Browsing Category

Investing

Buying PCGS Old Green Holders & NGC Fatty Holders

Buying PCGS Old Green Holders & NGC Fatty Holders
Photo Credit: Continental Coin and Jewelry

Listen closely, because I’m going to tell you a secret about the rare coin market that every numismatic investor should know.

The field of numismatics is dominated by third-party grading services these days.  Coins submitted to these firms are graded by experienced industry professionals and then sealed in hard, clear polycarbonate cases.  This simple concept revolutionized the trade, giving coin collectors and investors confidence that the coins they’re buying are both genuine and properly graded.

However, there is a certain mythology surrounding certified coins housed in PCGS Old Green holders and vintage NGC Fatty Holders.  Coins found in these early holders generally trade for slight premiums over coins of the same grade in more recent PCGS and NGC slabs.

But why is this the case?

In order to understand the reason PCGS Old Green holders and vintage NGC Fatty Holders sell for higher prices than newer slabbed coins, it is necessary to examine the early history of the grading services.

Before the advent of third-party grading, the coin market was the Wild West.  Unscrupulous dealers frequently over-graded the coins they were selling, while simultaneously under-grading any coins they were buying.  Dubious telemarketing firms and boiler room operations cold-called people trying to sell “investment grade” coins that invariably turned out to have been cleaned, damaged, over-graded or otherwise compromised.

Now this might not have mattered for the kid buying a common-date, circulated Mercury dime from his local coin shop.  But it created a major trust problem with more expensive coins that were worth hundreds or even thousands of dollars.  The lack of uniform grading standards was tearing the numismatic community apart.  It wasn’t hard to foresee a bleak future where average coin collectors – fed up with grading inconsistencies and problem coins passed off as good – would simply choose to quit collecting.

Something had to be done.

Enter a consortium of professional coin dealers led by legendary numismatist David Hall.  These innovators believed that if coins could be independently graded by a well-respected numismatic organization and then encapsulated in tamper-resistant packaging, it would create a market where these certified, or “slabbed”, coins could trade sight unseen as commodities.  The resulting company, PCGS (Professional Coin Grading Service) officially launched in February 1986.  Its primary competitor, NGC (Numismatic Guaranty Corporation), was founded just a year later in 1987.

But in order to convince the market that their new product was worthwhile, the dealers behind PCGS and NGC knew that they had to be scrupulous to a fault with their grading.  If a coin was borderline, it was better to knock it down a grade and preserve the integrity of the firm and, by extension, the entire idea of third-party certification.  As a result, early submissions to both PCGS and NGC were almost always conservatively graded by today’s standards.

It was only many years later, as the certified coin market gradually came to mature, that PCGS and NGC found they could relax their grading standards somewhat.  Therefore, collectors and investors tend to place a small premium on coins housed in earlier slabs from either major grading service.

 

PCGS Old Green Holder & NGC Fatty Holder Morgan Silver Dollars for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

The very earliest PCGS holders are known in the numismatic community as “Rattlers” because the entombed coin could sometimes move slightly in its case.  These early PCGS cases featured white or green labels and smaller-sized holders compared to more modern slabs.  The company produced Rattlers (PCGS Generation 1.0 to Gen 1.2) from its inception in 1986 until September 1989, when the firm discovered that they could be counterfeited.

PCGS quickly responded to this threat by updating the Rattler with a clear plastic exterior ring, barcoded label and reverse hologram sticker.  These holders are actually old Rattler holders encased in a separate, clear plastic collar.  These more counterfeit-resistant transitional type holders (PCGS Gen 2.0 to Gen 2.2) ran from September 1989 until January 1990.

By early 1990, PCGS had completed the engineering necessary to switch over to a single-piece, stackable holder with the familiar green label and reverse hologram sticker.  These improved Old Green holders (PCGS Gen 3.0 to Gen 3.1) were used from January 1990 to September 1998.  Because of their long production run, these holders constitute the bulk of Old Green holders in existence.  It is important to note that the green label dye color was not always stable on Gen 3.0 slabs, sometimes leading to blue or yellow discoloration.

