Price Guide Updates and Grading Variation
JMoo100
Posts: 112 ✭✭
Do you think that published price guides account for 'quality for the grade' when setting their prices. I would assume that coins that are unsatisfactory for the grade trade hands more frequently than coins that are nicer for their grade. If this is in fact true and the pricing guides do not account for coin quality (w/in a given grade), it would seem that lower quality coins are over-represented in the pricing algorithm and therefore depressing the published prices. More are than science here, and I am learning to buy coins and not holders, but am interested in folks' thoughts on the above.
I generally try to account for this by reviewing auction prices realized and the associated coins' photos to account for this in my grading process. That said, when I have gone to sell coins to dealers, they often cling to the price guide without evaluating the coins quality relative to other coins of the same grade.
Comments
Also, a second follow-on question. What do folks make of John Alabanese CAC coin price guide? Where does it fall on the Gretysheet (whole sale) to PCGS (pricey retail) continuum?
Greysheet and the CAC price guide are published by the same people.
No dealer is going to spend time assessing the coin unless it is their specialty or they have a market for it. A lot of coins change hands dealer to dealer. That is the "safe price".
Also, keep in mind that everyone thinks their babies are beautiful. Dealers eyes are a bit more jaded.
I'm curious why you would make this assumption. Lots of people are selective about what they will buy and "nicer for the grade" coins can be easier to sell than the dogs are.
Because people cull the dogs more quickly than their favorites.
But it really depends on the genre. If you're buying 5 figure condition census coins, they are all scarce and don't trade hands frequently. On the other hand, if you buy AU Morgans...
There are quite a few series where most of the nicer coins are traded in a fashion where the price guides can't see the sales, that affirms your thoughts from me. I'm not seeing a whole lot of what I would call PQ coins hitting the auctions. Heritage has a ton Seated Dollars coming up and most are Meh!
Makes sense, but how many times can you profitably do that? Is there that much meat on the bone?
The people who churn their collections aren't making money
I don't expect they do, but I'm talking about the individual coins. Once they've sold the dogs, how many more times can each be profitably sold?
Depends on the time scale.
Wouldn't the same thing be true for coins that are nicer for their grade?
Yes. Except they may stay in a collection for a generation.
What % are CACs?
While I don’t know the answer to the OP, I think there’s a lot to be said for the theory posed. That is, it seems to make sense that as a generalization, the nicer coins for the grade tend to stay in collections longer, hence appear in auction less frequently, where the less attractive coins in a grade probably appear more frequently, and therefore have a greater influence on pricing guides. I know Rick Snow agrees with this.
Separately, after I paid high prices for a couple of coins in auctions due to their high eye appeal, I asked John Feigenbaum specifically if these purchases can/will have an impact on his pricing of these coins in his pricing model. He replied that because of the real nice eye appeal of these coins, they were “outliers”, and as such would not be used for pricing adjustments.
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
I always figured the guides represented the bulk of the bell curve, meaning mostly average for the grade. Both ends get chopped off and everything in the middle is worth roughly the same. A lot coins are plentiful enough for the guides to be good and then there are specialty markets where they lag behind what those who are really involved know what’s actually going on. I think most people accept that really PQ coins aren’t represented by the guides (maybe excluding CAC guide because they should all be fairly PQ?). Also, dogs are dogs and people don’t usually pay full price for those, either.
I think this is correct.
That's also why price guides are not very helpful for truly scarce coins.
@JMoo100... If I were a dealer, the information you are seeking would be important. As a casual collector, I buy what I like and if the price is acceptable. I do know the general price ranges on coins I am interested in, and certainly seek bargains. However, a really nice coin could get me to stretch a bit. Just my collector point of view. Cheers, RickO
First of all not some digital guy set in concrete:
Price guides are merely a guideline / point in time, subject to change due to market conditions.I refer to CF (PCGS), CPG (based on CDN bid), BNR, and CP (coin prices). However cost plus is a major component in my pricing process if not the main driver. CPG has both prices for CAC and non CAC material (A&B coins get sticker, C don’t).
As far as generalizations about price guides I have no use for that kind of convo / speculation / generalizations. Often IMO it reflects the bias or ignorance of the poster. Each coin unique both A,B,C (grade range) and subject to PQ pricing factors based on the expertise of the dealer - PQ, Super Luster, Toning, Pedigree, low pop (world), low end, market factors, cost plus etc.
