MS-64 Peace Dollars: Now They’re Affordable!

NSDR Journal

Vol. XI, No. 4

November 1994

MS-64 Peace Dollars:  Now They’re Affordable!

By Randy Campbell

My previous article, “Crash and Burn:  The Collapse of Franklin Half Dollar Prices,” chronicled the 78 percent decline of MS-65 Franklin prices from 1990 to 1994.  Unfortunately, the Franklins are not the only series to undergo massive downward price corrections during the last several years.

From June of 1989 through August of 1994, the Peace dollar series has also experienced a huge price decline.  Specifically, in MS-64 condition, the cumulative bid for all 24 dates in the series has dropped from $27,515 to $7,028, a decline of 74.5 percent.  This collapse is unprecedented in the history of the Peace dollar market.

Why the Collapse?

The precise reasons for the collapse of many segments of the U.S. coin market have been a hot topic of debate within the collector and dealer fraternities.  On the demand side of the equation, critics have noted the significant drop-off in A.N.A. membership and local coin club memberships as an indication that fewer buyers are pursuing the available number of coins.  Meanwhile, on the supply side, the three major grading services (ANACS, PCGS and NGC) have certified over 5 million coins over the last several years, thereby (according to the critics) flooding the market with an oversupply that cannot possibly be absorbed by today’s shrinking number of coin buyers.

Another factor that is frequently mentioned deals with the incredible increase in certified coin prices that occurred in early 1989.  At that time, speculation was rampant that Wall Street was about to enter the coin market.  It was assumed that high quality certified coins would be the target of those Wall Street buyers looking to build investment portfolios.

A few coin purchases were made by some of the investment fund managers.  Predictably, this led to even higher prices as speculators rushed to buy up virtually every nice coin that was available on the market.

However, at the June 1989 Long Beach coin convention, the speculation bubble burst when it became apparent that Wall Street was NOT going to continue to make significant rare coin purchases for their portfolios.

Speculators panicked and sold their coins as fast as they could in an effort to minimize their losses.  Prices plummeted precipitously during the last part of 1989.

The U.S. economic recession of 1991-92 only worsened an already horrible situation.  Collectors and dealers were strapped for cash.  Little or no “fresh money” was coming into the hobby.  And prices continued to flounder as few people wanted to buy into a declining market.

The four year market tailspin began to level off in 1993.  By early 1994, the gloomy coin market outlook began to improve.  There was actually some talk of a modest coin market recovery just beyond the horizon.  Meanwhile, the U.S. economy seemed to be improving.  And coin prices had become “stupid cheap,” at least in some series.

How Cheap Are They?

In the Peace dollar series, prices had dropped, and dropped, – and dropped some more!  In MS-64 condition, the following is just a representative sampling of how far prices have fallen from June 2 of 1989 to August 12 of 1994.  Study the following statistics:

No doubt these huge losses represent a catastrophe to those who bought near the top of the market in 1989.  However, there is a significant upside to this unprecedented decline.  Specifically, new collectors looking to assemble a complete set of high quality Peace dollars CAN NOW AFFORD TO DO IT!  And many old time Peace dollar collectors, most of whom were priced out of the market in 1989, are now delighted to discover that most dates in the series are well within range of their collecting budget.  This “affordability factor” is one reason why I believe that the Great Crash in MS-64 Peace dollar prices is nearing an end.

Yes, prices may drop a bit more, but I strongly believe we are approaching a market bottom for this series.  So, for those of you who like to “buy low,” perhaps now is the time to take a closer look at MS-64 Peace dollars.

How Scarce Are They?

MS-64 Peace dollars are MUCH SCARCER than MS-65 Morgan dollars.  No, that’s not a misprint.  As of recent population reports by ANACS (June, ’94), PCGS (Feb., ’94) and NGC (Jan. ’94), the three leading grading services have certified  nearly 200,000 MS-65 Morgans, compared to less than 82,000 MS-64 Peace dollars!

That 82,000 figure doesn’t tell the whole story.  We must subtract what I call “The Crackout Factor,” that is, those MS-64 Peace dollar that were cracked out of their holders and resubmitted to the same, or different services in the hope of getting the coin upgraded to an MS-65.  When that coin was returned to the owner in another MS-64 holder, the population of that date was artificially inflated.  One numismatist told me he submitted the same 1927-S dollar 19 times to the grading services, in the hope of getting it graded MS-65 (June 2, 1989, price difference between the two grades was over $15,000!)

Given the huge price disparities between MS-64 and MS-65 Peace dollars, I estimate that “The Crackout Factor” accounts for about 40 percent of the population of MS-64 Peace dollars.

We also must subtract what I call “The Investor Factor.”  This consists of those MS-64 coins purchased by investors who have no interest in selling their coins at today’s much lower prices.  I estimate that at least 10 percent of the population of MS-64 Peace dollars is off the market and unavailable to today’s collectors because of “The Investment Factor.”

Then there are those MS-64 Peace dollars owned by silver dollar fanatics who have no intention of selling their coins at virtually any price.  These fanatics wouldn’t sell their coins in 1989, and they certainly won’t sell them at 1994 prices.  I estimate that perhaps another 10 percent of MS-64 Peace dollars are unavailable to today’s collectors because of what I call “The Fanatic Factor.”

After combining “The Crackout Factor,” “The Investor Factor,” and “The Fanatic Factor,” I have come to the conclusion that the Estimated Available Supply (E.A.S.) of MS-64 Peace dollars is only 40 percent of the listed numbers in the population reports.  For dates with a particularly large price spread between MS-64 and MS-65 (such as 1923-S, 1924-S, 1925-S, 1927-D, 1927-S and 1928-S) the MS-64 E.A.S. might be only 20 percent of those figures listed in the reports.

