By Russell A. Augustin – AU Capital Management….
At the Sotheby’s York Avenue location in New York City last week, the important sale of the D. Brent Pogue Collection took place over what could only be best described as an ‘anxious’ three-hour period. The numismatic auction house Stacks Bowers held the sale in conjunction with Sotheby’s and offered only 128 single coin lots that were ultimately purchased by 46 different bidders. Buyers participated either in person, on the Internet, or by telephone with the assistance of an agent.
The sum invoice total, including a 17.5% buyer’s fee, was $25.3 million. Not only that, but the accumulated prices realized was 11% over the published retail prices offered by the Collectors Universe PCGS Price Guide.
Remarkably, the average price per lot invoiced at slightly less than $200,000 – a fantastic amount considering 14% of the coins offered realized less than $25,000 each. Even more notable are these statistics (according to our records): twenty (20) bidders spent over $250,000; nine (9) of these bidders spent over $1 million dollars and one (1) bidder spent nearly $5 million dollars.
As with any collection, hedge fund or investment basket, there are the winners and losers. Also, we find the only reasonable resource (other than auction records) from which to assess the values for these PCGS-graded coins is the Collectors Universe PCGS Price Guide. Comparing the prices realized with the PCGS Price Guide, here is what we saw:
Half Dime (Business strike) -9%
Dime (Business strike) -11%
Quarter (Business strike) 12%
Half Dollar (Business strike) -5%
Proofs & Specimens for these Denominations -17%
Quarter Eagles (Business strike) 70%
Stack’s Bowers has done an excellent and classic “text-book” rendering on how to sell the collection, divided into six events.
The series represented in this initial event were the Flowing Hair, Draped and Capped Bust half dimes and quarters; the Flowing Hair and Draped Bust dimes; the Flowing Hair half dollars and both the Draped and Capped Bust quarter eagles. Note that all of these coins with the obvious exception of the half dollars are of the small diameter variety. As they did in Norweb and Eliasberg, Stacks Bowers has got the formula right – sell the small coins first. Here’s how these areas performed:
Flowing Hair sold for average of 37% above CU
Half dime (Business strike) -8%
Half dollar (Business strike) 46%
Draped Bust sold for average of -6% below CU
Half dime (Business strike) -15%
Dime (Business strike) -11%
Quarter (Business strike) 31%
Quarter (Business strike) without 1796 25C* -30%
Half dollar (Business strike) -11%
Capped Bust sold for average of 21% above CU
Half dime (Business strike) 12%
Quarter (Business strike) 21%
Quarter eagles sold for average of 70% above CU 70%
*We posted the price for the Draped Bust quarters “with” and “without the 1796 25C” since the other coins in the series followed the same downtrend. As it turned out, the 1796 price realized was so incredibly different than the rest of the series it needs to be singled out.
From these figures, it’s quite clear the gold quarter eagles (+70%) and the Flowing Hair half dollars (+46%) helped bolster the overall results for this sale. The series proving to be the weakest was Draped Bust, with the exception of the most remarkable coins. The Capped Bust series continues to enjoy a healthy and active collector base and did quite well considering the overall state of the present market.
Most, if not all of the coins offered last week had some kind of provenance. This is becoming more and more important in numismatics (and has proven to be critical when collecting ancient coins). We went back into our records and compared the difference between the last auction price realized for these exact coins and the recent prices. These numbers indicate the longer you hold the coin off of the market the better it performs:
Coins appearing for sale within the last 1-2 years -13%
Coins appearing for sale within the last 3-5 years -7%
Coins appearing for sale within the last 5-8 years -16%
Coins appearing for sale within the last 8-13 years 125%
Coins appearing for sale within the last 13-20 years 166%
Coins appearing for sale within the 20 years or more 242%
Note: As we compiled this information, we noticed 17 coins had originally been in NGC holders when last appearing for auction, especially within the past 5-8 years, and had been assigned a one-point lower grade by PCGS. In most cases the previous NGC auction price (total $2.9M) was higher than the PCGS price realized last week (total $2.2M), leading us to wonder if it’s better to keep such coins in the higher-graded holders?
We anticipate the Gold coins in the next sale will be the top performers again. The present author has had a chance to review each of the Early half eagles and eagles and has come to the conclusion these coins will have even greater participation than that enjoyed by the quarter eagles last week and the prices will also set new records.
If last week’s sale results are any indication of what future prices will be, given no change in any world markets, we can come to a few straightforward conclusions:
1. The gold coins will realize way above expectations.
2. Highest-grade examples will be strong.
3. Coins with “unique or nearly so” qualities will be strong, such as Proof or Specimen strikes
4. Coins that are represented in widely collected series and that are relatively affordable will do well.
One thing was missing from the presentation of this sale – the CAC endorsement. To those who do not participate in the on-line chat rooms, hear rumors on the bourse floor or study the statistics like a professor, I am sure there was some question as to why none of these coins were offered with the ‘green bean’ on the holder. Studies have demonstrated this label tends to bring greater confidence and stronger prices in a retail arena such as this, so why were they not CAC’d? Well, they actually were, according to the CAC population report, but for reasons publicly unknown, the Pogue family decided against reholdering the coins with the CAC label. We hope the parties involved see past their differences for future sales and choose to offer the coins with the endorsement. Besides, one extra bid could very well mean an increase of 10% to the bottom line – in this case that would be $2.5 million dollars.
This is the first of seven sales that will occur over the next two years. Included in this Collection are 650 coins struck during the first four decades of the birth of our country, ending in 1839. The Pogue family wisely acquired only the best coins available and emphasized state-of-preservation, eye appeal and surface originality. This is an event that will be spoken in the same breath as Garrett, Eliasberg, Norweb, Pittman, Bass, Trompeter, Newman and Gardner. If planned well enough in advance, one could acquire a world-class rarity, take advantage of a buyer’s market, and hopefully earn a strong return-on-investment in the coming years!