Keys, semi-keys, hot coins, sleepers, or the rare.

Discussion in 'US Coins Forum' started by National dealer, Jun 26, 2004.

  1. National dealer

    National dealer New Member

    Okay ladies and gentlemen,

    As many of you read the trade publications you have undoubtfully been reading about the must have coins. So my question to you, what makes a coin fall into this catagory?

    Some say mintage, some say availability, and some say overall collectibility.

    Many key dates are not the lowest minted in the series.

    Many sleepers are readily available.

    Are these coins just hype?

    Now as you post your opinions, don't quote some profound authors views, but consider what makes you believe that a coin is hot or rare.
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  3. Ed Zak

    Ed Zak New Member

    Look at history...

    For many of us...we understand the basics of what constitutes a rare or key date. Low mintage, year minted, mint condition, market demand, etc., we know the basics.

    For me, I also like to look at the historical aspect of what was going on at the time a coin was issued. For instance, trying to find a 1931 P or D penny in MS Red condition is very tough. Why? Put yourself back to 1931 and the country was in the mist of the Great Depression. Do I save that nice looking new penny or do I feed my family? With 1 out of every 4 people NOT working, I am sure that any coins minted HAD to be circulated so that people could "eat". Actually, I believe it is easier to find a 1931-S in MS Red condition than a 31-P or D. I have a nice red 31-S, but I am still looking to upgrade the 31-D and P coins I have.

    Look at the 1932 D and S quarter. Couple the fact that no quarters were minted in 1931, the low mintage numbers, the depression era where a quarter could really buy something, and the tendacy for collectors to save the very first issues, made these quarters what they are today...EXPENSIVE!

    Executive orders like what Roosevelt did when he pulled gold off the market in 1933 surely paid a role in determining what was going to be a key date (or not) for gold coin collectors. In 1933, you find over 445,000 1933 double eagles were minted and the next year...well, you know the story.

    Last but not least...error dates get a lot of attention because it seems that everybody is looking for the next 1955 D.D.O. penny. For instance, the market is hot for the 1972 D.D.O. while the demand for the 1995 D.D.O. has seen to taper off. Why? Haven't a clue, but that is the nature of our hobby!
  4. jody526

    jody526 New Member

    In many cases, that's exactly what they are.

    If you ask a dealer what coins are "must haves" for any collector, you can expect that the answer will be very simular to what he has in his inventory.

    If you ask a collector the same question, the answer is likely to be the coins that he is unable to find.
  5. ziggy29

    ziggy29 Senior Member

    There are several factors. Mintage is one, but it also depends on survivability, the degree to which the coin circulated (creating "condition rarities") and the popularity of the particular series.

    The 1909-S VDB and 1931-S cent both have mintages below that of the 1914-D, but the latter is generally more valuable as you get into the higher grades. As a first-year coin, a lot of '09-S VDB cents were saved early on, and even during the Depression the 1931-S cent was quickly recognized as scarce and often saved. They both have high rates of survival in higher grades. The 1914-D, on the other hand, was used heavily and it took quite a few years before many people realized its scarcity and started setting them aside. (The '31-S, in particular, is rarely seen in grades below VF.) By the time '14-D was widely recognized as a scarce date, the damage was mostly done and most were "average circulated." In the Indian cent world, the same is true of 1877 versus 1909-S. The latter was saved more and circulated much less, making the '77 the "key" despite having nearly triple the mintage of the 1909-S Indian.

    And, of course, there's the popularity of a series. There are coins many times rarer than any of the cents mentioned above, and many times rarer than even some of the scarcer Morgan dollars -- but are much, much cheaper.

    Then there's just market mania. Whatever is "hot" is what people chase after, either because (a) they want in on the price appreciation to turn a profit or (b) they want to buy before the price goes up much more. Sometimes these go up just because they've *been* going up (see also the tech stock mania of 1999 and the rare coin market of the early 1980s). This is the "hype" side of the equation.

    GDJMSP Numismatist Moderator

    There is one thing and only one thing that really matters to make a coin " hot " - demand.

    Mintage doesn't matter much - there are many coins with sizable mintages that cost a small fortune - because of demand.

    Collectibility doesn't matter at all - everything is collectible.

    Availability is entirely dependent upon demand. If nobody wants them - you can find them on any street corner. If everybody wants them - finding one will be tough. So availability & demand go hand in hand.