The Common Dates

The six commonest dates in the Peace dollar series in MS-64 are:  the 1922 (Aug. 12, 1994 high Certified Coin Dealer Newsletter) bid = $30; the 1922-D (bid=$40); the 1923 (bid=$30); the 1924 (bid=$31); the 1925 (bid=$32); and the 1926 (bid=$31).  As a group, these six dates account for over 83 percent of all MS-64 Peace dollars!  Put another way, the remaining 18 dates in the series have a combined population of just over 13,000 coins, and an E.A.S. of roughly 5,000 coins – not a lot of coins for a series as popular as the Peace dollar series.

Among the common dates, the 1926 is by far my favorite date for investment.  Its combined population in MS-64 is 2,151 coins, a far cry from the combined population of the 1923 (34,782).  If you intend to buy just one date from this group in MS-64, clearly, that date should be the 1926.

The Semi-Common Dates

This group consists of those seven dates whose bid price in MS-64 is greater than $50 but less than $200.  They are:  the 1992-S (bid=$130); the 1923-D (bid=$135); the 1926-D (bid=$136); the 1926-S (bid=$108); the 1927 (bid=$185); the 1934 (bid=$130); and the 1935 (bid=$110).  The combined population of these seven dates ranges from a low of just 664, for the 1927, to a high of 1,270 for the 1935.

In my opinion, the 1927 offers potential buyers the best value of any date from this group.  Its population of 664 coins is virtually identical to two other dates (the 1925-S and the 1928) whose bid prices are nearly double that of the 1927.  At $185 bid, the MS-64 1927 is strongly recommended.

The Intermediate Dates

Six dates have a bid price in the range of $200 to $349.  They are:  the 1921 (bid=$290); the 1923-S (bid=$200); the 1925-S (bid=$325); the 1928 (bid=$340); the 1934-D (bid=$250); and the 1935-S (bid=$230).

This group contains what I believe to be the single most underrated date in the series in MS-64 condition.  Study the following data and you’ll see what I mean.

Would you have guessed that, in MS-64, the 1934-D is about four times as scarce as the 1921?  Amazingly, the 1934-D is THE SECOND RAREST DATE IN THE SERIES IN MS-64 CONDITION!  At $250 bid, the 1934-D may be the most underrated of all Peace dollars in this grade.  Go for it!

The Better Dates

Four dates are currently bid more than $350 but less than $1,000.  They are:  the 1924-S (bid=$575); the 1927-D (bid=$390); the 1927-S (bid=$425); and the 1928-S is one date, in particular, that should draw strong interest in MS-64.  If you can afford it, I heartily recommend pleasing MS-64 examples of this date at anywhere near the current bid level of $675.

The Key Date

Traditionally, the 1934-S has been regarded as the key date to the series in uncirculated condition.  And, indeed, it is the scarcest date in MS-62, MS-63, and MS-64.  As of recent population reports, only 240 1934-S dollars have been certified MS-64 (and the estimated available supply is less than half of that number).

The 1934-S will not be a stellar performer in MS-64 condition.  However, since everyone needs an example of this date to complete their set, it will probably not get much cheaper.

When purchasing an uncirculated 1934-S, make SURE the coin you are considering is pleasing for the grade, since it’s usually the first coin that dealers look at when appraising a complete set of Peace dollars.  Be wary of uncirculated 1934-S dollars offered at steep discounts from current prices.

Before You Buy

Most serious collectors already have recent copies of their favorite pricing guides and the population reports from the three major grading services.

Those considering the purchase of MS-64 Peace dollars should follow two more bits of advice.  First, unless you are an expert in this series, buy only those coins that are certified – by ANACS, PCGS, or NGC.  All three of these services guarantee the grade and authenticity of their encapsulated silver dollars, an invaluable asset at liquidation time.  Some of the lesser known services do NOT fully guarantee their coins.

Second, buy only those coins which you believe are pleasing for the grade.  As a professional grader (for ANACS) I can tell you for a FACT that not all MS-64’s were created equal.  Some will have slightly better eye appeal than others.  It is worth paying an extra premium (if necessary) to obtain those coins which are “no question” 64’s since, at resale time, these are the coins that command the strongest prices.

My Top Three Dates

At current depressed levels, the entire Peace dollar series seems reasonably priced in MS-64 condition. However, three dates stand out as my personal favorites.

1. You can’t beat the very scarce and very CHEAP 1934-D.  Although it’s the second rarest date in the series in MS-64, it’s only the ninth most expensive date.  Therefore, on a price/rarity basis, this date is greatly undervalued.  The current bid of $250 seems very attractive for a coin of this scarcity.
2. The 1927, at $185 bid, is also bargain priced in MS-64.  Down from $1,220 in mid-1989, this date is now a recommended buy at current levels.
3. For those collecting on very limited budgets, the 1926 is a likely winner at only $31 bid.  In MS-64 it is about 16 times scarcer than the ultra-common 1923, yet it’s bid at just $1 more.

At current (August 12, 1994) bid prices the cumulative bid for all 24 dates in the series is $7,028.  Accumulating a complete set of MS-64 Peace dollars that are pleasing for the grade might cost you $8,000 to $9,000 – a far cry from the $30,000+ prices of mid-1989.

And remember, too, that if the current population reports are remotely accurate, no more than a few dozen complete sets of MS-64 Peace dollars could ever be completed!

So, if you don’t mind paying less money for some truly nice coins, perhaps now is the time to make your move.  Have fun collecting Peace dollars!