What’s one of the worst things that can happen to a coin collector?
One thing I would suggest is to see the value of coins lovingly purchased decrease in value.
If coins traditionally go up in value as attested to by record prices achieved at auction by the great rarities, why would collectors find the value of their coins going down?
Well, not all coins are rare. In fact, most coins are fairly common. Their value is dependent upon the number of collectors who are interested in them not shrinking.
So some purchases will prove to be unprofitable.
This is normal.
Another normal thing in the hobby is the presence of fads. These are coins that are fashionable to own for a time and then hobby tastes change.
A fad we seem to be going through now is that for coins with an MS-70 grade.
More and more current American Eagle coins, Buffalo gold and modern commemoratives are shipped to third-party grading services and come back in brand new plastic slabs with MS-70 grades.
This is a great testimony to the quality control at the Mint.
However, coin collectors who are conditioned to always want the best and who know that this condition in prior series can be both very scarce and very valuable seem to be buying modern MS-70 coins in quantities that will assure that their coins will always be common.
But they don’t realize it.
MS-70 shouts to them “rare and valuable.”
How can they possibly be making a mistake?
If the buyers are putting full sets together of one each of all American Eagles or modern commemoratives in the MS-70 grade, that is a true collector purpose. It is not a mistake.
If they are buying current MS-70 coins in quantity simply because they think they will rise in price, they might be throwing away good money on coins whose initial price includes a high premium built in when compared to say, unslabbed average MS-64 or MS-65 examples.
In looking at a fairly recent Numismatic Guaranty Corp. Census report, I see that for the 2002 silver American Eagle there are just 14 First Strike designation coins that make MS-70.
That number looks like the grade is fairly scarce.
Compare it to the 2010 Early Release silver American Eagle. Making the MS-70 grade are 44,177 pieces.
Will the 2010 coin ever be truly scarce?
Collectors who are buying them in large numbers might wake up and discover that one of the worst things that can happen to a collector, has happened to them. They have a quantity when they really only needed one.