Because the earliest white label PCGS holders (Gen 1.0 and Gen 1.1) were only used during the first month of the company’s operation, they aren’t commonly encountered today.  Due to their extreme rarity, these very early white label PCGS holders have an elevated degree of collectability among some coin enthusiasts, even when they don’t hold very valuable coins.

In contrast, the beloved Old Green holders span all the way from PCGS Gen 1.2 (first released in February 1986; this first generation were also Rattlers) all the way to PCGS Gen 3.1 holders, which were discontinued in September 1998.  Today’s coin collectors and dealers often refer to Older Green holders by the abbreviation “OGH”, which you will frequently find used in online auction titles.

Thankfully, NGC’s holder history is somewhat less convoluted than PCGS’s.  NGC’s first slabbed coins came in slick-looking, all-black holders.  But this only lasted from August 1987 until December 1987, when the color was changed to white.  This aesthetic change was made because while the original black background made bright gold and silver coins look stunning, it diminished the visual appeal of bronze and heavily toned silver coins.  The early, all-black NGC holders are considered the most desirable early slab to many collectors, sporting prices that can reach into the thousands of dollars each, regardless of the coin they contain!

All-white NGC holders were produced from December 1987 until 1997 with only minor updates along the way, like the addition of barcoded labels in 1993.  These are the vintage NGC Fatty holders (also known as “Fattie” holders) that many coin buffs treasure today.  These slabs acquired their name because of their distinctively thick, “soap dish” shape, which was replaced in later generations by a slimmer, more streamlined form.

Now that we’ve got the history out of the way, we can talk more about why you might want to buy PCGS Old Green holders or vintage NGC Fatty holders.

 

PCGS Old Green Holder & NGC Fatty Holder Pre-1933 U.S. Gold Coins for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

First, some collectors simply enjoy the history that these older slabs carry with them.  Many of these coins were traded back and forth during the late 1980s certified coin bubble, when Wall Street briefly burst into the numismatic realm.  Investors bid up some coin series, like classic U.S. commemorative coins, to such absurd heights that even now – some 30 years later – prices are still off their all-time highs by as much as 90%!

As an aside, I believe this means it is a great time to buy many series of older, numismatically-oriented coins.  After all, do you know anything else that still costs the same amount of money it did in the 1980s?

But for most collectors and investors, the primary reason to buy PCGS Old Green holders and vintage NGC Fatty holders is because you’ll have a better chance of getting a solidly-graded coin for the stated numerical grade.

Even though third-party grading companies strive for consistency, coin grading is an inherently subjective endeavor.  Sometimes graders – even professionals – come to work tired or have an off day.  When the difference between a single numerical grade – like an MS-64 and MS-65 – can be anywhere from hundreds to thousands of dollars, making certain that you’re getting what you’re paying for can be priceless.

Of course, our discussion of vintage NGC Fatty holders and PCGS Old Green holders wouldn’t be complete if we didn’t broach the topic of crack-outs and re-submittals.  Older PCGS and NGC slabs were often so conservatively graded that a cottage industry arose in the early 2000s centered on removing (or cracking-out) under-graded coins from their holders and then resubmitting them to the grading services in hopes of acquiring a higher grade.

Cracking coins out of older holders was so lucrative that it kicked off a veritable decade long gold rush from the late 1990s to the late 2000s.  By that time, the third-party grading services had discontinued the strict grading of the PCGS Old Green holder/NGC Fatty holder era.  So a conservatively graded coin in an older holder might very well come back from one of the companies with a one or (very rarely) two grade increase!

