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Formula would be nice

I had an email inquiry that sounds ever so reasonable.

It read, “price guides go as high as MS-65 and PF65, How are higher graded coins such as MS69&70 and PF69&70 given values? Is there some kind of formula used?”

It seems like a reasonable question, but I am sure my answer disappointed the sender.

“All pricing formulas work backwards from the market price. There is no formula for an MS-70 value based on a known MS-65 price. Prices are determined by the number of top graded pieces versus demand for them. Some modern issues have more MS-70 pieces than MS-65 in the population reports. This has the effect of depressing the prices and making very little difference in value between the two grades.”

Now my answer presumes that we are talking about new issues getting these new and very high grades.

If you have an MS-69 Morgan silver dollar, you probably can name your price. There just are not very many of these around.

However, with today’s higher quality control standards and many issues made only for sale directly to collectors, more and more coins achieve these higher grades.

So the relationship between the price of an MS-65 Morgan and one in MS-69 will be entirely different from that of a coin that was minted for collectors last year.

This is not to say that top grade coins are not desirable. They are. Some incredibly so, but they work off a different dynamic.

What it boils down to is you have to look at conditions in every single issue and know that they are different.

That, I know, is the opposite of a formula, but it is the truth.

At any given time, it is the current market price that is real no matter what you might think it should be.

Sometimes the market price today can prove to be wrong in the long run. That’s where great study and a feel for markets can lead some collectors to great opportunities and success.

In short, if everybody had a formula, markets would not fluctuate and we could all buy low and sell high.

I have bought and lost enough money on sure things in the past to know that is not the case.

Buzz blogger Dave Harper is editor of the weekly newspaper "Numismatic News."