Posted: 8/3/2008 3:37:23 PM |
Buying what you like
Since the creation of Early Releases labeled coins, and the lawsuit/settlement involving First Strikes, I've heard many arguments, the most frequent of which is that it is a marketing ploy on behalf of the grading company. In fairness, I'll point out that PCGS still issues First Strike coins, with a qualification on the label not dissimilar to the cards issued by NGC about their Early Releases designation coins.
First, I'll also mention other "special" labels available:
First Day of Issue
First Day of Mintage
First Year of Issue
Not to mention the special labels that go along with the Presidential Dollars in general, as well as those for the First Spouse coins.
These just begin to scratch the surface I am sure, but you get the idea.
There are collectors who are interested in collecting special labels, and there is nothing wrong with that.
So, for instance, when First Strike coins came along, it was something new, and it was a new label to collect. Is that a marketing ploy? Perhaps. I'll get back to that though.
Now, there was a settlement about it, and the conditions about it were made very clear. NGC has made their position extremely clear. Why PCGS didn't also get sued still perplexes me, but that's another story. Anyway, NGC then created the Early Releases designation, and described them as coins they grade (more specifically which NGC receives) within the first 30 days of a coin's release.
Interestingly, when coins eligible for such designation are released, NGC's turnaround time comes to a crawl. This is not an intended criticism of NGC. It is an observation which is intended to recognize that collectors and dealers alike tend to submit many coins within the initial 30-day window to obtain the Early Releases pedigree. Why? As a recent journal writer observed quite well, his coin and let us say my coin may have been minted on the same day, but let's say I submitted my coin to NGC within the first 30 days to obtain the Early Releases pedigree and he submits his 6 months later. We each obtain an MS70 grade on our Silver American Eagle coins, good for us! Which coin is worth more?
That is the question of the hour!
To some collectors, the idea of a special label is silly, and the coin is the coin, so they see no need to pay a premium in grading, nor for the coin in such a holder after the fact.
To other collectors, the idea of a special label is NOT silly, and they see a special label as a distinction of sorts.
To other collectors still, the jury is still out. These collectors may be opting to use the special label seeing that it can do no harm, and hoping that it MAY be of added value in the future.
NGC does not add extra points for Early Releases coins.
However, if you check the PCGS online price guide for First Strike coins, arguably a comparable pedigree to the Early Releases from NGC, in the last couple of years of Silver American Eagles for instance, even an MS69 or PF69 SAE with a 1st Strike designation in the PCGS online price guide is worth $5, $10 or up to $25 more than its plain label counterpart.
Applying that logic to NGC grading fees, I've opted to submit coins I buy from the U.S. Mint under the Modern Special tier to NGC, when they are eligible for Early Releases. The math works for me, at least when looking at the price guides, when thinking about potential re-sale.
Am I dealer? No. I am what one might call a collector-investor. I am a collector who buys what he likes, while at the same time I hope that the things that I am choosing to buy will be worth more some day. Sometimes, my hope for increased prices someday influences my purchases, other times it doesn't (such as when I might just be trying to fill a hole in a collection or something).
So, doing the math on submitting 5 Silver American Eagles within 30 days of release to NGC:
Under the Modern grading tier, the cost is $12.50, and if you submit them online, you may take a 10% discount, making the cost per coin $11.25.
Under the Modern Special grading tier (for Early Releases), the cost is $15 per coin. Taking the same 10% discount, the cost is $13.50 per coin. Thus, the initial cost differential is $2.25 per coin.
When price guides even a year later show a cost differential of $10 or $15 for a First Strike, and presumably an Early Release may reflect similarly in the marketplace, the $2.25 seems like a nominal charge which may result in a substantial return on investment (ROI) if the coin is sold (500% in a year?) at some point in the future.
Another occurred recently eBay when the 2008-W Silver American Eagle coins with the 2007 Reverse coins were being sold, the coins with the Early Release pedigree were bringing a $50 - $100 (and higher) premium to those with the plain brown NGC label, and were doing so consistently.
A final thought: If it IS a marketing ploy, perhaps we have only ourselves (that is collectors, all of us) to blame. You heard it here first. Why do I say that? If there was no market for Early Releases, First Strike, First Day of Issue, First Day of Mintage, etc. labels, does anyone honestly think that the Third Party Grading companies (TPGs) would still be making them?
It may be too early to tell if the Early Releases are truly value added, which is a fair enough assessment. For the time being though, I am one collector-investor who is comfortable with how price guides appear to be giving the pedigree a lead, if not a commanding one.
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