Unfortunately, the crack-out gold rush days are long gone.  Most of the coins that could reasonably have been expected to upgrade have already been resubmitted by now.  But that doesn’t mean that older PCGS and NGC holder coins aren’t still quite desirable.  There are plenty of vintage NGC Fatty holders and PCGS Old Green holders that house really, really nice coins for their grade.  In addition, many collectors feel that vintage holder coins have a better chance of getting CAC approval.

As a final bonus, resubmission upgrades remain a possibility in some niche numismatic markets that have languished since the turn of the millennium.  So common-date Morgan silver dollars, Walking Liberty halves and classic U.S. commemorative halves might provide those with a keen eye the (admittedly slim) possibility of buying a legitimately under-graded coin, as long as you stick to lower priced examples.  This is due to the fact that with these coin series, the value increase from moving, for instance, from MS-62 to MS-63 might not cover the third-party grading service’s resubmission fee.

Consequently, PCGS Old Green holders and NGC Fatty holders often command 5% to 15% premiums over newer holder coins of the same type, date, grade and mint.  The next logical step up the value ladder is getting a “green bean” CAC-stickered coin.  But a CAC stickered specimen can set you back an additional 20% to 100% (!) over an identically graded non-CAC coin, depending on a multitude of different variables.  Given the massive price differentials, a lot of value-conscious collectors and investors opt for coins in vintage holders instead.

 

PCGS Old Green Holder & NGC Fatty Holder Classic U.S. Commemorative Coins for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

Now for the caveats.

It is vitally important that you buy the coin, not the holder.  An old holder is merely an indicator that a coin might be interesting.  There are, without a doubt, over-graded, thoroughly ugly coins that reside in PCGS Old Green holders and vintage NGC Fatty holders.  It is up to you to avoid these over-graded dogs yourself.

An unethical seller may try to distract you from a lower quality coin by emphasizing the fact that it is housed in a vintage holder.  But that doesn’t mean the coin is automatically good.  The old holders simply give you a potential edge in the very competitive world of investment grade numismatics.

I would also like to warn you that PCGS has started to issue coins in “throwback” holders.  These PCGS throwback or retro holders are new issues with “tribute” labels that are similar to those found in older holders.  Happily, they all have a tell which allows for easy identification.  Every PCGS throwback holder has “PCGS GEN X.X” in a shield printed on the rear label.  If you see this, you know it is a new holder.

To the best of my knowledge, NGC has not issued any Fatty/Fattie holders since 1997.

Although they aren’t a magic silver bullet, early PCGS Old Green holders and vintage NGC Fatty holders can be a great way for savvy coin investors to pick up solidly graded rare coins at a reasonable price.

 

Read more thought-provoking Antique Sage coin articles here.

-or-

Read in-depth Antique Sage rare coin investment guides here.


Can Jade Slabs Be a Precious Metal Alternative?

Can Jade Slabs Be a Precious Metal Alternative?

I’ve been obsessed with rough jade for a few years now.  I’ve been particularly interested in jade slabs and jade blocks, which are roughed-out or semi-finished pieces of jade that are ready to be fashioned into finished goods.  And this got me thinking.

Would it be possible to invest in jade slabs as a precious metal alternative?  I know this sounds a bit crazy, but bear with me (if you’re the adventurous type).

In order to be considered a reasonable bullion alternative, an item must be a good store of value.  But what makes something a good store of value?

It might be instructive to look at the premiere tangible asset that is already synonymous with that role: precious metals.

Gold and silver are elements possessing exceedingly fine properties.  They are highly resistant to corrosion and oxidation.  They are extremely malleable and ductile.  They are excellent conductors of heat and electricity.  And they are both quite beautiful.

Like the precious metals, jade also has superlative physical properties.

For those who don’t know, there are actually two kinds of true jade – nephrite jade and jadeite jade.  Even though these stones have completely different chemical compositions, they possess very similar physical properties, which is why they are both classified as true jades.

All jade is exceptionally tough.  In fact, jade is tougher than steel!  This is one of the reasons that pre-historic people fashioned jade into axes, daggers and other useful tools.

