THE MILESTONE COIN AUCTION WITH A MAGICAL IMMUNITY
Millions of Dollars in Rarities Were Hammered Down During a Global Pandemic
So far, in this century, the greatest U.S. coin collection to have been publicly auctioned is that of the Pogue family. The seventh installment of the collection was auctioned by Stack’s Bowers Galleries in Santa Ana, California, on March 20, 2020, shortly after the coronavirus (COVID-19) was reported to be infecting U.S. citizens at an alarming rate, resulting in an unprecedented crisis and widespread lockdown. Regarding the coronavirus and the Pogue VII event, two points are extremely important. First, the results of the Pogue VII auction provide crucial circumstantial evidence that prices for gem-quality 19th century U.S. coins had not fallen since the outbreak and reports of COVID-19 in the U.S. Second, the Pogue VII sale itself was very successful as retail-level or even beyond retail prices were realized for a substantial percentage of the coins. To a large extent, successful bidders were paying collector-level prices rather than dealers buying for inventory or telemarketing firms. Factual evidence and logical analysis suggest that the prices realized for most coins in the Pogue VII session would not have been higher if the coronavirus had never existed. It is impossible to know this for certain, but there is little in economics or life in general that can be known for certain. I am making a case that the consequences of the virus did not have a dampening effect on most of the prices realized or on the thrust of the Pogue VII session overall. In terms of the economic climate during the auction, there is a need to think about activities in stock and bullion markets during March 2020 and also to interpret logically how downturns in these markets affected coin buyers. Markets for equities and general commodities were volatile and trending sharply downward overall. This lead to fears that a severe recession was beginning. During the middle of March, governors of the most populated states were issuing executive orders that severely restricted business activity and consumer spending. For example, most of the physical stores
in the state of New York were closed, including entire shopping malls. Thousands of businesses in New Jersey, Florida, and California were shutdown. Regarding the success of the Pogue VII session, it is essential to become aware that prices realized were in line with market levels for rare coins in January, and early February 2020 before the panic and government-ordered shutdowns occurred. The coronavirus and turbulence in various markets must have affected the Pogue VII event in some ways. Many variables affect the outcomes of public auctions. Invariably, some coins would have realized different prices had the auction been held on a different day at a different time of day, at a different location, or during a period characterized by better economic, social, and medical circumstances. I am not drawing a conclusion about the price realized of every single coin in the Pogue VII sale. I am referring to most coins and the success of the auction as a whole. Logically, the COVID-19 outbreak and the crisis that followed lead to bidding effects in both directions. When stock markets fall, some people spend less money on coins, and others spend more money on coins. This outcome is also true in bullion markets. People re-organize their respective holdings and take both investment and hobby aspects into account. If both stock markets and bullion markets are trending downward, then people who are already interested in rare coins may sell stocks and or bullion to buy more rare coins. Additionally, many affluent people were not working or not working as much during the beginning of government shutdowns of private business activities. During the second half of March, they had more time to focus on buying rare coins rather than being busy working at their respective jobs. Someone usually working ten hours a day may have found himself idle and then more likely to turn to hobbies.
COIN BIDDING AUDIENCE ASSESSMENT
After more than twenty-five years of analyzing coin auctions and consulting about rare coins, I am certain that a substantial percentage of buyers of expensive rare coins are successful business people, many of whom work long hours. It follows that if government policies forcibly slow down or stall a private business due to a pandemic, the people who own or run the respective business have more time to sit in front of a computer and talk to coin professionals on the phone. They have more time to think about coins and buy them. Even a middle-level business executive who is told not to come to work will then have more time to talk to coin dealers, other coin collectors, and auction firm employees. He or she can then bid in auctions from home with a laptop. It’s essential to keep in mind when analyzing the effects of the coronavirus on coin auctions that most buyers of expensive coins are already wealthy, and time became more precious to them than money. It is common for people who have significant holdings in stocks or bullion to ‘get out’ by selling at least half their respective holdings as soon as market levels start to drop sharply. Others decided to ‘ride out the storm,’ keep their stocks and bullion, and buy coins as a hobby while they have time. Customarily, some wealthy coin buyers figured that, if their investments are likely to drop in value anyway, they might as well enjoy collecting coins and take their minds off the horrid events characterizing the economy and society at large. Also, if stock, real estate, and general commodity investments seem to be falling in value, then coin collectors have less downside risk by spending large sums on rare coins. Indeed, any expensive purchase involves risk. The sharp downturns in stock, bullion, and Bitcoin markets, however, must have caused some people to wonder if they were too heavily invested in one or more of those areas.
