INVESTING IN QUALITY: ALWAYS IN STYLE
By Greg Mencotti
The human animal loves beauty. Be it in collectibles, architecture, nature itself, each other, we are drawn to beauty – perhaps instinctively - certainly by cultural conditioning. For over 100 years, anthropologists have determined that universally – across time and space – all human cultures deeply appreciate their collective concept of beauty.
Above this many cultures, at any
given time and across the centuries, seem to regard certain characteristics of
beauty as near universal. Example include: a sincere human smile; the golden
rectangle, rule of thirds and certain aspect ratios; primary and complementary
The point here is beauty counts. It affects our singular, cultural and universal perceptions deeply and persuasively.
Applying this to U.S. coins, one example of artistic beauty has been lauded across western society for over 100 years as possibly the most beautiful design in coinage history (Exaggeration? Probably.): The St. Gaudens gold Double Eagle. It is exquisite.
Step back a notch – Beauty of design represents an important aspect of “Quality”.
Others are state of preservation, numerical grade and eye appeal. Let’s stop at this for the sake of limited space and turn toward a coin’s quality as a contributor (only one of several factors) to good value / good investment.
A few questions arise at this juncture:
1. Is quality more important than rarity?
2. The higher the grade, the better the investment?
3. Grade and eye appeal – for which should I strive?
4. How important is the series itself as opposed to the singular coin itself?
5. How smart are Registry Sets, in that very high ranking equilibrates to high investment potential?
My quickie answers:
3. Both, but of the two – eye appeal.
4. Both, but more often the series.
5. Somewhere between not smart to really rather stupid.
Case in point:
COIN A: $20 gold St. Gaudens - 1922 / PCGS MS65
This particular issue is common within the StG series. Maybe 250,000 specimens still exist, making it common by almost any numismatic viewpoint.
But a funny thing happens in higher grades:
MS 61 - $1,570; MS 62 - $1,575; MS 63 - $1,665; MS 64 - $1,760 (Stay awake please); MS 65 - $3250; MS 66 - $35,000. [Source: PCGS CoinFacts]
A fine example of a “condition rarity”: a relatively common coin that’s really tough to find in high grades.
1922’s typically look great (strong strike, pretty luster), and the 65’s I’ve seen are captivating.
Narrowing the field to 64, 65 & 66, how does quality correlate to investment potential?
My opinion: MS 65; then MS 64; then MS 66. In any grade, I’d assure that the eye appeal is better than average.
I’ll use this example in a future article on “scarcity”, explaining rationale behind 65, 64, 66.
COIN B: Half Dime – 1866 / PCGS MS65
Here’s a case of design regression. The Seated Liberty series starts with a charming jewel in 1837. If you’re not familiar with this obverse cameo and uncluttered reverse, please look it up; one of US coinage’s greatest designs. Thirty years later, its design is crowded and pedestrian.
Two basic commonalities - Coin A and Coin B:
• Same “investment quality” grade: PCGS MS65
• Price guide valuations are equivalent
Three basic digressions - Coin A and Coin B
• Design – A is big, gold and gorgeous; B is tiny, silver and ho-hum
• Eye Appeal – You tell me.
• Scarcity – Coin A: 258,000 estimated survivors; 5,500 in MS65 and above.
Coin B: 300 estimated survivors; 17 in MS65 and above. [Source: PCGS CoinFacts]
Which is the better investment?
Why do you think so?