Searching for a “Sleeper”: Collecting Classic US Coins

By Mark Ferguson for PCGS ……
 

Undervalued coins are often referred to as “sleepers”.

People who search for sleepers in numismatics are looking for coins or banknotes that show potential for better-than-average price gains during the coming months and years. Identifying sleepers requires an in-depth study of coins, banknotes, and the market, and PCGS offers a wealth of easily accessible information to draw from such as charts, graphs, indexes, the PCGS Price Guide, the PCGS Population Report, and PCGS CoinFacts.

Perhaps no numismatist was better at identifying sleepers than the late John Jay Pittman (1913-1996). His daughter Polly told me her father used to stay up until two or three in the morning studying auction catalogs and other numismatic reference works. As a result, the story goes, over his lifetime Pittman invested no more than $100,000 in his collection, which sold for over $30 million after his death!

Pittman was a shrewd negotiator, but more importantly, a shrewd researcher. While the benefit of time greatly helped enhance the value of his collection, he made many carefully thought-out purchases of sleepers. A few well-known examples that sold in 1997 during the first installment of the sale of his collection include his purchase at the 1948 ANA convention in Boston of a 1792 Half Disme for $100 that realized $308,000; his 1956 purchase of a Proof 1854 Type 2 Gold Dollar, one of four known, for $525 that realized $176,000; and his purchase of one of two known Proof 1833 $5 Half Eagles for $635 from the 1954 King Farouk sale in Egypt, which realized $467,500. He purchased the 1854 Proof Gold Dollar at the Central States Numismatic Society Convention auction in Indianapolis where, when the lot came up for sale, he walked to the front of the room, faced the crowd, held his arm high in the air to bid, and stared down anyone who dared to bid against him until he won the coin. After that move, he earned the nickname “The Statue of Liberty.”

Bust Half Dime, 1792 H10C, PCGS MS68. Image: PCGS.
Gold Dollar, 1854 G$1 Type 2, DCAM, PCGS PR64+DCAM. Image: PCGS.

Today’s Market

This could be one of the most advantageous times in numismatic history to identify, locate, and purchase sleepers. The current market reminds me of the 2003 to 2004 period, when the coin market was awakening from a long slumber and downward price spiral as it finished its decade-long transition from the investor-based market of the 1970s, ’80s, and early ’90s to a much healthier collector-based market. During the 2000s, times were good. Investments in stocks, real estate, fine art, rare coins, and other speculative alternatives made strong gains, only to be stopped by the financial crisis, now more than a decade ago.

The tremendous amount of stimulus money being injected into the economy these days and the interest in alternative and tangible investments bodes well for numismatics. The market is already experiencing strong price gains in areas like the popular Morgan Dollar series and auction results for high-grade rare coins, in general, have been strong as of late.

Prospects are bright for gains in rare coin values during the next several years as multiple top rarities are poised to break the $10 million mark. As several famous rarities begin to sell for eight figures, the stage will be set for price levels to reach new, astonishing price records, generating publicity for the coin market and pulling lesser-priced coins to higher price levels with them.

A More Recent Search for a Sleeper

A few years ago, collector-investor John Assay (not his real name) was looking for a place in numismatics to invest money. He wanted to identify a sleeper that fit within his budget, that would maximize his investment potential, and allow him to actively participate in collecting. He was attracted to gold coinage, and at the beginning of his search, the Proof-only 1879 Flowing Hair $4 Stella caught his attention.

However, he quickly realized that, with a mintage of 415 according to PCGS CoinFacts, there were probably hundreds of these coins that have survived. Indeed, PCGS CoinFacts estimates that at least 300 to 350 “are still around.” Furthermore, Assay realized that, for him, owning one of these coins amounts to “coin buying,” not “coin collecting.” In other words, purchasing one example of this coin issue, which could be done with relative ease, would amount to investing, not collecting, so he resumed his search for a sleeper.

Assay had been a lifelong collector of coins and other important collectibles, and since his youth had been interested in Territorial gold coins from the American West. He began his quest by perusing the PCGS Population Report and reviewing the total number of coins graded for each issue of Territorial gold coinage. Next, when he found some low-population issues that looked promising, he looked them up in the PCGS Price Guide to find their relative value to other Territorial issues and determine whether they fit his budget. Mr. Assay said these resources were “absolutely essential” to his research.

One coin type that caught his attention was the United States Assay Office of Gold $10 coins from 1852 and 1853. The population total for the 1852 issue was much higher than for the 1853 issue. Curiously, he observed that the 1853 coins were issued in two varieties, denoting their fineness: “884 THOUS” and “900 THOUS”, whereas all the 1852 $10 coins were made as “884 THOUS”. These notations are prominently displayed on the coins’ obverses. Currently, the PCGS Population Report lists a total of 211 for the 1852 issue, 13 for the 1853 884 variety, and 18 for the 1853 900 variety, but the populations were much smaller when Assay began his search.

California Gold, 1853 $10 Assay 884, PCGS AU55. Image: PCGS.

Sensing that he was on to something, Assay took his research further by seeking out specialty books on the subject. He soon discovered that the 884 variety was only struck for one week in 1853, from February 23 to March 1. Eureka! Assay found his sleeper. Now the pressing question became, with a PCGS population of just a handful of coins, how could he find one to buy?

Prior to beginning his search for the coin, he studied auction records and discreetly discussed Territorials with a few dealers and other experts. In his quest, he also attended shows on both coasts and in the Midwest. Finally, Assay found a nice AU example in an auction and bought it. Later, he was able to upgrade the coin. Assay built a collection that contains a few other Territorials, so the 1853 884 THOUS $10 gold coin satisfied his collecting interest, as well as an investment.

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