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.
