At the Numismatic Guaranty Corp. luncheon at the Florida United Numismatists show in Tampa on Jan. 8, NGC chairman Mark Salzberg presented some refreshing comments relating to his perceptions of the rare coin market.
While indicating strong demand at the top of the market for rare, high-quality coins, he noted that the astronomic prices achieved for low-population common coins as an indicator of a possible bubble in the market.
A bubble is sometimes referred to as a speculative or price bubble, and represents a deviation in the price that an object is trading at and its intrinsic value – or, that objects are selling for more than their true value. The problem is that bubbles pop.
Salzberg cited the example of a Mint State 68 Walking Liberty half dollar that sold for more than $100,000.
In an Aug. 10, 2010, Heritage auction, a 1944 Walking Liberty half dollar graded MS-68 by Professional Coin Grading Service realized $109,250.
By contrast, an MS-68 example graded by NGC at a Heritage auction earlier in 2010 sold for $6,900. MS-67 examples certified by both NGC and PCGS routinely traded in 2010 at the $1,000 to $1,500 level.
In the Jan. 4 Bowers and Merena Tampa Bay auction (from a practical perspective, the pre-FUN auction), a top-of-the-pop (meaning none are graded higher) 1946-S Washington quarter dollar graded MS-68 by PCGS with a Certified Acceptance Corp. sticker found a new buyer at $14,950. (Image right courtesy of Bowers and Merena Auctions)
In contrast, a gorgeously toned MS-67 PCGS 1946-S quarter dollar – also with a CAC sticker – sold for $1,092.50, at a May 2009 Heritage auction. A "regular" PCGS MS-67 1946-S quarter dollar sold for $373.75 at Heritage on Jan. 9. PCGS has graded 93 examples of the issue in MS-67 and only four in MS-68.
Salzberg urged attendees to look at "top of the pop" coins from a value perspective, saying that for $100,000, a collector could buy two Matte Proof Saint-Gaudens $20 double eagles. A Proof 65 1915 double eagle sold for $43,125 at the 2010 FUN sale.
Salzberg's message was that while some coins are truly rare, many of the very high prices in the current market for 20th century coins that are common in low and even higher Mint State grades may not be entirely justified from a value perspective.