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NumisMedia Monthly


Our monthly article detailing specific areas

of numismatics for dealers, collectors, and

investors of United States Rare Coins




November 2015

Timing is Key to Investing in Rare Coins

     Long time numismatic experts study historical sales of all true rarities to help determine the long-term potential for a specific rarity. Many will research past major auctions, following the path of various coins, to analyze how they were graded in the earlier years and examine historical photos, when available, to see if the coins had been altered in any way. Keep in mind, before the certification services applied numerical grading, the descriptions for quality were inconsistent and all over the board. Uncirculated was the lowest Mint State description, followed by BU for Brilliant Uncirculated, Choice BU, and then Gem BU. Of course, every dealer had their own qualifiers and many still use these today in addition to the numeric grade. Look how CAC caught on and has become a major sales tool for exceptional quality coins and especially for those truly rare coins.

     Collectors and dealers are always on the lookout for coins that have potential for future profits; it takes a good eye for quality, knowledge of the current market, and historical comparisons. Below are a few examples of rare coins that have sold recently along with some of the history of their previous sales in auctions. In all three comparisons, these very notable coins were held on to by their owners for some time which produced greater profits.

     The 1880 $4 Gold Coiled Hair Stella sold in April of this year for $1,821,250, graded by NGC as PR67 and had the CAC approval as well. This coin traces back to the DuPont Collection prior to 1982; it later realized $440,000 in a 1991 Superior Sale. This is the only PR67 coin certified by PCGS or NGC although there are three listed by NGC in PR67 Cameo. One of those sold in September 2013 for $2,574,000 which was well over its previous sale of $977,500 at the January 2005 Heritage Auctions FUN Sale.

     The 1927 D $20 Gold St. Gaudens in NGC MS66 sold at the January 2014 Heritage Auctions FUN Sale for $1,997,500. Four years earlier, Heritage sold a PCGS MS66 coin for $1,495,000 to Legend Numismatics; that is a price increase of more than a half million dollars in four years. Of course, no two coins are alike, so this may or may not be a perfect example of expected profits. But here is what we do know. The NGC coin that sold for nearly $2 million is the very same coin that was purchased by Dr. Steven Duckor in 1984 for $198,000. It was then sold in 1998 as a PCGS MS65 for $577,500; a lovely profit for the good doctor. The coin then went unsold in a 2001 Superior Sale before it found its eventual way to a consignor who sold it for $1,997,500. Although we do not know how much was paid for this coin previous to this final sale, we do know there was plenty of profit from the last known sale price of $577,500 to the final sale price of $1,997,500. The current population shows five PCGS coins and two NGC coins in MS66; there is only one in PCGS MS67.

     The 1796 Draped Bust Half Dollar with 16 Stars, graded PCGS MS64, sold as part of the Gardner Sale in May of this year, brought $329,000. This is one of just two coins certified in MS64, the other by NGC; NGC also shows two coins in MS65. This coin can be traced back to the American Numismatic Rarities Sale in March 2004 where it brought $276,000; however, it has sold on several occasions between 2004 and the Heritage Auctions Sale earlier this year.

     All of these examples are the types of coins that advanced collectors look to buy and then put away for a period time. This is the primary reason why you see some dramatic increases in value. And there are hundreds of other coins that could have been used for this article as well. Below are a few other rarities that have sold in the past year, listed with the latest sales prices realized, along with the previous sales prices realized of the same or similar coin.

Date/DenominationGradeLatest Price
Realized
Previous Price
Realized
1838 O Capped Bust Half DollarPCGS SP50$293,750
Heritage 8/15
$253,000
Stack’s 10/06
1799 $10 Gold Heraldic EaglePCGS MS65 CAC$376,000
Heritage 4/15
$241,500
Stack’s 8/06
1801 $10 Gold Heraldic EaglePCGS MS65$258,500
Heritage 4/15
$207,000
Heritage 1/12
1856 O $20 GoldNGC AU55$340,750
Heritage 8/15
$5,250
Stack’s 8/71
1870 CC $20 GoldNGC AU50$270,250
Heritage 4/15
$120,750
Goldberg 6/00
1908 $20 Gold St. GaudensNGC PR65$329,000
Heritage 4/15
$276,000
Heritage 11/05

     All of the coins above were held off the market by their owners for some time thus creating anticipation and excitement when they became available. The mystique of low pop rarities and the fact that these types of coins may not be available again for decades will always entice aggressive buyers. Let’s not forget that demand plays an important role in this equation as well. If the economy is soft when specific rarities hit the market, it could negatively influence the final prices realized. This is why it is important for auction houses to select an appropriate time for a specific sale, making sure that demand is at a high.

     That being said, not all rare coins have been profitable of late. In researching specific coins for this article we found that there were many coins that were bought and sold within a very short timeframe that did not profit nearly as well. Some buyers may have gotten overzealous on a coin they needed for a collection and paid more than the coin was worth. And some sellers may have been in need of cash flow so they wound up selling into a weaker market. Of course, this lack of good timing on one side can create an opportunity for the next buyer or seller.

     Timing is usually a major factor in buying rarities and realizing maximum profits. By selecting the right coins and having the patience to wait for the next upward market cycle, a good investment can become a great investment. Of course in the end the proof is ultimately in the sales. But with a good eye for quality and rarity and the time to research these rarities, all one needs is an inclination to collect the best available for the money.








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