Over 200 Years Of Combined Numismatic Experience At Your Disposal.
|June 2016 Issue|
My Coin Journey Part XII
By Warren Mills
As I stated in My Coin Journey Part XI, we had a perfect storm for making money for our clients in 1989. I recognized that we were right in the middle of a speculative bubble. So I issued an all-out sell signal. For a few weeks, we were able to buy hundreds of thousands of dollars of rare coins back from clients for incredible profits. Talk about a win-win: take your original investment off of the table and roll the profits into under-valued areas. It worked like clockwork!
Then in the middle of June, I went on vacation and left instructions to keep the ball rolling. Alas, the owner got cold feet and concocted a story about putting the company in jeopardy. The buy-back program was stopped on a dime and many people missed the greatest run-up in coin history. Thankfully, we made many hundreds of people huge money: 2 to 5 times their initial purchase price!
As the summer of 1989 rolled on, the market weakened, but one area held up well until the spring of 1990. That area was 19th Century high grade type coins. For decades, 19th Century type always had the most knowledgeable client base of all numismatics. This base of buyers knew how rare certain issues were and they remained loyal supporters of the area they loved for longer than they should. As the avalanche kept coming, even 19th Century type could not hold on. It also slid dramatically.
I could read the writing on the wall for the coin market not holding up much longer. In addition, I could see myself not working for the company I was with much longer. I knew I had to leave because I lost all respect for the firm.
In late 1989, I was approached by a large coin firm about working with them. I had no interest in moving, but I would be happy to work out of New Hampshire for them. I told my friends I was leaving and gave my notice. Other people elected to leave and some of us started an office for Oaktree Numismatics. One of the principles in the firm was a former business partner of mine and he respected my knowledge and ethics. However, they sold coins that I did not believe would meet clients’ objectives for the future. When I was pressed to sell high grade foreign issues that , in my opinion, were no more than glorified bullion, a rift was started. I would not compromise and sell that material. I could not recommend it.
Due to my friendship with one of the principles, we tried to work things out; but in less than six months, I told them I could not work for them any longer. I knew what I wanted to do and that was to sell the best coins available for the grades that were strictly and technically graded. So, in June of 1990, Rare Coins of New Hampshire (RCNH) was started.
In our next issue, I’ll share the row we had to hoe to get RCNH off of the ground. I will say that it’s been fun, but not all fun and games.
Plus Coins and CAC
By Warren Mills
In many instances, I see plus coins that are no finer than a non-plus issue. From MS-62’s to MS-67’s, I’ve seen CAC sticker a plus coin, such as a 67+, which may make it one of the finest graded and CAC’d. However, keep in mind that CAC is not stickering it as a 67+; it is stickering it as a 67. The inconsistency of the grading services in assigning plus grades is scary! I’ve seen 67’s that are much nicer than 67+ coins. I believe that CAC only examines the coin as the whole point grade.
Two problems I see: the first problem is “how do you assign a formula to figure a plus price?” The second problem is the ego-driven mania for the highest graded registry set coins may cause someone to pay a tremendous but unjustifiable premium on the coin. If another couple of plus pieces enter the market, the price could tank. Again, in many instances, the plus on the grade is not justified.
I believe that CAC should only sticker a plus graded coin if it truly is a plus in their eyes. That way a premium price can be more justifiable. I will try to speak with CAC about this issue for a later newsletter.
Partner and owner of Rare Coins of New Hampshire, Inc. since June, 1990 and a full time coin dealer since 1979. Warren is a full member of the Professional Numismatists Guild and a life member of the American Numismatic Association. He was selected by the Rosen Numismatic Advisory as one of the ten leading numismatists in the country for twelve consecutive years. He was selected by PCGS and written up in their newsletter as handling and submitting some of the nicest coins they have ever seen.
Pogue Auction Breaks Multiple Records!
By Joseph Presti
The competition for a once in a lifetime offering continued with the recent completion of the Pogue IV sale at the end of May. This most recent sale brought in $16.7 million, bringing the total for the collection at more than $85 million. So far, this collection has easily surpassed any other rare coin collection for total value, and there is still more to come.
