@spacehayduke said:
Data is what data is, no one has so far discounted the data I present. One said it was a biased snapshot, no, two major numismatic selling sites showing the limit on CAC coins offered, not biased. I love CAC coins and mostly buy them bc they are great, but they seem to be a small part of the total market (and we are not even talking tokens, world, modern, etc, etc,). Again, Ian puts out the best coins in his email each week, everyone amazing and only 18% are CAC amongst the elite coins out of his total auction each week. That convinces me that CAC is not as important to the total numismatic market even though I love having beaned coins myself. I am a scientist and trying to analyze this without bias (notice I love CAC). I certainly would not place these kinds of limits on my product to sell (CAC only) if I were trying to make a living unless I was able to make a niche market from CAC only and be successful at it (I noted a few can, most can't)............ Thaz the whole point of my post above. So no, they a really are not a Market Maker, except within a very small niche market (for high quality coins for the grade for some US coins only) that is just one small fraction of the total numismatic market. I find that interesting and data don't lie.........
Imagine if someone like GC only auctioned off CAC coins, would they be the great success they are in the market? Well no. And GC is clearly a market maker because of their diversity in product.
Again, I love CAC coins and mostly buy and own them, I am just evaluating what I see and what it means.
Best, SH
You’re misunderstanding the definition of market maker. See what others such as MFeld have said.
The term "market maker" means their activity has a dramatic impact on the market as a whole. How large is the coin market? What percentage of that market constitutes CAC coins? How does the pricing of CAC coins impact the pricing of non-CAC coins?
The longer I live the more convincing proofs I see of this truth, that God governs in the affairs of men. And if a sparrow cannot fall to the ground without His notice is it possible for an empire to rise without His aid? Benjamin Franklin
@pmh1nic said:
The term "market maker" means their activity has a dramatic impact on the market as a whole. How large is the coin market? What percentage of that market constitutes CAC coins? How does the pricing of CAC coins impact the pricing of non-CAC coins?
You are confusing "market maker" with "market mover". @ms71, @MFeld and others have accurately described the role of a market maker earlier in this thread.
@pmh1nic said:
The term "market maker" means their activity has a dramatic impact on the market as a whole. How large is the coin market? What percentage of that market constitutes CAC coins? How does the pricing of CAC coins impact the pricing of non-CAC coins?
While the activity of a “market maker” can have a dramatic impact on the market as a whole, that’s not what the term means. Market participants can have major impacts without being market makers. And market makers don’t necessarily have such impacts on the market.
“Market Maker Definition - Investopedia
What Is a Market Maker?
The term market maker refers to a firm or individual who actively quotes two-sided markets in a particular security, providing bids and offers (known as asks) along with the market size of each. Market makers provide liquidity and depth to markets and profit from the difference in the bid-ask spread. They may also make trades for their own accounts, which are known as principal trades.”
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
@Walkerguy21D said:
I have a dealer friend who does $millions in sales annually on the national circuit, and I bet you could count the number of CAC coins he’s handled on one hand.
All that indicates is the market/niche he’s chosen for his business. Hundreds of dealers always have many coins with CAC stickers. I think Legend Numismatics does quite well selling mostly coins with CAC’s.
Steve
A day without fine wine and working on your coin collection is like a day without sunshine!!!
@pmh1nic said:
The term "market maker" means their activity has a dramatic impact on the market as a whole. How large is the coin market? What percentage of that market constitutes CAC coins? How does the pricing of CAC coins impact the pricing of non-CAC coins?
Also NOT what market maker means:
mar·ket mak·er
/ˈmärkət ˌmākər/
noun
1.
a dealer in securities or other assets who undertakes to buy or sell at specified prices at all times.
@Walkerguy21D said:
I have a dealer friend who does $millions in sales annually on the national circuit, and I bet you could count the number of CAC coins he’s handled on one hand.
All that indicates is the market/niche he’s chosen for his business. Hundreds of dealers always have many coins with CAC stickers. I think Legend Numismatics does quite well selling mostly coins with CAC’s.
Steve
Hmm, I just attended winter FUN, and I didn’t see hundreds of dealers with many CAC stickered coins. I saw several dealers with many CAC coins, more dealers that had a few/some, and many more that had none. Maybe they were all the ones who skipped the show 😉
Anyway, my point was that there is a very large segment of the market that CAC isn’t a part of. For every Legend, there are many more guys who rarely deal in CAC coins, if at all.
Which gets back to the OP’s original point.
@spacehayduke said:
I think both GC and ebay provide a key view of what the real market is out there.
Thoughts?
Often, coins go through a dealer from one collection to another, without ever being offered publicly. Why would a dealer pay a fee to have somebody sell their coins for them when they can retail them directly to the buyers who want them?
@pmh1nic said:
The term "market maker" means their activity has a dramatic impact on the market as a whole. How large is the coin market? What percentage of that market constitutes CAC coins? How does the pricing of CAC coins impact the pricing of non-CAC coins?
While the activity of a “market maker” can have a dramatic impact on the market as a whole, that’s not what the term means. Market participants can have major impacts without being market makers. And market makers don’t necessarily have such impacts on the market.
