A coin buying routine is like a golf putting routine.  When Tiger Woods gets ready to make a putt, he follows the same putting routine every time.  You need a similar routine when buying coins.

Any good putting routine takes the golfer from reviewing the layout of the green, to assessing the break of the shot, to addressing the ball, to determining how much force is needed, to striking the ball with your putter.  Having a similar routine for buying coins will give you a system for determining whether to buy a coin or move on to the next.

The coin buying mental game is no less important than having a good golf mental game.  The first thing that you must know is that there are tons of coins out there for you to buy.  Unless you are looking to buying an ultra rare coin, you don’t have to buy the first coin you see.  Take your time.  With a little patience, you will be able to buy a much better coin for your collection.

In today’s buy it now world, coin collectors are buying slabbed coins looking solely at the grading number.  Many of these coin buyers are not selective in their buying.  If they want to buy a 1921 high relief peace dollar graded MS-65, they look at a bunch of certified 1921 peace dollars and buy the first MS-65 they see.  But with a little patience and developing a good coin buying routine, you can buy the best MS-65 1921 high relief peace dollar with stunning eye appeal.

I have not mastered my coin buying routine, as the following steps are being improved as I gain more experience.  However, I do think that it is a pretty good system.  This system assumes that I am looking for a particular coin.  For this example, let’s assume that I am looking to buy a 1921 Peace Dollar.  The 1921 Peace Dollar is the high relief Peace Dollar which just so happens to be the first Peace Dollar ,minted.  It is one of the key date Peace Dollars and perfect for both a U.S. type set collection or the anchor for your Peace Dollar collection.

Here is the coin buying routine I use when looking to buy peace dollars.

1.  Know the grade you want to buy. The 1921 Peace dollar is a key date peace dollar and therefore is not a cheap coin.  The Red Book lists the price of the 1921 Peace Dollar at $120 for VF-20, $285 for MS-60, $775 for MS-64 and $2,500 for MS-65.  If you know that you don’t want to pay in the thousands, you might as well not look at MS-65 1921 Peace Dollars.  Likewise, if you don’t want a circulated Peace Dollar you might as well only look at Mint State coins.  For this example, I am going to  look for an MS-64 Peace Dollar.

2.  Look at the coin grade. Now that I know that I want to buy a MS-64 1921 Peace Dollar, I only look at coins graded MS-64.   Therefore, if I am looking through a dealer’s box of Peace Dollars, I will look at the dealer’s grade on his 1921 peace dollars.  This works great for slabbed coins, but can be a little more difficult for raw coins.  If you are looking at raw coins, you will have to use the rest of this coin buying routine to determine whether the coin is accurately graded.

3.  Determine if coin has good eye appeal. When I started my coin buying routine I learned a lot from Scott Travers’ One-Minute Coin Expert. However, Scott lists eye appeal as the last step in his coin buying routine.  But for the average coin collector, I think that eye appeal should be one of the first steps in determining whether to buy a coin.  If the coin doesn’t have good eye appeal, I don’t want to buy it.  Additionally, eye appeal is an easy tool to quickly weed out the dogs.

4.  Check the rim for dents or nicks. The next step is to start to check out the surfaces of the coin.  I like to start with the rim and move inward.  I find that most people focus on the picture on the coin and often miss imperfections on the rim and surfaces because they become myopic.

5.  Check the fields for scratches, wear, bag marks and other blemishes. These surface imperfections should not detract from the coin’s eye appeal.  If you are looking at MS-65 coins and below, the surfaces might have imperfections.  I don’t like to buy any coin with blemishes on key areas of the coin.  For the 1921 Peace dollar, I don’t want any coin with a mark on Miss Liberty’s face, neck or fields.

6.  Determine whether the coin has good luster. Determining mint luster is about determining how light reflects off the coin.  The more luster a coin has the more light will be reflected from the coin.

7.  Determine whether the toning of the coin is appealing. As coins age, they often tone.  As the coin’s metal interacts with the environment, the metal can turn colors.  Some toning is beautiful and some is unattractive.  When I look at a coins’ toning, I want to make sure that it is appealing and not artificial.

