In reviewing the new edition of my mass-market Dell paperback book, The Insider’s Guide to U.S. Coin Values, COINage magazine Senior Editor Ed Reiter likened its listings to a popular television game show. “Here, as on TV,” he said, “the price is right.”

The Price Is Right is more than just the name of a long-running TV game show. It’s also the name of the game in the rare coin marketplace today.

Pricing–fair, honest, accurate pricing–is the cornerstone of consumer protection for those who purchase coins in the current market.

At first glance, this may seem self-evident: The key to getting good value is making sure you don’t overpay. In years gone by, however, coin buyers’ biggest concern wasn’t pricing as such, but rather authentication and, more recently, grading.

In the early 1970s, counterfeit and altered coins posed very real threats; a wave of such material had poured into the marketplace, undermining consumer confidence and jeopardizing the stability of the market and even the very future of the hobby.

The American Numismatic Association responded to this threat in 1972 by establishing the ANA Certification Service (ANACS) to determine the authenticity of coins that were submitted for its review. As the decade wore on, it also sponsored well-attended counterfeit detection seminars, initially conducted by crusading ANA President Virgil Hancock.

Within a few years, counterfeit and altered coins subsided as burning issues–only to be replaced by a new overriding concern: the scourge of overgrading. Again the ANA reacted vigorously, adding grading to the services provided by ANACS in 1979. This calmed the concern for a time; by the mid-1980s, however, grading inconsistencies had caused the smoldering problem to flare up anew.

This time, the response came from the dealer community. In February 1986, a group of coin dealers led by David Hall announced the formation of the Professional Coin Grading Service to combat the grading problem through the use of such innovations as consensus grading and encapsulation of coins in sonically sealed, hard plastic holders. The “slabbing” revolution had arrived.

Shortly afterward, John Albanese broke away from PCGS to establish the Numismatic Guaranty Corporation of America (NGC), and since then these two companies–along with ANACS– have worked diligently to lessen coin buyers’ concerns about grading.

It would be nice to report that coin buyers’ worries are now at an end. Unfortunately, though, the 1990s are witnessing a new kind of assault on the coin market’s integrity and the pocketbooks and purses of those who purchase rare coins. This time, the assault is a frontal one: Instead of defrauding customers by selling them counterfeit or altered coins … or cheating them by overgrading coins, and thus inflating their cost indirectly … at least one unscrupulous dealer brazenly overcharged them simply by pricing very rare coins at a multiple of established market levels.

As a longtime consumer advocate, I have viewed this development with alarm. Indeed, it was this concern that helped me determine the structure for The Insider’s Guide to U.S. Coin Values. Other fine price guides exist–some whose earliest editions date back many years. But none of the other existing books adequately deals with crucial realities of the current coin market.

In The Insider’s Guide, I strive to provide across- the-board listings for rare certified (“slabbed”) coins in high grade levels–the kinds of levels buyers routinely encounter in the marketplace of the Nineties and the kinds of grades to which other annual price guides don’t assign values. For example, try to find values for Mint State- and Proof-63 and 65 Seated Liberty dollars by date in any other annual price guide.

Theoretically, at least, coin consumers don’t need the same degree of education and knowledge today as would have been advisable just a few years ago. They don’t need to be able to tell whether a given coin–let’s say a high-relief Saint-Gaudens $20 gold piece–is counterfeit or real, or whether its condition is mint state or about uncirculated. With certified grading, those ballpark judgments have been made by experts, and the non-expert buyer can have a reasonable degree of confidence in the accuracy and market acceptance of their conclusions.

One thing the general public does need, however, is an accurate price guide. Without it, they still can be ripped off through the simple, straightforward strategem of being charged far more than the coin is worth.

An accurate, readily available price guide is the single most important consumer protection tool in today’s coin market. The educational seminars of years gone by, where collectors learned the basics of counterfeit detection and grading, no longer loom as large as they did before. They still provide useful information, and those who have the time and inclination will benefit from attending them. Similarly, books dealing with these subjects are still well worth reading. But the certification services have removed a good deal of the risk from buying coins, obviating the need for buyers to be as knowledgeable on authentication and grading.

In much the same way, a thorough, readily available annual price guide serves as the surrogate expert on the value of the coins in its listings, allowing the average consumer who has no access to trade periodicals to determine ballpark values for very rare certified coins.

A number of different elements come into play in determining the value of a coin, and also in compiling a coin price guide. I drew upon all of these in formulating “The Insider’s Guide.”

Appraising–or pricing–a coin takes knowledge and skill, of course, but it also involves a degree of intuition. Experts develop this by trading coins extensively for long periods of time.

The value of a coin is determined by the interrelationship of three basic factors: the grade, the supply and the demand. The higher the grade, the lower the supply and the higher the demand, the greater the value.

