An example of what concerns me about low pops
coinguy1
Posts: 13,484 ✭✭✭
Recently, there have been a number of threads on the message boards regarding "modern" low population/registry set coins and how the risks in them compare to those of various "classic" coins.
Here is a specific example of what concerns me about certain (not all) low population/registry set coins:
Earlier this month, while at a show, I was offered a newly certified PCGS MS68FB Mercury dime from the 1940's with a PCGS population of 4 (the population had been 3, prior to this coin having been made). In my opinion, considering the assigned grade, the coin was a dog, pig, or whatever bad name you care to call it. It was unattractive, with a mottled, light, hazy obverse tone and did not have special luster or eye-appeal. It clearly did not belong in a 68 holder. It was a gift, mistake, fluke or bad joke at that grade. If the coin were submitted another 100 times, raw, I would bet it would not grade MS68FB again, not even once! I was not alone in my thoughts on the matter, either.
The coin supposedly sold for $6500 wholesale and when it finds a happy new home in a registry collection, will most likely do so at a price in excess of $7000. If the coin were in a PCGS MS67FB holder, where it belongs, it would sell for approximately $200. In other words, if the coin were sold raw, on its own merits (which I believe should be at least a consideration when a buyer spends hundreds or thousands of dollars on a coin), it would realize roughly 3% of the price/value placed on it in its current holder. Danger, danger!
For comparison purposes, let's take the 1876 NGC MS64 Seated Liberty half dollar discussed last week. Let's say, for argument's sake, that someone feels the way about it, that I do about the Mercury dime above - that it is overgraded by a point and belongs in an MS63 holder. If the 1876 half dollar were to trade on its own merits, rather than with the benefit of the MS64 rating, it would probably sell for approximately 50% of it's current "value."
Granted, a 50% downside is not an appealing thought. That is, unless you compare it to that of a 97% downside in the case of the Mercury dime. And, that doesn't even begin to take into account all of the remaining uncertified Mercury dimes out there and the likelihood that additional MS68FB's will be made. That will increase the available supply by a healthy percentage and, more than likely, put downward pressure on the "value" of the coin.
I could go on, but I think you get the point. There are many other examples I could point to - this just happens to be a recent, real life situation. By the way, in case anyone is wondering, I passed on the coin.
Here is a specific example of what concerns me about certain (not all) low population/registry set coins:
Earlier this month, while at a show, I was offered a newly certified PCGS MS68FB Mercury dime from the 1940's with a PCGS population of 4 (the population had been 3, prior to this coin having been made). In my opinion, considering the assigned grade, the coin was a dog, pig, or whatever bad name you care to call it. It was unattractive, with a mottled, light, hazy obverse tone and did not have special luster or eye-appeal. It clearly did not belong in a 68 holder. It was a gift, mistake, fluke or bad joke at that grade. If the coin were submitted another 100 times, raw, I would bet it would not grade MS68FB again, not even once! I was not alone in my thoughts on the matter, either.
The coin supposedly sold for $6500 wholesale and when it finds a happy new home in a registry collection, will most likely do so at a price in excess of $7000. If the coin were in a PCGS MS67FB holder, where it belongs, it would sell for approximately $200. In other words, if the coin were sold raw, on its own merits (which I believe should be at least a consideration when a buyer spends hundreds or thousands of dollars on a coin), it would realize roughly 3% of the price/value placed on it in its current holder. Danger, danger!
For comparison purposes, let's take the 1876 NGC MS64 Seated Liberty half dollar discussed last week. Let's say, for argument's sake, that someone feels the way about it, that I do about the Mercury dime above - that it is overgraded by a point and belongs in an MS63 holder. If the 1876 half dollar were to trade on its own merits, rather than with the benefit of the MS64 rating, it would probably sell for approximately 50% of it's current "value."
Granted, a 50% downside is not an appealing thought. That is, unless you compare it to that of a 97% downside in the case of the Mercury dime. And, that doesn't even begin to take into account all of the remaining uncertified Mercury dimes out there and the likelihood that additional MS68FB's will be made. That will increase the available supply by a healthy percentage and, more than likely, put downward pressure on the "value" of the coin.
I could go on, but I think you get the point. There are many other examples I could point to - this just happens to be a recent, real life situation. By the way, in case anyone is wondering, I passed on the coin.
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Comments
Russ, NCNE
"Senorita HepKitty"
"I want a real cool Kitty from Hepcat City, to stay in step with me" - Bill Carter
Just my two-cents (U.S.)