8.  Determine whether the coin has good details. The next step in my coin buying routine is determining whether the coin has a good strike.  Finding full detail coins is one of the most fun aspects of coin collecting for me.  I have written a lot here about collecting full step Jefferson Nickels.  Full Step Jefferson Nickels have a good strike.  Jefferson nickel collectors focus in on the steps of Monticello because this area of the nickel is a good indicator on whether the coin is fully struck.  If the Jefferson nickel has full steps, chances are the rest of the coin will be well struck.  Each coin series has its areas to look at to help determine whether the coin is fully struck.  Remember that just because a coin is Mint State does not mean that it is fully struck.  In fact, in my example of buying a 1921 Peace Dollar, the MS-64 description allows for some weakness in key areas of this coin.  Therefore finding a fully struck 1921 Peace Dollar will be extra special.

9.  Determine how much you are will to pay for the coin. The last step of my coin buying routine is determining the appropriate coin price.  Most coin guides list prices for average coins by grade.  If you have followed this coin buying guide and found a coin that passes all of the above tests, you have a beautiful coin in your hand.  This coin will not be average for its grade, it will be a primo coin.  Continuing with buying 1921 Peace Dollars, following this coin buying guide would have lead me to finding a primo 1921 Peace Dollar.  Chances are that this Peace Dollar is on the very high end of the MS-64 grading scale.  Therefore, since the coin is at the upper end, don’t be afraid to pay more for it.  Use the coin price guides to give you a ballpark price for an average coin of this grade and then determine how much more your are willing to pay for this primo coin.

Like any golfer, you need to consistently follow this coin buying routine everytime you look at buying a coin.  If you practice the steps outlined in this coin buying guide, this routine will become automatic.  You will consistently be able to buy the best coins in a given grade.  This will help you to build a superb coin collection that will be worth more money in the long run than the buyer who just looks at the grade on the certified slab.

CAC offers two services to the coin collecting community,

• Verifying the grades assigned by PCGS and NGC are accurate, and
• Market making in CAC approved coins.

Why does market believe there is a need for CAC to verify the accuracy of PCGS and NGC slabbed coins?  Well, according to CAC, it is because of th gradeflation that is supposedly occuring at PCGS and NGC.  CAC founder John Albanese believes that the coin investing community and coin collecting community needs CAC to ensure that coins are being accurately graded.

But, I have to ask, wasn’t this the purpose of PCGS and NGC?  Aren’t slabbed coins supposed to already perform this function?  If PCGS and NGC have succumbed to the business pressures of their clients and are improperly grading coins, what stops CAC from doing the same?  Sure right now they might not be, but it seems to me that over time these same pressures will exist for CAC.  In fact, the pressures will probably be greater because there will be added pressure from PCGS and NGC to not make them look bad.

I am also concerned that coin slab holders are going to start to look like NASCAR race cars with stickers all over them.  I mean if seeing the CAC sticker is necessary, maybe we need to triple check the accuracy of the coin grades.  To me, this seems crazy.

My solution is to stop this and demand that PCGS and NGC accurately grade coins.  That is what we are paying them for.  What do you think of CAC verified coins?

Franklin Half Dollar With NGC Star

The NGC star designation confuses a lot of coin collectors, novices and pros alike.  On Sunday, I went to a local coin show where I bought my first slabbed coin with the NGC star designation.  It is a beautiful PR-67* 1962 Franklin Half Dollar.  But, to tell you the truth, I didn’t know what the NGC star designation meant on the coin holder.  All that I knew is that it was the nicest looking proof Franklin Half Dollar I saw that day.

As soon as I got home from the show, I started researching what the NGC star designation means.  Hopefully this guide will help other beginning coin collectors.

What is the NGC Star Designation?

In its simplest terms the NGC star designation designates a coin with superior eye appeal as compared to other coins of the same grade.  But the NGC grading service has more criteria that are pretty fascinating.

For Mint State coins, NGC has one set of criteria for toned coins and a different criteria for untoned coins. Proof coins have a different set of criteria.

