@FlyingAl said:
The MS63 Kennedy is a great example I think.
The definition of worth - "the value of something measured by its qualities or by the esteem in which it is held." (Webster).
Is it worth $500? Absolutely. Why? Someone paid that much for it. Could it be worth more? Yes. Less? Not at the time it was sold.
Here's my thought process. The worth of something should be the highest value or amount of money (esteem in which is is held) a person wishes to pay for a good or service. That number can vary with person, but that variance doesn't matter - because it is the highest value. Someone paid $500 for the coin. Therefore, it is worth $500. However, someone could come along and pay $600 for it, making the worth higher. If someone offers $400, the worth doesn't drop - someone still wishes to pay $500.
The caveat is this - the worth of an item is subject to time, just like we all are. Hopefully I didn't ramble off into incoherency here.
The variance in price that different buyers are willing to pay does matter, when determining “worth”.
Why would the $500 coin later be worth $600 if someone subsequently offered that for it, but at the same time, still be worth $500 if someone was subsequently willing to pay only $400 for it?
Once a coin has sold (whether privately or publicly via auction) its’ worth isn’t necessarily tied to its previous transaction price. Additionally, while there might be one or more buyers for a coin at a top-dollar price, its’ owner might not know who the high buyers are or how to reach them. For example, even if there are two buyers for your $500 coin at $1000, but you don’t know that or them, is it “worth” $1000?
You're missing the point. If I owned the coin and I showed it to my next door neighbor who knows nothing about coins says "I'd only give you 50c for it" and my neighbor on the other side recognized it as silver and said "It's worth $9 to me", that means nothing about what the coin is worth. Instead it is worth the most, or very close to the most, that a knowledgeable buyer would be willing to pay. If I were to put a coin on the BST and one person offers $400 and another offers $600 the coin is obviously not worth $400 and not even $500, and may even be worth more than $600.
Please give me at least an iota of credit for having a clue about how the market functions. I didn’t miss the point. I was taking issue with the idea that a previous sale price of a coin necessarily establishes a minimum value for it for the future.
Ah, well in that case I completely misunderstood your post. I agree with you strongly and think that dealers who refuse to sell a coin for what it's "worth" because they paid more than that for it are beyond foolish. This is in al fields, not just coins, but we don't see a gas station attempting to sell for $4.59 because that is what it paid when all the other nearby stations are asking $3.99.
In many cases, at least dealers who refuse to sell coins for what they're worth, aren't dealing in commodities, as are gas stations selling gas. So the dealers might have a passable excuse.
Well, you have vastly more experience than I do, but the vast majority of coins are close enough to commodities as to not make a difference (responding to a different post). I mean all silver eagles are, of course, unique, but rolls of, say, 2006 silver eagles are traded as such. Likewise (modern) proof sets or low grade 90%. I've seen an awful lot of small dealers (who are unlikely to have even a single four figure coin, and certainly not many) who act this way.
Of course if we have a coin with special toning, or a rare error or something then it's not a commodity and the dealer can believe that there is someone out there for whom the coin is worth $800 and can justify holding out for that, but really the "$800 coin" is costing the dealer money every day it sits in inventory, and it may be better to sell at $600 and do 10 flips making $20 each with the $600 in the time he'd be waiting for the $800 buyer.
@FlyingAl said:
The MS63 Kennedy is a great example I think.
The definition of worth - "the value of something measured by its qualities or by the esteem in which it is held." (Webster).
Is it worth $500? Absolutely. Why? Someone paid that much for it. Could it be worth more? Yes. Less? Not at the time it was sold.
Here's my thought process. The worth of something should be the highest value or amount of money (esteem in which is is held) a person wishes to pay for a good or service. That number can vary with person, but that variance doesn't matter - because it is the highest value. Someone paid $500 for the coin. Therefore, it is worth $500. However, someone could come along and pay $600 for it, making the worth higher. If someone offers $400, the worth doesn't drop - someone still wishes to pay $500.