“Market Maker Definition - Investopedia
What Is a Market Maker?
The term market maker refers to a firm or individual who actively quotes two-sided markets in a particular security, providing bids and offers (known as asks) along with the market size of each. Market makers provide liquidity and depth to markets and profit from the difference in the bid-ask spread. They may also make trades for their own accounts, which are known as principal trades.”
Forgive me for screwing up the terms. That said, how much influence does CAC have on the coin market as a whole? Is it significant or is their influence pretty much limited to a small segment of the coin market?
The longer I live the more convincing proofs I see of this truth, that God governs in the affairs of men. And if a sparrow cannot fall to the ground without His notice is it possible for an empire to rise without His aid? Benjamin Franklin
@pmh1nic said:
The term "market maker" means their activity has a dramatic impact on the market as a whole. How large is the coin market? What percentage of that market constitutes CAC coins? How does the pricing of CAC coins impact the pricing of non-CAC coins?
While the activity of a “market maker” can have a dramatic impact on the market as a whole, that’s not what the term means. Market participants can have major impacts without being market makers. And market makers don’t necessarily have such impacts on the market.
“Market Maker Definition - Investopedia
What Is a Market Maker?
The term market maker refers to a firm or individual who actively quotes two-sided markets in a particular security, providing bids and offers (known as asks) along with the market size of each. Market makers provide liquidity and depth to markets and profit from the difference in the bid-ask spread. They may also make trades for their own accounts, which are known as principal trades.”
Forgive me for screwing up the terms. That said, how much influence does CAC have on the coin market as a whole? Is it significant or is their influence pretty much limited to a small segment of the coin market?
It's huge in dollars and other segments that they choose to make market in. It is minor in things like tokens, early Federal and, I think, Barber coinage.
They buy and sell a lot of coins. They just don't retail any. Which is why most people don't realize what they are doing.
I don’t pay attention to CAC stickers. If a coin has it fine, if it doesn’t that’s fine too. I’ll bid or offer what I feel is a fair price. If somebody else wants to pay more because of a sticker that’s fine too. I know I have one sticker. It’s on the one proof buffalo I have. It’s my avatar to the left a PCGS 1937 PR67+.
Forgive me for screwing up the terms. That said, how much influence does CAC have on the coin market as a whole? Is it significant or is their influence pretty much limited to a small segment of the coin market?
CACs are not relevant with inexpensive or modern coins. CAC has the greatest influence with the coin "not in hand" market; i.e. coins sold through the mail. A coin (not extremely rare ones) without a CAC can realize a deeply discount price in an auction regardless of how good its picture appears; whereas, a CAC coin will sell close to or exceed a price guide price.
@Type2 said:
Some need it, some don’t. If it’s on the holder good if it’s not that’s fine. I can see! if I see a nice coin and it doesn’t have the bean I’ll buy it still. It’s not needed for me I’m not going to pass on it because it’s not there. How many people need to look at it to say yup that’s a coin. Spend your money how you want but I don’t let a bean stop me or help me make a decision. Done or we will be here all day. 😉
I am not afraid to buy a coin based on eye appeal factors and contact marks if it’s not too expensive. What I am more concerned about is missing pvc high point friction putty etc. Can you spot all these issues?
CAC has established itself in the market, and is definitely qualified, and established, as a market maker. This debate is purely academic. Cheers, RickO
@Walkerguy21D said:
Hmm, I just attended winter FUN, and I didn’t see hundreds of dealers with many CAC stickered coins. I saw several dealers with many CAC coins, more dealers that had a few/some, and many more that had none. Maybe they were all the ones who skipped the show 😉
Anyway, my point was that there is a very large segment of the market that CAC isn’t a part of. For every Legend, there are many more guys who rarely deal in CAC coins, if at all.
Which gets back to the OP’s original point.
Exactly, that was my point despite semantics of the term 'market maker' that apparently I misused. The point I was making is, despite my interest in coins with CAC stickers and their very limited availability, only relatively few dealers can make a living solely selling them, most of the numismatic market has nothing to do with CAC stickers, and to me this was an interesting realization given all of the hype built up about CAC. Don't get me wrong, I am a big supporter of what they do but just sayin'.
I'm not anti CAC or a basher, and I own some CAC'd coins - I just don't seek them out, or pay a premium for them.
JA does a good job, and likely provides added assurance for those spending the big bucks - and for those who choose to make a market in them, more power to 'em. The pie is big enough for everyone to have a slice.
@ricko said:
CAC has established itself in the market, and is definitely qualified, and established, as a market maker. This debate is purely academic. Cheers, RickO
Correct. The term market maker does not technically apply in numismatics because we are not trading securities. But the intent of CAC is to influence the pricing and availability by certifying high end rare coins and they have been very successful.
@ricko said:
CAC has established itself in the market, and is definitely qualified, and established, as a market maker. This debate is purely academic. Cheers, RickO
Correct. The term market maker does not technically apply in numismatics because we are not trading securities. But the intent of CAC is to influence the pricing and availability by certifying high end rare coins and they have been very successful.
The first part of your post is not accurate. They will bid on CAC coins and provide liquidity to sellers and coins to buyers. They are literally "making a market".
