By Louis Golino for CoinWeek ………

Leo Freese wrote recently  about the 2013-W Buffalo reverse proof gold coins, specifically those sold and graded at the recent ANA World’s Fair of Money held in Rosemont, Illinois and asked if he should buy those coins. He suggested that because no more than 1500 of the total mintage of the coins would be both graded PF-70 and have the show label that this could create the conditions for a “modern rarity,” and that these are the coins collectors want.

I would suggest that these coins are not nearly as special as they have been portrayed by Mr. Frese and the dealers selling them, and that the coins will not retain their current premiums, let alone “easily double from here,” as Mr. Freese wrote. In fact, as I explain below, some have already declined substantially.

rev proof ana The Coin Analyst: Are the Chicago ANA Buffalo Reverse Proof Gold Coins Really That Special?First of all, there is nothing inherently different about the coins sold at the ANA show from those purchased through regular Mint channels. In fact, despite having initially had their orders backordered until sometime in September, many people who ordered this coin online when it was first offered prior to the start of the show started receiving their coins with a few days of the end of the show. By last week many people who ordered online had received their coins.

Quite simply, there is no way to prove the ANA coins were struck before the ones sold on the Mint’s web site or over the phone. It has been well established through lawsuits and extensive discussion in the numismatic media in recent years that first strike and early release labels merely reflect the submission policies of the grading companies and have nothing to do with when the coins were actually struck. To do that the Mint would have to track which dies were used to make which coins, and that is not something they do. Given that these coins were struck to demand, if anything, the coins ordered online before the show were probably produced before those sold at the show in anticipation of very high demand from online buyers.

I can understand why buyers were eager to get their hands on the coins at the ANA as the reverse proof Buffalo is a very nice coin, and if it does not become a regular issue, it has the potential to develop a healthy premium as a result of high demand from future collectors coupled with likely higher gold prices in the future.

But I must question the wisdom of paying early retail prices for these coins, which have reached as much as $4,000 and more for PCGS proof-70 ANA label coins. In fact, on September 3, Great Collections (www.greatcollections.com) sold just such a coin for $2,803 ($3,083 with the buyer’s premium), which is quite a drop in such a short period. On e-Bay there are a lot more NGC coins because they were at the show grading the coins, whereas those graded by PCGS had to be either submitted during the show or reach PCGS by August 21, according to PCGS customer service. At NGC buyers who still have their original Mint receipts from the show can still submit them for the special ANA label.

rev proof buf ngc retro The Coin Analyst: Are the Chicago ANA Buffalo Reverse Proof Gold Coins Really That Special?On e-Bay the NGC coins are averaging about $3,000 with the highest recent sale being for one in a retro NGC holder for $3,500. For the PCGS coins the highest posted recent price is $3,250, though some coins are sold at best offer prices which are agreed to between buyer and seller and not listed publicly.

Any time the same coin in the same label sells for a range that goes from $2,800 to $4,000 and more in a very short period, as is the case for the PCGS coins, I would be leery. I simply do not see there being much in the way of upside potential for these coins. In fact, I see a lot more potential downside than upside, especially since they are still available until September 5 from the Mint for a current price of $1,740 and non-ANA label proof-70 coins are available from many dealers for about $2,000.

Is the ANA show label really worth $1500 or more? Does anyone who has studied modern U.S. coins over time think future buyers will pay those premiums? I seriously doubt it and think a lot of people who paid retail prices will soon have buyer’s remorse.

I can understand why dealers and other buyers would purchase these coins at the Mint, have them graded at the show, and sell them for an enormous quick profit before premiums start dropping. But to call the ANA-label coins “modern rarities” is to distort whatever meaning that term has (since very few modern coins are even truly rare). A grading label can add value, but it does not make a coin rare unless it is a condition rarity situation where only a very small number of coins have been graded 70.

I find it very unfortunate that so many people have been chasing these over-hyped ANA-label reverse proofs when they could purchase two from the Mint for the same price. Furthermore, I am especially troubled by the fact that, as I explained recently was detailed in Coin World , three major dealers managed to secure the majority of the show coins. By paying many people premiums to stand in line for hours and purchase coins on their behalf, and thereby get around the Mint’s per person buying limits at the show, these companies made it that much harder for the average collector to buy a coin at the show, especially given how quickly the coins sold the first day of the show.

