Coin Collecting Strategies: Some Thoughts on Rarity
Having just published a blog about coin rarity based on grade distribution, I’ve been thinking more about the many concepts of rarity and how they apply to coin collecting. Let’s take a look at a few and discuss them.
Rarity is probably one of the two or three most misused terms in all of numismatics, especially from the selling side. I consistently see coins referred to as “rare” which most definitely are not.
Collectors need to remember that rarity is a relative concept. A coin like an 1895 Morgan Dollar is always termed a “rare” coin. Within the context of the Morgan Dollar series, it is rare. But one needs to remember that there are hundreds of examples known in grades up to and including PR67 and, if compared to a coin like an 1867-S quarter eagle (which is priced at a tiny fraction of the 1895 dollar) it is common. What always needs to be remembered when analyzing rarity is context. There are, in theory, hundreds if not thousands of serious Morgan dollar collectors and this makes a coin like an 1895 contextually rare. On the other hand, there are probably less than two to three dozen serious collectors of Liberty Head quarter eagles and an issue like an 1867-S exists in enough quantity that anyone who wants a decent example should be able to find one. In other words, there are basically enough to go around; at least for now.
Rarity is both relative and series specific. It is difficult to compare absolute rarity from one series to another. As I mentioned above, a coin with 20 known in all grades can be a great rarity in a popular series, or it can be a “sleeper” if it is in a series which has the potential of being more intensely collected in the future. There are also numerous esoteric coins that have 20 known but the number of collectors is so few that 20 coins is the equivalent to hundreds of pieces known in a more popular series.
There are essentially two types of rarity. The first is overall rarity. This refers to a coin which is rare in all grades and whose rarity is not solely predicated on its grade. A coin which is rare in all grades is also called fundamentally rare. As a dealer, these are the types of coins I like to buy and what I specialize in.
A coin can be fundamentally rare for a number of reasons. A Proof 1878 gold dollar is fundamentally rare because of its original mintage figure (a scant 20 coins). An 1828/7 half eagle is fundamentally rare because virtually every known example was melted in 1834 when the weight was changed for gold coins and old tenor half eagles were worth more than face value. An 1865 half eagle is rare not only because of a low original mintage figure (1,270 business strikes) but because of the fact that it is a well-used Civil War issue that not only saw active use in circulation was later melted.
In the area of branch mint gold, few issues are fundamentally rare. Most exist in quantities of 150-200 in all grades. But nearly all branch mint coins are grade rarities.
In nearly all series of American coins, grade rarity has become more significant to collectors than condition rarity. An 1843-D half eagle in Very Fine is a relatively available coin and within the context of Dahlonega issues it is common. But this same date in, say, Mint State-63 is very rare and it is described as a grade rarity.
But the real grade rarities in American numismatics tend to be in 20th century series. An average quality MS64 1912 St. Gaudens double eagle is worth around $5,000 in MS64 and $25,000 or more in properly graded MS65. The disparity can be far, far greater with coins from the 1940’s, 1950’s and 1960’s. As an example (and I selected this totally randomly) a 1942-S quarter is worth $300 in PCGS MS66, $2,500 in PCGS MS67 and close to $20,000—maybe more—in PCGS MS68. That’s a big difference in quality for a difference in appearance that might not be readily recognizable to more than a handful of dealers and specialized collectors.
The difference between the 1843-D half eagle and the 1942-S quarter is that the former has a reasonably significant degree of value in all grades. Even a cleaned, no-grade 1843-D is worth around $1,000; an average quality circulated 1942-S might not fetch six bucks at your local coin shop.
To my way of thinking the “best” coins are what I call dual rarities. This is a coin that is not only rare from an overall standpoint (i.e., it might have a total number known of 40-50) and it is among the best known for that particular issue. Going back to a coin I mentioned earlier in this blog, the 1865 half eagle, a nice AU55 example would be a dual rarity as it would be among the finest known examples of a coin which is rare in all grades.
The newest category of rarity, one that dates from the 1970’s but which is probably at its height right now, is what I refer to as appearance rarity. Appearance rarity can be related to strike (Full Bands for Mercury dimes, Full Head for Standing Liberty quarters) or it can be related to coloration (Red and Brown or Red for Lincoln Cents). The newest categories of appearance rarity relate to the actual finish of a Proof coin (Deep Cameo/Ultra Cameo) or for business strikes (Prooflike or Deep Mirror Prooflike).
