Tuesday, September 26, 2017

Directions in Copper & Coins

I have been absent from the blog scene for personal reasons. But, I continue to participate in the coin market, and have been observing the shifts underway in the market for early copper coins. A few of my observations are summarized as follows:
> The coin market (in general) continues to mark time. Coin collectors have learned to be patient. The opportunity to acquire a truly rare coin always trumps the circumstances of the current market ups & downs. Generic material remains very weak. However, marquee coins continue to sell at reasonable prices (bargains, one might possibly argue). There are a number of forces exerting influence on the coin market today. Uncertainty is high, due to both economic and political factors. The overall economy, while appearing strong on the surface, faces a number of headwinds. Interest rates, energy prices, currency values are all at historically high levels of volatility. A long bull market in equities faces an uncertain future. Gold remains stable (?) at 2-year old levels. A break-out feels imminent.
> Coin collecting is faced with an additional worry - the demographic challenge. The old guard is beginning to liquidate, and newcomers to copper are less inclined to follow the old ways. Full sets, by Sheldon or Newcomb # are no longer in vogue. There are so many other collecting themes to consider - die-state collecting, date-specific, RED BOOK sets, error collections. This is challenging the traditional models for value. R5 once represented a desirable coin (population less than 75). but, what if only 50 people find themselves wanting one? Well.... there will be fewer bidders. That is the new reality. But, what if a new terminal die-state is found for an R1 variety:  now, THAT is interesting! This is how it has always been with collecting. The shift is neither new nor should it be surprising.
> GRADING! This is a subject that could fill a book. Since 1986, we have witnessed the era of the third-party-grading service (TPG). There is no denying the success of the TPG, as a business. What about the success from the perspective of the coin hobby? Well, in fairness, there have been some positive developments: Authentication, as part of the TPG service, has gone a long way to remove counterfeit & altered coins from the market place. Certification has also created value in the form of "perceived good" coins (ie. coins that the services deem fit for numerical grades). The "bad" coins (those deemed unfit by the grading services, and given "details" grades) have suffered a great deal of persecution in the marketplace. Is this fair? That depends upon your perspective of the role of the TPG. They have become the "arbiters" of good & bad in the coin marker. Those willing to accept the  judgement of the TPG hold the products of that judgement. Those willing to think on their own may hold some questionable (?) coins. One day, when the third-party grading paradigm is discarded, these questionable items may find increased market acceptance. When might this occur? Probably not soon enough to save today's owners. But, the coin market is ultimately rational, and the time will come when rarity & condition (in the absolute sense) will prevail over "condition rarity" (as defined by population reports). This is (admittedly) an optimistic scenario for the triumph of logic over propaganda. Time will tell whether it is an accurate forecast.
> What about coin collecting? Will it survive the transition to a "cashless" society? We have witnessed the steep decline in stamp collecting. That should send a collective chill up the spines of today's coin collectors. Most of the stamps collected over the past 50 years are best licked and used to send out letters today! Could this also happen to coins? Well, in some cases, YES! Those double albums of statehood quarters, culled from circulation, are doomed to the tip jars of the world. The fate should be different for the classic coins from the 18th & 19th century. The abandonment of coinage in the U.S. might actually lead to a resurgence of interest in classic old coins. Rarity and history might combine to create a virtuous cycle for collectors of classic U.S. coinage. Again, I admit to a touch of romanticism and optimism combined. But, I hope I am right!

Sunday, April 16, 2017

A little note about Numismatic Literature

I recently made the acquaintance of a young man who works at a local business, and he expressed an interest in coins after learning that I am an avid collector. Lately, each time I see this fellow, he either asks me what I have that is "new", or he entertains me with a story of some numismatic item that he found.
I remember being surprised by his interest, since I thought that everyone his age was infatuated with high-tech "toys", and had no interest in "old school" hobbies like collecting. I decided to try to inspire this kid, by gifting a few numismatic books to him.
The first gift was the modern classic "100 Greatest U.S. Coins" by Jeff Garrett and Ron Guth. I just happened to obtain a duplicate copy of the 2nd edition, and the intent of the gift was "shock & awe", at both the beauty and the value of some of our finest coins.

Next, after we had a discussion about mint-marks on Mercury dimes, I gave the young man two different books. First, an early edition of "A.N.A. Grading Standards" (I purchased a newer edition for my own use). Second was an earlier edition of "The Cherrypicker's Guide To Rare Die Varieties" by Bill Fivaz and J.T. Stanton. These two books have a lot of practical value for a new numismatist.