I realize that both parties in those arrangements consented to what they were doing, but I can tell you that if I had been at the show, I would not have agreed to a $100-200 premium when I had the chance to make about $2,000 per coin as the dealers did, and I wonder how those who accepted the small premiums feel now that they see what those coins have been bringing.

Moreover, I raise these points not simply out of concerns about fair access, but also because a modern coin whose mintage, or in this case a subsection of the total mintage sold only in person at a coin show, is scooped up by a handful of dealers is unlikely to sustain its high retail premium over time. The history of modern numismatics is strewn with coins that were hyped as being extra special when they came out, only to see their values plummet later. 1500 may seem like a small percentage of the mintage of a coin with well over 40,000 examples in existence, but it only matters in the long-term if there is something truly unique about those 1500 coins. The only thing unique about the ANA label coins is the fact that they were sold at the show, and I doubt many people will care that much were they were sold years from now.

The Mint has indicated that it plans to launch more major releases at future ANA shows, and going forward I think the Mint needs to come up with a more fair distribution system than the one used in Rosement, especially for coins in high demand. Not to mention the fact that according to an article in the August 27 PCGS e-Collector by Justin and Mitchell Spivack, fist fights almost broke out as people tried to jump the line of buyers. I have asked the Mint for comment on this and will report back what I hear from them.

golino portrait thumb The Coin Analyst: Are the Chicago ANA Buffalo Reverse Proof Gold Coins Really That Special?Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin WorldNumismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANAPCGSNGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

 
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23 Comments

  1. Charles Morgan says:

    +1 Louis.

    Charles Morgan

  2. Mickey Smith says:

    Why pay a higher price? It reminds me of those TV shows selling coins way over spot & deeming them as a rare coin which is a lie. The people who call in & buy from these TV shows have/are getting ripped off big time. If the Mint want to really make great collector coin pack, they should have minted a Buffalo Nickel to go with the gold Buffalo gold coin dated 2013! Now a one year 2 coins type set would have made the collectors go nuts!

    • Louis says:

      Thanks, Mickey. I like that idea too, and I have heard other collectors make the same suggestion. At least they issued the reverse proof separately instead of doing a 2-coin set as contemplated at one point, which would have made it too pricey for many buyers. A separate Buffalo nickel set in silver with coins from different mints in different finishes would have been fun too, and that would have provided an alternative for those who can not swing two grand for a gold coin.

  3. Houston Roy says:

    Ah, sanity at long last.

  4. Scott says:

    The mint should have scheduled this product release to coincide with the first public day of the ANA convention, that way nobody could complain. Anyone who pays much of a premium for an ANA labeled coin is a fool IMHO.

  5. Al Carman says:

    It seems to me folks can not see the forest for the trees ……I want a quality coin with good grade …….not some label that has someones endorsement

  6. tekhen says:

    +1
    buy the coin, not the label!

    what’s sad… people are buying at the ridiculous price

  7. Charles Morgan says:

    If the Mint was actually trying to make this an event- they bring the documented first 100 or 1000 struck. THAT would be something that collector market would be ecstatic about (especially if it were the lower of the two numbers). Marketing the coins the Mint brought to the show is silly and only meant to give dealers a quick buck.

    It reminds me of the egregious 25th Anniversary ASE set with a household limit of 5 and a mintage limit of 100,000. I have multiple industry sources that point to dealers who arranged to purchase tens of thousands of these sets by networking with customers. You’d have to be a total rube to think those sets were going to maintain their value. It was pure greed.

    • Louis says:

      Charles,
      The Perth Mint is doing this with the first 1K struck of lunar and kookaburra bullion coins by tracking them through the minting process. They have the most advanced mint in the world, which must help, but we simply don’t do this and I doubt we ever will.

      On the 2011 sets it’s true many dealers did what you said, and there was even a heated debated over the role one particular company played which I discussed in Coin World in a guest commentary, but the sets are still worth $700 or twice issue price because of the low mintage. These are the lowest mintage eagles except for the 1995-w proof only and the 2007-W error coin, and many, many collectors ordered from the Mint too. Every time there is a high demand set dealers use various means to get around household limits because they need the stock for orders and our Mint does not do dealer sales like other mints with some limited exceptions. It may be time to just separate dealer and other sales as long as the price is the same.

  8. dan says:

    Louis

    I cant agree with you more, but the BS is not just with this label, there are many more ridiculous labels out there. The issue is how do you educate what I assume or hope are just new collectors? Very rarely do I see articles by prominent people in the field discussing and condemning this crap.

