Welcome to the debut edition of CoinWeek FAQ's .....
Each month we take some of the most interesting questions from the reader mailbag and answer them in our unique analytic way.
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Q. What effect will PCGS’ new American Silver Eagle spotting policy have on the future investment potential of the series?
Charles- I think it will have a massive impact on the series from an investment standpoint, and from a business standpoint when it comes to the bottom line at PCGS and any other third party grading firm that adopts such a position. The reason for the change is logical, however, as the problem develops seemingly at random and can develop years after the coin’s been slabbed. One would assume that PCGS has researched every component of their holder to see if they are in fact causing the problem - because if that turned out to be the case, then they’d have a GIANT mess on their hands. But, since the mint has claimed full culpability for the problem, citing planchet preparation processes as the likely cause, PCGS is off the hook.
I liken the problem to one I had when I bought my dream car several years ago, a Porsche Boxster. Even though the car was awesome in every way and a Consumer Reports Best Buy, I lived in fear that the engine would suffer a cataclysmic failure, as that year’s model had a problem with them. When after a year I got rid of the car (it caught on fire, of all things!), I was relieved.
I think if I owned a set of PR70DCAM and MS70 eagles I’d be even more worried. PCGS has already amended their price guide to list “SPOT FREE” coins, which means spotted material (regardless of grade) are now “second class” coins in the eyes of the grading services. In our opinion, “second class” MS-70 and MS-69 bullion coin premiums are a silly proposition. Those without the stomach to see their equity stake in high-end eagle sets vanish with the unwelcome appearance of a milk spot or two will probably try to get out now, while there’s still decent money being thrown at them.
Q. I recently saw the reverse of a Jefferson nickel that was graded MS-66 FS. Problem is most of Monticello’s detail was washed out. What gives?
Hubert- I think I know the thread you’re talking about. We look at designations like Full Steps, Full Split Bands, Full Bell Lines, Full Talons (a SBA designation not yet adopted by the TPGs) and so forth as imperfect attempts to differentiate specific characteristics or features of an individual coin for specialists.
The problem with these designations is that focusing on one specific feature, such as the steps on your washed out nickel, ignores other important aspects of a coin - such as die state, eye appeal, surface preservation, color, etc. In other words, there are always great coins out there without the designation and so-so or worse coins out there with the designation.
We’d like to see the hobby develop to the point where TPGs accurately account for die state and fullness of strike throughout the entire design and not just one small feature such as a step. They wouldn’t even have to get fancy with the label. I don’t think it’d be too hard to slap a QR code on the slab.
Q. Over at PCGS you guys said that color commemoratives are going to be the premium coins from the series in the future? Does that mean that MS-69 and 70 don’t matter to you guys?
Charles- We didn’t say that. It’s just that you have to look at the populations and think. Are there more than enough collectors to satisfy the quantity of graded coins? Perfection is great, but what’s the value of perfection? If you have 2,000 eager buyers and 500 available coins, then those coins have “value”. If you have 2,000 perfect coins and 500 eager buyers then you don’t have “value”.
We think color, on the other hand, will command premiums. Natural color, that is. It’s our belief that collector behavior and packaging technologies being what they are, most modern commemoratives will not be stored long term in media that will produce spectacular colors. There are a few exceptions that are quite lovely, as well as a few really ugly orange and goldenrod Constitution dollars that have taken a permanent perch on eBay. Nice coins with nice color will likely capture the imagination of future collectors a bit more than one of an army of thousands of blast white, “perfect” specimens.
The biggest threat to this potential future market, obviously, is coin doctoring. When the market starts to see an abundance of colored pieces, look out! Let’s just hope that the technology for busting coin doctors and artificially toned pieces improves
Q. Are you guys going to write a second installment on So-Called Dollars?
Charles- Great question, person who is totally not us! The second and third installments are already written. It takes a little time to format longer, image-heavy articles like the so-called dollar series, and there’s been a lot of news to report on lately, but rest assured Scott will publish them shortly.
So that’s it for this month. We’ve dipped our toe in the water. What we’d really like to do is answer YOUR questions. Seriously. If you don’t want to see any more blatant self-promotion, then drop us a line at firstname.lastname@example.org. Heard an old coin legend, and want to know if it’s true? Have you looked everywhere online and just can’t seem to find out anything about this one coin in your collection? Feeling ornery and want to stump us? Then write! You know you want to.
©2013 Charles Morgan and Hubert Walker