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Archive for July, 2009

2009 ANA Summer Seminar on Advanced United States Coin Grading and Problem Coins. A Critique.

Posted in coin condition, coin investments, collector investments, Economy, Gammill Numismatics, Grading, Grading problem coins, Half Cents, Hard Times Tokens, knowledge is power, large cents, rare coin investment, shield nickels, Stand Alone Coins for Investments, tagged , , , , , , , , , , , , , , , , , , , , , , , , on July 28, 2009| Leave a Comment »

Instructors: William Shamhart, Jr., Charles Browne, Lane Brunner, John Dannreuther & John Albanese

Week of July 4, 2009

If you aren’t familiar with the five names above, you should make a concerted effort to find out who they are and where you might meet and learn from their years of experience in numismatics. These gentlemen have a strong background in numismatic research, the marketplace, pricing and “grading” some of the most famous collector coins that have appeared in the market during the last 20-30 years. Of course, these were the gentlemen who taught the ANA’s Advanced United States Coin Grading and Problem Coins class out in Colorado Springs during the second session of this year’s ANA’s summer seminar series.

Bill Shamhart has been teaching advanced grading out at the ANA during the summer seminar series for a number of years and always brings along an “all star” roster of graders, numismatic experts and innovators in the hobby. Of course, Bill heads up the class and is a demanding mentor with the students’ best interest always out front. He is nothing less than a consummate professional whose philosophy is deeply seated in education.

Charles Browne is likewise a most respected PCGS grader and summer instructor with magnificent grading skills and a more than unique ability to explain the subtlety between that PF 66 and PF 67. Charlie also has a very enjoyable personality which enables him to readily share his strong fundamental understanding of market grading and the market place. He also has a mature and profound knowledge of the field of numismatics.

John Albanese, as most of you know, is the president of CAC. He was also one of the co-founders of PCGS and founder of NGC. He is a soft-spoken individual who is easy to engage and discuss grading and answer your questions. He is a man of many interests and seems to be one of the few who are able to see the “big picture” in the “collectibles space”. What an opportunity we had to have him there as an instructor for the week! It was a unique occasion to learn firsthand his insight into creating that little green “CAC” sticker. In addition, we benefited from his one-on-one instruction about grading which was an experience in itself. He was indeed, as they all were, splendid gentlemen with education at the top of their agenda.

Dr. Lane Brunner has served several positions with the ANA. Lane has a sharp and critical eye when it comes to grading high end coins and spotting coins that have problems of every description. His natural teaching skills were evident in our one-on-one examination of coins and explanation of problems that were present on many of the coins.

Finally, there was John Dannreuther, one of the co-founders of PCGS, a well-known world class researcher, author, consultant and rare coin dealer. John was just a wealth of information and enthusiastically shared his personal experiences in the business, as well as, some of his unpublished results regarding the minting process and in particular about proof coinage. His attention to detail during our one-on-one exercises was truly informative. John is currently working on his opus on proof gold coins and gave an excellent lecture on the production of proofs. What a wealth of information!

John, or JD as we learned to call him, rounded out a particularly unique gathering of instructors of exceptional caliber for our one week course.

All of these fellows have been around the business for a while (sorry for that guys), but as I am sure Bill would say……’the truth sometime hurts’.  These gentlemen are to be applauded for donating their time and energy so their students will not only be better at grading and detecting problem coins, but will also continue the generous giving of time and energy to numismatics through their example.

These instructors have seen, and in fact, been part of a lot of the change we have all seen during the last twenty years or so in our hobby. Their accomplishments range from the founding of the two most successful grading services and subsequent innovations, such as CAC, participating in numismatic service organizations, publishing articles, reference books and teaching.  Finally, they have been successful dealers who have prospered through ethical practices and survived the chaotic markets that occurred during the late 70’s and early 80’s.

From a historical perspective, these gentlemen’s mentors and current colleagues are among the greatest names in 20th century US numismatics.  I am sure that in future years, all the students in this class will delight in the fact that they sat in the room with these men for a week and were able to discuss the timely developments of grading, the coin market itself and contemplate the future of our hobby.

Now some comments about the class and its content.