    The article by leo in my opinion was nothing more than a sales pitch. In his article he states that maybe he would pick up one of the coins to keep for the future yet he has 2 with “that special label ” for sale on his web site for $3,500. I am surprised that coin world does not have sometype of disclamer about promoting items? My only wish is that the professional associations and organizations would ACTIVELY take a stand against such baloney. I have said many times before that there is a definitely a need for authentication and a third party grading but at this point, many of these additional facts are meaningless. I have always felt that it is the responsiblility of every collector to help educate future collectors, but unfortunately it appears that some do not believe in that theory.

    While most of us can admit to a mistake or two when we were new at collecting, ( maybe even when we were not so new ) I know for me it did not involve as large a monetary mistake as some of these might and it was not from being mislead by a label. I just wish there was a way to get the groups and publications to make a concerted effort denouncing some of these practices and the fact that the label alone does not make something rare. Real bottom line is, it is all about the coin!

    • Leo Frese says:

      Dan,
      I appreciate your thoughts, but I must clarify for the record: I am an Independent Consultant. After spending nearly 30 years inside the largest rare coin auction house I have come to believe there’s a more effective and economical way for collectors and estates to sell their coins. As I mentioned in the article, I thought these coins could increase in value IF THE TELEMARKETERS hyped them. I DO NOT SELL ANY PERSONAL COINS on my website, it is there to bring individual collections and estates to market. A couple clients had these coins available, and I am selling them for them. Personally, I still have not decided if I want to buy one. However, i see the PCGS coins are now selling in the $3500-4000 range with dealer teletype buy prices in excess of $3000.

  9. Very good article, Louis.

    This is part of why I don’t really spend money on modern graded coins. I’m just not convinced they deliver real, long term value except (maybe) when dealing with a series of coins with known production problems that caused the majority of pieces to be subpar.

    As to this release itself, it reminds me of the “San Francisco” bullion silver eagle thing a few years back, where dealers tried to charge extra premium for slabbed eagles from San Francisco. I don’t expect the ANA labels to hold their values.

  10. Louis says:

    Thanks to everyone for their comments. Unfortunately I don’t think it is only newer collectors who are buying the ANA label coins. For now they are still selling and bringing high prices, but as I argued, I doubt they will be doing this over the long haul. This may be a situation where if enough people are convinced they are special, the market price will hold for a while, but it seems like a risky purchase to me. I can see having your COA signed by the Mint Director. But if you really want a memento of the show, how about an inexpensive ANA show medal? I still enjoy seeing the one I have from the 1976 NYC show.

  11. Mercury says:

    Great article Louis,
    The only thing you fail to mention in regards those who have choose to throw away as much as $4000.00 on a label is the adage, “because I can.” It’s this same mentality that say if you put a fresh coat of pain on a old jalopy you’d increase it value 1000% and someone will buy it. As collectors, it’s our nature to “buy” into things. It’s the same reason why people are willing to pay millions of dollars for a painting that has an artist label on it as oppose to just buying the print. Not that I don’t agree with you, it’s just that I’m glad I couldn’t afford one or maybe I might have. What motivates some collector may not even slightly interest another. For some collectors, it not so much the price or the value of the item, as it is the hunt. “So what if tomorrow it tanks, at least I have it and you don’t” is how some view it. In their minds, they’re the –it and they got the goods to prove it. So who’s the smart guy verse the dummy in this case? Well I guess it’s the one who after the dust clears still feels like a winner and not a loser.

  12. Leo Frese says:

    Louis,
    May I offer a few comments on your mostly excellent and outstanding article: 1. I never said these coins would increase in value, what the article clearly states is they could increase in value IF the TELEMARKETERS promoted them. 2. I never said these were the first minted. Instead, they are the first GRADED. 3. After 30 years in the auction industry my love is for RARE coins, not modern issue material. I even note in my article how I feel about this modern issue material. 4. I don’t like what I see with the modern issues, but there is a huge segment of the marketplace that loves and collects this material. Hopefully this love for coins will find it’s way to the old classics! Thank you
    Leo Frese (just one e in the middle)

    • Louis says:

      Leo,
      Thank you very much for your kind words, and for clarifying your comments. And please accept my apologies on the name typo, which I am sure CoinWeek will correct. I am waiting on some new glasses I ordered last week!
      Also, I did not indicate you said the coins were the first minted, but I think many people have that misperception, which is I why I addressed it. Only some of my article was a response to yours. I also sought to address some other issues you did not specifically address.
      At the end of the day, and I think this was your point too, the market for now says these coins are worth more than the non-ANA coins. My point was I think it’s ultimately an artificial distinction that will not stand the test of time. True rarity in modern coins has to come from mintage or condition rarity, not artificial distinctions that someone who markets labels comes up with. It’s like the low ball registry coin concept. Someone says “I have the lowest graded example of such and such coin, and none are graded worse.” Is that really a rare and desirable coin for the market as a whole? Not to me, but there are always people with plenty of money who will buy something like that.

