Determining Value
When you are collecting coins for any reason such as hobby, profit, retirement, etc. one of the most important things is, what is my coin worth?
There are a few factors that affect the coins value and they are; grade, demand, mintage, was the coin cleaned and how rare is the coin. Also in silver and gold coins the price of silver and gold metal affects the price of these coins as well.
In determining the value of my coins I use some reference material, The Coin Dealer news letter[ grey sheets], Official A.N.A. Grading Standards for U.S. coins, The Red Book a guide to U.S. coins, The Cherrypickers’ Guide to rare die varieties and Walter Breen’s complete encyclopedia of U.S. and Colonial coins. With understanding the information in these reference materials you can determine the value of your coins.
Now you must understand any one that wants your coin wants to make a profit on it. So if you determine your coin is worth $100 and decide to sell it to someone you can get anywhere from $50 to $90. So you need to understand selling a coin is a very delicate matter. We will talk more on selling later, remember though, your coin is worth $100 to you and may not be to others.
When I find a coin, I examine it under a 5X, 10X and 20X loupe, I look for scratches, errors, signs of cleaning and any other abnormalities on the coin. I then use the A.N.A. grading standard to determine the grade. I use The Cherrypickers’ Guide and Walter Breen book to see if there are any errors in that series and other information they may have on the coin. Once I do that I go to the Grey sheets and look up that coin to determine the Grey Sheets value established for that coin in the condition I determined it was. NOTE: The Grey Sheet price is just a guide and it is used a lot in dealing with coins.
Now if the coins does not have any errors or is not a rare coin based on Mintage value then the Grey Sheets list two prices a bid price and an ask price. I determine the price using the bid price. When it comes time to sell the coin most collectors/dealers start with the bid price minus 10% to 50%. The ask price is used when you go to a dealer or elsewhere to buy a coin most of the time they show you or tell you the grey sheet price and refer to the ask price because it is a higher value then the bid price, hence more profit for them. Selling is a little more complex then that although I am hitting on the basics for now.
The Grey Sheets and other materials list prices based on grade of the coin. To better understand what is grading I suggest you use the A.N.A. Grading book it was very helpful to me.
Also note coin prices/values vary especially gold and silver coins, this is because gold and silver metal prices vary daily/weekly and demand changes.
If you have a coin that is in bad condition, that is, scratched badly, worn so you cannot read some or all of the information, and it is a silver or gold coin, it is still worth money based on silver or gold metal prices because these coins are made with a high percentage of silver or gold metal.
So, now I have determined the value of the coin I found, I put the coin in a 2×2 coin holder and label the holder with the date, condition, price, etc.. If I am collecting coins and using a coin folder for a series, I place it in the Dansco or other coin folder.
So we talked a little on finding coins and determining its value, next we will talk on buying coins for your collection.