News and Analysis: scarce coins, coin markets, and the coin collecting community #41
A Weekly Column by Greg Reynolds
Today’s column features recommendations for collectors. Last week, the topic was advice for true beginners. Back in September, I wrote about coins in the $250 to $1000 range. Most of my columns, feature articles and reviews are about coins that cost more than $5000 each. In various pieces, however, I have mentioned coins that cost less than $100, or even less than $10. Please see my two part series on why 1933/34 is the true dividing line between classic and modern U.S. coinage (part 1; part 2). It is true that only a small amount of money is needed to collect U.S. coins. There are plenty of scarce, naturally toned, pre-1934 coins that are available for less then ten dollars each, sometimes for less than one dollar. The topic here, though, is U.S. coins in the $1000 to $5000 range.
Coin business veterans John Albanese, Kris Oyster and Mark Feld contributed their respective opinions regarding coins that are good values for collectors, for logical, aesthetic and cultural reasons, with investment issues being a secondary consideration. It is not implied that any of the coins mentioned herein will turn out to be excellent investments, though some might very well be. Rare coins should be purchased by people who are interested in coins and enjoy owning them.
I. Gold Coins
Regarding gold coins in this price range, John Albanese recommends Liberty Head Half Eagles ($5 gold coins) and Eagles ($10 pieces) “from the 1840s and 1850s.” Specifically, Albanese refers to “P-Mints and O-Mints, original EF [grade] coins.”
New Orleans Mint Half Eagles from this era tend to be scarcer and more expensive than their Philadelphia Mint counterparts. Albanese suggests “better dates,” and thus not the relatively common 1854-O Half Eagle that is worth around $600 in EF-40 grade. According to the PCGS price guide, some New Orleans Mint, PCGS graded EF-40 Half Eagles are valued as follows: 1840-O $950, 1845-O $1200, 1846-O $1000, 1851-O $1650, 1855-O $2600, 1857-O $2000.
In my (this writer’s) opinion, the 1842-O Half Eagle is a good value for collectors. This issue is extremely rare. Certainly, there are fewer than one hundred 1842-O Half Eagles known, maybe not as many as fifty! In August 2010, a PCGS graded EF-45 1842-O was auctioned for $3738. As I did not see it, I am not endorsing this specific coin. Generally, an EF-40 or higher grade 1842-O Half Eagle with natural toning and mostly original surfaces that is priced at less than $5000 would be a good value, and such a Very Fine grade 1842-O would be a good value at less than $2500. Note that I am not just referring to a coin’s certified numerical grade, I am recommending coins with mostly to fully original surfaces.
Albanese indicates that almost all the Extremely Fine grade Philadelphia and New Orleans Mint Half Eagles and Eagles, from the 1840s and 1850s, that John has seen are “original.” For much less than $5000 each, a majority of the Philadelphia and New Orleans Eagle issues, from the 1840s and 1850s, could be easily obtained.
Kris Oyster also recommends New Orleans Mint gold coins. “O-Mint Liberty Half Eagles and Quarter Eagles [$2½ gold coins] are so darn cheap,” Oyster declares, “pay retail or over retail for them. They are worth it.” Oyster favors New Orleans Mint Eagles and Double Eagles, too. Kris is a managing director and the chief numismatist at DGSE.
Oyster strongly suggests gold coins that were minted in Charlotte, Dahlonega and Carson City, as well. Kris regards these as better values than corresponding Philadelphia, Denver and San Francisco Mint issues. Most of “these can be picked up for a song in lower grades, Good to AU. Retail is a bargain for these coins, [again] pay over retail if you have to because these coins are so rare, when you see one, it may be your only chance to own [that particular] gold treasure,” Oyster gushes.
Oyster is also “ a strong advocate of Type One $20 coins, minted from 1850 to 1866. These coins are very underpriced in VF to AU and [some] can be obtained for less than $5000 in” MS-60 to -62 grades. “A Type One Double Eagle is a great piece of American history to behold. Search the date and Mint [of each] and see what was going on [at the time]. For example, if you buy an 1855-S coin, read about what life was like in San Francisco in 1855. Study the history,” Oyster adds.
I (this writer) suggest that a collector buy just one or two Type One Double Eagles for a gold type set. By carefully obtaining coins in the $1000 to $5000 range, a collector could make considerable progress towards a comprehensive 1795 to 1933 gold type set.