The caveat is this - the worth of an item is subject to time, just like we all are. Hopefully I didn't ramble off into incoherency here.
The variance in price that different buyers are willing to pay does matter, when determining “worth”.
Why would the $500 coin later be worth $600 if someone subsequently offered that for it, but at the same time, still be worth $500 if someone was subsequently willing to pay only $400 for it?
Once a coin has sold (whether privately or publicly via auction) its’ worth isn’t necessarily tied to its previous transaction price. Additionally, while there might be one or more buyers for a coin at a top-dollar price, its’ owner might not know who the high buyers are or how to reach them. For example, even if there are two buyers for your $500 coin at $1000, but you don’t know that or them, is it “worth” $1000?
You're missing the point. If I owned the coin and I showed it to my next door neighbor who knows nothing about coins says "I'd only give you 50c for it" and my neighbor on the other side recognized it as silver and said "It's worth $9 to me", that means nothing about what the coin is worth. Instead it is worth the most, or very close to the most, that a knowledgeable buyer would be willing to pay. If I were to put a coin on the BST and one person offers $400 and another offers $600 the coin is obviously not worth $400 and not even $500, and may even be worth more than $600.
Please give me at least an iota of credit for having a clue about how the market functions. I didn’t miss the point. I was taking issue with the idea that a previous sale price of a coin necessarily establishes a minimum value for it for the future.
Yes. The only thing that really matters is what the next person is willing to pay for it.
And to @daltex the definition of "Knowledgeable buyer" appears to be "one who agrees with me". Per the Kennedy coin that launched this thread, there were two buyers at $500+ and yet half of the commenters labeled both of them idiots.
Not at all. A working definition would be "Someone who has done some basic, independent, research to learn what similar items can usually be acquired for." I say "independent" because someone who sees platinum plated statehood quarters on the Home Shopping Club for just $250 for a P&D set and the pitchman waves a computer printout purporting to show them selling on eBay for $800 is not a knowledgeable buyer.
Few coins are so infrequently traded that you can't find good comps. Few of anything are.
@jmlanzaf said:
I sold a run of Moon Knight comics yesterday. Opening bid was $199. An hour before it ended, some generous soul emailed me to offer $170. Hammer price was $243. Clearly, different people have it different values.
In fact, you could argue that auctions work on that principle. Every bidder puts a different value on the item. There was, after all, an underbidder in the GC auction.
Agree.
What I like about eBay is that you can see what each bidder's high bid was.
If my math is correct $3400 seems to be an estimated value with no other info on the specific coins. JMO
PS half of the above 12 coins sold for more than $3240...........and half sold for less than $3240
boston
Additionally,
If we accept this definition for an 'outlier' [there are different definitions] the there are no 'outliers' in the 12 price results.
.
An outlier is defined as any observation in a dataset that is 1.5 IQRs greater than the third quartile or 1.5 IQRs less than the first quartile, where IQR stands for “interquartile range” and is the difference between the first and third quartile.
.
Outliers: none
Minimum: 2402
First quartile: 2760
Median: 3360
Third quartile: 4080
Maximum: 5040
It's not a valid sample size but (for fun!B) using all of the prices @MFeld provided and using a widely accepted standard deviation gives us a mean of $3440 and a standard deviation of ~$221. Using the standard bellcurve distribution of 2σ to represent 95% of a population, the normal distribution of prices should be between $3007-$3873 so, by this measure, there are several outliers.
Of course, it's for naught as we need a larger sample size and some sort of random selection.
I see these prices as being from 3 separate, approximately normal distributions:
A. PCGS MS-65 toned non-CAC: 2760, 2640, 2880
B. PCGS MS-65 CAC: 3720
C. NGC MS-65 untoned, with very few marks in fields: 5040 @MFeld listed [Edit: the slab] attributes, but later posters have left them out.
As for worth of coins, economics defines several different types of values.
In the example of an auction, the winning bid X indicates the underbidder was willing to pay X-increment,
and the winner was willing to pay at least X.
