From the March 2007 issue of ACCent, the newsletter of the Anchorage Coin Club:
What's Up With The Cents of 1909? Their Prices!
By Mike Nourse
Some of you may remember that I did an article about four years ago about the need to gather up some Lincoln cents from the year 1909 in anticipation of a possible price increase in said cents. Well, it turns out that I was about three years early in that prediction, but starting about a year ago the prices of all 1909 cents, Lincoln and Indian Head, started to go up with a vengeance. We are not talking small gains here folks: the 1909 VDB cents have doubled in low grades and the 1909 Indian cents have tripled! This is good stuff, people!
Where will the prices on these relatively common cents go from here? Nobody knows for sure of course, but I would suspect that there is still some room for prices to advance, though the majority of the move is over.
First, let me recap that article from four years ago, Summer 2003. At that time, I suggested that the prices of 1909 Lincoln cents, both with and without the VDB, would advance as the year 2009 approached. My thinking at the time is that a large number of coin promoters would be assembling and selling to the public coin sets in commemoration of the 100th anniversary of the Lincoln cent. By promoters I mean the companies that sell coins and coin sets to the general public as opposed to collectors. The sets are generally housed in plastic holders with cardboard inserts with pictures and historical information about the coins in the set. There is usually a fancy certificate of authenticity and other gee whiz kind of stuff enclosed. The coins themselves are generally low grade and often cleaned because the non collecting public likes shiny coins. You will find these coin sets advertised in high circulation magazines and in newspapers, but not in numismatic periodicals. The price charged is much higher than an experienced collector would pay, but in their defense the companies building these sets do have a huge advertising bill to pay. While the price charged for these sets is rather steep, I think that this whole process is beneficial to the hobby by getting people exposed to the hobby.
Now here we are in 2007, and the prices on all 1909 cents have been advancing strongly for the last year. In the original article, I suggested that gains for the two keys from that year would be limited as they would not be used to build sets for the general public. The companies that build and sell these sets want to do so at the lowest possible cost, so that means sticking with the Philadelphia issues and staying away from the 1909-S and 1909-S V.D.B. key coins. I had originally envisioned the promoters building sets consisting of the 1909 plain and 1909 V.D.B. cents along with whatever cent designs are issued in 2009. Based on the recent price trends, I would say that they are also planning on including a 1909 Indian head cent in their sets.
As I mentioned earlier, the promoters wish to build these sets as cheaply as possible. This means that the condition of the coins is rather irrelevant. As long as the date is clear, they do not need to be any higher than Good-4 or maybe even an AG-3+, again as long as the date is clear. In order to get the quantities needed, they will probably have to buy all they can in say Good-4 to maybe Fine-12 condition, or maybe even a bit higher if they are having trouble acquiring enough volume. Of course, if prices surge in these lower grades, the higher grade coins will be taken along for the ride.
Lets look at the individual issues.
1909 Plain Lincoln Cent in MS-63 Red
I was correct that the 1909-S plain and V.D.B. coins would not move much in anticipation of the 100th anniversary of the Lincoln cent. Both coins have moved up about 10 to 15 percent in value in lower grades. This is actually fairly poor performance, as coins in general, and key date coins in particular, have been on a roll for the last several years. These two dates have actually underperformed many other key dates in other series. Even within the universe of Lincoln cents, the other key dates have done much, much better. Looking at the other two keys of the series shows that the 1914-D has jumped an impressive 20 to 40 percent in value, depending on the exact condition. The 1931-S has done even better, advancing a whopping 30 to 60 percent in lower grades.
I was incorrect, however, in expecting a price jump in the 1909 plain Lincoln cents. Because they were starting from such a low price level, it seemed like they could easily make a 50 percent jump and still be fairly cheap. That has proven so far to not be the case, and prices on these coins have hardly budged at all.
1909 V.D.B. Lincoln Cent in MS-64 Red
One coin that did make a big jump forward in price over the last year, nearly doubling in lower grades, is the 1909 V.D.B. cent from the Philadelphia mint. Comparing their prices in the March 2006 and March 2007 Greysheets shows a jump in the bid price from $4.05 up to $8.00 in Good condition. Fines moved from $4.50 to $8.40. Very Good condition shows a similar leap in price. While this is an extremely common issue in all grades, it is also very, very popular. It is one of those coins that the general public has heard of even though they may not know anything else about coins other than how to spend them. A Lincoln cent with the V.D.B. on the reverse is an essential ingredient in any set commemorating the 100th anniversary of this design.
1909 Indian Head Cent in MS-63 Red and Brown
Now here is one that I did not see coming: the 1909 Indian Head cent. I never expected the 1909 Indian cent to be part of the cent sets that would be sold to the public, but I have to assume that somebody is accumulating these cents in huge quantities for inclusion in such a set. Other late date Indian head cents have not budged at all in price in lower grades. The semi key 1908-S is stagnant as well though the key date 1909-S Indian cent has zipped up about 25%. That 25% increase sounds good, but it is less than one tenth as great as the huge move in prices of the 1909 Philadelphia Indian cent! In Good condition, they have jumped from $2.75 all the way up to $7.00, a 255% increase! In Fine condition, they have moved from $3.00 to $7.50, a 250% increase in one year. The pattern is the same for the Very Goods. Wow, how great is that for a one year investment? Sure wish I had bought a few thousand of them last year.
So, what is the point of all of this? It just goes to show that sometimes you can predict the price trends of certain coins, though not with perfect accuracy. And timing such a move is nearly impossible. Is it time to sell these cents now and buy them back in 2010 after the promotions are done? Or has the price increase only just begun? Nobody knows for sure, but prices on these three cents are likely to be in nearly continuous motion in one direction or another for at least the next two or three years.
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Questions, comments, or suggestions? Mail to: Mike@alaskacoinexchange.com