By Charles Morgan with Hubert Walker

If you’re anything like me, then you occasionally submit coins to one of the major Third Party Grading companies to preserve them, attribute them, or to add to your collection of certified coins.

I look at a lot of raw material in the hopes that my grading eye is good enough to cherry nice coins from dealers’ inventories. Most dealers don’t have the time or the expertise to accurately appraise all of their holdings, which means that an eagle-eyed collector always has a shot to buy something significantly undervalued.

This, more than anything, is why I like to collect moderns. With classic coins you have a mature market, and really nice pieces can be very, very expensive. If a dealer acquires an exceptional 1935-S Peace dollar, you can be sure that this coin won’t be brought to market until it’s been sent in for certification. This coin nearly doubles in value for every notch up the MS grading scale it climbs, leaving precious little, if any, wiggle room for a buyer to come out ahead.

coin grading Coin Submission Success StrategiesThis is not to say that I don’t like classic coins. I love them. It’s just that you will never have the opportunity to buy high-quality classic coins relatively near face value, and with older raw coins you’re taking a risk that someone’s tampered with it to make it appear better than it is. Besides, I love being the person who pulls out something especially noteworthy, gets it encapsulated, and preserves it for future generations of collectors.

I realize that traditionalists might argue that a high-mintage modern coin such as a 1998 quarter with an asking price of close to $500 in a top pop grade is a poor investment. They might point to the fact that certified population totals are bound to multiply significantly over time and that downward pressures on price are bound to erase the existing premiums on these coins placed by registry set collectors who are vying for leader board positions. I don’t argue to the contrary. Supply and demand are now, and will always be, the key factors for pricing in the numismatic marketplace.

Having said that, are we to believe that the same rules of supply and demand that apply to 18th and 19th century coins will not also apply to moderns? Is there truly “enough” demand for the 1921 Morgan to buy up the 70,000+ mint state examples that PCGS alone has graded? Not to mention NGC, ANACS, ICG or any of the tens of thousands of raw coins sitting in dealers’ inventories? Certainly not. Furthermore, I ask, do you ever see a point when we’ll see a similar amount of modern material graded and certified by a reputable grading company? The answer to this question remains to be seen but there will come a point where it won’t be economically feasible to continue submitting certain modern releases, and attrition will eat away at the total number of raw coins until it becomes a rare thing to pull top pop coins from the wild.

But what shouldn’t be open to debate is the fact that these superior quality coins aren’t going to find themselves, and the longer we wait to look, the less likely it is that we’ll be able to preserve enough high-grade specimens to satisfy future demand. From the 1930s through the fifties and early sixties, coin-crazy collectors were pulling out numismatic treasures en masse. Thanks to the development of a sophisticated grade-centered marketplace, a second wave of numismatic extraction is possible. To give you a leg up on the competition, I’d like to provide you some of my coin selection and submission secrets.

I. Decide Which Coins to Submit

zeiss loupe Coin Submission Success StrategiesThe most important step is selecting which coins to submit, and this requires research teamed with patience and a good eye. Circulating coins don’t get delivered from the mint to the consumer’s hand in a perfect state of preservation, nor are all coins created equally. A variety of factors like planchet condition, the quality of the strike, and die state, can impose limits on how high the grade for a Mint State condition coin can be. Other, more subjective factors, such as eye appeal, also play a role in determining a coin’s “value”. Consider eye appeal. I always tell people, “Eye appeal is ‘I’ appeal”. In other words, if the coin doesn’t appeal to you visually, why would it appeal to anybody else?

A coin with great eye appeal can command stronger prices than a grade that is technically a notch or two stronger on the Sheldon Scale. Grade alone does not determine the desirability of a coin. As a submitter, I would just as soon submit a coin with great eye appeal as submit one that is technically freer of grade-limiting flaws.

If the first thing you do when considering a coin at a coin shop is look at the grade marked on the holder, then you should reconsider your approach.