UNDERSTANDING SOCIAL AND ECONOMIC CONDITIONS
Before referring to the prices realized of individual coins, it makes sense to provide some factual data regarding the economic climate shortly before the Pogue VII auction on March 20, 2020. According to the U.S. government’s Center for Disease Control (CDC) website, the total number of COVID-19 cases in the U.S. was 30, yes, just thirty, on March 1. On March 13, one week before the Pogue VII session, the total number of cases was 1,896. On March 17, three days before the auction, the number was 7,038. On March 19, the day before the auction, the number, 15,219, was more than five hundred times what was reported by March 1. By 4 p.m. on the day of the auction, the number of cases had risen to 18,747, an increase of 18.8% in one day. As of April 1, the record number of new cases during any one day, 3,557, was set on March 16. Undoubtedly, some coin buyers and observers favored a postponement of this auction. The Pogue VII auction of coins and the Pogue VI auction of rare paper money were both scheduled to be conducted, along with other auction sessions by Stack’s Bowers Galleries, at the Baltimore Coin & Collectibles Expo. On Friday, March 13, Baltimore’s mayor, Bernard “Jack” Young, issued a press release, a provision of which referred to large events, “more than 250 people.” This press release stated that “citypermitted” large events were canceled by executive order. Stack’s Bowers Galleries then announced that the Pogue sessions and other auction sessions would take place in California. Eventually, it was indicated that the sale would be at a luxury hotel in Newport Beach, California. Later,
though, the plan changed. Famous collector Alan Weinberg attended the sale, and he publicly reported in the E-sylum that the Pogue VII sale was held in a large room within the same building that houses the Stack’s Bowers Galleries corporate headquarters in Santa Ana, California. Turmoil in equities and commodities markets continued throughout March. Data on Kitco.com reveals that, on March 2, gold closed in London at $1,599.65 United States dollars per troy ounce. After rising to $1,683.65 on March 6, gold fell to a March bottom point of $1,474.25 on March 19, one day before the Pogue VII auction. Again according to the Kitco listings of London Fix prices in USD, the price of silver averaged just below $18 per troy ounce in January and February 2020, with little deviation, a high of $18.78 and a low of $17.47 per troy ounce. However, silver began the month of March by closing at $16.915 on March 2, popping back to over $17 on March 10, but falling to $12.965 on March 16, 2020, and falling further to about $12 on March 19, 2020, the day before the Pogue VII session. As it was consistently around $18 in January and February, and then down to $12 on March 19, movements in the price of silver must have puzzled coin enthusiasts, even those who usually ignore bullion. From March 2 to March 20, silver fell from $16.915 to $12.63, a decline of 25.33% The S&P500 stock index began the year by closing at 3257.85 on January 2. On March 2, it closed at 3090.23 and then fell 22%, closing at 2409.39 on March 19. Before the auction session started at 6 p.m. Eastern Time, the S&P500 fell even more to 2,304.92. The S&P500 thus fell 25% from March 2 to March 20. According to the Wall Street Journal (wsj.com), at the start of trading on January 2, the Dow stock index was at 28,638.97. On March 2, the Dow closed at 26,703.32, a drop of about 6.76 percent since January 2. A week before the auction, on March 13, the index closed at 23,185.62, which is a drop of 13.17% in just eleven days. On the day of the Pogue VII session, the Dow closed at 19, 173.98, and was thus down more than 28% since March 2! The most famous cryptocurrency, Bitcoin, did not fare much better during the first twenty days of March 2020. According to Yahoo Finance, Bitcoin opened January 1, at $7,194.89. On March 1, Bitcoin closed at $8,562.45. On March 13, one week before the Pogue VII session, Bitcoin closed at $5,563.71, down more than 35% since the beginning of the month. Bitcoin rose from March 13 to March 19, closing at $6,191.19. Bitcoin again rose slightly on March 20 to $6,198.78, though still down about 27.7% from March 2 to March 20. Therefore, silver, the S&P500 index, the Dow Jones index, and Bitcoin each fell between 25% and 29% from the beginning of March to March 20, before the start of the Pogue VII session in the evening Eastern Standard Time. The closing prices for the auction lots were astonishing in comparison.
