What is a single grade point worth?

tradedollarnut

This is a question I've been struggling with lately and a PM conversation with a collector plus wondercoin's statement has me thinking about it again.

Wondercoin's post from another thread [my bold]:

I took a break from my MS Silver Wash Quarter set a couple years ago. I sold none of the coins since then and bought none either. And, you know what... I basically missed close to nothing in all that time (maybe one or two interesting coins). Now, the 1932-D PCGS-MS66 Quarter is available once again. Do I want to compete for it or not? Not sure, but, frankly, if I am this indecisive, perhaps my "break" is not over? I still greatly enjoy the silver Washington quarters even though I have taken a break for several years now. one day I may "wake up" and decide to go full steam ahead on imrpoving upon the collection. One day I may "wake up" and decide to sell them all. In the meantime, "no action is action".

Not only whether you want to compete for it, but how much is a single point worth? How much are you willing to pay to acquire a 1/0 top pop over a nice PQ example of the undergrade? Of course it matters what one's financial circumstance is ... but even then for most people there's got to be limits. The collector I was conversing with is faced with paying $175k more than the undergrade - I'm not sure I could do that ... I'm more comfortable in the $50k range for something that's not an acclaimed wonder coin or classic rarity.

curly

Brother, I don't mind "reaching" for a 1/0 coin but I don't know if I would go much beyond 50% of 65 money.

BECOKA

My issue is partly money but mostly I have come to realize that if the coin just looks better and is a lower grade I have no desire for the top pop. It would not only have to be solid for the grade but the looks would have to be far superior to the lower graded coin.

There are too many cases where the top pop is dipped and does not look that good.

DMWJR

Questions you would have to ask:

Are the coins properly graded?

Is it a common date coin or a key date coin?

What is the proportion of the $175k to the value of the coin?

These questions might get you closer to making a decision.

LeeG

This is a great question that we all have to consider at some point in our collecting experience. Personally, I would take the PQ++ undergrade. Seems to be a better value. It also depends on if your a Registry Collector or Coin collector.

Steve27

"What is a single grade point worth?"

It depends on what your motives are. If you're big on competition then it might be worth a lot; however, if you're strictly a coin collector then it might not be worth much at all (technical grade and eye appeal don't necessarily follow each other).

TAClough

<< <i>What is a single grade point worth? >>



I am not sure, but I have been recently told by someone (will not mention name) high in the food chain at PCGS that the next grade up which would be a pop 1/0 is only worth $20 more.

wondercoin

The key for me (and I would assume a great deal of collectors as well) is what other places I could go with the money at this point. Depressed real estate? Paying down debt to get stronger if one thinks everything will be getting weaker? Other options in classic or modern coins (e.g. platinum coins which have returned over 40% since December, 2007 even including today's 5% dip - buy on the dip?), etc., etc.. Or, a 1 point coin upgrade?

I think more and more... collectors are weighing their options before leaping into 1 point upgrades these days. Especially, because of the other interesting opportunities out there, including a stock market off nearly 2,000 points from the high and real estate "fire sale" deals that may look interesting. Not to mention, straight purchases of gold bullion (up 51.72% at this moment year over year) - what % of collectible coins can top 52% return this past year? Once you have tasted the sweetness of a 52% return without even having to fly to auctions, deal with paying the auction companies, deal with reselling the coins later, etc. - is there any wonder collectors might be pausing a bit on dropping $100k on a 1 point upgrade these days? I know I am. Neat thread TDN.

Wondercoin

curly

wondercoin, that's good point brother, a very good point.

SmallEagle

Putting aside what a grade point is worth to me, if you look at current auction results and price guides you can describe the situations where going from the "runner-up" to the top-pop grade of a date/mintmark combination results in 100%+ price markups.

1.) Areas with a lot of registry players Morgan Dollars, Lincoln Cents, etc.
2.) Examples where the "runner-up" grade has a population of 15-50 times the number of top pop issues. Example 63 MS65 1932D 25c, vs. 1 MS66, etc,
3.) Examples where the top pop is also the top pop for the entire type. Example MS68 1875-S 20c. There seem to be a number of collectors building high end type sets at the moment.

tradedollarnut

Agreed - I think that 100% increase is exceeded quite often going to a top pop. I myself am quite guilty of large expenditures for the finest known of a date - I remember paying $150k for the incredible MS66 1864 dollar. That's $100k for a point ... which I may have refused to do if I had owned an MS65. But my coin was an MS64, so I was kinda looking at it as two points.

