These days the new coin collector will typically use eBay to buy coins. It's a readily acessible market place and especially in the case of NCLT (non circulating legal tender) it's possible to find almost any coin you want at any time. One thing you'll notice when browsing eBay listings is that sellers are fairly free and easier with the words 'scarce' and 'rare'. Of course in most cases it's perfectly obvious that the coins they are selling are neither scarce nor rare. However, in the case of some coins it can be confusing to the new collector because the coins being sold are fairly high value. Examples of this type of coin that are marketed as scarce or rare are low to mid grade Australian 1925 and 1946 pennies, Australian 2000 $1/10c mules, and Australian 2000 VC dollars. To the new collector armed with his new McDonalds or Renniks coin catalogue each of these types of coins has a high catalogue value and may seem like a wise purchase. However, lets take a look at this type of coin and see what we can find on eBay (searches were done on 1 November 2009)
1925 Penny - 34 listed for sale
1946 Penny - 27 listed for sale
2000 $1/10c Mule - 9 listed
2000 VC Dollar - 4 listed
There we have 4 supposed scarce coins which right now, at this very second you can purchase almost instantly for your own collection. While it is harder to find one of these coins than say, a 1964 penny, market places like eBay means that if you must have one then you can pretty much get one in lower grade any time you like. Where this doesn't hold true is with true high grade 1925 and 1946 pennies and high grade 2000 mules. These are truly hard coins to find and because of this you'll rarely find them listed up on eBay. Interestingly there are a couple of higher grade 2000 $1/10c mules available right now but the price wanted for them (more than $5,000) reflects the true scarcity relative to the lower grade examples that routinely trade at $400-$500 on eBay. With regards to high grade 1925/46 pennies I'd be extremely cautious about buying these on eBay, the coins are counterfeited heavily and it is very difficult to pick these forgeries if you are not experienced. You may be a lot better off purchasing such coins from a dealer or at a more traditional coin auction.
I think it's worth a quick word on why VC dollars are worth what they are considering the high mintage and relative ease of obtaining one. Firstly, it's a military themed coin and for some reason these always seem to do a little better than other themed coins. The main reason though is that the secondary market for these NCLT coins can quickly over-heat in the weeks immediately after release and the net result is a lot of owners of the coin who paid an inflated price and are completely unwilling to sell them at a lower price. Some similar example to this is the 2007 Ashes PNC and the recent Red Back Tuvalu release form the Perth Mint. These are all quite high mintage releases that experienced an overheat in the secondary market in the weeks immediately after release and now owners are simply un-willing to sell them for less, but they are not at all hard to obtain. I wouldn't consider any of them good 'investments', the CV for the Ashes PNC and the VC dollar have barely changed for years!
Posted by mnemtsas at November 1, 2009 3:04 PM
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