@ricko said:
CAC has established itself in the market, and is definitely qualified, and established, as a market maker. This debate is purely academic. Cheers, RickO
Correct. The term market maker does not technically apply in numismatics because we are not trading securities. But the intent of CAC is to influence the pricing and availability by certifying high end rare coins and they have been very successful.
The first part of your post is not accurate. They will bid on CAC coins and provide liquidity to sellers and coins to buyers. They are literally "making a market".
I think he was saying that in the narrow sense, the term “market maker” is restricted to making markets in securities, and rare coins aren’t securities. That doesn’t mean that CAC and others aren’t making markets in rare coins, however. And some definitions I’ve seen use the term more broadly than others, anyway.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
@ricko said:
CAC has established itself in the market, and is definitely qualified, and established, as a market maker. This debate is purely academic. Cheers, RickO
Correct. The term market maker does not technically apply in numismatics because we are not trading securities. But the intent of CAC is to influence the pricing and availability by certifying high end rare coins and they have been very successful.
The first part of your post is not accurate. They will bid on CAC coins and provide liquidity to sellers and coins to buyers. They are literally "making a market".
I think he was saying that in a technical sense, the term “market maker” is restricted to making markets in securities, and rare coins aren’t securities. That doesn’t mean that CAC and others aren’t making markets in rare coins, however.
I understand, but even as a technical term, I would suggest that restricting market making to securities is too narrow. There are market makers in all sorts of assets that are not considered securities, e.g., bank loans, real estate, gold/bullion, and, of course, rare coins.
With regard to market impact rather than market maker, hasn't an important result of CAC (along with the introduction of plus grades) been to promote more of a continuum of prices along the grade curve, so that the sometimes absurd price jumps from one grade to another have been smoothed out a bit. It has helped the market accept the concept, for example, that a high end MS64 is almost as nice, or in some cases and to some eyes, nicer, than a low end MS65. This is clearly a positive development.
Just finished my bottle last week. It was a gift from my mom that she picked up when she visited the Makers Mark distillery. She got to dip the bottle in the red wax. Good stuff. I will have to replace it soon. Saw some neat bottles at the local store. Makers Mark made the store a few special bottles that are aged a number of years.
Op you have a good point and the analysis to back it up. Last time I checked CAC only 7 pct certified coins on eBay.
I sold off my CAC coins ages ago. Made good money on them. Would have no prob buying some at my price.
However my focus has changed mainly to World Material and Currency so CAC a moot issue for me.
So the Cac hobbyists will need invite somebody else to their party. Example: Per my CPG (retail) 1st Qtr Review a MS65 Saint is $2490 (Non CAC) and $3480 CAC. That’s a premium of $990, common coin. If floats your boat it’s your hobby your money.
I am sure there are a lot of them who have made money on CAC coins especially if they already had material to get stickered (send in coins to CAC). The total (or real) coin market is much more than CAC.
Given the current market, I'm not surprised that there are only a handful of dealers with mostly CAC in their cases, most with a few, and some with none. The CAC coins have largely disappeared in my region, and were likely snapped up at premium prices. In my experience, green beans mean a much quicker sell. I have not measured the time difference in inventory, but all of the CAC coins (already stickered, not made later by me) I bought from Chicago ANA last August were gone within a month at local shows. Some of the other non-CAC coins languished and were eventually wholesaled. Common question was why those did not also have stickers.
Yes, many coins that CAC considers will remain raw or slabbed and never stickered, or don't make economic sense to send in, while other coins benefit immensely on the market from submission and passing JA and Shamhart and Co's approval. I buy and sell many coins raw, slabbed, and stickered because I feel they are great coins for whatever they are and whatever grade/condition they are. I also buy coins in non-host holders and raw that I think would make money.
The total coin market, as the previous post said, is more than CAC and will and always should be. But the total coin market isn't a monolith, and is made up of many different mini-markets that have ups and downs and currently the CAC market like many other niches is up. Way up. Smaller premiums are now much larger. Certain types of holders (doilies, NGC white labels) are getting moon money. Narrow and obscure items I used to collect and would languish as BINs on eBay are skyrocketing and flying as soon as posted.
The real conclusion of these CAC threads should be to each their own. If you like the coin (not the sticker) and the price is great, buy it! If not, don't. That applies to all coins.
GSAs, OBW rolls, Seated, Walkers. Anything old and Colorado-focused, CO nationals.
@Joey29 said:
Not true. Many knowledgeable collectors can’t necessarily catch all pvc and high point friction and putty and surface issues that may not be apparent.
I love PVC & some other Alt-surf saints. (you can sort-of see under putty w/ a strong enough light)
CAC won't bean them and dealers will do anything to get rid of them. (some probably think they buried me)
It's like a 1/2 price sale
PCGS charges less than $100 to expertly conserve/regrade/re-holder it. It's one of the best deals in numismatics.
So far as cabinet friction on a saint goes....Even a lot of MS67's have it. It ain't no biggie.
@Joey29 said:
Not true. Many knowledgeable collectors can’t necessarily catch all pvc and high point friction and putty and surface issues that may not be apparent.