Cheers,
Bob
1. Mercury Dimes are more "classic" a coin. But, if you want to consider them "modern", then, so are Walkers and then probably Buffalo nickels, etc. I am fine going back to 1932 or early for the definition of modern and perhaps I now understand many of your comments a bit better knowing you are referring to nearly all 20th century coins series as "moderns".
2. I met with David Hall Friday afternoon to show him another 11 crossover coins that went 0/11 and after his review remained 0/11, but his explanations were very helpful and I do appreciate his taking the time to meet with me. Anyway, during our meeting, I mentioned to him that I bought a coin out of the Santa Clara Heritage sale with the intent of pulling it off the market in a series I work closely with the top collector. My position was that the coin was harmful to the series and needed to be downgraded. David Hall entirely agreed with what I did. He made it clear that PCGS wanted coins like that off the market and if I was able to pick it up on the cheap to accomplish that task, even better. He made it clear that collectors and dealers were "all in this together".
So, my thought is the next time a miserable "dog" comes through a dealer's hands, why not suggest to the seller to do the right thing and let PCGS take it off the market at the wholesale price, rather than let the coin trade several more times, making it that much more difficult to remove the coin from the market later on?
That comment is general in nature and not directed at you Mark, but your thoughts are appreciated.
It's too bad this one couldn't be submitted back to PCGS for a review- it's downgrade, and a check cut for the balance.
I sure hope there isn't a Mercury collector out there that is playing the Registry game only for points! Somehow, after reading their messages for the last few months on the Registry forum, I doubt there is. They all seem to be in it for the fun and for the COINS.
peacockcoins
Lucy, PM me and I'll quote you a price on an MS68FBL Franklin. I don't have one, but I'll be happy to quote you a price, anyway.
This is something I have a problem with. The "right thing" is doing exactly what? PCGS are the so-called EXPERTS. They grade the coin using their changing standards and give it back to the submitter. Who are we to say they made a mistake?
If I buy a coin in that is undergraded, PCGS doesn't care and they don't want to hear from me. I can resubmit it and pay the full fees again - even if it upgrades. Now a dog comes along and I am supposed to give them first crack at it so they don't pay out as much money?
They don't care how much money I pay out to get an undergraded coin in the correct grade slab. Why should I care how much they pay to get one of their mistakes off the market.
After all, I'm just some dumb guy that can't grade because they are the grading experts. If they say that dog is MS68, then it is MS68. It's not my place to judge.
When PCGS starts refunding grading fees on coins submitted for regrade that UPGRADE, then they can expect help from the community. Until then, these dogs will always find a home with people who don't care because it is in a slab and graded by the experts.
Want to watch their registry sets to see who adds a 1940's MS68?
I agree, it would be great if the coin in question could be submitted for downgrade. The problem is, the dealer offering the coin had probably just "made" it. He wouldn't want to have it downgraded and even if he did, I just can't see PCGS eating several thousand dollars for a coin that they had just certified.
Mitch/Wondercoin,
Please see my reply to Russ, concerning my use of the term "modern". I am glad that you better understand some of my previous comments. I apoligize for not having been clearer on that before.
I like what you did in buying a coin to have PCGS take off the market. I often wonder about that process but have concerns about doing that before discussing it with PCGS or NGC. What if you buy such a coin but PCGS or NGC decides it is ok as is or that you have paid too much to be fully reimbursed? I do think the major grading services should work harder with dealers to encourage them to help clean up some of the mistakes which are floating around.
roadrunner
1939 mercury ms 68
to me that is what a 68 should look like lusterwise
We have both seen many threads that discuss coins both classic and modern,that are in slabs that shouldn't be.That is the real problem,not pop reports.IMHO
Registry 1909-1958 Proof Lincolns
Greg: I appreciate your comments and can understand where you are coming from. And, I do suspect if you see a more "collector friendly PCGS" in the months and years ahead, you might alter your position somewhat as you alluded to. Wondercoin.
As a friendly and sincere suggestion, how 'bout we refer to these unappealing coins as BOOGERS. Animals are important to us: as companions, workers, as examples of beauty, and as food.
As for this topic, I think Merz is correct in saying that the issue is about mis-graded specimens. But, it is also about low pop coins. Suppose you have a high grade 1873-CC Trade Dollar. The best known is graded MS65 by NGC and MS64 by PCGS. The 2nd best is graded MS64 by PCGS. The #2 coin surfaced at the MS64 level first, while the Vermeule coin (#1) surfaced MUCH later. How de-valued did the ex-#1 coin suddenly become?