I began to reminisce about my own beginnings with numismatic literature.
My interest in U.S. coins began to stir in the late 1980's. I occasionally visited the retail coin shop of Steve Estes PN. Steve kept a stock of coin books for sale, and the first one I spent real money for was another classic: "The History of United States Coinage as Illustrated by the Garrett Collection" written by Q. David Bowers, who is one of the preeminent numismatists of our time (and a prolific author) . Dave wrote this book as a tribute to the famous Garrett family collection at the time of the collection's sale (by his firm, Bowers & Ruddy). The collection had been donated by the Garrett family to the Johns Hopkins University in Baltimore, MD, and board of Johns Hopkins made the decision to sell.

This volume remains one of the keystones to my numismatic library, and I can still recommend it as a good way to learn about U.S. coinage and one of America's earliest and most devoted collectors, T. Harrison Garrett. I remember being enthralled by the image of the Garrett family home (known as Evergreen House) in north Baltimore, and the thrill of actually visiting Evergreen House and taking the tour over 15 years later.
My next big numismatic literature purchase was "Walter Breen's Complete Encyclopedia of U.S. and Colonial Coins". As the title implies, this was an ambitious effort to cover (in great detail) the colonial coinage of the early U.S. (ie. prior to the establishment of the U.S. Mint and commencement of coin production in 1793), all the regular-issue U.S. coinage (plus proof and commemorative issues), and even much of the private & territorial coins of the U.S. Breen supplemented his encyclopedic understanding of each series with amusing (and occasionally factual) anecdotes concerning the production and/or the collecting of particular coinage issues. Breen's work covered the important types for each series, while leaving the exhaustive variety-by-variety analysis to other authors. By that time, I had become involved in collecting large cents, and it was Breen who informed me about some of the important cent hoards and accumulations (eg. The Nichols Find and the Randall Hoard) and the fact that some coins are important enough to have names of their own (eg. "THE COIN", which refers to a particular 1793 Chain Cent).

Tuesday, February 21, 2017

Goldbergs Feb. 2017 Pre-Long Beach sale - Auction Commentary

The Goldbergs held their traditional pre-Long Beach copper auction on Sunday Feb. 12 at the Intercontinental Hotel in L.A. The ballroom was full, but not overcrowded, and the bidding was lively, even though the pace of the action was slow (about 40 lots / hour).

There were five coin collections to sell: 1. The Haig Koshkarian Red Book Large Cent Set. 2. Tom Reynolds Part-2 Large Cents. 3. The Chuck Heck 1794 Large Cent Set. 4. The Pierre Fricke Color Set of Large Cents. and 5. The Bruce Tucker Collection.

The question in my mind, going into this sale, was whether the copper market could shake off the doldrums that seemed to settle over the market last summer. This auction provided an affirmative answer, but with a few caveats. Allow me to elaborate a little:

  • The Koshkarian coins were carefully chosen coins of generally high quality. Many of the coins represented rare opportunities for bidders, which can often lead to runaway bidding. This happened from time-to-time during the Koshkarian sale, but not too often. Bidders were selective.

  • > The first upside surprise was provided by LOT 3, a 1793 Chain Cent (S-4) graded PCGS AU-50 (though only an EAC VF-30). This coin hammered for $140,000 vs. a $65,000 estimate.
    > Just two lots later (LOT 5), a 1793 Wreath Cent, lettered edge (S-11c) graded PCGS AU-55 was hammered for $48,000 vs. a 75,000 estimate. A real bargain considering this very coin sold for $92,000 in 2011!
    > Two lots later (LOT 7) a rather attractive 1794 Hd. of 93 Cent (S-20b / R5) hammered for just $20,000 vs. an estimate of $30,000. Here, the reason appears to be the PCGS "Genuine" holder. Almost every coin that PCGS did not deem gradeable was punished mercilessly by the bidders.
    > The next upside surprise was LOT 21. A very attractive 1797 Draped Bust Cent with Rev. of 1795 (S-120a) graded PCGS AU-58 was bid to $70,000 vs. an estimate of only $18,000! I suspect PCGS registry set bidders in this case.
    > The Koshkarian 1804 cent (LOT 50, S-266c) (PCGS AU-55) brought a winning bid of $165,000 vs. an estimate of $45,000. A strong price for the 2nd-finest PCGS-graded coin.
    > LOT 58, a very nice 1807 S-276 graded PCGS MS-62 was bid all the way to $95,000 vs. the estimate of $10,000. The hammer price defies explanation.
    > The Koshkarian 1826/5 N-8 cent, graded PCGS MS-64 went for a hammer of $23,000 vs. an estimate of $7500. A remarkable price for a really nice coin.
    > LOT 127, an 1844/81 N-2 cent graded PCGS MS64 RB was hammered for $65,000 (estimate was $25,000). The result is not surprising for the finest-graded coin of a popular overdate variety.