Two coins officially brought over $1 million in this sale. The proof 1833 half eagle ($5) and the specimen 1795 bust dollar. What is more amazing is that neither the 1822 half eagle or the finest known 1804 dollar sold! A bid of over $10.5 million was received for the 1804 dollar, and over $7 million was bid for the only collectible 1822 half eagle. Neither of these bids met the consignor’s reserve and failed to sell. If both of these coins had sold, the total price paid for them would have been more than what the entire sale brought in.
In addition to the two million dollar plus coins sold, eight coins brought in 6 figures each. They are as follows in descending order of price bid:
- 1825/4 half eagle - $940,000
- 1829 Small Planchet $5 - $822,500
- 1832 12 Stars $5 - $822,500
- 1835 Proof $5 - $822,500
- 1795 Draped Bust dollar - $763,750
- 1829 Large Planchet $5 - 763,750
- 1838- Bust half dollar - $493,500
- 1838-C half eagle - $235, 000
All Aboard! All Aboard For The “C, D & O!”
By Paul V. Battaglia
Our readers and customers who are also railroad buffs might be wondering if this acronym once stood for a standard or narrow gauge line given my title and presentation. Not this time around, yet I bet a few of you deduced the above three characters represent the Charlotte, Dahlonega and New Orleans mints. Good for you, coin aficionados.
A number of fine books have been written on these mints over the decades. My focus here, though brief, is about locating real, true and fresh pieces in the $1, $2 ½ , $3, $5, $10 & $20 series. With very few exceptions, the mintages on these coins are dreadfully low; their survivors beyond that are lower and it’s almost anyone’s guess as to how many are TRULY ORIGINAL. I will wager that we at RCNH have handled and placed no more than a few dozen in our twenty-six plus years of ongoing operation. Our company want lists on these coins are ongoing, of a permanent nature and transits from year to year without discussion or question. Once in a while, lightning does strike and we locate a precious survivor. In addition, we are actually able to purchase it. Coins of this caliber are of an “understood, non-verbal buy” when located. However, do not be fooled into thinking that we are also encountering a so-called larger number of these mints that we are rejecting due to their sight-unseen states, ha! No sir, and no ma’am! We have, and I have, found that nearly any and all of these coins are snapped up with zeal as well as a blind eye where non-originality is lacking. (Sadly, yet unsurprisingly, the latter prevails.) Like today’s coins from famous collections as well as that cool find on any bourse floor, they are often being socked away into what I term “multi-generational” collections. None of us will be around to witness their re-entry into numismatic society.
I have digressed too long as the point of my article is to implore you to initially:
- Substantiate that you are beholding an ORIGINAL SPECIMEN from one of these mints.
- Ask yourself the one and only relevant question: “If I were to crack out this coin, my 1847-D $5 Half Eagle in VF25, would it return in the same grade?” All right, I will bend here and accept “any grade” as ORIGINALITY trumps grade in my book. I have coins in my collection that have been knocked down in grade, yet were still certifiable and gradable. Gee, not too crazy about that you and I would say.
- What about the coin being returned with “altered surfaces?” How would that do? Yeah, I knew you would kick on that the hardest. So would I. Collectors and investors reading my article are now collectively yelling at me and in a single voice are stating: “Sheeeesh, Paul, I have to buy something for my set. I have saved up the money, and have been waiting years.” (Therefore, you deserve to buy the coin? Is that what I hear?) Well, I do see your point and more than sympathize. However, do not take this as my being in agreement with you. OK, the sheer rarity-combination-lower survivability of these coins rather assures that their market will continue at some type of level. After all, nobody wants to lose money nor can it be “tolerated” within the industry, if I know the industry like I know the back of my hand. Look out now, here comes the Devil’s Advocate stating the tried-and-true fact that: “A coin is original but once.” Touché. Commercial grading is just that, period. I should not make excuses nor relax standards due to a lack of originality. Hmmmm, sounds as if I am naïve in my thinking after five decades in numismatics. Or, will patience alone guarantee my/your locating an original example? In theory, yes. In reality, possibly not. Possessing the genes of Methuselah might help, but random order and statistics rule any and all days.
