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Thread Title: Undervalued Coins
Created On Wednesday January 16, 2013 5:54 PM


Boosibri
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Wednesday January 16, 2013 5:54 PM

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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 Challenge with many of these rare issues is that there are so few that the auction records are plainly out of date.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.

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RYK
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Wednesday January 16, 2013 6:05 PM

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I like the coin that you have posted and, in general, not surprisingly , like your taste in coins.

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.

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Few decisions in life motivated by greed ever have happy outcomes--Peter Bernstein, The 60/40 Solution

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Boosibri
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Wednesday January 16, 2013 6:18 PM

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<< 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.



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RYK
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Wednesday January 16, 2013 6:34 PM

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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.



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Few decisions in life motivated by greed ever have happy outcomes--Peter Bernstein, The 60/40 Solution

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hiijacker
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Wednesday January 16, 2013 8:26 PM

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About a week after i bought an 1822 dime it had a huge jump in value in the greysheet. So timing is everything.

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Walkerguy21D
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Thursday January 17, 2013 4:51 AM

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Difficult subject, and was hoping to see more responses.....there are a number of scarce, and even rare issues around, but the key is unlocking the value.
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.



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ambro51
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Thursday January 17, 2013 6:34 AM

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I don't think you can have an undervalued coin as much as you can have an undervalued series.

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Overdate
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Thursday January 17, 2013 6:53 AM

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<< Post an issue which you feel is significantly undervalued and why. >>

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.

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291fifth
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Thursday January 17, 2013 7:52 AM

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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.

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All glory is fleeting.

Edited: Thursday January 17, 2013 at 7:52 AM by 291fifth

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GeorgeKellogg
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Thursday January 17, 2013 8:13 AM

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I bought this coin, an 1851-D half eagle, with an extremely weak D, for several reasons, but one was that I felt it was "too cheap to pass up." I understand that the term "undervalued" is ambiguous and that there are differences in opinion on what it means.

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.





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Edited: Thursday January 17, 2013 at 8:32 AM by GeorgeKellogg

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bidask
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Thursday January 17, 2013 9:01 AM

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<< 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.

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jimbux61
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Thursday January 17, 2013 9:08 AM

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After having put together several sets of the $2.50 Indian series, the 1914 is very tough and perhaps a bit of a sleeper. The series itself is popular because it is attainable and perhaps somewhat undervalued. The late dates are easy, the early dates can be a challenge.

I also think matte proof Lincolns may be undervalued, but the collector base for these may be a bit thin.

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ambro51
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Thursday January 17, 2013 9:12 AM

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. I think Canadian Blacksmith Coppers are exceedingly undervalued, amazingly scarce and mysteriously interesting. There IS talk of a major well researched book forthcoming.....one of the reasons I'm buying now...

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Sonorandesertrat
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Thursday January 17, 2013 10:06 AM

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<< That said I would say AU 55-62 seated liberty dollars with original skin and especially better dates are in my opinion undervalued. >>





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jmj3esq
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Thursday January 17, 2013 10:40 AM

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I would personally say early commemoartive half dollars. They are very affordable compared to their low mintages.

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s4ny
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Thursday January 17, 2013 1:28 PM

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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.

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rhedden
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Thursday January 17, 2013 1:34 PM

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This thread would have been a lot easier to answer in 2005. There is very little left in the US coins market that is woefully undervalued. One piece of advice I would give is not to call something undervalued or "sleeper" unless you already own enough examples to satisfy yourself. People read these messages and then go looking for the undervalued items. On the other hand, some people just post items they already own in the hopes of driving the price up. Thus, I would advise proceeding with caution.

The 1797 13 stars half dime is undervalued in all grades. It's legitimately Rare with a capital "R". Yes, I own one already.


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mozin
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Thursday January 17, 2013 2:30 PM

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<< 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.

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I collect Capped Bust series by variety in PCGS AU/MS grades.

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LindeDad
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Thursday January 17, 2013 3:05 PM

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<< 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.

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renomedphys
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Thursday January 17, 2013 3:40 PM

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I think many early proofs with mintages under 50 or 100 or so are undervalued. I'm pretty sure they would be more popular if there were more of them out there, but as it stands, most collectors write them off as being unattainable, keeping demand down.

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.

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