From the January 2002 issue of ACCent, the newsletter of the Anchorage Coin Club:
Are Popular Mint Errors A Good Value Now?
(Focus On The 1916 Double Die Nickel)
By Mike Nourse
When I read the various numismatic
periodicals that I receive in the mail, I often times end up spending about the
same amount of time looking at the advertising as I do reading the articles.
There is no better way to see what the current trends are. Even just a quick
glance through the two major weekly periodicals will show that slabbed modern
coins are all the rage right now, as they have been throughout the year 2001.
You can find full page spreads advertising all sorts of modern regular issue,
commemorative, and bullion coinage, mostly Proofs, and all in slabs. You will
learn what types of coins are being promoted, and what collectors are buying by
looking at the ads, not by reading the articles. Just remember that looking at
the advertisements will tell you what is popular now, but not what will be the
next big thing.
When I read the various numismatic periodicals that I receive in the mail, I often times end up spending about the same amount of time looking at the advertising as I do reading the articles. There is no better way to see what the current trends are. Even just a quick glance through the two major weekly periodicals will show that slabbed modern coins are all the rage right now, as they have been throughout the year 2001. You can find full page spreads advertising all sorts of modern regular issue, commemorative, and bullion coinage, mostly Proofs, and all in slabs. You will learn what types of coins are being promoted, and what collectors are buying by looking at the ads, not by reading the articles. Just remember that looking at the advertisements will tell you what is popular now, but not what will be the next big thing.
Where am I going with this rambling on about reading advertisements? One recent ad caught my attention. Not the ad itself, but the coins in it. I am looking at the October 9, 2001 Numismatic News, page 29. There is an ad by prominent auction house Spink in which they illustrate some of the highlights of an upcoming (now passed) auction to be held in New York. Along with identifying the coin pictured, the auction company provides an estimated price range in which they expect the winning bid to fall.
On the top row, there is illustrated a 1916 Buffalo nickel with a doubled obverse die. This coin carries an estimate of $20,000 to $30,000, the highest estimate of any of the 17 coins pictured in this full-page ad. What struck me about that fact is that the other coins pictured in this ad are very scarce and / or desirable pieces, including century old Proof gold coins, an 1856 flying eagle cent, a 1795 draped bust dollar, a 1907 high relief $20 gold piece, and an array of patterns.
Back to the buffalo nickel. With an estimate of $20,000 to $30,000, it is obviously in excellent condition, probably a lower Mint State grade, although a specific grade is not given. There is no disputing that it is an impressive example of a doubled die, with bold doubling clearly visible in the date area. And, of course, it is a scarce coin with only about 120 pieces having been slabbed by NGC and PCGS thus far and an estimated 200 pieces in existence. Certainly this is a desirable coin. But is it truly the most desirable (indicated by being highest priced) coin on this page of auction highlights?
There is no clear answer to that question as it is a matter of opinion. Eventually we will be able to confirm that the nickel did receive the highest bid of all these coins once the auction results are published. The real question is what will this coin’s price performance be in the years ahead? Few people can spend $20,000 to $30,000 on a coin without concern for its future value.
One thing to consider (back to reading advertisements again!) is that error coins are very popular right now. This is likely due to the abundant press coverage of the spectacular Sacagawea dollar / quarter mule errors. There is also a lot written on the subject of errors and varieties on a regular basis in the form of weekly columns, news articles, and books. A great deal of interest has been generated in this field by the publication of the immensely popular Cherrypickers’ Guide To Rare Die Varieties by Bill Fivaz and J. T. Stanton, now in its fourth edition.
As for the other coins in the ad, are they in a sector of numismatics that could currently be described as hot? Well, early silver dollars have started generating some interest and increasing prices, but the other fifteen featured coins are in sectors that can pretty well be described as dead. My area of expertise is Proof coinage of the 1817 – 1917 era, which has been as cold as a dead fish for years (I am glad for this as I can buy these coins that nobody else wants nice and cheap!). The beautiful Proof gold coins featured here may be purchased today for less than they would have cost 20 years ago. Patterns too have been dead for years. These magnificent coins, for the most part, carry the same valuations they had a decade or two ago. Therefore, by being in a hot sector of the coin market, the 1916 doubled die buffalo nickel is currently the most valuable coin in this ad even though it is also one of the most common.
But it is not the fact that the error nickel has the highest estimate of all of the coins on that page that really got my attention. I was looking over the seven pattern coins illustrated, to which more than half of the page is dedicated. There are three trade dollars with markedly different designs, a nickel with a Liberty head that resembles the head on regular issue nickels starting in 1883 but otherwise completely different, a metric dollar, and a double eagle. The most common of these seven patterns is about equal in rarity to the buffalo nickel while the least common is about ten times scarcer. Except for the nickel, they are all large coins, and all of them are in Proof condition. With all of that going for them, would you believe that if all seven of these coins sold for their highest estimated price, all seven could be purchased for a total of $23,000, which is far less than the $30,000 high estimate for the nickel. That goes to show you what a difference it makes when a coin is in a hot area versus those that are currently out of favor.
What does all this mean for those of us that are not in the market for $30,000 nickels or Proof gold? It means that you have to keep an eye on that advertising, and avoid pouring all your money into the currently hot sector of numismatics! Jefferson nickels were the greatest thing since sliced bread in the 1960’s. Many are worth less now (out of favor) than they were back then (in favor). In the late 1970’s, a Proof 1973-S silver Eisenhower dollar would cost you $100 minimum (in favor). Now they are $25 (out of favor, a possible bargain?). Five years ago I had about fifteen double row boxes of Washington quarters, and nobody wanted to buy them. Most of them were Uncirculated, and lots of them retailed for only a small premium over silver melt value (out of favor). You know what has happened to their values since the state quarter program began in 1999!
If the coins you are collecting now are not near the top of the current hot list (anyone want a Mercury dime?) do not worry. Every sector of numismatics will have its day in the spotlight, and you will then be glad that you collected those coins when nobody else wanted them. I mentioned Jefferson nickels being popular in the 1960’s. They are pretty dead right now except for the super high grade slabbed Proofs, but one day a design change or the publication of a book on the series will re-ignite interest in the Jeffersons. The old Proof coins that I enjoy so much will also one day be back in favor though nobody knows when. On the other hand, Beanie Babies will never… O.K., I won’t go there.
Returning to the 1916 doubled die obverse nickel again, please note that there are lots of great errors, including doubled dies, that may be purchased at a tiny fraction of the price of those popular pieces. The previously mentioned Cherrypickers’ Guide is the bible of the error and variety world. Flip through the pages and see what is available, often for a minimal premium, or no premium at all if you find it yourself. The authors do an absolute first class job of illustrating and describing the varieties that are out there, so make sure that you have a copy of the most recent edition.
The moral of the story: do not be afraid of collecting a series that is not in favor (does anybody collect capped bust halves any more?). You may end up with a gold mine when attention returns to that series!
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Questions, comments, or suggestions? Mail to: Mike@alaskacoinexchange.com