Have I shot holes and blown your thunder in enjoying your collection and pursuit* of these gold coins? I hope not for it was never my purpose. Just re-think your strategy and return to the ABC’s in acquiring C, D & O-mint gold coins. What would I do? A relevant question. I would wait, yet keep my eyes open for opportunity. Opportunity, like hope, is always out there. I will end this article with two thoughts I have harboured for many years, yet rarely broached.
“The Charlotte, Dahlonega and New Orleans Mints regarding U.S. Gold Coins are all underrated and a challenge with few other equal numismatic series peers.”
“It is my staunch opinion that the American South has an unknown number of these coins in very private coffers of an indeterminate number of citizens.”
I would invite your opinion on these statements….do not be shy.
*The PURSUIT of a coin always outweighs the chase in my experience. That ongoing chase keeps us alert, sharp, hopeful and questing for knowledge and human interaction among ourselves.
Paul Battaglia is the Senior Numismatist and a Life Member of the ANA. He travels with owner, Warren Mills, to the major coin shows across the country. Paul has 50+ years numismatic experience and has been with RCNH since 1990. He also cherishes reading, cooking, language, music, classic cars, lily/orchid culture, chess, economic statistics, differing viewpoints and FISHING.
A Bargain? An 1811 Half Cent Found On eBay
By Lou Roten
I recently saw what appeared to be a nice (raw) 1811 half cent purchased on eBay for less than $100. One of the first coins I bought after joining RCNH was an early half cent, the more common 1804 (stemless, plain 4). I like the design, but more than that, it was interesting to me because the series is very old and the coin reverse bears the fraction 1/200, indicating its value relative to the dollar; the reason possibly to reach those who could recognize a number but may not be able to read.
Image of fake 1811 reverse found on eBay
Actual 1811 reverse
(Image found at ha.com)
The consensus was that the eBay coin was a fake. This prompted me to find out why. The fact that the coin was not graded is certainly a clue; to Walter Breen’s Encyclopedia of Half Cents I went.
The wreath design was changed in 1809: the reverse was redesigned to be a continuous clockwise wreath with 27 leaves and 13 berries originating from the ribbon; the earlier design had 16 leaves clockwise on the left and 19 leaves counterclockwise on the right, both originating from the ribbon at 6 o’clock. Also the 1/200 fraction was removed in 1809 with the Classic Head series.
From Breen’s Encyclopedia section on the issues of 1809 to 18291:
“Precisely because the wreath and its contents are invariable, the only source of variation from one working reverse to another will be the positions of letters in UNITED STATES OF AMERICA with respect to each other, and to the leaves of the wreath.”
Paraphrasing from the same citation (moving clockwise) Breen’s method focuses on the:
- 6th leaf – the outer leaf of the 2nd group at about 9 o’clock under the D of UNITED
- 13th leaf – highest leaf of the 4th group, under the ES of STATES
- 15th leaf – outer leaf of the 5th group under the F of OF at about 1:30 o’clock
- 23rd leaf – outermost of the 6th group, at about 4:30 o’clock, nearest the C in AMERICA
The job now was to learn how the leaves are counted on the new 1809 wreath design and later to understand Breen’s method of determining variations.
Counting the leaves:
Moving from the left and clockwise (I believe the leaves are counted from the outside in):
- The first leaf is alone and just to the left of the ribbon
- The first group has 4 leaves, #2 – 5 (above the U in UNITED)
- The second group also has 4 leaves, #6 – 9 (to the right of the D in UNITED)
- The third group has 3 leaves, #10 – 12 (under the A in STATES)
- The fourth group has 2 leaves, #13 and 14 (under the 2nd S in STATES)
- The fifth group has 4 leaves, #15 – 18 (under the F in OF)
- The sixth group also has 4 leaves, #19 – 22 (to the left of M in AMERICA)
- The seventh group has 3 leaves, #23 – 25 (above the C in AMERICA)
- The last group is just to the right of the ribbon and has 2 leaves, #26 and 27 (above the 2nd leg of the A in AMERICA)
Discriminating factors in this case are a leaf in the 6th group, the 24th leaf and the 13th leaf in the 4th group (if counting from the outside in). Look at the position of the real 1811 24th leaf tip (2nd leaf in the group) with respect to the first leg of the 2nd A in AMERICA. The tip of the leaf is just reaching that leg of the A. The position of this leaf is the same for all variations of the 1811 half cent.