My approach to pricing from a big picture overview of the item (not some digital player). I may also review auction data, what online sellers asking. So I am not some digital play caller - it’s not just the formation it’s also how the QB reads the defense (individual item, market conditions).
Each PG has its particular appeal to me: PCGS (my Pcgs inventory on my phone plus CF), CPG (based on CDN), Coin Prices (bullion coins, on one page by date, denomination plus their super Market Watch Overview by Richard Giedroc). So with all that I can develop a good big picture / playcall.
Too bad they couldn't be utilized for "+" values.
Agreed, but neither CDN nor CAC recognize “+” grades. As such, not only they don’t provide pricing for those grades, I believe they ignore sales of coins in plus grades to determine their pricing for whole grade numbers. I agree those plus grade sale prices should indeed be ignored for their pricing models.
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
I understand. I was thinking more in terms of the PCGS' price guide which of course, John F does not oversee. To my way of thinking, the PCGS "+" pricing gives some guidance as to how far I want to go over CAC's guidance.
Here is an example for you. I found a really nice CAC coin that I felt was very undervalued by the price guides in terms of the relative populations in that series. PCGS put the value at $825, CAC $1020. I paid, hard swallow, $1,435.00!!! I think at the price I paid, it's still undervalued. Now the PCGS "+" value was $3,750!!! Granted my coin is not a "+"; but that's an abnormal spread between a straight grade and a "+." Then someday there is always the possibility of a RECONSIDERATION as it is in a "Series" era holder. : )
@DisneyFan , I fully agree. Your coin is not YET a plus, but maybe it can be. The PCGS quarterly special gives you one free, pay for four. Several of my nicer coins I send in for Reconsideration, and occasionally I get a plus, and sometimes, as you correctly point out, the pricing differential for a plus is surprisingly large.
Yes, the PCGS Price Guide showing plus values is a tremendous “quick” help. Looking at prices realized of plus coin sales from both PCGS auction archives and GC auction archives is better, but just takes more time.
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
I don’t believe outliers (bid war, etc) should be part of a price guide. As I said previously coins that are exceptionally PQ would be marked up accordingly by the dealer based on his experience / expertise in the business. In another thread somebody bid up a $100 MS 70 Platinum eagle 4200 over PG more than the coin worth. So reward their nuclear bid by increasing the price guide price? NO way! No interest in subsidizing that lol. Let them be the end user.
If somebody paid too much that should not pollute the price guide. They need take responsibility for the hit not the rest of us. If that’s really valid price show me where you retailed for more on the bourse.
If CAC MV on coin $1020 and somebody paid $1435 imo they overpaid as the CAC price already ramped up. I bought $3500 MV CAC coin deal lot recently from my table at show at my usual cash offer of 70 pct CPG to the seller for $ 2450 then later on flipped to investor at $3300. That’s how I roll.
Actually it's a little more complicated than that. The label is driving the price, not the coin. There were only four recent MS 2008 - W First Strikes selling at GC. All were in that range and the PCGS price guide for this FS label is $7500.
That anecdote proves nothing. If your "investor" went across the room and flipped the deal for $4000, then we know the price guide is incorrect and your slavish adherence to it simply robbed the original seller of hundreds of dollars. The combined ignorance of you and your supplier don't validate the price guide.
JM - oh I am ignorant now lol. Your shooting yourself in the foot. I buy it right then execute my business accordingly. It’s not just getting good retail sales. There are many considering the economy selling out / going to other areas. If you like overpaying we’ll go for it. I just don’t think that should skew price guides. Coins don’t pay dividends. Chasing deals like that is simply a part of my process just as important as sales volume - pays show expenses plus compensates me for my time. Not in the biz for free. My goal optimal operation / maximum time efficiency. Enjoy your coin blog hobby.
When they start calling me names I know they are losing.
Rule # 1 : Never overpay.
Rule # 2: Never overpay.
The OP is correct you have to drill down into the data and analyze.
Yes dealers will cling to CDN and buy wholesale, sell retail that is pure economics.
As far as outliers not influencing pricing I disagree. The Fairmont coins are spectacular circulated specimens and they have rewrote the price guides on liberty gold, from sale to sale.
Also many great collections were formed by overpaying to obtain remarkable specimens.
Different series have different pricing models, it pays to study the availability and demand levels before making general statements.