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Undervalued Coins
Boosibri
Posts: 11,927 ✭✭✭✭✭
So an earlier comment within a thread got me thinking on the topic of "Undervalued" coins and I thought it may be an interesting topic for the group.
The stock market has been used to compare valuation of coins and stocks. I find this idea faulty. Companies earn profits and the market can under appreciate future cash flows. Coins provide no future earnings (only enjoyment). The value of one item is relative to the value of another. For something to be undervalued there must be a catalyst to unlock that value, otherwise the issue is in fact properly valued despite its relative valuation. As such underlying value in the coin market for me deals with relative valuation and the catalyst which will unlock capital appreciation.
The idea....
Post an issue which you feel is significantly undervalued and why.
Importantly, what is the catalyst that will unlock the value of this issue?
My offering is the 1842 $5 Large Letters, population 47.
It is an absolute rarity and is in fact the rarest No Motto half eagle with the exception of the 1863, 1864-s, and 1865. A nice AU example can be had for between $4,000 and $5,000 IF you can find one. A branch mint 1842-D Small date or a 1842-C Large Date would be roughly the same price with a population of 200 and 400 respectively.
There is in my opinion a maturation in the rare date gold market towards an appreciation of absolute rarity. This can be seen in the auction records for issues such as the 1859 $5, and the early with Motto half eagles (1866-1875 in particularly). Challenge with many of these rare issues is that there are so few that the auction records are plainly out of date. Time will tell on the 42 LL but for me it is the most undervalued No Motto Half Eagle and the one with the most price appreciation potential.
Im curious where this thread goes, maybe no where but hopefully people have fun thinking about those scare and under appreciated issues that are challenging to find and fun to own.
The stock market has been used to compare valuation of coins and stocks. I find this idea faulty. Companies earn profits and the market can under appreciate future cash flows. Coins provide no future earnings (only enjoyment). The value of one item is relative to the value of another. For something to be undervalued there must be a catalyst to unlock that value, otherwise the issue is in fact properly valued despite its relative valuation. As such underlying value in the coin market for me deals with relative valuation and the catalyst which will unlock capital appreciation.
The idea....
Post an issue which you feel is significantly undervalued and why.
Importantly, what is the catalyst that will unlock the value of this issue?
My offering is the 1842 $5 Large Letters, population 47.
It is an absolute rarity and is in fact the rarest No Motto half eagle with the exception of the 1863, 1864-s, and 1865. A nice AU example can be had for between $4,000 and $5,000 IF you can find one. A branch mint 1842-D Small date or a 1842-C Large Date would be roughly the same price with a population of 200 and 400 respectively.
There is in my opinion a maturation in the rare date gold market towards an appreciation of absolute rarity. This can be seen in the auction records for issues such as the 1859 $5, and the early with Motto half eagles (1866-1875 in particularly). Challenge with many of these rare issues is that there are so few that the auction records are plainly out of date. Time will tell on the 42 LL but for me it is the most undervalued No Motto Half Eagle and the one with the most price appreciation potential.
Im curious where this thread goes, maybe no where but hopefully people have fun thinking about those scare and under appreciated issues that are challenging to find and fun to own.
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Comments
I have a completely different view of undervalued coins than you or most people. Comparing stocks to coins is ludicrous, IMO.
To me, undervalued coins are valued by me more than other coins, and that is why they are undervalued. I have no idea which coins will appreciate in value over time; a lot of this has to do with factors beyond my control, beyond my expertise, and beyond my prophetic talent. I have had some winners and losers in the past, probably more losers than winners, but the winners were so big that they trumped the losers. The winners tend to be coins that are both scarce and popular (61-O $20's and 61-D $5's, not esoteric and unpopular).
Instead of focusing on value, I focus on coins that I like and appreciate and are difficult to find, especially the way that I like them. Maybe others will appreciate them even more in the future, maybe they will not, but as long as I enjoy them while I own them (and can afford to do so), the issue of valuation is moot.
As for the specific coin that you have posted, barring a promotion of Philly half eagles the likes of which we have never before seen, I do not see a groundswell of interest.
<< <i>To me, undervalued coins are valued by me more than other coins, and that is why they are undervalued. >>
I absolutely agree with this statement. The reason I bought the coin below is that 1) I just liked it, 2) its super rare, 3)I won't see another one in 3 years. The idea that it can appreciate in value is secondary to my purchase decision. That being said, I see coins such as a 1911-D $2 1/2 or $5 and say, this is good value in comparison.
When I said "The value of one item is relative to the value of another." I am touching on the exact point which you highlight... What you appreciate about the coin give it it's value both on an absolute and on a relative basis. Some coins will appreciate, others will not. That's not what I buy them for either.
