There is a lot of talk in the last decade about "gradeflation", and it's effect on the coin market. Dealers and collectors are worried about changing standards, and the effect it has on their coins' value. It is this author's opinion that collectors need to go back to their roots, and stop collecting "grades" and instead start collecting "coins."
What does it mean to collect a "coin" as opposed to a "grade"? When you collect for the grade, you are buying primarily based on a coin's numeric coin grade; is it an "MS-64" or is it an "MS-65"? That is your concern when you grade-collect. If you are coin-collecting, you are collecting based on the rarity of the coin (e.g mintage of 200 coins vs mintage of 2,000,000), the beauty of the coin's surfaces (luster, toning, spots, etc are more important than the numeric grade), and also based on the history and story behind the coin.
Mint errors are collected based primarily on demand for the error type (which could be called the "history or story" of the coin), rarity and last of all, grade (also, grading standards for mint errors are much looser than they are for "regular" U.S. coins.) Error collectors are far more concerned about the coin, than they are about it's grade. They are much more "coin collectors" than they are "grade collectors."
This approach also makes a lot of sense for collectors who are collecting non-error U.S. coins. Within any given U.S. coin series, a coin's rarity should be the primary concern, and the "grade rarity", should not matter that much beyond perhaps 3 tiers of mintstate (MS-60, MS-65 and MS-70), with prices reasonably reflective of those grades, but not of that much concern. Things like surface quality, ugly toning/spotting, distracting marks, strike, etc should be more concerning to collectors than a numeric grade number.
Grading standards for mintstate coins are unstable and changing, and are actually very hard to even define, so why is everyone buying based on this unstable "grade system" of collecting? Rather than worrying about a coin grading MS-66 over an MS-65, buy a coin for it's physical rarity, overall pleasing appearance, and leave it at that. People seem to be "grade collecting", when they should be "coin collecting."
One of the most well known and popular U.S. mint errors just sold: a 2000 Sacagawea dollar/statehood quarter mule. The coin is graded PCGS MS-66 and brought $85,000, and was sold to well known Sacagawea mule collector Tommy Bolack, who now owns and incredible 12 examples.
Below is a link to the Coin World article.
Note: above image is courtesy of Fred Weinberg
A pair of the rare and popular 1943 copper cents were recently discovered, and certified by NGC. The coins are worth many hundreds of thousands of dollars each, and are a remarkable discovery! 1943 copper cents are the most valuable mint error for U.S. coins, with the 1943-D being the most valuable of them all. These are not worth as much as the 1943-D, but are still likely to bring well over $250,000 each, for a combined value of $500,000 or more.
We are told these will go on auction over the coming year.
Read about them in the link below: https://www.ngccoin.com/news/article/5949/1942-1943-Lincoln-cents-mint-errors/
The year is off to a good start in our opinion, with our sales being brisk, major auction results looking relatively strong, and overall good activity in the market. We have been through a number of major coin shows, auctions, and have been able to get a feel for how the error coin market is doing.
There are strong areas and weak areas, with some of the more common (even if expensive) errors types being generally weak, and but with the truly rare, dramatic, or unusual error types being in demand. We are out of stock of many error types, and coins we have often had multiples of, and currently we cannot find replacements. This shows the strength of the market to us. Although we cannot know what the rest of the year will bring, we are optimistic and please with how the year is going so far, and are looking forward to the rest of the year.
So what are some areas which are good collecting opportunities right now? Certain types of errors have dropped in price in the last number of years, and prices are at the lowest they’ve been in years for some of these error types. This is an opportunity for collectors to start building a collection. Although error coin collecting is not really an investment, the investing mantra “buy low, sell high”, bears some relevance to collecting. So here are some areas which we believe are good values right now (these are not listed in order of “good value.”)
1.Lincoln cent on Roosevelt dime double-denominations
Average Cost: $750
These have come down in price over the last several years, with “common date” 11c coins selling for around $500-$650 in average mint state grades. Even some of the scarcer dates sale in this price range or a little more due to a lack of demand. A collection by date would make a very challenging and difficult set—but the difficulty is half the fun, which would make it a good set.
Because there is little competition for the rare dates/mints at this time, this would make a great set to work on right now.
2.State Quarter Errors
Average Cost: Varies
The market for state quarter errors priced under about $1,000 is soft right now, making for a good collecting opportunity.
There are any number of error types to collecting within the state quarter series: missing clad layers, double-strikes, off-centers, elliptical clips, etc. Pick an error type and then start collecting it. There is a lot of fun in trying to accomplish a set like this, and quite a challenge as well. 50 coins would be required to complete a set for any of these error types, with some states being super rare, and some being relatively common. Prices on these generally are 25-50% lower than they were 10 years ago, and that’s a good thing for collecting them.