I doubt that even after three years I could get my money back out of the coin ... but I think it added value to my set above and beyond its own value.

tradedollarnut

I guess the point I'm trying to make is that at some value it ceases to make financial sense and is all about passion. If you're not madly in love with the coin, then why do it?

BECOKA

<< <i>I guess the point I'm trying to make is that at some value it ceases to make financial sense and is all about passion. If you're not madly in love with the coin, then why do it? >>



Because someone might have more money than sense?

scher

I know nothing about wash. Qtrs.. that said..the money you are talkin about for that is nuts...at least ya dont have to worry bout me runnin it up..HA..cannot imagine that for a 32d.
Bruce Scher

wondercoin

"I know nothing about wash. Qtrs.. that said..the money you are talkin about for that is nuts...at least ya dont have to worry bout me runnin it up..HA..cannot imagine that for a 32d.
Bruce Scher"

Bruce - It should be interesting to see just how the most vauable silver Washington quarter actually did perform over the past 6 years or so. Consider that the last buyer paid just under $90k for the coin at auction back then. So, next month when the coin sells, will it return the straight 15-20% per year that great classic coins can deliver? Heck, if that is the case, the coin would need to sell for close to $175k at auction here (and I am not saying it won't!). And, assuming it does sell for that -in 6 years, the coin might need to be worth $350k to "keep up" with the big time classic coin returns. And, this gets back to my point - would a collector have a chance to "double up"on the 32-D purchase over the next 6 years? For that matter, will gold be at $1,900/oz in 6 or 7 years making for an easy double up with far less risk (i.e. risk that PCGS graded # 2 or #3 MS66 in next 6 years)? Where are you putting your money? There is no true measure for the "love" associated with owning a pop 1 Wash quarter (I certainly do enjoy my companion pop 1 1932-P MS67 quite a bit stil). Wondercoin

DIMEMAN

If I had the money and that was my series I would buy the 32-D in a heartbeat. Not because it is a pop 1, but because it is a very beautiful coin and is tuff 65 and above.

JMHO

RegistryCoin

SmallEagle is on the right track. A single grade point's value is best compared and described in terms of the percentage difference from one grade to the next. This way we can compare the relative genius or stupidity of paying a multiple or mulitples of the next lower grade for any coins or series.
As an example, check the multiple of the Washington '34-D's jump from ms66 to ms67. It's multiple is greater than that of the '32-D's jump from ms65 to ms66. The ms66 '32-D would have to sell for $162,800 for it's multiple to be equal to that of the '34-D.

roadrunner

The thumbrule in silver 19th century type has often been 2X to 3X for the next grade up. That generally assumes a pop reduction of
50% to 70%. For a pop top it gets a little cloudier but I've never exceeded the 3-1 ratio for that next grade point. While 20th century REG sets routinely go from 5X to 20X to 100X, that's not for me.

TDN paying 3X the price for his gem 1864 fits neatly in my criteria.
If the number of coins one point down is fairly large, then to me that should shift the ratio towards 2-1.

roadrunner

LincolnCentMan

That depends on how bad you want to be "#1."

-David

Griv

<< <i>Agreed - I think that 100% increase is exceeded quite often going to a top pop. I myself am quite guilty of large expenditures for the finest known of a date - I remember paying $150k for the incredible MS66 1864 dollar. That's $100k for a point ... which I may have refused to do if I had owned an MS65. But my coin was an MS64, so I was kinda looking at it as two points.

I doubt that even after three years I could get my money back out of the coin ... but I think it added value to my set above and beyond its own value. >>



I'm sure it did. Any pictures?

tradedollarnut

TahoeDale

It may be worth more than you think, at first glance.

The 1892-O Micro-o Barber half has a pop of 3 in Gem or better. Steve Duckor's 65, a 67( the Queller coin graded 66 at the sale), and the Eliasberg 68.

When a true rarity is involved, price will probably be no object for us idiots who love our coins.

speety

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I'll give ya 18 times face for it...

Edit: After thinking about it, it's a 6 point upgrade so...i'll give you 18 times face plus our coin?

coinkat

It really depends on the coin and to an extent, the series. Some series really do not have as high of a surviving population in certain grades... take MEXICO 8 Reales for example... how many Cap & Rays exist in MS67?

Well... someone had to ask.

Griv

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Very, very nice.