Coin Rarities & Related Topics: News and Analysis regarding scarce coins, coin auctions, and the coin collecting community #305
A Weekly CoinWeek Column by Greg Reynolds ……..

 

Though famous, “Lily Nicole” dimes and Gardner coins constitute a very small percentage of the coins in the official coin auction of the Houston Money Show in December. A consignment from Leon Hendrickson is noteworthy as well.

Heritage will auction more than one thousand coins at the Houston Money Show, which will be held December 3-5 at the George Brown Convention Center. This show is hosted by the Greater Houston Coin Club.

Sets of Buffalo nickels, Indian Head quarter eagles and Indian Head half eagles are from the consignment of Leon Hendrickson, the founder of SilverTowne. One Hendrickson half eagle that is extremely memorable is the Eliasberg-Raj 1909, which is PCGS certified as “Proof-66+” and is CAC approved. Assuming that the Eliasberg-Raj 1909 appears exactly the same as it did when I examined it in August 2011, it is extremely original, crisp and neat, a fabulous coin overall.

Houston Money Show Coin Auction

A listing of many of the coins in this auction here would not be productive. When discussing an auction in the Age of the Internet, there is little to be gained by listing highlights or other lots in the auction. Anyone who is interested may access listings by visiting the web sites of the respective auction firms. Besides, auction catalogues in PDF format are often available to be downloaded for free.

There is no longer a need or a compelling reason to uncritically report the contents of upcoming or closed auctions. Therefore, I often emphasize aspects of coin auctions that I hope will enable collectors and other coin buyers learn about markets for rare coins, the traditions of coin collecting, the physical characteristics of coins, and the workings of the coin auction business.

Although the fourth and final auction of Gene Gardner’s collection of U.S. coins was covered last week, at least fifteen coins that were recently in the Gardner Collection will be offered in Houston. Certainly, fourteen of these sold in the Gardner III auction on May, 12, 2015. In this same auction in Houston, there are at least ten Barber Dimes that were in the “Lily Nicole Collection,” which Heritage auctioned in April 2015.

“Lily Nicole” Dimes Re-Appear

This is one of the 10 greatest sets of business strike Barber dimes. The “Lily Nicole Collection” is listed as the second “All-Time Finest” in the PCGS set registry, though the third ranked set, that of Stewart Blay, is almost certainly superior. Other leading sets, such as the Hugon Collection, were never in the PCGS set registry. I recently discussed two “Lily Nicole” dimes that re-appeared in the Stack’s-Bowers auction earlier this month.

The “Lily Nicole” 1895-S, 1898-S and 1911-S dimes are particularly newsworthy. The PCGS graded “MS-65+” and CAC approved 1895-S brought $4,935 result in April, which was not a retail price. It is among the finest known. The Nicole 1898-S is PCGS graded as MS-66 and CAC approved. In July 2011, Heritage auctioned this same coin for $9,487.50. Yet, in April 2015, it went for $3,525, about 37% of the previous price realized for the same coin in 2011!

So, this might be a case where someone calculated that a coin brought a price in April that is in the lower end of the wholesale range and would have a higher expected value in a subsequent auction. To understand the value of this 1898-S, it would be important to reflect upon market conditions in 2011 and relevant changes. Before theorizing about changes in market values for such an 1898-S dime, however, it would make sense to analyze the strength of the $9,487.50 result in 2011. Was that result then a slightly strong price or was it a price that was then considered to be extraordinarily high, super-strong?

Also, as of March 2011, PCGS had graded five 1898-S dimes as MS-66 and one as MS-67. While there is still just one graded as MS-67, a total of eight have now been graded as MS-66 and one has risen to “MS-66+.” Grade-inflation affects the value of coins, though could not entirely explain the same 1898-S dime bringing 63% less, four years later.

As of November 1, 2004, seven 1911-S dimes had been PCGS graded as MS-67. Now, 10 have been and one has been assigned a “MS-67+” grade. The Hugon-Nicole 1911-S realized $3910 on Jan. 12, 2005. In April 2015, it sold for a lesser amount, $3,525.