I love PVC & some other Alt-surf saints. (you can sort-of see under putty w/ a strong enough light)
CAC won't bean them and dealers will do anything to get rid of them. (some probably think they buried me)
It's like a 1/2 price sale
PCGS charges less than $100 to expertly conserve/regrade/re-holder it. It's one of the best deals in numismatics.
So far as cabinet friction on a saint goes....Even a lot of MS67's have it. It ain't no biggie.
So you like to upgrade problem coins? But not all collectors are into that game.
Btw Saints don’t have cabinet friction, they have stacking marks. I don’t believe the TPG services will grade Saints 67 with any dull wear type stacking marks. Or CAC. I think at 67 or more they need to be at least shiny or fully frosted preferably.
@Joey29 said:
Not true. Many knowledgeable collectors can’t necessarily catch all pvc and high point friction and putty and surface issues that may not be apparent.
I love PVC & some other Alt-surf saints. (you can sort-of see under putty w/ a strong enough light)
CAC won't bean them and dealers will do anything to get rid of them. (some probably think they buried me)
It's like a 1/2 price sale
PCGS charges less than $100 to expertly conserve/regrade/re-holder it. It's one of the best deals in numismatics.
So far as cabinet friction on a saint goes....Even a lot of MS67's have it. It ain't no biggie.
So you like to upgrade problem coins? But not all collectors are into that game.
Btw Saints don’t have cabinet friction, they have stacking marks. I don’t believe the TPG services will grade Saints 67 with any dull wear type stacking marks. Or CAC. I think at 67 or more they need to be at least shiny or fully frosted preferably.
They could have either one depending on whether they were stacked or stored in a cabinet or both.
@jmlanzaf said:
It is also worth considering that since CAC stickers half the coins or more, if you are seeing less than half of GC or eBay coins being CAC, this might PROVE CAC is a market maker because those coins get bought and sold without going to auction.
This.
When I sold 12 extra PCGS/CAC Lib $2.50's to an East Coast dealer in 2021 I was surprised that none of them were ever listed on their daily email list of available coins. The dealer apparently had ready buyers for all of them and did not need to advertise their availability.
I commonly search a major auction house's listings to add $2.50's to my PCGS/CAC Only set.....with little success. I have concluded that better date collector coins I look for in PCGS/CAC are offered to specialist dealers and are not consigned to auction houses.
@jmlanzaf said:
It is also worth considering that since CAC stickers half the coins or more, if you are seeing less than half of GC or eBay coins being CAC, this might PROVE CAC is a market maker because those coins get bought and sold without going to auction.
This.
When I sold 12 extra PCGS/CAC Lib $2.50's to an East Coast dealer in 2021 I was surprised that none of them were ever listed on their daily email list of available coins. The dealer apparently had ready buyers for all of them and did not need to advertise their availability.
I commonly search a major auction house's listings to add $2.50's to my PCGS/CAC Only set.....with little success. I have concluded that better date collector coins I look for in PCGS/CAC are offered to specialist dealers and are not consigned to auction houses.
There's no doubt that a great part of really nice PCGS/CAC coins that come to market never appear among dealers' public offerings. They get sold "behind the curtain" to customers well known to the dealer to be seeking such items. If I were a dealer, that's the way I'd operate.
Let's look at this in another way perhaps. No one would disagree that Morgan's are a big part of the numismatic market of US coins?
OK let's look at the numbers.
For example, let's take the common 1881-S and compare numbers:
All 1881-S CAC with + coins added into pop bc CAC lumps them: 65 (n=1740), 66 (n=1888), 67 (n=1051)
All 1881-S PCGS grading events 65 and 65+ (n=58,560), 66 and 66+ (n=16,077), 67 and 67+ (n=3,171)
All 1881-S NGC grading events 65 (n=58,084), 66 (n=19,020), 67 and 67+ (n=4,777)
1881-S total grading events PCGS+NGC:
65 - 116,644
66 - 35,097
67 - 7,948
We will assume that the pop reports bc of crack outs, etc. inflates the totals by 30%. This may or may not be accurate, could be as much as half(?), or maybe less but it provides a reasonable(?) estimate of extant coins out there.
Then taking CAC grading events and correcting the NGC and PCGS totals to 70% (factor of 0.7) to remove the duplicate events:
65 -1740/(116644 x 0.7) = 2.1%
66 - 1888/(35097 x 0.7) = 7.7%
67 - 1051/(7948 x 0.7) = 18.9%
Those numbers will move up or down abit depending on the true amount of extant coins in PCGS and CAC holders.
But what this shows is 1) that coins in the few hundred dollar range like the 65 and 66 1881-S Morgans, CAC has stickered a few percent of the available coins and certainly <10% of the total no matter how one chooses to roll the dice for grading events versus extant coins. Assuming a 40% success rate frequently quoted, then maybe they have seen 10-15% of these few hundred dollar valued US coins but they don't seem to have a big market share in these.
2) Not surprisingly, for higher valued coins, the percentage of the CAC coins goes up and I am sure we can find some coins where 40% or more of the total estimates in PCGS and NGC coins for a given expensive date and grade for a type has CAC stickers, meaning CAC has seen most of them, and have a significant market share.
