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NumisMedia Monthly
July 2009
Opportunistic Buyers Taking Advantage
The coin market may be considerably lower today than it was at the beginning of 2008. The past year and a half have been trying times for sellers, but buyers now have the opportunity to acquire coins at discounts of previous years' FMV levels. The economy has been tough on dealers and collectors, and many have been forced to sell coins out of their untouchable boxes. Thousands of coins are currently available that normally would have been held for a better market. A classic example of this is the recently sold 1804 Dollar, which realized $2.3 million in the Heritage Auction Galleries Central States Sale. This coin previously sold for $2,475,000 in March of 2006 and it had the potential for a $3 million price tag. The new owner believes that potential is still there. Now it may be difficult for many of us to think of this coin as a bargain, but this is the type of opportunity many buyers are now seeking.
We have prepared a list of coins that dealers feel could have potential based on today's lower FMV levels. The $4 Gold Stella is always popular, but because of its high price tag, the number of prospective buyers is somewhat limited. The 1879 Flowing Hair in PR66 was listed at an FMV of $300,000 in January 2008 and is now priced at $275,000. In PR67, it was $475,000 versus today's FMV of $437,500. Another Flowing Hair coin, the 1795 Half Dollar in AU58 had a previous FMV of $30,630 in 2008 and today it is $23,440; this is down almost 25%. In January 2008, the 1806/5 Bust Half Dollar was $41,880 in MS64, while today the FMV is $35,940. Several other coins are listed below; however, there are thousands of other potential bargains out there.
| Date | Grade | January 2008 | July 2009 |
| 1794 Half Dime | MS64 | $55,250 | $48,750 |
| 1795 Half Dime | MS65 | $43,550 | $38,350 |
| 1798/97 Dime 16 St | MS65 | $53,130 | $44,380 |
| 1875 Twenty Cent | PR67 | $44,850 | $34,450 |
| 1875 S Twenty Cent | MS67 | $29,900 | $24,050 |
| 1895 Barber Dime | MS66 | $14,950 | $10,600 |
| 1796 Bust Quarter | MS64 | $125,450 | $118,950 |
| 1806 Bust Quarter | MS66 | $110,630 | $96,880 |
| 1901 S Bar Quarter | MS66 | $130,000 | $117,000 |
| 1794 Flow Hair Dol | XF40 | $275,000 | $250,000 |
| 1801 Bust Dollar | MS62 | $41,880 | $36,880 |
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As you can see, some of these are very rare dates, such as the 1796 Draped Bust Quarter. The FMV of this quarter has not dropped significantly, but this is a coin that does not come along very often. In a hot market, this type of coin will bring a premium. Another way to help find potential is to check the population report for the specific date and grade to determine how many coins could be in the marketplace at any one time. The 1796 Quarter has a total of 14 coins certified by NGC and PCGS in MS64, with 14 additional coins grading higher. Be sure to take into account that the population numbers could be slightly skewed due to resubmissions and repeat grades.
When a market softens it is most likely that specialty areas will suffer the most. For example, Deep Mirror Prooflike Dollars have a very limited number of advanced collectors willing to pay the strongest prices for the highest certified coins available. Granted, there are probably thousands of collectors for DMPL Dollars; but most of them collect the coins they feel are reasonably priced for the grade, not willing to pay competitive prices to advance the market.
In a fast moving, rising market, advanced collectors know they have to be willing to pay aggressive prices if they want the finest available coins. The DMPL Dollar market had a strong upward cycle for about two years that finally found resistance in the last quarter of 2008. Since that time, some of the top collectors have become sellers into this market. That point in itself is enough to lower the market a good 10% or more because some of the top buyers have been removed from the competition. It also creates some weariness for the remaining buyers as to the direction of the market. Add to this indecision, the state of the economy, you have a predilection towards much lower levels. This has certainly been the case for the last several months as high grade DMPL Dollars have generally fallen as much as 20%. These declines have been documented at several major auctions.
In April 2008, the FMV for the 1889 DMPL Morgan Dollar was $23,190 in MS66 and today it is $16,060. In an extreme example, the 1895 S in DMPL MS66 was $105,630 in April 2008 and now it is a much lower $85,630. In MS65 DMPL, the 1887/6 was $41,560 and now it has an FMV of only $25,000. Several dealers felt this coin had been overpriced at the previous high level.
The weather is getting hot and many dealers are currently planning summer vacations; however, like most collectors, they welcome opportunities when presented to them. The FMV for thousands of coins in specific grades may be lower today than in January 2008. It's a great time to be a buyer as long as you make educated purchasing decisions. Patience is the key if you are a collector in a highly specialized series. You have to be able to wait out the slumps that come along when a series softens dramatically and dive in when the waters feel just right.
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