There were twenty five students in the class, including one YN. We had five instructors for almost every exercise we conducted with one-on-one follow-up. The line of attack in the class was simple: we were to look at and evaluate as many coins in 5 days as possible, and then be able to gain a consensus within a group setting about the grade of those coins. I think we saw most US type coins (in copper, silver and gold) and in grades from AU 58 to MS 68 as well as a good number of proof issues.

Not stopping with the grade, you had to determine the method of manufacture (mint state or proof), color designation for copper, other designations such as PL, DMPL, cameo, ultra cameo, FH, FBL, FSBs, FS, as well as, whether the coin had been lightly dipped (and thus graded) or harshly dipped and a “no grade”, cleaning (heavy vs light hairlines), re-colored or doctored to cover scratches or spots….and so own. All the coins were either PCGS or NGC to the best of my recollection.

We broke up into five groups with one instructor assigned to each group. Then the fun began.  “Number you papers from one to thirty” came the directive from one of the instructors. Another instructor might tell us that we have 30 seconds to inspect each coin and then must pass it to our neighbor. They reminded us to go with our first impression using only the naked eye and then if you see a problem use your loupe. A loupe was also appropriate for the smaller coins. It seemed as if we were off to the races…and in fact we were!

Coins were passed around the group; you recorded your grade; and after everyone had graded the coins, we begin an in-depth evaluation of the coins. The objective was to arrive at some consensus regarding the grade within the group. All the while, we were getting feedback from our table instructor in the way of questions, comments and tips such as, you might want to look at that coin one more time (since you clearly missed something the first time).  The greatest learning tool was in the effort to gain consensus regarding a grade.  This was the process that exposed everyones thoughts about  the grade of the coins and thus provided the forum for disussion with the each other as well as the instructor.

At first, it was hectic but as that first day progressed I think most of us fell into a rhythm that at least helped everyone get to the second day. Then it started all over again on day two.

We were looking at a lot of different coins and were processing a lot of information in a very short period of time. In the first couple of exercises the grade spread within a given group might be from AU 58 to MS 65 or higher.  The objective of the class was to narrow that range down to the correct grade, or to be at least only one point away. Despite the hectic nature of the process the composure and positive instruction from the instructors resulted in little anxiety associated with the process after the first day. We were now on a steep learning curve and had nothing but critical information to gain. This realization, I think, was a big turning point in the class. Now, we had nothing to lose so to speak, but everything to gain. So listen and learn!

As the week progressed, each groups’ consensus grade became tighter and we also gained a much better understanding of A, B and C coins within a grade.  This is something John expanded on with regard to certified coins getting those little green “CAC” stickers.  

All in all it was a great week and is among the strongest classes I have seen the ANA summer seminar series offer in many years.   There were several people that signed up for the class next year before leaving Colorado Springs at the end  of the week.  That says an awful lot about the instructors and class content.  I don’t know of another place where you could gain this type of information from a fine group of experts.  I might also mention, there were several students in the class that had taken the class in previous years (as in last year).

If  you have the opportunity and are interested in grading ,be sure to look into this class.  You must have completed the Beginning and Intermediate grading classes before you can get into this advanced class. 

Remember: Eye Appeal and Luster are the two things that your eyes see first when looking at a coin and thus represents that critical first impression.  Eye appeal and luster are the top factors being considered in market grading and thus pricing.

We were constantly reminded that with market grading, eye appeal adds a little, but forgives a lot.

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Think Thrice when you see that old PCGS or NGC Slab.

Posted in Uncategorized, tagged , , , , , , , , , , , , , , , , on July 23, 2009| Leave a Comment »

In the July 6th (2009)  issue of Coin World Steve Roach wrote an interesting article entitled, “Is Old better than new? Age of slabs plays pricing role“.  This is a very informative article which suggests that in some cases because of the more conservative grading practices at PCGS and NGC in the early days, that coins in their old holders might be under-graded by subsequent market standards and thus would be a prime target for a nice profitable upgrade.  Over the years this has happened numerous times to be sure.  Steve gives several examples in his article (p. 46).

P1100222_edited

An Example of one of the early PCGS Holders

There are a couple of aspects about these “old slabs” that need a comment or two that were not mentioned in Steve’s article.