“Grade” refers to the coin’s level of preservation: how many nicks or scratches or other flaws it has. Coins are graded on a scale of 1 to 70, with higher numbers signifying higher grades. The 1-to-70 scale is the numismatist’s shorthand way of referring to coins.

Supply is the number of specimens available. Among the most important reflections of supply in the current marketplace are the population and census reports issued by the leading grading services. PCGS and NGC issue these reports on a regular basis, and they indicate how many coins have been certified in the various grade levels by the service in question.

These reports are very helpful, but they’re also less than perfect, because they fail to measure the effect of resubmissions. Often, dealers will send the same coin to a grading service over and over in hopes of receiving a higher grade. If the same coin is submitted 20 times, the population or census report will indicate that 20 different coins have been graded, not that just one coin was graded 20 times, unless the submitter is conscientious enough to return the holder inserts to the grading service.

Demand refers to the number of people who desire a particular type of coin. A coin may have a mintage of only 1,000, but if there are just 500 people who want it, its value may not be especially high. On the other hand, a coin with a mintage of nearly 500,000–the 1909-S VDB Lincoln cent, for example–may have a million people pursuing it, and therefore may command a substantial premium.

Compiling a yearly price guide requires good insight into current market trends as well as strong forecasting skills. Consider the case of the 1881-S Morgan dollar. Since 1989, we’ve seen lessening demand for this particular coin in Mint State-65 condition. At the same time, the supply has actually increased because more specimens have been graded by the certification services. Thus, when I put together The Insider’s Guide to U.S. Coin Values (Dell, yearly, $6.99), I priced this coin conservatively, reasoning that the trends and future expectations both were bearish.

Assigning accurate values to common-date gold coins is particularly difficult months in advance, since these are tied to gold bullion prices, which can be highly variable. It’s hard to predict what gold is going to do even day to day–so figuring what it it may do from one year to the next, and coming up with reasonable fair-market values, is very difficult.

For accurate price information on a week-to-week basis, I highly recommend The Certified Coin Dealer Newsletter, a weekly listing published in Torrance, California.

For general information on how coins are bought and sold, as well as ballpark figures on the values of rare coins, The Insider’s Guide is extremely helpful–and it really is invaluable for investors buying high-grade, high- priced coins: It’s the only annual price guide currently available that’s singlehandedly authored by a full-time dealer.

How important is pricing to coin consumers today? We got dramatic evidence some years ago in a court case where the U.S. Department of Justice and U.S. Attorney brought suit against a coin dealer for allegedly engaging in fraud by grossly overpricing coins represented to be a good investment.

That dealer’s trial revealed many instances where coins graded by his firm had been overpriced astronomically. But if the consumers who bought these coins had simply purchased a price guide–right off the shelf at their local bookstore–for $5 and looked at the prices, they might never have been victimized.

It appears that all or most of the coins sold by that coin dealer had been certified by either NGC or PCGS. The fraud alleged by the government was based on overpricing.

In one case, for example, testimony showed that in July 1990, that dealer sold an 1894-O Morgan dollar graded Mint State-65 for $209,200. NGC founder John Albanese, who appeared as an expert witness for the government, testified that at the time of that sale, the coin’s fair market value was $40,000–less than 20 percent of what the dealer charged.

In December 1990, the dealer advised his client that the coin had increased in value to $607,200. Albanese testified that on the contrary, the coin had actually gone down in value in the interim and was then worth just $30,000.

Here’s another example: In August 1990, that dealer sold an 1890-CC Morgan dollar graded Mint State-65 with a tail bar imperfection for $203,150. Albanese estimated that at the time of that sale, its value was a mere $11,000. In December 1990, the dealer told the client the coin was worth $289,310. Albanese’s appraisal for December 1990: $6,000.

Price guides are clearly becoming the new cornerstone of consumer protection. Consumers who are willing to go out and spend $5 on a good price guide can prevent this type of fraud from happening to them.

Let’s take a look at one more example from the trial: In July 1988, that dealer sold an 1889 Morgan dollar graded Mint State-65 Deep Mirror Prooflike for $39,440–and in September 1991, he told his client the coin had nearly doubled in value, to $78,000. Albanese placed the value of this coin at $3,500 in July ’88 and $4,000 in September ’91. Again, the overpricing was enormous. And again, it could have been detected readily by checking a price guide.

It’s helpful to understand what kind of people buy rare coins. I know it was helpful to me in compiling the prices for The Insider’s Guide to U.S. Coin Values.

The rare coin market is really a spectrum made up of different kinds of buyers. Let’s put the collector on the lefthand side of this spectrum and the investor on the right.

