If I were a top-pop modern collector...

[cladking]

It was back around 1976/ 7 when hobby leaders started suggesting that high grade coins were much more desirable than lower grades and that all collectors would be well advised to collect the finest they could afford or understand. This wasn't extremely popular advice initially but several dealers sprang up to provide the supply and it seemed to catch on then. In '77 you could go through a dealer's stock of Morgans and pick out gems, PL's, VAM's, and toners and pay only a 50 or 100% premium. By 1980 gems were commanding many multiples of typical specimens and the typical coins were up two or three fold. This wasn't confined to only Morgans and could be seen to a lesser extent in walkers and mercs. There was a small impact on some of the older coins where they existed in any quantity in BU like later large cents.

 

The process expanded during the '80's after the crash of April, 1980. But moderns weren't much affected for two very obvious reasons; There was no way to supply the coins and buyers had no way toi know if they were getting what wasa advertised. Of course there was an exceedingly limited demand for such coins in any case.

 

But the toughest moderns (Ikes) were recognized quite early on and there were a handful of collectors chasing these even back in 1980. They actually had a small market by 1986 and some coins traded hands for hundreds of dollars. The grading services were no help to these markets initially because people simply didn't send the coins in.

 

The market crashed in '90 and was in the doldrums in 1995 when the moderns lifted the market out of its lethargy. These coins were starting to get more attention even before the states program was announced and have been on a fairly slow and steady upturn since. The classics went on a tear when the baby boomers came back into the market starting in '98/ '99.

 

Right now it seems like all the markets are sort of holding their breathe waiting to see what's next.

 

The prices of all coins in all grades are based on supply and demand. It's safe to assume that coins that are common in high grades don't have as great a spread between these grades. Those which are trough in high grades can have huge spreads. You look at a price guide and see the spread as indicative of registry demand but in point of fact it is much more indicative of the relative availability of the coins. It is true that much of the demand at the very high end is from people in the registry but isn't it a little natural for those who collect the high grades to want to show them off. Where you see a clever marketing scheme I see friendly competition. Keep in mind that there were coins changing hands at prices in the thousands of dollars BEFORE there were any of these moderns allowed in the registries. It was '98 or '99 before moderns were admitted and there were $5000 Ikes by that time.

 

I agree that coin collectors are very "value" minded and I've mot tried to hide the fact that my initial attraction to moderns back in 1972 was as a speculation. Despite some tremendous paper profits I would not do it again if I had to do over. There are more important things than profit and when you're wrong for as long as I was there might be no way to really gain. I'm still promoting these coins because I still believe in them. I'd like to start selling a few of these even though they aren't really appreciated fully yet.

 

But when you get down to it collecting is always about emotions. One doesn't make a calculated decision that what his safety deposit box needs most is bust, Morgan or Ike dollars. Coins don't really serve a necessary function except perhaps to scratch an itch. We collect because it's fun. Some can make money by selling dear, some by buying right, and some (like me) by being lucky. But most don't make money if they are trying to the exclusion of fun or dealing. I think your perspective is fine but I think you're mostly wrong about moderns. They might be a great place to lose a lot of money if you're greedy but they are one of the best places to have fun and this should keep them strong at least until that changes.

[World Colonial]

To your last statement, you are correct. If you remember your Star Trek characters, I am more like "Mr Spock" while many others are like "Dr. McCoy".

 

You know your market history well and I remember and agree with much that you include though not all.

 

The pricing differences between many or most coins on the highest "investor" grades versus the lower "collector" grades have reached such extremes in many cases that eventually (whenever that is), the practical limit will be reached unless a substantial inflow of additional funds enters the market. This happens in bull markets I know but I consider the current one over for the foreseeable future as I have covered in many prior posts. The most immediate factor that comes to mind which would negate this opinion is metal prices. I am bullish on them longer terms though not now but even if my expectations prove to be incorrect, its still likely or possible that many or most coins could underperform because of the economy.

 

But in terms of relative valuation, here is an approach that I think is a good compromise though I cannot say that many collectors consider it or practice it in actuality.

 

If I were interested in a series with these widespread and higher than normal price variations, I would opt for a slightly lower grade coin, one a few points below the conditional rarity, and use the difference to buy other material. Let me give you one example using the coins I collect though it could apply to many many others.

 

The coins I collect are probably "conditional rarities" but that is not why I bought them and the price premiums between these and even moderate to higher circulated grades are extremely modest. But its not like I bought my (for example) 1813 Mexico PCGS MS-66 1/4 real over another specimen that was graded MS-65 or MS-63. (If you are interested, you can see this coin on my "About Me" page on eBay. Its an absolutely fabulous coin though it looks somewhat different in hand. My handle is "jwither".) For most buyers, they have that luxury because the coins they collect are available in multiple at one time or in close proximity.

