CoinAge Article Questions Logic Behind "Quality Mania" and the Registry

kyleknap

I just got around to reading the April 2002 issue of "CoinAge" today. On page 6 I came upon a very interesting article in the "My Two Cents' Worth" column by Ed Reiter, I encourage everyone to read this. He claims that coin collectors today put too much stock into the condition of a coin, and not that coin's absolute rarity. Consider one example he gives, a 1954-P Lincoln cent is worth about fifty-cents in MS63RD, but that same coin in a PCGS MS67RD slab recently traded for $3600. (Personally, I don't care if it's an MS70RD, no 1954-P Lincoln on this planet is worth that much.)The article mentions that this quality mania is mostly due to the Set Registry programs put in place by PCGS and NGC. Ed then states "Clearly, however, modern coins--whatever their condition--are not worth the kinds of prices people are paying. No matter how rare the population and census reports may show them to be in the highest grade levels, millions more may exist, simply awaiting submission for certification."

Do you agree? I think it's long overdue for someone to speak out about all of this registry bs.

Kyle

braddick

I disagree, although not strongly. There is a subset of collectors who chase after 'coin rarity' and those who want 'grade rarity'. Both fall under the Coin Collecting Hobby tent. Is one more logical than the other?
I suggest you ask a non collector if any of it makes sense.

keithdagen

Disagree as well. Grade rarity with moderns exist. Maybe not to the point that some collectors are willing to defend it, but more so than a majority seem to believe. Case in point, Dennis has been advertising on the boards for 6 months a willingness to pay $5K for a PCGS slabbed copper-nickel MS-67 Ike. If those coin existed, I would think that the populations would be exploding.

Keith

PS -- Did the article mention any Benson coins. Those are slightly older pieces that collectors were willing to pay multples of bid because of the toning. I guess that "mania" is hitting more than the moderns.

Keith

kyleknap

Let's use the 1954-P Lincoln just as an example. A 54p in PCGS MS66RD usually sells for $150-$175 (still way too much IMO), but an MS67RD traded for $3,600. That MS67RD might have been in an MS66RD holder last week. Bottom line, there are millions of 1954-P cents around, you're never going to have any trouble finding one, and $3,600 is just plain crazy. Who knows how many MS67RD's arre sitting around in the throusands of rolls that exist throughout the country.

Kyle

keithdagen

Kyle,

That's the crux of the problem. There are issues that are probably not rare that command hefty premiums. I don't know if this cent is one or not, I don't know enough about the series to speculate. However, there are some moderns that are geniunely rare in high grade because of the minting process, handling, or other factors that deserve the premiums they command.

Figuring out which is which is difficult, and neither the genuinely rare nor their cousins that are more commmon are respected by most as true collectibles.

Keith

kyleknap

Give me an example of a modern that is genuinely rare. This means that the coin would have collector value and demand in G04.

Kyle

dpoole

The condition rarities are not just a matter of unsearched rolls. The fact of the matter is, the mid to later dates in the 30's and early 40's have relatively large numbers of MS67s, often for far lower overall mintages. And for that reason, their prices are far lower. The later wheat dates, particularly in the P series, had far less qualities runs, despite their larger production. The reason the condition rarities in those dates cost more (admittedly far too much, even so) is because people generally perceive that a PCGS -graded MS67 coin for those dates is actually a coin of rare quality.

You'd better believe that people are submitting large qualities of these dates now. It's just that most of them are coming back at lower grades.

keithdagen

dpoole,

Thanks for adding some info on that Lincoln. Looking at the populations, the number of 67's for the Phillies in the 50's are less than a third of their branch mint counterparts.

Kyle,

There isn't a "modern" piece that has a lot of demand in GD-04, but most classic coins are that way as well. 80% of the Morgan series trades at common prices in GD-04. For the moderns though, since they are considered non-collectible, the majority of the mintages are going to be closer to GD-04 than MS-67 because they get spent without anyone looking at them.