    Condition can and does affect price - but just look at all the coins that sell for hundreds of dollars in Good. That kind of shows that coin does not have to be MS to cost a lot. Again it is demand.

    This is the basic rule of economics - the more people who want something - the more that item will cost or be " hot ". And in a very big way the most powerful driving force of making a particular coin hot is notoriety, advertising - or as some say - hype. Talk enough, write enough and show it enough and it will become popular. If it becomes popular - it will have demand.

    To prove my point - what do you suppose a US coin with only 4 known examples would cost ? $100, 000 - $1,000,000 ? Most folks would say yes - easily.

    Well I own a particular Spanish colonial 4 reale coin for which there are only 4 known. Would you believe I paid just over $300 for it :eek:

    As I said - demand is everything ;)
  7. rbm86

    rbm86 Coin Hoarder

    GD hit the nail on the head (as usual) -- It boils down to economics -- supply and demand. What is interesting is how supply and demand (mostly demand) changes over time.

    For example, when the 1975 Proof Set first came out, the 75-S Lincoln, a common coin, sold for as high as $20 because it was the first year the San Franciso cents were proof-only. Once the hype died down, and the end of circulation strike San Franciso cents became a reality for every year thereafter, the price declined, and the 75-s proof lincoln can now be had for about $2.50.

    Examples of supply changes are less common. The one that comes to mind is the discovery of the GSA hoard of Carson City silver dollars.
  8. cladking

    cladking Coin Collector

    A hot coin is anything you collect and a rare coin is anything you still don't have after exerting a reasonable amount of effort to find it.
  9. satootoko

    satootoko Retired

    In an acceptable grade, at a price you can afford :p

    I've "found" a lot of coins that I still don't have, either because of condition or price. :(
  10. National dealer

    National dealer New Member

    Very good replies. As often on the dealer end of the business, we tend to forget what collectors actually think. As mentioned, many dealers consider inventory rare. Especially in this day of the declining coin-store. I often hear the touted numbers of collectors that have entered the hobby. Does this really effect the prices of coins? Do others perpetuate this myth? I see many coins of the newer coins that are sold for incredible prices because of how rare the coin or condition of the coin is. Do collectors really believe that out of hundreds of millions of coins produced that only 10 can reach rarity within the date?

    I read with interest about these kinds of coins. Many of the coins mentioned here in this discussion are considered tough to find. If you attend any major show, many examples of the key Lincolns can be found, yet they are rare. I hear about the tough Morgan dates, yet the same thing can be said. The 95 proof being the lone example.
    While price may be the ultimate factor in which coins are bought, price doesn't make it rare.
  11. GDJMSP

    GDJMSP Numismatist Moderator

    I find it curious that you would consider this a myth. To me it is simple mathematics and the law of supply and demand. I will grant that for truly rare items - demand has little to do with it; at least when talking about US coinage. There are only so many people who can afford or would want to pay a million dollars for a coin.

    But with items of lower price, yet still considered to be an outrageous price for the coin in question - demand is the driving force. If 10, 20 or 30 collectors want to bid on a given coin, for whatever reason, the price is going up. If only 1 or 2 wants it - not likely it will.

    Condition rarity is absolutely not dependent on the age of a coin. Too many times I have had this discussion with those collectors and/or dealers who think mintage numbers have a correlation with the quality or high grade of a coin. This is simply not true. One has nothing to do with the other.

    Many suppose that just because a given coin was produced in huge numbers, in particular modern coins, that many high or ultra high grade examples must exist. Why ? Just because they have to exist ? If they do - where are they ?

    The part that always gets to me is that those who believe this have no problem at all thinking that a coin struck 100 or 150 yrs ago and that grades MS68 has to be extremely rare. But yet one struck 30 yrs ago that grades MS68 cannot be rare simply because of the number of coins struck. The logic of this thinking escapes me. The age of a coin has nothing to do with condition rarity. There are just as many condition rarities for older coins as there for modern coins - perhaps even more.

    But yet these older condition rarities are never questioned - never doubted. Nobody ever says " they struck 60 million of these - there has to be a lot more of them out there !" Take the 1918 cent for example - if someone offered you an MS67 example - would you consider it rare ? Or would you say - they struck almost 300,000,000 of these coins - there has to be a lot more of them out there - it can't be valuable.

    But the fact remains - they aren't out there. Perhaps a few do exist, but certainly not in any huge numbers. The reason they don't exist is because the methods used to manufacture coins don't allow them to exist except in very small quantities.