REVIEWING POGUE COLLECTION HISTORY
The sale was the seventh auction session of the Pogue Family Coin & Currency Collection conducted by Stack’s Bowers Galleries, beginning in May 2015. The first four sessions were conducted in association with Sotheby’s at the firm’s headquarters in New York. The sixth session featured rare paper money and took place the day before Pogue VII at the same location. A team built the Pogue Collection, and members of that team changed over time, among the participants were Mike Brownlee, David Akers, Richard Burdick, a Texas dealer who wishes to remain anonymous, and other coin dealers, plus accounting people working for the Pogue family. From the beginning, Brent’s Pogue’s father was the chief, and he is familiar with markets for rare coins Although Brent Pogue died in July 2019, the collection still lives. There are coins and paper money that have not yet been sold, including an 1822 $5 gold coin and the finest known 1804 silver dollar. Many of the coins in the Pogue VII session were from a “type set” of rare or particularly interesting ‘dates’ that was never completed. The most famous Buffalo nickel issue is the 1937-D error that is characterized by a buffalo, really a bison, with just three legs. A U.S. Mint employee ground most of one of the legs off of a reverse die. As a relatively scarce and very popular issue, this was a newsworthy member of the Pogue Family Collection type set.
POST-AUCTION REVIEW
This specific 1937-D ‘Three Legged’ Buffalo’ was PCGS graded as MS-65 and CAC verified. The coin was an attractive, original, and technically impressive coin. This nickel realized $22,200. In January or early February 2020, this would have been a moderate to strong price. In October 2019, when market prices were higher than they were anytime so far in 2020, Heritage auctioned a different CAC verified, PCGS graded MS-65 1937-D’ Three Legged’ Buffalo nickel for $22,800. CAC has verified more than twenty as MS-65 and six as MS-66. There is no reason to assume or speculate that the Pogue’s Three Legged’ Buffalo’ would have brought more than it did if the coronavirus had never existed. A CAC verified, PCGS graded MS-67 1874 ‘With Arrows’ dime realized $22,800, way above levels in retail price guides. The February 2020 issue of The CAC Rare Coin Market Review lists a retail level of $15,100. Before and after the auction, the PCGS price guide valued this coin at $13,500. There is no evidence to suggest that this coin
would have brought more had COVID-19 never arrived. The Pogue Collection, PCGS graded MS-67+ 1899 dime also has a CAC sticker. Classic U.S. coins and a few types of modern coins that are already PCGS or NGC graded can be submitted to CAC for fees. If experts at CAC determine that the grade of a submitted coin is in the middle or high end of the whole unit grade range already stated on a PCGS or NGC holder, then a green CAC sticker is affixed to the holder. CAC graders ignore pluses or stars designated by PCGS or NGC. This 1899 dime would have qualified for a sticker if it was PCGS graded MS-67 rather than MS-67+. CAC is not declaring an opinion about such a ‘plus.’ The market value of this 1899 dime was around the same in January 2020 as it was in January 2016, though perhaps a little higher in 2016. The Pogue 1899 brought $6,000 on March 20, 2020. A different PCGS graded MS-67+ 1899 dime, also with a CAC sticker, was auctioned for $5,875 by Heritage in January 2016. While these two coins are not exactly alike and a multitude of factors influence auction results, the lower price realized in January 2016 of a similar-looking 1899 dime, with the same credentials, is circumstantial evidence that the outbreak of the coronavirus did not affect the price achieved for the Pogue 1899 dime on March 20, 2020. Another famous coin in the collection, a 1916-D Mercury dime, was PCGS certified MS67FB and bears a CAC sticker. The coin is the key to the series of Mercury dimes. This exact 1916-D dime, with the same certification, brought $195,500 when auctioned by Heritage in August 2010 in a sale that fared well during a healthy time. Market values for gem-quality Mercury dimes were higher in August 2010 than they were in January or February 2020. On March 20, 2020, this 1916-D dime brought more, $204,000, than the same coin brought in August 2010, $195,500, even though it was worth more in August 2010. Therefore, it seems unlikely that the economic effects of the coronavirus had a negative effect on the price of this coin. The Pogue Collection 1939-D dime is also a superb type coin. This 1939-D is PCGS certified MS68FB and ha a CAC sticker. Before the coronavirus outbreak, the PCGS price guide value was $950; the NGC price guide value was $1,000; the CDN-CPG retail value was $998. This 1939-D dime realized $2,160. It is unlikely that a dealer would pay that much even if he thought it was likely to ‘upgrade’ at PCGS from MS-68 to MS-68+. Moreover, the CAC population report lists forty-seven 1939-D dimes that were PCGS or NGC certified as MS68FB and then verified at CAC. It seems extremely unlikely that this coin would have realized more in this auction if a coronavirus had never existed. Who would have paid more than $2,160? The 1896-S is one of the three keys in the series of Barber quarters and a notable condition rarity in MS-65 and higher grades. The 1896-S in this sale was PCGS graded as MS-66 and was not CAC verified. It may have been conserved in a way that affected the coin’s color. In February of this year, multiple price guides valued this coin at between $80,000 and $91,000. Many dealers would probably have been willing to pay more than $70,000. The $96,000 result was clearly strong. It is unlikely that this coin would have brought more had it been auctioned in February or January before many people were thinking about the coronavirus. Indeed, according to data compiled at PCGS, the price realized of $96,000 is an all-time auction record for an 1896-S quarter.
