Three Dollar Opportunities

Posted on 6/7/2018

Take a closer look at the 19th Century gold series.

Is time flying by or am I getting old – or both? How is it June already?

Regardless, 2018 is nearly half over. So where does the numismatic world stand as we near mid-2018? Many ardent collectors I have spoken to recently have been having a great time, carefully pulling in quality coins at what several have referred to as a “terrific value.” For others, nice circ-type coins, those in the VF-AU ranges, are a challenge, especially when it comes to early federal issues and gold type.

Conversely, much Choice to Gem material is at virtual bargain levels, especially when charting back a few years. Gerald from Henderson, Kentucky, a longtime type and series collector, was excited about opportunities.

A grandmother’s wisdom

“Hey, I have been at it for nearly 30 years, and I am not 40! Believe it or not, I got the coin bug from my grandmother. She loved history and coins. Every time a coin would be released for that new year, Gram would set them aside. Not just one, mind you. She was one of those folks who had to get a roll...

“ ‘You never know: Someday, someone might want one,’ she would tell me. She saved everything from the last few years of Walkers and nearly every year of Franklins, too. She was in her late teens when she began setting aside rolls of coins she bought from tip money she got waitressing at a local diner.

“I was so thrilled when I would visit and she would share with me a select year one that she had picked up multiple rolls of. I was almost 10 when she gave me a roll of Lincoln pennies from 1979, my birth year. Breaking open a new roll of old coins was, I don’t know, like going back in time!

“I was truly amazed when I carefully looked at a few of those pennies, they were bright orange gold. Before I had a chance of picking one up for closer examination, Gram would repeat ‘Gerry, hold the coin on its edges.’ I was so excited that these were mine, so I had to, of course, start with a Lincoln Cent collection.”

From Cents to Three Dollar Gold

Gerald advised me that his parents picked up a few supplies for him: a blue Whitman Lincoln Cent album (1941-1958), some 2x2 cardboard holders, a staple gun and, of course, a Red Book.

“The basics, you know. I couldn’t afford rolls, so it was just uncirculated singles. It didn’t take long and had my first album filled in less than a year. Grammy was quite proud! All through school, I took time to collect and ventured into more esoteric US coins: Two Cent, Three Cent pieces, and I picked up my first 20 Cent piece just after high school. It is the common 1875-S, but in a strong XF neighborhood.”

My friend from Kentucky is now a regular and enthusiastic fixture at regional and some major shows, and is still excited to acquire the obsolete or lesser known. “I made it to CSNS again this year. I was in the market for a nice MS 63 or better Three Dollar Gold.”

1854 Gold $3, graded NGC MS 63. Realized $3,818 in October 2014.
Click images to enlarge. (Image courtesy of Heritage Auctions)

Gerald imparted some great observations.

“I remember I almost splurged for a MS 63-caliber Three Dollar Gold ten years ago. It was an 1878 and it was offered to me at Greysheet “Bid” at $7,500. I remember I was so tempted but I eased back and figured I would wait. I am glad I did, because I was able to buy a great-looking 1878 NGC MS 63 at CSNS for $2,800. I mean, that is a huge savings, nearly 65% for a coin I almost bought 10 years ago. I really believe at these levels, type Three Dollar Gold –especially in MS 62 to MS 65 – is a bargain.

Opportunities in the market

I concur with the Kentucky gent. Interestingly, MS 65 coins are also trading at nearly half of levels observed a decade ago.

A bit of research on the NGC Census reveals that, as a series, only 1,087 coins appear in MS 63, and nearly half of that total (524) is the 1878. In lofty full gem MS 65, a scant 281 coins appear in the NGC Census, and 127 are the common 1878… common with a mintage of 82,304, I might add.

For reference, ten years ago, a Three Dollar Princess in MS 64 was Greysheet dealer Bid at $8,800 and Ask was $9,200; and in MS 65, Bid $19,500, Ask $20,500. Now flash forward to 2018: Just in the last few months at auction, I have seen quality MS 64’s sell for as little as $3,600 (or about 60% less than Dealer Bid exactly a decade ago) and MS 65’s selling for $7,500, reflecting a 61.5% discount for the same time period.

Although high-end Mint State Three Dollar Gold may still be priced beyond the budget for the average collector, coins of this caliber appear to be destined for some significant traction in the next few years as collectors vie more for type coins and/or to upgrade Registry sets. Interestingly, the AU 50 through Mint State 60 designees have maintained a much greater percentage of their values compared to a decade ago.

The next challenge

Gerald also informed me that he was reaching back a bit further and sizing up another acquisition.

“I really like the Flowing Hair series, and the Half Dime has been on my radar. I have been doing research and I am sizing up the market for a nice MS 63 coin.”

Unfortunately, in this series, there are no discounts or bargains to be had when compared within the same timeline. A quick check revealed that in June 2008, the 1795 or type coin Flowing Hair Half Dime was “Bid” at $15,000 and “Ask” was $17,000, while today, the NGC Census reveals only 24 coins reside as MS 63 and the NGC Price Guide value is $22,000, or nearly 47% higher than a decade ago. Especially in this grade, it is a truly popular type coin and collectors are battling for the very small supply of Choice Mint State or better coins.

1795 Flowing Hair Half Dime, graded NGC MS 63. Realized $34,075 in April 2015
Click images to enlarge. (Image courtesy of Heritage Auctions)

However, I suggested a comprise (but not in quality): How about the Capped Bust Half Dime in gem MS 65, I relayed to the Bluegrass State native? This is a short series, only produced for nine years, one which I am very partial to, personally by the way. As a series, a total of 449 coins appear as MS 65 in the NGC Census, with the last year (1837) reporting the fewest gems at 17 and the 1835 the most populous at 77.

1833 Capped Bust Half Dime, graded NGC MS 65. Realized $2,232 in February 2017.
Click images to enlarge. (Image courtesy of Heritage Auctions)

Yet when compared to 2008, when dealer “Bid” was $3,100 and “Ask” $3,400, I have seen several full gem MS 65 coins realize under $2,000 at auction in the past few months. Here, the collector has a great opportunity to cherry-pick inventory or scan upcoming auction lots for eye-appealing well-struck coins, and will most probably be able to secure one at around a 35% reduction of the 2008 levels.

Yet for type coins in average collector grade (VF to AU), the Capped Bust Half Dimes have advanced an average of 50% during the same time window. This is true for the majority of early federal type coins. The supply of quality circulated examples is becoming much harder to come by. While many seize at the moment and try to corral the finest-knowns and high-grade wonder type, prices are bound to vacillate, especially once a buyer has secured their targeted coin of choice.

The same is not true for much of the early type residing in solid collector grades of VF-AU. While pricing is still affordable, take time to carefully check the multitude of internet sales and auctions and, of course, on the bourse.

Just a suggestion: With the school season over for most youngsters, on that next trip to a local or major show, include the kids, bring them along, let them experience what makes this hobby the greatest in the world!

Until next time, happy collecting!

Jim Bisognani is an NGC Price Guide Analyst, having previously served for many years as an analyst and writer for another major price guide. He has written extensively on US coin market trends and values.

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