Vol. VIII No. 1
Pick Any Date Dollar- It’s a Bargain
By Robert R. Van Ryzin
Courtesy of Numismatic News
It used to be that coin dealer interviews would work their way around to asking dealers what their favorite picks were. Each dealer had his or her own particular sleeper – one coin in a relatively active series that hadn’t been noticed and might be ready for a significant price hike. By the end of the article, the reader was left with a few choices – a few supposedly special dates forecast for future profit potential.
This article is no different, except for one key factor. Given the recent drops in bid prices for mint state Morgan and Peace dollars, it’s hard to get a dealer to stick to one or two favorite picks. At today’s list prices, which show even scarcer dates that once commanded $6,000 in MS- condition resting at barely $1,000 everything seems like a bargain.
Forget K-Mart, Walgreen’s, Wal-mart and other discount stores, right now the best bargains may be in dealer’s trays rather than on store shelves.
One silver dollar authority who has watched the plummet in prices with a keen eye is Wayne Miller of Helena, Mont. Miller terms it the worst market he has ever witnessed and finds bargains pretty much across the board.
“Everything is so incredibly cheap that I would say that right now a person could get some good buys just buying generic -65’s” Miller said, noting that so-called common dates are now trading at one fifth the price levels seen in June of this year and are “mind-bogglingly cheap.” “I’ve been in the business for 25 years and this is absolutely without question the worst market I have ever seen and I don’t know that we are at the bottom yet,” Miller stated.
“It’s a decimated market out there right now,” added dealer John Dannreuther of Memphis Tenn. “If people don’t come in and buy now, they don’t have any brains at all.”
“I can’t think of anything from 1794 to 1935 that I don’t think anyone shouldn’t buy,” said Bruce Amspacher of Newport Beach, Calif. “I’m not that way all of the time. I’m not always a bull, but right now those coins are reasonable if you’ve got some money.
“I was talking to a dealer at ANA and he said for the first time in a long time I can look anybody straight in the eye and say this coin is a good deal with absolutely no reservations whatsoever.”
Opinions as to what led to the drastic fall in Morgan and Peace dollars prices vary, with most centering around the advent of certified grading and the way in which bids are recorded on the American Numismatic Exchange and American Teleprocessing Corporation dealer trading exchanges.
Miller links the fall of silver dollar prices to the velocity of trading created by certified coin grading.
“The process of slabbing coins causes a velocity in the market, because it shortens the amount of time a person owns a coin,” Miller explained. “As soon as he gets the specific grade on it the coin is immediately saleable, whereas, in the past, 90 percent of a person’s inventory might have just sat in the box until somebody came along and looked at it.
“It has made practically every coin in a dealer’s inventory saleable at that moment. Before, a person would lug 20 or 30 boxes of coins to a show and he might sell half of a box; now people have been selling the stuff as soon as it gets back from the grading service and it has caused a tremendous collapse, especially in generic stuff, and it’s rippling through.
“I think it will eventually catch the real high-powered stuff, too, so that’s why I say right now a person would be better to buy generic -65s and -66s at these levels. These are historic low levels for graded coins and some of them are at prices that we haven’t seen since the late ‘70’s,” according to Miller.
“The drop in prices is a combination of things,” Dannruether explained, citing the weakening of the economy and contending that the coin market was already in a down phase.
He also blamed the electronic trading networks’ use of a bid-driven market, whereby, dealer bid postings can cause a coin to drop in value without a single coin trading hands.
“I think both of the systems are going to convert to a logical way of trading coins,” he said of ATC and ANE. “The logical way is the way coins are traded. You walk up to a guy and say how much is it and he says $500 and you offer him $400 and then you agree to $450. That’s the last trade.”
Using an MS-65 1886-S Morgan dollar as an example, dealer Al Johnbrier of Bowie, Md., tried to explain the current state of the market and the problems he sees generated by a bid-driven market.
“I had heard that one of the market-makers on ANE was bidding $765 for this coin which a year and a half ago was $6,000.” Johnbrier said. “I am not saying that an ’86-S in -5 (MS-65) is worth $6,000 but he was bidding $765 on ANE.
“John Highfill had a bid of $1,450 on ATC, would have loved to buy one at $1,550, probably would have paid $2,000 if he could find one, and yet the Blue Sheet (Certified Coin Dealers Newsletter) indicated $765 and so John Q. Public comes in with Blue Sheet and wants to buy an ’86-S for $765. No. 1 he doesn’t find it, and No. 2, if he finds the dealer that has it, say I had one, I would probably want $3,500. So, he looks at me like I am cheating him or overpricing him, and he walks away disgusted. Yet, he doesn’t realize how tough the coin in,” Johnbrier explained.
With a population of only 62 coins in MS-65, many ’86-S dollars are probably off the market, Johnbrier observed.
“So why should that coin in 18 months drop from $6,000 to $765? It’s ridiculous.”
