Over the last decade or so, a very curious type of "rare coin" has become increasingly popular - the so-called "grade rarity." The traditional rare coin is considered to be "rare" because it has a low mintage, or very few specimens of the total mintage have survived. The grade rarity, however, derives its value from the fact that very few coins have been graded in that grade.
When the major grading services began publishing breakdowns of the number of specimens that had been graded in each general grade category (i.e. MS-67 or EF-45), collectors became aware of the fact that ultra high-grade coins were really, really rare in many cases. This was true even among recently issued coins. A 2003 business strike Lincoln Cent that received a perfect grade of MS-70 from PCGS was considered so rare and unlikely that collectors bid the coin up to $15,000 when it went up for auction in 2008.
I don't consider grade rarities to be good investments. They are based on the fad of forming registry sets, and have no true inherent value of their own once the fad for this type of collecting fades. I mean, seriously, use your brain! Can a coin with a mintage of 3.3 billion specimens really be considered rare?
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In some sense we deal with condition rarities all the time when we pay more for coins of a higher grade because there are fewer of them. A major difference with modern coins is that a coin can be of little value all the way up through grade 69 and then suddenly people are paying thousands of dollars for grade 70 coins, perhaps not even because the grade is really rare, but just because so few have been graded. After all, it is not even worth having most modern coins graded at all unless they are believed to be perfect and even then you are taking a real chance that they will come back as MS69 or PR69 and the grading and slabbing will have cost more than the coin is worth raw. Even coins that are minted in small quantities by modern standards, a few thousand or a few tens of thousands of coins, are not really rare, especially when you consider that the vast majority of the coins are available and in top condition. Coins, like most of the proof Morgan dollars, that were only minted in the hundreds over a hundred years ago typically only fetch a few thousand dollars in the marketplace. To pay as much for a modern cent, just because it is “perfect” seems plain wrong.
Clair you are so on the money for that one. As the minting process has improved so has the quality causing most proof coins to be an automatic PR65 Deep Cameo when 20 – 30 yrs ago they were barely 63 or 64’s with few having a light cameo.
Many proof and BU Silver coins are coming out as 66’s and 68’s.
There does appear to be an increase in the arrogant behavior of it’s slabbed a 68 so now it’s worth thousands even though it’s not.
You state in your story about registery sets that you can not put a PCGS graded coin in an NGC registery set. This information is incorrect. You can not put an NGC coin in a PCGS registery set. PCGS only accepts PCGS coins. NGC accepts NGC and PCGS coins.