So only the underbidder's full valuation is revealed.
For insurance purposes, we could use "replacement value", i.e. what it would cost to get another if this one is lost or destroyed.
For the purpose of selling in the future, we might want to estimate the distribution of what the coin might sell for at some point in the future.
If the coin will be auctioned, there needs to be that underbidder again, plus the winner who values it more.
So we know this auction attendance can be a significant source of variation.
For holding a coin, we are essentially paying the opportunity cost - what the buy price could return over the time period if invested in some other asset. The full calculation also involves the capital gain or loss.
These all involve uncertain quantities, but we can make a rough estimate.
Also factoring into the amount a person is willing to pay for a coin are their budget and the competing things they are buying with their money. If you have a large budget and are already very happy with your house, car, vacations, etc. then you are happy to spend a lot on coins to get the marginal utility from coins equal to that from the other goods you bought. So the willingness to pay depends on lots of things in addition to how much you like coins.
If my math is correct $3400 seems to be an estimated value with no other info on the specific coins. JMO
PS half of the above 12 coins sold for more than $3240...........and half sold for less than $3240
boston
Additionally,
If we accept this definition for an 'outlier' [there are different definitions] the there are no 'outliers' in the 12 price results.
.
An outlier is defined as any observation in a dataset that is 1.5 IQRs greater than the third quartile or 1.5 IQRs less than the first quartile, where IQR stands for “interquartile range” and is the difference between the first and third quartile.
.
Outliers: none
Minimum: 2402
First quartile: 2760
Median: 3360
Third quartile: 4080
Maximum: 5040
It's not a valid sample size but (for fun!B) using all of the prices @MFeld provided and using a widely accepted standard deviation gives us a mean of $3440 and a standard deviation of ~$221. Using the standard bellcurve distribution of 2σ to represent 95% of a population, the normal distribution of prices should be between $3007-$3873 so, by this measure, there are several outliers.
Of course, it's for naught as we need a larger sample size and some sort of random selection.
I see these prices as being from 3 separate, approximately normal distributions:
A. PCGS MS-65 toned non-CAC: 2760, 2640, 2880
B. PCGS MS-65 CAC: 3720
C. NGC MS-65 untoned, with very few marks in fields: 5040 @MFeld listed these attributes, but later posters have left them out.
I just listed prices realized, without regard to whether the coins were toned.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
A lot of the posters on here will pay over market for a coin/note they feel is worth it. I myself won't. I use greysheet as a guide. I have gone above grey sheet but on average I try not to. I know what dealers will pay and I don't want to get stuck on the losing side of an eventual sale. So I pay what I feel is fair and that could be below grey sheet or slightly above.
But I'm also not a player in the registry set, I have no desire for top pops or crazy high grades that cost thousands more than a comparable coin.
But as to what something is worth, its worth what someone is willing to pay. In some cases its below market and in others its above market. Only you can feel comfortable with what you pay.
Available and disposable income is a driver of perspective often in what one collects and in perception of value. I don’t think there are many killer whales who would be satisfied on a diet of zooplankton.
Seated Half Society member #38 "Got a flaming heart, can't get my fill"
@Catbert said:
Available and disposable income is a driver of perspective often in what one collects and in perception of value.
To a point. Having disposable income doesn't mean that you are going to spend it on coins. I took 2 vacations this year and am planning another soon. My next car is going to be an A5 Cabriolet, but I wouldn't spend $500 on an ugly toned common date 1964 50 cents. Heck for MS63, I would pay spot.
@Catbert said:
Available and disposable income is a driver of perspective often in what one collects and in perception of value. I don’t think there are many killer whales who would be satisfied on a diet of zooplankton.
Blue whales can eat up to 16 tons of plankton daily.
@Catbert said:
....killer whales who would be satisfied on a diet of zooplankton.
The orca or killer whale (Orcinus orca) is a toothed whale belonging to the oceanic dolphin family, of which it is the largest member. So its not really a whale.