In addition to being tough, jade is also renowned for its hardness.  Nephrite sports a Mohs hardness of 6.0 to 6.5, while its near-twin jadeite is slightly harder at 6.5 to 7.0.  Although these values don’t rival the hardness of rubies (9.0) or diamonds (10.0), jade is still harder than steel and cannot be scratched with a knife blade.

Jade will also take a very fine polish.  The very best jades can be burnished to a mirror-like finish that looks eerily glass-like in its perfection.  This makes it a superb material for carvings, jewelry and other decorative purposes.

Jade is a rather dense gem as well.  Nephrite has a specific gravity of 2.90 to 3.05 gm/cm3, while jadeite ranges from 3.20 to 3.45 gm/cm3.  Although it is not nearly as dense as gold or silver, jade is substantially denser than the average rock.  This is because most ordinary rocks have a high quartz content, which gives them a specific gravity close to that of quartz – around 2.65 gm/cm3.  It is one of those strange laws of the universe that valuable materials are, more often than not, high density materials.

However, interesting physical properties alone are not enough to endow a material with store of value status.

Durability, for example, is another prerequisite.  Being highly corrosion resistant, gold and silver last pretty much forever.  And they are more or less indestructible.  If you are attempting to destroy precious metals, the best you can do is powder and scatter them, or dissolve them in impractically strong acids.

Jade once again proves itself very similar to gold and silver in terms of its durability.  Archeologists regularly recover fully intact ancient Chinese and Meso-American jade artifacts that have been buried for thousands of years.  If you were to expose a piece of jade to the elements for a few decades, it would remain curiously untouched (other than perhaps growing a bit of moss).  If you were to deposit a specimen of jade in the corner of your basement for a couple centuries, it would fully retain its original appearance and properties.

And the fact that jade is tougher than steel means that the mythical greenstone is nearly impervious to mechanical damage.  Prior to the mid 19th century, the native Maori people of New Zealand used jade clubs called “mere” to crack open the skulls of their enemies in tribal warfare.  Their jade weapons almost always escaped these conflicts undamaged and can be viewed in museums today, hundreds of years later.

In other words, jade is as close to being eternal as any physical substance on earth can hope to get.

Rarity is another attribute that drives the desirability of jade, making it a compelling store of value and an intriguing bullion alternative.  Jade is often found as boulders in alluvial deposits.  And it isn’t uncommon for these water-worn boulders to weigh hundreds of pounds or even tons.

This might seem like a contradiction.  How can anything found in the form of gigantic boulders be rare?

The answer is that most of those boulders are extremely low quality jade that isn’t fit for any kind of use.  Gem quality jade has an unusual combination of saturated color, fine texture and high translucency that is extraordinarily rare in nature.

For example, a jade prospector may sort through tons of rough jade nodules in order to find a single pound of medium quality material.  And that assumes he has been lucky!  A Wyoming prospector called USMiner has posted a series of jade prospecting videos on YouTube that detail the challenges faced in looking for high quality jade.  I’ve posted the second video in his informative “Green Gold” series below, which I highly suggest you watch:

 

 

But a material must possess other attributes besides durability in order to be considered a legitimate store of value.

For instance, a raw material must be usable.  In other words, it must be possible to turn it into a useful or desirable finished good.

Jade fulfills this requirement with flying colors.  Jade jewelry is ubiquitous in the modern world, from bracelets to pendants to earrings.  Jade carving has grown into a cherished global tradition, with a thriving industry centered in China and Hong Kong joined by a fledgling one in New Zealand, Canada and the United States.

The remarkable stone has been treasured for many centuries – particularly in China, where “The Stone of Heaven” as it is known has long been a national obsession.  Today, fine antique jade artifacts from the Chinese Ming (1368 to 1644 AD) and Qing (1644 to 1912 AD) Dynasties, as well as exquisitely carved pieces from the Indian Mughal Empire (1526 to 1857 AD), are avidly collected by wealthy jade enthusiasts worldwide.

