Value Quest 2009
By Doug Winter
the feeling that the Numismatic Buzzword for
2009 is going to be “value.” If you are like
most collectors, your purchases in the coming
year(s) are not going to be as extensive as they
were in the past. If you are buying fewer coins,
you’ll want to stretch your coin purchasing
dollars and look for pieces that offer the
biggest bang for the buck. I have a few
suggestions, which are mainly conceptual in
nature, to guide you along the Value Trail.
Regardless of series, date or mint, coins that
have a nice, original appearance are very rare.
My definition of “original” is a coin that
appears to not have been cleaned, dipped,
processed or otherwise enhanced in recent
generations. In many series, especially ones
like early gold and southern branch mint gold,
truly original coins probably represent less
than 5% of the available population. If you
don’t believe me, take a look sometime at a
large auction that is held in conjunction with a
major convention. Assuming that you know what
you are looking for, my guess is that you’ll see
coin after coin that is too bright or bleached
out or bedecked with “unusual” coloration. In
some sales there may be thirty or forty early
gold coins and only a small handful that fit my
criteria of originality.
It makes sense to me that if you are going to
buy fewer coins in 2009 (or, who knows, maybe
you won’t buy fewer coins, just less expensive
ones…) you should be buying prettier, more
aesthetically appealing ones. And one of the
things that I am continually amazed about in the
rare date gold market is that, when they are
available, choice, original pieces tend to only
bring a small percentage (10-20% at most) over
the typical “schlock” that is usually offered.
Another important point to consider when
purchasing coins with a newfound appreciation
for value is current market price versus prices
in 2002-2003. I use 2003 as the point in time
that prices in many gold series began to rise
significantly. As an example, many early gold
coins that were worth $6,000-8,000 in 2002-2003
had been at that level for quite a few years.
Today, these same coins may be worth
$10,000-12,000 or even more in some cases.
If you own stocks, you are probably well aware
of the fact that the drops in the market since
early September have basically eroded all stock
profits achieved in the last five years. While
the coin market has, so far, held its value far
better than I would have expected, it is
certainly a possibility that today’s $10,000
coin could certainly drop to $6,000 in a fairly
short period of time. By studying the past
history of specific subsections of the market,
the value- conscious collector should have a
clearer idea of potential downside.
There are actually a number of rare date gold
coins that are worth the same today as they were
in 2002-2003. Examples include very high grade
Charlotte and Dahlonega issues (in this case
MS63 and above), many San Francisco issues from
the 1850’s, 1860’s and 1870’s and even a number
of New Orleans gold coins. The reasons for this
range from the market being damaged by too many
overgraded coins in holders (in the case of
Charlotte and Dahlonega pieces) to collector
indifference (in the case of the San Francisco
coinage) to poor reporting of prices by Trends
and CDN (in the case of New Orleans issues).
Just because a coin was worth $5,000 in 2003 and
it is worth the same today does not mean that it
offers the “best” value to a buyer in 2009. But,
it is interesting to ponder if coins such as
this might have less downside than areas of the
market that have shot up considerably.
Which brings us to the third and final point to
consider in our Valuequest 2009. Liquidity is
likely to be a huge factor in the coin market in
the coming year(s). This is probably no time to
be “cute” when it comes to your coin purchases.
My guess is that coins that had limited appeal
and liquidity issues in the good market of
2003-2008 might have virtually no appeal and
liquidity in the potentially-not-so-good market
of 2009 and beyond. In other words, key dates
may drop in price somewhat but they are still
likely to have a lot of collector demand. And to
use an analogy from the non-gold coin market,
series such as Three Cent Nickels, Shield
Nickels and Liberty Nickels have and will
probably always be also-rans because they are
just not especially interesting in the opinion
of most collectors.
So, in summary, I believe that three of the key
elements that will drive the market in 2009 are
originality, current price levels versus
pre-bull market prices and liquidity/popularity.
These were obviously key elements in years past
but with the market euphoria of the past not
likely to be seen for awhile, I think they will
be more important than ever.