We had a great market until May 2006 and then a slump. What’s your outlook for 2007/2008? Please explain in detail.

I expect that precious metals will be higher, that the uncontrolled deficit and the problems in Iraq will be exacerbated by continuing terrorist fears and that both investors and collectors will continue to enter the coin marketplace in larger numbers than previously expected. However, it’s going to be a mixed bag in terms of inflationary expectations, because I think the Fed is well focused on inflation. Metals will go up, inflation will stay in check or increase a little bit, and higher metals prices will strengthen the coin market. If gold goes to $800 or $900 an ounce, then certain areas of the coin market will get stronger.

What areas of the market look to be the best performers for 2007/2008? Please explain why.

For the last couple of years, I’ve been placing great emphasis on classic gold coins such as Early American gold from the late 1700s and early 1800s – and with higher precious metals prices and especially higher gold prices, I would expect these coins to continue to outperform the market as a whole. I also expect generic gold coins, the entry-level coins for new gold investors, to continue to pique the interest of the initiated.

What areas of the market look to be the worst performers for 2007/2008? Please explain why.

I think you’ll see some unexpected surprises in coins that are rare but have been over-promoted. Some of these coins, such as Continental dollar patterns, have gotten out of hand in terms of price. Some of the high-grade Continental dollars and even some of the great rarities will see a bit of correcting in 2007/2008, even with higher precious metals prices. Take the gem half disme, for example. That has become a seven-figure coin, and I think it’s a bit overpriced. It’s not going to be a worse performer, but it’s also not going to go from seven figures to eight. The absolute worst performers for 2007/2008 are probably going to be some of the First Strike coins and a lot of the high-grade modern coins. Both are selling today for much more than their actual available supply would seem to justify.

Since the lows of 2001, gold almost tripled, but rare coin performance severely lagged gold. Some indices show gains of 20%-40% from 2001 to the highs of 2006! (A) What accounts for the disparity? (B) What does this portend for the future?

(A) In the last great gold boom, back in 1980, all the excitement and irrational exuberance were generated by coin dealers themselves. They were buying and selling rare coins on their own accounts and for inventory. As gold soared ever higher, they were buying ever more rare coins and paying ever higher prices. Dealers themselves are the greatest marketplace engine for demand. Conditions were similar in the smaller bull market of 1989. Today, the situation is just the opposite. Dealers are being more cautious and not buying as many rare coins with their profits from precious metals, knowing from sad experience that if the gold market drops, the rare-coin market could follow suit. The current demand is strictly from consumers – and it’s healthier this way. But the reality is, a lot of gold coins are not performing as well as we would like because of this.

(B) This portends that gains will be more solid and that if gold goes down in value, coin prices probably will not decline precipitously, as they did in the early 1980s. We will have a marketplace that’s far less volatile than we had in 1980 and 1989 and, to a lesser degree, in 1992. On the other hand, if gold goes up in value, we probably won’t see as dramatic an upturn in coin prices as we might have seen in the past, with the possible exception of some of the generic coins, such as Mint State-65 Saint Gaudens double eagles, which are the signature coins of numismatic gold promotions.

Do you think that “Ohiogate” had a detrimental impact on the market? If yes, how so and why? If not, why not? What lasting effects can we expect from “Ohiogate”?

Ohiogate really became an external event, with the coins being sold in a bull market very expertly over time in sales well coordinated by John Albanese. He advised Ohio on how to sell the coins systematically. There were no fire sales and the whole thing had zero impact on the market. I see no lasting effects whatsoever.

What will it take for a large financial institution to make a commitment to the coin market? What specific sectors of the market would be most likely emphasized in the portfolio of a large coin fund?

