Scarcity vs Rarity, And My First Big Lesson
“Scarce” and “Rare” are words that people often use interchangeably like “jealous” and “envious”, even though they mean very different things. The story of my first big mistake in the coin shop was a hard lesson that often gets overlooked in numismatics: the difference between scarcity and rarity.
I was in my early teens, and competent enough to not go running into the back to ask questions every 10 minutes. Back then I dealt almost exclusively with bullion, with some better date silver dollars thrown in every once in a while. Of course I fancied myself already 90% an expert (a notion that I was quickly disabused of in the following years), and when a new gold coin that I hadn’t seen before crossed my path, I hopped on the internet to look it up.
The coin piqued my interest on two fronts – not only was it something I hadn’t seen before, but it was a piedfort (double thick), something else that was new to me then. It was a gold coin commemorating General Lafayette, and I discovered that in the whole wide world, only 20,000 of these had been made!
I was already acquainted with the phenomena of private mints striking “limited mintage” medals that were really just bullion, but this was an actual coin, stuck by the government of France, and with a certificate and everything! I concluded this must be a very rare coin indeed, and purchased it from the gentleman for a significant premium above its melt content, paid the man, and proudly took my new acquisition into the back to show my father.
Suffice it to say that he was less than pleased, and curtly informed me that the only thing “rarer” than my treasure was going to be someone who wanted to buy it. “There is,” he told me “a huge difference between scarcity and rarity.”
He turned out to be so very, very right. I tried my damnest to sell this coin, on dealer networks, on eBay, anything I could think of – for YEARS. I was determined that we would get out of this thing without taking a loss. In the end, I gave up and we melted it down for way less than I had paid for it.
I learned this the hard way:
- Scarce: Something of which there are not very many.
- Rare: Something of which there are not very many, that people actually want.
If I scribble a doodle on a napkin, I’ve certainly got a unique, scarce item! Would you pay for it? I hope not, I’m a terrible artist. If Picasso were to doodle on a napkin, it would be auctioned to the highest bidder.
Strangely enough, I look back almost fondly on this story, and find myself giving abridged versions to customers once in a while. The difference between scarcity and rarity is forever burned into my brain, and should always be kept in mind when assessing coins and collectibles.