues is not a tremendous amount of money and someone or some organization could make these move very quickly.
This article is a guest article written by:
The thoughts and opinions in the piece are those of their author and are not necessarily the thoughts of the Certified Collectibles Group.
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