I had an interesting experience at a recent show that I thought was worth sharing. A new-to-the-market collector/investor came up to my table and asked to see my “best coins”. I was happy to share them with him and pulled out a gorgeous 1802 quarter eagle in PCGS AU58 and a lovely 1798/7 eagle in PCGS AU55. After some back-and-forth negotiating, I could see this coin deal was not going to get done. The reasons why it didn’t are what I want to briefly discuss.
Now let me say in advance that the individual that I was dealing with is younger than I am, better looking than I am, smarter than I am, and without a doubt much, much richer than I am. He’s someone whose family has had tremendous success investing in other areas and he is a recent convert to the rare coin market. But I think he’s approaching coins from a totally wrong perspective.
This guy likes deals. And he likes sexy, interesting coins. In other words, he wants to buy the best coins that I (or other dealers) have but he wants to buy them at levels that are unqualified, unquestionable “coin deals.” Good market or bad market, I don’t see this happening.
One thing that I have learned as a dealer in the last few years is that really good coins are really hard to find. Most of the great old-time collections have been dispersed and you just don’t see many “old time Gems” any more. Any when you do, like in the instance of the recent Naftzger Collection of late date Large Cents, the pent-up demand for the fresh, superb coins is so strong that they sell for crazy prices.
The investor I mentioned comes from a real estate background and he is, no doubt, used to panic sellers who have a nice piece of property but who are in over their heads and have to bail. Quickly. This doesn’t really seem to happen much anymore in the coin market. The speculators who bought the “ coin deals ” in the last Bull Market are the guys who bought the overgraded, overrated “stuff” that, in retrospect, maybe wasn’t such a good coin deal after all. The guys who bought the great coins and paid up for them aren’t selling. They aren’t selling because they don’t have to and because they know that what they have can’t be easily replaced. The “stuff” is what you tend to see, over and over, in auctions.
In the coin market, price buyers invariably wind-up with the worst possible coins for the grade. As I have mentioned before, there are coins with huge variations of value within a specific grade. For example, there are MS65 1795 half eagles that I think are worth well over $500,000 And there are MS65 1795 half eagles that I wouldn’t pay $350,000 for. The guys who “like the deals” are always going to wind up with the substandard coin. No ands, ifs or buts. It always works out this way.
That’s not to say that there aren’t good values in the coin market. I can think of dozens and dozens of coins that are undervalued in relation to their rarity and level of demand. I think that’s what the deal-hunters don’t understand. The real deals in numismatics come with knowledge of coins, not buying something for 10% less than Greysheet Bid. The Greysheet is never going to teach you that, as an example, an 1864-S eagle is a sensational value at double current published levels.
I realize that this sounds like a self-serving dealer blog justifying the “need” to stick a high price tag on nice coins. It’s not meant to be that but I can understand that interpretation. I just was sorry to see a potentially great customer pass on two incredible coins for his collection because they weren’t “deals”.
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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 US Gold 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 an exceptional eye for properly graded and original coins have 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.