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Red Copper Guarantee Impact
Waltz
Posts: 86
We're approaching 3 months without the PCGS Red Copper Guarantee (tm). I've noticed a distinct reduction of red and cameo coins, particularly Indian Cents coming to market. Our friends at Coin Age Magazine have included red copper (particularly Lincolns) under the what's not category, and specifically mentioning the changes to the guarantee as a factor. Very interested in the group's perspective. - Thanks, Brent
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<< <i>Obvious to you (and frankly to me as well) but there was no clear consensus on the matter. Several experts in copper predicted business as usual in 2010 in spite of PCGS decision. >>
I have noticed that the variance in prices on a given date/grade of RD copper coins has increased signficantly. For example, before the repeal of the guarantee when a PCGS 65RD 1909-S VDB came to auction, there seemed to be a price floor that was the rock bottom price that the coin would sell for no matter what it looked like. Sure the ugly ones didn't command top dollar, but they still got a decent price based on the grade on the holder and presumably the grade and color guarantee. From what I've seen, since the repeal of the guarantee the nice examples are still getting strong money and I haven't noticed any discernable decrease in the market price of the good ones. However, the bad examples that have spotting or are clearly RB coins seem to have crashed through that previous price floor creating a bigger spread between the good examples and the bad ones of the same coin in the same grade. Just my observations of looking at them in some of the auctions, seems to make sense to me.
So for the nice examples out there I seem to agree with the copper experts' predictions of business as usual... but for those bad examples out there the market may have gotten a bit tighter.
All that said, after 1/1/10 I've held off on any major RD copper purchases for awhile to see what would happen to prices... and then once the hype of the "Big One" started over a month ago I pretty much held of on most coin purchases altogether... except for a few pretty ones I couldn't pass up
Michael Kittle Rare Coins --- 1908-S Indian Head Cent Grading Set --- No. 1 1909 Mint Set --- Kittlecoins on Facebook --- Long Beach Table 448
Red copper prices are stronger than ever for nice coins. For Dreck there is no floor and some are deemed "worthless". This is exactly what I thought would happen to red copper that has been lightened,spots removed or altered in some other way. I stepped up two months ago and bought almost $300,000 worth of red copper. I continually sell choice red copper for record prices. Old green holders are a plus only if the color and surfaces are original.In other words if the coins were not misgraded from the gitgo.
Stewart
ps I sold a 1946 in ms 67 red for more than $10,000 last week.
I sold two ms 67 red Indian cents in the 1900's for $45,000 this week.
Just what proponents of a market with tighter spreads (thus more liquid and transparent) feared.
This result, as Mr. Blay notes.....high end collectors, who understand Red Copper, will continue to buy/sell these coins.
Given the mindset of the other 97%...they move away in droves.
Sooner or later, the high end collectors will achieve their goals, and the market will "adjust".
There has ALWAYS been a premium on properly graded red coins in old holders as it shows color stability; I believe that as we move forward and the advent of Copper registries regardless of color there will be less emphasis on the red and more emphasis on strike, eye appeal, and rarity-
Just my rambling- I am not a player in red copper-
John
My Complete PROOF Lincoln Cent with Major Varieties(1909-2015)Set Registry
Steve - I feel the object of collecting is to complete a set that is matching whether it is Red,Red and brown,brown and red,brown or any circulated grade whether it is AU or very fine. I believe it has to do with passion and time....just like making Love.
Ray - I doubt there are 97% of the collectors out there who are skeptical of collecting red copper. However there are 97% of actors who can never achieve a sustainable income from performing. There are even fewer fine artists. However collecting red copper is my cup of tea.
I know you gave up collecting copper and now collect gold. Are you aware gold is the most altered metal in numismatics ? Enjoy what you collect
Stewart
...but, the vast majority of collectors will never reach your plateau. To them, spending ten thousand dollars on a MS67 1946 Lincoln, of which nearly one billion were struck, when the next grade down, an MS66, trades at $275, well...........it is a decision that must be made with a firmness of experience that the coin is now RED, and will always be RED. Dessicants and dehuidifiers in hand, worry and perhaps sleepless nights...together with the fact that PCGS now has modified the RED copper guarantee....reminds me somewhat of a trip to the casino.
.........and BTW, I still have several RED copper pieces, which together with their packs of dessicants...are tucked away where no eye shall see them.
Frankly, the hobby continues to filter the population of coins, and TPG's have assisted in this. The cream floats to the top and the rest sinks. The removal of the copper guarantee probably does more good to protect the collector's money from this point forward than if it were to stay in place. Over the past 20 years, red coins and "wannabe" red coins have been plucked out and put into TPG holders. Now the "wannabe" coins are being filtered out. Over time, less fresh red coins will come to the market, and the top coins will eventually get ranked and stay that way. Just look at some of the other series that have matured like early copper, trade dollars, etc. This is the future of each series until another breakthrough in coin grading comes along which will further delineate between the finest coins, collector grade coins, and dreck.
IMO, there are three types of coins out there. The finest ones, collector grade coins, and dreck. There is nothing wrong with collecting the finest coins you can afford for each date/mm, or collecting a well matched set of collector coins (whether vg, f, xf, au, or ms63). Dreck can come in any supposed grade. I have been pruning my collection for awhile now. PCGS has bought some of the dreck back. The few that are left are basically writeoffs, and I will get whatever I can get for them and move on. I have a feeling my losses there are more than made up by some of growth in value of my coins that are truly quality coins. There will always be a strong market for them.
Even before the announcement, if I had my choice between an MS64 red cent and an MS65 RB, I might go with the RB. (However, copper is pretty individualistic, so I'd have to look at the coins--and, I'm more of a gold and Morgan dollars guy at the moment, though I did think about filling that long-vacant 1909s VDB spot in my old Lincoln cent collection last coin show.)
I agree that in the long run, the guarantee change won't be a major factor--though I do wonder if PCGS will eventually reconsider their stance now that they're instituting databases that actively seek out coin doctoring.
Take back your insurance, nothing is guaranteed - Tom Petty
I'll remember to do that.
There is a difference in the markets between Lincoln's and Indians. One factor is the Grey Sheet lists RD prices for Lincolns and RB prices for Indians. I think as PCGS's site takes hold for pricing, Indians will benefit in RD more than Lincolns.
I'd also mention the Photo Seal factor.