Doug Winter blog-- Undervalued US Gold Coins in the $1,500 to $3,500 Range
Longacre
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I was reading one of the recent Doug Winter blogs about undervalued gold coins. He listed some interesting serices. I copied one of his suggestions below. I have a few questions at the bottom of this post. Here is the excerpt:
"Philadelphia and San Francisco Quarter Eagles, 1865-1876.
Many of the quarter eagles made from 1865 through 1876 at the Philadelphia and San Francisco mint are scarcer than their southern counterparts at half the price.
My favorite sleeper dates are the 1867, 1869, 1870, 1870-S, 1872 and 1876. Not a single one of these will cost you more than $2,000-3,000 in nice AU grades and the beauty of these dates is that, when available, they tend to be quite well made and reasonably attractive.
Are these coins good “investments?” I doubt it, unless you move up the ladder and buy nice Uncirculated pieces (which, as Mr. Mlaker will remind me, is an elitist sentiment…) which seem like very good value to me."
Questions:
(1) What is meant by "these coins are not good investments"? If this series of coins are undervalued, does that by definition make them a "good investment"?
(2) By "good investment", does he mean financial return, or something else? Does "investment" mean "collector value", especially since he says you have to move up the ladder to AU to reach the good investment threshold? If not, then why mention you need to get to the AU level for a particular reason?
"Philadelphia and San Francisco Quarter Eagles, 1865-1876.
Many of the quarter eagles made from 1865 through 1876 at the Philadelphia and San Francisco mint are scarcer than their southern counterparts at half the price.
My favorite sleeper dates are the 1867, 1869, 1870, 1870-S, 1872 and 1876. Not a single one of these will cost you more than $2,000-3,000 in nice AU grades and the beauty of these dates is that, when available, they tend to be quite well made and reasonably attractive.
Are these coins good “investments?” I doubt it, unless you move up the ladder and buy nice Uncirculated pieces (which, as Mr. Mlaker will remind me, is an elitist sentiment…) which seem like very good value to me."
Questions:
(1) What is meant by "these coins are not good investments"? If this series of coins are undervalued, does that by definition make them a "good investment"?
(2) By "good investment", does he mean financial return, or something else? Does "investment" mean "collector value", especially since he says you have to move up the ladder to AU to reach the good investment threshold? If not, then why mention you need to get to the AU level for a particular reason?
Always took candy from strangers
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
0
Comments
<< <i>I was reading one of the recent Doug Winter blogs about undervalued gold coins. He listed some interesting serices. I copied one of his suggestions below. I have a few questions at the bottom of this post. Here is the excerpt:
"Philadelphia and San Francisco Quarter Eagles, 1865-1876.
Many of the quarter eagles made from 1865 through 1876 at the Philadelphia and San Francisco mint are scarcer than their southern counterparts at half the price.
My favorite sleeper dates are the 1867, 1869, 1870, 1870-S, 1872 and 1876. Not a single one of these will cost you more than $2,000-3,000 in nice AU grades and the beauty of these dates is that, when available, they tend to be quite well made and reasonably attractive.
Are these coins good “investments?” I doubt it, unless you move up the ladder and buy nice Uncirculated pieces (which, as Mr. Mlaker will remind me, is an elitist sentiment…) which seem like very good value to me."
Questions:
(1) What is meant by "these coins are not good investments"? If this series of coins are undervalued, does that by definition make them a "good investment"?
(2) By "good investment", does he mean financial return, or something else? Does "investment" mean "collector value", especially since he says you have to move up the ladder to AU to reach the good investment threshold? If not, then why mention you need to get to the AU level for a particular reason? >>
Short of being able to peer into his mind I would interpret his message and answer your questions as follows:"
They are not good investments in that they are relatively cheap to their Southern counterparts, but that does not mean they will increase in value at anything above an average rate of the market on a whole. Scarce is one one part of the equation. There has to be demand on the other, and he may be referencing that the demand side for Philadelphia Mint coins will never be what it is for its' Southern brethren.
Good investment means it will it go up in value greater than the general market. He is saying that he does not see the market for AU Philadelphia coin increasing in value at a rate to be considered (in his mind) a "good" return (or more accurately not "above average").
Thanks for letting me play.
undervalued = low demand.
<< <i>Questions:
(1) What is meant by "these coins are not good investments"? If this series of coins are undervalued, does that by definition make them a "good investment"?
(2) By "good investment", does he mean financial return, or something else? Does "investment" mean "collector value", especially since he says you have to move up the ladder to AU to reach the good investment threshold? If not, then why mention you need to get to the AU level for a particular reason? >>
I wondered too what Doug meant when I read his blog earlier this week.
If we are considering financial return the noted coins are not good investments in XF/AU. Apart from the southern mint issues the Lib $2.50 series attracts little interest. I believe Doug is pointing out their collector value as overlooked low mintage issues with comparatively small surviving populations.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
<< <i>from the "Keets" dictionary of Numismatic terms.................
undervalued = low demand. >>
In the world of scarce date 19th century coins, "undervalued" usually means low surviving pops yet to be recognized by the general hobby.
Seated coins were in that world from 1970-2002. Each year they got a little more recognized. I have no doubt there are plenty of 19th century gold
coins that are still unrecognized by most because not many people build full sets of things like $2-1/2, $5 or $10 Libs. The cost of building full or nearly full sets of
Lib seated quarters or $5 and $10 Libs is cost prohibitive, not to mention hard to do. That's what turns most people away. Yeah, the demand is low. But the
pops are very low as well. Eventually people realize that an 1870-s $2-1/2 or 1872-s 25c is many times rarer and cheaper than a "common" 1901-s quarter and say, "why not"?
Undervalued in this case doesn't stay undervalued forever. Collectors and investors will eventually ferret these coins out because they are very undervalued.
<< <i>from the "Keets" dictionary of Numismatic terms.................
undervalued = low demand. >>
I think I have that book in my library.
The definition sounds about right to me.
Mike
to be undervalued well into the future.
And yes, I think he meant investment in the sense of return on capital outlay.
<< <i>Something that is "undervalued" can be a poor investment if it is projected to continue
to be undervalued well into the future.
And yes, I think he meant investment in the sense of return on capital outlay. >>
If it is projected to continue to be undervalued well into the future, it is properly valued.
Not, undervalued. Coin values are determined by supply and demand.
A clearer example is gold bullion. Is it undervalued, overvalued, or properly valued? Answer: properly valued
based on supply and demand right now.
Remember someone once asked Yogi what time it was and he replied "you mean right now?"
<< <i>In the stock market, you could stretch the Price/Earnings ratio to measure demand. Some stocks such as ALU have low P/E ratios indicating they are under valued and stock analysts sometimes define low P/E stocks as value stocks. On the opposite end of the spectrum, overvalued stocks (coins) are considered growth stocks (GMCR before Einhorn, Amazon, etc). >>
I agree with your analysis, but have to say that while I consider AMZN to be overvalued, the market considers it to be fairly valued. It may turn out that I am wrong and Amazon grows into its price earnings ratio. To paraphrase DW, I think that Amazon is overvalued and will continue to be overvalued. That is, however, a finite statement. Eventually, AMZN will trade at a level that I would consider to represent fair valuation. There is more data available with which one can estimate the future value of Amazon than there is for a certain date range of quarter eagles from the Philadelphia mint.
I can say that GE was overvalued at 58 and undervalued at 6, but only with the benefit of hindsight.