It is common knowledge that this has always been a  hot area for the crack-out artist. There have been a lot of these early graded coins which have been cracked out, received an upgrade, and thus brought more money.  But just as likely, there were probably coins that were over-graded!  What happened to those coins?

In spite of this earlier point in time, let’s be realistic.  Considering the bull market we have seen in rare coins during recent years, it is probably better to face reality and realize that most of those coins in the “vintage” holders have likely been inspected by the crack-out artist who are expert graders working for the larger dealers (who see such a huge volume of coins that the average collector can’t even comprehend) and auction houses.  Therefore, if you come across one of these old holders you need to ask the question, why is it still in that old holder!  Was it because no one thought it would upgrade, or was it over graded to begin with while grading standards were being established?  Likely, there is a very good reason the coin in that older holder is in its “final resting place” (the vintage holder).  You must realize that the day after they started slabbing coins, someone starting cracking them out and resubmitting them hoping for better grades; essentially taking advantage of the subjective nature of grading.  And as we all know, that crack-out process continues to this day and we don’t have to limit the crack-outs just to old PCGS or NGC  holders.

The bottom line remains, you have to be able to grade the coin and not make a judgment about grade on whether it is in an old holder.  Certainly, don’t draw any firm conclusions about whether it has been under-graded  just because of the holder and when the coin was graded.  All this despite the changes in grading standards we have incurred over the last 20 or so years.

NGC Holders with Black Inserts ARE VERY COLLECTIBLE!

Now, there is another aspect to these old holders, particularly early NGC holders, that one must consider, i.e., the collectability of some of these very early holders.  For example, NGC started out on day one putting their coins in holders with a black background…..that only lasted about three days before it was discontinued probably due to negative market feed back and the fact, the holder simply didn’t have nice eye appeal, particularly for copper coins.  Thus, NGC coins (see below) in these old black holders are quite collectible and often can be valued at multiples of the coins they contain.

NGCBlack193910cbackNGCBlack193910cfront

 

 

 

 

 

 

 

 

The above photos came from the following link which gives a great deal of information regarding these collectible NGC slabs.  Thanks to Lane Brunner for pointing this area of collecting out to Gammill Numismatics, LLC. http://forums.collectors.com/messageview.cfm?catid=26&threadid=727096 

 

Conclusion:  It’s still the same old advice…..buy the coin, not the holder…..unless you have found an old NGC “collectible holder“. 

This is probably new information to many collectors, but none the less, gives you something else to be on the lookout for when looking in dealers’ showcases or someone’s personal collection.  You may be able to tell a fellow collector that the coin in that old holder isn’t of any great value but the holder, well,  is worth a lot!

I guess a green CAC sticker on one of these early black NGC holders would really be a keeper for a collection.

Think thrice: is the coin under-graded, over-graded or is it in a collectible slab (holder).

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As the Economy Goes, So Goes the Coin Market

Posted in coin condition, coin investments, collector investments, Economy, key date investments, knowledge is power, rare coin investment, Uncategorized, tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on July 18, 2009| Leave a Comment »

 AM23507536-oz

As the economy continues to struggle with rising unemployment numbers (heading toward 10%), tight credit for small businesses, bankruptcies and housing foreclosures increasing 15% in the first half of 2009, it should be no surprise that we are also seeing the activity of the coin collecting community shift their priorities.  With less disposable income we are seeing a drop in attendance and purchases by collectors at both the local and national level at both shows and auctions. Additionally, this economic down turn has hit collectors at all financial levels.  These are certainly not surprising results, but the question a lot of dealers and collectors alike are asking is: how long will it last? 

Many dealers are traveling less (particularly between coasts) due to slow retail and wholesale sales which are primarily due to the factors mentioned above, as well as, the lack of fresh material and the presence of what are referred to as “C” and “D” quality coins on the floor.  Or, to say it another way, too much of what everyone has already seen time and time again.  Dealers are relying more and more on internet transactions to get rid of these less than desirable coins while looking for the more desirable “A” and “B” coins, and in particular those coins that have the new little green “CAC” (Certified Acceptance Corporation) sticker affixed.  