I chose my example because I didn't want to turn this into a classics vs moderns issue. I don't want people to think that TDN was a fool for chasing the previously finest known specimen; he's definately no fool. But, even he'll acknowledge the risks involved when chasing coins that are at that level. The risk of becoming #2 is there (who cares if the 15th specimen becomes #16?); and, the risk of having too few high rollers when his low pop coin comes onto the market (thus lowering competition) is there.
In the Stack's catalog of the Mr. 1796 Collection, Mr. Walter said something to the effect that it's not crazy to chase low (or top) pop specimens into high price levels because they are traded so infrequently and that the prices he paid essentially will be used to establish new pricing levels for these coins.
With all due respect to Mr. Walter, he's sort of correct. He fails to see that at the next auction appearance of these special coins that market may correct downwards simply because of a decrease in demand. (This happened to the Hon. Jimmy Hayes 1866 Seated Dollar!)
EVP
How does one get a hater to stop hating?
I can be reached at evillageprowler@gmail.com
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
Would also recommend checking the pop reports from 5 years ago - very helpful to have a long term trend perspective. As an example, I bought a IHC MS67R in March 2002 - pop 1 in 1996 too. No guarantee of staying that way but it is somewhat reassuring.
"In my opinion, considering the assigned grade, the coin was a dog, pig, or whatever bad name you care to call it. It was unattractive, with a mottled, light, hazy obverse tone and did not have special luster or eye-appeal. It clearly did not belong in a 68 holder. It was a gift, mistake, fluke or bad joke at that grade. If the coin were submitted another 100 times, raw, I would bet it would not grade MS68FB again, not even once! I was not alone in my thoughts on the matter, either."
I understand and agree with the sentiment of your message but wonder if you are describing "a PCGS MS67FB " coin either.
excluding the nice scans on Ebay. Some are white blazers, others are toned, all are true 68s, I don't
worry alot about the pops, I trust PCGS/NGC grading and every 68 that I have seen in a PCGS/NGC
holder has been a true 68, granted some were closer to 67 than others, but all displayed the necessary
strike for a 68. I guess I have not had your bad luck, but I have no problem with a toned coin being
graded a 68. NGC is slightly better with toned Mercs as far as technical grading, but I like PCGS as well.
Good luck in the future.
Brian.
<< <i>I would avoid any top pop coin in a series where there is a very reasonable chance of original rolls still being out there. >>
...and while we're not collecting gems made after 1931 then we may as well
not collect any coin after 1931. We're better off collecting real coins anyway!
<< <i>
<< <i>I would avoid any top pop coin in a series where there is a very reasonable chance of original rolls still being out there. >>
...and while we're not collecting gems made after 1931 then we may as well
not collect any coin after 1931 We're better off collecting real coins anyway! >>
.......................i think people would be shocked if they new how many coins are still in original bags and rolls. most coins 1934 and after.....and all this new stuff made by the millions, a few get graded, and people yell,, hey look only 10 known in ms69...........yes, until all the rest start getting graded, and the pops start to fall as will the price.....a common coin, is just that.......common...and will never become rare.
Oops!
How does one get a hater to stop hating?
I can be reached at evillageprowler@gmail.com
Tell me more about your meeting with David Hall and the crossovers.....were you saying that you showed him 11 NGC (presumably nice for the grade) pieces that you felt should cross to PCGS and he disagreed with you on all 11 of them? That sounds rather odd.
dragon
<< <i>
<< <i>
<< <i>I would avoid any top pop coin in a series where there is a very reasonable chance of original rolls still being out there. >>
...and while we're not collecting gems made after 1931 then we may as well
not collect any coin after 1931 We're better off collecting real coins anyway! >>
.......................i think people would be shocked if they new how many coins are still in original bags and rolls. most coins 1934 and after.....and all this new stuff made by the millions, a few get graded, and people yell,, hey look only 10 known in ms69...........yes, until all the rest start getting graded, and the pops start to fall as will the price.....a common coin, is just that.......common...and will never become rare. >>
You've proved my point better than I could. Thank you.
Yes, I also showed him an 0/11 batch of crossovers on Friday. It was very helpful, as we pinpointed 2 coins that were the best in the bunch and were "liners". I will not give up on those (2) coins. The other 9 coins I am finished with. So far, 0/15 in reviews with David Hall, but as I said on the other board, this is not purely about "winning", but about doing the right thing. Of course, I would have liked a review coin to "work" though. Wondercoin.