SOMETHING TO LEARN FROM ALL SALES
The 1915 quarter was not one of the highlights of the Pogue Collection. This quarter was PCGS graded MS-66. Miss Liberty’s head has numerous depressions. This particular coin is one of more than twenty-five 1915 quarters that PCGS has graded as MS-66. I would have regarded $1,025 as a strong price for this coin In June 2019, when the value of a PCGS graded MS-66 1915 quarter was not much different from what it was in January 2020, Heritage auctioned a PCGS graded MS-66 1915 quarter for $870. On March 20, 2020, the Pogue 1915 sold for $1,320, well into a retail price range. It is doubtful that this coin would have sold for significantly more than $1,320 if it had been auctioned in December 2019 or January 2020, before the coronavirus was deemed a severe problem in the U.S. While some of the Standing Liberty quarters realized high prices because bidders were attracted to their respective pretty colors, it makes sense to refer to three of the ‘more bland’ Standing Liberty quarters to further document the point that the economic effects of the COVID-19 pandemic probably did not reduce the prices realized overall in the Pogue VII auction. A PCGS graded MS-66+ 1920 with a ‘Full Head’ designation sold for $9,600. The PCGS price guide value was $3,500, and the NGC price guide value was $4,100. As a reference, I note that The Gene Gardner Collection, PCGS graded MS-66+ 1920 quarter, also with a ‘Full Head’ designation, sold for $4,112.50 in October 2014 and was auctioned again in January 2017 for $4,700. During October 2014 and during January 2017, market levels were higher than they were during the first three months of 2020. Even so, the Pogue 1920 quarter, which does not have a CAC sticker, sold for more than twice as much as this particular Gardner coin. It may be essential to attribute the high result to the strength of the Pogue VII session rather than to market levels or to the coin itself, which was not spectacular.
While the Pogue 1929-S quarter has some iridescent toning in the outer fields and at the periphery, it has streaky russet and rust-colored toning in the primary areas. Though an attractive and desirable coin, the 1929-S was not one of the more attention-drawing, colorful Standing Liberty quarters in the Pogue VII auction. Besides, the 1929-S is one of the most common dates in the series. Hundreds have been PCGS graded MS-65 or higher. The Pogue 1929-S presented in the sale is PCGS graded MS-66+ and has a CAC sticker. Back in January 2019, Heritage auctioned a different 1929-S quarter that was also PCGS graded MS-66+ and also had a CAC sticker. That coin realized $840 during the Heritage sale, while the Pogue coin realized $3,360. Comparably, the PCGS price guide value is or was $950. The CPG-CAC retail value for a CAC verified MS-66 1929-S was $676. Even if PCGS were to upgrade this coin to MS-67, the price realized of $3,360 would still be oddly high. Were bidders figuring that it would upgrade from 66+ to 67 and upgrade from flat head to ‘Full Head’? This possibility is hard to believe. It is likely, though, consequences of the spread of the coronavirus did not dissuade or distract bidders of this coin. While indeed a desirable coin, the Pogue 1930S is even less exciting than the Pogue 1929-S. At least a half-dozen beautiful 1930-S quarters are around. The coin presented at auction is not one of them, yet it brought $3,960 — a price of half that would have been strong. The Pogue Collection, 1951-D Washington quarter, has thick natural toning and neat original luster. While it is distinctive, the 1951-D is not among the most colorfully toned Washington quarters in the Pogue set. This 1951-D does not have a CAC sticker. On January 12, 2020, the firm of David Lawrence Rare Coins sold a different PCGS graded MS-67 1951-D quarter for $210. The Pogue 1951-D should be worth a premium over that coin due to the Pogue coin’s originality. I would not have been surprised had the Pogue 1951-D quarter realized $390. The price realized was $780! The excitement of the Pogue VII event must have been responsible for the solid price realized for the Pogue 1964-D Kennedy half dollar. This coin is extremely common. Even most gems are not certified because many dealers figure that the costs of certification outweigh the benefits for 1964-D halves. In December 2019, Heritage sold a PCGS graded MS-66+ 1964-D for $114. While the Pogue piece may well be more attractive, it is hard to understand the price realized of $408. Also, in December 2019, Heritage sold a PCGS graded MS-67 (sixty-seven) 1964-D half for $384, which is less than the price realized by the Pogue Collection PCGS graded MS-66 1964-D