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Collection culled during last bullion boom

If you feel obligated to check the price of precious metals every day, you can probably relate to how I was feeling back in the last half of 1979.

Gold was on its way to $850 and silver to $50 an ounce. Such a frantic market in gold and silver can be very disruptive to those who really only care about truly rare and interesting coins.

I made a lot of money – at least a lot of money by my standards back in 1978-1980 when the price of gold hit its peak. Certainly, I was not alone. In fact, everyone made a lot of money as we basically could not lose.

Over years of collecting and saving most of us had significant numbers of silver coins saved from circulation for their face value. To have a VG-8 Morgan dollar that my grandfather had given me suddenly worth $25 was found money if there was ever found money. That situation was repeated over and over again with even many of the coins that had been purchased like proof sets or things like 1955 Roosevelt dimes suddenly at prices we had never imagined possible and that was just because of the silver value. It had nothing to do with a new heavy demand for low mintage Roosevelt dimes.

Growing up I had always thought that running a coin shop was about the best job in the world. You could make money doing something that you loved while talking about coins all day. It just didn’t get any better in my mind. Other kids wanted to be firemen and baseball players or head of a major company or even President, but I could see no better future than standing around a coin shop all day looking at Indian Head cents.

In fact during 1978-1980 I got to basically do that and it cured me forever of that childhood fantasy that being a coin dealer was nothing but being a full-time collector by another name. It was not actually my store and it was not actually a coin shop but rather an antique store owned by my friends.

It had started innocently enough as they asked if I would help them if there were ever any estates or deals involving coins. That was simple. Then it was decided that we would put a few coins and things like cheap Confederate paper money in low grade in the store as novelties.

I was never needed, as an Indian Head cent for less than a dollar or common date Morgan dollar in VG for $5 were not items that required my presence. The people buying them were not collectors. The one local 5th grader who was starting a collection was different and I would drive 30 miles simply to see him once a week, getting him the 1955-D Lincoln cent or whatever he would want. It was a little like the good old days of sitting and talking about coins although this time I was the teacher and dealer and had someone who reminded me a little of myself at a young age as the customer.

It was about that time that the phone started ringing and ringing and ringing. I had been reading and watching the price increase of both gold and silver. At first it was simply interesting, but that would change rapidly. The public began to discover what most in numismatics already knew, which was that the price increase was not stopping and if anything, it was picking up momentum.

Initially the whole matter had no impact on my schedule except for the fact that the phone kept ringing from the store where there would be someone with a few coins to sell. I would give the price of the day and it was always fairly simple, but that too began to change.

First it would be rings, then watches and sterling silver until one fine day I received a frantic call from the store. “There’s a guy in here with his teeth in a napkin,” shouted the owner. I could only answer that we did not buy or sell teeth with a suggestion as to another store that  might.

It got to the point where there was not a moment of peace. Moreover, as the prices climbed, so did the margin between the buying price of gold or silver and the actual value. There was a reason. The big buyers who ultimately would end up with the coins or rings for melting were falling behind. Their prices were not keeping pace. It might take days or weeks for  coins or rings to be melted. During that period the price might go up, but it also might go down. That was felt throughout the chain from the smallest buyer on up. Everyone was starting to be cautious.

People started to become much more difficult. A lady called with a complete set of Canadian silver Olympic commemoratives. I told her the set’s rough silver value.

 “Is that all?” was the reply with a confrontational tone in her voice.

I explained politely that the price was more than she had paid for the coins but that still did not seem to satisfy her.

“I’m sure I can get more,” she stated.

I agreed that if she drove two hours to a certain coin shop that was a big buyer that they might well pay a few cents more per ounce, but I added quickly, “You have to consider your costs and so do I. Either you spend the few hours and pay for the gas and parking or I do. If it’s me, I have to get those costs back, so you get a few cents per ounce less.”

As the record levels were reached, everyone was very cautious. Moreover, I was simply tired of a day-after-day flood of such questions and problems. It was near the top, when I was sitting in the store about closing time.

