Over 200 Years Of Combined Numismatic Experience At Your Disposal.
|January 2017 Issue|
A Newsletter By:
The Rosen Numismatic Advisory:
The 2017/2018 Crystal Ball Survey, Part-1
Welcome to our 1st issue of the 2017 RCNH Rare Coin Enthusiast. As I wrote in our December issue, I was asked to contribute my thoughts on the market in the Rosen Numismatic Advisory. Maurice does a good job in getting to the heart of the matter with his questions. Please find information on his newsletter subscription at the end of the article.
I’ve included for our readers the questions I was asked and my responses. If you wish to see the responses of his other panel members which included John Albanese, Don Ketterling, Rick Snow, Scott Travers & John Feigenbaum, feel free to contact Maurice. If you have any questions about my responses, feel free to call or e-mail me at your convenience.
Part One of the responses will appear this month and with his permission, Part Two will be in our February issue.
I hope you had a blessed Christmas and all of us at RCNH want to wish you a happy & healthy New Year.
1) What are the most important issues facing the coin market in 2017/2018?
1. How the election is going to affect the market.
2. For knowledgeable buyers, I feel a very important issue is the inconsistency in grading. Will we continue to see an ever growing gap between sight and sight unseen buying?
3. Counterfeiting of bullion and certified coin holders.
2) How should those issues be dealt with and what posture should investors take in light of those issues?
1. Fear is a great motivator. I normally would recommend a capital preservation strategy of U.S. American Eagle gold & silver as well as U.S. circulated silver coins, pre-1965 and circulated dollars, pre-1936. However, for the more well-heeled, the semi-numismatic or generic U.S. gold issues could be a wonderful buy. You can acquire MS-63 and MS-64 Saints for a very modest premium above melt and they are certified for grade and authenticity. With diligence and knowledge of grading, cherry picked examples may CAC for an added price and demand benefit. Another important factor to consider is the tidal wave of counterfeits that will enter the market in many bullion related items. These generic $20’s will be great protection as well. For diversity, MS-62 or 63 $5 Libs, $10 Libs and $10 Indians would be nice additions too!
2. It’s amazing that after the wonderful and much needed certifying of coins, that the grading is still looked at as a problem. I’m very concerned that commercially graded and off quality coins will continue to be a drag on the whole coin market. Even the most knowledgeable buyers that have exercised great diligence by only selecting the top coins for the grade are seeing the effects of poorly graded coins in their collections. Off quality drags down the whole market.
The best way to deal with the problem is to recognize that there really is a two tier pricing market. It’s a fact…so you deal with it by trying to buy the strictest and most eye-appealing coins for the grade. If you’re not an expert, seek out CAC approved pieces. CAC is trying to sticker all the solidly graded coins for the stated grade. Do I agree with them all, no! Just pass on any coins that may not appeal to you until you find one that does.
We’ve seen many things happen in the coin industry since the inception of the grading services in 1986. As less and less vintage coins are certified, the grading services make their money certifying modern bullion and foreign coins. When the vintage coins start to be less available, CAC will ramp up their marketing effort of solid and high end coins for the grade. When this happens, the gap between the low end over-commercialized junk will widen and premium coins for the grade could escalate dramatically.
3. Counterfeiting is going to come on like a tidal wave. I believe all forms of bullion, except maybe junk silver, will be affected. As coin dealers you can’t say “who cares.” This problem will shake confidence in the entire hard asset market... know your dealer.
I recommend obviously looking at PCGS and NGC graded coins. Stock up on the $5’s, $10’s & $20’s that are certified. In times of economic uncertainty, they should trade for large premiums.
3a) Dave Bowers wrote in the 9/12/16 Coin World: “Grading is more disorganized that it has been any time in the past 30 years.” How do you see grading today?
Grading is inconsistent. It is truly amazing to see that after 30 years, it’s still not right. Circulated type coins that are horribly cleaned are now being graded without designating them as cleaned! Ten years ago, about half of the circulated type coins for all series that are graded today would have been called “no grades.” Mint State coins are extremely commercial. Today’s MS-65 coins in many instances were yesterday’s 63’s! Remember the days of NCI graded coins? They were looked at as a bane to the industry. Today, they’d be considered a fresh deal with dealers regrading them for upgrades at PCGS and NGC.
3b) What advice do you have for coin investors looking to get their money’s worth?
Find a dealer that not only knows how to read a label, but can actually grade the coin in the holder. If you don’t trust anyone, start seeing green and gold dots in front of your eyes from buying green & gold stickered CAC coins.
3c) What advice do you have for the grading services to overcome their “disorganized” ways?
Don’t train individuals with little to no experience in coins to be graders, because you can hire them for less money than an experienced numismatist. I also do not understand why finalizers don’t look at every submission or rubber stamp the submission if two graders agree with the grade. The other issue are plus (+) grades. Are these coins really better or is it another way for the grading services to increase their revenue by giving people the incentive to submit their coins for a better grade? How finite can the grading services split the hairs between MS-65 and MS-66 and all of the full grade points?
