A Small Study …. (Coin Grades vs. their Scarcity)

[Pierre_Henri 108]

I have done a little research (regarding the grades of coins vs. their scarcity) and took the well known Presidential Inauguration R5 of 1994 in Proof Ultra Cameo condition as an example.

 

NGC has graded 1166 of these coins which gives quite a large universum for a small study like this.

 

At the top and bottom end, one PFUC -70 (top) and one PFUC-60 (bottom) have been graded. (PFUC = Proof Ultra Cameo)

 

Now in “normal” circumstances, one would expect a bell shaped result with the largest percentage of “in betweens” in the PFUC-65 range.

 

Alas, not in this study: Only 10 coins were graded in PFUC–65 condition with 3 lower and 1153 higher.

 

Here are the results…

 

PFUC -70 – 1 coin

PFUC-69 -- 584 coins

PFUC -68 -- 400 coins

PFU PFUC -67 – 122 coins

PFUC-66 – 46 coins

PFUC -65 – 10 coins

PFUC-64 – 2 coins

PFUC-60 – 1 coin

 

The probable reason why the expected result is turned on its head is that the term “ULTRA CAMEO” usually indicates an exceptional high grade – so the bell shaped result is not seen but what is astonishing is that even in the top-top grades (67 to 69) the scarcity DROPS as the condition IMPROVES.

 

A PFUC -69 constitutes exactly half of the numbers (50%) graded while the PFUC-67 represents only 10% of the total graded.

 

If you had x amount in your pocket, would you rather buy a PFUC -69 (not rare) or a PFUC-67 (scarce) if the price were the same?

 

Or would you rather buy the UNIQUE PFUC-60 that is, believe it or not, JUST AS SCARCE as the HIGHEST EVER graded being also a single known example (PFUC-70)?

 

Strange days indeed …

 

Pierre

[ECONOZONE 10]

You can see with the birthday Mandela coin that the 63 sells for much more than the 66 and 67.An au50 sold for over R3000 last week, so as a seller you want a scarce grade not a high one.

[ThomasMueller 10]

Hello,

 

what are these 1994 R5 presidential inauguration proofs worth? I have three of them, they are in a plastic holder and of course without fingerprints, scratches... But they are NOT graded.

 

Regards Thomas

 

[4kids 10]

I've seen many unsuspecting buyers being lulled into buying low grade Modern coins as described here with talk of "only one in this grade", "Extremely Rare in this grade" etc, etc. These lower grade coins are usually taken up by buyers that has no idea of coin collecting and the value of the piece they chase on auctions. I feel sorry for these buyers as they would never in their lifetime be able to recover the cost of these pieces when trying to sell it.

 

Fact of the matter is that the only coin in the Presidential Inauguration R5 that should exceed expectations in price based on rarity and grade would be the PF70UC to any knowledgeable collector.

 

The ungraded pieces should fetch close or surpass the catalogue value of

R 3000.00 providing that they have the certificate and in original issued boxes.

 

[Cold Sea 8]

Couldn't agree more 4kids

[Pierre_Henri 108]

Please explain

 

The ungraded pieces should fetch close or surpass the catalogue value of

R 3000.00 providing that they have the certificate and in original issued boxes.

 

Jan, what do you mean by the above? Or are you talking about the R1 and NOT the R5 that I was refering to in the small study?

 

Regards

 

Pierre

[4kids 10]

Pierre,

 

I am referring to the R 1.00 silver piece and also got my coins mixed up somewhat. Nevertheless the value of PF70UC R 5.00 coin should also be "THE" collectible piece that would fetch a high premium if sold on an open market.

 

Unfortunately or fortunate, depends on how you look at it, The Mint uses some of the best technology in coin design and manufacturing, especially when it comes to proof coins, hence the reason for the reverse bell effect you study point out.

 

A badly struck coin could and will never demand a premium price over a better coin as as said among knowledgeable collectors, buyers of these lower graded pieces are not knowledgeable in collection and only see these pieces as some form of investment.