| by James Halperin
Let’s pretend it’s your birthday. I’d like to give you a
gift. Assuming I’d spend the same on either, would you rather
have a fairly common coin in uncommonly nice condition, or a
recognized rarity in average grade? For decades now, in the
mainstream coin market, condition has been king. Among
uncirculated coins, tiny differences in condition can sometimes
result in huge differences in value. Some otherwise common coins
apparently become desirable when their numerical grade approaches
the magic 70 mark.
I’ve bought and sold thousands of them, yet I still enjoy the
opportunity to examine “wonder coins”, i.e. pieces that are
extraordinary because of their condition.
Like many others, I would generally encourage collectors to buy
the finest quality they can afford, but I also must caution
against the danger of getting caught up in the “numbers game”.
Comparing recent grading service population reports can be
sobering. Within some series, especially the post-WWII issues,
coins receiving grades of MS-67 or higher are astonishingly
common.
I’m not suggesting that these coins aren’t beautiful, but I
cringe when I hear dealers and collectors refer to them as scarce.
In applying that label to a coin, the number of existing specimens
in all grades seems a fairly solid method that you can sink your
teeth into (there’s comfort and satisfaction to be gained when
your collection includes one of ten, twenty, two hundred, or even
five hundred known examples of a particular coin), while paying
huge premiums for condition alone seems dangerous.
Once again, I would encourage you to review grading service
population reports before selling your early type coins and moving
the money into MS-68 War Nickels or another comparable modern
issue. Compare the latest statistics to the population figures
from five years ago. With a few, well scattered exceptions, the
populations of common coins in uncommonly nice condition has
mushroomed. I predict this will continue. At one time, you may
have been the only person who owned Coin X in an MS-69 grading
service holder. Now you probably have some company. Maybe a lot
of company.
One of my responsibilities at Heritage is to manage an
inventory valued at over $20 million. I must be able to predict
supply and demand on a daily, weekly, and monthly, basis. The
experience of others may vary, but I’ve found that I make fewer
mistakes by buying the proven performers, those being scarce and
rare coins.
The demand for coins follows fairly predictable cycles as
interest ebbs and flows. I find this lack of permanence
fascinating. Grading standards have fluctuated as well. I once
overheard an extremely knowledgeable, veteran numismatist, refer
to such change as the evolution of grading. Perhaps I’m being
old fashioned, but I’m not convinced that all evolution is good.
Killer Bees come to mind as another example.
If you’re looking for stability, and lasting value, think
about the coins your grandfather would have most wanted in his
collection.Were it my birthday, and you were giving me a coin, my
choice would be to receive something legitimately scarce in better
than normally encountered condition. The owner of a coin of both
rarity and quality can enjoy the best that numismatics has to
offer.
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