Reasons For Re-Appearances

Although all facts about particular consignments will never be publicly revealed, it is worthwhile to discuss the reasons why some coins that have been recently auctioned are offered again in a matter of months, as such repeated offerings are not unusual in the coin business. This aspect of the coin auction environment was particularly puzzling to a coin collector who asked for my assistance, years ago.

He had been a coin collector when he was a kid. He decided to return to the community and participate in major auctions. He was astonished that some coins that he saw in one auction were offered in another a few months later. He persistently asked that I explain the reasons, or at least plausible reasons, to him. He felt to be a knowledgeable auction participant there was a need for him to know why coins would repeatedly appear in relatively short periods of time, especially if he was considering bidding on them.

The most obvious reason is often not the true reason. The most obvious reason is that a coin appears at auction repeatedly because it fails to sell repeatedly and is consigned by the same individual or entity over and over again. Usually in such cases, the consignor is waiting for the one eager bidder who will pay substantially more than all other interested bidders. In regards to Gardner coins in the upcoming auction in Houston, this is not the reason.

I am convinced that all of the coins in the four Gardner sales were sold without reserve. For personal reasons, Gene felt a need to sell his collection in 2014 and 2015 in the four Gardner sales that I have already discussed at length. I do not believe that Gene had any intention of ‘buying back’ coins. I doubt that Gardner is a consignor to the upcoming auction in Houston.

The four sales of the Gardner Collection were held in New York City on June 23, 2014, October 27, 2014, May 12, 2015 and October 28, 2015. It is hoped that interested people will refer to my series of seven discussions about the Gardner Collection. In part 2, there were interpretations of especially famous coins in the first auction and in part 4, the second auction was covered.

In part 6, the third auction was reviewed and half dollars received special attention. In part 7, there were analytical conclusions about the scope and meaning of the Gardner Collection, with reflections upon its importance in the history of coin collecting in the U.S. Additionally, a few coins that were in both the Eliasberg and Gardner Collections were covered in detail.

Why are at least 14 coins in the Gardner III sale in May 2015 being offered again in December? One category of reasons is unrelated to coins. A buyer in May could have changed his mind about collecting coins, could have become ill, could have had to focus upon personal or business problems, or could have died.

Another category relates to the reality that, in most major coin auctions, there will be many coins that bring strong prices and many that bring weak prices. Some dealers calculate so that they will buy particular coins at weak prices and then consign them to other auctions in the near future.

Dealers using such tactics know that they will incur losses on some individual coins. They figure that they will profit on average from such a strategy. Most of the re-appearing Gardner coins, however, did not bring weak prices in Gardner III. Plus, the Gardner III sale was an epic event, while the upcoming auction in Houston will not be remembered for decades.

A dealer playing this “game” may first attempt to sell his purchases privately before re-consigning coins to auction. It is possible that the consignor of some Gardner coins to this auction sold other Gardner coins privately since May.

The concept of profiting in the short run by buying coins at auction for weak prices is being simplified here. There are many pertinent variables in actuality. Although the notion of selling a coin purchased at auction for a profit, without a change in certification, needs to be analytically distinguished from the concept of seeking ‘better’ certifications, there are more than a few dealers who combine both approaches.

There are many wholesalers who buy already certified coins for the purpose of re-submitting them to PCGS or NGC. They figure the respective probability that each coin will receive a higher grade after being re-submitted. In most coin auctions, there are dealer-consignments of coins that failed to upgrade or ‘cross.’

Most such dealers will resubmit the same coins over and over again, if an ‘upgrade’ is not ‘achieved’ at the onset. Others will try once or twice for an upgrade and then consign the respective coin to another auction whether it has upgraded or not. It may be that some or all of the fourteen or more Gardner coins in the upcoming auction were obtained in May by dealers “looking for upgrades”.