1: pcgs ms68 pennsylvania p 25c - price $1600 plus
2: icg ms67 pennsylvania p 25c - price $45
it's just something i don't really understand.
Assume this 1940's dime in MS68FB was a killer coin for the grade - would you recommend it to a customer knowing it is a "modern" coin with the potential of many undiscovered coins? If so, isn't your point here to simply avoid buying low end junk, as opposed to "modern" coins?
Now, consider the 5,000+ 1857-S $20s that exist, the 55,000+ slabbed 1908 N/M $20s that exist, 1865-S $20s, the bags of Morgans in the late 1870s and 1880s, the 150,000+ slabbed 1881(s) Morgans that exist.
Now Mark, if a NGC-MS67 or PCGS-MS67 white 81(s) Morgan came your way at a nice wholesale price, would you have any hesitation to offer it for sale to your customers? There are 150,000 slabbed 81(s) Morgans at PCGS alone and well over 1,000 MS67+ slabbed 81(s) Morgans at PCGS alone!
Any difference between the buyer of the 81(s) Morgan in MS67 who socks down $500+ for a pop 1000++++ coin and the buyer of a 1936(s) Mercury Dime in PCGS-MS67FB who socks down the same $500 for a pop 36/0 dime? Why is the Mercury Dime buyer not as "smart "as the Morgan Dollar buyer? Let's have some fun
2: icg ms67 pennsylvania p 25c - price $45
it's just something i don't really understand.
That's kind of like saying:
2002 Lamborghini Murcielago $275,000
2001 Dodge Caravan $19,000
At least compare the same grading company.
Charlie
Assume this 1940's dime in MS68FB was a killer coin for the grade - would you recommend it to a customer knowing it is a "modern" coin with the potential of many undiscovered coins? If so, isn't your point here to simply avoid buying low end junk, as opposed to "modern" coins?"
When we offer coins for sale, we don't typically recommend them (or not) - it's not like people are sending us money and saying "spend this on whatever you recommend." However, I would not be opposed to buying and offering for sale, the type of killer coin you described above.
Yes, a major part of my point was that people should avoid buying "low end junk" as you put it. We strongly recommend that buyers consider the merits of the coins, themselves and not buy blindly, based on the grades on the labels. I believe that is even more critical, however, when low pop coins are involved and when a one point difference in grade leads to astronomical percentage price differentials.
You also asked "Now Mark, if a NGC-MS67 or PCGS-MS67 white 81(s) Morgan came your way at a nice wholesale price, would you have any hesitation to offer it for sale to your customers? There are 150,000 slabbed 81(s) Morgans at PCGS alone and well over 1,000 MS67+ slabbed 81(s) Morgans at PCGS alone! "
No, I would have no hesitation offering a nice MS67 1881-S Morgan dollar.
Lastly, you asked "Any difference between the buyer of the 81(s) Morgan in MS67 who socks down $500+ for a pop 1000++++ coin and the buyer of a 1936(s) Mercury Dime in PCGS-MS67FB who socks down the same $500 for a pop 36/0 dime? Why is the Mercury Dime buyer not as "smart "as the Morgan Dollar buyer?"
I don't know if there is a difference between the buyer of the 1881-S $1 and the buyer of the 1936-S dime and I wouldn't claim that one was smarter than the other. However, I do feel that because there is a larger percentage price increase for the dime (from MS66FB to MS67 FB) than there is for the dollar (from MS66 to MS67), the buyer of the dime needs to be a bit more cautious in his purchase.
Buy the coin, not the grading label and make sure that the coin stands on its own merits. Low pop coins are fine, so long as the grades are accurate, the prices paid are "realistic," the buyers are spending discretionary funds (as opposed to those which they might actually need some day) and are aware of the risks.
<< <i>
That's kind of like saying:
2002 Lamborghini Murcielago $275,000
2001 Dodge Caravan $19,000
At least compare the same grading company. >>
no i would contend that it's more like comparing a lincoln navigator and a ford excavator, or whatever they call that thing.
same basic guts, different fancy, or not so fancy, clothing.
i was just giving results of two auctions that ended approx. 10 minutes apart. ironically, the icg auction had an extreme close up photo with a full 7 day return. the pcgs was an aerial shot from about 10 feet, don't recall seeing a return priviledge.
the pcgs 67's seem to be going for 2 to three times the icg, a little over a hundred bucks. i actually have a really funny feeling the same person who bought the pcgs also took the icg. the icg, also quite ironically, was a "private auction" so i'm not able to tell. i just think if i had paid 1600 bucks for a coin and one that was probably awfully close in quality was sitting there at 3% of the price i might be tempted to buy the cheapie and compare. (probably just a perverse bit of thinking on my part, but i would love to know.)