Image of fake 1811 half cent reverse found on eBay
1826 half cent reverse
(Image found at ha.com)
Matching reverse to the fake 1811 – the 1826 reverse
Look at the position of the same leaf (the 24th) tip on the 1826 reverse with the tip reaching well beyond that leg of the A to the center of the letter. After looking through the reverses of this series, I have concluded that the reverse of the eBay fake 1811 is closest to that of the 1826 CMM1. According to Breen there is no reverse variation of the 1811, wide date or close date, with the tip of that leaf so positioned. Rather all the variations have the position of the 1811 image, just reaching the first leg of the A.
Now look at the position of the S slightly to the left of the tip of leaf #13 of the 1826. This is the position of the S on the 1811 eBay coin. The reverse of the eBay 1811 again matches very well with the 1826 reverse. Given that the 1811 sold on eBay has a reverse much like the reverse of the 1826, the conclusion can only be that it is a fake, a non-existent die pair variety. Without the availability of a large library here at RCNH, I would not have known.
This is another example of the need for caution. The red-flag has to be the fact this rare coin was not graded. All raw coins must be considered with great care, particularly if a coin is rare. There is no reason whatsoever not to have such a coin authenticated and graded. It is possible that someone may unwittingly offer a coin that is both rare and authentic, but the obvious precaution of a solid return policy must be in place; the coin so purchased must be authenticated immediately within the return window.
- Walter Breen’s Encyclopedia of United States Half Cents 1793 – 1857, © 1983, page 293
Images of the real 1811 and 1826 half cent reverses courtesy of Heritage Auctions
Lou Roten - current adjunct instructor - mathematics / physics, Franklin Pierce University; environmental scientist; fiddler; life-long interest in collecting coins and stamps with some interruptions; very interested in the evolution of the coin making process.
A Bit Of Research Pays Off
By Dave Carleton
It has been a very active month of May here at RCNH. The appointment calendar has been pretty well filled Monday through Friday. If possible, when I have the opportunity, I like to ask the people who come in for evaluations, how they heard about us. Part of the reason I ask is to get an idea of how our advertising is reaching these folks. Even though we’ve been here in the People's United Bank Building for 26 years, there are many people who live nearby that never knew we were even here. Many of the people that come in don’t have any idea of what they have because they had acquired the material from a member of the family that has passed on. When asked, many say they found us in the Yellow Pages, on the Web and some from the radio. Some people have found notes with the coins, urging them to contact us because they knew the new owners would be treated fairly.
I asked a lady recently how she found us and was pleasantly surprised by her answer. She said that when she was doing her search for a dealer, she found that we had what appeared to be a bunch of market affiliations and even though she didn’t know what they meant, they seemed impressive. Then she did something I wish more people would do and that was to follow up on those affiliations and see what they were all about. She told me that she was impressed with our associations but was particularly attracted to our PNG (Professional Numismatists Guild) membership. I was so happy that she went this far to check us out because the PNG is the crown jewel of our affiliations. (I’m including a link to PNG at the end of this article, so you can read about all the requirements and Code of Ethics the members have to abide by.) Briefly, the PNG is a nonprofit organization founded in 1955 and is composed of many of the country’s top numismatic experts. There are only 310 members of the PNG in the whole country and only 51 that are APMD (Accredited Precious Metals Dealer) of which we are one.
It really makes me scratch my head why it happens so often that someone buys numismatic and bullion material from someone that has no affiliations and then do their due diligence to find us so we, as so often happens, can tell them that they got involved in a bad deal . It’s just that it’s hard to convey this negative news to people, and at the same time, try not to condemn the whole hard asset market. The funny thing is that if you are reading this missive then you’re probably aware of what I just spoke about. It’s unfortunate that the people who need to know these things have yet to enter this market and the process will continue to recycle.