A man drove up and pulled out what was probably the world’s worst double eagle, or at least the worst that I had seen. It was worn and marked and generally awful. It was Friday and shelling out the $800 it was worth at the time would have been a major inconvenience leaving us without enough cash for the weekend.

I basically just told the man that I did not want the coin, but gave him an address, suggesting that I thought he could get about $800 for it. He thanked me, but I should have thanked him, for at that point I knew it was time to get out of the business and out of my mostly bullion coins. If that double eagle was worth $800, the price was just too high in my opinion.

It was probably the least well supported decision I have ever made and certainly one of the best. Before closing I called the very same coin shop I had told the man to go and visit and told my friend there I was coming in Monday with a gold type set and a fair amount of silver to sell. What I wanted was to get an appointment and lock in prices. I simply had lost faith in the prices and I knew all too well that the lines outside the store to sell would form early in the morning. This way I could walk in and simply be done with the whole matter.

When metal prices soar, almost everyone has what is often called “found money.” It is unexpected. Certainly, that was the case with me. The two double eagles I had purchased for around $70 each in college at the going rate of $800, the same as the dreadful example the man had brought into the store, were certainly better in terms of profit than anything I had except for the silver.

Even with profits like that as an inducement, it is hard to say goodbye to old friends and collections you have enjoyed. I had, however, studied things and more importantly asked a question of a mine executive as to what price gold and silver had to reach to financially justify opening old mines and taking other steps to increase production. In the case of both gold and silver, that price had safely been passed and to me that, along with the awful-looking double eagle now at $800, were key elements in my decision to sell.

What I learned that weekend as I tried to sort through my coins to determine what to sell and what to keep was that high metal prices can force you into some very difficult decisions.
In the case of my gold type set, although each coin told a story, it was a fairly easy choice. The $1 and $3 coins were not for sale as gold prices played very little role in their value, but all the others were definitely going to be sold.

Even if gold went to $1,000, I was convinced it would not hold at the $800 level and that meant that if I was patient I could simply sell now and later buy back the set if I wanted it. I would not be able to buy the exact coins, including one Saint-Gaudens double eagle that had a tooth mark from an unfortunate incident in college when a friend doing his best Old West imitation had taken the occasion to bite it. In fact, I was worried that his bite might well cost me $25 or so when it came to a final price for the double eagle. At high metal prices, things normally not considered such as heavy wear, possibly making a silver coin lighter than should be the case, or bites on double eagles can create problems that in normal times would be no problem.

It was, however, my various silver coins where I had the toughest decisions to make. Some might be confronted with similar decisions today. It’s amazing how going through set after set you can suddenly turn yourself into knots trying to figure out if certain dates have potential from numismatic interest or are simply forever junk silver. My collection had its share of both.

Some of the tougher calls came in the case of older issues where I had good dates, but ones which were sometimes heavily circulated. My Mercury dime collection, for example, was complete except for the overdates and the 1916-D.

It was clear to me that even with high silver prices, I would keep the 1921 and 1921-D. The problem was with the rest as in a Mercury dime set you have low mintage dates that are not very expensive. For example the 1930-S, 1931-D and 1931-S all have mintages of less than 2 million pieces. Rising silver prices had swept aside the carefully recorded relationships among the various dates in price guides that were suddenly obsolete.

In the end I simply decided to sell everything but the 1921 and 1921-D, as despite the lower mintages I knew my examples of some dates were simply too low in grade to justify saving. Had they been XF or even VF the decision might have been different, but they were not and I had to be realistic.

My complete Roosevelt dime set presented a couple challenges but not many. The fact that the better 1949-S made it easy as the 1949-S brings larger premiums in Mint State, but in circulated grades it is still relatively inexpensive. Even in upper circulated grades I saw no real future for the 1949-S, which would see its price rise to anything close to its price with silver at $40 an ounce.

I thought long and hard about the 1955, 1955-D and 1955-S Roosevelt dimes. I had them all in Mint State and with mintages of under 20 million for each I had to think that for some reason these dates simply had yet to be discovered.

In fact, the problem was that they had been discovered by too many back in 1955 and had been hoarded. Of course I did not have the details on the hoarding, so reaching a decision was difficult.

