By Patrick Heller
In early 1989, there was the specter of possibly millions of dollars of “Wall Street-organized” rare coin investment funds entering the market to purchase large quantities of rare coins. Dealers and collectors scurried to “beat the rush” by creating a coin-buying frenzy. Prices rose significantly in anticipation of this “outside” money flowing into the numismatic market.
Looking back, the very top of the market occurred approximately during the major Long Beach convention at the beginning of June 1989. By mid-1989 doubts appeared as to whether this “investor” demand for PCGS- and NGC-certified U.S. coins would materialize. Some of the funds were never launched while others only drew a small fraction of the anticipated investor funding. The numismatic market stalled, then slowly started to retrench.
There are a great many U.S. coins that today are trading at price levels far below what they were 31 years ago. At the same time, there is also a lot of coins trading at higher prices, especially among gold issues as the gold spot price was just over $360 in early June 1989.
As part of my work, I have tracked several types and series of coins in various grades and of coin sets on how they have performed over time. The two most common benchmarks I used for my starting points are the June 2, 1989 issues of the Greysheet and Bluesheet wholesale price guides and the latest December 1998 issues of the various Greysheets and Bluesheets (before the first of the U.S. Statehood quarters was released in early 1999).
In my U.S. coin analyses, I have tried to identify the grades of coins that reflect better value than other dates of the same grades in the different series and of which coin types in various grades also appear to be the better values. For part of my analyses, I used prices in the early June 1989 market peak for reference.
Valuations fluctuate on the basis of supply and demand. Gold coins, and to a lesser degree silver coins, can also have a significant price impact from their changing precious metals value. Supplies of coins can change if a hoard is discovered and brought to market. Demand can surge when a new reference book inspires a greater number of collectors. Prices can also change on the perception of possible loosening of grading standards over time.
For this column, I want to focus on the U.S. Morgan dollar series of circulation coinage. In general, the prices of coins in Choice Mint State-63 condition have performed better, on average, than those in higher grades. Perhaps half of those issues today are trading at higher prices than in mid-1989. A lesser number of Morgans graded Very Choice Mint State-64 is now at prices above what they were 31 years ago. In comparison, most of the coins in Gem Mint State-65 and -66 quality are trading far below their prices at the June 1989 peak.
Just for fun, here are some Morgan dollars available in one or more grades from MS-63 to MS-66 at prices at least 80 percent lower than they would have cost you at the 1989 market peak:
In MS-63 grade
In MS-64 grade
1880, 1882-O, 1890
In MS-65 grades
1878 7TF Reverse of 1878, 1879, 1880, 1880-O, 1881, 1881-O, 1882, 1882-O, 1883, 1883-O, 1884, 1887, 1887/6, 1887-O, 1887-S, 1888, 1888-O, 1889, 1890, 1890-O, 1891, 1896, 1897, 1898, 1900, 1900-O, 1901-O, 1902, 1902-O, 1903, 1904, 1904-O,1921, 1921-D, 1921-S
In MS-66 grades,
1878 Reverse of 1878, 1879, 1879-S, 1880, 1880-CC, 1880-S, 1881, 1881-S, 1882, 1882-CC, 1882-S, 1883, 1882-O, 1883-O, 1884, 1884-O, 1885, 1885-O, 1886, 1887, 1887-S, 1888, 1888-O, 1888-S, 1889, 1896, 1897, 1898, 1898-O, 1899-O, 1900, 1900-O, 1900-S, 1901-O, 1904, 1904-O, 1921, 1921-D
Don’t consider this list as necessarily representing the dates and grades with the highest future appreciation prospects. Some of these dates and grades may have been negatively impacted by the appearance of a greater than normal quantity of discovered hoards. If anything, consider that these lists may more reflect coins that have lesser than average downside price risk.
In general, I am optimistic that from now into the future most Morgan dollar prices will rise in most grades. The reason for that is that I think the numismatic market will get a boost from a likely rise in the spot price of silver for the rest of 2020 and beyond.
Patrick A. Heller was honored as a 2019 FUN Numismatic Ambassador. He is also the recipient of the American Numismatic Association 2018 Glenn Smedley Memorial Service Award, 2017 Exemplary Service Award 2012 Harry Forman National Dealer of the Year Award, and 2008 Presidential Award winner. Over the years, he has also been honored by the Numismatic Literary Guild (including twice in 2019), Professional Numismatists Guild, Industry Council for Tangible Assets, and the Michigan State Numismatic Society. He is the communications officer of Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Some of his radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and become part of the audio and text archives posted at http://www.1320wils.com).