the photo of the icg made it look absolutely perfect, which is actually what prompted me to chime in on this thread. i know it would have been much more telling to either have a pcgs 67 or an icg 68 to compare prices, it's just the obvious question "how very much better looking can the pcgs 68 be than the icg 67?" i don't think it can be that much prettier. (that is if you fancy the PA design in the first place)
it's obvious that people are willing to pay 6400 times face value for low pop coins with mintages approaching 1/2 billion coins.
it's still just not something i understand.
I don't have anything against "modern" coins (whatever the definiton)....just affirming the original point of the thread - be careful and think about what your doing....I don't have a vested interest one way or the other.
On the other hand the ICG coin could be of an MS-66 quality and the PCGS coin could be of MS-68 quality. There is no substitute for personal inspection.
I agree that when the price goes up more than 3 to 5 times the next lower grade that warning bells should go off that as a buyer you must be absolutely sure of what you are doing or simply pass on the deal.
Back in 1998 I purchased a PCGS MS-67 red 1972 DDO cent from Ellesmere. I paid around $2000 at the time and such price was around 3.5 times the MS-66 red price. Now it seems to be 4.5 times the MS-66 price. If I was buying today, I would have been more cautious as the price differential has grown.
Just because the price differential has gotten larger does not mean the higher graded coin is a bad buy. But a solid knowledge of the history of the coin, the understanding of the market in question both present and past become more imperative before the buyer takes on ther coin.
.
^^^^^^I could not have said that better Greg
Go BIG or GO HOME. ©Bill
Proof Barbers, which are relatively available, have been increasing at 10-20% levels overall (all grades included) for many years. But scarcer coins might have much lower numbers. There are some types/dates/varieties which may only change 0-10% per year. Those IMO would be the place to start looking to evaluate better buys. For coins that have increased 20-40% in one year, look elsewhere. I think many moderns fall into the higher category.
The 36-s merc doubled its 67FB pop from 1998 to 2001. A nearly 25% annual gain. In 66FB it only went up 6% per year. The 81-s dollar in PCGS MS67 (as well as MS 65 grade) only increased the pop by 11% in 3 years (a 4% annual increase). Based on increasing pops, yeah, the 81-s in 67 looks to be a better buy than the 36-s Merc and many other moderns. During this same period Ikes in MS67 were up over 50% and MS68's were up over 250% in pops.
roadrunner
You included the silver coins. The clad Ikes are the difficult coins, but I understand your analysis.
Mark -
My concern regarding low-pop coins (all series) is that pop reports are primarily a grading service phenomenon, and don't constitute legitimate populations classic or modern. Many classic collectors who bought and held coins over the last 30 years see no benefit in submitting to grading services. I'd love to really know how many superb examples are held in private collections ungraded. I wonder how many nice coins Q.David Bowers sold to collectors that have never been submitted? Lastly, the grading services seem to be providing an estimate of grade. If the best hired guns in the industry can't grade consistently, what are you buying when you purchase that Merc? Coins are regularly upgraded/downgraded on resubmission. There is no grading standard consensus among the services, and drifting grading standards within each service. Lastly, occasionally all of the services just plain miss the grade. Obviously, there is no reason not to buy a PQ coin and pay a premium. Paying a large multiple based on the information contained in the pop reports is gambling.
BTW - I thought you might enjoy reading Bowers position on grading services - Bowers says "As I have said in print many times before, the numerical grade is just one of several factors affecting the value and market price of a coin. The sharpness of strike, toning or brilliance, and overall aesthetic appeal car, be equally or even more important in many instances. While the original thought behind slabbed coins was to create so-called "sight-unseen" markets, where one could blindly buy an MS-63, MS-65, or some other grade coin without seeing it, in practice this simply has not happened. "
and it sets us apart from practitioners and consultants. Gregor
are graded numerous times by multiple services. The only way pop reports could be truly meaning-
ful across the whole spectrum of collectible coins would be if they were all graded or if a represent-
ative sample were graded. In the long run the only thing that matters is supply and demand!
Those who collect or study moderns discover very early on that high grade examples of most issues
are far more elusive than comparable specimens of many of the older coins. This is a fact that can't
change and is independent of the pop reports! This isn't to say that everyone should buy moderns
or even that anyone should buy moderns, just that rare appears in old coins and new.