 

Hardly ANY of the coins I buy are ever available or readily available at the same time or in close proximity. (The South Africa QEII and KGVI proofs are the exceptions.) A few times I see them like this but not often. And in this example I am using, the 1813 is actually the most common date from Mexico and one of the most common from all six mints (probably behind the 1821G and 1817 "So").

 

This series, the Spanish colonial pillars and the Spanish cross series that I collect are all very hard to find in high grade. Some of them are very difficult to almost impossible to find AT ALL. Yet the buyer of (for example) US modern conditional rarities or higher grade Morgan Dollars could spend MORE (far more in some instances) on these than I or others do on coins that are much scacer and in many instances of equal or greater historical significance.

 

So though I know collectors will do what they want (as I think they should), this is the concept I just do not "get". Its really a complete mystery to me. Some I know do so because they just really like what they happen to collect (as you do) but I really believe that most collectors do so because they are unaware of what else their money can buy.

 

And when I say this, I do not only say it for the coins I collect but also for others. As one example, I saw a copper Byzantine coin in a recent European auction that included a large number of fabulous Greek, Roman and Medieval coins. I'm not knowledgeable about these coins at all but I know that the gold Solidus is common (or most appear to be) while I have never seen a decent silver or bronze coin at all that I remember. Yet this coin which must be really rare, sold for less than a paltry $1000.

 

If I were to spend $1000, I would rather own this coin (or my 1813 Mexico 1/4 real which cost $525) and my 1883-O NGC MS-64 Morgan Dollar (yes, I actually own one but do not tell anybody) than one or more of these coins in MS-65 or MS-66. And its not that I dislike Morgan Dollars because I do not. Its just that the coin I have is actually nice and perfectly acceptable but just costs much less than others graded above it.

[cladking]

You don't need to sell me on world coins. I believe most of them are undervalued relative to US coins and in time this will change. Some will think this must occur to the detriment of US coins but this isn't the way the world works. The success of one market hurts another only if the demand is shifting from one to another. If people abandoned Morgans and started collecting buffalos enmass then this would be the case. But the question is how do you stop or change peoples' emotions.

 

In the case of world coins and moderns (as well as world moderns) most of the demand that causes them to catch up will be new demand. How many people have dropped bust dollars to concentrate on clad? ... fewer than a dozen probably; far fewer than the number who have dropped clad to concentrate on bust dollars.

 

You may well be right that the market for "conditional rarities" is a bubble that can't last. I've wondered this same thing as a few Morgans have gone from $10 to $20,000 over the last 30 years and some Ikes have done even better going from $1.50 to $10,000 over only 25 years. It would be easy to make a strong case that collectors will eventually be all onboard the "highest grade you can afford" bandwagon and prices will fall to little higher than their original levels.

 

But there's a great deal working against this. Collectors have always prefered rarity and superb specimens. In the past this usually translated to most of their effort being directed at obtaining rarity. This especially applied to common coins since it was exceedingly labor intensive to seek out and buy quality without grading services and computers. With most old coins there was little incentive since the variation in quality between the finest which could be found with a reasonable effort and the first coin you looked at might not be very great. But this isn't as true with moderns since qulity can be nearly universally poor. Quality to collectors of coins that usually come worn means less wear not higher grades of unc. How many people are looking for the finest 1804 cent? Most collectors would be ecstatic just to have a nice undamaged specimen without extreme wear. To these collectors worrying about full strikes on common coins may seem absurd but the collectors of these coins are looking for good specimens. It really doesn't matter to me that there are millions of a coin in circulation if I want the coin in gem; Just like it doesn't matter to the large cent that there are plenty of really nice 1802 coins when he needs the '04.

 

Will the market for high grades collapse? I'd consider the odds to be nearly remote at this point. It's a distinct possibility that the spreads could become even greater for the more common gems if demand decreases but so long as there are grading services to identify the finest coins and computers to locate them then there will be some demand at least for the very finest of each date. In other words the prices could come down for coins near the top if people start beliieving that MS-63 or MS-65 is good enough but you'll never see an MS-68 Morgan for $25 again.

[World Colonial]

Your comment about the impact of computers is entirely correct. I do not think I would have been able to find most of the coins I own without the internet which has made eBay possible (where until a few years ago I bought all my coins) and made it easier to find, view and bid on auctions (some live) and locate dealer inventory.

 

As an example, in 2006 I attended the ANA Money Show. I ran into someone who was a long time collector of Mexico pillar dollars. For pillar coinage, they are the most popular because they are big coins and for most issues, by far the most common as well of all denominations. He told me that he had been collecting them for about 30 years but until recently (he did not say exactly when), he only saw the coins in VF or XF, never or hardly ever better. Then all of a sudden, the high grade specimens showed up seemingly out of nowhere. And today, the prospective buyer can find mint state issues fairly regularly at in the bigger auctions. I attribute this to both the internet and the higher prices which it partially made possible due to the increased liquidity.

