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Pedigree Sales Show Market Trends
 | By David L. Ganz, Numismatic News
April 23, 2008 |
This is a two part column talking about auction pedigrees (Part I) with a focus on the Mickley-Hawn-Quellar 1804 silver dollar and the Anderson-Dupont-Yoder 1838-O half dollar. Part II tells the fascinating story of tracking down a footnote - a price realized 20 years ago - on a pedigreed piece highlighted in my new book, "Profitable Coin Collecting," which Krause will publish July 20.
Rare coins are white hot. On April 17, Heritage sold the David Quellar family specimen of the 1804 silver dollar for $3.7 million, and the Yoder family 1838-O half dollar (a circulated proof-45) for $276,000. Both coins and all others quoted refer to the hammer price plus the buyer's premium, if any, charged winning bidders.
Both pieces realized prove the state of the market when looked at in the context of the lengthy pedigree that each offers. The 1804 dollar goes back 140 years; the 1838-O half dollar covers a half century of the coin market with its ups, downs, and sideways momentum.
For more than 40 years, I've been writing about the rare coin market and auction sale trends, and have charted the path that I called in one book "planning your rare coin retirement." It's become more important to me as I get nearer to my own; my 57th birthday (coincidentally my 43rd year as a coin writer) comes up July 28.
Although the 1804 dollar is drama - who hasn't heard of the coin - on a recent cruise to the Middle East, Kathy and I were offered what the vendor said was "genuine" for just $50 from a foreign lad - and its price impressive, the half dollar from New Orleans Mint first year of issue, 1838, had to my eye the more impressive gain.
Some of the accompanying charts show comparisons - graphed side-by-side - of the cost at various times and measures the gains and the losses in a highly visible way. For example, the 1838-O half is measured beside the 1804 silver dollar and a portfolio of coins once assembled for Salomon Brothers, then a white shoe Wall Street powerhouse that dabbled in the rare coin market.
Salomon Brothers released its first study of tangible assets - including rare coins - in 1978. To the surprise of many on Wall Street, and elsewhere, rare coins turned out to be a long-term investment vehicle that substantially outperformed equities and bonds. The coin market exploded as a result of the survey and a variety of other economic factors.
That classic examination, and the dozen that followed it each summer, were closely watched by many investors, as well as collectors - all of whom wondered how an objective examination of the rare coin market would fare. A number of other tangible asserts were also brought into the comparison, which was organized by investment banking partner Robert S. Solomon as a means of creating impetus for alternative investment vehicles, i.e., something other than the traditional products of stocks and bonds.
Over its lifetime, Salomon Brothers' survey compared rare coins with the Consumer Price Index (CPI) the stock or equities market, bonds, collector postage stamps, Chinese ceramics, farmland, gold, silver, Old Master paintings, foreign exchange, diamonds and even Treasury bills. For tangible assets, a variety of reliable sources were utilized for the information.
Results of the annual survey, which considered a market basket of some 20 type coins (silver dollars, subsidiary and minor coinage - but no gold coins) were consistently impressive, showing that over long periods of time, rare coins had a solid track record.
I utilized the basic premise and filled in the data to form the ultimate comparison test: a spreadsheet that goes back to 1928 - now a total of 80 years - and affords the possibility of using the Salomon portfolio - with my numbers - to draw comparisons with other investment vehicles.
But you may ask, what about contemporary market trends; I depend on NumisMedia's Dennis Baker for the figures. Dennis has supplied me with working data for the past six or seven years, and has also included MS-65 data so I can compare. It is so off-the-chart as to make the comparisons ridiculous. But in a forthcoming book that Krause Publications will print this summer, "Profitable Coin Collecting," I'll do just that.
A total of 20 different individual coin types were included in the Salomon Brothers examination, none of them gold, most of them subsidiary coinage (dimes, quarters and half dollars), some of them minor coinage (half cent through three cent nickel), and a couple of silver dollars and commemoratives.
Gold was left out because it was felt by Salomon that general gold coins would mirror the gold market ( a measured component) and be influenced by non-numismatic events. Scott Travers advanced the same argument to me a couple of years ago and I spent a hundred hours or more to try and prove him wrong - only to discover the data does not lie; it might work with $3 gold pieces, but generic Saints just parallel the gold market.
Coins included in the market basket are each broadly representative of a class of coins, or a type that is widely collected and hence easy to value, even if the individual coin date and condition is not easily replicated. For example, an 1876 20-cent piece in uncirculated condition is approximately the same as an 1875 20- cent piece and even an 1875-S.
A 1795 draped bust dollar is similar to the 1796 or even the 1797 or 1798 silver dollar (though clearly not the 1794, in a class by itself). (You'll have to wait for the book to see that one a separate chapter is devoted to it, many charts, and a fascinating outcome).
Mintages and scarcity vary, but overall trends can be followed with reasonable adjustments. The coins were initially selected for Salomon Brothers by Stack's, the well known New York coin dealer, and were designed so that if, for example, an 1873 two-cent piece in proof is not seen on the auction market, or in over-the-counter trading, then an 1871 or even an 1865 (with adjustments) can be substituted to check on the appropriate price.
