By Doug Winter – RareGoldCoins.com ……
CoinWeek Content Partner ……
I am continually asked by new collectors, and by established collectors who are new to gold coins, what should they collect.
For some collectors, the answer is a specialized collection focusing on a specific series/denomination/mint. But other collectors chafe at the structure required to collect a specialized set and they want the freedom to buy “neat” coins without committing to a specific project. For these collectors, I’d like to present an option that I call the “Best Available Coin” strategy.
To better understand this strategy, I am going to use a sports analogy. If you don’t follow or like sports, pardon the format, but just bear with me and see where this is going.
As a sports fan, I am fascinated by the drafting process in each of the major sports – especially football and basketball. By successfully implementing a clever drafting strategy, certain franchises in both the NBA and the NFL have managed to add useful players to their squads, year in and year out; even when their drafting position isn’t very good.
The General Managers who are most successful in their respective draft(s) have achieved success by drafting the best player available at the time they make their selection. As an example, an NFL team might not need a linebacker, but a potential star linebacker who is available with their pick isn’t passed on. This player might have ranked as the 15th-best overall in the draft, but due to a host of potential reasons he is still available at the 30th pick. In this situation, a savvy GM realizes this player is a great value and selects him even though the team has a number of good linebackers already.
So how does drafting a linebacker factor into successfully building a collection of US gold coins?
1840-C $5.00 PCGS AU50; A recently sold Douglas Winter Numismatics (DWN) item that meets some of the hypothetical parameters discussed below
Many collectors I know have adapted the “Best Available Player” drafting strategy into their own version of “Best Available Coin.” They make their purchases based on a set of parameters that include—but are not limited to—the following:
- Cost: Usually a range (say, $2,500-7,500 per coin). Obviously this will impact the other parameters.
- Grade: For the sake of convenience, let’s say that the lowest acceptable grade for this collection is EF40.
- Rarity: This is typically expressed as a range. For this hypothetical collector, let’s say they are limiting their purchases to coins that have a total PCGS/NGC population of fewer than 200 (remember, though, that PCGS and NGC grading statistics are inflated by resubmissions).
- Condition Rarity: Here, the collector can dictate how their coins would appear if the grade for each issue was graphed. For the sake of convenience let’s say each coin needs to be in the top third graded.
- Date of Issuance: Given the anticipated cost range and rarity parameters above, this collector will focus on Classic Head and Liberty Head gold. Let’s give them a date range of 1834 to 1895.
- Appearance: Given that this is a DWN blog, let’s assume that the collector wants the coins he purchases to be as choice and original as possible.
You’ll notice I didn’t include grading service and add-ons (CAC and others). I would leave this to the individual collector.
1855-C $2.50 PCGS AU53; Another DWN item that meets our criteria
So… what does this model “Best Available Coin” strategy look like?
Our hypothetical collector is limiting himself to US gold coins dated from 1834 through 1895, in EF40 and higher grades, priced at $2,500 to $7,500, with nice original color and surfaces. He wants coins that are at a minimum “scarce” to “very scarce” and wants these coins to be better-than-average quality for the specific issue relative to the total number known.
1854-S $10.00 PCGS AU50 CAC
Will this collector be able to purchase interesting coins? Obviously, he is going to be priced out on the major rarities; both overall rarity and grade rarity.
But there is still plenty of variety for this collector to select from. He can buy small coins (gold dollars and quarter eagles) and large coins (eagles and double eagles). He can buy mintmarked coins including reasonably high-grade pieces from Charlotte, Carson City, and Dahlonega. He can purchase a wide variety of types and form a number of sub-sets within his collection (a seven-mint Liberty Head half eagle set, for example).
For many collectors, assembling a date set is too confining and/or repetitious. I believe my “Best Available Coin” strategy is a good option for collectors who want less structure but who don’t want to feel that their purchases are totally random.
What are your thoughts about this strategy? Use the comments section below to let me know if you use this strategy and if you do, how have you modified it to fit your collecting needs.
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About Doug Winter
Doug has spent much of his life in the field of numismatics; beginning collecting coins at the age of seven, and by the time he was 10 years old, buying and selling coins at conventions in the New York City area.
In 1989, he founded Douglas Winter Numismatics, and his firm specializes in buying and selling choice and rare United States coins, especially US gold coins and all branch mint material.
Recognized as one of the leading specialized numismatic firms, Doug is an award winning author of over a dozen numismatic books and the recognized expert on US Gold. His knowledge and exceptional eye for properly graded and original coins has made him one of the most respected figures in the numismatic community and a sought after dealer by collectors and investors looking for professional personalized service, a select inventory of impeccable quality and fair and honest pricing. Doug is also a major buyer of all US coins and is always looking to purchase collections both large and small. He can be reached at (214) 675-9897.
Doug has been a contributor to the Guidebook of United States Coins (also known as the “Redbook”) since 1983, Walter Breen’s Encyclopedia of United States and Colonial Coins, Q. David Bowers’ Encyclopedia of United States Silver Dollars and Andrew Pollock’s United States Pattern and Related Issues
In addition he has authored 13 books on US Gold coins including:
- Gold Coins of the New Orleans Mint: 1839-1909
- Gold Coins of the Carson City Mint: 1870 – 1893
- Gold Coins of the Charlotte Mint: 1838-1861
- Gold Coins of the Dahlonega Mint 1838-1861
- The United States $3 Gold Pieces 1854-1889
- Carson City Gold Coinage 1870-1893: A Rarity and Condition Census Update
- An Insider’s Guide to Collecting Type One Double Eagles
- The Connoisseur’s Guide to United States Gold Coins
- A Collector’s Guide To Indian Head Quarter Eagles
- The Acadiana Collection of New Orleans Coinage
- Type Three Double Eagles, 1877-1907: A Numismatic History and Analysis
- Gold Coins of the Dahlonega Mint, 1838-1861: A Numismatic History and Analysis
- Type Two Double Eagles, 1866-1876: A Numismatic History and Analysis
Finally Doug is a member of virtually every major numismatic organization, professional trade group and major coin association in the US.