II. Upside is Not the Only Factor When You Have Coins with Great Eye Appeal

I purchased a 1982-D Washington half dollar, a robustly common silver commemorative coin. The only thing rare about the coin is finding a coin shop that doesn’t have a dozen of them. On one particular visit, I decided to look through every single one of them the shop had, which was about fifty.

wash 50c Coin Submission Success StrategiesI’d hoped to find a super nice one that might grade out MS-69, either for my own pleasure or for profit as the coin is scarce in that grade. It should come as no surprise, that after about twenty-five minutes of looking, I realized that none of the coins would qualify as “nearly perfect”.

What I did find, however, was a beautiful piece with deep reflective mirrors. This is the business strike, mind you. Bold reflective mirrors are not the norm. The reflectivity of the fields gives the devices a near cameo appearance. It’s what I’d call a prooflike coin.

Taking a look at PCGS’s price data and population reports, I knew that this coin had plenty of downside risk and not much in the way of upside potential. My best case scenario is that the coin will come back MS-68 and have some potential market value. This is certainly not the type of coin that I would feature in a submission, but is the kind of coin I’d throw in to round out an order.

1982-D PCGS Population & Price Report[1]
MS-64 MS-65 MS-66 MS-67 MS-68 MS-69
37 106 265 493 1646 501
$14 $14 $14 $17 $45 $225

Not much upside here. Prices in red represent net loss if certified in those grades.

My Washington came back at MS-66. I think PCGS got it right and while the coin is certainly not premium quality, the prooflike strike may command a premium in the future should I try to sell it. But the process of searching through a stack of coins, and finding something fun and unusual, was well worth my investment.

The second coin is a 1961 proof dime. I enjoy cherrying silver era proof sets from the inventories of cash for gold and silver shops. I recommend you do the same, as these proof sets tend to come from collectors instead of institutional sources. On one stop I found four separate proof sets with at least one cameo’ed coin.  I found a 1961 set in a Capital holder with a cameo’ed Franklin half, a 1961 in original government packaging with a cameo’ed dime, a 1957 proof set with a cameo’ed dime, and a 1958 proof set with a cameo’ed nickel.

1961 pr 10c Coin Submission Success StrategiesOf all of these pieces, the 1961 dime had the best cameo. It was blast white on the obverse and reverse, plus it came in a crisp, well-maintained mint package. These aren’t especially expensive coins, even in cameo, but it is difficult to find cameos in silver era proof sets since most of them have been pored over by dealers and collectors. Finding three in one stop is highly atypical.

Like the 1982 Washington half dollar, a later date silver proof- even one with a cameo- is not in and of itself submission-worthy. These are clearly add-on coins to a larger order, but it is the type of coin I want to have preserved.

When the dime came back PR68CAM, I was pleased. A tidy little profit from a proof set I bought at melt, and I have three more cameos to go.

III. Wobble Your Coins under a Grading-Quality Lamp

The biggest mistake you can make in evaluating a coin is looking at it under less than ideal light. Hairline scratches, abrasions, and breaks in luster can all be camouflaged without exposing the coin to light coming from all directions. Also, collectors typically are at a disadvantage by not having a vast pool of coins at their disposal to study and get a feel for the nuances of each date, mint, and series. This comes with time. Unfortunately, when it comes to paying $15 to $30 per submission, time is money.

Your best tool for identifying quality coins is the fine art of “wobbling” (my hat is off to friend and fellow numismatic writer, Rob Ezerman, who coined the term). A proper “wobble” and close inspection can help you separate the contenders from the pretenders. To wobble a coin, hold it by the rim with your fingers and gently and slowly adjust the angle at which light strikes the surface until you’ve observed the coin from a number of directional light configurations. Professional graders evaluate hundreds to thousands of coins a day, so the quickest way for them to downgrade a coin is to look for hairline scratches that reflect light. Wobbling your coins and finding these issues yourself will save you time, money, and lots of frustration.

Remember: a premium quality coin will dazzle no matter how light strikes it. A coin of lower quality will reveal hidden problems when tilted just right.

Use previously-graded coins as a point of reference, but keep in mind that even slabbed coins must be viewed in proper grading light to give you a good indication of quality.