Incidentally, historical or cultural significance is another important factor in determining whether an object is a good store of value.  Gold and silver score superbly on this metric, having been equated with money for thousands of years in most societies.

While jade cannot compare with the legendary status of gold’s monetary cultural dominance, it is rapidly finding its own niche nonetheless.  For instance, jade has been associated with high status and prosperity in East Asia for millennia.  In China, Korea, Taiwan, Hong Kong and parts of Southeast Asia, jade has no problem standing shoulder to shoulder with gold and silver as a valuable precious material.

Jade’s history in the West, however, has been somewhat shorter and more ambivalent.  The Spanish conquistadors first encountered the exceptional green stone in Central America in the 16th century when they conquered the Aztec and Mayan civilizations.  However, the Spanish were only interested in gold and silver, not jade.  As a result, the precious stone lay at the periphery of European thought for another 400 years.

It was not until the late 19th and early 20th century that European jewelers began to experiment with jade – undoubtedly because of the growing influence of Orientalism in Western art.  Since that time, jade has gradually been accepted as a bona fide gemstone all over the world.

Rough jade is typically found in rounded nodules with an opaque rind covering the stone.  These nodules are usually formed via hydraulic action when a primary deposit is weathered into a river.  However, somewhat coarser jade nodules can also be formed by wind-blown sand or other debris scouring their surfaces.  When this happens, the stone is called a “slick” or “wind slick”.

Over the course of millions of years, the weathering process tends to erode away any lower quality material, leaving only the hardest, highest quality jade.  This makes rough jade nodules from weathered secondary deposits particularly desirable.

While rock hounds have eagerly collected fine jade slicks and boulders for many decades, everyone else in the West largely ignored the precious “Stone of Heaven”.  But as the Chinese economy boomed over the past 20 years, demand for jade has inexorably risen, driving prices ever higher.   Meanwhile, Westerners have gradually become more familiar with jade’s many fine qualities.  As a result, hard asset investors are beginning to realize that stacking rough jade like they stack gold or silver might be a very profitable, if unconventional, idea.

Unfortunately, the opaque rind on rough jade nodules means that you typically can’t see into the stone in order to assess its quality.  Because of this quirk of the gemstone, jade is sometimes known in China as “the gambling stone“.

This is one of the big reasons why I like jade slabs and jade blocks as investment pieces.  With semi-finished jade, the exterior rind has usually been either mostly or completely cut away, revealing the true quality of the material inside.  This means that when you purchase rough jade slabs or blocks, you have the advantage of pretty much knowing exactly what you’re getting.

Some more traditional precious metal investors might be skeptical of investing in jade.  And if you fall into that category, I completely understand your reluctance.  Jade isn’t for buttoned-down conservative types.  Like most alternative investments, the stone is rather illiquid – so you have to be committed for the long-term when you buy.

And yet when we look at its physical properties, jade compares quite favorably to the precious metals.  It not only looks amazingly beautiful, but also has an unmatched combination of hardness and tenacity.  This renders it one of the most durable substances on earth – easily the equal of gold and silver in this regard.

It is also a very rare gemstone, and getting rarer every day as demand skyrockets.  The easy to mine river deposits have been exhausted within the past few decades, leaving nothing but small, remote alluvial deposits and difficult to access, hard-rock primary deposits.

Jade also has a rich history that has endowed the hallowed material with a special place in East Asian culture.  The West is definitely playing catch-up here, but I think that Westerners will undoubtedly recognize the prized stone as a compelling store of value in the future.  Jade is a luxury raw material par excellence – fit for the very finest jewelry, carvings and objets d’art.

Jade may not be gold or silver, but I believe that jade slabs and jade blocks are an underappreciated bullion alternative for the savvy tangible asset investor.  For those who want to learn more about jade, please read my two investment guides titled “An Alluring Enigma – Rough Jade” and “A Jadeite & Nephrite Jade Investor’s Buying Guide“.