So yes within their area of the US coin market, for coins over $1K, they are a big player and likely 10's of % of the total coins out there have CAC stickers and most probably have passed through CAC evaluation. But that in of itself is a particular niche of the total numismatic market - currency, tokens, medals, modern, type US, details, ANACS, ICG, raw, etc. etc. and world for all of these too.
So these numbers seem to be consistent with auction listings, ebay listings, dealer websites, and dealer offerings at coins shows. So sure there may be private treaty purchases and yes auctions may have a paucity of CAC coins bc of this, but overall it seems that CAC stickered coins are what they are perceived to be, an active part of the >$1K coins within their area of stickering. No surprises there but that is a very limited part of the total numismatic market. I now see why so few dealers have large amounts of CAC stickered coins, and how challenging it is for the dealers that do to find them. But it also bespeaks to their limited niche in the whole numismatic market place which was the point of my first post even if I got semantics wrong for some terms.
Disclaimer again, I like CAC and what they do within their niche, just analyzing things to understand and going beyond the hype.......
Disclaimer again, I like CAC and what they do within their niche, just analyzing things to understand and going beyond the hype.......
DisneyFan
A through analysis!
I don't know how easy it is to differentiate between 65, 66, & 67 1881-S Morgan dollars. If it is, the collecting population may not feel the need to obtain a CAC especially when these coins are plentiful. Another factor is the PCGS price guide puts the value of these coins at $250, $375 and $1,100. Is it worth the effort and lead time to obtain the CAC valuation of $260, $381 & $1,100?
On the other hand, early date Walkers are scarce and difficult to grade. A CAC helps confirm the grade. CAC populations of early Walkers are also low, perhaps deservingly so.
This is actually a decent thread. I've never submitted to CAC, but do have some stickered coins in my collection.
As for "market making", CAC has definitely affected the pricing of MS Saints, especially in the grades of MS-66 and above. The 1928 is a very common date in the series, but you aren't going to get a stickered coin in 66 for anywhere near PCGS price guide, especially if it's a luster bomb. I have yet to see an MS-66 or higher Saint with a gold CAC sticker. I can only imagine the insanity that would ensue if one went up for auction.
Nice coins tend to sell for more (raw, single-certified, multi-certified).
CAC coins apparently sell for more.
CAC coins apparently tend to be nice.
So if a coin sells for a strong price, is it really because it is CAC, or simply because it is a nice coin ?
This reminds me of the debate about going to college. They say that people who go to college earn a lot more in their lifetime than those that don't. But smart people go to college at a greater frequency. So when a college graduate earns more money in their lifetime, is it because they went to college, or is it simply because they are smarter ?
@dcarr said:
Nice coins tend to sell for more (raw, single-certified, multi-certified).
CAC coins apparently sell for more.
CAC coins apparently tend to be nice.
So if a coin sells for a strong price, is it really because it is CAC, or simply because it is a nice coin ?
This reminds me of the debate about going to college. They say that people who go to college earn a lot more in their lifetime than those that don't. But smart people go to college at a greater frequency. So when a college graduate earns more money in their lifetime, is it because they went to college, or is it simply because they are smarter ?
It is a myth that "smarter" people go to college. A lot of it is socioeconomic and not based on basic intellect. Now, if you amend that to "motivated" or "driven" people go to college in larger numbers, then we might agree.
It is a myth that "smarter" people go to college. A lot of it is socioeconomic and not based on basic intellect. Now, if you amend that to "motivated" or "driven" people go to college in larger numbers, then we might agree.
Basically agree; but, there are always those "C" students demanding an "A" because they need it.
It's about liquidity, risk management, not losing money or getting stuck with coins in their plastic tombs and final resting place. Also there is a lot of "look what I've got" with having coins in the right holder and the right approvals.
It is a myth that "smarter" people go to college. A lot of it is socioeconomic and not based on basic intellect. Now, if you amend that to "motivated" or "driven" people go to college in larger numbers, then we might agree.
Basically agree; but, there are always those "C" students demanding an "A" because they need it.
Yes, but I'm not sure that is any kind of disagreement.
@Weiss said:
I don't consider CAC a "market maker" any more than I consider PCGS or NGC a "market maker".
Why don’t you consider CAC to be a market maker? They make markets in/buy and sell CAC coins. PCGS and NGC don’t.
CAC is the definition of a market maker. Although as we saw in a prior thread, people feel free to redefine the term "market maker".
One of the few things I'm not enthusiastic about is the CAC role as market maker as well as certifier. There is a bit of subjectivity present as well a at least a potential conflict of interest.
Comments
You’re misunderstanding the definition of market maker. See what others such as MFeld have said.
Choice Numismatics www.ChoiceCoin.com
CN eBay
All of my collection is in a safe deposit box!
The term "market maker" means their activity has a dramatic impact on the market as a whole. How large is the coin market? What percentage of that market constitutes CAC coins? How does the pricing of CAC coins impact the pricing of non-CAC coins?
You are confusing "market maker" with "market mover". @ms71, @MFeld and others have accurately described the role of a market maker earlier in this thread.
While the activity of a “market maker” can have a dramatic impact on the market as a whole, that’s not what the term means. Market participants can have major impacts without being market makers. And market makers don’t necessarily have such impacts on the market.
