Buying “high end” coins vs. “solid” coins

dan1ecu

Here’s a question for those who buy coins for investment purposes. I often see coins described as “high end” (meaning that it’s very close to the next grade) or “solid for the grade” (meaning that it’s neither high end nor low end, but somewhere in the middle). As far as selling the coin later on, which is better? What I mean is, if I buy a coin in an MS64 holder as an MS64+++ for a steep premium over a “solid” MS64, am I likely to be able to sell it later for a similar premium? It might require some effort on my part to convince a buyer that the coin is worth a significant percentage over and above the sheet value, especially if the buyer wants to buy at wholesale prices. A well-known, reputable dealer might be able to describe a coin as “high end” and charge a premium, but how difficult would it be for an individual to do this?

On the other hand, if I am selling a coin that is “solid” for the grade, I don’t need to convince the buyer that my MS64 is worth more than any other MS64; therefore, wouldn’t I have an easier time making a profit?

Am I thinking about this the wrong way? I’d appreciate comments.

Dan

DIMEMAN

I would tend to agree with you dan. It is hard for an individual to get "premium" money when selling to a dealer.

JMHO, Jon

tradedollarnut

A truly high end coin, with a significant spread of value between the grades, will always sell for a premium. But don't expect to get a premium from the first dealer you try to sell it to and don't expect to not lose your 15-25% (assuming a stable market).

And make darn sure you know what a high end coin is before you start paying premiums for one! An awful lot of them advertised as such are NOT.

The reason to buy those coins is because there will always be a buyer for them (they are liquid) and if grading standards change they will either hold their grade (if tighter) or go up a grade (if looser). A solid for the grade coin would become low end or high end, but not experience the big jump up in price by going up a grade.

dan1ecu

I appreciate the comments --

Are there any dealers here that would be willing to give their perspective? I think it's an important issue.

Thanks,

Dan

ms71

As TDN said, the first part of this battle is to learn what really is a high-end coin. Examine as many as you can find, particularly in the series that interests you. About 75% of coins seem to be advertised as "high-end" or "PQ", and the rest as "solid". When did you ever see "lower end of the grade range" or "barely made it"? Once you are able to tell a true PQ, the second half of the battle is convincing the seller you're dealing with that you can do it. This will probably take some time, a relationship of many months or years. Once a dealer knows that you know, things change. The dealer knows a PQ, and he wants to buy it as low as possible. By the same token, if it's a real PQ, he doesn't want to let it walk away to somebody else. The key is how he judges your knowledge and market savvy (and how ready a market he sees for it). To paraphrase an old Supreme Court justice: "I can't define PQ, but I know it when I see it".

Higashiyama

It is hard to add to the excellent comments above.

Forgetting about resale for a moment, I think the real "bargains" are in coins that are either high end, or very solid, or NGC "*", especially where there is a major discontinuity and jump in price between technical grades. In spite of advice to buy the coin, the market really does not price on a smooth, continuous basis. (e.g. -- It would be unusual for a premium quality MS 64 sesquicentennial half to approach the price of one that is slabbed as MS65, and the same could be said for a Missouri and many others).

Slabbing is still only about a 15 year old phenomemon -- my own (perhaps sentimental) guess is that over time, collectors will fill in these pricing gaps to a greater degree, so that either the MS65 sesqui price will come down, or the PQ 64 price will come up. If this is true, the 20 % premium for the PQ coin is a bargain.

coinguy1

Dan, you have a good strategy and have received some excellent advice.

One caution, though - "high end" and "solid for the grade" are, unfortunately, subjective terms. And, as already pointed out, they are often over used or misused. So is the term "PQ." I have seen far too many coins called "PQ" that are dogs, pigs, anything but "premium quality" or "high end," in my subjective opinion.

Make sure the coins you buy, sell themselves to you, based on their quality and eye-appeal - don't rely on the buzz words of the seller.