A Weekly CoinWeek Column by Greg Reynolds
News and Analysis regarding scarce coins, coin markets, and the coin collecting community #112
Click Here to read Part One of this article: An Introduction to Liberty Nickels, part 1, Circulated Coins
This week's topic is the collecting of uncirculated Liberty Nickels. I focus on those that grade MS-63 or higher, though I mention values for MS-62 grade coins. This discussion is aimed at beginning collectors and/or people who have not yet started sets of uncirculated Liberty Nickels. Type coins are covered as well.
Last week, I put forth an introduction to Liberty Nickels and I focused upon circulated coins. I then emphasized that circulated Liberty Nickels are among the most affordable of all classic U.S. coins. These are wonderful choices for beginners in general and for intermediate collectors who like nickels.
I now point out that Liberty Nickels are among the least expensive of all classic U.S. coins in Choice Uncirculated and Proof grades, coins that grade 63 or higher. It is true, though, that Liberty Nickels that grade above 61 are usually much more expensive than those of the same respective dates that grade under 60.
Collectors who are seeking very inexpensive coins or who are not familiar with the series of Liberty Nickels may wish to click here to read part 1. (As always, clickable links are in blue.) A set of Choice Uncirculated Liberty Nickels, those that are PCGS or NGC graded MS-63 or higher, would probably cost at least $10,000. Much of this total, however, may be attributed to just a few of the thirty-three coins in the set. The cost of such a set may be reduced by acquiring Proofs of two of the key dates. Proofs of 1885 and 1886 Liberty Nickels are much less costly than business strikes. Also, a set may consist of mostly Choice Uncirculated Liberty Nickels along with some circulated representatives of key and semi-key dates, and could then cost much less than $10,000.
Besides, Mark Feld states that, “rather than recommending or avoiding particular grades, I advocate pursuing individual examples based on their eye-appeal.” Feld was a full-time grader for the NGC during most of the 1990s and worked as a grader for a few leading coin dealers before returning to his own business. Mark recommends coins that are particularly appealing in comparison to other coins of the same type, date (or equivalent date), and numerical grade. Many collectors, however, feel drawn to gem quality coins. Dr. Steven Duckor comes to mind.
A gem quality set of Liberty Nickels, MS-65 and higher grade coins, could easily cost more than $50,000. Indeed, uncirculated Liberty Nickels are 'in the news' this month as Stack's-Bowers will soon auction the first ranked set in the PCGS Registry. For that set, the total realization will be vastly more than $50,000. I am not, though, discussing top ranked sets, or finest known coins, here. I am considering MS-62 to -65 grade coins and this discussion is geared towards beginners and intermediate level collectors.
Consider, as I explain in part 1, that only two Liberty Nickels are needed for a type set. These need not be expensive.
I. Notes about Grades
The grading of uncirculated coins is complicated and many of the factors involved cannot be explained with words alone. The terms 'Mint State' (MS) and Uncirculated are nearly the same. In my view, since the founding of the PCGS in 1986, it has been widely accepted that coins that are not strictly uncirculated may qualify for MS-61 or MS-62 grades, providing that such coins score well in other categories, relating to technical factors, eye appeal and/or surface quality.
A Liberty Nickel that is PCGS or NGC graded MS-60 usually has serious problems, though it may be strictly uncirculated. In relation to Liberty Nickels, I ignore MS-60 and MS-61 grade coins, because these tend to have very undesirable characteristics.
A collector who cannot afford MS-63 grade Liberty Nickels, especially of better dates, may wish to acquire some Liberty Nickels in Extremely Fine or AU grades. While MS-60 to MS-62 coins tend to have problems or controversial issues, problem-free Extremely Fine or AU grade Liberty Nickels of all dates can be found without much difficulty. Some MS-62 grade coins, depending upon their respective individual characteristics may 'fit better,' however, into a set of mostly MS-63 and -64 grade Liberty Nickels. So, I mention prices for MS-62 grade coins in this discussion. In some cases, the price of a MS-62 grade coin of a better date Liberty Nickel will be much lower than the price of a MS-63 grade coin of the same date.
Although the primary topic here is Liberty Nickels that grade 63 or higher, there is just no way to explain such grades. Technical factors, eye appeal, and surface quality are major components of such grades. Technical factors relate to scratches, contact marks, and other interruptions of the metal. Surface quality has to do with luster, the degree of originality, the characteristics of toning, among other matters.
By tradition, coins that grade MS-63 or Proof-63 are termed “Choice,” and 64 grade coins are each “Very Choice.” Coins that grade 65 or higher are gems. A coin that grades 67 is “Superb” or is called a “Superb Gem.” The focus here is on MS-63 to MS-65 grade coins. These are much more available and much more affordable than MS-66 or -67 grade Liberty Nickels.