Keith

kyleknap

That proves my point that moderns have very little absolute rarity. Morgans (which are certainly not moderns, but they're not textbook classics either) may not have a lot of value in G04, but they certainly start to move by the time you get to XF. I have yet to see a single modern that has any value in any circulated grade, and 99% of them don't have any value in MS64 or below.

Kyle

Cocoinut

I'd have to agree that registries are a major reason for the "quality mania". If the registry didn't exist, how many modern coins would be slabbed? For an answer to that, just look at a population report from 5 years ago and see how many 1996 and 1997 coins were listed. Before the registry, the vast majority of coins being slabbed would carry a premium even if they weren't slabbed. It seems ridiculous to me to pay $10 to slab a modern proof coin that's worth less than the cost of having it slabbed, when practically all of them are PR69DCAM's anyway!

In years past, most collectors were content with MS coins grading 64 to 66. Now, with the registries, we have intense competition when MS67 coins are offered for sale, and MS68's bring prices that no one thought possible a few years ago. If the registry didn't exist for collectors to "show off" their coins, what would happen to the market for high-end common date coins? I wish I had a crystal ball; is this the dawning of a new era in collecting, or just a fad whose bubble is waiting to burst?

There are still lots of unsearched BU rolls of most coins minted from 1940-1964. How many of us own (or even know someone else who owns) BU rolls from the 1970's '80's, and '90's? If not for mint sets, there would be some scarce dates in BU from those years. Examination of mint sets reveals that certain coins are seldom found without significant contact marks; these are the true modern rarities, not the proofs. Are they worth thousands of dollars? Not to me, but perhaps to collectors that feel that they must have the very best.

If I had $3600 to spend, I'd rather have a MS65 Flying Eagle cent than a 1954 in MS67RD. It's unlikely that large quantities of Flying Eagles will come on the market, but with all the rolls of 1954 cents that still exist, that pop 1 MS67RD will someday have lots of company.

Jim

wondercoin

I don't subscribe to that magazine, but my 2 cents:

1. The writer suggests that even a 1954(p) Lincoln in MS70RD would not be worth $3600-right? Well, could he have a clue as to the proper value of "p" mint 1950's Lincolns in top grade with a statement like that?

2. I would be a buyer of a nice 1954(p) Lincoln in PCGS-MS67RD at around $2000 even as the pop 2 coin and even though I don't actively market Lincolns as much as many folks out there. Assuming the pop 1 coin was nice, I would have considered around $3000 if the coin was offered to me.

3. I have spent 5 years trying to locate a PCGS-MS67RD Lincoln of this date. The best I have come up with is a handful of MS66RD coins. I spent several of those years ACTIVELY SEARCHING. Over the last 2 years, my search has been less intensive because I have basically given up.

While other "moderns" may be "easy" to obtain in high grade, imho, the writer picked a very bad example to illuminate his argument by using a 1954(p) Lincoln in PCGS-MS67RD. Wondercoin.

braddick

Kyle- Bad example using Moderns in GD04! Send me a PCGS gradable GD04 (or less) Franklin and I'll add $100.00 to your Paypal account immediately! Find me a Clad Kennedy in GD04 (same conditions) and I'll add $200.00 to your Paypal account. Ditto on a 1976 Ike ('P' or 'D').

There are many other examples- I won't bore you here. PM me for my list if you have anything you think I need!

((Don't even get me started as to the value- to me- of a true GD04 Sacawagea!))

Monstavet

I have been meaning to post a thread about this very article - in fact there are several articles in that issue of Coinage that take stabs at modern coinage and its collectors. The thing that got my goat was not whether a 1954 Lincoln in MS67Red is worth $3600 or 50 cents. What blew my skirt up was the writer saying that all 1804 dollars should be worth the same amount simply because they are rare! He specifically compares sales of two 1804 dollars, one for $3mil. and one more recently for less than $1mil. He feels that that is too large a disparity. Sure, one of the coins grades a pristine 67 and the other has ranged in grades from EF40 to AU58 (that is a whole other thread in itself) and looks like crap since someone took a file to it to make it appear circulated and thus avoid a mint recall. And one is a CLass 1 (original strike) and the other a Class III (restrike, 30 years later). But I guess if you are paying $3 mill, you don't give a hoot what the coin looks like, right?!?!?!