For an untoned coin to receive the star designation it must have the following characteristics:

• full vibrant luster
• no planchet irregularities
• no spots or blemishes

Toned coins must display the following:

• it must be attractively toned
• the toning can be a single color or multi-colored, but it may not have areas that are dark brown to black
• full luster that is not obscured by the toning
• no planchet irregularities
• no spots or blemishes

Proof coins must display all of the criteria for toned coins plus one of these additional characteristics:

• cameo or ultra cameo on the obverse
• cameo contrast on both sides of coins just short of NGC’s minimum standard for cameo designation
• qualify for the cameo designation on the reverse but have an ultra cameo obverse
• qualify for the ultra cameo designation and have exceptionally intense between devices and fields on both sides – this must exceeds the typical standards for ultra cameo designation

For any coin to receive the star designation, the NGC graders must unanimously agree that the coin deserves the NGC star designation.  This unanimous agreement helps to make sure that only coins that truly have exceptional eye appeal receive the star.

What the NGC Star Designation Does Not Mean

It is important for coin collectors to realize that the NGC star designation does not mean that the coin is on the high end of its particular grade.  Many people selling coins will say that the star means that the coin is of Premium Quality.  That is not true, except to state that the coin has exception eye appeal.

Many think that the NGC star designation is just a marketing gimmick.  But, I think that it is cool.  I love my Franklin Half Dollar with the NGC star designation.  I think that I want to collect a complete set of Proof Franklin Half Dollars with the star designation.

Grading Coins by Photographs

For anyone wanting to learn how to grade coins, I don’t think that there is a better book on the market than this one.  Whether you are completely new to coin grading or are already an experienced coin grader, I think that you will like this book.  It serves not only as a tutorial but also as a reference guide that you can use any time you are grading coins.

While this review will point out many great things about this book, I don’t want you to think that I am not going to point out the book’s short comings. When I buy a book, I always have certain hopes for what the book will discuss. And, unfortunately, Q. David Bowers did not meet all of my expectations.  But, despite not meeting all of my expectations, Grading Coins by Photographs is an excellent book that should be a part of any coin collector’s library.

Overview Review of Grading Coins by Photographs

This book is broken into seven chapters with the seventh chapter being the heart and soul of the book.  As is common with most coin collecting books, the first six chapters give an overview of the history of coin collecting and coin grading basics.  The seven chapters are:

1.  Importance of Grading

2.  History of Grading

3.  Expert Techniques in Grading

4.  Understanding the Surfaces of Coins

5.  Smart Grading and Buying

6.  How to Use This Book

7.  Grading U.S. Coins

Forward by David M. Sundman

One of my favorite parts of this coin collecting book is the forward by David M. Sundman.  Sundman is one of the owners of Littleton Coin Company.  Most coin collectors have heard of Littleton Coins.  This coin store advertises in every coin collecting magazine.  Often Littleton Coins is criticized as being overpriced, but most coin collectors acknowledge that Littleton Coins sells great quality coins that are accurately graded.

It was nice to read in the forward about how Sundman began collecting coins.  I also highly recommend reading the forward because Sundman outlines why coin dealers must accurately grade their coins.  If you are interested in becoming a coin dealer, I think this is a must read.

Chapter One – The Importance of Grading

Chapter one provides a good primer on why coin grading is an important skill to learn.  First and foremost, Bowers stresses that coin values are determined by two things – scarcity and quality.  If you don’t want to have to only buy certified coins, you have to learn how to grade coins.  Otherwise, you will never know whether you are paying too much.

This is the reason why I bought this book.  In my journey to become a numismatist, the fun for me is looking at coins, grading them myself, and feeling proud of the collection I have put together.  I don’t want to have to rely on coin grading services to tell me if a coin is of high quality.  I want the freedom to be able to buy none slabbed coins and know that I have not overpaid.

Chapter Two – History of Grading

This chapter walks coin collectors through how coin grading has changed throughout the centuries.  It explains how the 70 point grading system eventually became the standards and the rise of coin grading services, like ANACS, PCGS and NGC.  For those into history, I think you will enjoy this chapter.