  • The Reynolds coins were basically everything "left over" after Reynolds part-1, which was held at the same place a year earlier. Naturally, there were still a few nice coins in this sale; but the marquee coins were sold a year ago.

  • > LOT 174 provided the first upside surprise of the Reynolds coins. This beautiful 1798 S-167 cent graded PCGS AU-58 carried a pre-sale estimate of $5000 and hammered for $27,000! I will admit that the coin was indeed a beauty.
    > The 1800 NC-4 cent in the Reynolds collection (LOT 197, graded G4 by PCGS) was bid to $11,000 vs. an estimate of $2000. A case of a very conservative estimate.
    > LOT 225 in the Reynolds sale was an 1805 S-267 graded PCGS MS-65BN hammered at $44,000 vs. the estimate of just $15,000. I should note that this coin is also listed as CC#1 in the Noyes EAC census for the variety.

  • The Chuck Heck collection was an entirely different kind of sale from the previous two collections. The Heck coins were virtually all "raw" coins (no slab grades), and this auction was a collector-to-collector sale. The energy and enthusiasm that greeted the Heck coins was an encouraging sign to me. It convinced me that there are still people out there interested in owning nice coins (with or without the slab). The prices exceeded expectations nearly across the board. Notable coins included:

  • > LOT 273 was the famous Chuck Heck Sheldon-37, with a provenance extending back to 1910. This lot was bid with enthusiasm to $100,000 (estimate was $40,000).
    > LOT 292 was a 1794 Starred Reverse Cent (S-48) graded PCGS G-6 (the holder needed more for authenticity than grade). The hammer fell at $25,000 (vs. estimate of $12,000).

  • The Pierre Fricke color set met my expectations. There were not too many surprises among these lots.

  • > LOT 384 was one exception. This beautiful 1821 N-1 cent graded AU58+ by PCGS got bid all the way to $12,500 (estimate was $4000). I admit I liked this coin a lot, and would have been happy to own it (just not at the price it ultimately realized).

  • The Bruce Tucker collection contained a lot of nice coins, but not a lot of outstanding rarities. The collection came up very late in the sale, but I do not believe the prices suffered much as a result. There were still many internet bidders on-line at this hour, and these folks might have been shut out by floor bidders on the earlier material. At any rate, the Tucker coins sold at very reasonable levels.
  • Friday, January 20, 2017

    Beyond the Yellow Brick Road

    Happy New Year to all fans of coins, and especially to fans of early copper coins! I am excited about the collecting year ahead of us. The past year saw rare coin prices languish somewhat, but there are reasons to be optimistic. For one, there is a large auction of copper coming in early Feb. The Goldbergs have announced the sale of four large collections on a single day. Later, the Pogue Collection (Part-V) is scheduled at Stacks / Bowers. Records could fall!
    In other coin news, I just happened to be on-line watching the recent Heritage Auctions internet session, and I witnessed something that altered my understanding of the rare coin market: A 2004 Texas statehood quarter, graded NGC MS-69 was sold for $3055! That is NOT a typo. No, I did not forget to put the decimal point into that price. A single statehood quarter sold for Three Grand! The coin was part of a NGC Registry Set collection known as "The Mile High Collection". Now, for the really astounding part - this was not the highest price for a statehood quarter from this collection. A 1999 Pennsylvania quarter (also NGC MS-69) sold for $7050! WOW!
    You can find the entire Mile High Collection auction at the Heritage web site. I will provide a link here:
    The prices realized by these statehood quarters are a surprise to me because: 1. I do not collect this series. Therefore I do not really know how to grade the coins, or what the appropriate values should be. 2. I do collect early copper coins (half cents & large cents), and I have a pretty good idea of what can be purchased for $3000 in these categories (you can get something really NICE for $3K). 3. The statehood quarters are (for the most part) 21st-century U.S. coins, so they are plentiful. I believe there are many rolls of such coins (in uncirculated condition) sitting in desk drawers. 4. The MS-69 coins which sold for so much money are so-called "condition rarities". However, a huge overhang of "ungraded" coins is out there. If/when these are certified, the populations of these higher grade ranges can be radically increased. Would someone be willing to pay $3000 for a 2004 Texas quarter in MS-69 if they knew the population was 100, rather than 1? I would think not.
    I urge you to consider your own collecting / investing strategy. Are you buying coins for pleasure or profit (or both)? Are you spending hundreds (or thousands) of dollars per coin? Are you buying coins that have proven rarity, or are you buying low population modern coins (according to the grading service pop reports)? Have fun, but be careful!