It will take impressive price performance statistics combined with an excellent outlook for the future, combined with the appearance of a high upside and a low downside, combined with honorable fund managers. I think all this is a possibility, but we don’t seem to have the statistics that we need to show robust past price performance – and some of the projections that I’ve seen don’t suggest performance as strong as I’d like to see for the future. Still, I think deficient areas can be strengthened and that this will happen relatively soon. I think large coin funds would seek great rarities and generic rarities such as proof gold coins. I don’t think we’d see these people running out to buy rolls of 1950-D Jefferson nickels.

As we close 2006, how do you assess the state of coin grading?

I see things improving. I think the grading services are making a greater effort to be consistent. I don’t see the standards loosening from where they were a year ago, so it’s a case of status quo. But I think we’re in a better position now than we were a year ago. I applaud the grading services for learning as much as they can about coin doctoring and for taking a lot of doctored coins off the market. At this point, I would be very surprised to see grading loosen further. I think we’re at the point where people understand what the standards are.

How important are modern coins becoming to the market? What are your overall views and recommendations for investors?

I don’t believe modern coins are becoming important at all, except to the promoters who foist grossly overpriced super-high-grade examples on the unwary. Sadly, they also will become important to those who buy them – but in a negative sense, when they learn how much they’ve lost on their “investments.” And yet, while many deride them, such coins continue to bring ridiculously high prices in super grades.

I recommend not buying modern coins in grading-service holders, since these coins’ super grades – the basis for their outlandish prices – have already been established. If people want to dip their toes in the shark-infested waters of modern coins, they should do so by purchasing – or cherry-picking rolls for – coins that appear to be very high grades and send those coins to the grading services to see if they can get them certified as MS- or Proof-70. It may cost $15 or $30 apiece to get them certified, but it’s an educative process. If you submit 10 coins and even one comes back as 70, you’ve gotten a $1,000 coin for an investment of a couple of hundred dollars. If all of them come back with lesser grades – say, 68 or 69, then you’ve spent a few hundred dollars to learn about grading standards. That’s how I recommend investors get involved in modern coins.

Two sophisticated investors come to you to invest for the long term. One has $25,000, the other $250,000. Each investor wants only a few coins. What do you recommend to each and why? Please state the upside potential for your picks.

For the investor with $25,000, I would pick virtually all gold coins from $5 Libs to $20 Saints in the grades of MS-64 to MS-66. For the one with $250,000, I would recommend a portfolio of all gold coins with the exception of an MS-65 1909-S VDB Lincoln cent and a couple of other coins – perhaps an 1856 Flying Eagle cent and a few key-date coins of that nature. The rest would all be gold coins – an MS-66 Saint and early gold coins in MS-63 and above. These might include a prooflike 1799 $10 in an old holder in 63 or 64, a 64 $5 gold piece from 1799 or even an XF 1795. That’s how I would put together that portfolio. The upside on all those coins is tremendous, and I would expect that in a few years, all could double in value.

Increasing government regulations, further losses of privacy, more taxes, these are all likely to impact our lives in the years ahead. How might they impact the coin market? What specific advice do you have for today’s investors?

That’s an open-ended question, and it’s difficult to say. I really don’t see much more impact on the coin market than what we already have. I think we’re at a point now where we’re not going to see a greater overall across-the-board government impact on the marketplace. I think we’re at the high point of government regulation. If we have another terrorist attack and there is another spectacular event like 9/11, all bets are off; there will be more restrictions on funds, and banks will look more carefully at movements of large sums of money because they will be forced to do so by the government. But barring another terrorist attack, I think we’re at the height of regulation and we should actually see an easing of these regulations in the months and years ahead.

My advice to today’s investors is to keep very good records of all transactions, especially trades. Just make sure the transactions are all well documented.

What follows are a series of questions where I request you to state your Best Buys in a number of market sectors. Please list the ones you favor, (B) explain why you picked them, and give us an idea of their investment potential.

Best Buys for Type Coins in MS and Proof

Twenty-cent pieces certified as Proof-63 or 64

You’ll pay about $2,300 in Proof-63 and $4,000 in Proof-64. But when it comes to investment, these coins have lots of life in them. Appreciation of 15% should be the norm.