4) What undervalued area of the coin market is ready for exploitation that may be realized in 2017/2018? Please explain and give specific issues you favor.
Many series are under-valued, if you look at technically graded coins. Strictly graded coins with good eye-appeal are what everyone’s focus should be.
I think the price compression between grades on larger size gold type coins are too tight. Like a coiled spring, they could bust out to the upside. All bets are off if the central banks and governments keep manipulating the bullion prices, but if the metals break out…watch out.
Remember the old days of gold commemoratives being promoted every few years? They’re beautiful and abundant in high grades. However, there is a larger supply of them available than everyone anticipated. I feel that MS-67 CAC pieces that are close to the 66 prices are worthy of speculation.
Lastly, I love large size Seated Type quarters & halves… ”No Motto” in particular. This area is a personal favorite of mine in all grades, from circulated to uncirculated. However, they are not easy to promote.
5) The CDN has made great strides improving its price reporting and coverage. What additional improvements would you like to see?
I’m not impressed at all with CDN. What great strides have they made? I find the CDN adding plus or minus signs to specific issues is arbitrary at best. They recently killed the early Walking Liberty Half series. Many of the 1917 to 1933 issues, if strictly graded, should be increasing in value…not decreasing. Again, a classic case of over-graded coins bringing down the true, solidly graded, hard to find standouts. Isn’t the CDN (Greysheet) supposed to reflect the prices of high-end coins for the grade? It doesn’t seem that way to me!
6a) Premiums on generic U.S. Gold coins have fallen greatly. Is this an opportunity for investors bullish on gold or are premiums staying low for a long time?
I like these coins. The wildcard is in the future effect on world currencies, banks, world economics and government manipulations. I believe the US. Dollar will lose its reserve currency status. That’s one of the reasons why I really think these coins will be important in the future and will have applications for appreciation, preservation, insurance, etc.
6b) What specific issues are your favorites and why?
Stick to the larger size pieces: In gold, $5’s, $10’s and $20’s primarily in MS-62 and MS-63. In silver, common date Walkers MS-64 to MS-66 and Dollars in MS-63 to MS-66 could be heavily promoted.
*The Rosen Numismatic Advisory, The 2017/2018 Crystal Ball Survey, Part-1.
Vol. 41 No. 6, December 2016.
Numismatic Counseling, Inc.
P.O. Box 38
1120 Old Country Road, Suite 306
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.
Many Gold Coins Are Now Going From Common To SCARCER
And Sometimes, RARER.
By Paul V. Battaglia
My inspiration for this month’s article came from author and writer Richard Giedroyc. Mr. Giedroyc is part of the Numismatic News staff. He has written extensively for them plus has other publications to his credit.
I was captivated by his article after a few sentences which is the mark of an accomplished writer. Mr. Giedroyc stated how many otherwise common/available European gold coin, both classic and modern, were often available for two (2) percent over melt. The VAT (Value Added Tax) and capital gains tax are (currently) not applicable upon these coins at the moment. Also, collectors have subsequently raised their grade expectations from VF, upward. Therefore, this being a buyer’s market of unrivaled singularity, the collector can now afford to reach for an AU or into the BU grades. DEMAND has fallen off noticeably as well. Why? Our current economy is dreadful, plainly speaking. VALUE in nearly all things from hourly labor (and its’ inherent worth) up to most real estate has eroded due to an ever-available glut.
Many of my/our readers can readily cite situations where $20 Double Eagles have traded at melt, sometimes behind melt. Most of the current auctions have multiple examples of these coins below melt. Mr. Giedroyc continues by quoting well-known numismatic dealers and those dealers’ firsthand experience with the meeting of these varied coins in his article.
This numismatist particularly enjoyed his quip where “…the Bank of Canada in December 2015 ordered 215,000 $5 and $10 gold coins dating from the 1930’s to be melted to help balance the federal budget and avoid raising taxes.”* (Hmmm, cool, but I thought gold coins were no longer MONEY per some well-known investment firms, some newsletters, many huge banks, etc.? Yet, someone or somebody bought those gold coins, many of which are numismatic, right? Right. Canada’s shortfall was eliminated, right? Right! To which I must insert Steve Buscemi’s quote from the movie “Con Air” (1997): “Define irony: a bunch of…” Got it? Good, I knew you readers would. MY quote here is: “Gold and silver, satisfying all debts public and private for the last seven thousand (est.) years.“ Numbers do not lie. Gold & Silver both satisfy DEBT, period.
Time for me to make my point.
- So-called common/available gold coins ARE becoming scarcer with their current destruction.
- Once gold rises, demand tends to pick up.
- Once demand picks up so do the prices.
- Most people adore buying things when the rest of the herd is also buying en masse. Instead, be a swordfish, not a minnow.
- Those who are now acquiring the best grades they can afford will enjoy seeing these scarcer to rarer coins (made as such per the tinkerings of misguided economists and QE worshippers) rise in both demand and perceived-actual value.