David Carleton, a New Hampshire native was introduced to coin collecting by his father and Grandfather in the 50’s. Gold bullion speculation dominated the 70’s culminating in 1980 when focus on Numismatics returned. He became a life member of the ANA , met Warren Mills (his coin Guru) and they cofounded RCNH in 1990.
By Joseph Presti
If I told you there is only one computer in the world for every 542 people who want one, or one gallon of gasoline in the world for every 542 people who want one what would you do? Most people when presented with a statistic like this would react by attempting to buy or hoard more computers or oil because they realize that at some point in the future the price of the object in question is going to have to rise in order to secure more computers or oil.
Conversely, if there are several of the same item for every one in demand then the price will or should fall unless people believe incorrectly that the item is scarce. To prove my point, I had an older gentleman come to our office the other day and said he wanted to buy some silver. I always ask why, because I like to hear different people’s perspectives. He told me that it is the only thing “real.” He said that his grandfather would give him a silver dollar when he was a kid and he could buy 4-5 gallons of gas with it for his motorcycle. Today, that same silver dollar can still fill a motorcycle, but the dollar bill can’t buy one gallon of gas.
Let’s get back to the title of this article, 542:1, what does this represent? This is the actual number of ounces of gold sold on the COMEX for every ounce of physical gold in their possession. Stated another way, a COMEX gold contract controls 100 oz of gold, so for every five plus contracts there is only one ounce of gold backing that contract. So, unlike other commodity contracts, you can no longer execute your contract and take physical possession of the underlying metal. Talk about your ultimate paper asset! At least when you buy a stock you theoretically own a piece of the underlying company.
According to the article that I read in the Business Insider, the ratio of paper to real gold was consistent until around 2014. That is when it exploded to 100:1, then 300:1, to the current 542:1. This time period also corresponds with the selling of most of the physical gold that COMEX had in its’ possession to under 1 million ounces, from several million ounces. What is even more disturbing is that the gold has been gobbled up by Russia, China, India and the Middle East. All of these countries have sputtering of failing economies. So logically we should ask, why are they putting so much money into something you can’t eat or make everyday life better for their population? The answer is simple, they do not have faith in paper and are planning for something to happen in the financial markets sometime in the future. Unfortunately, this country has more of a short-term attitude toward everything, that’s part of the reason we have a $19 trillion deficit and don’t seem worried because we can’t think beyond the next election.
As a government, we should admit the obvious or we could all wake up one morning and have a nasty surprise waiting for us when all of our paper assets are worth much less than we thought. Unfortunately, the government and Wall Street have a vested interest in propping up the paper assets because not doing so would cause havoc with the mortgage market, government entitlements such as social security and most of all pension plans. If you don’t think anything is going to change then you owe it to yourself and your lineage to hold some physical gold and silver because it is only a matter of time before these historical stores of values will rise and with it rare coin prices.
Questions From The Mail Bag
By Warren Mills
Question: “How does Warren buy early type or dated coins if he won’t make an allowance for cleaning or over grading?” (This question was posed to Joe Presti at a recent auction.)
Thanks C.B. for the question.
Answer: The simple response is, “I don’t buy them for those reasons.” If we have a circ type coin in our inventory that is a late 18th Century or early 19th Century piece, it is original & superb. I find the horrid acceptance by the grading services to certify wretchedly cleaned, putrid alterations and over grading to be an abomination to the coin business. I choose to step aside and pass on these early or dated issues until either an acceptable piece comes along or not sell them at all! I’ll let the geniuses talk their customers into buying these types of coins. It’s sad because these early pieces are the essence of coin collecting history. I’d love to have a dozen in our inventory every month. I just won’t compromise my standards.
Thanks again and please keep those questions coming. We welcome your questions. So please send them to me directly or emailfor future newsletters and if you prefer, I will answer them for you privately.
On a sad final note, I’d like to mention the passing of my dear friend, Gary Carlson. I met him at Heritage in Dallas in 1982 and we started Numismatic Professionals of Dallas in 1984. It didn’t last, but our friendship remained strong right up to his passing. He was an excellent numismatist, a good athlete and great friend. I will miss him terribly and I ask you all to pray for the repose of his soul with our Lord & Savior, Jesus Christ.