II. Type Coins
There are two design types of Liberty Nickels. The first type, 'No Cents,' was minted only in 1883. The second type, 'With Cents,' dates from later in 1883 all the way to 1912, and it seems that just five Liberty Nickels, all intended to be Proofs, are dated 1913. The main difference between the two types is that the word 'CENTS' does not appear in the design of the first type and does appear in the design of the second type.
As I emphasized last week, a type set of just classic nickels is easy to complete, as only five coins are required. Plus, it would be easy to add representatives of all types of Jefferson Nickels to such a type set. Conveniently, all modern nickels are Jefferson Nickels.
Liberty Nickels of the first type, 'No Cents,' are not rare and are hardly even scarce. If these were not one-year type coins, they would be worth very little.
PCGS or NGC graded MS-62 'No Cents' nickels tend to sell for between $30 and $50 at auction. A fair retail price would be in the range of $35. Some sell for significantly more at auction, because of aesthetic characteristics or because some wholesalers figure that these may be upgraded to MS-63 or -64. Additionally, since less than half of all MS-62 grade 1883 'No Cents' nickels have been PCGS or NGC graded, collectors who are seeking PCGS or NGC certified coins for their respective type sets will be willing to pay more for a certified MS-62 than they would for a not certified coin that is said to grade “MS-62.”
The PCGS and the NGC have graded at least five hundred DIFFERENT 1883 'No Cents' Liberty Nickels as MS-62. Moreover, there are probably at least seven hundred that are not in PCGS or NGC holders, though would be graded as 'MS-62' if submitted. As for MS-63 grade 1883 'No Cents' nickels, there are more than two thousand.
Here is a list of prices realized and auction dates for PCGS graded MS-63 coins that have been recently sold by Heritage: 04/29/12 $84, 11/01/11 $58, 10/18/11 $50, 10/09/11 $36, 7/19/11 $62, 05/29/11 $56, 04/30/11 (with CAC) $89, 04/26/11 $47, 11/17/09 $44.
Here is a list of NGC graded MS-63 1883 'No Cents' Liberty Nickels that have also been auctioned by Heritage: 10/30/11 $36, 09/20/11 $109.25, 09/18/11 $79, 08/16/11 $56, 07/31/11 $44, 02/06/11 $84, 07/04/10 $56, 08/09/09 $42, 05/03/09 $51. As I have not seen the coins that I am listing here, I am providing such results as general information, partly to indicate that auction results will sometimes be higher or lower than market values. Please see my piece on 'What Are Auction Prices.'
Probably more than three thousand DIFFERENT 'No Cents' nickels have been PCGS or NGC graded MS-64. For a MS-64 grade 'No Cents' nickel, a fair retail price may be $75.
Recent auction results for PCGS or NGC graded MS-65 'No Cents' Liberty Nickels tend to range from $138 to nearly $250. Within the last two weeks, Heritage has auctioned three that are PCGS graded MS-65 for $150.65, $161, and $241.50, and three that are NGC graded MS-65, for $139.15, $161 and $230, respectively. An average retail value for a MS-65 'No Cents' Nickel is around $185.
While I am listing Heritage auction results, I am not endorsing Heritage. In the field of statistics, the value of data is partly a function of the size of the samples and the extent to which variables that are not being analyzed are contained.
Heritage has been one auction firm for decades, while others have recently changed ownership and style. Further, Heritage has one comprehensive website with auction archives that can be searched and sorted in many ways. Moreover, Heritage has recently sold large numbers of uncirculated Liberty Nickels, mostly to Internet bidders. Therefore, Heritage's auction records are valuable for my analyses of market values for uncirculated Liberty Nickels. Of course, Stack's-Bowers, the Goldbergs, DLRC and other firms sell them, too.
I repeat that particular auction results may be higher or lower than market prices. Other factors, not just auction prices, need to be taken into consideration, when estimating market values. I frequently talk to dealers who each trade many millions of dollars worth of coins every year.
Also, it is often educational for collectors to discuss the characteristics of specific coins with experts. Each, high quality, classic U.S. coin is distinctive in its own way.
III. Common Dates
A collector of type coins, who demands uncirculated Liberty Nickels for a type set, would seek an 1883 'No Cents' coin, which I just discussed, and a 'With Cents' type coin. Usually, collectors of type coins are drawn to the least scarce dates in a series.