If you collected old cars, would you want a pristine, never driven Model T, or one that got wrapped around a tree by some drunken idiot? Would you pay the same for both cars? And yes, that is a rhetorical question.

I am not an 1804 expert by anyone's imagination, but this guy seems way off here....
While I do collect moderns, I do realize that there are many, many of these coins to be slabbed yet, and that will affect prices. Nevertheless, MS67 examples will always be worth more than lower grade examples, regardless of series, denomination, or date.

Monstavet

Sorry, double post!

MoneyLA

My copy of CoinAge hasnt arrived yet, so I can't honestly comment on the article. Let me just suggest, however, that the numismatic press might want to downplay the "registry phenomenon" because the phenomenon and the price spiral it created might drive many collectors OUT of the hobby. the last thing coinage wants is to lose subscribers who have lost interest in collecting coins.

with that said, let's look at the reality of the market:

yes, the registry has created a "grade demand" for certain coins. My feeling is, if you want to spend your money on a grade rarity be my guest. I did it with the PR70 washingtons I had in my set until I sold it, as well as with the 1950 pr68 I had. Non-collectors who I discussed my passion with said I was nuts for paying $1,000 for a 1950 pr68, or $500 for a 1963 pr70. For that matter, I paid $3,000 for the 1936 pr66 I had. I believe these prices were justified -- while a non collector would say "that kind of money for a quarter?"

I dont knock the buyers of grade rarity coins. the bottom line is that this is a hobby, and offers enjoyment. If you get joy spending your money on coins, so be it. I have in the past and I am doing it again with a different series.

And for the critics of paying high prices, let me note the following which will probably support your position: coin collecting like other collecting hobbies operates on the "greater fool principle," meaning, prices go up when a greater fool comes along. Okay, Im a fool. Now, does anyone have any ms68 silver roosevelts to sell me?

cheers, alan mendelson

kyleknap

MItch,

The article stated that an MS67RD 54p sold for $3600, not MS70RD.

khayse

I just wanted to say that the registry pushing up coin
prices could never push me out of coin collecting.

If a hundred billionaires started collecting Ikes and I could
never afford to obtain a top one hundred piece, I would just
move down the curve and start collecting 64's or 65's instead
of 66's.

-Keith H

boiler78

You mean to tell me that people actually read Coinage?

coynclecter

I think there are two parts of this question.
One is whether the "highest graded" is truly the "highest out there"
The other is whether the "highest graded" of a coin with a billion pieces available is worth many thousands.

In 1985-6 when PCGS started up no one knew the populations. High end common coins went for a huge premium over lower MS pieces. Common MS 64 morgans were close to $200. MS 65 were over $500. 66 and 67 were outrageous. When collectors saw this they sent in a lot for grading and the buyers had all they needed and the prices crashed in 1989. A "rarity" in 1987 was a common coin by 1991.

One thing constant in history. It always repeats itself.

Typetone

My view is that there are some collectors who want high grade, beautiful, close to perfect coins. MS67 or better or PR67 or better. Such coins are just not available for most classic dates and denominations. Or, if available cost a fortune (literally). However, moderns are available in these grades, and so are sought after by a group of collectors who want the best. A 54P red Lincoln in 67 must be a beautiful piece, and rare in appearance. It's besides the point that there are a zillion MS65s. Point is they don't look as good. The registry may have some impact on the highest graded premium (ie if you really want the number one set, then you have to buy some of the low pop highest grades). But so what, collectors demand coins for all kinds of reasons. If the reason is to be listed number 1 then that's the reason. As long as collectors continue to have that goal, then prices will stay high. If being number 1 becomes less important, then maybe prices will fall.