A type set requires just one representative of each design type. While the one representative of each type, in a type set, is often one of the most common dates of that respective type, it does not have to be common. As 1924 and 1928 Saint Gaudens Double Eagles are so extremely common, for example, it would make sense for a gold type collector to select a slightly better date Saint for a type set. For less than $5000 per coin, a wide variety of gold type coins may be obtained.
II. Silver Coins
Rather than collect type coins, John Albanese contends, a collector “should become a semi-expert in one or two” particular series. For collectors who cannot afford to complete entire sets of a particular type, Albanese recommends “short sets. For example, I [John] knew a collector who put together a short set of Proof Liberty Seated Halves dating from 1880 to 1891. The same thing could be done with quarters.” Other starting points could be picked like 1874, after arrows were no longer employed on Liberty Seated dimes, quarters and halves. There are many sensible short sets that could be completed with coins priced at $1000 to $5000 each.
Collectors may also focus upon and/or exclude certain Mints from limited sets of Liberty Seated silver coins. Generally, Liberty Seated silver coins were minted from the late 1830s or so to 1891, though Liberty Seated Half Dimes and Liberty Seated Dollars were discontinued in 1873.
Kris Oyster suggests acquiring Proof Liberty Seated coins of all denominations that grade from “60 to 63.” He emphasizes Proof Liberty Seated Dollars.
For less than $5000 per coin, a collector could complete a set of Proof Liberty Seated Dollars from 1859 to 1873, with most of them being certified Proof-63. This set would include a totally complete set of the ‘With Motto’ type that was minted from 1866 to 1873. I (this writer) note that Proof Liberty Seated dollars dated 1858 and those dated earlier than 1858 are really separate topics.
Generally, Oyster maintains that the Proof Liberty Seated Type coins, from half dimes to silver dollars, that are priced from $1000 to $5000 each in 62 or 63 grade are good values, “great looking coins like these will not last long as people begin to see the value as these low mintage beauties trade for super low prices,” Oyster asserts. For less than $5000 per coin, a collector could acquire a large number of Proof Liberty Seated Half Dimes, Dimes, Quarters, Half Dollars and Silver Dollars.
In contrast to Albanese and Oyster, Mark Feld leans towards traditional type sets. In regard to silver coins in the $1000 to $5000 range, Feld recommends business strike of 19th century series: “MS66 Capped Bust Half Dimes, MS64-65 [1837-38 Liberty Seated] No Stars Half Dimes, MS63-64 Capped Bust Dimes, MS63-64 [Liberty Seated] No Stars Dimes, MS66-67 Barber Dimes, MS63 Capped Bust Quarters, MS63 [Liberty Seated] No Drapery [1838-40] Quarters, MS63-64  Arrows& Rays Quarters, MS66 Barber Quarters, MS63-64  Arrows & Rays Half Dollars [and] MS65-66 Barber Half Dollars.” Feld is referring to type coins, not rarities or even better dates.
Albanese and Feld agree that Barber coins, Bust Half Dimes and Bust Dimes are good values for collectors at current levels. Albanese states that, for business strikes (and not Proofs), these sets are completable or nearly so with coins that cost less than $5000 each. A decent 1901-S Quarter, however, is likely to be priced above $5000.
Albanese was the sole founder of the NGC in 1987. Nearly two decades later, John founded the CAC. Feld was, for many years, an expert grader at the NGC. Additionally, he has also worked for major leaders in the coin business. Mark is now self-employed.
I (this writer) find it noteworthy that, except for the extremely rare 1802 and the unique 1870-S, for less than $5000 per coin, a complete set of all half dime issues, 1794 to 1873, could be assembled. Indeed, a complete set of Capped Bust Half Dimes, which were minted from 1829 to 1837, in MS-64 or -65 grades could be built for less than $5000 per coin, perhaps including one or two that grade MS-66. (Die varieties are separate topics.)
Likewise, a complete set ‘by date’ of all three types of bust dimes, from 1796 to 1837, could be finished for less than $5000 per coin. A set of just Capped Bust, Reduced (or “small”) size dimes, which date from 1828 to 1837, could be virtually completed with all pieces grading MS-64. While an 1829 ‘Curl Base 2’ dime would be likely to cost more than $5000, two other widely recognized varieties of 1829 dimes could be acquired for less than $25 each in Good grade or less than $4200 in MS-64.