Chapter Three – Expert Techniques in Grading

This was one of my favorite sections of the book.  Bowers explains how to get started learning coin grading.  He explains that you should focus on learning to grade one coin series at a time.  I think that this is very important.  You have to look at a lot of coins in order to understand why one coin is graded an MS-65 and another is graded an MS-64.  If you jump around from one coin series to another you will miss the subtleties in the grading.

One of the best pieces of advice given by Bowers in this book is that beginning coin collectors should take advantage of the Internet when learning to grade coins.   Before the Internet, the only way to see lots of coins was to visit a coin shop or go to a coin show.  With the Internet, there are tons of online coin auction websites that provide pictures of certified coins.  Bowers recommends that you look at these photos and examine why the coin grading service assigned the grade that it did.  I think that this is excellent advice.

Chapter Four – Understanding The Surfaces of Coins

This is one of the most technical chapters of Grading Coins By Photographs.  In this chapter, Bowers explains the metals used in making coins, how those metals react over time to the environment and the things people do to preserve coins.  Bowers also does a great job explaining dipped coins and cleaned coins and what to watch out for.

Chapter Five – Smart Grading and Buying

Chapter 5 provides a good overview on how smart coin grading will help you to buy great coins and make money collecting coins.  In this chapter, Q. David Bowers explains how coin collectors can use expert grading to make sure that they are buying coins on the high end rather than the low end of a particular grade.  For instance, Bowers stresses that while two coins may be graded MS-65, one coin could be greatly superior to another.  It might have full details, better luster, or just generally better eye appeal.  This is what I am hoping to learn from coin grading.  I want to be able to assemble the best coin collections for the grade that I can afford.  I am not going to be able to afford MS-65 coins in all coin series.  But, I can make sure that I am buying the best coins for the grades that I can afford.

Chapter Six – How To Use This Book

In this chapter, Bowers provides his thoughts on the best way to use Grading Coins by Photographs.  I don’t really have much else to say here.  It is the set-up for the main chapter of the book.

Chapter Seven – Grading U.S. Coins

As I have mention before, chapter seven is the reason to buy this book.  In this chapter, Bowers provides tips on how to grade every U.S. coin type.  He discusses the history of each coin type, the striking and sharpness characteristics of each coin type, and pictures of that coin in uncirculated condition through the circulated grades.

The pictures of the coins for each grade are outstanding.  The photos that Bowers has used do a great job of showing how a VG-8 coin looks compared to a G-4 coin.  The photos are great tools when looking online to determine whether coins are accurately graded.

In addition to the great photos, Bowers’ explanation of what to look for in each coin grade is outstanding.  For example, Bowers explains where to look on each coin type to determine sharpness, strike and wear.  I love these explanations because it tells me where to look on a coin for details and wear on those key points.

Why I liked Grading Coins By Photographs

For anyone who wants to learn how to grade coins, I think that this is the best book I have read.  The photographs are excellent tools to help you visualize the differences between grades.  My positives are:

• great coin photographs
• best study guide for how to grade coins
• interesting to learn what Bowers looks for when grading coins and determining whether to buy a coin

My Criticisms of the Book

While I think that this is the best book ever written on coin grading, I believe that Bowers could have done more to help beginning coin collectors learn how to grade coins.  Here are the books negatives:

• Bowers does not adequately show how to grade Mint State coins.  For the circulated coin grades, Bowers shows pictures of each major circulated coin grade.  But for the Mint State grades, Bowers does not show a picture of each grade.  When collecting U.S. coins, many coins are only seriously collected in Mint State conditions.  I don’t understand why Bowers would not provide better tips and photos for grading Mint State coins.  This is a huge negative of the book!!
• Bowers could have written more about how to grade each coin type.  It seems like Chapters One through Chapter Six are kind of filler in the book.  I wish that Bowers would have focused more on the exact grading tips instead.  For instance, Bowers could have provided checklists for each coin type for how to grade it.  He could have discussed in depth what to look for in certain key dates of any series.
• I wish that Bowers explained how to grade coins when all you have to look at are photographs online.  Many coin collectors today buy coins online.  It seems that Bowers could have provided some tips on how to determine whether an online coin photo is accurately depicting the coin.  This would coin collectors tremendously.