    Sunday, September 18, 2016

    The Al Boka 1794 Large Cents - Post Auction Commentary

    The Al Boka Collection of 1794 cents was sold by Heritage Auctions in Long Beach, CA on Sept. 8, 2016. A specialized collection assembled with great passion and devotion (plus a little hard cash) over more than 10 years, The Boka collection is memorable for both the high quality of the coins and the extraordinary provenance that accompanies each coin. The names associated with these cents include virtually all the legendary figures from early copper collecting. Names like Maris, Garrett, Newcomb, Downing, Sheldon, Paschal, Halpern, Adams, Naftzger, Brown, Robinson, Loring, Husak, Rasmussen, and Holmes can all be found. The thrill of owning a coin that once graced the collection of any of these numismatic giants goes well beyond the mere pleasure of holding a beautiful object of historical importance. Al well understood the value of provenance, which is the central theme of the book he devoted to this collecting specialty, titled "Provenance Gallery of the year 1794".
    I was not able to attend this sale in person, having made an earlier, unfortunate decision to go on vacation in Europe during the week of the auction. However, I watched the results with much interest, and would like to report here on the results for the 5 special coins that I mentioned in my prior post about Al's collection.

  • LOT 5302 1794 S-18b PCGS AU58. This wonderful "Head of 93" cent was sold for $176,250. While this is not a price record for the variety, the price reflects both the high quality of the coin, and its solid provenance, going back to 1945.

  • LOT 5320 1794 S-35 PCGS AU50. The 2nd finest known S-35 (and finest available to collectors) was sold for $64,625. The price reflects not only the scarcity of this piece (the variety is rated R5, with fewer than 75 known to exist), but a stellar provenance dating to 1965.

  • LOT 5333 1794 S-48 (Starred Reverse) PCGS VF35. This famous cent is the "Discovery Coin" for the variety, tracing its ownership back to 1878 when the Chapman Brothers found it. It sold for $258,500. This price is not a record for the variety (that record is held by the Walter Husak coin, which Heritage sold in 2008). However, the new owner can revel in having acquired a beautiful and important historical artifact.

  • LOT 5343 1794 S-58 PCGS MS62. A beautiful coin with a short history of ownership - Al Boka purchased this coin from a collector who inherited the coin from his great-uncle, who had purchased it in the 1950's. This finest-known coin for the variety was sold for $51,700.

  • LOT 5351 1794 S-66 PCGS VF30. Although this example of the scarce "Split Pole" variety is a modest grade of VF30, it is the finest known. Furthermore, its provenance reads like a who's who of large cent collecting, and runs all the way back to 1914. It sold for $82,250. That price is an accurate reflection of the desirability of this beauty.

  • The entire Boka collection of 1794's (58 coins) brought $1,857,381. Of course, this is just a number (although it is a pretty big number). It is safe to say that this is the last time all of these unique coins will be together in one place. For all of the Al Boka 1794's, the odyssey continues!

    Sunday, August 28, 2016

    The Al Boka Large Cents - Keep an Eye on These Coins!

    Heritage Auctions will sell the Al Boka Collection of 1794 Large Cents on Sept. 8, 2016. This is sure to be a notable auction of a very significant specialized collection. In spite of the brevity of the sale (just 58 coins), a number of very important early U.S. Cents will find new homes.
    The Boka Collection is literally filled with important coins from 1794. Yet, for me there are a handful that stand out, even among this stellar group. Below are my personal favorites, along with my reason(s) for liking them so much:

    LOT 5302 1794 S-18b (Head of 93) - This coin is not only rare (the variety is rated R4) but it is beautiful. The color and surfaces are virtually without fault. It is rated as the 5th-finest known, and is without doubt one of the finest "Heads-of-93" you will ever encounter!

    LOT 5320 1794 S-35 - The second finest known coin for the variety, and the finest available to collectors (Coin#1 is impounded in the ANS Collection). S-35 is quite scarce overall (rated R5). This coin represents the latest known die-state, with a prominent crack bisecting the obverse in spectacular fashion.

    LOT 5333 1794 S-48 - The Discovery Coin for the famous "Starred Reverse" 1794 Cent. This distinction (as the discovery specimen) elevates this coin to superstar status among all large cents. In addition, the coin itself is quite impressive. It is the 5th finest known, and all of the famous stars on the rev. are prominently displayed. What a Wonder Coin!