Personally, I usually avoid the low pop pieces if they trade at phenomenal premiums to the next grade down. The exception is when there is a hugh quality difference. For example, I own 5 highest graded MS 67 C/N IKEs (average pop about 8). At three to five thousand dollars they are about 20 times the price of an MS66 example. However, there is no question but that the quality difference is phenomenal. PCGS draws the line between 66 and 67 for that series. I also collect proof Franklins. For some of the dates I notice little difference between 67s, 68s, and 69s (keeping the CAM/DCAM designator constant). If there is not much price difference, I will go for the higher grade (eg a 57 in 67DCAM is about $800 a 68DCAM is about $2,000 so go for the 68DCAM). Where there is a huge difference I will pass (eg a 62 in 68DCAM might run $500 while a 69DCAM might run $5,000 or more, so I do for the 68DCAM). This proof Franklin strategy might not get me a number 1 set, but it does get me a great collection for comparative cost.

Greg Samorajski

itsnotjustme

Kyle,
Where did you get that definition of genuinely rare--collector value and demand in GD04? Besides, no one claimed moderns are valuable in GD04. And if a "true collector coin" can be worth far more in high grade than in a lower grade, why can't a modern? Look at some Morgans... an 1886-O goes from 6K to 175K for a 1 point increase and it can be had for under $20 in XF! Or an 81-O, under $100 to over $1,000 for a 1 point change. Wouldn't these be examples of condition rarity, not coin rarity?

The value of any collectible is determined by rarity, condition, and demand. The market uses these to set the price. If there are millions more in that condition, I'd think people would be submitting them themselves, instead of paying for one that's already slabbed.

Cocoinut,
Perhaps you can submit my proof Ikes; I'll give you $5 per coin above the $10 slabbing fee if they all come back PR69DCAM!

Monstavet

Hear hear, Greg! What it comes down to for me is: spend your money wisely. Realize that there could well be other coins out there that will significantly impact the populations and ultimately the prices of the coins you choose to collect. That could be true of any series, modern or classic - although much less likely with older material. However, look at Morgans (are these classics? they can't possibly be considered modern?). WHat impact will the Binion hoard have on prices of Morgans. 100,000 new MS63, 64, and 65 (and a few others) coins has got to impact the populations for most dates. Ultimately, will not prices of Morgans have to come down because of this?

Monstavet

And I still don't think anyone has addressed the issue of that article...that somehow all 1804 dollars should be worth almost the same money regardless of having been filed or kept in pristine condition.

wayneherndon

While the criticism may (or may not) be true with respect to some of the coins of the last 20 years or so, the author clearly does not know his high grade Lincolns.

I have looked at a lot of BU 1954 cents. I can assure you that $3600 is well worth the money for a 67RD that meets the grade. In fact, if one was paying someone to look through BU rolls of 1954 cents, I can assure you that way more than $3600 would be spent looking for a 67RD. 1954, 1953 and 1949 cents in particular are very difficult to find in high grade. Over the past 5 years or so, I've been through hundreds of rolls of these dates (even original unopened bankwrapped rolls) and found only a small handful that will grade MS 66 RD and none that made it to MS 67 RD.

WH

KoinKollector

I agree w/ you somewhat Kyle....

Just remember tho, the SAME applies for the classics...

kyleknap

Brian,

I never said that those particular Morgans you mentioned wewre genuinly rare. Genuinly rare coins are things like early large cents, bust dollars, 93s Morgans. NO MODERN is genuinly rare.

Kyle

KoinKollector

93-S Morgan isnt "rare" either Kyle...

Like I said, the same rules applies for classic coins.

coynclecter

Might I submit that if one wants a 1954 that is 67RD for the beauty of looking at it why not buy a Proof 67RD for about $60. It's the same coin same date and may even be better looking.

I think the key here is having something higher graded than everyone elses. Without the registries and the pop reports this would not sell for what it does.