I would make some room in the 2017 budget for such gold coins. THIS IS PLAINLY AN OPPORTUNITY, readers.
Our table at F.U.N. 2017 is #1524. Stop by, show me what you have found and give me your opinions!
Thanks much, have a fine New Year 2017.
My sincere thanks to Mr. Richard Giedroyc of Numismatic News for his generous permission in permitting me to reference his insightful article.
*”Gold coins now hitting melting pot.” Posted on November 27, 2016 by Richard Giedroyc
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.
My Lucky Dollar
By Dave Carleton
Well here we are at the beginning of a New Year. I hope 2016 was a good one for you and I certainly wish the best for all of us in 2017.
At this moment, Warren and Paul are attending the F.U.N. Show in Ft. Lauderdale. They went armed with an extensive “want list” and I hope they’re able to find some nice material.
A couple of weeks ago while we were in the holiday mode, I got to thinking about how coins, especially when I was young, were an integral part of my Christmas presents. My Mom and Dad always put some kind of coin or coin related product in my stocking. Years later, after PCGS was started, I gave my Dad a certified 1925 Peace Dollar to commemorate his birth year. He accepted it graciously, but told me that he had a Peace Dollar that he had kept for a long time that was pretty important to him. I asked what coin he was referring to and he blew me away when he told me the story.
The story goes like this…
When I just turned 13, I rode my bike to a farm a few miles from my house and asked the farmer if he needed any help getting in his bales of hay. He hired me and I started making $1.00 an hour. As time went on, I started working more and more doing everything on the farm. Over time, the money started to add up and I told my parents that when I turned 16, I wanted to buy a Corvette. My mother said that it was my money and I could do what I wanted with it. I had a habit back then, and it was to go to the Souhegan National Bank here in Milford and convert my pay into silver dollars. I just loved the feel and the weight of the coins and I also found that I was less likely to spend them.
Fast forward to my 16th birthday and I re-announced my intention of buying a Corvette. Both of my parents responded with “no way” you’ll kill yourself in a car like that. I was crushed, but I moved ahead and bought a 1953 Chevrolet Bel Air for $25.00. I still wanted something cool and I set my sights on a 1961 Corvair. Unfortunately, I had to cart most of my silver dollars back to the bank to turn them into paper, which is what the dealer requested for the transaction. I bought the car and drove it off the lot. I had just come from the bank and had five Peace Dollars in my pocket which I put in the glove compartment.
Several months later I spun out on a wet corner, did a 180° and took out a telephone pole backwards. I took off my eyebrows when my head hit the glove compartment and there was blood everywhere. Off to the hospital I went.
In the meantime, my parents were driving through town when they saw the tow truck bringing my car to the garage. My mother recognized the car and they followed the wrecker to the lot. Seeing all the blood made my parents crazy because the tow truck driver couldn’t tell them about the condition of the driver. My dad cleaned out the car of my possessions and he found the Peace Dollars. He kept one of those dollars and always thought it to be lucky because I probably should have been killed in that accident.
I never knew he did that until that Christmas when I gave him the 1925. I have that coin now and it has a very special meaning to me.
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.
Questions From The Mail Bag
By Warren Mills
M.B. asked: What should I do with problem coins I bought from a dealer?
A new customer recently came in and asked me to review his AU to Unc. Peace Dollar collection. I said we do all appraisals free of charge and I will be happy to look at them. He came in with his set and I said everything was cleaned to varying degrees. I said for expensive coins, and particularly better grade pieces, it is not wise to buy them uncertified. The 1928 and 1934-S should always be certified for authenticity alone, let alone the grade too! If I give the dealer that assisted you the benefit of the doubt and say that he didn’t realize the coins he was selling you were cleaned, the proof will be in the pudding. Take them back and get a buy price for the set. M.B. informed me that he acquired the coins a while ago over time and hasn’t seen the dealer for a while. I said it’s a good idea to renew your acquaintance.
He took the set to the dealer who had a handful of regulars in his shop. M.B. handed him the set and asked him what he’d pay. The dealer looked at the set and said all of the coins were cleaned to which M.B. said…”I bought them all from you.” Unfortunately, a deal was not consummated by M.B.
If you insist on buying raw coins, get a guarantee like the one we have. We guarantee that all raw coins, at a minimum, will certify to the grade we sold them as. I believe we’re still the only dealer in the country that has this guarantee. Also, before you are in too deep, offer coins back occasionally to see if a dealer stands by his or her product. Recently, we had a customer that bought a fair amount of 69 and 70 bullion coins for a premium and the dealer did not need them when they wanted to sell!
I told M.B. to bring his set back when he can and we’ll look into certifying what we can for him and help him to value the rest. Thanks M.B. I wish the outcome had been better.
We will have our usual Corner Table at the F.U.N. show this month. I hope to see you there.
We are always happy to answer any questions you may have. So please keep sending in your questions to me directly or email Thank you.