1 MS vs. 3 or 4 AU - what do you choose?

JDelage · January 17, 2006 8:15AM

Suppose you can either buy 1 MS64 coin, or 3 or 4 AU58. All coins are available, and all coins fit your current interests. They all are fairly graded (neither PQ nor dogs), and they all have the eye appeal commensurate with their grade. You also estimate (subjectively) that neither is irrationaly valued by the market. Finally, you think that the availability are on par (obviously, the MS is scarcer than the AUs, but to get those 3 or 4 AUs would take you as long as to locate a similar MS). Finally, you know that if you buy either situation, you're not going to be able to buy other coins for a few months - say a quarter.

Given this, what would be your decision? Would you go for the higher grade, or would you go for the quantity?

TheRaven · January 17, 2006 8:18AM

I would probably go for the AU-58's.....

RYK · January 17, 2006 8:22AM

It really depends on the coins considered. I can think of circumstances where either would be my best answer.

JDelage · January 17, 2006 8:24AM

<< It really depends on the coins considered. I can think of circumstances where either would be my best answer. >>

What would be the parameters?

coinguy1 · January 17, 2006 8:29AM

Why would you be buying them and which option would give you more enjoyment?

One other alternative - the MS64 and (only) one of the AU58's.

RYK · January 17, 2006 8:33AM

Example:

I would rather have 4 AU Dahlonega $5's than one MS.

I would rather have 1 true MS-62 1855 G $1's than 4 AU-58's.

As a hypothetical, I cannot provide a blanket one-size-fits-all answer.

JDelage · January 17, 2006 8:34AM

<< Example:

I would rather have 4 AU Dahlonega $5's than one MS.

I would rather have 1 true MS-62 1855 G $1's than 4 AU-58's. >>

Can you articulate the reasons why? I think taking the discussion 1 step further in your decision process would be enlightning (for me at least...

)

tjkillian · January 17, 2006 8:36AM

For the coins I like to collect, mid-19th century, I would go with the single MS-64 example.

Tom

RYK · January 17, 2006 8:41AM

Perhaps I would rather have more better date coins and fewer, but nicer, type coins...but I do not even know if this stands up with other examples.

It probably also depends on the price point. One MS 65 merc over 4 AU-58s, but 4 AU $3's over 1 MS-63.

It probably also depends on whether you are collecting the series, speculating on bullion value, putting a type set together, etc.

What is the decision you are weighing?

marmac · January 17, 2006 8:59AM

I think the strategy you take depends on the issue in question. I have one issue in particular that I collect in lower grade because of the cost of an MS example, one of these days I will dump all the low grade examples for one nice MS...

mgoodm3 · January 17, 2006 8:59AM

Probably the MS.

JDelage · January 17, 2006 9:01AM

<< What is the decision you are weighing? >>

Nothing specific - I'm just grappling with the fact day after day that if I want appealing gold, I'm going to have to make some pretty hard compromises, and those questions help me think things through. Even for the relatively common coins, my funds are such that I can't hope to get high MS grades, and even for the lower end, MS60 - MS62, it's going to have to be super duper targeted. In fact, if I want to focus on MS stuff, I'm going to have to drop my ambition to go after no motto gold. If I go for NM, I'm going to have to focus on smaller coins AND lower grades (even high AU will be a stretch)... The idea of collecting "micro coins" (<$5) just doesn't get my blood flowing that much.

See, I'm one of those guys who was born to be rich. You hear often of those poor souls who suddenly inherit / win a dozen million $ and go boinkers. Well I, on the other hand, have exactly the right mental resilience for that kind of experience.

I see something like this and I go "sigh..."

Pinacle's 1913 Saint-Gaudens $20 NGC PR67

RedTiger · January 17, 2006 9:06AM

It is a no-brainer for anyone who has to ask, the AUs. The MS64 may be the better investment, may be more desirable and all of that. The downside of the AUs if the coins are low end for the grade is much less. The liquidity is higher--a person can't sell 1/4 or 1/2 or the MS64, but can sell one or two of the lower grade coins.

I find myself repeating this over and over. It takes the average collector several years to learn to grade consistently. Until that skill is learned, that person is far better off buying coins where the next grade down isn't a big price hit. If a person knows the series well enough to grade it, he/she probably doesn't have to ask this kind of question.

fc · January 17, 2006 9:08AM

warning will robinson on TPG graded coins in the MS60-63
grade range!

watch out for sliders that have rub. for some reason if it still
has lots of luster it gets a bump. i think rub anywhere, makes it
less than MS.

to make it even simpler. AU58 coins often make grades of MS60-63!
your money could be poured down the drain faster than you think.
buying MS62s and really ending up with AU58s.

JDelage · January 17, 2006 9:11AM

<< The downside of the AUs if the coins are low end for the grade is much less. The liquidity is higher--a person can't sell 1/4 or 1/2 or the MS64, but can sell one or two of the lower grade coins. >>

Good points, thanks.

D · January 17, 2006 9:21AM

Providing I could choose the MS grade of the MS coin, I would take the MS coin over the AU coins 8 days a week. One single MS70, or more realistically a 67 or 68 of some coins could more than pay for many AU counterparts. If you were to sell it of course.

-Daniel

RYK · January 17, 2006 9:31AM

I'm just grappling with the fact day after day that if I want appealing gold, I'm going to have to make some pretty hard compromises, and those questions help me think things through. Even for the relatively common coins, my funds are such that I can't hope to get high MS grades, and even for the lower end, MS60 - MS62, it's going to have to be super duper targeted. In fact, if I want to focus on MS stuff, I'm going to have to drop my ambition to go after no motto gold. If I go for NM, I'm going to have to focus on smaller coins AND lower grades (even high AU will be a stretch)... The idea of collecting "micro coins" (<$5) just doesn't get my blood flowing that much.