The baleen whales (blue whales, right whales, and humpback whales) eat plankton.
I see these prices as being from 3 separate, approximately normal distributions:
A. PCGS MS-65 toned non-CAC: 2760, 2640, 2880
B. PCGS MS-65 CAC: 3720
C. NGC MS-65 untoned, with very few marks in fields: 5040 @MFeld listed these attributes, but later posters have left them out.
I just listed prices realized, without regard to whether the coins were toned.
And I treated them as such. We can of course slice and dice the data however we like. I was (approximating) the range of realized values within MS65 Peace Dollars to attempt to quantify the range of values inclusive of toned/untoned/CAC/PQ/ugly/average coins. However, with enough data, we can easily do the same analysis on MS65 Toned non-CAC, NGC MS65s, or whatever to get the normal range of prices within whatever subset desired.
A coin is worth to me what I am willing to pay for it, but thinking way back to my econ classes I realize that answer would get me scorn from the prof and a failing grade. The prof would expect a graph with economic terms to explain my simplistic position. So I borrowed one:
Collectors operate by trying to obtain excessively high utility on a coin that will, at least for a short time, put the numismatist in a state of nirvana. For regular folks who use coins to make change, this would be some irrational perceived utility. The collector also views the coin at some perceived rarity that will yield the bizarre collecting joy of owning something that everyone else wants.
So the winner of the common Kennedy had the most delusional view of utility of all the bidders, and the perceived rarity was high enough that he thought the toning pattern could not be easily duplicated by natural or artificial means.
Ok, I had a little free time this morning to join this party.
Robert Scot: Engraving Liberty - biography of US Mint's first chief engraver
@1630Boston said:
If I eat lunch during my 12 hour work day [and that's a big IF], it's a peanut
butter sandwich while I drive.
Others at work think nothing of spending $30-$50 per day on lunch and a couple trips to Dunkin Donuts.
I think I'm ahead of the game
.
$40/day x 5 days/week x 52 weeks/year = $10,400.00.....................that could buy some nice coins!
Just my thought.
The above illustration shows where MY coin spending fund comes from.
I have no car and walk to work. I bring supper and 2 snacks every day for breaks. I've been doing that for almost 40 years. I don't drink coffee or use the vending machines for snacks or soda. I don't have any vices like drinking or smoking or taking recreational drugs. I simply save by not spending on things that I don't need.
Until I put it on a spreadsheet for them, my wife and daughter did not realize that they spend over $20,000 per year on eating out and going to Dunkin or Starbucks on a daily basis. Now add to that fuel for their cars and insurance to put it on the road and I have myself a pretty nice coin allowance.
To answer the OP, my collection is simply worth what someone is willing to pay for it. On the other hand, the value to me is "priceless" as it is the cost of my enjoyment and it's worth every penny.
My coins all grade 4 points higher than the TPG says and are worth ten times more than any price guide...
USAF (Ret) 1974 - 1994 - The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries. Remembering RickO, a brother in arms.
Kindly Tom Reynolds was/is a dealer and collector. I often thought his inventory was priced as a reflection of what he felt that were worth as a collector fan of early copper (if that makes any sense). Strong prices/high worth to him from a collector standpoint.
Seated Half Society member #38 "Got a flaming heart, can't get my fill"
Interesting thread! I especially like and can relate to how some of us come up with the funds to purchase. I'm able to forgo many trivial everyday or weekly expenses through habit and to use that money that would have been "wasted" for the enjoyment of my favorite hobby.
To me when purchasing a coin my determination of what it's worth is different than once I actually own it as part of my collection. When I'm contemplating a purchase I determine the worth by factors such as how long the specific coin has been in my search list, and my budget at the given moment of availability.
Once the coin is in my collection it's part of my total outlay on all of my collection and that I value at about 50% of my costs.
When going to sell a coin I try to recover my original cost after selling expenses. I have probably bought about 20 coins for every one that I've sold, so my experience is more with buying and keeping than it is with selling.
