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U.S. Rare Coin Market Update - BiMonthly

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An analysis of multi-year performances
( January, 2002)

Being a numbers guy by design and experience, I always like to sift through the constant hype coming out of some of the largest, Madison Avenue type rare coin dealerships and see what specific series and types of coins have done from a price standpoint over recent and past history.  Now I can hear a cry go up from the professional crowd as I use the Coin Dealer Newsletter (CDN) dealer-to-dealer sight-seen bid prices as the basis for my analyses.  Some will say that these prices don't reflect true wholesale levels for each series of coin in the marketplace today, and others will say that the current owner of CDN is not as conscientious as his father was at assuring accuracy of data.  Be this as it may or may not be, this is the best we have for readily available data unless we choose to use retail dealer-to-collector data from Coin World Trends, NumisMedia, or for example, where the variations in pricing can be even greater due to methodology and the myriad of mark-up levels reflected in retail pricing.  So just bear with me, unless you can offer me a more consistent source of pricing data which, after 5 years of research, I have yet to find.  In fairness to the data collectors, no two coins are alike even if they are the same certified grade, series, year, and mintmark.   A weekly guide such as CDN will take the most common date of a series, with the highest surviving populations across all grades, to reflect prices for that particular series as a way to save space.  For instance, the pricing of the 1908 $5 Indian is utilized for the $5 Indian Gold series since this specific rare coin has the largest, most common, population of survivors for that series.  More detailed pricing information is published by CDN on a monthly and rotating quarterly basis to take one down to the individual coin levels by date and mintmark to cover the majority of U.S. coins across most grades.   Furthermore, one has to go beyond the series categories themselves (say $5 Indian Gold) and analyze what specific dates/mintmarks did to really understand which coins were winners and which losers for a particular timeframe.

Although gold and silver bullion have done little, in net, to aid U.S. rare coin prices over the last 5 years, my time horizon for this analysis, recent physical purchasing of both precious metals since 9-11 is about to turn this influence from negative to positive.  I have used the 12-Piece U.S. Gold Set as a representative performance gauge for U.S. rare coins over multiple decades, and I continue to feel that this generic gold set will continue to be representative in the decades to come.  Note that we are talking about rather long periods of time here; certainly, a half-decade or decade are much longer than most investors' holdings periods in the 1990's stock market.  Any investor or collector has to have this long-time horizon for plunking down hard-earned cash in numismatic coins.  They are not trading vehicles, especially since most individuals buy at retail and obtain closer to wholesale prices when selling.  There are many variables at work in addition to a strong bullion market, so it takes somewhat of an aligning of the planets to get the U.S. rare coin market moving upward in a broad-based, full participation Bull Market.  The 12-Piece U.S. Gold Set has had a bumpy ride of late, but remember that the prices shown are for generic gold, that is, the most common, highest surviving populations, by date/ mintmark issues of each series.  Remember also, that generic gold coins' fortunes are most closely tied to bullion's performance than their more rare brethren, and that gold was around $350 per ounce in January 1997 and currently trades around $280 per ounce, a 20% decline.  Without further ado, a drum roll please:

Mint State 65

Sight-Seen CDN Bids


YTD 2001



+ / (-)





$1 Type I





$1 Type II





$1 Type III





$2 1/2 Liberty





$2 1/2 Indian





$3 Indian Princess





$5 Liberty w/ motto





$5 Indian





$10 Liberty /no motto





$10 Liberty w/ motto





$10 Indian





$20 Liberty Type I





$20 Liberty Type II





$20 Liberty Type III





$20 St. Gaudens





$20 High Relief


YTD '01

+ / (-)







YTD '01

+ / (-)






YTD '01

+ / (-)







Only the burgundy colored series make up the 12, 8, and 4-Piece U.S. gold sets; the gray colored series are noteworthy subsets of the overall U.S. Gold category.  As we can see from the above, the 12-Piece U.S. Gold Set has pretty much tracked the price of gold bullion during this 5-year period, down 24.7% versus bullion's 20% decline.  I don't recommend buying generic or common date gold coins to attempt to benefit from a new bull market in gold bullion, since pure bullion coins such as the American Eagle and Canadian Maple Leaf can be had with premiums over melt under 5% today.  When you buy rare coins, buy truly rare specimens that have combined PCGS and NGC populations under 70.  So this means buying fewer coins of greater rarity; even circulated (but certified!) examples of pre-Civil War coins are fine if they are also truly rare.

Back to the schedule above, looking at the YTD 2001 or Full-Year 2001 performances, the star performers were the $2.50 Indian (heavily promoted by certain promo-driven dealers), up 39.2%, the $10 Liberty with Motto, up 16.0%, and the $20 Saint Gaudens, up 15.1%.  The hands-down loser, and we told you this would happen in our "Coin Treasures and Hoards" articles, was the $20 Liberty Type I, down 47.5%, that was minted during the rough seas period from 1849 to 1866.  Does anyone out there remember the super-hyped Ship of Gold 1857-S $20 Liberty gold piece hoard that was miraculously "curated' without touching one atom of original patina?!!  My how the prices of a series can dive when the real population numbers surface from the murky seas of history!  Don't forget that the Brother Jonathan 1865-S hoard of $20 Liberties (Double Eagles) would also be having a negative impact on Type I pricing in 2001 as the population numbers eventually dribbled out from PCGS and NGC. So, shiver me timbers, total existing supply and even potential future supply still have a tremendous influence on rare coin prices.

