Jim Bisognani: The Price Is Right?

World coins make huge advances; transparency is a very clear advantage

By Jim Bisognani – NGC Weekly Market Report ……
August already? I have said it before and I will reiterate: Time seems to be on a much faster track as we age. As a youth, August was the swan song for school vacation. Preparations had to be made for back-to-school shopping, etc. — even going to school for “orientation”.

Yet I usually made the best use of that last vacation month.

Coins — surprised, right? — were always a motivating and relaxing subject. I could spend hours leafing through various guidebooks for US and world coins. I would fantasize about which coins I would go after if I had a few hundred dollars or more at my disposal. I would curate a list of which I would target and why and of course note their current market value.

I just rediscovered, tucked away in my 1970 copy of A Guide Book of Modern British Commonwealth Coins, one such list that I had compiled when I was 13. I was quickly able to ascertain that I really enjoyed coins from British India, Fiji, and Australia then as much I do today.

Looking back at the nearly 50-year-old prices, who wouldn’t be an aggressive buyer of, say, British India Victoria Half Rupee (1862-1899) in Mint State for $8 to a top price of $12.50 for the 1880-C issue? Consider this: An NGC AU 58 example of the 1880-C Half Rupee appearing in the Heritage Long Beach Sale in the fall of 2014 realized $7,050 USD! According to the NGC Census, this is the highest graded of four examples. Today, The NGC World Coin Price Guide values an XF coin at $4,000 and the MS at $8,000!

An 1881-C Half Rupee graded NGC MS 61 with a mint state value of $9 in 1970 pulled in $1,410 at the same 2014 sale. According to the NGC Census, only 10 coins had higher grades.

To round out the trio, an 1881-B Half Rupee graded NGC MS 63 corralled $2,585 versus the $9 valuation in Mint State! According to the NGC Census, only one coin appears at one grade higher.

So, these three coins, with a combined catalog value of $30.50 in Mint State about 50 years ago, realized $12,455 five years ago. Quite the return!

Numerous factors are involved here, but first and foremost the advent of third-party grading and population reports are a tremendous help in tracking world coins. Concise and timely auction data revealed this trio’s rarity.

Of course, British India has been a hot property for the past decade or more. And with the demand escalating from not only the citizens of that country but also worldwide has shone a spotlight on the country’s diverse and rare numismatic heritage.

Yet without public sales data, collectors would be left in the dark. Today, the world market is much more specialized.

As a youth, I had always especially enjoyed collecting from this faraway land because Indian silver coins were such bargains compared with similarly sized silver coins from other Commonwealth countries. I recall buying my first India collection for $49. It was actually a BU India type set of some 60 coins housed in a Dansco album!

I remember the business was called The Irish Coin Co. out of Montpelier, Vermont, owned by Steven Hochschild and Douglas Schneible. Yes, I still have the album and that original type collection along with several editions to fill out the album!

Part of the original sales pitch included the following from a Coin World ad from the summer of 1970:

“Probably the wisest investment and collecting opportunities in coins today are to be found in India coins. Nowhere else can one purchase beautiful silver and bronze, some 100 years old, at such low prices. The India Type Collection offered below is a no-nonsense bargain. If you want to know more about Indian coins, write for the India Coin Report prepared for us by Jerry Remick. This is a Type Collection of 60 different Indian coins dating back to 1875 and up to the 1969 Gandhi Crown. Some of the coins are silver; all are BU.”

For once, the hype was really timely advice. I know it propelled me into my lifelong passion for Indian coins.

My first purchase after acquiring the type set was a lovely BU 1892-C Rupee for $3.50 in the early fall of 1970. The coin is really superb, with wonderful original toning that makes the subtle lambent luster extremely appealing. I have never slabbed it. If it were graded, I am sure it would rate at least MS 65+.

Transparency is Very Clear

India is a perfect example of this world market renaissance.

This is precisely what happens with an increased demand for a market segment or country. Yet I can’t think of any comparable single US coin that, if bought at or near Red Book valuation of around $13 about 50 years ago, would be worth in excess of $7,000 today!

Whether it’s from the US or a world issue, an increase in market demand for a particular coin or series will ultimately dictate higher replacement levels for dealers to acquire the same coin. Today, collectors and dealers have this vital information online (including the NGC site) and may easily view and track US and world coins’ auction results and census numbers and have access to retail prices.

Today, transparency is so very important — an essential aid for collectors and dealers in determining values now and in the future.

The Price is Right?

Considering we have made such strides in this respect, it is distressing for me to hear of numerous dealers preferring not to buy coins at a public venue because they don’t want the average or serious numismatist to learn what a particular coin sold for. Obviously, anyone — collector or dealer — is allowed to offer a coin at any reasonable level. Yet our price guide or any price guide is only as good as the data used in compiling it.

According to a well-known major trader:

“Some dealers will buy a ‘rare’ coin based on instinct while others merely want to price a coin at any level they feel reasonably comfortable selling to a customer. With dealer-to-dealer transactions, there is no public trail. There’s a very real market outside of auction price results these days. I’m finding that a lot of dealers are simply refusing to bid in sales anymore because of the immediate transparency and would rather buy a coin for more that doesn’t have an instant track record.”

While this practice is usually limited to extreme rarities and other higher-end coins, this practice also can be observed with major marketers.

An example, said the trader: “[T]outing a particular rare $20 Saint-Gaudens, which in MS 65 (with a census less than 10) may command $85,000 or more. So, the MS 64 (which has a census of more than 100) and normally trades at auction for around $15,000 is logically hyped as really undervalued and is easily worth more in the $35K to $40K range.”

While this tactic may seem plausible based on the nearly six times greater value in just one grade, it is here where the auction data trail effectively debunks this notion and is critical in making a sound buying decision.

So, whether the coin in question is a common $20 Saint-Gaudens in MS 65 or an 1897-C British India Rupee graded MS 62, the collector/dealer should investigate to determine what the true market and the prevailing prices are before buying.

As always, take care of your collection and it will pay you dividends down the road.

Until next time, happy collecting!

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Jim Bisognani is an NGC Price Guide Analyst having previously served for many years as an analyst and writer for another major price guide. He has written extensively on US coin market trends and values.