“Market Maker Definition - Investopedia
What Is a Market Maker?
The term market maker refers to a firm or individual who actively quotes two-sided markets in a particular security, providing bids and offers (known as asks) along with the market size of each. Market makers provide liquidity and depth to markets and profit from the difference in the bid-ask spread. They may also make trades for their own accounts, which are known as principal trades.”
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Hoard the keys.
LOL. Fair enough.
All that indicates is the market/niche he’s chosen for his business. Hundreds of dealers always have many coins with CAC stickers. I think Legend Numismatics does quite well selling mostly coins with CAC’s.
Steve
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
Also NOT what market maker means:
mar·ket mak·er
/ˈmärkət ˌmākər/
noun
1.
a dealer in securities or other assets who undertakes to buy or sell at specified prices at all times.
Hmm, I just attended winter FUN, and I didn’t see hundreds of dealers with many CAC stickered coins. I saw several dealers with many CAC coins, more dealers that had a few/some, and many more that had none. Maybe they were all the ones who skipped the show 😉
Anyway, my point was that there is a very large segment of the market that CAC isn’t a part of. For every Legend, there are many more guys who rarely deal in CAC coins, if at all.
Which gets back to the OP’s original point.
Often, coins go through a dealer from one collection to another, without ever being offered publicly. Why would a dealer pay a fee to have somebody sell their coins for them when they can retail them directly to the buyers who want them?
Are those coins part of "the real market"?
Forgive me for screwing up the terms. That said, how much influence does CAC have on the coin market as a whole? Is it significant or is their influence pretty much limited to a small segment of the coin market?
It's huge in dollars and other segments that they choose to make market in. It is minor in things like tokens, early Federal and, I think, Barber coinage.
They buy and sell a lot of coins. They just don't retail any. Which is why most people don't realize what they are doing.
I don’t pay attention to CAC stickers. If a coin has it fine, if it doesn’t that’s fine too. I’ll bid or offer what I feel is a fair price. If somebody else wants to pay more because of a sticker that’s fine too. I know I have one sticker. It’s on the one proof buffalo I have. It’s my avatar to the left a PCGS 1937 PR67+.
CACs are not relevant with inexpensive or modern coins. CAC has the greatest influence with the coin "not in hand" market; i.e. coins sold through the mail. A coin (not extremely rare ones) without a CAC can realize a deeply discount price in an auction regardless of how good its picture appears; whereas, a CAC coin will sell close to or exceed a price guide price.
I know I have one sticker. It’s on the one proof buffalo I have. It’s my avatar to the left a PCGS 1937 PR67+.
A wise decision to have that CAC on that coin.
I am not afraid to buy a coin based on eye appeal factors and contact marks if it’s not too expensive. What I am more concerned about is missing pvc high point friction putty etc. Can you spot all these issues?
CAC has established itself in the market, and is definitely qualified, and established, as a market maker. This debate is purely academic. Cheers, RickO
I think it just means most collectors actually collect the coin and could care less about a silly little sticker. Crazy world!
Exactly, that was my point despite semantics of the term 'market maker' that apparently I misused. The point I was making is, despite my interest in coins with CAC stickers and their very limited availability, only relatively few dealers can make a living solely selling them, most of the numismatic market has nothing to do with CAC stickers, and to me this was an interesting realization given all of the hype built up about CAC. Don't get me wrong, I am a big supporter of what they do but just sayin'.
Best, SH
Thanks Al, I thought I knew what you meant....
I'm not anti CAC or a basher, and I own some CAC'd coins - I just don't seek them out, or pay a premium for them.
JA does a good job, and likely provides added assurance for those spending the big bucks - and for those who choose to make a market in them, more power to 'em. The pie is big enough for everyone to have a slice.
Correct. The term market maker does not technically apply in numismatics because we are not trading securities. But the intent of CAC is to influence the pricing and availability by certifying high end rare coins and they have been very successful.
CAC is nice for newbs.
If you buy something and later find that you've made a mistake, you can dump it more easily.
So far as advanced collecting goes, a person should need less hand-holding.
My Saint Set
The first part of your post is not accurate. They will bid on CAC coins and provide liquidity to sellers and coins to buyers. They are literally "making a market".
I think he was saying that in the narrow sense, the term “market maker” is restricted to making markets in securities, and rare coins aren’t securities. That doesn’t mean that CAC and others aren’t making markets in rare coins, however. And some definitions I’ve seen use the term more broadly than others, anyway.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
There are absolutely Market Makers for coins.
I understand, but even as a technical term, I would suggest that restricting market making to securities is too narrow. There are market makers in all sorts of assets that are not considered securities, e.g., bank loans, real estate, gold/bullion, and, of course, rare coins.
With regard to market impact rather than market maker, hasn't an important result of CAC (along with the introduction of plus grades) been to promote more of a continuum of prices along the grade curve, so that the sometimes absurd price jumps from one grade to another have been smoothed out a bit. It has helped the market accept the concept, for example, that a high end MS64 is almost as nice, or in some cases and to some eyes, nicer, than a low end MS65. This is clearly a positive development.