KoinKollector

<<<<Might I submit that if one wants a 1954 that is 67RD for the beauty of looking at it why not buy a Proof 67RD for about $60. It's the same coin same date and may even be better looking. >>>>

IF i was a business strike collector of Lincolns I wouldnt settle for a PF in my set... Im also positive I wouldnt settle for spending 3600 for a 67RD when a 66RD can be had for? Most people arnt competing to be #1.... To some thats not what its all about

merysu

Let me point out that we are talking about Ed Reiter's editorial, and an article by Tom Delorey, two guys who have been around a long time and have seen all the fads (like roll collecting of 50-d jeffs) come and go. Anyone remember when 50-d's were going for over $1k per roll? Anyway, I agree with Kyle and Ed to some extent, I don't agree with Tom's premise on the 1804's.....I love the the one that the Pogue's bought. And IMO it is worth every penny of the premium over the one recently sold by B&M. -mark-

kyleknap

KK,

A 93s isn't rare? They start at about $1k in G04, IF you can find one.

Also, classic collectors such as your self may not be competeing for the #1 spot, but that is the entire point of the modern registry.

Kyle

KoinKollector

Kyle,
Im not trying to bust your balls... A 93-S isnt rare. So its expensive. I agree w/ you there... Every show ive been to had more than a handful of 1893-S Morgans for sale... Whats the est surviving pop? Its gotta be well above 3k.... If you wanna talk about "rare", in my definition would be something like a 1802 half dime, 1841-O closed buds dime etc etc...

coynclecter

Merysu:

At the time 50d nickels were going for 1k per roll everyone was collecting sets and filling folders. Someone had purchased the vast majority of the 50-d before the reached circulation and they were hard to find in any grade. Most people had a hole in their set. I find it hard to believe that there is a large group out there collecting sets of MS67RD Lincolns.

I am curious you said you wouldn't "settle" for a proof in your business set. I may be old school but I would consider a proof to be an upgrade to a business set and would replace a business strike with a better grade proof any day. Do you consider a proof to be inferior or just another type of coin.

kyleknap

AS far as surviving pop on the 93s, and I'm estimating here, lets say 1500 in PCGS holders, 750 in NGC holders, and 500 elsewhere. These estimates are liberal in my opinion, so roughly 2750 coins exist, I count that as rare. OF course an 1802 1/2 10c is hudreds of times rarer than that, but that doesn't make the 93s common, or even extreemely scarce. The reason you see a lot of 93s's is that there is incredible demand for them, so they often change hands, a good date to flip easily, you can buy one of these and make a few hundred bucks in 20 minutes at a large show in the right market conditions.

THe 41o closed buds is a variety, and if memory serves there are at least 20 of them. If you count varieties, have a look at the 89p morgan, vam 23a, ONLY 1 known, let's stick with just dates/mintmarks and make it a lot easier.

Kyle

keithdagen

<< <i>AS far as surviving pop on the 93s, and I'm estimating here, lets say 1500 in PCGS holders, 750 in NGC holders, and 500 elsewhere. These estimates are liberal in my opinion, so roughly 2750 coins exist, I count that as rare >>



Kyle,

Do you really think that a majority of the existing pieces of this coin are slabbed? I see these raw all the time at shows.

Keith

KoinKollector

Actually there @ 12 1841-O small O close buds & @ 25 1841-O large O close buds know, but whos counting. I agree w. the date mm thing, i was just trying to get my point across on rarity. I never said the 93-S isnt a good coin to have, it just doesnt meet "my" standard of rare...


Just a lil sidenote. The closed buds isnt just some obscure variety in the seated dime series... its THE variety

kyleknap

Yes, I do believe the majority are slabbed. I have heard other survival estimates of this date by people who know a lot more than me about Morgans, and I have yet to hear one over 3500.