    I will readily agree that price does not determine rarity. Price only indicates one thing - demand. If there is no demand - there is no high price. Period.

    Rarity can only be determined by the number of coins that exist for a given year and mint. Condition rarity is a whole other world that has nothing to do with how many exist or how many were made. Or when they were made.
  12. ziggy29

    ziggy29 Senior Member

    Well, to me the modern MS-68/69 craze, paying hundreds of dollars for premium examples of exceedingly common coins, is an example of the Greater Fool Theory. Nevertheless, these prices are set by the market and what people will pay. Dealers wouldn't be selling these items for (say) $200 even as MS-64 and MS-65 examples could be found for a couple of bucks if people weren't willing to outbid each other for them.

    Still, I believe in what Dave Bowers frequently writes in his weekly Coin World columns -- you can buy fifty MS-64 coins for the price of one MS-67 in many series, and unless you're made of money and determined to have "condition census" coins, the former will provide much more enjoyment than the latter.

    Well, true. I'll bet a common-date MS-65 Morgan is orders of magnitude more common than many coins that sell for 1/10 of its price. Same would be true of Lincoln cents from 1909-1933, particularly in grades above VF.

    Price, though, can induce demand. When market forces at least temporarily cause a market price to rise, some people latch on to that, chase the "hot" items, creating more demand and causing even more of a spike. In othger words, the mere fact that a coin's value is rising causes more demand than would be there had the value not risen, and thus we have the beginnings of a true market mania.

    Now I'm not going to say we've reached the "mania" stage, but with certain series, ultra-high graded coins (particularly moderns) and key dates in popular series, it's getting close. I'm looking into finally getting that XF/AU 1877 cent that's been the last hole in a collection I've been building for nearly 30 years, and I'm depressed I didn't fill it last year. I could have; I had the money available them and I'd probably be left with $500 more of it. And now the dilemma is, do I put down $2,000+ now on a coin whose value (and demand) has risen sharply in recent months, or do I chance having it go higher, hoping the market may create a mid-1980s downturn where I can start buying the coins I want on the cheap? I lean toward the former, knowing I plan to hold it for a long time, but the state of the current market does make one wonder. Then again, I sold all my tech stocks in 1999, too. :D
  13. GDJMSP

    GDJMSP Numismatist Moderator

    This is the whole point I was trying to make. Morgans, Lincolns, Mercs, Buffs - you name it. They are all " exceedingly common coins." Granted there are some examples from certain mints and in certain years that are not exceedingly common. But neither are they rare - they are not even scarce. The only time that any of these coins can even come close to being considered scarce is with condition rarities.

    Which of course brings me back to my primary point that there is absolutley no difference when it comes to condition raitites between older & modern coins.

    I will agree with your comments except in regard to the grades you mentioned. Even for modern circulation type coins - examples in MS68 & 69 are exceedingly rare. Examples in MS66 are common - no doubt. In MS67 they become more difficult to find but they are not rare. I will readily admit that finding older coins in MS66 or 67 is not as easy as it with moderns. But it is by no means difficult in a general sense.

    As an example let's look at Bust Half dollars. There have been, at my last count, over 50,000 of them that have been graded AU50 and above. I don't care what rarity scale you use - that's as common as they get.

    By the way - I do agree about the market ;)
  14. National dealer

    National dealer New Member

    Well as many of you know, I try to make others think about what they believe, and this is no exception.
    I am very familiar with what constitutes condition rarity. Each series and coin within the series will have condition rarities. Whether that grade is high or low, will not change that fact.
    Many early coppers do not reach the mega grades, yet a mint state 60 will be a condition rarity.

    My thought in beginning this thread is to inspire the members here to question their own beliefs. Why do we think that something is rare or key.

    It has been my impression that most collectors equate value with rarity. GDJMSP makes several good points about this. The two often do not equal. Mintage will not always guarantee rarity. There are a few Morgan dollars with mintages of a few hundred thousand that are considered by all to be common date coins.

    When it comes to graded coins, the new coins are being struck much better than in years past, so the availability of MS-65 is now common. As GDJMSP points out, the ultra grades are still more of a oddity than the norm.
    This is why it is so important to understand how each coin and series is graded. One short fall of the grading books. We can not judge an 1891-O Morgan with the same standards as a 1921-P. Each coin must be graded by that coin. Not some standard. Factors such as strike are different from coin to coin. As each planchet is turned into a coin, the dies wear.

