By Eric Jordan
It is often said that opportunity only knocks once, but thankfully it’s not true. She knocks and knocks at our door, but at some point we have to be willing to hear her and welcome her in when she shows up. Today we are witnessing some of the greatest opportunities seen in U.S. numismatics since the Great Depression.
Looking through a U.S. coinage guide book is enough to give one the impression that if you wish to collect something other than clad material the golden era to have been a collector was 1906 to 1936. High-Relief Saint-Gaudens double eagles, matte proof gold Indians, 1916-D Mercury dimes, 1915 Panama-Pacific $50 commemorative gold pieces, 1909-O $10 and 1911-D $5 Mint State Indian gold pieces, and 1936 proof Walking Liberty half dollars among many others were affordable in their infancy to those with foresight but currently hold market values so high that most new collectors are “locked out.”
If you had lived in that seemingly magical era (1906-1936) you would likely have missed almost every coin mentioned above. Only a pitiful few of that generation’s collectors seized the opportunities moderns presented at that time because they did not have a firm grasp on four primary concepts:
1. Today’s troubled infants are tomorrow’s kings.
2. In series, absolute rarity is not paramount, relative rarity is.
3. Pay attention to set structure trends.
4. Series go through infancy, growth, and maturity, so show up early.
Today’s collectors must master the same concepts if they wish to end up with a collection that matures well. Let’s look at these concepts in a little more detail.
Today’s troubled infants are tomorrow’s kings.
Very low population type coins and series keys that are much rarer than their common date siblings almost without exception had something go wrong or were rejected by the collecting public in their year of issue, or soon thereafter. 1907 High-Relief Saints were much too hard to strike and did not stack properly, and 1916 Standing Liberty quarter production started too late in the year. Pan-Pac $50 gold slugs were too expensive for all but the wealthiest of collectors, and Mint State Indian gold coins were rejected by and large because of their unusual incuse designs. Matte proof Indians and Saints of the period sold very poorly because the fields did not have the impressive cameo look of late 1800s proof gold coins, and 1936 proof Walkers were overlooked because Mint State commemorative halves were the hot item that year.
The point is to look for the rejected or problem coin that otherwise has good fundamentals.
In series, absolute rarity is not paramount, relative rarity is.
The U.S. Mint has a long-standing tendency of producing big workhorse series that go on for years with rapidly expanding total populations that end up in the hands of the public. We don’t start collecting something until we have an example. This type of exposure serves as a relentless silent advertisement campaign for the series, and over time its effect becomes readily apparent. 1909-S VBD Lincoln cents are not “rare” compared to some semi-key half cents from the 19th century, but as the famous undisputed key of billions of Lincoln cents it is the coin that legions of collectors can’t afford in high grade. Similarly, millions of high-grade Morgans and $20 Saint-Gaudens double Eagles in the hands of the public produce the same effect with their respective (yet not rare) semi-key dates.
Today the Mint has massive active workhorse series such as silver, gold and platinum Eagles with mintage depressions profound enough to produce similar maturity behavior. Troubled infancy issues still show up from time to time and create tomorrow’s great coins. The trick is to recognize them and take advantage of them early.
Pay attention to set structure trends.
In the 1800s the public collected series by date only, ignoring mintmarks. Many collectors who started during that era failed to notice that newer collectors were assembling sets by date and mintmark, and missed such key issues as the 1909-S VDB Lincoln cent and 1916-D Mercury dime.
It is very important to figure out early whether a new series is going to be collected by issue date and mintmark, by changing reverse designs, or just by type. Set structure dictates series development and we can get some excellent clues by looking at the enabling legislation for the active series. For instance, some branch mint (with mintmark) silver commemorative half dollars from the first half of the 20th century are very low mintage coins, but carry almost zero premium after 50 to 75 years because their series is collected by type only. Collectors must be conscious of set structure when purchasing coins.
Series go through infancy, growth, then maturity – so show up early.
In the early years (normally the first 10-15 years) of series development the fundamentals are already in place. The coin issues to watch have attractive designs, big populations with tight key dates or fantastic type rarity and they are still very affordable for their general class of coin. Collector ranks steadily grow, but still there are more key coins floating around than there are high dollar buyers chasing them, so for the time, early key dates remain relatively affordable. This is the stage that allows those with more foresight than money the ability to lay the foundation for set completion by stretching a little. As the collector base continues to grow and very finite population series key dates start to find long-term homes the prices go into a growth phase that has a tendency to price collectors of moderate means out of the market. Inevitably these previously affordable issues reach prices that are so high it discourages new collectors from stepping on board because the coins are expensive and are already mature.
A place to start.
Moderns have a story to tell just as the great issues of the past. John Maben and I have offered a “box or basket of 50” concept in a new book published by Krause Publications entitled, “Top 50 Most Popular Modern Coins.” This book contains information about coins from interesting short sets, very scarce or popular modern type coins and noteworthy key dates to rapidly expanding series. These and a half dozen other coins that received honorable mention in the text but not specifically listed therein are a wonderful place to start. They may prove to be fantastic heirloom quality assets that can be handed down through succeeding generations. The coins in the text have valuable lessons to teach us about series development and we hope to cover many of them in a series of articles over the next few months, but this week let’s start with the smooth-edge 2007 Washington dollar because the series is a good case in point.
Smooth-edge Presidential dollars
The Presidential dollars are a great example of a modern historically significant series that ran straight into a troubled infancy issue shortly after the series commenced. Just as the Great Depression nearly halted U.S. Mint coinage production into the early 1930s, so too the economic hardship that started in 2008 encouraged the public to round up their change and turn it in to their local banks. The Treasury ended up with more change returning home than it knew what to do with. Series that had seen large production numbers previously were no longer needed at all. The Presidential dollars in particular went from being produced by the hundreds of millions for general circulation to only being made for special issue sales and the mintages have crashed.
The edge lettering (date, mintmark, E Pluribu Unum and In God We Trust)on these coins has proved to be a quality control problem for the Mint and offers an opportunity for the collectors. A small percentage of the Presidential dollars made it out the door with the lettering missing with the very first issue. Newer issues that have very small initial mintages due to economic conditions and are missing the edge lettering represent very low population keys in the midst of massive total series populations. Such combined anomalies produce a drastic staggering of the mintage chart and are a classic sign of future greatness.
Stable obverse changing reverse series (what the Mint frequently refers to as collector series) are becoming increasingly prevalent. State quarters, American the Beautiful quarters, Westward Journey nickels, Lincoln cents of the bicentennial of his birth, Sacagawea Native American dollars and Presidential dollars all have this structure. The consistent obverse produces a set with high cohesion and enforces a sense of belonging to the set while offering interesting design variation on the other side thus fueling collector desire to get the next one. It took one generation or about 30 to 40 years for the preferential set structure to move from just date, to date and mintmark. We could see the same thing show up over the next generational turn with these series. If that’s the case, the Presidential dollars could find themselves the beneficiaries of a broad structural shift in how sets are put together. In any case the changing reverse sets have all the bases covered. Date, date and mintmark, or design-based collecting, it is all the same to them.
Eric Jordan is co-author with John Maben of Top 50 Most Popular Modern Coins and a consultant to Modern Coin Mart.