3.Modern Off-Centers by Date/Mintmark
Average Cost $5-$75
Pick a series from Lincoln cents to Kennedy half dollars, and all are soft right now, with prices down. Although there are serious collectors forming sets, there aren’t as many right now, making for a good opportunity.
A good idea would be to pick a series, for example Lincoln Memorial cents, and then build a set by date and mintmark, with a requirement that all coins being 40-60% off-center, and mintstate, and with no major problems (counting wheel marks, etc, are so common on off-centers, it’s ok to have one, but nothing really obvious or major.) A set like this will cost much less than it did 10 years ago.
4.Off-Metal Jefferson Nickels on Cent Planchets
Average Cost: $350 a coin
Prices are pretty soft right now, with the exception of the earlier date coins (which are so rare that they are always in high demand.) Doing a set by date or date and mintmark would be very challenging, so a date set might be a better option. Also, the error type itself makes a nice collection because the error is very obvious since the off-metal is a big contrast (copper vs normal nickel.)
A good idea might be to limit the set to start in 1955, since many of the dates and mints prior to that year are rare and hard to find (although doing such a set would be neat and a great challenge for the collector who is up to it.) The coins in the 1990’s will be very tough as well, although because most collectors don’t realize just how rare they are, you could likely pick them up (if you were lucky enough to find one) at a relatively low price.
5.Buffalo Nickel Off-Centers
Average Cost: $750
Although always popular, at the moment buffalo nickel off-centers are fairly cheap. There have been enough of them come on the market in the last 5-10 years, that prices are lower than they used to be for most off-centers (very nice or very rare date examples being the exception.)
Collecting a date or date and mintmark set would be very challenging and fun, although more expensive than other coin series. Being a beautiful and popular design makes them a somewhat more expensive, but also a more attractive set.
6.Lincoln Cent Die Caps
Average Cost $350
These have dropped about 25-50% in the last 10 years, with coins being very affordable right now. 10 years ago they were selling for about $500, but have dropped in recent years. a Dramatic error and we like them.
7.Missing Clad Layers on 10c, 25c, Pres/Sac $1 and SBA $1
Average Cost: 10c $35, 25c $40, $1 $200-$400
While these used to be about 50% more expensive than they are now, over the last few years they’ve dropped in price. Generally, these are a good area to be collecting right now, since prices are down.
There are other areas which are good values, but these are a handful of areas worthy of consideration for collecting right now. If what you are buying right now is “hot”, with prices going up, maybe it’s a good time to stop collecting so much in that area, and pick one of these or some other area in the error coin market which is experiencing weakness. Most price drops in the coin hobby do not last, with fresh collectors eventually coming back in and pushing prices back up. Of course there’s no guarantee of that, but as they say “buy low and sell high”, and these are some “low” areas at the present time.
Above: The Baltimore coin show bourse floor. We’re finally catching up after a busy Baltimore coin show last week. The show, located in Baltimore, Maryland, and held 3 times a year, is one of our favorite shows of the years, due to its excellent location, which brings in lots of both customers and dealers from all over. This year we were wondering how good the show would be, since the coin market as a whole has been lackluster for the last number of years, and the error market has been effected as well. What all has caused a downturn in the coin market is anyone’s guess (and if you ask coin dealers, you will get different answers) and there are many factors which doubtless play a roll. So we were interested to see how this show would be both for us, as well as for the non-error dealers at the show. Overall, the show was excellent, with most dealers we talked to saying they were having a “good show”, and with other dealers having “their best Baltimore show ever!” There was a good energy at the show, and dealers seemed happy at the amount of selling they were doing. The auctions seemed to do well, with the Pogue sale of high-end coins having lots of excited bidders, and the various errors we saw in auctions went for good prices in our opinion. Buying and selling were overall good at the show. We bought less than we wanted to, and sold more than we expected, and overall would say that it was an active and good show, and we think the coin market appears to be on the upswing. Of course you cannot judge an entire market by one coin show, and we aren’t. Up till now, we’ve seen prices for error coins holding steady across most types and series, and with some areas being very active, with prices well above that of recent years. We are excited to see how the rest of the year goes, but things appear to be having an upward momentum for both the error market, and the coin market as a whole. In our next blog post, we will dive into some areas of the error coin market where prices are low, and therefore would be an excellent area to start a collection (low prices rarely last, and are often opportune times to build collections.) Happy collecting!