The collector tends to buy coins by date and mint mark, type coins, coins which are unique and coins in unusually high levels of preservation. Traditionally, the investor has bought coins which are fungible and generic–and we can often predict with some degree of precision what the investor climate is going to be like for such coins. It’s more difficult to forecast the collector marketplace. High-grade type coins tend to be collector/investor coins, pursued by both collectors and investors.

When you go to sell your coins, there are several kinds of offers you may receive. I discuss these in The Insider’s Guide:

The lowball offer: You show a dealer a coin with a market value of $5,000 and the dealer offers you 300 bucks.

The fair-market wholesale offer. This is the price at which a coin would trade between two reasonably intelligent and knowledgeable professionals, both of whom are under no compulsion or compunction to consummate the transaction. This is generally the price a coin would bring on the dealer-to- dealer level at a coin convention or coin show.

Fair market value. This is the price at which a coin would change hands between two intelligent people, both of whom have no compulsion or compunction to consummate the transaction. They wouldn’t necessarily be professionals. “Fair market value” would normally apply when a dealer sells a coin to a client who is knowledgeable about the marketplace.

In determining the prices for The Insider’s Guide, I pay careful attention to several different economic variables which affect the rare-coin marketplace. Let’s take a look at some of these:

Inflation. Domestic monetary inflating has a very positive impact on the value of rare coins; coins have always been perceived as inflationary hedges. Back in 1979 and 1980, when inflation was rampant, people rushed to tangible assets and rushed to get their money out of paper investments. So inflation is a plus. If people perceive inflation, or even anticipate inflation, rare coins will increase in value.

Deflation. This is a negative factor. When real goods fall in value and monetary deflating takes place, rare coins will decrease in value. Deflation is often associated with depression or steep recession.

Increasing personal net worth. This is a plus for coin values. People feel good when the value of their home goes up from three-quarters of a million dollars to a million dollars–or even from $200,000 to $250,000. It make them more willing to spend $25,000 or $50,000–or even $1,000–for a little metallic trinket.

Decreasing net worth. This is bad for coin values. If a couple’s home drops in value from $250,000 to $200,000 and one of the spouses loses his or her job, then buying $25,000 or $5,000 or even $100 worth of rare coins is totally out of the question.

A strong bullion market. Increases in the prices of gold and silver bullion are very helpful to coins. Coin dealers often make money speculating in the bullion market, and they put those profits back into coins.

A weak bullion market. This, of course, is bad for the coin market.

Economic prosperity in general is very good for coins. Recession or depression is very bad for coins. But an economic catastrophe can actually be good for coins. In an outright catastrophe, with panic in the streets and the prospect that money won’t be worth anything, coins can be propelled into the stratosphere.

In evaluating coins, you need to understand that coins are graded on a continuum and, for the most part, the values in my book are for coins in the center of the continuum.

Coins don’t always fall into neat, compartmentalized grades. Experts know this from handling such high volumes of coins on a regular basis. They understand that even for coins of the same type, the same date and generally the same grade, values can vary considerably.

Thus, at a coin show, experts may segregate large numbers of generic, fungible coins of the same type into piles of somewhat varying prices, even though they’re all in essentially the same basic grade. If an expert has 1,000 Saint-Gaudens double eagles, for example, he may divide them up into separate piles arranged according to price, rather than grade: one pile of coins priced at $385, another pile with $400 coins, and other piles with coins priced at $425, $450 and $475.

The lesson here is that even though two coins might be graded the same way by a grading service, that doesn’t mean they have the same value.

Here are a few tips to keep in mind when you’re considering two coins side by side that have the same grade:

Look at the strike. Is it strong, or is it weak?

Look at the eye appeal, and use your common sense: Is the coin pretty or is it ugly?

Look at the luster–the way in which the coin reflects light when you hold it under a pinpoint light source.

Look at the toning. Has it been artificially toned?

Look at the surfaces. If the coin has questionable toning, try to look under the surfaces to see if there are any scratches or if the coin is damaged in any way. A lot of people are thrown off by toning and don’t look at the scratches underneath.

Environmental damage also can be a serious detriment to the value of a coin–not only because it’s unattractive now, but because this kind of “skin cancer” can actually eat into the surface of the coin later if the coin isn’t properly neutralized.

So there you have it–a brief review of what determines the value of a coin and how an accurate price guide can save you from extremely costly mistakes.

Pricing is a key to getting good value today, and with the proliferation of price guides, I would hope that we will see no further frauds–or at least fewer frauds–like the one that was perpetrated on unwary clients by the coin dealer described earlier.

That dealer, by the way, was convicted on 11 counts of mail fraud, four counts of interstate transportation of stolen property and three counts of wire fraud. He was sentenced to a prison term of 76 months.

Skip to content