There are many approaches to collecting U.S. silver coins. In response to my inquiry regarding coins in the $1000 to $5000 range, John Albanese, Kris Oyster, and Mark Feld all did NOT mention any silver coins minted after 1916. Albanese does point out that 1916-D Mercury Dimes are easy to find in AG to Good grades and not hard to find in MS-64 to MS-65 grades, yet a nice VF or Extremely Fine grade 1916-D dime “is very tough to find”!
While Mark Feld recommends common date business strike Three Cent Nickels, Shield Nickels and Liberty Nickels in MS-66 grade, Albanese favors some Proof nickels in particular. Further, Albanese suggests a set of Proof Three Cent Nickels in 66 to 67 grades. This set is “very collectible and very completable,” Albanese relates. Plus, “they are pretty coins”!
Three Cent Nickels, which were minted from 1865 to 1889, have always been of Albanese’s “favorites,” and one of mine as well. I (this writer) am fascinated by the Three Cent Nickel. It is such an odd denomination and it is curious that there were Three Cent Nickels before there were five cent nickels. Moreover, the activities and political influence of nickel mogul Joseph Wharton are a noteworthy part of U.S. history. Plus, I very much like the obverse (front) design.
Albanese finds that Three Cent Nickels are much less costly than these were in 1980, more than thirty years ago. Indeed, in terms of “1980 prices, Gem Proof Three Cent Nickels can be bought now for cents on the dollar,” Albanese proclaims.
I (this writer) believe that it is also true that the prices for Proof Three Cent Nickels were much higher in early 1990 than corresponding prices are now. Indeed, prices for Proof-66 and -67 Three Cent Nickels were probably twice as high in early 1990.
I asked Albanese if there has been much grade-inflation pertaining to Proof-66 and -67 Three Cent Nickels. “No, there has been very little grade-inflation” regarding these, Albanese informs. Usually, “Three Cent Nickels that graded 66 or 67 in 1990 are graded the same now.”
Albanese strongly recommends five cent nickels, too, especially Proof-65 1866 Shield Nickels. Proofs ‘With Rays’ on the reverse (back) were made only in 1866 and 1867. Proof Shield Nickels without rays were struck from 1867 to 1883.
As Proof 1867 ‘With Rays’ nickels are extremely rare, “Proof 1866 Shield Nickels are essentially a one-year type,” Albanese concludes. “These are neat, interesting, pretty coins, often with nice cameos. Proof 1866 nickels come especially nice, usually stunning!” Albanese find that Proof-65 1866 Shield Nickels sell for “around $3000.”
Albanese also suggests that “Proof-67 1937 Buffalo Nickels are a good buy at a little more than $2000. In early 1980, they were selling for $7000! [Furthermore,] now a Proof-64 1937 nickel goes for around $1200. [A collector] is not paying a lot more for those extra three points.”
My (this writer’s) guess is that a wonderful, mid range to ‘high end’ Proof-67 1937 nickel may cost a collector between $2200 and $3000. Even so, John is correct that such a coin was much more expensive in the past and is now selling for a startlingly low premium over Proof-64, Proof-65 and Proof-66 1937 nickels. Besides, Brilliant Proof Buffalo Nickels are really cool. I (this writer) suggest selecting a Proof 1937 nickel that is even more sharply struck than the typical Proof 1937 nickel. Seeing so much detail on a Buffalo Nickel is satisfying in a way that is hard to describe, especially considering the blurriness of so many business strikes of the second type of Buffalo Nickels.
IV. Collecting by Type or ‘by Date’?
A type set of nickels is easy to assemble. Collecting any series of business strike nickels ‘by date,’ however, is very different undertaking and can be aggravating. For a collector of coins in the $1000 to $5000 range, I would suggest building a nearly complete type set of copper, nickel and silver, and/or a post-1865 type set of gold. I am referring to series of U.S. coins that began before 1933. (Regarding modern, post-1934 issues, please read last week’s column and a column last year on Collecting Modern Coins.)