Latin American Collection
Word. You could not pay me to buy the 1911-D QE. It is the most overrated pre-1933 US gold coin, IMO.
I agree with your reasoning for buying and owning the coin. I prefer to buy coins that I do not see often to those that I see every day. I just do not expect that it will outperform others in appreciation over time.
Cashback from Mr. Rebates
If it's in a dead or dying series, you may not live long enough to see any price appreciation, unless you happen to have it in an auction where two people
just 'have to have it'.
But once unlocked, price appreciation can be substantial. Look at higher circ, better date Barber halves. Legitimately a number of scarce issues abound in this
series in VF-AU. But it seemed few people collected them, until maybe 5-6 years ago (the B-fanatics can correct me on any of this). But they have been on fire the past few years, as several dealers have stated to me. Greysheet prices have risen substantially, yet woefully lag the 'real world' prices these can command at auction or between knowledgeable collectors.
What caused the catalyst, and where will it strike next? A good book on the series being published, perhaps? That's where your undervalued coins are.
Common date 90% circulated silver dimes, quarters, halves and dollars (all types); bullion silver eagles.
<< Importantly, what is the catalyst that will unlock the value of this issue? >>
A steep rise in the price of silver.
My Adolph A. Weinman signature
I purchased this coin at the Tennessee State Numismatic Society Show several years ago, from a dealer. Oddly, the coin, graded XF40 by our hosts, was identified as an 1851 (Philadelphia) issue. The dealer knew that it was a D-Mint product and so did the collector from whom he purchased the coin. Later, I had the coin recertified by PCGS as an 1851-D Weak D.
I knew that the variety was very rare, as it was struck from the same reverse die as the 1850-D half eagle reverse with a lightly impressed mint mark, except that the die had been worn and polished to the extent that the mint mark can only be clearly seen by tilting the coin in good light. The pronounced die cracks around the periphery of the reverse match perfectly with the 1850-D reverse die. I'll post my 1850-D when I get the photos from Todd (BluCC Photos). For the time being, I've posted an 1850-D half eagle from CoinFacts, which illustrates how weak the mint mark could be, even before the reverse die was re-used in 1851.
I am still amazed that I purchased a rare variety of Dahlonega gold for less than a thousand dollars.
<< <i>The US coin market is large, mature and orderly. It is unlikely that anything is undervalued unless there is a significant shift in collector interests. >>
Yes if the discussion includes foreign coins I can contribute more thoughts.
That said I would say AU 55-62 seated liberty dollars with original skin and especially better dates are in my opinion undervalued.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I also think matte proof Lincolns may be undervalued, but the collector base for these may be a bit thin.
<< <i>That said I would say AU 55-62 seated liberty dollars with original skin and especially better dates are in my opinion undervalued. >>
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
The MS62 common date Indian Quarter Eagles sell for around $500, a little above MS61, but the MS63 examples sell for for almost
twice the MS62 coins.
I would say that the MS62 Indian Qtr Eagles are undervalued.
The 1797 13 stars half dime is undervalued in all grades. It's legitimately Rare with a capital "R". Yes, I own one already.
<< <i>That being said, I see coins such as a 1911-D $2 1/2 or $5 and say, this is good value in comparison.
Word. You could not pay me to buy the 1911-D QE. It is the most overrated pre-1933 US gold coin, IMO.
I agree with your reasoning for buying and owning the coin. I prefer to buy coins that I do not see often to those that I see every day. I just do not expect that it will outperform others in appreciation over time. >>
The Indian Quarter Eagle 1911-D has held its value very evenly for the past eight years, as far as CoinFacts shows. I think the reason so many 1911-Ds are up for auction is that there are so many collectors wanting them. In the regular Indian Quarter Eagle PCGS Registry there are 80 collections, while in the NGC Registry there are 463 collections.
<< <i>I think coins can be undervalued if someone can correctly anticipate future demand.
The MS62 common date Indian Quarter Eagles sell for around $500, a little above MS61, but the MS63 examples sell for for almost
twice the MS62 coins.
I would say that the MS62 Indian Qtr Eagles are undervalued. >>
And I could counter that most of the MS62 coins I have seen are just ugly enough to never go to the prom.
Comparing them to post 1860 mintages, and in series like Indian Cents and Lincolns, you can see what I'm talking about. I mean a top pop Large Cent proof with a mintage of seven sells for around $50K, wheras a top pop IHC with a mintage of 4000 sells for $15K.
Empty Nest Collection
Matt’s Mattes