As it would turn out, a number of 1955 dates were in a similar situation as the 1955-D quarter and 1955 Franklin half dollar are also low mintage. Ultimately I made what, at the time, was a very hard decision. All the Roosevelt dimes would go, simply because it was nearly 25 years since the 1955 dimes were produced and if they had yet to catch on, my feeling was that they might never have their day in the sun.
Quarters were a much easier decision. I had some better date Standing Liberty quarters, but their problem was that they were heavily circulated, including in some cases partial dates. I did not have the 1916, but I did save my 1927-D. In the case of the earlier dates, I probably made some mistake as since 1980 some have done very well in G-4. At the time, however, especially with strict grading my feeling was that there were only a couple dates with any potential as the others would suffer because of low grades so I basically sold all but a few.

When it came to Washington quarters there were no decisions to make. The only two dates that I would have saved were the 1932-D and 1932-S but I had neither. My dates from the 1930s were simply not in grades where they would bring any premium and that made the decisions easy as I saw no future for a 1934-D or 1936-S, which would see its price higher than its silver value at the time in the near future.
Half dollars were also relatively easy. In fact, I had already sold the 40 percent  silver half dollars I had. Like the 35 percent wartime Jefferson nickels, to get anything over their face value for a coin containing less than 90 percent silver seemed like truly found money.

The 1964 Kennedy half dollar was in the same situation as we knew by the 1970s that the 1964 and 1964-D had huge mintages. The thought was while important back in 1964 they had no future in terms of higher prices.

Actually that thinking was right except for the highest grades, but even if a few higher grades were sold, the others that were circulated more than made up for any potential better coins sold as silver.
In fact, its only been in recent years where the 1964 and the 40 percent silver Kennedy half dollars have ever posted significant price gains. Those gains will potentially continue, but the fact is, of my Kennedy half dollars, there were probably none that would have been called MS-65 or better.

The other half dollars were relatively easy. The 1921-S Walking Liberty half dollar was not being sold, but all the others were. I thought a few times about some of the lower mintage Franklin half dollars, but they were circulated, which I figured limited their potential in the future and the same was true of the Walking Liberty half dollars. If I had an obverse mintmark, the 1938-D or any of the other 1921 dates, I would have saved them, but since I did not have them it was not an issue.

The other silver coins were tougher. I had a number of silver dollars and in the end opted to save my Carson City Morgans purchased from the GSA as well as a Peace dollar just to have one. The other circulated Morgan and Peace dollars, however, were sold. The same was true of the couple uncirculated rolls of various denominations that I still had as well as the proof sets after 1958.

I could probably have sold more proof sets for their silver value, but somehow I suspected those from before 1959 might have more potential than just their metallic content. I was right in a couple of cases and probably wrong when it came to a couple of others.

Of course having a sudden large windfall caused me to start shopping. In reality, buying coins when silver and gold prices are high may not be the best time to do serious coin buying. It is not a case where something like a 1793 Chain reverse large cent is going to go to higher levels because of the price of gold and silver. It does, however, go to higher levels as do most issues because of the profits dealers are making from the high metal prices and then plowing back into other inventory.

Some dealers and collectors tend to take their profits and put them into older and better coins. I was similar as suddenly I had an 1801 Bust dollar in XF and an 1853 no arrows and rays half dollar in lower Mint State. There was a method to my madness as I could not stop collecting. I had just changed what I was collecting as suddenly I was working on a type set and the Bust dollar and 1853 arrows and rays half dollar, which was only issued for one year, were two of the better coins in a type set.

In the months that followed the price of silver and gold continued to go up and then early in 1980 it peaked. The fall was quick and dramatic. By that time I had basically closed down our buying of gold and silver, although when the fall began I tried to help a couple friends who had simply gotten too greedy by waiting too long. You could not get a certain price and many times the local bullion buyers were not even answering the phone.

I was not that surprised and as the interest decreased along with the prices I was basically content to life as I had known it before the metals had soared.

It was an interesting experience and I had made good money while acquiring a couple key coins for my next collection. I would, however, stop short of suggesting it was fun as when metals soar the old ways of collecting and doing business suffer.        

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