As 1796 quarters and 1796-97 Draped Bust, Small Eagle halves are very expensive, a collector of coins in the $1000 to $5000 range might consider a silver type set that just covers U.S. coins of the 19th century. Similarly, to avoid the costs of some of the gold coins of 1907, a beginning collector may wish to assemble a type set of gold coins relating to just the second half of the 19th century. Such a gold type set could be expanded to include, where applicable, coins of all pertinent Mints, those in Philadelphia, San Francisco, Carson City (NV), Charlotte (NC) and Dahlonega (GA).
Before collecting copper coins in the $1000 to $5000 range, I suggest examining many copper coins AND communicating with experts. Collecting copper coins is more complicated. Reading books and articles that relate to copper coins may be helpful. (I wrote many articles about copper coins in recent years.)
For those who choose to collect Proof silver coins, I suggest focusing upon Proof-64 and higher grade coins. I really disagree with Kris Oyster on this point. In my view, Proof Liberty Seated coins in the 62 to 63 range have just too many hairlines and/or other issues. I concede that someone who is collecting a series of 19th century Proof coins ‘by date,’ and thus not solely ‘by type,’ should consider including some Proof-60 to -63 grade pieces in his or her set.
For some nickel issues, business strikes are worth more than Proofs and some such Proofs are hard to identify; collectors should buy Proofs when these cost less than business strikes, for coins with the same numerical grade. There would be less risk in doing so, and some of the nickels that are certified as Proofs are not really Proofs, anyway.
After building some kind of a type set, which may be very limited, a collector might find that he or she especially likes a particular type or a whole denomination like quarter dollars or Half Eagles. If a collector plans to assemble a set of a particular series, and thus collect ‘by date,’ it is important to think a little at the beginning, ask questions of experts, and develop some kind of a plan. Except in registry sets, ‘by date’ refers to both years and mint locations. Traditionally, 1908, 1908-D, 1908-O and 1908-S are four different ‘dates’! Indeed, there are four such ‘dates’ of Barber Dimes. An expanded type set of business strike Barber coins could include, I suggest, one from each Mint, and thus twelve coins in total.
Type sets are expandable and customizable in other ways. While I recommend building type sets, Albanese thinks otherwise.
“If [coin buyers] concentrate or specialize in one or two coin series, they can become competent or even semi-experts in that small segment. This increases their chances of building something special as well as not being taken advantage of. Let’s face it, coins are wonderful but, most consumers are not buying the ‘right’ coins,” Albanese explains.
I (this writer) could understand a collector limiting his or her self to one or two denominations, like dimes and Eagles, or half cents and half dollars. One or two types is, however, just too limiting, in my view. Would a collector wish to spend years collecting Buffalo Nickels, Classic Head Half Eagles and nothing else?
Most collectors seek or at least enjoy an assortment of items. Moreover, for $1000 to $5000 coin, it is impossible to build one of the all-time best sets of any one type. With a $5000 per coin limit, however, a meaningful collection of several series, along with a type set, is very much practical.
The term ‘meaningful’ in this context is mostly objective, rather than subjective. I am referring to assembling a collection that is consistent with the values and traditions of coin collecting in the U.S., a collection that sophisticated experts today, including Albanese, would regard as meaningful. (Some relevant points are put forth in the second part of my series on collecting naturally toned coins.)
Generally, regarding pre-1935 U.S. coins, type sets and date (plus mintmark) sets that are comprised of fairly graded, naturally toned coins are very much consistent with the traditions of collecting U.S. coins. A collection does not have to include any gem quality coins to be meaningful. Naturally toned, extremely fine grade pre-1935 U.S. coins, with mostly to fully original surfaces, have been regarded as ‘meaningful’ for generations. I am referring to the views of veteran collectors and/or sophisticated experts. As an aside, note that artificially brightened ‘mint state’ coins are often marketed to people who know little, if anything, about coins.
Albanese’s view regarding gem coins and circulated coins should be considered by collectors. “I [John] love superb gem coins but a 62 or a 63 has the feel of an impaired gem. An honestly worn Fine or Very Fine [grade] coin has much more character and history.” I (this writer) would like to add that many coins in the AU-55 to MS-63 range have a lot of problems and/or have been very apparently artificially brightened via some form of (acidic) dipping. I strongly agree with John in that collectors who cannot afford 64 or higher grade coins in a chosen area should consider naturally toned coins in the Fine-12 to AU-55 range, especially Extremely Fine grade coins.
©2011 Greg Reynolds