OK. This thread is leading me to:
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Just finished my bottle last week. It was a gift from my mom that she picked up when she visited the Makers Mark distillery. She got to dip the bottle in the red wax. Good stuff. I will have to replace it soon. Saw some neat bottles at the local store. Makers Mark made the store a few special bottles that are aged a number of years.
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$5 Type Set https://www.pcgs.com/setregistry/u-s-coins/type-sets/half-eagle-type-set-circulation-strikes-1795-1929/album/344192
CBH Set https://www.pcgs.com/setregistry/everyman-collections/everyman-half-dollars/everyman-capped-bust-half-dollars-1807-1839/album/345572
Op you have a good point and the analysis to back it up. Last time I checked CAC only 7 pct certified coins on eBay.
I sold off my CAC coins ages ago. Made good money on them. Would have no prob buying some at my price.
However my focus has changed mainly to World Material and Currency so CAC a moot issue for me.
So the Cac hobbyists will need invite somebody else to their party. Example: Per my CPG (retail) 1st Qtr Review a MS65 Saint is $2490 (Non CAC) and $3480 CAC. That’s a premium of $990, common coin. If floats your boat it’s your hobby your money.
I am sure there are a lot of them who have made money on CAC coins especially if they already had material to get stickered (send in coins to CAC). The total (or real) coin market is much more than CAC.
Given the current market, I'm not surprised that there are only a handful of dealers with mostly CAC in their cases, most with a few, and some with none. The CAC coins have largely disappeared in my region, and were likely snapped up at premium prices. In my experience, green beans mean a much quicker sell. I have not measured the time difference in inventory, but all of the CAC coins (already stickered, not made later by me) I bought from Chicago ANA last August were gone within a month at local shows. Some of the other non-CAC coins languished and were eventually wholesaled. Common question was why those did not also have stickers.
Yes, many coins that CAC considers will remain raw or slabbed and never stickered, or don't make economic sense to send in, while other coins benefit immensely on the market from submission and passing JA and Shamhart and Co's approval. I buy and sell many coins raw, slabbed, and stickered because I feel they are great coins for whatever they are and whatever grade/condition they are. I also buy coins in non-host holders and raw that I think would make money.
The total coin market, as the previous post said, is more than CAC and will and always should be. But the total coin market isn't a monolith, and is made up of many different mini-markets that have ups and downs and currently the CAC market like many other niches is up. Way up. Smaller premiums are now much larger. Certain types of holders (doilies, NGC white labels) are getting moon money. Narrow and obscure items I used to collect and would languish as BINs on eBay are skyrocketing and flying as soon as posted.
The real conclusion of these CAC threads should be to each their own. If you like the coin (not the sticker) and the price is great, buy it! If not, don't. That applies to all coins.
Gonna get me a $50 Octagonal someday. Some. Day.
Not true. Many knowledgeable collectors can’t necessarily catch all pvc and high point friction and putty and surface issues that may not be apparent.
I love PVC & some other Alt-surf saints. (you can sort-of see under putty w/ a strong enough light)
CAC won't bean them and dealers will do anything to get rid of them. (some probably think they buried me)
It's like a 1/2 price sale
PCGS charges less than $100 to expertly conserve/regrade/re-holder it. It's one of the best deals in numismatics.
So far as cabinet friction on a saint goes....Even a lot of MS67's have it. It ain't no biggie.
My Saint Set
Btw Saints don’t have cabinet friction, they have stacking marks. I don’t believe the TPG services will grade Saints 67 with any dull wear type stacking marks. Or CAC. I think at 67 or more they need to be at least shiny or fully frosted preferably.
They could have either one depending on whether they were stacked or stored in a cabinet or both.
This.
When I sold 12 extra PCGS/CAC Lib $2.50's to an East Coast dealer in 2021 I was surprised that none of them were ever listed on their daily email list of available coins. The dealer apparently had ready buyers for all of them and did not need to advertise their availability.
I commonly search a major auction house's listings to add $2.50's to my PCGS/CAC Only set.....with little success. I have concluded that better date collector coins I look for in PCGS/CAC are offered to specialist dealers and are not consigned to auction houses.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
There's no doubt that a great part of really nice PCGS/CAC coins that come to market never appear among dealers' public offerings. They get sold "behind the curtain" to customers well known to the dealer to be seeking such items. If I were a dealer, that's the way I'd operate.
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Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't no optical illusion, it only looks like an optical illusion.
My mind reader refuses to charge me....
Let's look at this in another way perhaps. No one would disagree that Morgan's are a big part of the numismatic market of US coins?
OK let's look at the numbers.
For example, let's take the common 1881-S and compare numbers:
All 1881-S CAC with + coins added into pop bc CAC lumps them: 65 (n=1740), 66 (n=1888), 67 (n=1051)
All 1881-S PCGS grading events 65 and 65+ (n=58,560), 66 and 66+ (n=16,077), 67 and 67+ (n=3,171)
All 1881-S NGC grading events 65 (n=58,084), 66 (n=19,020), 67 and 67+ (n=4,777)
1881-S total grading events PCGS+NGC:
65 - 116,644
66 - 35,097
67 - 7,948
We will assume that the pop reports bc of crack outs, etc. inflates the totals by 30%. This may or may not be accurate, could be as much as half(?), or maybe less but it provides a reasonable(?) estimate of extant coins out there.