Common-date Barber silver coins in Mint State-64 or 65, or Proof-64 or 65

The Barber coins served Americans long and well in commerce, and relatively few were preserved in mint condition. As a result, they’re elusive in high mint-state grades. You can expect to pay hundreds of dollars for even a common-date example in Mint State-64 or 65 – and more for a Proof-64 or 65, for proof mintages rarely exceeded 1,000. But these coins are legitimately scarce and the prices are justified. There are important bellwether coins and have lagged the market, so don’t go overboard and load up on them. But any recommendation of Type coins would be complete without these coins included.

State 1809-1837 Capped Bust dimes

Capped Bust dimes had extremely low mintages, judged by current standards. In only four years did their output exceed 1 million – and then not by much. On the other hand, there were nine years when the total came to less than 500,000. Furthermore, few were saved, since coin collectors were similarly sparse in those early years. You can expect to spend close to $600 for the “small size” (1828-1837) and $1,000 for the “large size” (1809-1828), even for specimens graded just Mint State-60, and several times as much for one that grades MS-63. But these coins are legitimately scarce and well worth the premiums they bring. These coins are undervalued by 25-40%.

Copper-nickel Indian Head cents graded Mint State-64

Although its annual mintages weren’t small by the standards of the day, ranging between 10 million and 50 million, this “white” Indian cent enjoys wide popularity as a type coin. In Mint State-64, it costs about $300 (not counting the higher-priced 1859), but I consider that a good value and a coin that could easily double in price.

Trade dollars graded Proof-64, 65, 66 or 67

Considering how elusive they are, they represent good values at current market levels – about $4,200 in Proof-64, $10,000 in Proof-65, $12,000 in Proof-66, and $20,000 in Proof-67. They are rare, beautiful, old, historic and desirable. 25% appreciation during the next couple of years is realistic.

Franklin half dollars graded Mint State-66 or higher

The design is deceptively simple, with Benjamin Franklin’s portrait and the likeness of the Liberty Bell both having clean, open looks. But subtle details are missing from most of these coins, even in mint condition; few, for example, display full lines on the bell. Franklin half dollars are common in grades of Mint State-63 and below; in higher grades, however, they command substantial premiums, generally much more than $100 – and based on their scarcity, they’re well worth it. Prices sometimes reach into the thousands of dollars depending on specific coin. Some dates in the 1950’s with full bell lines that are priced at $500 or so could easily reach into the thousands of dollars within a couple of years. This is one of my personal favorites, and I have salted away a number of beautifully toned examples for myself at relatively cheap prices.
1793 Chain and Wreath cents

The Chain cent and Wreath cent are obviously coins of tremendous historical significance. More than that, however, both are major rarities. The Mint produced only about 36,000 Chain cents and 63,000 Wreath cents, and in both cases those mintages are subdivided into several highly collectible varieties. You can expect to pay hundreds of dollars for low-grade specimens of either coin and thousands for high-grade examples, but they’re worth it. Seldom in U.S. coinage have history, rarity and romance intersected so dramatically – and so appealingly. A doubling in value within 3-4 years is realistic.

Two-cent piece in Mint State-65 Red

Because of the high usage of early two-cent pieces and the low mintage of later ones, relatively few exist today in pristine mint condition. Even among the ones that were saved initially, many were mishandled over the years. In Mint State-65, common-date examples cost $1,300 or more today – but the price is right, for these are truly scarce, historic coins. A realistic trading range should be above $3,000 per coin, but many coins such as these never achieve their potential because they are a part of an obsolete series.

Draped Bust silver dollars and half dollars graded AU-50 to AU-55

The earlier coins in the series, from 1795 to 1803, while attainable, also are far from inexpensive, for all have mintages under half a million and, in most cases, under 100,000. Draped Bust half dollars lingered until 1807, but topped 500,000 in just one year, 1806. Both denominations are prohibitively expensive in mint condition. They’ll set you back several thousand dollars even in about uncirculated (AU) condition – but as rare, historic and highly coveted coins, they’re well worth the outlay. These are perennial favorites that should appreciate 10% or more per year.