Many thousands of 'With Cents' Liberty Nickels survive in MS-64 and MS-65 grades. Collectors of nickels who can afford a Liberty Nickel that grades at least MS-64 should acquire one. For someone who cannot afford, or does not wish to buy, a MS-64 grade 'With Cents' Liberty Nickel, a PCGS or NGC graded MS-62 Liberty Nickel may be acquired in an online auction for a price between $50 and $100, when these are available.
Similarly, a 'common date' Liberty Nickel 'With Cents' in MS-63 grade could easily be acquired via Internet bidding for a price between $90 and $120. A retail price in the range of $130 would usually be fair for one of these. I continue to emphasize, though, that the characteristics of individual coins, not just their respective certified grades, should be taken into consideration. Personally, I would rather pay a little more and have a chance to carefully examine each coin, rather than bid online for coins that I have never seen.
According to Numismedia.com, the least scarce dates in MS-64 and -65 grades are the 1902, the 1903, the 1904 and the 1911. According to the PCGS price guide, all the Liberty Nickels dating from 1899 to 1906, and also the 1911 and the 1912, are equally the least expensive in MS-64 and MS-65 grades, “$300” each in MS-64 grade and “$575” in MS-65.
Numismedia, PCGS and other guides indicate that the 1911 issue is one of the most common dates of the Liberty Nickel 'With Cents' design type, perhaps the most common. In recent auctions, prices for PCGS or NGC graded MS-64 1911 nickels have ranged from around $145 to around $190.
Earlier this month, Heritage auctioned a PCGS graded MS-64 1911 for $161. The current retail level is probably around $180, which is thus lower than the retail levels that prevailed for these during the past few years. Auction results, on average, tend to be around the borders between wholesale and retail price ranges. Again, I urge people to read my article on 'What are Auction Prices.'
A MS-65 grade 1911 costs substantially more than a MS-64 grade 1911 nickel. On five occasions since May 1, 2010, Heritage has auctioned a PCGS or NGC graded MS-65 1911 nickel for exactly $373.75. One of the five has a CAC sticker. During the same period, other 1911s that are each PCGS or NGC graded MS-65 grade have sold for $345 twice, $356.50, $431.25, and $460.
An anomaly is a PCGS graded MS-65 1911 with a CAC sticker brought $1437.50 in Aug. 2010. It may be true that two bidders figured that it would upgrade if resubmitted to the PCGS.
In my view, the values in leading price guides are incorrectly high for MS-65 grade, common date Liberty Nickels. The true retail level seems to be around $435.
Since 2010, PCGS or NGC graded MS-66 1911 'With Cents' Liberty Nickels have been auctioned by Heritage for prices ranging from $661.25 to $1495. My guess is that an average quality certified MS-66 1911 could sell for anywhere between $700 and $900, at auction. Prices for MS-66 grade representatives of several other common dates fall into the same range. Usually, though not always, certified MS-66 Liberty Nickels with CAC stickers bring premiums.
IV. 1885 Liberty Nickels
The three keys are the 1885, the 1886 and the 1912-S. The 1885 is the princess of the Liberty Nickel series.
While I am tempted to engage in a long discussion about 1885 nickels here, I figure that it is better to analyze this issue at length in the future, separately. Beginning and intermediate level collectors should first acquire other dates in the series, and learn much about Liberty Nickels, before acquiring an uncirculated 1885.
V. 1886 Liberty Nickels
Although many more 1886 Liberty Nickels survive in total, in MS-65 and higher grades, the 1886 seems to be even more of a condition rarity than the 1885. Are 1886 Liberty Nickels undervalued in some grades?
In MS-62 grade, Heritage has recently auctioned a few for prices in the range of $1200 to $1500 or so. The NGC graded MS-62 1886 that realized $2990 in Feb. 2012 may have been interpreted as being undergraded by some expert bidders. In March 2012, Stack's-Bowers auctioned a PCGS graded MS-62 1886 Liberty Nickel for $1495, which I view as a retail price or as close to the retail range.
In Sept. 2011, Stack's-Bowers auctioned a PCGS graded MS-63 grade 1886 Liberty Nickel for $2415, a strong price. Since, 2009, other MS-63 grade 1886 nickels have sold for amounts from around $1700 to around $2100 at auction. Three different price guides indicate that the retail price level for a MS-63 grade 1886 is “$2500.” I have no reason to think otherwise.
Leading price guides tend to value MS-64 grade 1886 Liberty Nickels at more than $4000. My impression, however, is that the current retail level is around $3750. Although uncirculated 1886 Liberty Nickels are not as costly as 1885 Liberty Nickels of the same respective grades, these are the more expensive than the other business strikes in the series.