There is a forum member I know who collects branch mint (mostly NM) $5's, primarily in XF/AU, because he likes the liquidity, appearance, and affordability of the coins in that range. The MS coins are rare, expensive, and relatively illiquid. Many have problems and are overgraded, to boot.

Coindexter · January 17, 2006 9:38AM

Being as my type set is in its infancy and AU58 is a wholly desirable grade for me, I would go with the four AU coins. If my type set were already complete or only required one or two more coins, however, I would definitely opt for the mintstate example.

Fountainhead · January 17, 2006 10:15AM

It would depend upon whether I cared more about the fields or about the devices of a coin. Slight device wear with clear fields is to me an AU-58; no device wear with scratchy fields I consider an MS64.

My preference depends upon the type of coin. For a HR Saint, I want pristine devices; for a Large Cent, clear fields and RB color.

JRocco · January 17, 2006 10:35AM

I have to agree that it really depends on the series. Merc dimes have been mentioned, or use Frankies as an example- there really isn't that much to AU coins in that series (barring the extreme exceptions like the 16D) so I would take the nice rarer MS coin, yet in other series - like early bust quarters or halves, nice AU coins are really hard to come by in some cases and I would rather have 4 nice AU bust quarters then 1 nice MS example.
Only my opinion of course and this is based on the collector in me, NOT the investor in me.

TheRaven · January 17, 2006 11:00AM

Ya have to weight all options and get what you think you will be happy with.....

DaveG · January 17, 2006 11:01AM

First off, what are your goals?

If you're going to be buying pre-1933 US gold coins, you need to be focused.

First of all, why are you buying common coins?

Second, if you're buying type coins (and can handle only buying one coin a quarter), then by all means, go after the highest grade you can afford. Just keep in mind that you may prefer a "matched set" (say all AU-58s) rather than two XF-45s and one MS-64, for example.

Third, you may prefer to follow Dave Bowers' advice to buy just before the big price jump: If an MS-65 is twice the price of an MS-64, you may be better off buying two nice MS-64s instead of one MS-65.

But the main thing is to decide what will make you the happiest and then stick to that plan.

TheRaven · January 17, 2006 11:02AM

I think the price jump point is something huge to look at.....

tradedollarnut · January 17, 2006 11:05AM

For the series I collect, definitely would take the MS64. But I really think it depends on your goals. Which would make you happier in the long run - lots of AU's or a few MS coins? If you're doing the set, can you ever hope to complete it in your lifetime in MS64??? Believe me - a set with MS64's and AU's in it doesn't look as nice as a set of all AU's.

RYK · January 17, 2006 11:20AM

But the main thing is to decide what will make you the happiest and then stick to that plan.

DaveG,

Could you kindly elaborate on this "plan" thingy?

bgrice · January 17, 2006 11:21AM

If the coins in this theoretical question are readily available on the market at any given time I'd opt for the one MS coin. If, on the other hand, they normally can't be found readily in AU-MS grades when you are on the market & looking for them then I would buy the 3-4 AU coins.

MikeInFL · January 17, 2006 11:25AM

The answer lies in what your goals as a collector are...

Personally, if the coins were for my date set (large cents), then I'd choose the AU coins, because that aligns with my goals of building a set of AU large cents.

However, if the coins in question were type coins, then I'd choose the MS coins as aligns with my goals of type collecting.

ColonialCoinUnion · January 17, 2006 11:33AM

I can give you a blanket answer -

I would choose the highest graded, most eye-appealling, highest quality coins I could afford. And I would take into consideration the rims, color, luster, surfaces, centering and strike. And I would make the decision irrespective of the grade on the holders.

100proof1957 · January 17, 2006 11:51AM

For my 1857 set the 4 AU's win !

Bailey1977 · January 19, 2006 3:19PM

morgannut2 · January 19, 2006 3:28PM

In Morgans I traded 2 AU 1894-P's for an pretty MS63 example=== I don't regret the decision, but finacially it was really dumb (the AU55/58's have doubled in value, the MS coins are stagnant)---I think that illustrates the overall market answer to your question, for Morgan dollar keys.

TommyType · January 19, 2006 4:06PM

Late to the game.....but my answer was brought into focus by the parameter that I would be spending approximately 3 months worth of my coin budget.

Taking that into account, and my collecting desires and objectives, the AU-58's are DEFINITELY my answer. I've NEVER paid 3 months worth of budget on one coin, and don't plan to if I can get some nice AU-58's instead!

I'm all about the design...one nice example of each type. AU-58 is the perfect grade.

ccex · January 19, 2006 7:38PM

<< For the series I collect, definitely would take the MS64. But I really think it depends on your goals. Which would make you happier in the long run - lots of AU's or a few MS coins? If you're doing the set, can you ever hope to complete it in your lifetime in MS64??? Believe me - a set with MS64's and AU's in it doesn't look as nice as a set of all AU's. >>

For the series I collect (Barbers), definitely wuld take the 4 AU coins, since I will neverhave the funds for an MS-64 set. The definitive references on Barbers (by David Lawrence) mention several collectors attempting to complete a nice AU set where D.L. had to fill the holes with MS coins.

1 MS vs. 3 or 4 AU - what do you choose?

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