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Long Beard's Blog

10 Oct 2020

Underlying Potential

Coins-United States | Long Beard

Numismatics, or coin collecting if you prefer, is the the study and acquisition of coinage with an emphasis of enjoyment, more often a passion. Enjoyment in the beauty of design, the history behind it and/or the era in which it circulated. The seemingly endless quest to complete a certain series or grouping for self gratification through accomplishment. At some point along the way, a particular coin or set suddenly rises in value for a variety of reasons. Occasionally without possessing one before this happens and leaves us wishing we'd seen it coming. As a result we begin an attempt to predict that next golden opportunity to buy low sell high while quickly learning the difficulty of foresight. The subject of this week looks a four coins falling under this category which have already begun to show promise while their full potential has yet to occur. Enjoy!


Modern clad coinage has been relatively shun by collectors since their arrival in 1965 due to the cost of silver over face value. While modern coinage finds it's way into our collections, largely pulled from circulation to complete a date year set, a vast majority look to pre-1964 silver. Certainly there are series such as the Kennedy half dollar or the Eisenhower dollar which are highly popular, but for the most part modern coinage values have remained stagnant and unchanged from the beginning as a result of their appeal. Looking at the market, through previous and current auctions, modern coinage has begun growing in collectability as astute collectors are adding high grade specimens to their holdings. As an example, a common date 1977 Roosevelt dime with a mintage of 750 million and graded PCGS MS67 is currently bidding at $360.00 . Ten years ago this same coin would have sold for not more than that above the grading submission cost. So does this mean one should buy a roll of dimes and submit them for grading with the hope and intent of such profit? The intelligent answer would be to research the modern coinage for trend rather than availability. Meaning, while the example has a one of one population and none higher, the buyer is most likely one who specializes in the series. Buying in bulk and paying the fees incurred would almost certainly be a break even scenario at best.Of my opinion, through close examination of the trend combined with popularity, one denomination stands out with a value not seen in decades.


In the early nineteen-eighties the country was experiencing an economical crisis. Unemployment was high, and while collectors still collected, most people spent what they had rolling coin to deposit into their bank accounts. The federal government was no different as it looked for ways to reduce cost and spending. As such, the Treasury Department had done just that by ceasing the production of uncirculated coin sets for 1982 and 1983. With one exception, mint state examples were only available through circulating. There were, however, "special" sets issued and available only from the branch mint gift shops of Philadelphia and Denver. These souvenir sets as they are called differed from the normal mint issued sets in that they were coins pulled from the production line rather than being more carefully struck previously. While all five denominations of the two years are valued higher across each series due to circulation issues only,and the Lincoln and Kennedy being the most popular, the Washington quarter offers the greater margin from low cost to high value.


Despite mintages of around half a million for each of the dates and mint marks, the survival figures in mint state grades are far lower than other years. Aside from the afore mentioned conditions leading to availability, and while still relatively plentiful, finding an upper end mint state example of an as yet graded specimen will prove challenging. The greatest hurdle arises from the packaging. A plastic film not intended for long term storage which causes scuffs, blemishes and toning. This should in no way discourage from value as we look at the highest three grades from each year since those lower will at some point pace the upper. The following results are for mint state 66 though 68 based on combined figures from PCGS and NGC due to their preference and track records within the marketplace. Bear in mind that the actual graded figure totals are higher when including the other third party firms, however, the discussion pertains to a maximized profit on future resale.


1982 Production mintage: 500,931,000.

Total submissions: 933

MS66/67/68: 356,48 and 3

Previous auction prices: $282, $360 and $10,200

1982 D

Production mintage: 480,042,788

Total submissions: 1069

MS66/67/68: 373, 377 and 1

Previous auction prices: $70, $410 and $1920

1983 Production mintage: 673,535,000

Total submissions: 2758

MS66/67/68: 608, 350 and 29

Previous auction prices: $26, $55 and $276

1983 D

Production mintage: 617,806,446

Total submissions: 940

MS66/67/68: 423, 247 and 39

Previous auction prices: $15, $61 and $1140



In conclusion, buying an ungraded specimen has quite the potential with a keen eye and the aid of good magnification. Buying one graded also has upside potential with the market heading in that direction. The difference being in the amount of value over the initial cost. Once again, of my opinion, if you look at the figures for a 1983 D this appears to be the better choice when compared with the 1982 as to value margin since the numbers are similar. To reiterate, the coinage of 1982 and 1983 have tremendous long term value in mint state grades.




