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NumisMedia Monthly
September 2007
Unlimited Potential in Classic Coins
Today's collectors benefit from statistics. They want to know the original mintage of an issue and beyond that, how many coins have been certified in a specific grade. We have taken that one or two steps further in making a comparison of the original mintage of three specific issues to the total number of coins certified in all grades by NGC and PCGS. Once we determined that percentage then we developed a ratio of the total number of coins graded in MS65 and higher to the total number of coins certified. Modern issue coins have a greater percentage of high grades certified compared to original mintage than older classic coins. This is a fact that eludes many of today's novice collectors upon entering numismatics. This same fact is not lost on those advanced collectors searching for the 'real deal' in rarity.
Certified coins offer the consumer protection from the vagaries of grading subjectivity. However, collectors must be aware that dealers value NGC and PCGS above all other services. Therefore, we will use NGC and PCGS exclusively for the comparison study in this article.
The 1992 S Columbus Half Dollar in Proof has an original mintage of 390,255. NGC and PCGS have certified a total of 3,196 coins in all grades. This means that less than 1% of the original mintage has been certified by NGC and PCGS. However, a whopping 99.8% of those coins are graded PR65 and higher. The FMV for the ultimate grade of PR70 is $250. You can develop your own ratios by dividing the number of coins in a specific grade by the number of total certified coins. The fact that only a small percentage of the original mintage has been certified by these two major grading services emphasizes the reality that most collectors believe the common modern issues are not worth the certification expense.
The next coin we selected is one of the most common Morgan Silver Dollars, the 1881 S. The original mintage is 12,760,000 with 322,560 certified by NGC and PCGS in all grades. This reveals a high percentage of coins certified of 2.5% of the original mintage. There are over 100,000 coins certified in MS65 and higher leaving us with a ratio of 33% of all graded by NGC and PCGS. This is exactly why the 1881 S has one of the lowest FMVs of all the Morgan Dollars in MS65, 66, and 67. Yet, when you refine this ratio in MS68 and 69 it comes out to a minuscule .06% of the total 1881 S Morgan Dollars certified by NGC and PCGS. The FMV in MS68 is $4,560 and MS69 is $53,130. If you want to take this a step further, there are only .8% of the original mintage of 1881 S Dollars that qualify for the MS65 and higher grade.
The last coin we arbitrarily selected is the 1892 Barber Half Dollar; with an original mintage of 934,000 and 1688 coins certified by NGC and PCGS. This is a tiny .18% of those coins certified. There are 279 coins graded MS65 and higher; this is 16.5% of the total NGC and PCGS coins certified and is rather high for a coin in the 1800's. Then again, the 1892 is a common date. Only .03% of the original mintage grades MS65 or higher. The FMV for the highest grade MS68 is $42,250 with just two coins certified by both services. Ultimately, Registry set collectors are the true determinants of values for these highest-grade issues.
Just to add a little intrigue we are going to insert another element into this mix of numbers and availability. How many times have you looked for a specific coin, searched through numerous inventories without finding a single one that met your standards for that grade? This occurs all the time. Just because that 1881 S Morgan Dollar is graded MS65 does not mean you will like it. All collectors have different tastes; what appeals to one may not to another. The FMV for the 1881 S Morgan Dollar in MS65 is $146. However, we all know that some coins will sell for less than this price while others will command more. It is a matter of eye appeal and whether the coin is a high-end or low-end coin for the grade.
If you took the 80,423 coins graded by NGC and PCGS in MS65 and lined them up next to one another with the worst coin on one end and the best coin on the other, you would be amazed at the difference in quality between the two extremes. It would probably look like a difference of two grade points. However, the worst coin is technically a 65 but may lack a certain amount of eye appeal, while the best coin has eye appeal and looks like it could be a 66.
Now a smaller group may not look as significant, such as an 1802/1 $2.5 Gold piece in MS62 with an FMV of $48,100. With only six coins total certified by both services, this group might look a lot closer from one end to the other. Yet the low-end coins that do not meet the standards of the majority of numismatists typically sell for discounts of FMV. In addition, these coins may be dragging down the overall values of the rest of the coins in the specific group. Dealers and collectors do not want the low-end coins; they want middle to upper-end quality for the grade. These are the coins we use to report the FMV.
Hopefully, you are grasping the idea that even with census reports at your disposal, coins may be rarer than you think. In January 2003, the 1802/1 $2.5 Gold was reported at $31,560 in MS62. It has increased over 50% and yet we have more buyers with more money interested in these types of coins. The supplies are dwindling and demand remains exuberant to say the least. When you consider how many new collectors are joining the other millions of satisfied numismatists, new demand will continue to put more pressure on prices.
Keep in mind there is another factor that increases the virtual rarity of all Classic Coins: they are submitted to NGC and PCGS multiple times in an effort to receive the highest grade possible. Many times the same coin is sent to both services. If we actually knew how many coins existed in all grades the numbers would be even more astounding than we indicated. The rarity factor would increase and most likely so would the FMV.
Properly graded early coinage continues to lead the list of issues that dealers and collectors want to acquire. In most cases, every fresh coin in a major auction will bring new higher prices for pre-1800 coins. This can also be said for most other coins up to at least the 1840s, including all denominations. The amount of money that appears to be available for rare coins is astronomical, and with the economy in disarray, what better venue is there to place discretionary income?
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