Best Buys in the Gold Coin sector

Early $2½, $5 and $10 gold pieces in mint condition

Early U.S. gold coins are beyond compare – in a class by themselves – in mint condition. In fact, early gold pieces graded MS-63, 64 and 65 are the most important coins in the marketplace as this is written. And they will remain so as long as gold continues to increase in value. As this is written, these coins are absolutely on fire. Everyone who can afford them wants to buy them, and collectors, investors – and even dealers – are throwing away their price guides when they bid on them at auctions. It’s not unusual to see such a coin with a price-guide value of $40,000 bring $90,000 or more at an auction. This is a textbook case of supply and demand: Very few of these coins are available, and the universe wants to buy them. With early gold coins, the momentum has been fueled by gold’s continuing surge and the powerful demand from determined buyers. And both of those propellants seem likely to persist. Under such circumstances, that $90,000 early gold coin – far from being overpriced – may look like a bargain before long. These are the coins you should be pursuing if you want to maximize your gold-related gains in the current marketplace.

Type II and III Liberty Head double eagles graded Mint State 60 through 63

This coin is listed as a winner, as I am optimistic about the outlook for gold. However, if you see gold bullion decreasing in value dramatically, you can reasonably expect Type II and III Liberty Head double eagles graded Mint State 60 through 63 to be big losers if you purchased them when gold was higher. Further, Section 352 of the U.S. Patriot Act could significantly impact the investment attractiveness of these “Libs,” as many dealers of these kinds of gold coins are now required to keep detailed records of transactions to comply with anti-money laundering requirements that are now being enforced. In December 2006, with gold at $617.30 per ounce, a common date Type III Liberty Head double eagle retails for $685 in MS-60; $725 in MS-61; $740 in MS-62; and $825 in MS-63. Type II is rarer and, thus, more expensive. These are bullion investments at these low prices, and could easily double or triple after the Buffalo bullion coin novelty wears off and if gold increases in value. I see virtually no downside at these levels and am aggressively recommending them not only to my best clients, but to my closest relatives.

Type 3 Liberty double eagles graded Proof-65

Type 3, is the gold proof I especially recommend. A Proof-65 example will cost you about $100,000 – but with mintages ranging from a low of 20 to a high of just 158, these coins are not only dazzling but downright rare. A doubling in value is realistic with higher gold bullion values creating economic justification.

Best Buys in Silver Dollars
1885-CC Morgan dollar graded Mint State-65 (and similar dollars that have only slightly higher values in Mint State than in circulated conditions)

The 1885-CC Morgan dollar is rare in every condition because the Nevada mint produced just 228,000 cartwheels that year—the fourth-lowest mintage in the Morgan series. A circulated piece will cost you much more than the corresponding 1886-O; even in the grade of Extremely Fine, for instance, the ‘85-CC dollar sells for nearly $600. But there are no huge increments as you go up the grading scale. On the contrary, the jumps are quite small until you reach the high mint-state range. This rare-date coin can be obtained for less than $1,300 in MS-65 and less than $2,600 in MS-66. True, this reflects the fact that much of the mintage survives in uncirculated condition, having been stored for decades in U.S. Treasury vaults. But given the low mintage, the current market values have a bedrock base of rarity. And you can go to bed not having to worry that your rare, beautiful coin—struck at a colorful mint spawned by the historic Comstock Lode—will have lost much of its value overnight. Carson City dollars in U.S. government General Services Administration (G.S.A.) sealed cases are often worthy of a premium, especially if NGC has offered its opinion as to the coin’s grade and affixed its hologram to the holder. Coins in these holders, sold by the G.S.A. to the public from 1972 to 1980, can be considered original and not tampered with. This is an excellent safeguard for collectors concerned with coins having been doctored or altered after they left the Mint. Be careful not to get too enthusiastic over the concept of a sealed government holder and an NGC grade: Sometimes these coins will sell for hundreds of dollars more just because they are in G.S.A. holders. Crack the holder, and you will never be able to recover the premium.