Most of those who try to play grading games incur losses. Moreover, those who are financially successful at this game tend to be inflicting damage upon the coin community, and are usually not helping anyone other than themselves. (My article last year regarding the future of grading and certification is relevant to this topic.) It makes more logical sense and is more economically efficient for the coins in an auction to sell to collectors who really desire them or to dealers who intend to sell them to buyers who will enjoy owning the respective coins.

As for Gardner coins that are re-appearing in December, all of them are not being mentioned here and I am including some that I did not see or do not now remember. When I mention a coin, it should never be assumed that I am in agreement with the grade assigned, unless I explicitly say so. Prospective bidders are encouraged to consult experts before spending substantial sums. It is a good idea to ask questions about the physical characteristics of specific coins.

Proof 1853 Dime

The Kaufman-Greensboro-Gardner Proof 1853 dime has an illustrious pedigree. There are relevant remarks about the Kaufman and Greensboro collections in my piece on the Pittman-Kaufman-Greensboro Proof 1850 quarter. (Please click to read it.)

gr_pr10c_1853, Courtesy Heritage Coin Auction
Kaufman-Greensboro-Gardner Proof 1853 10c at Houston Money Show Coin Auction. Courtesy Heritage Auctions.

In August 2007, while NGC certified as Proof-66, this 1853 dime was auctioned for $97,750. Market levels for Liberty Seated coins in general rose very rapidly from 2002 to 2005, before peaking around 2007. Coin markets overall peaked at the end of July or beginning of August 2008.

During the first sale of the Greensboro Collection in October 2012, this 1853 dime brought $70,500. It did not have a CAC sticker in October 2012, though did have one when sold in the Gardner I sale on June 23, 2014, for $52,875.

After the Gardner I sale, this 1853 was submitted to PCGS where it was certified as ‘Proof-66+.’ At the auction of the Houston Money Show in 2014, about one year before the upcoming sale, this Proof 1853 dime brought $52,875, the same price it realized in June 2014 while in an NGC holder without a ‘+’!

This coin scores very high in the category of originality. The neat brown-russet hues and touches of green are very appealing.

Gardner 1866-S Dime

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Gardner 1866-S 10c at Houston Money Show Coin Auction. Courtesy Heritage Auctions.

A Gardner 1866-S dime is NGC graded as MS-66 and appears to be in the exact same holder now that it resided in when it was auctioned for $14,100 in May. The NGC graded MS-66 1866-S dime that brought $23,575 in 2004 is a different coin.

Gardner Proof 1865 Quarter

An NGC certified “Proof-68” 1865 quarter realized $23,500 in May. It is now in a new NGC holder with the same certification and a different serial number. I just glanced at this coin in May. I will not comment on the grade of this coin here. It has exceptionally attractive, natural toning.

Gardner 1873 Quarter

The Gardner 1873 ‘No Arrows’ quarter seems to be in the exact same holder now that it was in when it was auctioned in May for $7637.50. It is in a PCGS holder that probably dates from October 1998 to January 2002 or so. I am not certain about the history of PCGS holders. It is one of four, at most, that are each PCGS graded as MS-66. Neither PCGS nor NGC has graded a business strike 1873 ‘No Arrows’ business strike quarter above MS-66.

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Gardner 1873 ‘No Arrows’ 25c at Houston Money Show Coin Auction. Courtesy Heritage Auctions.

The obverse has naturally toned nicely and is very pretty. There are imperfections near star #9, the liberty cap and star #10. These are a little bothersome and may preclude CAC approval for this coin at the MS-66 level. Nonetheless, the MS-66 grade is fair enough. The noteworthy appeal of the obverse offsets imperfections on the reverse.

The $7,637.50 result in May was a fair moderate price, perhaps even slightly strong, not some kind of a bargain. The PCGS graded MS-65 coin of the same issue that Heritage sold in February 2014 for the same price, $7637.50, is a better coin, in my view. Nonetheless, this is a neat coin and would be a pleasing addition to a collection of Liberty Seated quarters.