    LOT 5343 1794 S-58 - The aspect of this coin that sets it apart is not its overall rarity (the variety is just R3), but rather its stellar condition. Rated as MS60 by EAC standards (PCGS MS62), this coin stands alone atop the condition census for S-58.

    LOT 5351 1794 S-66 - The Boka S-66 is the finest known for the variety, in spite of its modest grade (VF25 by EAC standards). The variety is quite scarce overall (R5). The S-66 is known as the "Split Pole" variety, due to a die-break that develops along the forward extension of the pole in front of Miss Liberty's neck. The Boka coin exhibits a very prominent split pole, along with superb color and above average surfaces.

    Thursday, June 16, 2016

    The challenges for coin collectors

    Coin collecting is a hobby, right? It is meant to be relaxing and fun, Right?
    Well, that is probably the right way to think about it. That was probably the way it felt for most of us in the beginning. But, things never stand still, and always move forward. Coins can appreciate in value with time. Prudent purchases of rare coins can turn out to be wise investments. Knowledge is power, and all that.
    Looking back to my own numismatic awakenings, I now see that period of time as very different for collectors from the present. It was the early 1980's. Rare coins were available, but you had to physically "go and hunt" for them. There were coin shops and coin shows, but there was no internet marketplace. The only grading service was ANACS, and they were issuing certificates (not using encapsulation). Grading standards were "fluid" (to say the least).
    Fast forward a few years, and the rare coin market began to flourish, with confidence injected by PCGS and other 3rd-party graders. Coin grading accuracy became a paramount concern. The value of Grade vs. Rarity was debated. The term "Condition Rarity" was invented. On-line price guides, together with a plethora of specialized reference books resulted in an explosion of available information. Knowledge was still power.
    The coin market today is both wide-spread (thanks to national auction companies and the internet), and highly specialized (Early copper, Morgan Dollars, FBL Franklins, FSB Mercuries, etc.). We have come a long way (I will leave it to others to debate whether we have made progress, or have moved backwards - that is a moot point, as we are here now).
    In spite of all this apparent progress (eg. change), I think there are existential threats to the coin market that are too big to be ignored. Here (in random order), are some of the ominous trends I see just ahead:
    1. Coin use is in decline. Demand for circulating U.S. coins is in a long-term downward trend. This trend is being driven not just by the increasing cost of making the coins, but by the increasing use of debit cards (and other technology) as an alternative to cash. You may argue that this trend is not relevant to collectible coins, which are rare & desirable objects in their own right. There is some truth to this. However, this argument fails to address the longer term issue: who will want to collect coins when there is no one alive with direct experience with their use in daily life?
    2. Coin collectors are aging. I do not have any handy statistic to quote regarding the median age of the U.S. coin collector population. However, I have anecdotal evidence that tells me two things: One - the collector base is largely male. Two - the collector base is aging. The problem for the coin market is compound: not only are the current owners of rare coins reaching the age where they wish to sell their collections, but the size of the collector base to absorb those coins is shrinking. Basic economics (supply vs. demand) can readily predict the outcome of such a scenario: lower prices for rare coins!
    3. Grading standards are not fixed. I realize it is heresy to say that grading standards have changed (after all, we call them "standards" don't we?). But, let us not shrink from the fact that the third-party grading services (TPG) practice "market grading" vs. "technical grading". Technical grading standards should remain the same. But there are Bull markets for coins (when prices are increasing), and there are Bear markets (when prices stay flat or decrease). It is commonly accepted that market grading standards become more liberal during bull markets and more conservative during bears. Yesterday's MS64 is today's MS63, and the old VF20 is now F15, etc. Coins that are graded & encapsulated in TPG holders during Bull markets still carry that optimistic grade, but will not command the same market price during a Bear market. The result is typically lower bid prices. The lower bids are duly noted and reported by the price guides, and the downward spiral of prices is amplified. Naturally, the converse of this process can also occur when the market cycle turns from bust-to-boom again. However, savvy dealers and collectors know how to remedy that situation - they simply "crack out" all the conservatively graded coins and resubmit them for higher Bull market grades!
    4. Costs keep rising. Table rent at coin shows is higher. Airline tickets and hotel rooms also get more expensive over time. The coin dealer is now being squeezed. Costs are heading higher, but the prices collectors are willing to pay for the products do not seem to be moving up at the same rate. The only answer for the dealer is to seek more on-line business, and limit travel to coin shows. This will invariably lead to fewer coin shows, and concentration of activity at the few "premier" shows that survive.

    Conclusion: I apologize if this post seems overly pessimistic. I still enjoy collecting coins, and I consider it a terrific hobby and pastime. I wonder how many people in the U.S. will know what purpose coins serve in 2066?