Gerry's Ground Rules for Buying Quality Coins

Originally published on June 11 2017

Buying coins and researching their historical significance can be a productive activity as a hobbyist. Spending time and money on acquiring appreciating assets rather than depreciating assets is a noble pursuit and can be most gratifying. Wise purchase decisions will be proven to be financially sound over a longer term horizon. I've done very well with my own Liberty Seated dime pursuits; both from an intellectual and financial perspective. So what is the secret for making wise numismatic purchase decisions? Following are my operating principals.

- Purchasing quality coins is a logical process rather than emotional decision. One must have a plan and a procedure towards suppressing the emotional or gratifying portion of the purchase process. I can't stress this first point enough as emotions typically lead to less than stellar purchase decisions.

- Evaluating a coin for potential purchase requires knowledge and patience. Grading skills and understanding the minting fundamentals of the time period during which a coin was struck is critical. Grading skills come from examining 100s if not 1000s of coins. Ignore the Third Party Grading service opinion when examining a coin and form you own judgment. Don't be lazy and rely on the grading services as a cop out if a bad purchase decision is made. As a buyer, you are responsible for purchase decisions so self educate on grading and examine as many coins as possible to refine personal assessment skills.

- Originality, Strike and Eye Appeal are the all important evaluation criteria. Start with the realization that no two coins are alike. Each coin's life cycle is a historical mystery. The number of individuals who have handled the coin is unknown. Storage conditions are unknown. It is the buyer's challenge to study a coin and attempt to infer answers to these questions from surface and visual characteristics.

• Originality - Judging originality take considerable experience and is the subject of a course module at the ANA Summer Seminar. Becoming a metallurgist and understanding the physical properties of a coin's base metal or alloy will be rewarded when spending four or more figures on quality coins. This topic alone could consume pages of commentary but the point is to learn to recognize original coins.


• Strike - Learn the striking weak points of any coinage design as part of your self education process. Fully struck coins will always be desired by advanced numismatists and they will pay premiums for the opportunity to own a coin that has all device details being deeply impressed. This parameter is the easiest to understand and learn.


• Eye Appeal - This last parameter is most subjective or is it? Let's take a look at two circulated Capped Bust quarters; both are CAC approved and graded Extra Fine. Which coin has more eye appeal? Buy coins that are visual pleasing to you; they will most likely be pleasing to the next owner and easier to sell when divestment time comes.

- Premium coins will most likely carry a premium price. Those collectors who have done their homework, acquired numismatic skills and purchased the best of the best, should be entitled to ask fair market value for their above average coins. Being a value buyer means accepting coins that are only average or worst, inferior. The financial appreciation potential of value coins is questionable. Most value coins will be difficult to divest and discounting will be necessary.

- Seek guidance from a trusted dealer who is also a well known numismatist. In the absence of time, due to other professional pursuits, refining numismatic evaluation skills may take years. If that is your situation, then trusting the skills of a well recognized numismatic dealer is the best alternative. But do remember that professional dealers are working for a living. Relationship building via several coin purchases is important towards demonstrating sincerity and seeking special advice. Those individuals who seek advice without purchases will probably receive what they pay for...

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Customer Feedback

Following is email feedback that is a pleasure to share:

Hello Gerry,
I enjoyed your commentary about purchasing quality coins.  I copied your comments into my personal coin "log" for future reference - and good reading.  Anyways, two other thoughts came to my mind:

Know Why You Buy a Particular Coin - Not all coins are purchased for the same reason, especially among advanced specialist collectors.  For example, some are purchased as an example of a die variety, in which case the grade, surface conditions and originality may or may not be important; some are purchased as an example of a grade; some are purchased as an example of a date (the typical "hole filler"); some for simple eye appeal; and some as an investment.  The key is to know why you purchased a coin so when the time comes to sell you do not have false expectations.

Realize you cannot buy them all!  I am always aware of anywhere between half a dozen to a hundred coins I would like to buy.  Be patient, save as needed, and purchase those that will be constructive to your collection.

The Tenafly Collection consignor writes...

Hi Gerry
Great blog this a.m., Gerry's Ground Rules. I've made emotional purchases in the distant past, like "I must have this coin" or "I need that coin". Most of those were impulse buys without actually scrutinizing the item, sort of like buying fly swatters at the supermarket checkout counter. Even though, they were all really nice coins but there was only marginal collector focus. A big change for me was when I purchased that 1851-O dime from GFRC; obviously its price was above "guide" and "CoinFacts" prices but I never ever saw even a borderline nice specimen of that issue. So I just had to have it basically at any price, and am I glad I got it.  That was a "throw the book out" purchase for me.  As a result there's more scrutiny regarding my COLLECTION instead of just "window shopping". 

Tenafly's 1851-O PCGS AU55 Seated Dime

I never depend on the designated slab grade; that's only a (good) guide for me to learn commercial grading. The eye appeal is so important and the same coin doesn't look the same to any 2 collectors. The TPG's stay away from the big 3: eye appeal, strike, originality as well they should. What's most important to me is the "originality" perceived; although like you said who knows where the coin's been or how it was stored, was it "doctored", etc.  It's always an educated crapshoot with originality. Of course a full strike helps, but that's seldom possible with many LS issues. Didn't someone once say, "Buy the book before the coin"? The most relevant statement ever.