Value - rare/desired coin: high grade

Wondo

It has always intrigued me that really popular coins in high grade trade at lower multiples to worn examples than less desireable issues. The economics are obvious, people want the coin no matter the grade. I think that gives the collector a tremendous opportunity at value. For instance:

A 16d Merc ratio at fine to unc is only 1:10. A 09svdb is less than that. There are hundreds of coins that have ratios of 1:1000. Anyway, I think it is an interesting phenonema.

Thoughts?

RYK

I have never thought of it in those terms, but I have certainly made similar observations. It may be in part a function that some less popular coins are common in lower grade and rare in high grade (as they were not saved) while the popular/rare coins are relatively scarce in all grades but survive disproportionately in higher grade because they were recognized as rare by collectors early, sought, and saved. Make sense?

Unfortunately, the pop reports do not help us because the common/unpopular coins are not sent for certification nearly as frequently as the rare/popular coins are.

Crackout

While these ratios may show good value, most times (for me anyway) the overall cost of the coin comes into play. I can afford a modern slabbed PF DCAM at a 1:1000 price ratio over a Fine example, but if I want a 16-D Merc - I'm looking very hard a a G-4.

Conder101

No too surprising. Say you have a thousand collectors few of which are wealthy enough that price is not an object. And let us suppose there are two coins, one a key date of which only a couple hundred exist and the other a common date with ten thousand pieces in all grades but only a few in top grade. And finally stipulate that these collects WANT both of these coins. So what happens?

The well moneyed collectors bid up the few high grade pieces of each to high levels do to competition between themselves and the majority of the 1000 collectors can't touch them so they have to turn to the lower grade pieces. Now for the key date there are almost five collectors for every coin so bidding on the lower grade coins is also intense ant the move up in price resulting in a low ratio between mid-grade and high grade coins. In the case of the common date though there are ten coins for each collector. No competition for a coin because "there will always be another one come by soon." So the price stays low and the thousand collectors do not cause the prices to rise. This results in a very high ratio.

Add another hundred collectors. Unless there are well moneyed people in this group the price of the high grade pieces won't change that much but the increased demand for the lower grade key date pushes those prices up and lowers the ratio. For the common date they just sop up some more of the surplus coins but cause no additonal pressure on price because there is still a surplus so that ratio doesn't change.

BillJones

Conder's analysis is a good one, but there is one other kicker in the current market.

It is almost impossible to find a 1916-D in Mint State these days at the shows. And when you do find it, asking price is almost always a lot more than the prices you see listed in the current price guides.

I agree that the ratio between the circulated grades and Mint State for key date coins tends to be lower than it is for common dates. Still the reality is that it might not be as low as you think.