Rarity or Condition Yields Greater Return

Let's say everything else is equal. You have x amt of money to buy a slabbed coin and you'd like the biggest return on your investment over the course of 10-20 yrs. You see 2 coins that cost the same and either one will consume all of your funds. You like both coins equally. The rarer one is VF and the less rare one is MS63. Generally speaking, on avg, which coin would tend to have the better chance of yielding a greater return, the rare VF coin or the more common MS63 coin?

I know there are endless factors that would affect your decision, but after weighing all these other factors and concluding they both have the same likelihood of success, would you lean toward condition or rarity?

 

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It would depend on your definition of rare. Too many people over use the term. Is a 1909s vdb rare? No not in the least, highly collected yes.

 

In general (and hypothetically speaking), I'll take absolute rarity over conditional rarity every time.

 

Anyone got a crystal ball? Who knows how the market will trend down the pike? It's a crap shoot at best. If I had bought some classic commems back in the eighties (and paid top dollar) I wouldn't whistling Dixie now because, in many cases, you can pick them up today for far less than what was being paid for them back then.

 

Without specific examples, we can go back and forth on this all day long and there will never be a meeting of the minds.

Chris

 

There is not enough information to make that call. It would all depend on collector demand. Recently the statehood quarter program sent Washington quarters through the roof and now they are substantially cheaper than two years ago. Who knows what collector trend will be there in twenty years. Just ask stamp collectors how much profit they have made sitting on rare or conditionally rare stamps for the past twenty years. Back up though, they may take a swing at you.

 

the answer is buy the one that you like the most because there isn't any guarantee that either will be worth more 10 years from now.

 

Based on your premise, I would chose the absolute rarity over the condition rarity.

 

All else is never really equal.

But just to play along in the example you gave the unc will "always" win out over a circ. People simply want a pristine example when they can afford it so will always stretch more for an MS-60 than a VF.

Generally speaking in the real world such things simply aren't equal because it depends on which gains in popularity and which wanes. No matter how popular something is it can always become more popular even if it's only VF and no matter how out of favor something is it can become more out of favor even if it's a scarce MS-63.

But when a series increases the higher percentages are MS-60 and higher and when it decreases the higher grades will always retain as much increase as the lower grades. Of course there are rarities that are so scarce in Unc that this might not apply in the short term.

And it should be added that this could change someday.

 

ive purchased a mag called Coin Prices. I looked at certain coins, their mintage numbers and their listed worst condition price and their listed best condition price. Here's an example:
Morgan Silver Dollars:

1885 cc, 228,000 minted, VG8 $550, MS65 $1,100
1885, 17,787,760 minted, VG8 $30.50, MS65 $199
mintage 78.02x, VG8 18.03x, MS65 5.53x

So in this particular example only 1.28% as many coins were minted 1885cc vs 1885. Even though 78.02x as many 1885's were minted vs 1885cc's, the value of the 1885cc's is only 18x greater in VG8 condition and 5.5x greater in MS65 condition.

Ive done several examples, about 10, and all but one seemed to me to point toward condition as being more important. Of course, I realize this is very simplistic and there are many factors that effect price, but it is a factor. I might look at more examples and find the reverse to be true, but I kind of doubt it. Also, the examples I produced were older coins and included mintage numbers that differed greatly.

 

oh i know and i know more every day. but of course im just comparing one inflated number to another so hopefully theyre equal in that regard

 

Perfect example of why when you read some books they recommend an optimum grade to collect in. I can't remember which book it was it, but it said why collect a circulated coin when you can get a nice MS coin for a few dollars more.

As to the OP I would say it would depend on what coins we were comparing.

 

One of the reasons they have mutual funds is it is not a real good idea to put all your eggs in one basket. Given your two conditions, however, I think I would choose a more "rare" coin in a lesser grade. Now as to why...If you are considering it as an investment item (Coins STINK in general as an investment item) you would have a bigger market to sell the "rare" coin into. As to why I said "rare", as you read more you would question if a 1909 S VDB is a rare coin or a "rare" coin.

 

anyone know of a good place to research price changes over the yrs?

 

Buy the coin you like the most and fits your collecting goals. That way, in 20 years, when neither of them have appreciated in price much you will not kick yourself for having bought a coin you don't love for non-existent monetary returns. The 'return' on buying a coin you like will be higher.

 

We could give many examples on rarity vs. condition vs. popularity.

Would you rather have a High Relief Saint in mint condition, or the finest 09S VDB cent for the same $$$?

Would you rather have a 1792 H10c in any condition, or an MS68 1904 $20 Lib.?

Would you rather have 1795 $10 gold piece, or a 1916D 10c of equal value?

 

Here is my two cent piece.

Pick a coin from 1880. Pretty much all 1880 Barber Halves are here. Not saying a 1880 Barber half is rare, but just an example.

Will any more 1880 BH's get lost in the future? Probably...but the chance is small.

While I don't see rare coins getting rarer, as most rare coins are properly kept, I do see coins of higher grades becoming more rare.

There are still plenty of high grade, old coins in the "wild". Clueless people who know nothing about proper preservation, might go and ruin a old, high grade coin. Polishing it with silver polish, soaking it in acid, etc.

I think coins in higher grades offer a better return. 40 years from now there will probably be as many 1880 BH's as there were 40 years ago, but there will more or less likely be less surviving in higher grades.

 

That's probably true about Barbers. The current edition of the Rosen numismatic advisory has an article on historical performance of Barber type coinage in MS65 and PR65. Recent history has not been great, but you never know.