Gold coins for under $2500: Latest DW article

RYK

DW posted an article entitled 13 Interesting Gold Coins Priced Below $2,500 today on his website. I am often asked for suggestions for collecting rare date gold coins on a budget, and this list is an excellent starting point. With a little creativity, an interested numismatist could probably come up with thirteen more suggestions.

USCGCraig

You could make it an even 20 to put in your PCGS box. My first is an 1877-P Quarter Eagle graded AU50. I love that coin. Mintage of 1,632, pop of 10 with only 49 higher. It was well under the $2,500 threshold.

DaveG

While I can't be sure I've examined every coin in every dealer's case, I don't think I've ever seen an S-mint gold dollar, a Reconstruction-era P-mint gold dollar or a P-mint quarter eagle from the 1840s at a coin show (no, not even Baltimore or the two ANAs I've been to) - and I haven't seen a Type I double eagle in about four years, either.

bidask

Good post!

RYK

<< <i>While I can't be sure I've examined every coin in every dealer's case, I don't think I've ever seen an S-mint gold dollar, a Reconstruction-era P-mint gold dollar or a P-mint quarter eagle from the 1840s at a coin show (no, not even Baltimore or the two ANAs I've been to) - and I haven't seen a Type I double eagle in about four years, either. >>



Next time in B'more, spend some time with the Heritage auction lots and you will see representatives of all if these.

I think a set of Philly coronet No Motto half eagles would be another nice project in XF/AU. Two of the Civil War dates would break $2500, but many of the dates would be under $500!

TheRaven

Any interesting article to say the least.....

Only thing is I wish I had a budget of $2500 for one coin.....

Alot of those coins notched down a grade or so for those of lesser pockets does work however.....

CharlotteDude

This strategy seems to me like DW is contradicting an earlier article/blog he released circa 23 Oct 2006? I would venture that S-mint $1 gold is right in the same league as S-mint $10's and Philly $20s. San Fran Type III $20s?? In his Oct 23 blog, he addresses those coins that fall into a "ubiquitous" category as being hard to sell and if you're looking for rare, desirable coins, should be avoided... believe Type III S-mint $20s fall right smack into that category. I realize he's providing suggestions on coins that fall under $2500, but this latest article does seem to contradict his buying strategy less than 2 weeks ago. I think most would agree that people tend to (and should) avoid those types of coins that are hard to sell. It will be interesting to see if these 'under $2500' coins start populating on his website in the near future.... or, maybe I'm just reading into it a bit too much? Here's the Oct 23 blog:


October 23, 2006

In the last five years, my website raregoldcoins.com has become a primary focus in my business. It has been interesting to observe which coins sell the most quickly and why, in my opinion, they do. I’d like to pass on some of the lessons I’ve learned as I believe it will help you make better decisions when it comes to your collection.

1. Photogenic coins sell. In this instance the term “photogenic” is interchangeable with the more numismatic term “eye appeal.” When I buy a coin which has really pretty color or which has great luster or which has a very sharp strike (or, better yet, a combination of all these attributes) I can be reasonably certain the coin will sell well. If a coin has a glaring negative attribute that is readily apparent in an image, it is likely to be a hard sell. As an example, an otherwise nice coin which has a large grease spot on Liberty’s cheek will be hard to sell, even if the coin is quite rare. When you are putting together a collection, buy coins that are pretty.

2. Coins in the right pricing “sweet spot” sell. For me, this pricing zone is in the $2,500 to $7,500 range. There are coin dealers who seem to be able to sell lots of $25,000+ coins. (I certainly sell my fair share of them). But once you get past $10,000 or so, the air gets pretty thin in most series and liquidity drops. That’s why I like interesting coins in the $2,500-7,500 range. They are generally quite liquid and I can turn over my inventory alot more quickly when I’m selling coins in this price range then when I’m selling more expensive coins. Let me add that I have no problem with buying expensive coins but that my resistance level increases based on the series. In other words, with early gold coins, there are virtually no decent pieces available in the $2,500-7,500 and I would expand this sweet spot to $10,000-20,000. But with Charlotte, Dahlonega and New Orleans issues, I feel that there is excellent value in the lower price range(s) and my focus shifts accordingly. I will certainly buy a $20,000 Charlotte or Dahlonega coin but it has to be pretty special to get me interested.

3. Interesting coins sell. People like coins which can be summarized in a few words or less. The 1838-C half eagle is popular because it’s a first year of issue and it’s the only Classic Head half eagle from the Charlotte mint. Even if you aren’t a specialist in Charlotte coinage, you are likely to quickly discern the appeal of this coin. In the same series, an 1844-C half eagle may not be as easy to sell. It is clearly a scarcer date than the 1838-C but its range of appeal is limited to collectors who specialize in Charlotte gold coinage; whereas the 1838-C might appeal to type collectors, date collectors and people who just like neat coins. There are other “neatness factors” that appeal to collectors: very low mintage figures, unusual designs, key date status, good pedigrees and large size are all positive attributes. If a coin which I am being offered for sale has one or more of these attributes, the chances are good that I will add it to my inventory. A collection that contains interesting coins is a collection that I would be very pleased to purchase from its owner.

4. Coins have to be properly priced. In this day and age, it is reasonably easy for a collector to determine how much the last four AU55 1840-0 quarter eagles have brought at auction. If I price a coin comparably to these four auction records (and it is a decent looking piece) the chances are good that it will sell. If I price my coin at 50% more than the last four records, it won’t sell. Now there are exceptions to this rule. Coins that do not trade regularly at auction (like the same 1840-O quarter eagle but in MS63) are much harder to price. And certain coins (like an 1880-O eagle in AU50 or better grades) are clearly undervalued and are worth more than most published pricing guides suggest.