Coins in the market basket include: 1. 1794 Liberty cap half cent, extremely fine; 2. 1873 2 cent piece, brilliant proof; 3. 1866 5 cent nickel with rays brilliant proof; 4. 1862 3 cent silver B.U.; 5. 1862 half dime B.U.; 6. 1807 draped bust dime B.U.; 7. 1866 liberty seated dime B.U.; 8. 1876 20 cents B.U.; 9. 1873 arrows quarter B.U. ; 10. 1886 seated quarter B.U.; 11. 1916 quarter B.U.; 12. 1815 bust half uncirculated; 13. 1834 bust half B.U.; 14. 1855-O seated half B.U.; 15. 1921 Walking Liberty half B.U.; 16. 1795 draped bust dollar b.u.; 17. 1847 seated dollar B.U.; 18. 1884-S Morgan dollar B.U.; 19. 1881 Trade dollar (proof); 20. 1928 Hawaiian commemorative half dollar.
In many articles about the Salomon Brothers study, the 1881 trade dollar is referred to as being uncirculated; a number of my columns did so through the years. The trade dollar in question is a proof-only year, so while the spotter was mislabeled the price was always correct.
The hardest part about preparing a column or for that matter a book about coin rarities is the data accumulation. Nowhere, it seems, to prove harder than with the 1838-O half dollar, of which about 20 are known to have been struck and about a dozen known to have survived into the 21st century.
All of the 1838-O half dollars were struck as presentation pieces or proofs of 170 years ago at the New Orleans mint, located in Vieux Carre, the French quarter in New Orleans. One specimen went almost immediately to the Smithsonian from Mint Director Paterson. What became of the others has always been problematical.
But if it proved to be difficult to ascertain where the coins came from, and how they changed hands a century ago, it turns out that modern prices realized could be just as difficult. The case involving the Anderson Dupont specimen, sold in November 1954, at last resold April 17, 2008, is a key point.
Through the years, I've tried to avoid reporting private treaty transactions because they are so difficult to prove. In the case of this coin, it almost seems devoid of a history earlier than its sale except that Colonel Green is part of its provenance, as he is with so many major rarities. (His mother, Hetty Green, was known as the "witch of Wall Street" but was a miser. "Ned" Green was a prominent collector using his inheritance to acquire major rarities.
In a recent 2008 catalog (unusually, two of the 1838 New Orleans half dollars were sold this year, alone) Heritage Numismatic Auctions offered this history of eight auction sales at public auction since 1954 together with some private treaty handling:
Col. E.H.R. Green
Anderson-Dupont sale (Stack's, 11/1954), lot 2104
Mr. Gottschalk
1957 ANA Sale (Federal Coin Exchange, 8/1957), lot 1535A
"TAD" Collection (Stack's)
Julian Leidman
Steve Ivy
Manfra, Tordella, and Brookes
1983 ANA Sale (Kagin's, 8/1983), lot 2494
Mid-American (5/1985), lot 392
1986 ANA Sale (Kagin's, 8/1986), lot 4657A
H.W Blevins (Superior, 6/1988), lot 3567
Bowers and Merena (3/1989), lot 2000
Vintage Auctions (8/1989), lot 202.
Yoder family (4/2008), lot 2310
Finding data is sometimes a painstaking process, but the Stacks sale of the Anderson - Dupont collection of 1954 is easily located as was the price realized, $3,500. Its next auction appearance in the 1957 ANA convention auction conducted by Federal Coin Exchange of Cleveland. There, too the catalog is easy to find and the result is a $4,450 price realized.
A series of private sales follow until in August 1983 Kagan's ANA sale saw the coin yield the $29,700 price realized. It next appeared in the Jasper Robertson collection sold by Mid-American in 1985 for $32,500. The next year at the 1986 ANA sale Kagin sold it for $33,000.
Superior Galleries (the Goldberg) sold Woody Blevin's collection in 1988, where the '38-O brought $44,000 - and in August 1989 as the ANA headed to Pittsburgh, a pre-ANA sale was held by Vintage Auctions where all data reports the lot was sold.
We'll come back to the 1989 sale in the next column and solve a mystery that is almost 20 years old: What did the coin sell for at that sale. But in the meanwhile let's take a look at price realized in 2008: $276,000, a small fortune.
At the same time that the 1838-0 was selling, so was the 1804 silver dollar, with pedigree going back more than 140 years, coincidently around the time the earliest New Orleans 1838 half dollars were being sold. (At Coogan's sale of the Mickley collection in 1867, an example of the 1838-O half dollar brought $2.75. The 1804 silver dollar brought $750.
Back in 1868, it is probable that the half dollar proof had yet to be damaged or its surface impaired. So a real comparison as to the relative value of the two coins can be seen from the perspective of 140 years ago.
The side-by-side is startling and shows a significant and favorable comparison with the champion half dollar.
I next thought it would be fun to compare the 1838-O half against the Salomon model portfolio, and with Dennis Baker's modern data and my earlier effort combined, it turns out the rate of gain is also favorable when contrasted with the 1804 silver dollar. (See chart 2, also accompanying).
The final chart that I tried was one that added silver bullion to the mix. The silver appears to outpace the portfolio, but not the 1838-O half dollar. Again, the 1838-O is a real winner, showing the vibrancy and vitality of the rare coin market.
In concluding the 1838-O to be an unappreciated rarity, I stumbled onto a secret as to a recent unreported price. I use it as a footnote to "Profitable Coin Collecting," which shows you something about the data, its acquisition, and reliability.
Between now and the next installment of this column, try an experiment and see if you can find the price that the coin sold for in 1989. I spent over 100 hours on that singular question. The answer surprised me as much as the research methodology.
( - Continued May 13)
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