By Douglas LePre – Senior Portfolio Manager at Blanchard and Company, Inc …….
My entire career – 30 years – has been dedicated to the rare coin business. In that time the market has grown in many different directions, but the one concept that hasn’t changed is the idea of buying the rarest coins you can afford at the time of your purchase. Just ask Harry Bass, John Jay Pittman or D. Brent Pogue.
Initially, buyers have the tendency of purchasing items that are inexpensive and familiar – Morgan Dollars, Peace Dollars or $20 Liberties, just to name a few. Each of the aforementioned coins are staples in the rare coin market and always have been, but as a buyer the key is to avoid the coins with extensive populations. Every denomination of coin minted in the United States contains certain dates that are elusive, either because of low original mintages or low survival rates due to damage, heavy circulation or melt.
We’ve all found ourselves in a situation that gives us the opportunity to “save” a bit of money by buying a slightly less expensive item, but do we really save anything by doing so? Some people think a dollar saved is a dollar earned, but I have found the inverse to be true especially when it comes to consumer items such as tools and investments like rare coins. Sure I can save a little by purchasing the less expensive item, but due to its inferior quality, over time I either will have to replace it on multiple occasions or not reap the full benefit of ownership.
This pattern is one that I see regularly in new buyers – everyone wants to wrap their arms around a huge pile of shiny coins while repeating the words, “mine, mine, all mine!” The problem with that philosophy is that anything that can be bought or sold by the bushel just isn’t rare. It’s really just that simple! If we look at the most historic collections ever assembled, each of them was built based on the theory that they would strive to be the finest ever constructed. Collectors and investors need to follow this approach whether building a set or buying individual rarities. In either case your investment is safe and, in most cases, sought after.
Let’s let the numbers do the talking. Below are some comparisons that I think will illustrate this point. I have chosen to use two of the coins mentioned earlier in this article – the Morgan Dollar and the Peace Dollar – as points of comparison. I will track the value of the most common date against the rarest date in each series graded MS-63 using a 15-year auction history to validate my opinion. I do understand that the rarest examples can sometimes be well out of reach for many collectors, but this comparison illustrates the importance of rarity, not cost. Generally speaking, even the 5th or 6th rarest dates will provide the desired results.
|1893 S||02/2000||$52,900||07/2015||$282,000||433% increase|
|1921 P||04/ 2000||$46||08/2015||$56||21% increase|
|1922||02/ 2000||$39||08/ 2015||$73||87% increase|
Authors Note: All auction records supplied through PCGS Auction Archives. Most common vs. least common coins determined by their original mintage (proof only issues excluded)
As the above numbers confirm, when it comes to quality vs. quantity, quality is the direction we should all look toward. It also proves that quality can be affordable. You don’t need to buy the most expensive items to find value.
I think it only fair to offer a little direction to those who are interested in applying the quality over quantity principal, so here are a few suggestions to those looking to acquire affordable rarities:
• Early flowing hair and draped bust type coins are a very safe home for your equity as they are the earliest coins minted in the United States. These coins are popular amongst both collectors and investors due to their history and scarcity.
• Proof coins from the mid-1800s thru the early 1900s are another arena where your dollar buys a fairly high degree of rarity for the money.
• Key date rarities from any series will always treat you well. When buying key date examples look in the highest grade your budget will allow. These are coins that will always be in demand due to their rarity and they are constantly sought after by set builders so they can fill the holes in their collections. Therefore they always a great storage of equity. In closing, just remember one thing: quality is remembered long after price is forgotten!
About Douglas LePre
Senior Portfolio Manager
Blanchard and Company, Inc.
Douglas LePre has been servicing clients of the numismatic community for thirty years and has a comprehensive understanding of the marketplace and its products. Having placed some of the scarcest coins in the market Douglas has established himself as someone who recognizes quality and makes every effort to ensure that his clientele get the highest class of rarity for their portfolio.