Mintage vs. Survivability
Entry posted by coinsbygary ·
The difference between a coins mintage and the number that have survived through the years can be immense.
Greetings everyone, when I was young collector, I relied heavily on mintage figures to determine whether a coin had the potential to rise in value. I thought that lower mintages correlated to a faster rise in value. Now years later, I have learned there are many more factors that combined with mintage figures contribute to a coin?s potential to increase in value. The first thing to consider after mintage is demand; if you own a coin with a low mintage that nobody wants, it will not appreciably increase in value. For instance, the value of my XF 1876 20-cent piece with a mintage of just over 15,000 has increased very little over the years. However, take the same coin in mint-state condition and it fares a lot better because one, the coin is much rarer and two more people will want to own it. Fortunately, due to the scarcity of this coin, it currently has a solid Fair Market Value, but as far as growth is concerned, the coin has only kept pace with inflation over the years that I have owned it.
Another factor that I have never considered before is survivability. Survivability is an estimate of how many coins have survived up until now and are available to collectors. Again, I bought an 1885-CC Morgan dollar when I was young thinking that the low mintage would catapult this coin in value over time. With a mintage of 228,000, how could I go wrong? However, according to PCGS Coin Facts, 185,150 or 81% of all 1885-CC Morgan dollars have survived; of that number, 166,650 have survived in mint-state condition! While the low mintage and Carson City mintmark give this coin solid value, because of the number of coins available that value does not rise quickly over time.
Concerning my ?Born in the Bayou? Morgan Dollar collection, approximately 10% of all New Orleans dollars minted over 26 years have survived. When you factor in the various hoards and melts, the survival rate within certain grades becomes very critical in determining the value of a particular date, mint, and grade. To illustrate this point, take two dates in the series, the 1885-O and 1886-O dollars. The 1885-O dollar has a mintage of 9,185,000 and an estimated survival in all grades of 936,300 coins with 511,300 of those in mint-state condition. The 1886-O dollar has a mintage of 10,710,000 and an estimated survival in all grades of 1,000,067 coins with 19,067 of those in mint-state condition. In grades MS-65 and higher, the 1885-O dollar is estimated to have 73,640 coins, while the 1886-O has six. The MS-65 1885-O dollar with a lower mintage has a FMV of $156, while the 1886-O has a FMV of $206,250!
When you apply these figures to the NGC and PCGS certified populations, you get a clear indication of why survivability is one of the more critical factors in determining a coin?s value. For instance, say 10,000 people want to collect an 1885-O and 1886-O PCGS or NGC certified Morgan Dollar in MS-65 condition. Everyone could own an 1885-O dollar, while only four people could own the 1886-O dollar; this effectively forces everyone else to settle for a lower grade. With a combined 3,271 NGC and PCGS certified 1886-O dollars in grades' MS-60 to 64, almost 7,000 of 10,000 people will have to settle for a coin in a circulated grade. Finally, with 4,280 AU certified coins, nearly 2,700 people are still without the 1886-O dollar. The rarity of the 1886-O dollar in mint-state condition also explains why over 50% of all certified 1886-O dollars are in AU condition. Conversely, it is not very cost effective to submit circulated 1885-O dollars for grading because they are only worth $26.45 in AU-55 condition. Therefore, only 201 1885-O dollars are currently certified by both NGC and PCGS in grades lower than MS-60!
By searching NGC and PCGS population reports to calculate certification statistics and PCGS Coin Facts to determine survival; I have compiled a spreadsheet with numerous statistics for all the coins in my set. What makes these statistics fascinating to me is that they tell a story of US Treasury Department hoards due to low public demand for silver dollars and massive melts due to political pressure from miners. All this today, offers collectors a good supply of quality coins and true rarities. In other words, there is something for everyone!
In summary, the old saying, it takes money to make money is true. If you collect coins as an investment, you must buy the best coins available in any given series. I collect coins for the pleasure this hobby gives me, and I am not particularly disturbed that a few of my coins have not performed well. Nevertheless, we all want our coins to increase in value and the current steep rise in gold and silver gives us all reasons to smile!
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