Numismatic Research and Pricing in Today’s World
Posted by Jeff Garrett on the Numismatic Guaranty Corporation Weekly Market Report …..
A generation ago, basic numismatic research for most serious collectors consisted of checking prices in the latest edition of the Guide Book of United States Coins (the “Red Book”).
I remember a time in the 1970s when coin dealers would not even price a coin until they received the newest edition of this popular price guide. In the 1970s, the Red Book listed a narrow range of grades, with the top prices being for one level of Mint State – Uncirculated. The Red Book contains very accurate mintage figures, but offers little information about how many coins survive of each issue. It is still extremely popular, but it is far from the only source of numismatic information available for collectors and dealers.
In the last ten to twenty years, there has been an explosion of numismatic information that has been made available to rare coin collectors. This plethora of data has a great deal to do with the strong growth of numismatics in recent years. In the late 1970s, David Akers blazed a trail by coming out with a series of books on United States gold coins. He began with a detailed analysis of Gold Dollars that, for the first time, included a coin by coin commentary discussing rarity, strike, and other details gathered by his study of auction appearances. For the first time, auction record information was also included in his analysis. Soon to follow were books on the remainder of United States gold denominations. Interestingly, his groundbreaking works did not include valuation information. I remember studying his works carefully, trying to glean information about underrated issues and other details that would give me a competitive advantage on the bourse floor. Akers’ books are still amazingly relevant and I recommend anyone who is serious about United States gold coins to purchase a set of these great books.
Today, there are similar books covering nearly every series of United States coins. Whitman Publishing, among others, offers a steady stream of books that give amazingly detailed information that collectors can use to study the history of a series in order to make better buying decisions. Some of these books educate collectors while others serve to inspire participation in a particular field of numismatics. My popular book, 100 Greatest United States Coins, was an opportunity for me to relate the rich stories that truly great coins have to offer. Most who purchased that book could never afford most of the coins listed in the book, but still enjoy learning about them, nonetheless.
A couple of years ago I taught a class for the ANA Summer Seminar in Colorado Springs, Colorado. The class was titled “How to Value United States Coins”. For two days I gave students detailed information about how a seasoned professional goes about establishing the asking price for a rare coin. I will try to summarize most of the important points for this article. Establishing a fair price for a rare coin is not as easy at it sometimes appears. If you price a coin too low, it could sell immediately and you might realize you have left a considerable profit on the table. Pricing the coin too high and you will find it stays in the show case and soon becomes “stale merchandise”. It is very important for all successful dealers’ and collectors to price coins correctly when offering them for sale.
Today, the tools of numismatic research are far greater than when I began my career in numismatics over thirty years ago. Now, there are dozens of well written books, numerous web sites with pricing and research information (including NGCcoin.com) not to mention several weekly and monthly price guides. Also, in recent years, auction records have become very important when pricing a rare coin. Most of the major auction houses offer information from past sales and some websites, such as NGCcoin.com, provide this data as well. Auction records have become very important due the fact that some coins rarely trade and most price guides are just estimates. Seeing what a coin sold for in a specific grade, can be invaluable. Auction records can sometimes be confusing however, as many identical coins will sell for greatly different prices – in the same grade! The eye appeal of a coin frequently plays a major factor in auction results. It should also be remembered that many rare coins are sold to dealers at auction and the final retail prices are sometimes, considerably higher. This might be a confusing concept to some collectors, or dealers, who consider auction prices the actual retail value of a coin. Consider the following scenario: A major rare coin auction offers 8,000 lots for sale. Of those, serious collectors are interested in only purchasing around 4,500 of the lots. The remainder is most likely sold to dealers who expect to realize a profit. Nearly every sale is like this. Like most prices, auction records are just one (and not always absolute) guide when determining value.
Finally, another major research tool available for today’s collectors and dealers are the NGC population figures for coins that have been certified. Years ago, most serious students of rare coins could only guess at the survival numbers of most rare coins. Who would have thought that there were hundreds of thousands of Gem Morgan Silver Dollars in existence! After 25 years, the “NGC Census” has clearly shown some coins, previously believed to be “common”, are very rare with very few (or even none!) having been graded in Mint State. Thus, these population numbers are a crucial tool when establishing the value and desirability of a rare coin. Low population coins are highly sought-after. Whenever I am lucky enough to handle a rare coin that is at the top of the charts when it comes to grade, I am very careful not to price the coin too low. For some coins, the only way to establish a fair value is to offer the coin at auction. This is highly recommended for most of the very popular series, especially 20th Century coinage.
There are also many clubs now devoted to specialized collecting. Many of these organizations offer tremendous research resources and most members are more than willing to share this knowledge, as well. Colonial coinage and early copper collecting is an excellent example of the series that have active clubs that are helpful in numismatic research. Early American Coppers (EAC) has been around for decades and has over 1,200 active members. There are many other similar organizations and a list of these specialty groups can be found as “member clubs” of the American Numismatic Association. Most of these organizations also offer camaraderie which is very important in order for one to fully enjoy the numismatic hobby.
Dave Bowers long ago gave the best advice most collectors will ever hear: “Buy the book, Before the coin”. That advice still holds true, but now you also will need a great internet connection to take full advantage of the wonderful resources that are available to collectors and dealers.