IV. Diagram Your Coins

I also like to sketch out the coins I submit for grading. I do this by filling in a circle with flaws that I find when I’m evaluating a coin. You can use any standard word processing software to print pages with circles large enough to draw inside of them.

Sketching out your coins, starting from the 12 o’clock position and going clockwise around the perimeter is a great way to “save” a record of your inspection. This process also aids in the type of pattern recognition skill that will be essential for you to develop when trying to pre-screen premium quality coins.

In the periphery, make note of the coin’s eye appeal, die state, strike quality, and any problems you think might hurt the coin. Before you make your final decision, look at the coins again and refer to your notes. The better you get at evaluating your coins, the fewer surprises you find during the second review.

V. Stage Your Submission

If you submit several coins from the same date or the same series, it’s best to employ the following strategy to get the best results:

  1. 1. Insert your coins into the Saflip facing the same direction. Coin graders give more weight to the obverse than the reverse, so let the coin slide out of the holder obverse first. It saves the grader time and gives them more time to look at your coin.
  1. 2. Order the coins in ascending order based on what you feel the grade will be. Graders spend but a few moments looking at your coin before assigning a grade. This skill requires excellent pattern recognition and the ability to visually remember cues gleaned during inspection. Stack the deck in your favor by inching up the quality of the coins one after another.

VI. Keep a Spreadsheet of Your Submissions

Be fastidious about your TPG submissions. The key is to predict as accurately as possible what your ROI (Return on Investment) will be once you get your coins back. I find that two rounds of grading help me decide on the final lineup of pieces I submit. My spreadsheet concept is simple: I list the coins by series, date and mint, and enter in my expected grade for the piece. I also list the coin’s purchase price and the grading cost, plus the potential “values” the coin will have at one grade lower than my expected grade, at my expected grade, and one grade higher. It is rare that I under-grade my own material; most of my coins come back where I thought they would be, or one or two grades lower.  When they come back lower, I refer back to my diagrams and compare them again to the coin in the holder. I try to learn from my mistakes.

By the way, I use Microsoft Excel on a Mac but there are alternatives.  Apple has Numbers for the Mac, and you can find all sorts of free software available on download sites like www.tucows.com and www.majorgeeks.com.  I haven’t used any of the free programs, however, so I can’t vouch for them.  There’s also Google Docs, which anyone with a Google or Gmail account can use for free.  One good thing about Google Docs is the ability to share your work online with other collectors if you so desire.

VII. Conclusion

Having an accurate picture of what to expect is key when doing a cost analysis of the submission. Also, when it’s time to sell your coins, it’s good to know how much margin you’ll have.

Over time, as you become more familiar with coin grading and the TPGs different standards for a particular series, your accuracy will increase. Your spreadsheet and diagrams will serve as a historical record of all of your submissions and will show you how far you’ve come in assessing the quality of the coins you purchase for your collection.

* * *

Everyone approaches collecting differently. What’s your advice? Share it with us in the comments below.

Flip of a Coin:

If you’ve ever collected an error coin, you owe Arnold Margolis (1925-2012) a debt of gratitude. Margolis worked for NBC for 35 years as a Senior Video Control Engineer, but his real passion was mint errors. He served as a member of the Board of CONE and was the first president of NECA (both now united as CONECA), was the publisher of Errorscope and Error Trends Coin Magazine, and the author of a number of great numismatic books, including: How Error Coins are Made in the U.S. Mints and The Error Coin Encyclopedia.

The design of the 2013 Girl Scout Commemorative dollar has been revealed. Up next, designs for the 2013 Five Star Generals commemoratives and the 2014 Civil Rights Act of 1964 commemorative dollar.

PCGS has just graded one 1982-D Washington half dollar MS-70, which leaves the 2011 Army half dollar as the only modern commemorative business strike release to not grade higher than MS-69. My take on that coin can be found here.


[1] Values pulled from PCGS.com 5/6/2012.

 

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1 Comments

  1. Great article! The only thing negative about this is the lack of comments. I also try to cherry coins and submit to PCGS and this info might just take me one step further. Thanks!

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