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!

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.

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?

Tom Reynolds Large Cents - Thanks for the Memories!

Well, the auction of the Tom Reynolds large cents is now in the books. It was a memorable sale that falls just short of the legendary category.
There were a lot of memorable coins in the sale. The venue for the auction was the Intercontinental Hotel in West L.A., which proved to be a very comfortable and inviting place for a coin sale. The pre-sale publicity was well handled, and the cataloging & photography of the auction lots was masterfully done.
All of this positive energy was countered by a sagging coin market, and the stock market turmoil of the past month. The net result was a coin sale in which a large number of important early large cents traded hands without great fanfare, and without many new price records.
My impressions from the Reynolds auction are shared below (in random order):

There were no million dollar coins in this sale (and, none were expected). Five lots did pierce the $100K mark [a 1793 Chain Cent (LOT-1), a choice 1793 S9 Wreath Cent in PCGS MS65BN (LOT-3), another 1793 Wreath S-10 in PCGS MS64BN (LOT-5), a stunning 1798 Draped Bust Cent with Rev. of 1795 (S155) in unsurpassed PCGS MS65BN (LOT-141), and a remarkable 1809 Classic Head Cent (LOT-311)].

By my count, 131 of the 332 numismatic lots in the Reynolds sale brought a hammer price lower than the pre-sale estimate. There are a number of possible explanations for this occurrence, but the simplest (and most defensible) is that the estimates were formulated at an earlier time, when the coin market was in better health. Obviously, a year-long decline in commodity prices, and the poor performance turned in by the U.S. equities market in Jan. 2016 had an impact on the confidence of rare coin buyers.

Some dates and some series fared better than others. The prices realized by 1793 cents were more-or-less in line with my expectations. 1794 cents did rather well, as the collector base for this date is quite strong, and this sale offered a unique opportunity to bid for condition census pieces. To my surprise, cents from 1796 were rather weak. I am not sure how to explain the paltry prices realized by the cents from this year, and I will need to do some more research on this topic. Prices for Draped Bust cents (1796-1807) were generally soft, although a few exceptional pieces created a bidding frenzy. Classic Head coins (1808-1814) seemed to be in ascendancy, with strong bidding observed for all but the most common varieties.

Throughout the past year, there have been comments (verbal and written) among early copper enthusiasts, that collecting of early date cents by Sheldon variety, with the aim of completing the entire series was no longer popular. According to these theorists, a full Sheldon set had become prohibitively expensive, and younger collectors were more interested in high-grade date sets or specialized (eg. Red Book) sets of cents. The results from this auction proved that variety collecting remains very much alive. To cite just a few examples: LOT-9,  a 1793 S-12 (R6) in PCGS G-6 was hammered for $22K (more than double the estimate of $10K). LOT-23, a 1794 S-33 (R6), the famous "Wheel-spoke Reverse" in PCGS VG-8 hammered for $23K (vs. estimate of $15K). LOT-122, a 1798 S-144 (R5+) in PCGS VG-8 hammered for $7750 (vs. estimate of $5000). Finally, LOT-242, an 1801 S217 (R6+) in PCGS F-12 (and #8 in the condition census) hammered for $14,500 (the estimate was $15,000).

Easily the biggest upside surprise of this sale (for me) was provided by LOT-271. An 1807 S-274 (R2) in PCGS AU-53 with a pre-sale estimate of $6000 soared all the way to a hammer price of $46,000! I later learned that the reason for this stellar performance was competition among PCGS set registry collectors. Not far behind this surprise was LOT-222. An 1800 S-201 (R4+) graded VF-30 by PCGS with a pre-sale estimate of $2000. The hammer price for this coin was $10,500!

The biggest downside surprise in the sale was provided by LOT-216. A rare variety of 1800/79 overdate (S-195 / R5) graded EF-40 by PCGS. This coin was hammered for $3300 vs. a pre-sale estimate of $10,000! Perhaps the new owner feels good about getting a bargain. Right behind this coin on the downside was LOT-54. A 1795 Liberty Cap cent (S-76a / R5) graded EF-45 by PCGS, but with numerous rim nicks. This coin hammered for $5000 vs. an estimate of $15,000. It is interesting to note that a similar situation arose when the Paul Gerrie 1795 S76a was sold by Goldbergs in 2013.