V. Proofs Instead of Uncs?
While the current topic is uncirculated business strikes, I cannot resist suggesting that collectors mix some Proofs into sets of mostly business strikes, especially Proofs of the 1885 and the 1886. In 62 and higher grades, Proof 1885 and 1886 Liberty Nickels generally cost less than one-third as much as business strikes of the same date that have been assigned the same numerical grade by the same service.
John Albanese and Mark Feld agree that collectors should have the option of mixing Proofs and business strikes in the same sets. “I do not see why not,” Albanese remarks. “People do not have to register their sets” with the PCGS or the NGC. “Collectors should make decisions for themselves,” John feels. “Many collectors in the old days mixed Proofs and business strikes in the same sets,” Albanese notes.
In this regard, the “old days” were not that long ago. Until the 1980s, a very large percentage of collectors viewed Proofs as being superior to business strikes. Since around 1990, however, the trend has been for collectors to interpret Proofs as merely being products of different methods of manufacture, rather than being superior items or more important in general. Indeed, many collectors now view Proofs as being less important than business strikes.
As I discussed a few weeks ago, in a much different context, throughout the history of coin collecting in the U.S., most leading collectors strongly preferred Proofs and sought business strikes when Proofs were not available. Louis Eliasberg, the Norweb family, Floyd Starr, the Garrett Family, and many others mixed Proofs and business strikes in the same sets. Usually, when they had a Proof of a given type and date, they did not regard a business strike of the same type and date as being needed or as an enhancement. Examples are mentioned in my discussion of Dr. Duckor's set of Barber Half Dollars in 2010.
The traditional approach is to include Proofs and business strikes in the same sets and the new approach is to regard the collecting of Proofs and business strikes of the same coin type as two separate undertakings, with no overlap. My immediate point is that the traditional rules, in this context, are still legitimate. Collectors should not feel compelled to follow current PCGS rules, rather than rules followed by Louis Eliasberg and the Norwebs, among many others, over the history of coin collecting in the U.S.
VI. 1912-D and 1912-S
Although Three Cent Nickels were first minted in 1865 and five cent nickels were first minted in 1866, all nickels were struck at the 'headquarters' Mint in Philadelphia before 1912. The 1912-Denver Mint issue is not quite a key date, though it is a better date.
In Jan. 2012, Stack's-Bowers auctioned an NGC graded MS-63 1912-D, from “The Rolette Collection,” for $345. In Sept. 2011, the Goldbergs auctioned a PCGS graded MS-63 1912-D for $437. In Nov. 2010, Spectrum-B&M sold another PCGS graded MS-63 for $312. A retail dealer may charge more than the respective auction prices for these three coins.
In June 2011, Stack's-Bowers auctioned a PCGS graded MS-64 1912-D for $632. This is a retail price, or is very close to the retail level.
In Jan. 2011, Stack's-Bowers auctioned a PCGS graded MS-65 1912-D for $1610. In my view, this was a strong auction result and the current retail level is only slightly above this amount.
The 1912-San Francisco Mint nickel is much scarcer than the 1912-Denver Mint nickel. Last week, I discussed prices for circulated 1912-S Liberty Nickels. These are relatively expensive. Collectors who do not wish to, or are not ready to, buy a Choice Uncirculated 1912-S may wish to obtain a circulated 1912-S.
In March 2012, Stack's-Bowers auctioned an NGC graded MS-63 1912-S for $1811. In Aug. 2011, this same firm sold one that is PCGS graded MS-63 and CAC approved for $1633.
The toning on 1912-S nickels is often colorful. Albanese points out that these tend to exhibit a “light green to blue hue, different colors than [those found on] 1912-P and 1912-D nickels.”
While natural toning on 1912-S nickels is often really neat, not all toning is natural. I suggest being careful.
Mark Feld maintains that, “if collectors buy Liberty Nickels in NGC and PCGS holders, they have an extremely high percentage chance of avoiding artificially toned examples.” Mark, though, deals mostly in common dates, and not as much in 'better date' Liberty Nickels. (He probably handles many better dates of other series.)
I have seen more than a few artificially toned Liberty Nickels of better dates, especially 1912-S nickels, in PCGS and NGC holders. Before spending thousands for a MS-64 or higher grade 1912-S nickel, buy common dates for at least a few months and discuss 1912-S nickels with experts.
In general, collectors should start by spending amounts that they each regard as not large. It is a good idea to read about coins and ask questions. Furthermore, it makes sense to think about a collecting strategy and a collecting budget. Liberty Nickels are excellent choices for collectors who like nickels, who wish to complete type or date sets, and who would like to buy classic U.S. coins for relatively low prices. Similar collections of other classic U.S. coin series are usually much costlier.
©2012 Greg Reynolds