Kyle

Gerry

Ed Reiter used a particularly poor example to buttress his preconceived opinion – to add to what others have already pointed out, I’d like to quote The Complete Guide To Lincoln Cents by David Lange: “1954-P cents are notable for their generally poor quality. Most are dark and were coined from severely overused dies.” Over the next few years, a couple of other ms67s may be slabbed, but don’t bet on it until you try to make one yourself.

kyleknap

I would like to direct everyone's atention to two issues of Mike De Falco's "Renegade Report." Keep in mind both of these pieces are written by someone who has been in this business for 30 years, and has seen the ups and downs, the fads and frenzies. I would pay close attention to both of these pieces and really consider thier content, as the points expressed here are very important.

Link

Kyle

Monstavet

Regarding the above linked article...comparing 69DCAMs to common pr65s (no cam/dcam) is apples and oranges. What it is starting to sound like to me, is the old guys with 30-40 years of experience think the only thing worth collecting are Barber dimes and seated liberty halves. Hey, there all all kinds of things to collect. To each his own. If you don't see the value in it, don't spend your money on it! Are some of the prices being paid for modern coins too high? Most definitely! How about some of the classics? Oh yeah, baby! IS the Registry the root of all evil? Come on!

coynclecter

Thank you Kyleknap for the link and thanks to Mike for the honest article.

Being an old time collector I saw 50-D nickels sell for more than Unc gold pieces in the 60’s. A 1955S Lincoln sold for more than an Unc Indian Head. How do they compare now

In the 80’s 67FSB Mercs sold for more than Unc Bust Halves

Now we have Jefferson nickels selling for more than proof classic gold.

Learn from history. In the end the coins with rarity, history and beauty held their value while short term fads promoted by dealers seeking profits always fell apart and left the collector holding.

Take your profits and get into something that has held value over the years and will have value in years to come.

Eastside

Quality moderns may surface in the future as there are no doubt unsearched rolls out there but most likley they are of the lower mintages as these were the top dollar investments in the mid to late sixties and old timers who obtained them then will not part with them, god knows i've tried to buy some off oldtimers even offering double greysheet, but I can understand their veiw and stubborness, when back then a roll of say 1955p jeffersons cost around $150.00 at it's peek equivelent to three monthes rent in 1960's dollars, where today greysheet bid is about 6 or7 bucks, as for common quality high mintages may be a differant story as supply may have been melted or dumped into coin dealer tills you know this happened, some year are depleted, example coins from1982 thru 86 are hard to find in bu rolls, this may be in part due to reccession years as well as disalutionment in coins after the 60's roll bust and the 80's silver and gold bust, very dark and gloomy days for coin dealers.


Eastside

RELLA

Nice link to that wonderful article slamming the 1995-W Proof SAE...I don't like this about myself, but I have a hard time seeing the point in someone's writing when it shows a reckless disregard for the facts...always in support of the author's assertions of course. Does he or does he not state a wholesale bid of $90 for this coin, and is that not in fact the wholesale bid price of the far more common 1995-P Proof SAE? I would also love to get my hands on any genuine 1995-S Proof SAE out there...another coin this man seems to think exists. If someone wants to rant and rave about anything, they should take care to not distort the facts.

In the meantime, I'm open to buy any and all PR68DCAM 1995-W OR 1995-S SAEs at $100! Get your profit here, back up the truck if you have to, I'll take as many at that price as you can find.

Another note....since when did proof coins become "better" examples of the same coin in a business strike again?

RELLA

kranky

If a particular cent is $150 in 66RD and $3600 in 67RD, I would have to seriously wonder why I would want the 67 especially if my motivation was to have a pop 1 coin. It would certainly not be out of the question for one of those 66s to get upgraded someday. Now if the next closest coin was a 64, that's a different story.

I suppose there are collectors with quite a bit of disposable income to spend on coins, and perhaps they wouldn't even mind if another 67RD (or two or three) came along later, and that's a side of the story I guess I tend to overlook.

nucklehead

I've read the Coinage article and as far as I'm concerned it is just one mans opionion nothing more nothing less.The bottom line is collect what you like and to hell with what others think be it moderns,classics,tokens whatever. As far as I'm concerned this entire thread has been a far better read than the 2 cents worth article.