TODAY’S (APRIL 2006) COIN TALK COMMENTARY

[EZ_E]

http://blog.numisvision.com/

 

 

TODAY’S (APRIL 2006) COIN TALK COMMENTARY

 

I can’t believe I wrote that article a little over two decades ago – it seems like just last week. My, how time flies when you’re having fun, and I certainly have had fun throughout the entire course of my numismatic career – but enough about me.

 

I hope that you enjoyed this blast from my past because I intend to resurrect more of my old articles from time to time, particularly when they are germane to a current issue that I believe merits discussion in this column.

 

Although the article I shared with you focused on the silver commemorative market in the summer of 1984 – its underlying message pertaining to the importance of ORIGINALITY and EYE APPEAL when acquiring coins is timeless and particularly relevant to ALL series of U.S. coinage today. In fact, a recent thread on the CU Message Board (that began in a complimentary fashion but rapidly deteriorated into a virulent criticism of an article written by one of my peers) was my inspiration for this particular resurrection.

 

[font:Comic Sans MS]With the advent of the PCGS and NGC Set Registry’s – many of today’s newer and less experienced collectors and investors place more emphasis upon the grade on the insert rather than the coin in the holder. In my humble opinion that is a tragic mistake because the certified grade is (and always will be) secondary to positive eye appeal and overall quality when it comes to realizing the most money for your coins.

 

The fact is high-end (for the certified grade) specimens with exceptional eye appeal are the very kind of coins that stimulate extremely strong interest on the part of prospective buyers, resulting in higher prices realized when sold. Conversely, low-end (for the certified grade) coins with average or below average eye appeal create very little excitement among potential buyers and are more often than not lackluster sellers.

 

Unfortunately, many but not all of today’s newer dealers (along with countless numbers of collectors and investors) have become PARALYZED by PLASTIC and are in fact addicted to it. They trustingly accept the grade on the insert as gospel because their livelihood isn’t dependent upon their ability to accurately and consistently grade raw coins as it was twenty years ago. The TPG’s have unwittingly created a generation of plastic merchants who wouldn’t know a premium quality and/or low-end coin if it bit ‘em on the rear end. In this market environment it’s not at all unusual for salesmanship and marketing prowess to win out over knowledge and experience, the ultimate effect of which will not become readily apparent to many until the chicken’s come home to roost. Moreover, the current Registry Set obsession has further exacerbated this situation by placing an unrealistic emphasis on numbers alone rather than the actual quality and eye appeal of the coins themselves.

 

In the final analysis the best coins to acquire for your collection (or portfolio if that’s how you choose to categorize your rare coin holdings) are those that possess the type of QUALITY and EYE APPEAL that will elicit genuine excitement and enthusiasm in the numismatic marketplace. When and if the time comes that you choose to liquidate your holdings you’ll be in the drivers seat if you have the type of coins that everyone is eager to buy — rather than the kind of coins that everyone is anxious to sell. As I said way back in July 1984 –“Eye appeal counts for a LOT and FORGIVES a little.” It was true then and is even more so today. As a closing thought I’d like to share a quote often used by one of my long-time clients – “Great coins are not cheap and cheap coins are not great!” That is a simple but very poignant thought, and one that I would wholeheartedly encourage all of my readers to take some time to reflect upon.[/font]

[EZ_E]

 

Upon thoughtful consideration of the final results of this

sale there are a few noteworthy points that merit mention in

my closing commentary.

 

Genuine rarity, accurate grading and exceptional eye appeal

were without question the most important factors

contributing to the high and/or record prices realized

 

Specimens that I refer to as “plastic” coins (those

that are low-end or over-graded) did not perform well at

all. Witness the PCGS MS64 DMPL 1879-CC dollar – a classic

example of what I’m talking about. It was an attractive

MS64 PL to be sure, but the plastic holder in which it was

housed indicated that it was a MS64 DMPL. The mirror fields

were not reflective enough to qualify for the DMPL

designation that appeared on the label; therefore I would

categorize it as a low-end or “plastic” DMPL dollar.