 

Read more thought-provoking Antique Sage investing articles here.

-or-

Read in-depth Antique Sage investment guides here.

Vollmer Poured Silver Bars – Art Meets Bullion with VPS

Vollmer Poured Silver Bars - Art Meets Bullion with VPS

Update: Vollmer Poured Silver is now defunct.

I was browsing eBay a few months ago looking for unusual and exceptional tangible assets when I found something truly breathtaking.  Purely by chance, I stumbled across a magnificent hand-poured silver bullion bar emblazoned with the image of a kraken – a mythological sea monster in the form of a giant octopus.  I was enthralled.

I know my way around silver bullion, having written about bullion bars that have a component of collector’s value in the past.  And while I like a good vintage silver bar, I have also come to appreciate the investment potential of modern hand-poured silver bullion bars.

And the silver bar I had just found – with its high-relief sculptural elements and oxidized surfaces – was the absolute finest example I had ever laid my eyes on.  The angry kraken seemed almost alive, as if it was writhing across the bar’s slightly roughened surface.  A small skull and crossbones punched into the bar’s lower corner (along with the maker’s initials, VPS) lent a buccaneer air, completing the masterpiece.

It was utterly unlike any silver art bar I had ever seen before.

There was a catch, though.  It was made by a firm I had never heard of: Vollmer Poured Silver.  I realized immediately that I had to find out as much as I could about this extraordinary company.

Vollmer Poured Silver, also known by the acronym VPS, is a precious metal micro-foundry launched by Devin Vollmer in 2016.  Devin personally designs and hand-pours every art bar that leaves his studio, which is located in the rugged Berkshire Mountains of western Massachusetts.

And what gorgeous silver bars they are!

Devin skillfully weaves skull, dragon and pirate themes into a fantastical tapestry of precious metal delight.  In fact, I cringe a little at the use of the vanilla term “silver bar” to describe some of Devin’s work, which really borders on 3-dimensional sculpture.  Indeed, ultra high relief is one of the hallmarks of Vollmer Poured Silver bars.

I am also quite certain that Vollmer Poured Silver’s Berkshire address is no accident.  This achingly beautiful New England region, from the lush Housatonic River Valley to the imposing heights of Mount Greylock, has been a favorite haunt of artists for centuries.  Many famous creatives – from the sculptor Daniel Chester French (creator of the monumental Lincoln statue in Washington D.C.’s Lincoln Memorial), to the novelists Nathaniel Hawthorne (writer of The House of the Seven Gables) and Herman Melville (author of Moby Dick) – have called these picturesque rolling hills home.  So it isn’t surprising to me that such a talented artist as Devin Vollmer decided to set up shop in the Berkshires.

And make no mistake, Devin is an artist in the classic sense of the word.  He hand-sculpts and hand-carves the molds for every one of his works using mediums as varied as Petrobond, Delft Clay and graphite.  He then employs the ancient lost wax method and various sand-casting techniques to forge his works.  Simply put, Vollmer Poured Silver resides at that unique juncture between art and bullion.

Another factor that makes Vollmer Poured Silver bars so desirable is that fact that many of them are strictly limited in mintage.  It isn’t uncommon for Devin to only produce 5, 10 or 15 specimens of his more complex silver bar designs.  For example, the awe-inspiring kraken-themed bar pictured above was limited to a run of only 5 specimens.

Such small mintage numbers are highly unusual, even in the world of artisan hand-poured silver bullion bars.  For instance, the well-known company Yeager’s Poured Silver (YPS) usually produces limited edition runs of 100, 200 or even 500 bars.  And many YPS bars have uncapped mintages as well (although, to be fair, VPS has a few issues that are also unlimited).