Gardner Half Dollars

A Gardner 1835 Capped Bust half dollar was NGC graded MS-64 when it sold in May 2015 for $5,875. It is now PCGS graded as MS-65! It had been purchased privately from Jason Carter in 2011. I will refrain from commenting on this coin.

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Gardner 1906 Barber Proof 50c at Houston Money Show Coin Auction. Courtesy Heritage Auctions.

The Gardner 1856-O half remains PCGS graded as MS-66. In May, this Gardner 1856-O half was in a PCGS holder that was issued between October 1998 and January 2002. It is now in a current, standard PCGS holder. In May, this coin went for $9,987.50.

Although the grade of the obverse of this 1856-O is solidly in the middle of the 66 range, there are a few noticeable contact marks in the upper reverse fields. The coin overall grades in the low to middle of the 66 range. It might be true that it just missed qualifying for a CAC sticker. If a wholesaler thought so, then he may have figured that it was worthwhile to re-submit it to CAC.

If a coin fails to be CAC approved and is later housed in a new holder with a different serial number, experts at CAC might not remember that they saw it before. It is typical for more than four hundred coins to be evaluated at CAC each business day.

Whether its grade is in the ‘low end’ or middle of the 66 range, this 1856-O is a desirable coin. There are many experienced collectors who would very much like to own it.

The Gardner NGC certified “Proof-68*” 1906 half was awarded a star for eye appeal by graders at NGC. On July 31, 2008, when markets for rare U.S. coins were literally peaking, this coin was auctioned for $17,250. In May 2015, it brought $10,868.75.

It might be true that the buyer in May figured that it had a good chance of being PCGS certified as “Proof-68” as well. Alternately, he could have figured that he could sell it privately for more than $12,000 without a change in holders.

As there were so many dazzling and/or colorful Proof Barber coins in the Gardner Collection, it would have required too many hours to take notes about each one. I do not remember this coin. Barber halves that are certified as “Proof-68” are not hard to find.

Proof 1878 Trade Dollar

The Gardner PCGS certified Proof-66 and CAC approved 1878 Trade Dollar sold for $12,337.50 in May 2015. The buyer in May might have concluded that the price then was weak because the exact same coin, in the same holder, sold for $17,625 in the auction held at the Houston Money Show in December 2013.

If so, such reasoning would be flawed. The amount realized in 2013 was very strong, well into the retail range. Market values for Gem Proof Trade dollars have slid a little from December 2013 to May 2015, though not substantially. The price in May 2015 was moderate, meaning it was around the border between wholesale and retail price ranges. In order for this coin to bring substantially more in December than it brought in May, it will probably be necessary for at least two collectors or their respective agents to bid rather aggressively on it.

1875-S Dime Downgrades!

gr_10c_75s, Courtesy Heritage Coin Auction
Gardner 1875-S 10c at Houston Money Show Coin Auction. Courtesy Heritage Auctions.

The re-appearance of the Gardner 1875-S dime with high mintmark is understandable. In Gardner III, it was NGC graded as MS-66 and not CAC approved. This 1875-S then brought $3,055. I could understand why some wholesalers might have calculated that this coin had a good chance of ‘crossing’ at PCGS at the MS-66 level or would qualify for a CAC sticker if graded as MS-65 by PCGS. As it turns out, it was PCGS graded as “MS-65+” and now has a CAC sticker.

Even so, the $3,055 result was not a weak price for this coin in May. It will be interesting to find out if it brings significantly more in December.

The precise circumstances and history of any one coin are beside the theme here. It is hoped that this discussion illuminates the phenomena of coins that really sell at auction re-appearing at auction a short time later.

In order to be educational, a theory about the re-appearance of any one coin does not have to necessarily be true regarding that one coin; it has to be plausible and applicable to many other coins. In addition to being a report of items ‘in the news,’ it is hoped that this discussion contributes toward an understanding of the coin auction business, by collectors.

©2015 Greg Reynolds
insightful10@gmail.com
 

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