This coin realized $25,300 against a CDN bid price of

$26,500 – more than a thousand dollars less, which I’m

certain would not have been the case if this were a

no-doubt-about-it Deep Mirror Prooflike dollar.

 

With few exceptions (one of them a mistaken bid) Prooflike

coins did not fare well overall in this sale regardless of

rarity, quality or eye appeal. I think the best example of

that in this auction was the PCGS MS66 PL 1888-S dollar,

which was a population one, finest known specimen. I was the

winning bidder at $16,100 in Baltimore. Prior to selling it

to the consignor — I purchased this very same coin for

$22,138 in an October 2006 Bowers and Merena sale, paying

significantly more than it realized here. I don’t know if

the low selling price at the Heritage sale was the result of

actual softness in the Prooflike dollar market or if those

bidding in this sale were focused primarily on the Deep

Mirror Prooflike specimens, but I suspect it was probably

the latter.

 

The few NGC certified DPL and PL dollars in this collection

realized low prices for the most part in relation to current

Greysheet (CDN) bid for the assigned grades. Consider the

NGC MS65 DPL 1879-O that realized $16,100 against a CDN bid

of $23,000. Or how about the excessively rare NGC MS64 DPL

1894-P dollar that sold for $20,700 in the face of a $45,000

CDN bid. There most certainly appears to be an anti-NGC bias

when it comes to Deep Mirror Prooflike and Prooflike

dollars. Again, I am not trying to denigrate NGC in any way

whatsoever — but this does seem to be a marketplace

reality based upon major auction results over many years. To

be perfectly honest, there are some really great DMPL

dollars in NGC holders – you just have to get them in a

like-graded PCGS holder (via crack-out or crossover) if you

wish to realize top dollar for them.

 

In closing If you glean absolutely nothing else from this

article I would hope that it will encourage you to further

study and comprehend the direct (and ever so significant)

correlation between rarity, quality, eye appeal and value.

Since the inception of the PCGS (and later NGC) Set

Registries there has been a very unfortunate over emphasis

placed upon the assigned third-party grade designation

within the plastic holder. In their quest to be number one,

many collectors have neglected the most important

consideration of all when it comes to future resale – that

is, the actual quality of the coin itself rather than the

grade on the insert. May I now suggest that you not allow

ego and/or pride to influence your buying decisions, but

rather let discretion reign and buy the coin, not the

holder.

 

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To drive home the true meaning of eye appeal I would like

to tell you about a past experience of mine. A couple of

years ago I offered a very good client a Gem Proof 1938

Walking Liberty half at a very large premium. This coin had

beautiful bright iridescent golden rainbow toning about the

periphery that literally seemed to glow. He took one look at

the coin, and even though the price was outlandish, he said;

“I have to buy it. You could put that coin in a case with

a hundred other coins and it would be the one that everyone

reaches for first.” That statement truly sums up the

meaning of eye appeal. In conclusion I would just like to

say – eye appeal counts for a lot and forgives a little.

[stgecko]

 

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To drive home the true meaning of eye appeal I would like

to tell you about a past experience of mine. A couple of

years ago I offered a very good client a Gem Proof 1938

Walking Liberty half at a very large premium. This coin had

beautiful bright iridescent golden rainbow toning about the

periphery that literally seemed to glow. He took one look at

the coin, and even though the price was outlandish, he said;

“I have to buy it. You could put that coin in a case with

a hundred other coins and it would be the one that everyone

reaches for first.” That statement truly sums up the

meaning of eye appeal. In conclusion I would just like to

say – eye appeal counts for a lot and forgives a little.

 

 

I believe this paragraph says it all and thanks for driving the point home!

I know when I see the pretty one in the case thats the one I have to have.

[michael]

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