    Now I want all of you to understand that as a dealer, my view of coins will slightly differ than most collectors. As the availability of dealer networks and a working history with dealers, I have more ready access to a wide range of coins. So what may take a collector weeks to find, I can find in a few hours.

    I hope that I have made a few of you re-consider the way you look at rarity or keys. Numbers are just numbers, and values are just values. It takes more than one or the other to deem rare. Numismatics as a whole is an ever changing arena. We are but a small part in the history, and it is our understanding and willingness to pass the information along that will make it more enjoyable for all involved for many years to come.
  15. cladking

    cladking Coin Collector

    "When it comes to graded coins, the new coins are being struck much better than in years past, so the availability of MS-65 is now common. As GDJMSP points out, the ultra grades are still more of a oddity than the norm."

    This is true only on the very late date circulating coinage and largely because many collectors are setting these aside now days. Gems still account for small percentage of mintage but now they are being saved in greater number.
  16. National dealer

    National dealer New Member

    The term gem is changing these days. In the early series of coins, MS-65 would fall into the gem class as it was harder to average that grade.
    With coins struck after 1990, the standard for gem has gone up. Today's coins should be MS-68 to be considered gem quality. 69 or 70 should be considered rare by any standard. Now I am not talking about some of these low grading service claims of MS69 or 70, but the true grade. For anyone that believes these grades are a dime a dozen, please find me a few :D
  17. cladking

    cladking Coin Collector

    "Well, to me the modern MS-68/69 craze, paying hundreds of dollars for premium examples of exceedingly common coins, is an example of the Greater Fool Theory. Nevertheless, these prices are set by the market and what people will pay. Dealers wouldn't be selling these items for (say) $200 even as MS-64 and MS-65 examples could be found for a couple of bucks if people weren't willing to outbid each other for them."

    I believe you're missing the point entirely. All high grade coins are hot and in many cases they needn't be the very highest. High grade coins are hot because collectors have been focusing on choice coins and upgrades for the last couple generations. The internet and grading services have identified these coins and brought them into our homes making them readily available to the swelling population of collectors. It is far easier to find a very high grade '09-S vdb cent than it is to find a comparably graded '72-D cent (at least with a full strike and available for sale). '68 cents virtually all have carbon spots in the mint sets, are there going to be ANY well struck gems in rolls which are unaffected? People are collecting these coins now and do desire nice coins. As the numbers of collectors increases there should be many surprises among the lower grade coins too! The clad coins simply weren't saved at all and the years have been extremely hard on all the moderns which simply had no value until recently. They were not saved, they were not set aside or protected, they have withered away in circulation and the tiny demand for higher grade examples has swamped the even tinier supply.
    You can still buy a '72 mint set which might have a really great gem for $4 or $5. Most collectors though find it far more cost effective to buy the gem already slabbed on the market.

    As GDJMSP said, age does not equate to value. In the long run all the rare moderns whether by grade or mintage will likely have similar prices to the older coins. Obviously demand will be the deciding factor.
  18. aem4162

    aem4162 New Member

    i don't understand "hype. i collect the coins that will fill in a particular set or just look pretty.
  19. jody526

    jody526 New Member

    Don't understand hype?
    Let me give you a couple of examples.

    The 1922-No D Lincoln cent and the 1937-D 3-Legged Buffalo nickel.

    These are nothing more than die varieties, and yet they are valued at multiples of other simular die varieties. Why? Well let's think about it.

    First, they are listed in The Red Book as well as Krause. Second, (and probably most importantly) there is a hole for them in most coin albums.

    Now why are these two die varieties considered part of a complete set, while other die varieties are not? You guessed it, "hype".

    There are many other ways in which coins are hyped, (Pop-Tops, condition rareities, MS mania, creating artificial markets) but it's the same with anything that's bought and sold, marketing tactics move merchandise.

    As long as we collect the coins that appeal to us, regardless of what anyone else tells us we "must have", we can avoid the hype, and have a collection we can be proud of.
  20. satootoko

    satootoko Retired

    Amen brother!
  21. National dealer

    National dealer New Member

    Don't forget the registry set crowd. These individuals have had a lot of impact on prices in the past few years. When the best coins come available, record prices are a given. Date and mintmark is a non factor. Only the grade matters.
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