half. The PCGS graded MS-65 1845-D $5 gold coin is a famous condition rarity. Few Dahlonega (Georgia) Mint coins have received high grades from PCGS or NGC. Market levels for such specimens are around the same or, more likely, lower now than they were when ANR auctioned this same coin for $80,500 in August 2006. The January 2020 issue of the CPG Coin & Currency Quarterly valued this $5 gold coin at $97,400. On March 20, the 1845-D from the Pogue Collection commanded $96,000. This price realized thus does not provide a reason to believe that the onset of the COVID-19 pandemic or the downturn in stock markets negatively impacted bidding on this coin. Certainly, the price realized was well within a retail range. The Pittman-Pogue 1911-S is the only 1911-S $5 gold coin that is PCGS graded as MS-66. Furthermore, it has a CAC sticker. Before this auction and before the coronavirus was widely discussed, a fair retail price for this species would be around $90,000. Price guides did
not say otherwise. This coin realized just that, $90,000. The Pogue Collection 1854-S $10 gold coin is PCGS graded AU-58 and has a CAC sticker. Like others I’ve mentioned earlier in this article, this is not a great coin, is not rare, and is not one of the highlights of this auction. Nevertheless, there is a point to mentioning it. Prices for the most exciting coins in the auction or for the rarities that are very hard to find are not central to demonstrating my point that there is no evidence that the COVID-19 pandemic had a dampening effect on the prices realized in the Pogue VII session. The prices realized for relatively unimportant coins are essential to understanding an auction. A collector could easily pass on the 1854-S $10 coin and just wait for another that is certified certifificertified as grading in the AU-55 to MS-61 range, of which there are many. My analysis suggests that, in January and February 2020, a retail range for this coin was between $5,000 and $6,000. This coin realized $6,600, a notably strong price. For a 1907 ‘No Periods’ regular issue Indian Head $10 gold coin that is PCGS graded MS-66 and CAC verified, the $15,600 price realized during this auction is clearly retail, way above wholesale levels. There is not a solid reason to argue that this coin would have brought a higher price if it had come to auction in December 2019, January 2020, or February 2020. The Pogue Collection, CAC verified, PCGS graded MS-65+ 1885-S $20 gold coin realized $55,200. The exact same coin was auctioned for $46,000 in August 2007 when coin markets were scorching, near zeniths for rarities. Furthermore, this coin sold in 2007 at a heavily-attended ANA Convention. Also, price guides dating from January and February 2020 all give the impression that the price realized of $55,200 in March was strong. I am not commenting here on the quality or desirability of this 1885-S $20 gold coin. I am, as I’ve explained throughout this article, supporting my point that coins in Pogue VII would not, on average, have realized higher prices had they been auctioned one to three months earlier, before the coronavirus pandemic.
PREPARATION PAYS OFF
It is important to note that Stack’s Bowers Galleries made many of the Pogue VII lots available for viewing at the FUN Convention in January and during the Long Beach Expo in February 2020. Moreover, they hosted formal lot viewing sessions, with proper lighting, in Santa Ana during late February and in New York City during early March. It’s clear, several collectors and dealers took the opportunity to examine the coins in the Pogue VII auction in advance of the sale. Travel, since the coronavirus pandemic developed, is a whole different matter. Many medical experts and government agencies are advising against air travel. Furthermore, many businesses have shut down due to emergency directives by governors of several states. With that, it might be unusually difficult for coin people to examine auction lots as they may once have. The lesson to be learned from the Pogue VII event is that a major coin auction may fare exceptionally well amid severe public health or economic times of crisis. Evidence and my analysis suggest that the sharp and shocking declines in stock, bullion, and Bitcoin markets during the first twenty days in March 2020 did not negatively impact the success of the Pogue VII auction as a whole. I was surprised and fascinated by my theory. I was not expecting the Pogue VII auction to be so successful. I am glad that I had the opportunity to inspect the coins, with suitable lighting carefully, and to analyze this legendary event. This auction was an important and positive part of the history of coin markets.