[cladking]

Your comment about the impact of computers is entirely correct. I do not think I would have been able to find most of the coins I own without the internet which has made eBay possible (where until a few years ago I bought all my coins) and made it easier to find, view and bid on auctions (some live) and locate dealer inventory.

 

As an example, in 2006 I attended the ANA Money Show. I ran into someone who was a long time collector of Mexico pillar dollars. For pillar coinage, they are the most popular because they are big coins and for most issues, by far the most common as well of all denominations. He told me that he had been collecting them for about 30 years but until recently (he did not say exactly when), he only saw the coins in VF or XF, never or hardly ever better. Then all of a sudden, the high grade specimens showed up seemingly out of nowhere. And today, the prospective buyer can find mint state issues fairly regularly at in the bigger auctions. I attribute this to both the internet and the higher prices which it partially made possible due to the increased liquidity.

 

The same thing applies to moderns. There are coins that I would have thought didn't even exist in such high grade on the pop reports. Generally the pops parallel what I've seen pretty closely but gems have a tendency to "bunch up" and go to places where they escaped my notice in some instances.

 

I love coins and coin collecting. This applies equally to ancients, moderns, and everything in between. I really believe people can have fun in any area and that so long as they are having fun the money will probably take care of itself. You should know when you are buying a flash-in-the-pan and enjoy the flash since there might not be much left after the comotion dies down.

[Coin]

It is all about the 'here and now' .

 

Sure , There are bazillions of un-opened Mint sets full of top coins that have not been graded yet. If and when these coins are sent in for grading, the pop reports will be changed .

 

Sure , There are people out ther who could give a Rat's A@@ about money or how much it costs for them to throw the money away on something fleeting like a top-pop modern .

 

Put them together and you get someone who has the ability to spend like there is no tommorrow for a piece of plastic to put into a top set for the right of bragging about having the top modern set of whatever .

 

Why is this a problem for you ? It is their money and solely their right to pi$$ it away however they want to do this. It may not make sense to you or me , but it is not our problem. I have a few top-pop moderns my self from submissions for coins to fill holes in some of my sets and have even bought a few top-pop coins , a couple of times without knowing they were top pop coins .I never bothered to check them that hard at the time. It didn't bother me then and it does not bother me now when I read about some rich guy throwing money at their stuff to get them . To each , his or her own .

[cladking]

Oh yeah if you can't find that pop top in one of the millions of mint sets that are still out there then there are always the billions of coins people set aside. Eventually anyone who ever paid more than face value for any modern coin will lose his entire INVESTMENT and it will serve him right for buying such garbage. Even if any of this junk was rare, and obviously it can't be, who'd ever want to collect any coin made by the trillions and trillions.

 

It won't be too soon when these guys finally wake up and smell the coffee.

 

At least we have the good sense to talk about such junk on the tangents board since every real coin collector knows they quit making coins in 1964.

 

 

 

I'm sure Coin has looked at enough mint sets to know that almost every coin in every set looks about alike and they're all MS-67. It's hard to imagine how he brought himself to actually look at one set though much less two.

[Coin]

Well , actually , I have been through a lot of mint sets . Luckily the local coin shop guy doesn't mind that I look through his stock to find the ones with the coins that I want . I'm not sure if the mint ever really bothered to treat the mint set coins with any special care as most looked worse for wear than the ones I've found in bank rolls . It is the search that I enjoy , especially when I do find a few that have no marks and decent strikes , occasionally with that and great eye appeal worth submitting.

 

When you say the Mint stopped making coins in 1964 , are you refering to the silver content ? ( I am taking the 40% out of the equation also .Re: Kennedy halves)

 

As far as the bazillions of coins spewed out of mint machines in recent years , most of them are horribly banged-up , even still yet , it is still fun to find ones that are in great shape. With older coins like the Early coppers getting into the extremes in cost for Mint State examples , I have very little choice but to collect the moderns in MS and for me that begins around the early 1900's . I do try to collect some older coins , but they are usually either problem coins or circulated common dates .

Sure I appreciate the classic designs , but I enjoy the modern designs as my hobby as I can actually work with them , whereas I can only look at the classic ones in other's collections , outside of the few examples I've managed to obtain.

 

Foreign coins are nice , also , and I have a few Italian coins that I like , but I'm not as driven to find and complete those sets as I am with modern US coinage , that's all.

[Houston Investor]

Well, 69 to 70 is how mods come from the mint nowadays. It doesn't take a rocket scientist to figure out if you submit enough of them it is easy to get a 70 unless a TPG is deliberately holding down the top grade. When I submit mods and cherry pick them I usually have a 60-70% rate on 70's. The ones that would grade less than 69 are the scarcer ones. But who wants these!

 

Whats becoming scarcer is the folks who will pay really top dollar for the 70's .