I have mixed feelings about appearance rarity. If I was collecting Lincoln Cents by date, would I spend $100,000+ for a PCGS Red MS65 1926-S or $5,000+ for a mostly red MS65 Red and Brown? Easy answer for me (without a doubt I’m in for the Red and Brown coin) but, then again, I’m a fundamental rarity guy and not a condition rarity so the concepts of appearance rarity seems totally wacky to me. But there are instances I will and do pay a premium for appearance; an example would be a better date Type Three double eagle in MS63 designated as Deep Mirror Prooflike or a rare date Proof Liberty Head half eagle designated as Deep Cameo.
One of the oldest subcategories of rarity is also one of the hardest for the layman to figure. Certain series, like Large Cents and Capped Bust half dollars are avidly collected by die variety. There might not be more a few dozen very serious collectors in these two areas but they tend to be extremely passionate and often very well-heeled. For a non-specialist like me, I am often amazed at the huge prices certain early cents bring but I can appreciate them. My only caveat for a variety collector is to avoid paying premiums in series which are not avidly collected by die variety. You may collect Trade Dollars by variety but if you do you are one of probably ten or fewer collectors who do. Paying a large premium for a seemingly rare variety might not prove financially prudent down the road.
In closing, I’d like to quickly address a question which I am often asked by new collectors: how can you tell if a coin is truly rare? I think frequency of appearance at auction is an excellent guide.
- If a coin appears for sale at virtually all major sales, it is common. An example of this would be a 1901-S eagle in MS64.
- If a coin appears a few times a year at auction (say three or four times), it is at the very least scarce. An example of this would be an 1849-D half eagle in AU50.
- If a coin appears less than once per year at auction, it is rare. This is true from both an in-grade and overall rarity perspective.
- And if a coin appears at auction once every three to five years? That, in my opinion, is a coin which is very rare or even extremely rare.
About Doug Winter
Doug has spent much of his life in the field of numismatics; beginning collecting coins at the age of seven, and by the time he was ten years old, buying and selling coins at conventions in the New York City area.
Recognized as one of the leading specialized numismatic firms, Doug is an award winning author of over a dozen numismatic books and the recognized expert on US Gold. His knowledge and exceptional eye for properly graded and original coins has made him one of the most respected figures in the numismatic community and a sought after dealer by collectors and investors looking for professional personalized service, a select inventory of impeccable quality and fair and honest pricing. Doug is also a major buyer of all US coins and is always looking to purchase collections both large and small. He can be reached at 214-675-9897.
Doug has been a contributor to the Guidebook of United States Coins (also known as the “Redbook”) since 1983, Walter Breen’s Encyclopedia of United States and Colonial Coins, Q. David Bowers’ Encyclopedia of United States Silver Dollars and Andrew Pollock’s United States Pattern and Related Issues
In addition he has authored 13 books on US Gold coins including:
- Gold Coins of the New Orleans Mint: 1839-1909
- Gold Coins of the Carson City Mint: 1870 – 1893
- Gold Coins of the Charlotte Mint: 1838-1861
- Gold Coins of the Dahlonega Mint 1838-1861
- The United States $3 Gold Pieces 1854-1889
- Carson City Gold Coinage 1870-1893: A Rarity and Condition Census Update
- An Insider’s Guide to Collecting Type One Double Eagles
- The Connoisseur’s Guide to United States Gold Coins
- A Collector’s Guide To Indian Head Quarter Eagles
- The Acadiana Collection of New Orleans Coinage
- Type Three Double Eagles, 1877-1907: A Numismatic History and Analysis
- Gold Coins of the Dahlonega Mint, 1838-1861: A Numismatic History and Analysis
- Type Two Double Eagles, 1866-1876: A Numismatic History and Analysis
Finally Doug is a member of virtually every major numismatic organization, professional trade group and major coin association in the US.
If you are interested in buying or selling classic US coins or if you would like to have the world’s leading expert work with you assembling a set of coins? Contact Doug Winter at (214) 675-9897 or by email at email@example.com.