Then taking CAC grading events and correcting the NGC and PCGS totals to 70% (factor of 0.7) to remove the duplicate events:
65 -1740/(116644 x 0.7) = 2.1%
66 - 1888/(35097 x 0.7) = 7.7%
67 - 1051/(7948 x 0.7) = 18.9%
Those numbers will move up or down abit depending on the true amount of extant coins in PCGS and CAC holders.
But what this shows is 1) that coins in the few hundred dollar range like the 65 and 66 1881-S Morgans, CAC has stickered a few percent of the available coins and certainly <10% of the total no matter how one chooses to roll the dice for grading events versus extant coins. Assuming a 40% success rate frequently quoted, then maybe they have seen 10-15% of these few hundred dollar valued US coins but they don't seem to have a big market share in these.
2) Not surprisingly, for higher valued coins, the percentage of the CAC coins goes up and I am sure we can find some coins where 40% or more of the total estimates in PCGS and NGC coins for a given expensive date and grade for a type has CAC stickers, meaning CAC has seen most of them, and have a significant market share.
So yes within their area of the US coin market, for coins over $1K, they are a big player and likely 10's of % of the total coins out there have CAC stickers and most probably have passed through CAC evaluation. But that in of itself is a particular niche of the total numismatic market - currency, tokens, medals, modern, type US, details, ANACS, ICG, raw, etc. etc. and world for all of these too.
So these numbers seem to be consistent with auction listings, ebay listings, dealer websites, and dealer offerings at coins shows. So sure there may be private treaty purchases and yes auctions may have a paucity of CAC coins bc of this, but overall it seems that CAC stickered coins are what they are perceived to be, an active part of the >$1K coins within their area of stickering. No surprises there but that is a very limited part of the total numismatic market. I now see why so few dealers have large amounts of CAC stickered coins, and how challenging it is for the dealers that do to find them. But it also bespeaks to their limited niche in the whole numismatic market place which was the point of my first post even if I got semantics wrong for some terms.
Disclaimer again, I like CAC and what they do within their niche, just analyzing things to understand and going beyond the hype.......
Best, SH
DisneyFan
A through analysis!
I don't know how easy it is to differentiate between 65, 66, & 67 1881-S Morgan dollars. If it is, the collecting population may not feel the need to obtain a CAC especially when these coins are plentiful. Another factor is the PCGS price guide puts the value of these coins at $250, $375 and $1,100. Is it worth the effort and lead time to obtain the CAC valuation of $260, $381 & $1,100?
On the other hand, early date Walkers are scarce and difficult to grade. A CAC helps confirm the grade. CAC populations of early Walkers are also low, perhaps deservingly so.
This is actually a decent thread. I've never submitted to CAC, but do have some stickered coins in my collection.
As for "market making", CAC has definitely affected the pricing of MS Saints, especially in the grades of MS-66 and above. The 1928 is a very common date in the series, but you aren't going to get a stickered coin in 66 for anywhere near PCGS price guide, especially if it's a luster bomb. I have yet to see an MS-66 or higher Saint with a gold CAC sticker. I can only imagine the insanity that would ensue if one went up for auction.
10-4,
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From what I can figure CAC about 7 pct slabbed coins on eBay. Not exactly a black black hole devouring the galaxy.
I have sold all my CAC doing well. I can see them as a market maker with their pricing system reflected by CAC and CDN.
As far as some desire replace - not at this time. The direction of the economy has limited my bidding / purchases.
Have moved more to bullion, mods, world, currency.
Nice coins tend to sell for more (raw, single-certified, multi-certified).
CAC coins apparently sell for more.
CAC coins apparently tend to be nice.
So if a coin sells for a strong price, is it really because it is CAC, or simply because it is a nice coin ?
This reminds me of the debate about going to college. They say that people who go to college earn a lot more in their lifetime than those that don't. But smart people go to college at a greater frequency. So when a college graduate earns more money in their lifetime, is it because they went to college, or is it simply because they are smarter ?
It is a myth that "smarter" people go to college. A lot of it is socioeconomic and not based on basic intellect. Now, if you amend that to "motivated" or "driven" people go to college in larger numbers, then we might agree.
Basically agree; but, there are always those "C" students demanding an "A" because they need it.
I don't consider CAC a "market maker" any more than I consider PCGS or NGC a "market maker".
--Severian the Lame
It's about liquidity, risk management, not losing money or getting stuck with coins in their plastic tombs and final resting place. Also there is a lot of "look what I've got" with having coins in the right holder and the right approvals.
Why don’t you consider CAC to be a market maker? They make markets in/buy and sell CAC coins. PCGS and NGC don’t.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Yes, but I'm not sure that is any kind of disagreement.
CAC is the definition of a market maker. Although as we saw in a prior thread, people feel free to redefine the term "market maker".
One of the few things I'm not enthusiastic about is the CAC role as market maker as well as certifier. There is a bit of subjectivity present as well a at least a potential conflict of interest.
To court controversy.
--Severian the Lame