Note, the “C” and “D” coins that are selling for discounts are not good collector or investor coins for your portfolio!    If dealers and collectors are trying to get rid of this material now, they will be trying to do the same thing in twenty years.  Quality (often referred to as eye appeal) is the leading factor that dominates market value!  

It is not surprising that a number of collectors out there have slowed down, or at least put things on hold for a while.  There are also a number of collectors and dealers that are either being forced to sell their collections to make ends meet; or, they are just becoming disillusioned by the current rare coin market, jittery economy and few positive signs of a timely recovery. 

There is also a strong desire by everyone in this collectible/ investment space to establish the value of their numismatic portfolios.  Of course value is always based on quality, availability and demand, and in a down market, the inferior examples in a specific grade are just going to sit and sit and sit!  In this market, only the top tier coins, i.e. the “A” and “B” examples in any given grade are going to be the coins that will move, and probably move at a premium independent of tier price.  Likewise the more common issues are going to be less desirable and will suffer due to the lack of demand for such ordinary items.  Add to this the overall movement of the world economy and this becomes a complex issue unless you are holding bullion (for which there are daily prices, and liquidation is efficient and has a well defined mechanism).

For some collectors who have been able to put themselves in a strong cash position, this is an excellent time to purchase coins if the right gems emerge.  For example, the recent sell of the Adams-Carter Class III 1804 dollar brought half a million dollars less than it would have reportedly brought a year ago due to the current recession.  This rarity sold several months ago at the CSNS show in Cincinnati.  It sold for $2.3 million (including the buyer’s premium) and was considered by the buyer at that time to be a bargain.  Time will tell, but my best guess is that this coin will recover nicely from the current down turn simply because it is a “true rarity“.  A true rarity is important for everyone to understand vs.  series rarities such as the 1909 S VDB.

In the early part of this recession, it seemed as though the casual (new) collectors began to disappear as the economy tightened up.  However, at this point, with the continuing problems on Wall Street, Main Street, General Motors going in and out of Chapter 11, CIT on the brink of insolvency, credit card debt, real estate debt and increased home foreclosures, we find that a lot of people who thought they were insulated from a fragile economy simply are not.  Of course Bernie Madoff made us all acutely aware of the criminal nature of some people and how cautious we all should be in the current environment with all financial investments.  Thus, there seems to be a slow methodical breather being taken by the collector base, as well as investors, until things become a little more upbeat, i.e. employment numbers dramatically improve for starters.

Remember, it started with the causal collector, then moved to the more dedicated collector and finally to the financially capable and steadfast collector.  Caution rules the moment for most.  At present, the biggest buyers of coins are coin dealers! 

Another important realization is that a price correction is taking place in the numismatic marketplace just as it has in so many other parts of our economy.  Of course we have the same problem as the other markets and that is, we don’t yet know where or when we will (or have) reach the bottom, what the recovery will look like and finally the time line of that recovery.

There are areas in this market that are doing better than others.  For example, early copper collectors seem to be holding up their area of collecting, while Morgan Dollars (particularly the common dates) and some of the more common early commemoratives are weakening.  Indian Head Cents and Lincoln Cents are somewhat slow.  Early Type (“A” and “B” coins) seem to be holding their own due mainly to their rarity due to scarcity.  This of course provides a nice buying opportunity if these are areas of interest to you and cash is available.  So, what do you buy now with confidence that your investment is sound in this down market?  You buy “A” and “B” coins that are rare due to scarcity and are always, for these reasons, in high demand.  Look for that “CAC” sticker or work closely with an experienced rare coin dealer to help you make these decisions.

The collectible and rare coin market has maintained its strength longer than most investment vehicles.  At first, it looked like rare coins were the ideal hedge against what was happening in the stock market.  However, sooner or later, just as with all bubbles, it has been forced to give back some of that rapid growth seen in the past three to five years.  There has been a lot said about foreign vs US money coming in from all over the world to purchase rare coins.  Now we see the effect of that world economy and realize the reality and consequences of what is now a world market in rare US coins, controlled by an impartial and slashing world economy.  

How long will it last?  It will last until we start seeing positive job reports at the end of every week for starts!  Look for that first and then formulate the next question!

When will collectors/investors from all positions and skill levels feel comfortable enough to re-enter the coin market once the economy begins to gain positive momentum?

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