Now please don’t misunderstand me.  I love Yeager’s Poured Silver.  I have happily purchased many of their products in the past, including a one kilo silver bar grab bag that hit all the right notes.  But, mintages aside, there is still a considerable difference between the CNC-assisted graphite mold designs that YPS specializes in and the free-form, hand-sculpting that Vollmer Poured Silver embraces.

Fine art does come at a high price, though.  You can expect to pay between $27 and $30 a troy ounce for VPS bars (with the price of silver hovering around $17) when purchasing directly from the VPS online shop.  Discontinued designs available only on the secondary market can easily exceed $32 a troy ounce.

This represents a substantial premium over bullion value, but one that I feel is well-justified based on Vollmer’s ridiculously low mintages and tremendous artistic skill.  Due to this unique combination of desirable attributes, Vollmer Poured Silver bars typically hold their value in the secondary market quite well.  And there is every probability that they will appreciate in value over time.

I also want to make a clear distinction between VPS hand-poured silver and the so-called silver art bars of the 1970s.  Although sometimes touted as a desirable vintage alternative by shady promoters, 1970s “art” bars really don’t have anything to do with art at all.  They often memorialized random or inconsequential themes, such as the Shriners, signs of the zodiac or go-go dancers, just to name a few.  And they were invariably machine struck via dies, which allowed for unlimited, mass-production runs.

In other words, Vollmer Poured Silver bars are handcrafted works of true art, while 1970s “art” bars are just bullion (and often ugly bullion at that).

Of course, there are other modern hand-poured artisan bar manufacturers out there besides VPS.  Mutiny Metals, MK Barz, Pit Bullion and Backyard Bullion are some of the better known micro-studios currently producing exceptionally beautiful work.  Much like Devin Vollmer, the owners of these companies strive to create unique and alluring hand-cast silver bars.  And while they all succeed in this endeavor, I believe that Vollmer Poured Silver bars stand out as being truly superb.

 

Read more thought-provoking Antique Sage investing articles here.

-or-

Read in-depth Antique Sage investment guides here.

Playing the Odds with Gorham Sterling Flatware

Playing the Odds with Gorham Sterling Flatware

I love old American sterling silver flatware.  I believe it is one of the most underappreciated and undervalued antiques currently available in the marketplace.  So you can imagine my delight when I stumbled across a partial set of Gorham sterling flatware selling below scrap value during an outing to a local garage sale last summer.

This was notable by itself, but became even more interesting when I was browsing eBay the other day.  I found a set of 6 Gorham sterling silver butter knives in the very same Etruscan pattern that I had purchased at the garage sale.  This beautiful set weighed in at a hefty 154 grams (4.95 troy ounces).  Unlike a lot of antique cutlery, these butter knives didn’t have stainless steel blades, so all of that weight was solid sterling silver.  Better yet, the buy-it-now price was only $82, plus $7.95 shipping and handling.

But before I delve too far into the financial specifics, I want to take a short detour to talk about The Gorham Manufacturing Company and its Etruscan pattern.

Gorham sterling flatware has a stellar reputation among antique silver collectors.   The company produced a broad range of designs to appeal to every taste – everything from the simple and staid to the exuberant and fancy.  Many of its designs – like Chantilly (1895), Buttercup (1899), Fairfax (1910) and Strasbourg (1897) – are still among today’s most popular silver flatware patterns more than a century after their inception.

Of course, Etruscan (1913) was also one of Gorham’s more popular patterns.  It was created by the firm’s celebrated chief designer, the Englishman William C. Codman.  From the moment he was hired in 1891 until his retirement in 1914, Mr. Codman was undoubtedly Gorham’s most valuable employee.  He contributed 55 flatware patterns to Gorham’s stable over his career (including the firm’s all-time bestseller – Chantilly) and was also the brainchild of its coveted Martelé line of hand-finished hollowware.

The Etruscan pattern’s sleek lines and geometric Greek key motifs foreshadowed the rise of 1920s Art Deco styling.  This is in spite of the fact that the Etruscan pattern had been designed in 1913, almost a full decade before the start of the 1920s.

