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Thursday, December 27, 2012

Idiocy - or arbitrage?

Henry VII (1485-1509) gold Angel ND, S-2187, Pheon (arrow) mm, struck 1505-09, MS65 PCGS

Great Britain, Great Britain: Henry VII (1485-1509) gold Angel ND,... Image #1

This coin is selling in the current Heritage Auction with a reserve of $17,625 including the buyer's feeIt is the single most common gold angel in "As Struck" condition - unfortunately the strike is absolutely atrocious. The surfaces are granular and unpleasant, the devices barely visible.  Altogether this is a coin that in a British Auction like Spink of DNW could be expected to realize somewhere around $3000.  

However, it is very shiny and sports a very high Slabbed Grade.  US Collectors like that.  And it will certainly be interesting to see if some US Collector buys the holder.

If so it will be the classic Greater Fool's game Henry VII Angels are quite common, and the Mint Mark Pheon is the most common mint mark.  Most every British Auction will have a few specimens far nicer than this.  And even very rare angels in AS struck condition - for example a Henry VI - might not be expected to quite bring the listed reserve for this coin.

It is intersting that NGC in its Ancients Dept has nagivated this problem by listing grades for the strike and surface as well as the state of preservation.  At NGC ancients this might be an MS Strike 2/5 Surface 2/5 - which would not be considered a premium coin.

Why hammered coins from other eras are not treated similarly by the grading companies is a mystery.

This is a wonderful example of the dangers of simply buying a grade in a market you might not be very familiar with.  

Know your markets.  Buy what you know.

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