Aug 30, 2014

Rare with mushrooms and spinach

Coin rarity scales measure known pieces of a particular date, mintmark, die variety and sometimes grade.  The Sheldon Rarity Scale was developed for Early American Coppers.  Sheldon defined rare as R-5 = 31-75 pieces known.  The Universal Rarity Scale developed by Q. David Bowers spans a wider population range and is more useful in describing the higher mint output of modern US coins.  Population is a simple concept but when it comes to market prices, supply doesn’t work alone, demand carries equal weight.  For example, the 1909-S Indian Head Cent (mintage 309,000) trades at lower prices than the iconic 1909-S VDB Lincoln Cent (mintage 484,000) because a lot more people collect Lincolns, simple as that.  Both are Sheldon R-1 common (mintage over 1251) and Bowers URS-20 (mintage 250,000 - 499,999).  

There are no widely accepted population estimates of mint strike errors but eBay search has a feature that is useful in comparing population differences by year.  Search result pages often show refinement data.  The first screenshot below is a search result for lincoln cent off center and the left hand column reveals sample years and quantities of active listings.

By clicking the see all link we can expand and see more years and quantities.

Caution - Do not accept high level refinement data at face value.  Click through to review the actual listing pages to validate denomination, year, mintmark, condition, etc.  For example, the 27 piece result for 2008 is surprising and in fact the individual listing pages show no true off center 2008 Lincoln Cents.  Despite the imperfections, with validation the year refinement data is a useful indicator of strike error rarity.  

Aug 24, 2014

Beauty is skin deep, ugly goes to the bone

Dateless and partial date mis-struck Lincoln Cents are a common affordable entry point to error coin collecting.  With no visible date, one must look elsewhere to establish an age and value range.  Coin design provides solid clues, such as wheat ears marking the pre-1959 era.  Material composition is another distinguishing factor.  In 1982 the US Mint changed the metal composition of Lincoln Memorial Cents to reduce raw material cost.  Copper alloy (95% copper / 5% zinc) was replaced by a copper plated zinc core (2.5% copper and 97.5% zinc).  Direct weight measurement is a reliable way to tell the difference.  Zinc core cents weigh 2.50 grams nominal vs. 3.11 grams for copper.  

A weak aspect of zinc core cents is their distinct copper-zinc boundary layer, a construction resembling the first electrical battery invented by Alessandro Volta in 1800.  Volta’s battery used copper and zinc electrodes to produce an electric current in the presence of brine or vinegar.  Similar electrochemical reactions are possible when copper plated zinc core cents are exposed to atmospheric and handling contamination.  The zinc core becomes vulnerable when a strike error displaces copper plating.  Electrochemical reactions slowly degrade the coin’s appearance over time.  Due to the unsightly look and preservation challenges of exposed zinc core cents, many Lincoln Memorial Cent error collectors focus on pre-1983 copper only.  

Aug 17, 2014

Shake and Bake

Coin collectors naturally use price guides to lookup bid and ask prices.  These guides work best when based on large sets of fresh reliable data.  Error coins are thinly traded so error coin price guides tend to assign broad-brush values to coin types such as Lincoln Memorial cents.  The collector must do his or her own research and analysis to fine tune year, mintmark and other differences.  Opportunities abound because individual error coins do not necessarily trade at a single type price or at fixed multiples of their non-error cousins.  A prime raw data source is eBay.  Members are able to search and filter completed auctions, fixed price sales results, etc.  There is no substitute for recent sales data when establishing comps.  Even if you have no intention to buy or sell on their platform, the ability to shake and bake data is worth the price of registration, which happens to be free.  Don’t forget the eBay mobile app which has many advanced search functions, so the smartphone in your pocket can help you make fast informed trading decisions in the field.

When shopping on eBay, there are many tips and tricks to search and refine data.  Here’s one.  Find hidden listings, in other words listings masked by keyword weakness.  Most people understandably do not speak error coin lingo.  When they find themselves in a position to sell unwanted oddball coins, critical keywords get omitted from titles and descriptions, making items hard to find.  For example, “1944 Penny Error has cut out” is probably not the best way to use an 80 character title block to reach buyers searching some or all of the keywords “lincoln wheat cent clip clipped planchet error”.  Visual photo browsing is one way to find poorly described items but this may or may not work for you depending on your eye hand skills and available time.  In a similar vein, weak photos may present good buying opportunities.  Most buyers run away at first glance of a bad photo but you should know that poor photo skills do not automatically signal a bad product.  Leap of faith bidding can pay off in low competition when you find blurry photos listed by a seller who has solid feedback based on steady coin sales and a clear return policy.

When selling, don’t make the mistakes noted above.  Maximize your audience.  Write accurate keyword rich titles and descriptions.  Use the full 80 character title allowance.  Phrases like “look awesome great buy for you” need not apply because buyers don't search those keywords.  Upload 12 well lit razor sharp photos that fully depict your item true to life.  Fancy equipment isn’t needed, a cellphone camera and a little practice will do.  Pixels are free so don’t even think about using less than all 12 photos allowed.   Keep in mind your customer’s reaction and feedback if the item in hand looks worse than the photos or if the item has a condition that isn’t visible in the photos.  Truth in advertising goes a long way towards making customers happy and building a strong reputation.

Aug 9, 2014

Gold Nuggets

Webster defines an error as something that is not correct, an unintentional deviation.  In a manufacturing environment, mistakes cost producers time and money to detect, rework, repair or scrap.  Defective products that reach customers can damage the producer's reputation and bottom line.  Serious errors may present health and safety risks to the manufacturer and end user.  These facts drive global businesses to promote variation reduction and error elimination in their operations.  One such business is the US Mint.  Quality improvements in their output have been most evident since the year 2002.  Their impressive reduction in major errors directly impacts the modern US error coin market.  Shortage gives rise to opportunity.

The late lean manufacturing teacher Yuzuru Ito described process failures as gold nuggets or treasures because they tell a story of how and why failures occur.  Mr. Ito wasn't collecting coins, he was helping industry prevent mistakes.  Nevertheless the gold nugget analogy strikes a chord with numismatic error collectors.  From time to time we will show you interesting errors and share the stories behind them.  We also invite you to read the general numismatic information published here.