5. Rare coins sell. This sounds obvious but it is a point that needs to be reiterated. Whenever I list a really rare coin for sale (like an 1861-D gold dollar, an 1847-O half eagle or an 1870-CC eagle) it sells quickly and receives multiple enquiries. People want to own rare coins, especially if they are attractive and fairly priced. If I had to choose between, say, an 1870-CC eagle in EF45 and an 1873-CC eagle in AU55 (an issue which is rarer than the 1870-CC in higher grade yet priced comparably) I would always choose the former. Unless you are putting together a date set, focus on the rare dates for each series.

So what doesn’t sell? Obviously, I don’t go out and try to purchase coins for my inventory that are going to sit around for months and stagnate. But there are patterns I see on my website and these are patterns which you should avoid when assembling your collection:

1. No matter how rare the coin, certain series are really hard to sell. An example of this would be Liberty Head San Francisco eagles. Even if I have a really attractive, fairly priced example of a very rare issue like an 1863-S this is a hard coin to sell unless I happen to be working with a specialist collector who needs this specific date. I try to avoid thin, highly specialized markets.

2. Even if they are cheap, I avoid ugly coins. On more than one occasion, I’ve bought a coin at auction because it’s been too cheap to resist. But it’s been cheap for a good reason: it has heavily abraded surfaces or it is obviously scrubbed or it is very poorly struck. You get what you pay for and if you are buying coins based solely on price, you are destined to have a collection full of duds.

3. Ubiquitous coins are hard to sell as well. If I listed a bunch of common and semi-common Liberty Head half eagles or had a long list of common Saint Gaudens double eagles, the chances are good that they wouldn’t sell, even if they were genuinely nice coins for the grade or if they were priced competitively. Buyers go on my website looking for rare gold coins. You are building a rare coin collection. Always keep the word “rare” in mind when you are considering adding a coin to your set.

Doug Winter
10/23/06
www.raregoldcoins.com
For more information about United States gold coinage please contact me at dwn@ont.com


Just keeping it real...

the 'dude

Longacre

It is an interesting article, and I think he wrote it from a contrarian point of view, even though he does not really state that. I doubt that any of the coins listed would be included in any quantity on his website. I agree with his point that on a basic level, those coins can be obtained for less than $2500, and in some cases, substantially less. The issue that I have, and Charlottedude states it well, is the thin market for these coins. These coins are definitely cheap, but I am always concerned that the secondary market for them just isn't there. For example, the Philly quarter eagles are genuinely rare, but the unfortunate thing is that no one cares. From a pure collecting point of view, I agree 100% with what DW says. However, in terms of marketability of the coins in the aftermarket, a collector just needs to be aware of the full picture. Again, I think the article was written to highlight coins where you can get a lot for the money, and I don't think the article was intended to also comment on the status of these coins in the marketplace in general. It would be interesting if he wrote a followup article on the 10-15 year price trends on all of these coins.

RYK

This strategy seems to me like DW is contradicting an earlier article/blog he released circa 23 Oct 2006? I would venture that S-mint $1 gold is right in the same league as S-mint $10's and Philly $20s. San Fran Type III $20s?? In his Oct 23 blog, he addresses those coins that fall into a "ubiquitous" category as being hard to sell and if you're looking for rare, desirable coins, should be avoided... believe Type III S-mint $20s fall right smack into that category. I realize he's providing suggestions on coins that fall under $2500, but this latest article does seem to contradict his buying strategy less than 2 weeks ago. I think most would agree that people tend to (and should) avoid those types of coins that are hard to sell. It will be interesting to see if these 'under $2500' coins start populating on his website in the near future.... or, maybe I'm just reading into it a bit too much? Here's the Oct 23 blog:

I actually do not see the conflict. The under $2500 per coin market is quite a bit different from the "sweet spot" coins, the ones that he more typically sells. I have been buying coins from Doug for nearly five years, and the type of coins he prefers to buy/sell have not changed much, and I doubt that they will change much going forward.

I like some of his set ideas, and others are probably duds. I thought the S-mint gold dollars were a terrific idea, one that I never before considered. You get a coin from the first year of the mint, an oddball 1856-S Type II (because SF did not get the Type III dies in time), and an Indian princess coin dated 1870-S, a miniature of the unique and storied $3, as well as four pre-Civil War dates. What could be more interesting than that?

On the other hand, the SF Type III $20's are essentially generics and to me very boring. However, they trade like generics and the downside is minimal.

In some of these areas, DW is an active participant (NO gold, $3's), and in others, I have never seen him offer a coin (low mintage quarter eagles, Philly classic head QE's and HE's) and would be shocked to see him offer them in the future.

CharlotteDude

One thing I failed to do was qualify my last... I was directing those contradictions towards the suggested series that tend to be out of favor with most collectors, and for that reason, most buyers... the S-mint $1s, Philly 10's, S-mint TIII $20s and so forth. I believe DW was right on about his New Orleans mint $5/$10 & $3 gold suggestions... those coins do have potential to gather a ground-swell collector following, and enjoy the most potential to become the next highly sought-after series... Granted, the $3 gold series may have played out its latest popularity run... for now. There's been a slight pull back in demand for them, but I believe this is only temporary.

still keepin' it real,

'dude