Modern Day Slabbed High Grades/Spec. Designations

I often see threads here concerning people buying newly issued coins slabbed in MS 70 and also these type of coins with special designations. I guess the most popular special designatins are "First Day of Issue" and "First Strike".

It appears most CT members say to people posting something to the effect of not to buy these coins, not worth the extra premium one has to pay. I can honestly say I've said this a few times myself, and even when I didn't actually reply I agreed with those that did. I'm not so sure about that any more, and I thought it would be good to start a discussion about it.

Many times it is said that inexperienced collectors or grannies buy these coins. I think it goes beyond that. I have read many times and had dealers tell me personally it is much easier today to sell a slabbed coin than a raw one. I know I'll be getting away from the main subject for a little while, but bear with me on this. These people prefer slabbed coins because:

#1-They enjoy coin collecting, but don't have the time or desire to learn how to grade coins or spot fakes. They depend on the TPG companies to do it for them feeling protected against a loss right at the time of purchase.

#2-They may be purchasing a slabbed coin thinking the slab will better preserve the coin for the long term.

#3-Many may consider it a more investment quality way of purchasing the coins. This would also include more expected profit potential down the road for resale.

#4-The may just like the way coins look slabbed. All different sizes of coins in all the same size holders as long as they stay with the same company.

#5-They are very new to coin collecting and the TV and TPG marketing is inflluencing them several different ways this is what they should do.

I'm going to continue this, but a really bad lighting storm is now going on and I'm shutting down for awhile. Sorry about that, but to be continued.

 

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Until I know how to tell the difference between a copy and a real coin I will buy a slabbed coins only from NGC, PCGS and ANACS. Since I am a member of NGC I can check the verification of each coin.
With say that, I tend to stay away from MS/PF 70 because in my mind I don't feel it's worth an extra premium. I mainly by morgan's and I try to get them in MS63/64 since A. it's a reasonable price and B. It's what I can afford.

I know that NGC "value" of the coin is a little more than what it may actually be worth however it will give me an idea of what to pay (especially when purchasing online..ebay/amazon etc..)

My 2 cents

-Shrek

 

From my experience bullion coins are not harder or easier to sell if they have been graded or not.

I do agree that classic coins that have been graded are easier to sell then raw coins. But IMHO this does not apply to coins made in the last 75 years or so barring key dates and errors.

 

True! In a graded coin the buyer knows what he,s getting vs Raw!!

 

Well Dutchman I agree.
Bullion is bullion for the most part and I think you'd know as you probably sell alot of it.

 

I just got into collecting bullion slabbed coins. I always pay more for the first strike. My feelings on first strike or early release is that it would be really hard for these numbers to increase in the database after the first month is over. For example my 1988 silver eagle ms70 costed me $2500 and the 1988 silver eagle ms70 first strike costed me approximately $5200. The normal ms 70 pop will increase while the first strike's pop will always be 4. I may be wrong but that is how I collect.

 

To me that seems like a ton of money for an ounce of silver.... but to each his own.

 

sheez I'm with you Dutchman.
That is crazy for a bullion coin just crazy.
But to each his own. I'm gonna have to see about sending in some of mine to get that grade and sell them to you but I'd feel like I am ripping you off big time.

 

Last year the 1999 silver eagle ms70 went for almost $30k on H.A. There is one now with 14 days left and is going for $17k. It is amazing to see these modern day coins going for this kind of money. If I could find the millenium coin first strike ms70, I might pay more than $50k. But I definitely agree with you, it is a ton of money for one ounce of silver.

 

The way I see it enough time has not passed for the realistic prices to even out on these coins. Yes the populations are not that high especially for modern coins...In the hundred coin or so range... but for $5,200 you can buy nice a US pattern coin that there were only maybe 10-30 minted period... a hundred or more years ago... I think in 20 years... the prices for these graded modern coins are going to be significantly less.

 

I understand what you are saying about the pros of slabbing some modern coins. However, my big concern (especially with bullion coins) is that one will never be able to recoup that premium in the future. I buy raw bullion ASEs as close to spot (and as close to spotless) as I can. I love the design. I am betting that over time these will appreciate as silver hopefully increases in value. If not, then I have not lost that much. Now, if I sink hundreds or even thousands into slabbed bullion MS70s with first strike or first day of issue designations there is no guarantee that anyone will ever want them other than for the bullion value down the road. I am a firm believer that people should collect/acquire whatever makes them happy and/or comfortable but slabbed modern bullion is way too expensive and risky for me. For other modern series like proof Presidential or Sac dollars, State Quarters, etc. most of these are 69 or 70 anyway so I like mine right in their original mint packaging. TC

 

I'm back, sorry about that. In Florida you learn to respect the thunderstorms, they can be really wicked. I read the comments posted so far, I hope we have a good discussion here. I'll not comment on any of the posts until I complete this.

So I have tried to state why people prefer slabbed coins, but not modern issues in MS or PF 70 with or without special designations. I'll comment on that next:

#1- It is important to some people to have the best. At the same time they may limit their collecting to best they can afford. It is a lot cheaper to buy a MS 70 ASE than a MS 67 or 68 Peace Dollar or Morgan Dollar.

#2- It may give them a feeling their collection is really something special. This would go on to include FDOI designations and others.

#3- It may be again for investment or hope for higher profit potential. Recently I saw Coin Vault sell 2010 ASEs with a special slab stating 25th Anniversary. Some people were buying these there, then selling on ebay for a quick profit.

#4- Going along with the investment/profit it could be they see how much some the older ASEs or Fractional Buffalos sell for. They think there will be a hudge opportunity down the road. I saw HSN sell over one million dollars worth of ANACS MS 70 2010 ASEs.