Etruscan was so popular with well-to-do households that it was produced more or less continuously from its creation in 1913 until 1991, when Gorham retired it.  Unfortunately, the quality of Gorham sterling flatware declined starting in the early 1970s.  This is because the company was acquired by the industrial conglomerate Textron in 1967, which enacted cost-cutting measures.  As a result, vintage pre-1970 Gorham sterling flatware is preferred by astute collectors.

Now that we’ve had our brief history lesson, we can get back to the meat of this article.

The set of Gorham sterling flatware I found on eBay really got me thinking about intrinsic value and premium over melt.  With the spot price of silver hovering around $14.80 a troy ounce, the Etruscan butter knives I had been eyeing up contained about $68 worth of silver.  And the $82 asking price was tantalizingly close to the set’s scrap value.

This got me thinking.

One way to approach antiques that possess intrinsic value, like Gorham sterling flatware, is to calculate the cost over melt value.  This is known as the premium, which in this case was 32% ($82 asking price + $7.95 shipping = $89.95 total cost / $68 melt value).

A 32% premium is low…real low….ridiculously low, especially considering that we are talking about a matched set of desirable sterling cutlery that is most likely 50 to 100 years old.

But regardless of how enticing this deal might seem, it is important compare it against what else our $90 could buy us.

One obvious alternative to Gorham sterling flatware is to invest in a plain silver bullion bar.  If you shop around, you could find a generic 5 troy ounce bar for maybe $83 (with spot at $14.80 an ounce).  Many online bullion dealers have free shipping on order over $100, so assuming you could top-off the order, you would pay no shipping.  This works out to a cost per ounce of around $16.60 – a premium of just over 12%.

Now, does paying an extra 20% premium (32% for the sterling butter knives – 12% for the bullion bar) – equivalent to about $3 an ounce – make sense?  Is the old Gorham sterling flatware worth the extra expense?

This is where things get interesting.  You see, when you buy a bullion bar you are just buying a slug of metal.  It will never be worth more than the spot price of silver, provided it isn’t a vintage or poured bullion bar.  And the cheap generic silver bar cited in the thought experiment above definitely doesn’t fit into either of those special categories.

But sterling silver flatware is different.  Like all antiques, it has optionality – the possibility that it could sell for more than its bullion content to a collector based on its artistic merit, utilitarian application, historical significance or some combination of the trio.  In addition, sterling flatware’s value is anchored to the price of silver as well.  This means there are two potential ways to profit from antique sterling flatware: through a rising silver price or rising collector demand.

 

Vintage Gorham Sterling Flatware for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

The key is to not pay too much for that optionality.

With the Gorham sterling butter knives in the example above, the total cost of the optionality is a piddling $13.74.  This is mind-numbingly low.  Less than $15 in premium buys you a century of history from an iconic American luxury firm rendered in solid precious metal.  I’m comfortable playing the odds on this one.

And if you think a $15 premium is too much to pay, you could always wait for an eBay flash sale, where discounts of between 8% and 15% are available.

In addition, Gorham sterling flatware’s optionality – although puzzlingly cheap at the moment – never lapses or expires.  Buy the knives today, throw them in an old drawer and forget about them.  In 20 or 30 years, they will still be there, just as precious and beautiful as the day you hid them away.  The only difference is that they will have another couple decades of history behind them and perhaps need a good polish.

Oh, and they’ll probably be worth a lot more money than they are now.

Just how much longer can we expect to enjoy such obscenely good deals in the antiques market?  How much longer can 100 year old treasures sell for hardly more than the value of their recycled raw materials?

I don’t know the answer to that.

But I do know one thing; I’m buying antiques with both fists.  And if you want to diversify away from that insane fraud factory we call a stock market, you’ll buy too.

 

Read more thought-provoking Antique Sage investing articles here.

-or-

Read in-depth Antique Sage investment guides here.