Summary Review of Grading Coins By Photographs

While I have listed several serious shortcomings of the book, I still believe that this is the best coin grading book.  Before this book, most people recommended Photograde: Official Photographic Grading Guide for United States Coins, 19th Edition. I believe that Bowers’ book has bested Photograde.  If not for any other reason than, Grading Coins by Photographs provides color photographs of coins.

If you want to learn how to grade coins, or if you want a resource to help you to quickly visualize the coin grades, I highly recommend this book.  You should read more about this book at Amazon here – Grading Coins by Photographs.  Amazon also has a great review of this book.

PCGS First Strike $50 American Buffalo

Many coin collectors are confused by the grading companies’ use of labels like first strikes and early releases.  The PCGS grading service uses the label First Strike on certain of its graded coin slabs.  The NGC grading service uses the label Early Release on its graded coin slabs.

PCGS was the was the first coin grading service to designate coins are first strikes.  PCGS began using this designation on 2005 and 2006 bullion coins.  The 2005 and 2006 American Eagle Coins were the first coins to be marketed this way.  And then the 2006 24-karat proof and bullion American Buffalo Gold Coins also received the designation.

When I see these coins on sale at Ebay, often the sellers highlight the fact that the coins are First Stikes or Early Releases.  But should buyers care whether a coin is a first strike or early release?

PCGS gives this designation to coins that are submitted to PCGS for certification within thirty days that such coins first go on sale from the US Mint.  Likewise, NGC also gives this designation to coins submitted to it within the first thirty days of release by the Mint.  But, is there a reason to pay a premium for the first coins “released” from the US Mint?

I don’t think that buyers should pay a premium price for first strike coins or early release coins.  But, let’s examine the topic a little more.

The US Mint I think agrees with me.  After these designations started to show up on American Eagle Gold Coins and American Eagle Silver Coins is 2005 and 2006, the US Mint release a statement concerning these first strike coins.  The US Mint stressed that its quality contol process assures that all coins are struck with good dies.  The US Mint stated,

Our manufacturing facilities use a die set as long as the quality of resulting coins meets United States Mint standards, and then replace the dies, continually changing sets throughout the production process. For bullion American Eagle and American Buffalo Coins, the United States Mint makes an average of about 6,000 coins from one die set. For proof versions of the 2006 American Buffalo Coins, the yield is an average of about 1,500 coins per die set. For proof versions of the American Eagle Coins, the yield is an average of about 300-500 coins per die set. This means that coins may be minted from new die sets at any point and at multiple times while production of a coin is ongoing, not just the first day or at the beginning of production.

With only an average of 6,000 American Eagle uncirculated bullion coins being made from each die, I would bet that the US mint has more than 6,000 American Eagle uncirculated bullion coins ready to ship when it makes these coins available for sale.  If that is the case, assuming that there is a difference in quality between the first strike with a die and the 6,000th strike,  then a “first strike” coin could be the first coin struck with a die or the 6,000th coin struck.  This designation seems to me to be a meaningless marketing ploy.

What do you think about this issue?  Should the PCGS first strikes and NGC early releases?  Are you willing to pay a premium price for them?  If you would like to read more about this topic, there is a great thread over at the CoinTalk Coin Collecting Forum.

By assigning a grade to a coin, coin buyers and sellers have a better way to determine the quality of their coins and the coins’ worth.  Unless you are an expert at coin grading, when you go to purchase an non-certified coin, you don’t know for sure what is the coin’s value.  There can be a huge difference in value between an MS-65 and an MS-63.  But coin grading services help to increase the confidence of both the buyer and the seller.

Another great function that these coin grading services perform is the preservation of our rare coins.  When someone sends coins to be graded by a coin grading service, the coin grading services seal the coins in a protective plastic holder that is sonically sealed.  These protective holders help to keep our coins from becoming worn.  Hopefully, this will allow our future generations to always experience the beauty of our rare coins.