Another gold coin that had a down year in 2001, the $1 Gold, Type II, down 28.5%, is actually the rarest of the entire 12-Piece U.S. Gold Set, so it is stretching things to label it a generic gold coin.  But with a wholesale sticker price of $43,000 for MS65 "investment" or "gem" grade in December, 2000, there were probably a few executives that had to make margin calls and put some these diminutive beauties up for sale.  This is still one of my favorite long-term buys in U.S. gold since even the common date of 1854 is rare in all uncirculated or Mint State grades.  However, with a CDN price of around $11,000 in Mint State 63 grade today (recommended grade), an investor can sock away a truly rare coin for under $14,000, with little potential for discovery of future hoards.  In comparison, this sum represents three stock trades at the most, and you won't have to watch the ticker tape or your EKG on a daily basis either.  While they can make more Cisco stock, they can't make any more $1 Gold, Type II's, and the relatively low original mintage figures rule out the possibility of price destroying hoards.

Switching metals, let's go over to the silver side of the aisle, and observe what certain silver type coins have done on a performance basis over the last 5 years.  Let's look at a subset of the Morgan Silver Dollar series that I have tagged the
High Priced Spread or HIPS grouping of Morgans in MS65 grade that were over $3,500 in January, 1997.  This sum represents over time approximately 100 shares of the average stock listed on the NYSE (pre-Crash).  This selection process was somewhat arbitrary, but the intent was to see if price denoted rarity and market demand, and how this pricey group of silver dollars would fare with time.  Very, very well as you will see for yourself:

Mint State 65

Sight-Seen CDN Bids


YTD 2001



+ / (-)



(HIPS or High-Priced Spread)







1879 S (REV. 78)




1880 O




1882 O/S




1883 S




1887/6 O




1889 O




1890 CC




1891 P




1891 O




1892 CC




1892 O








1894 P








1895 S




1896 S




1897 O




1903 S




1904 S




Totals Shown


On a 5-Year basis, not a loser in the lot, with a subset performance, even after a corrective year in 2001, of a whopping 47.3%.  Selecting rare coins based solely on their prices within the universe of a particular grade and series is not without pitfalls, but this analysis shows that you get what you pay for.  This is also not to suggest that you rush out and plunk over $37,000 for an 1897-O Morgan in MS65, but there are plenty of purchase candidates within the
HIPS list that are still less than $7,000 today.  Morgans have historically been one of the most popular U.S. rare coin series within the silver dollar type class, and that is unlikely to change in the future.  Of course, for anyone who is a regular subscriber to this ezine, my favorite subset of Morgans is the Deep Mirror Prooflike variety where the survival rates compared to regular business strikes are 1% to 2% maximum.  These weighty, large, and often beautiful, multi-toned examples of the art of minting are substantial numismatic pieces that cover a broad and diverse historical period from 1878 to 1921.  They are "Turn of the Century" relics that came into being during a period of rapid change in America.  Each year and mintmark has a history lesson behind it.

Besides setting a price limit of $7,000 due to ease-of-liquidation considerations if nothing else, study the coins above that have appreciated less than 20% over the last 5 years.  These particular coins have less likelihood of experiencing additional price corrections in 2002, and are probably poised for further gains in the years ahead.  This selection criteria would include the 1890-CC, 1892-O, 1903-S, and 1904-S.  I would concentrate on these coins first since they have just begun to move, but not pass up the prior winners under $7,000 such as the 1879-S, 1889-O, 1892-CC, 1893, and the 1894-S.  The silver dollars in this latter subgroup have all had outsized gains in the last 5 years, but are still at least 40% below their 1989 all-time highs.  There is no guarantee that we will see the old highs within the next decade, as there are no guarantees in life, but U.S. rare coins have historically exceeded prior highs during every bull market to date.  The first subgroup acquisition approach would be to buy the laggards, and the second subgroup approach would be to buy the leaders.  Kind of like bottom fishing and momentum investing in stocks.  As more and more stock investors get disgusted with losses and diminished wealth since 2000, they will turn to alternative investments such as U.S. rare coins.  This has been happening for the last year or so, especially in key and semi-key date rare coins, where money has not seemed to be an issue at auction.  But I think even the big-money is buying rarer coins, but fewer coins in total.  Quality over quantity.

I will continue providing these types of analyses in the months ahead (especially on DMPL's, Peace Dollars, and Seated Liberty Half Dollars, three of my favorite silver type areas for 2002), because I think it is important to observe how the market has been pricing certain series and individual issues of U.S. rare coins.  As I have said many times of late, some U.S. rare coins have been in a true bull market over the last 5 years and others are still waiting for their turn.  I do think the vast majority of U.S. rare coins are about to enter on a multi-year bull market, if for no other reason than the total capitalization of less than $4 Billion for the entire numismatic enchilada is a drop in the bucket for U.S. investors.  In fact, it looks like less money than what has been lost in just one company alone .......... E-N-R-O-N.  Ya gotta know when to hold'em and when to fold'em!  Equally important, you have to know where to find value on the investment landscape today.  In the last 5 years, certain numismatic pieces have become even more undervalued and neglected by the majority.




David Morgan's monthly ezine specifically written for Silver Investors


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