  13. I was at the ANA and witnessed it all. You guys who harken back to other coins, inferring that times don’t change,and unique situations don’t exist, have no clue about the karma of this coin. Ray Charles and Helen Keller would buy these coins. That’s how attractive they are. The lemmings have already dove off the cliff. The only morons denigrating this ANA coin are the ones who didn’t get them. The only true thing you said is the people who flipped em for 50-200 dollars are regretting their decision to sell.
    The REGULAR ISSUE coins will be twice their issue price, just like the 09 UHR’s. the ANA versions will be like PL’s…three times their issue price.
    Nobody knows me in this business. It didn’t take a Phi Beta Kappa member (although I am one), to see the phenomenon of this coin at the show. My wife and I bought 60 of them. And we have major regrets. Yeah……that we didn’t buy 260. You naysayers keep pumping out the downside of everything. I’m trying to decide what color to order my new Porsche in. Keep up the good work!!!

    • Louis says:

      Jerry,
      I like the reverse proof coin a lot too and of course if I had been at the show I would have bought one there too. I got one in the mail from the Mint the day after the show ended. I was only referring to the graded examples with ANA labels. There is no way to tell the difference between one bought at the show and one bought online if not graded at the show or sent to PCGS the day the show ended. The UHR proof-likes are not at all the same. They have a different surface appearance, are scarcer than non-PL’s, and in fact, were the last coins struck, not the first.

    • Mercury says:

      Jerry,
      I think you do make a good point, in that the Reverse Proof Buffalo, even by itself is a popular coin, so adding the ANA Label is like adding icing on the cake and will only increase its appeal and value for years to come. Unlike Louis who feels that ANA Labels are artificial distinctions that will not stand the test of time. My feeling are that when you have a coin such as the Reverse Proof Buffalo, or any other coin like it that ends up with such a large mintage, then it’s the Label and the different types of labels that actually gives distinction to the coin by separating it from the large numbers of the original government packaged coins. And another thing Louis is not taking into consideration is that these ANA or “Labeled” coins are not just something you’d buy at a grocery store. The labeled coins that fetch the big bucks are first of all usually given the highest grade possible from a highly respectable third party grading service. So in this case, you have a highly respected bonafide grading institution giving a very popular coin the highest grade possible, and only a fraction of the total mintage of those coins will have the ANA LABEL. A label, which we now know to be exclusive in that these ANA Labels were some of the first, if not the first Reverse Proof Buffalo coins made available to collectors. I will admit that labels are not a magical cure all, and that in itself; the label does not have value. But when you take a coin as popular as the Reverse Proof Buffalo or even more so, a rare coin, and add a unique High graded label from a respectable third party grading service you’ve got something going on. And in my opinion the only ones who would argue these facts are most likely those who are taking it in the shorts because the TPG Labels are stepping on their ability to market their OGP coins they sell. They are the ones IMO who are clogging the blogs about how distasteful and valueless Labels are and hope they go away only because they “the seller” stand to lose customers to the “Labels”.

  14. simon says:

    My 2 cents : There is currently a dynamic tension between coin collecting and label frenzy. The label hunters obviously have funds and spend them unwisely. Louis is correct – in the long term the novice for labels will fade into the background as collectors who make purchases for keeps will eschew the label and examine the coin. There is little doubt in my mind that TPGs are primarily responsible for this abject state-of-affairs.

  15. Ikaika says:

    Louis,
    Another great article. Thank you. I missed this one when it was published a few weeks ago. One of the major concerns I have regarding this whole label thing is people are forgetting about the most important, that is the “coin” itself. This whole situation is being created by the TPG companies, big dealers and people like the Porsche guy. It is definitely not healthy for the hobby. I agree that these ANA labels at the end will have value no different than those without the designation. Are the true collectors the ones really buying these ANA coins? Cheers!

  16. Louis says:

    Thanks, Simon and Ikaika, for your kind words.

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