#5- Television shows harp on continously how low the percentage is going to be on their MS or PF 70s they are selling. They do an excellent job of marketing these I think we would all have to agree on. TPG companies have also certainly beefed up there marketing as well.

Now these high grade moderns have been around now for several years, and sell quite well. I know many say here eventually they will lose their value, and like I stated earlier I used to agree. But, I am tending to think this is not the way it is going to be.

Coin collecting goes through phases over the years with most of you knowing these without me going over any. We are definitely in a "slab popular" phase now in my opinion. The difference with this to me is it only going to get stronger for a long time to come.

Now does that mean I'm going to sell all my raw ASEs and go out and buy MS 70s? No, of course not. But, at the same time I think those that buy these new isssues in the highest grades are not making a mistake. IMO, using this as an example, a 2010 ASE raw and one in the grade of MS 70 five years from now the one that is slabbed will have shown to be the better investment. As always even if one has no intention of reselling, it is nice to know you made a good purchase.

Am I correct on any this? Maybe not, maybe some, and who knows possibly alot. I know myself over the last year I have changed somewhat concerning slabbed coins as stated:

#1- I did want to own something in PF 70. I chase the '09 Quarters in clad and silver all graded by NGC. I didn't purchase them for any other reason except I just wanted to own something in the 70 grade, and they were affordable. I have no intention in expanding my 70 collection.

#2- I'm working on a set of obsolete coins. So far I have purchased two, and as many of you know this consists of numerous different coins. I don't have the time or desire to spend becoming acquainted enough with each coin to feel comfortable buying raw. I have really come to appreciatel though that all slabbed in the same grade are not equal. I really see differences in MS 63 and 64.

 

I cannot argue against a very logical person. Your point makes perfect sense. I better collect the coins and sell them asap!!!!

 

I definitely agree with you on that. If I did think it was important to own modern issue 70s I would start with 2010 and go forward. Paying that kind of money mentioned is scary to me, but I don't have to really be scared since I couldn't afford them in the first place.

 

You certainly know more about that than I do. But, let me ask you something. What coins from say 1950 and earlier have seen thier values go up as much as some these moderns over the last few years? Some things excluded such as the '09 cent rolls everyone was flipping last year.

 

If people want to make money, I would find the cheapest ASE 2010 ms70 early release. I think someone would sell them for $65-$75/each in a month or so. Wait 6-12 months and sell them on ebay for $110. Just try one and see. I tried with 2009 gold eagle MS70 Early release and bought it close to spot which was $1150/each. After one year, I just sold it for $1750. I'm probably stupid to reveal this but I'm mostly a collector and not a seller so I really don't care.

 

My cut off was more directed at the end of the silver dollars... Maybe also including high end walkers. To answer your question honestly there aren't too many. To me these are 2 completely different markets. The market for graded modern bullion coins is very volatile with large swings up... and eventually down... while the classic coin market is much more stable and much less volatile. The volatility is caused by a few things. The perceived rarity of these coins. Whether they are truly rare or not is for another thread. Also registry set fever has caused a lot of these coins in top pop to get expensive.

Classic coins move up and down as well... of course... but baring a complete financial disaster I don't see them EVER moving as quickly as these modern pieces. The collector coin market is more "slow and steady wins the race". The truly rare coins continue to make modest gains... but still gain over time. One day the bottom is going to fall out of the modern coin market like many other markets before it. If you are a student of the history of the coin market you have seen it many times before in many different parts of the market... lots and lots of people have lost a lot of money in the coin market... and a very few people have made a lot of money in the coin market. I would keep this in mind before spending the kind of money we are talking about here on ANY coin.

 

I did think about if someone new to coin collecting would read this and make a decision to go out and buy a bunch of previous modern issue 70s at some of the prices they are now selling at.

You are right about what you said I think except one item I'm not sure of. The modern high grade coins will have some up and downs no doubt. But, I'm am leaning toward the fact they are not going to tumble or fall drastically in price as many think they are (myself included until recently).

If for no other reason there are now just too many people collecting these and will do so each year as they come out.

Whether one likes them or not coin selling on TV has certainly expanded over the last couple of years. Bowers in his book "Collecting and Investing in Rare Coins" says buying coins on TV will normally cost more. But, I think it is in this book also he says TV coin sales do cause values to stay up or something to that effect. Anyway, I certainly agree with both of his pooints on this.

 

I have thought about this myself. MS/PR 70 coins exist only with modern coins. It's the way you can own the best possible coin within a modern series. So what is the gamble on future value? Well to start with all those recommendations not to buy them helps to produce the opposite affect. If enough people don't buy them the price will go up. No matter what some may say, the value of a MS/PR 69 and 68 coin, will not match or exceed a MS/PR70 coin. So no matter what happens within a series, you will have the most valuable coin. As much as people don't like First Strike/Early Release designations, the same logic applies. Non-designated coins will never exceed the value of a designated coin. So which one makes more sense. What are you willing to risk on the gamble. If you are trying to score big, then like anything else in life, you must take a chance. The only thing I could see to change the comparative value of MS/PR70 vs all others, is technology becoming so advanced that MS/PR coins are the norm and everything else the exception. And that would still give you an advantage with your pre-technology coins within the same series. IMHO...

 

The biggest problem I have with all this is I am a coin collector, not a coin investor or coin seller. I don't have the affordabilty to do both. I knew at the time I should have bought those fractional buffalos, and I can name several others.

I did buy a Lincoln Chronicle Set, was going to sell it, but my wife asked not to. I think if this year I can finish what I'm currently working on I'll try to do a little on the investing of modern issues next year. Like the person before me said the if they did go down the loss wouldn't be that much, while the upside is greater. Maybe start a cycle of buying some each year sell the following year or late in the year then start over. Could be fun and different.