Comments

Mal_ANA_YN

Level 4

Having only been around for the last 9 years all I have known is clad coins. I always keep an eye out for super good looking high quality circulating coins. I have never submitted coins to a grading service. Something to look forward too?

Stumpy

Level 5

Very interesting Blog! I have many clad-coins in my collection simply because of how scattered my approach to collecting has been. I had never purchased a slabbed coin until April of 2020. Prior to that I had only purchased Mint and Commemoratives, everything else has been found in pocket change, or traded with old friends. Thanks for your great information, always a pleasure. Later!

Doug S.

Level 4

Very well written! I admit I dont collect clad coins at all :( Certainly food for thought here!! Regards Doug

World_Coin_Nut

Level 5

I rarely buy a coin just because I think that I can sell it for a profit. That said, it's always nice to find a coin in a roll or change that is worth far more than face value. Thank you for the well researched blog.

Mokie

Level 6

I developed a prejudice against clad coins because when I started collecting coins in '68, the clads had eradicated any chance I had of finding silver in circulation. That disdain for clad coinage has remained and it blinds me to any potential investment value in the clad area. Like you mentioned, of the clad coins, seems like Kennedy and Eisenhower sets are very popular but the dimes and quarters are substandard designs and generally too available. I guess I should shift my thinking a bit but since I do think of myself as a collector first and an investor a very distant second, I probably won't change my negative attitude. But great blog nonetheless and interesting how more modern collectors, lets say those that started as early as the 80s may not share my anti-clad prejudice.

TheNumisMaster

Level 5

Interesting.... This has never occurred to me, but now I want to do some more research.... Thanks for the thought provoking blog, and I hope to hear more from you. Cheers, NM

Golfer

Level 5

I would never pay that much for a higher grade modern coin with mintages in the millions. Would rather spend 400 dollars on a old coin with a mintage of 25K instead. Very interesting blog on modern coins and the prices being realized by higher graded examples. I would rather buy two 2019 S silver eagles for 1k each in MS69 than 1 example for 2k in MS 70. Just because the mintage is only 30k.

I don't collect the modern coins. Without registry sets, these coins would be worth a hundred dollars at the most. I can't imagine having 10k to spend on a quarter from the '80s

Longstrider

Level 6

Very enjoyable blog. You have picked an unique series to specialize in. I just learned about them recently. There does seem to be money to be made for a patient collector. I have given up, mostly, trying to pick a future money maker. I buy for me only, usually. haha. Thanks.

coinsbygary

Level 5

Thanks to the PCGS and NGC registry sets, high-grade modern coins' values are driven by the competition in the registry. That said, those with a good eye and lots of patience can find registry grade coins searching through bankrolls. Typically, the grading tier fees are more reasonable for common modern coins. There is a way to make money, but if you grade ten coins and nine come back as MS-65, and one comes back MS-67, the profit margin will be much thinner. Here's another tip. The grading companies guarantee their grades. The grader, who doesn't live in a bubble knows this. Therefore the graders are more likely to be tuff on giving out higher grades. After you learn what to look for, only submit the best of the best.

Long Beard

Level 5

I could not agree more. The grading firms and thereby registry set collectors drive the market especially within traditional auction houses. While I myself fall into the" buy the coin not the holder" crowd, I'm always looking for a potential bargain for a substantial future profit to further my collection. Yet something is surely happening in the market place as moderns are entering some big name collections.

"SUN"

Level 6

I agree with you. There are some sleepers in clad coinage.

Mike

Level 7

The same as the market always has been. But there are no crystal balls in this hobby. That's why dealers are not permitted to say what a coin will be worth in five years. No dealer. Sometimes you get a sleeper. I have been lucky with that a few times and have written about it. I hope everyone gets lucky once! That would be nice. Thanks . I will be back to read this again. Thanks.

I. R. Bama

Level 5

Very interesting blog, and I agree with your philosophy. Investing in the coin market is much like investing in stocks and mutual funds. With those, dollar cost averaging is an important concept. With coins it isn't a perfect analogy, but do invest in a wide variety of coins and their series and it will pay off. Then you aren't trying to guess the coin market.

Long Beard

Level 5

I've never been one to buy coins as an investment, sometimes buying them for future gains towards upgrading current pieces. Dollar for dollar, the stock market almost always yields higher returns.

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