“1885 Proof-66.
A splendid gem specimen with champagne toning at the center changing to
gold at the borders and blue at the rims. One
of the very finest remaining from a Proof mintage of only 930 coins.”
So read the cataloguer’s description of this pedigreed Morgan dollar.
One of the nice things about pedigreed coins is that, once
they are encapsulated in a grading service’s holder with the famous
former-owner’s name on the insert, they are easy to trace as they make their
way around the market. Eighteen
months later, this same coin found its way into another auction, this time
described as, “Brilliant with a trace of
color, good strike, average luster, medium mirrors, no serious marks...”
Oh yes, I forgot to mention the grade.
PCGS Proof-63.
With the buyer’s fee, the first purchaser paid about
$4,600. Now safely ensconced in
plastic, this nice coin cost its new owner $2,400.
So, what can we learn from this not particularly unusual
story? Don’t buy high and sell
low? Well, yes, but what else?
Let’s first take a look at some prices.
The current Red Book lists the 1885 dollar at $1,500 in Proof-63 and
“approximately” $4,000 in Proof-65. Coin
Market is somewhat more precise, with values of $1,450 at Proof-63 and $5,500 at Proof-65.
The Coin Dealer Newsletter
contains the most information. It shows “Bid” prices of $1,270 at Proof-63, $2,360 at
Proof-64 and $4,600 at Proof-65.
Thus, the first time our “splendid gem specimen” was
sold, the market was telling us that the coin was, perhaps, a marginal Proof-65,
but clearly not a Proof-66. (An
alternate, and probably more realistic, justification of the $4,600 price is
that the coin was considered to be a “strong” Proof-64 with an outstanding
heritage. A pedigree clearly adds
value, though how much value is always hard to determine.)
The second time around, the market decided that our
“brilliant” piece was a Proof-64, not a Proof-63 as judged by the experts in
Newport Beach, California. An
interesting footnote here is that our dollar
spent a few months of its life between auctions residing in a Proof-64 NGC
holder, and maybe it will again in the future, but that’s a story for another
time.
None
of this is intended to be an endorsement of NGC or a knock on PCGS or a
condemnation of the original cataloguer. I
respect them all; indeed, they agree more often than not. The real messages here are the same old ones we’ve heard so
many times before. Buy the book
before the coin (Jim Ruddy’s Photograde
is still a good choice; PCGS’s
Coin Grading and Counterfeit
Detection is especially good for mint state and proof coins).
Buy the coin, not the holder. Grading
is an art, not a science. Learn how
to grade. If you don’t know how
to grade, stick to certified coins. And,
of course, buy low and sell high.
This article
first
appeared in print in the June 8, 1999, issue of Numismatic
News.
