Mintage versus rarity

I've been collecting steadily for many, many years. In that time I have seen the hobby grow and decline for various reasons. As a member of two forums, having added this one as the second in recent days, a few things stick out as number one topics based on the posts. Which also hold true at coin shows, clubs and so forth. The number one topic seems to involve Lincoln Cents, and for good reason. It is the number one denomination/series everyone has or does collect. Getting back on topic, the second most common, are the "what's it worth" slash "Is this rare" posts. So I hope this post clears things up somewhat.

Since I'm a fan of the lowly dime, having every one back to 1885 (minus the varieties proofs and of course that 1894s Barber), I'll use these as an example. Every other denomination is similar should you wish to further examine your favorite. So, let's begin by looking at two coins in a middle grade of Mint State 64 (MS64) and based on PCGS listings since they are the top third party grader. The other graders are similar.

We'll start with the 1916d Winged Liberty (Mercury, as they are known) having the lowest mintage of the series at 264,000. Currently there are 107 available and 72 grading higher, MS67 being the top pop. The current average cost, based on a ten year average, is $16,446. Again, this is an average for discussion. Many variables add to the actual price realized such as eye appeal, provenance and so on.

Next, the 1867 Seated Liberty. The series which I am currently one-third through and lacking said specimen. Only a paltry 6,000 coins were struck. Of these, 15 made the grade with another 33 higher, MS67 is also the highest. Based on the same ten year average it brings $2,256.20 at auction.

In terms of rarity, the latter would be. So why isn't the much lower mintage of 1867 worth far more than the 1916d? To add to this, nearly a third of the series are below 50,000 struck, many of those below 15,000. Common sense would suggest that any of these should be. Yet only a few exceed the 1916d in terms of cost. Low mintage and rarity are both confusing and contradictive when assigning a value. Especially to those new to the hobby and even more so to those who do not. It boils down to a single fact. Popularity. Even the non-collector knows what a 1916d is and that it's "valuable". Which in reality it is if you are looking to acquire one. Yet, again, the term value applies more to the 1867 comparative looking at the number available versus the number of collectors. Only 6,000 collectors will ever own one. However, not every collector desires one. Repeating myself, popularity.

To close, and apologize for being long winded, I challenge you to look over what ever you collect for the hidden value lurking within. Collect what you like, enjoy what you collect. They don't have to be pristine third party graded. In my humble opinion, ALL United States coinage are beautiful works of art. Not to forget historical.

 

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Nice post. Welcome to C.T.
Yes, lowest mintage doesn't always mean most valuable. You have variables like you mentioned, popularity, but there are other factors such as...
Condition rarity, estimated survivors, etc... that factor into prices.

 

Low mintages are good but how popular is the coin? And there's the answer.

 

In my opinion the the key factor which determines the price of a coin is
Number of coins available / number of people who want one.

In other words, the ratio of the two.
Generally one would expect that the lower the number, the higher the price.

Supply and demand.

Absolute rarity (number available) or popularity alone do not by themselves determine how much people are willing to pay for a given coin.

Just my humble opinion.

 

Welcome to CT. Good topic. Some of the things you wrote sound like facts, while they merely reflect personal observations and/or preference.
E.g. Even the non-collector knows what a 1916d is and that it's "valuable".
Well... no

 

Some collectors are drawn to the 1880 gold dollar because it has a mintage of 1,600 pieces. The coin is also quite beautiful in the top grades because of the low mintages. The dies were fresh a well polished when these coins were struck.

Yet, the low mintage does not tell the whole story. The survival rate was quite high. "Coin Facts," which tends to post survival estimates on the low side, estimates that there are 1,000 survivors. Nine hundred and seventy-five of those survivors are thought to be in MS-60 or better. A surprising 650 of those pieces are said to be in MS-65 or better.

Here is a nice example. It's a pretty coin, but not as rare as it might seem to be. This one is in an Old Green Label PCGS MS-65 holder.

 

Welcome to the forum. I too am an aged collector that has seen the ebbs and flows of the hobby. I have come to the rationale that the 16-D dime and the 09-S, VdB cent while not rare are legendary. It was the coin we all dreamed of as a kid and believed we could never own. And that one factor is the basis of the value in those two. I am confident that I could drive to any of my dealers places and acquire one or the other. Look at the montage figures for the last six years of three cent nickels. Only a few thousand pieces minted yet they are affordable.... Thankfully as I am working on that set currently. But they aren’t very easy to find.

 

Simple answer, for every person collecting seated dimes who needs the 1867 there are probably a few hundred collecting the Mercury dime who need the 16 D.

 

There's something wrong here, but I can't quite put my finger on it. I think it's a problem with the definition of "popular".

Let's look at the 1916-D dime. It's popular, and it's expensive. It has the lowest mintage of the series. Lots of collectors want it, but can't afford it.

Compare it to the 1916-P Mercury. Almost 100 times as many were minted (22 million vs. 264 thousand). It's cheap, and nearly any Mercury dime collector can afford it.

How many collectors do you imagine have a 1916-D Merc, but not a 1916-P? I'd guess that number is very, very small. On the other hand, there may be a million collectors that have a 1916-P but not a 1916-D.