Better-date silver dollars

Many Morgan dollars and other traditional cartwheels have bright, dazzling luster and razor-sharp detail. You need to be careful, however, not to fall in love with just a pretty face. Certain common-date dollars – the 1880-S and 1881-S, for example – exist in large quantities in pristine mint condition and really are overvalued even when purchased for a fair market price. You should concentrate instead on coins with lower mintages, even though their condition might be a bit less spectacular. They needn’t be rare – only scarce. The 1886-S Morgan dollar and 1928 Peace dollar are two good examples. These coins will always be in demand, yet they’re difficult to promote (offer in ads with wide circulation and on television shopping programs with high viewerships because these marketers need coins of which many exist). They’re safer and sounder values. These coins have momentum and a rock-solid base and should continue appreciating smartly.

Best Buys in the U.S. Commemorative series

I specifically and emphatically do not like run-of-the-mill $500 commems. Many are overgraded, artificially toned, dark in color and generally undesirable. I also realize that the gold commems have experienced substantial price appreciation. Nonetheless, I believe that with higher gold, these gold commems will reach even higher levels—while the $500 problem coins will continue to languish in dealer inventory boxes.

The 1915 Panama-Pacific $50 gold piece, either octagonal or round

The $50 coins were identical in design, both depicting the Greek goddess Minerva on the obverse and her symbol, the owl, on the reverse; one was round, however, while the other was octagonal. These coins have been acclaimed for their beauty. Even more attractive to investment-minded buyers are their mintages: After unsold specimens were melted, the net remaining figures were 685 octagonal pieces and 483 round. These coins are expensive, typically bringing strong five-figure prices. But they’re rare, beautiful, desirable – and likely to continue rising in value as time goes by.

Best Buys among 20th Century Series coinage

All legitimate rarities that are truly considered necessary to complete a collection should see considerable price support. Examples are the 1955 Doubled die Lincoln cent (MS63 Red is the best value) and 1990 No-S Lincoln cent Proof (Proof-67 red is a good value). These types of coins will retain their value when the MS- and Proof-70 modern coin bubble bursts.

What changes or innovations are needed to make the pricing of coins a better deal for investors? Just as reduced commissions (even the elimination of commissions!), plus much narrower spreads between bids and asks, have dramatically lowered trading costs for stock traders, what can be done to make our market more efficient and a better deal for investors?

Spreads are about as low as they are going to get. The product is relatively decent. We need a big player to step up to the plate and recommend coins as an investment. Much of this is bandwagon effect and psychological. Gradual, reasonable steps to help make this come about are being taken. I have a new book scheduled for July, and I will try and help everybody by being positive. This book is very a departure from my role as a consumer advocate—which I have toned down for now in order to help the industry try and attract some institutional funds so everyone can make money.

Since PCGS and NGC began, we’ve seen a general loosening of grading standards. (A) Could standards in the future become stricter, thus reversing the trend of the last 20 years? (B) If yes, what event or events would cause this to take place. If you disagree, please explain why.

The standards will not become stricter permanently. The way the system is designed, standards move within a narrow range.

What 1, 2, or 3 coins are your favorite “sleepers,” coins you know to be much scarcer than generally perceived and, as a result, undervalued. Anything from the 1700’s to date, your picks. Please explain why you picked them and tell us their potential.

Proof silver Type from late 1800’s to early 1900’s—grades Proof-63 through Proof-64 (and possibly some Proof-65’s). Trying buying some—you will have to pay over sheet now. The coins are very scarce, and haven’t moved. A prominent trader told me he could raise the bids by about 20% and expect to receive no more than 5 coins total. With a little demand, these coins could double.

Skip to content