Will the market turn around? Miller says it’s hard to tell.
“I have never seen a market this bad and there is a possibility of an absolute total meltdown, but eventually the coin market has to reassert itself because there are so many people that like coins.
“I think a lot of collectors went on the sidelines when this stuff started coming out from slab city and just said, ‘I’m not going to pay $2,700 for an MS-67 ’81-S no matter who tells me it is a -67,’” he continued.
“And some of the prices were absolutely stupid. A month ago I sold an ’81-S PCGS MS-67 to another dealer for $1,850 that I could now replace for under $1,200, but the coin to me raw – when I looked at the coin – is worth $250 to $300. So there is still some overgrading in the services and I think that has also added to the meltdown,” Miller related.
Even though prices have plummeted, Dannreuther is confident that a strong market will return.
“The coin market is not dead; it is sick,” he said. “It’s been sick before. It will be sick again. It will also be well again. During the next run up in coins, I think a lot of these better-date Morgans will do real well. If you can buy them at these levels you’d come out really good if you hold on to them for another three to six months because that is probably how long it’s going to take.”
One coin he finds to be an exceptional value is the 1897 Morgan dollar, which dropped from roughly $1,600 to $300 and, Dannreuther feels, may be posed for recovery.
“This market is ultimately determined by everybody in concert, but at these levels I look at the downside and I see very limited downside on that coin,” he said. “I could give 25 others or 50 others in the same scenario.”
“I think the -65s offer the best price,” he continued. “However, if you went to generics I like the -4s because it is much easier for a coin to go from $40 to $80 than from $120 to $240.”
Besides recommending MS-65 dollars, Miller also thinks MS-64s are bargain priced, but cautions “there is probably still a little bit too much of that stuff around.”
He continued, “-66s are now a good deal at less than a third or fourth of what they were at the highest; -66s can be bought for under $400 right now and I think that makes a terrific buy.
“I think -64s and especially -65s and –6s in generic would be something that a person could put away and makes some money on because they are selling at about 20 or 30 percent of their highs.
“The slab market right now is so chaotic that I think you would be hard pressed to find some realistic prices on specific dates and that’s why right now I would recommend that people go just with generic,” Miller concluded.
Amspacher believes that current prices provide buying opportunities in all silver dollar series, even the common dates.
“The semi-key date Peace dollars have really gotten down to attractive prices,” he said, recommending specifically the 1923-D, 1934 and 1935 dates.
“Those coins, in my opinion, could double and still be cheap,” Amspacher declared. “That is how cheap they are. The Morgan series is similarly priced,” he said, and bargains abound, such as the 1878 with eight tail feathers, 1878-CC, 1880-CC, 1890-CC, 1891-CC and the 1897.
Amspacher also believes that at current levels proof Trade dollars are attractively priced.
“Those coins have gotten extremely reasonable,” Amspacher said. “They are at least 50 percent off of their highs of last summer and they are extremely popular.
“All you have to do is look at the population of Liberty Seated dollars to see that almost all of them are a good deal when you factor rarity versus price. That covers every series except Bust dollars and they are mostly collected in circulated condition. They are ultra-expensive in mint state, particularly MS-65 or better, the so-called investment grades.
“A lot of people buy those coins in XF and AU and they seem to be a bargain too,” Amspacher explained, so I’m really bullish on the dollar.”
Although he doesn’t see as great of potential for generic dates in the dollars, Amspacher said there is almost no downside risk at current prices.
“The generic dates will probably not perform as well as the better dates do, but I mean an MS-65 dollar is worth $130.I just can’t conceive of how you can’t justify that value. Sure, they could get a little bit cheaper,” the market veteran conceded, “but the risk factor is so minimized – we are talking about coins that were $825 in May of ’86 bid and you couldn’t find them. The demand outstripped the supply even at that price and now those coins are 15 percent of the price they were. What I am saying is, the coins went down nearly $700. It is not possible for that to happen again. They can’t go down another $150 – it’s not possible.”
Johnbrier likes the tougher dates in the Morgan series, but cautions it might be hard to shake them loose at today’s lower listings.
Topping his list are the 1880 and 1881 issues from New Orleans, both of which he said are tough above MS-63 and hard to obtain anywhere near list price.
Other dates he recommends include the 1886-S, -87-S and the ’88 and ’89-S. Also, Redfield hoard dates such as the 1890, ’91 and’97, which he terms “just absolute steals at the -65 levels right now.”
Johnbrier also feels that Peace dollars are underrated. Favorites include the 1923-D and the 1927-D, which he observed have fallen 50 percent in published price guides, though the population of certified coins hasn’t increased. He warned that these coins may not be available at current levels.
When everything settles down, Johnbrier believes MS-63 Morgans should be supportable at between $30 – $35, MS-64s at $75 – $100, and MS-65s at $250 – $350.
In the meantime, the current market doldrums should lead those who look for market bottoms to also be “bullish on the dollar.”