The price for the 1916-P is low. But on what grounds can you argue that it's less popular than the 1916-D? I'd say that it's more popular -- more people buy it, more people sell it, more people own it. It just doesn't command as much attention.

Does this make sense?

 

Look at the Three Cent Nickel series; many rarities by mintage but prices that are very affordable. Why, because it is not popular to the masses.

 

Here's another example, possibly more extreme.

I bought a Jane Pierce uncirculated First Spouse gold coin from the Mint, back when gold was skyrocketing. The total mintage for that issue was 3348. My coin, like most, is visually flawless, and has never been touched since the Mint shipped it. And it's a half ounce of gold.

From PCGS, it looks like the total population for MS 1909-S VDB cents, say from 64 on up, is close to 6000. They're more common than the Jane Pierce uncirculated gold. But I'd need three or more Jane Pierce half-ounces to buy one of those little copper lumps!

I suspect the FS gold will go through periods where it appreciates more rapidly than the Lincoln, based solely on gold spikes. And in the very long term, it's possible that once cents (and all other coins) disappear from commerce and from people's daily awareness, the Lincoln's value might dwindle significantly. But I doubt I'll live to see it, and I think it's unlikely even in my children's lifetimes.

 

I don't think this question has a simple answer, because people buy and pursue things for different reasons.

Some people want to "fit in" and own things that others seem to want. Anyone new to the hobby would quickly pick up that the 1916-D Mercury is a desired coin by many, because it receives a lot of press and it really sticks out in the Mercury Dime section of the price guides.

Some people buy on perceived future value. The 1916-D Mercury seems to have always been desired, so it seems like a decent bet that it will continue to remain desired. It may not. Or it might. No one knows the future. Some people buy on perceived current value alone.

Others buy to complete a set. Others buy things because their neighbors, friends or peer group have one. Others buy based on hype. Some people buy things irrationally (a lot of people buy things irrationally, especially collectors).

Some people buy something because they "want it," but they may not be able to explain exactly why they want it.

Some people buy for a combination of some or all of these factors, along with other factors not mentioned.

The word "popular" captures some of the sense of all of this, but it seems a little too simple, though it's probably as useful of a word as one can come up with to explain the extremely complicated psychology behind the value of things.

 

I tend to agree that once the Lincoln cent is no longer produced for circulation (yes, it's inevitable that this day will come), the interest will wane with future generations and the prices for key dates and rarities will go down. For sure I won't be around to witness it.

 

Popularity is not the right term, but it is close. “Market Demand” is more accurate and precise. A coin can be high grade. A coin can be exceedingly rare in absolute terms. But if there is little collector demand then the market determined price will remain low.

I own such a coin that is a prime case in point: A 1975 Proof five cent piece from Rhodesia. Look it up. Total mintage was ten (10) pieces. That’s right. Only nine other collectors other than me can own this particular coin. In terms of absolute rarity it is rarer than an 1804 Silver Dollar.

I paid about $590 for this coin, not 6 or 7 figures. Why? Because there is an exceedingly thin population of numismatists who collect coins of Ian Smith’s Rhodesian government (1965-1980). So long as this is the case, the market demand is exceedingly low and the price reflects this fact.

The good news here is that if you collect a specialty niche like this, you can have top quality and absolute rarity for affordable prices, but not necessarily bragging rights as most other collectors will likely shrug and say “meh.” But I enjoy working on my Rhodesian set even if others are completely uninterested in these coins.

 

But... but... but... for that kind of money you could've gotten a 1916-D dime in AG03, maybe even G04!

 

Very true......and I do collect Mercs. Been collecting those since 1970 and like most people I love the design. But I don’t like collecting them in AG03 and G04 or any grade below VF. In recent years I’ve only been buying MS examples. I guess I’m spoiled. I like mint state and proofs 95% of the time. This preference, of course, blows me out of the market for a 1916-D since I am not a numismatic “whale” capable of buying whatever I want with price being no object.

This is why I expanded into foreign coins in the past two decades. Lots of beautiful and historically interesting material out there to be had in top grade and rarity at achievable price points. In addition to Rhodesian coins I also pursue Peruvian Seated Libertad Half Dinero’s from the late 19th and early 20th centuries. I own many in the MS 65 thru 67 grading range with many exhibiting prooflike characteristics and having attractively low mintages. I rarely have to pay more than $100 per specimen, and often less than $50, because of the thin market in Peruvian coins and yet I own coins whose beauty rivals, if not exceeds, that of our own Liberty Seated Half Dimes. If you’ve never given much thought to foreigns you might want to peruse a Krause catalog of foreign material some time. So much good stuff out there to enjoy.

 

I do have an older printed Krause edition, and an electronic version as well. Moving to foreign material would be quite a stretch for me -- but stretching is good for you, right?

 

IMHO the U.S. Mint would be crazy to stop minting Lincoln cents for collectors when and if they stop minting zincolns for circulation. IMHO Canada missed the boat and stopped minting their cents completely. But our beloved? U.S. Mint, always looking for an angle, will certainly not be as pristine. Methinks lincolns will continue to be minted one way or the other for a long, long time. Besides in only 40 more years we can celebrated the 150th anniversary! Hopefully, if the U.S. Mint continues producing cents for collectors, it will be with the original composition. After all, they will be selling for a premium.