It takes more than one big transaction to make a market

By Steve Roach - www.steveroachonline.com
First published in the January 9, 2011, Issue of Coin World

The recent announcement that Blanchard and Co. sold the unique 1787 Brasher doubloon with New York metalsmith Ephraim Brasher’s EB counterstamp punched on the eagle’s breast in a private transaction for $7.395 million brings positive attention to the coin hobby, but it is dangerous to read too much into a single transaction.

The nearly $7.4 million paid for the unique 1787 Brasher, Punch on Breast doubloon brought positive attention to the rare coin market, but it takes more than a single transaction to move a market.
Surely the market for aesthetically pleasing, historically significant top rarities is strong across most collectible and fine art fields.

But, at least one article has referenced the coin’s last public sale — when it realized $2.99 million at a Jan. 12, 2005, Heritage auction — to imply that all coins have soared in value in the past seven years. While many coins have, thanks to rising bullion markets, many have not, and the performance of a single super-rarity is not necessarily indicative of the coin market as a whole.

Claims that the Brasher, Punch on Breast doubloon is the “world’s most valuable gold coin” are rather speculative, especially considering that the 1933 Saint-Gaudens $20 double eagle allegedly once owned by Egypt’s King Farouk sold at public auction in 2002 for $7,590,020. That coin remains the only example of that issue currently legal to own and the price stands as the highest price of a rare coin at auction. (The record for a private treaty sale is $7.85 million paid for a 1794 Flowing Hair silver dollar in May of 2010.)

The fact that the Langbord trial brought 10 more 1933 double eagles to light arguably doesn’t impact the market level of the one example of the 1933 double eagle that is legal to own, as long as the government continues to hold the coins and maintain that they will not be sold. If anything, one could argue that the trial and resulting media coverage made the 1933 double eagle even more famous.

Yet, marketing the Brasher doubloon as the world’s most valuable gold coin succeeded in attracting mainstream media attention to the sale, with more than 1,000 articles showing up on Google promoting the sale and, in turn, Blanchard.

No one can challenge that seven-figure sales of trophy coins are exciting and help energize the market for rarities. But it takes more than a single transaction to move a market, and one hopes that this single sale doesn’t inspire investors to jump into the market without first educating themselves on the risks and rewards of rare coin investing.

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Steve Roach is a Dallas, Texas, based rare coin appraiser and gentleman fine art dealer and appraiser.  He is an accredited member of the International Society of Appraisers and sits on its board of directors.  Steve is also the associate editor of Coin World.  Visit Steve online at www.steveroachonline.com

Each issue in the Saint-Gaudens $20 series has a unique story – FUN auction sets tone for year

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By Steve Roach - www.steveroachonline.com

First published in the January 2, 2011, Special Edition of Coin World

The auctions associated with the Florida United Numismatists convention, set for Orlando Jan. 5 to 8, are major market events that help set the tone for the coin market. The 2011 FUN auctions realized $46 million while the 2010 sales saw $37 million.

The 2012 Heritage auction is anchored by several significant consignments including Dr. and Mrs. Steven L. Duckor’s collection of exceptional Saint-Gaudens gold $20 double eagles. A collection like this provides a solid introduction to the nuances of the Saint-Gaudens series that make it so popular with novice and advanced collectors alike. Reading the lot descriptions can help contextualize the prices realized.

Regarding a 1913 Saint-Gaudens $20 double eagle graded Mint State 65 — a rare exception in this generally poorly produced issue — the cataloger wrote, “If a grading service could travel back in time to 1913 and set up a grading room in the Mint, there would likely still be only a small number of MS65 or finer coins certified.” The comment reveals a truism: that all coins are not created equal, and each issue in the Saint-Gaudens series has a story.

Some issues were well-produced at the time of issue, such as the 1908 Saint-Gaudens, No Motto double eagle. More than 19,000 examples were discovered in the 1990s with the Wells Fargo Hoard, which transformed the population of this issue with nearly 1,000 coins graded MS-67, 101 graded MS-68 and 10 graded MS-69. Clearly, this was an issue that was well-produced.

Hoards have transformed today’s concepts of rarity within the series. Yet, some issues in the series have been rarely encountered in hoards, such as the 1920-S double eagle, so while they were not considered especially rare in the 1940s and 1950s, today they are relatively rarer as other examples have become more common. In contrast, the 1924-S double eagle was once considered the key to the series — even rarer than the 1927-D coin — until the 1950s when hundreds of examples emerged from European bank vaults. Today, while still extremely rare in high grades, the 1924-S double eagle is no longer a legendary rarity.

Then there are issues with low mintages but extremely high survival rates.

Although just 12,367 1907 Saint-Gaudens, High Relief double eagles were struck, most were saved. Some of today’s most available Saint-Gaudens double eagles — like the 1924 — were mainly produced for international consumption, after domestic demand for new gold coins evaporated. Today’s population of these issues comes largely from European bank holdings. In contrast, although 1.7 million 1929 double eagles were struck, almost the entire mintage was melted, and today just 300 to 400 exist.

A highlight of the FUN auctions that might break the million-dollar mark is an MS-66 1921 double eagle. The other known MS-66 example sold at the 2005 Heritage auction of the Philip H. Morse Collection for $1,092,500.

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Steve Roach is a Dallas, Texas, based rare coin appraiser and fine art appraiser and gentleman dealer.  He is an accredited member of the International Society of Appraisers and sits on its board of directors.  Steve is also the associate editor of Coin World.  Visit Steve online at www.steveroachonline.com