I have been known to pay a premium for coins that I find very appealing. My "specialty" is Liberty nickels. I have collected several sets in various grade levels over the years, and I always tend to look for solid strikes first and foremost, because soft strikes are the norm for the series - some years are worse than others. Secondly, I look for unusual - but not crazy toning.
A couple of years ago, I was browsing Ebay out of sheer boredom and happened across this very common year, and low-MS graded V nickel. It was an 1883 "no cents" graded in MS62. The current collection I'm working on are all MS64's, so ordinarily, I would no even give it a second thought, but this particular specimen was toned in a way I thought was spectacular. At the time, the price guide on this coin was only $70, but the Buy It Now price was $135. Small potatoes, but nearly 2X price guide...
I didn't hesitate to pay it either. As meager as this coin is as far as value, it remains one of my favorites despite the fact that many coins in my collection are thousands of dollars. Anyway, coins are worth what we feel they are worth. The value of what we as collectors are willing to pay is what drives the market in numismatics.
Anyway, here's the coin...
Best regards, Dwayne F. Sessom Ebay ID: V-Nickel-Coins
@FlyingAl said:
The MS63 Kennedy is a great example I think.
The definition of worth - "the value of something measured by its qualities or by the esteem in which it is held." (Webster).
Is it worth $500? Absolutely. Why? Someone paid that much for it. Could it be worth more? Yes. Less? Not at the time it was sold.
Here's my thought process. The worth of something should be the highest value or amount of money (esteem in which is is held) a person wishes to pay for a good or service. That number can vary with person, but that variance doesn't matter - because it is the highest value. Someone paid $500 for the coin. Therefore, it is worth $500. However, someone could come along and pay $600 for it, making the worth higher. If someone offers $400, the worth doesn't drop - someone still wishes to pay $500.
The caveat is this - the worth of an item is subject to time, just like we all are. Hopefully I didn't ramble off into incoherency here.
The flaw in your thinking is that it is consistently worth $500 when this type of coin will be $250, 300, 400 600 etc depending on the auction and competition. A PCGS MS 65 1921 MS 65 Peace dollar will usually be in a range say of $2300-2700 so it’s fair to say that coin is worth approximately $2500. A PCGS 1945 half will almost always see around 115-135.
In the case of MS65 1921 Peace dollars, as well as a great many other coins, I think it’s less clear than the above. Listed below are the last five MS65 1921 Peace Dollars auctioned by Heritage - each on the same day in the same sale, last month. “Worth” is a most elusive concept.
Still 3 coins sold within $100 of each other, perhaps the $5000 coin was an outlier. I think if you ran the statistics of 100 sales of 1921 MS 65 Peace dollars the variance wouldn’t be large. And for more common dates less variance.
OK, then let's also look at results from July - here are the prices realized for seven PCGS MS65's that Heritage auctioned:
$3600
$2402
$4320
$4080
$3360
$3120
$3360
What's an MS65 "worth"?
The prices look good but now try to get that price from a dealer when you go to sell it’s always back of that price. It’s not going to happen.
@Type2 said:
The prices look good but now try to get that price from a dealer when you go to sell it’s always back of that price. It’s not going to happen.
Of course not. You won't be a dealer very long if you pay retail prices for your inventory.
Coins are not fungible, grading is not objective, and pricing history does not therefore easily lend itself to statistical analysis. This isn't to say that statistical analysis isn't useful -- you just need to be very careful about the assumptions you are making.
The value of a coin is not the same thing as its worth. The value of the sum total of raw elements in your body is worth around $17. Their worth to you is considerably more than that.
If for you, the worth of a coin is truly equal to its value, you should find something better to do with your time and money.
The emphasis here on sale price and potential resale price is much greater than I would expect on a hobby forum. It shouldn't be ignored, for sure, but it's only one consideration.
Vanishingly few collectors will realize a greater return on investment (ROI) with coins than they would with other asset classes. "Getting you money back" or "making a small profit" is actually a significant loss when you consider the opportunity cost and time value of money.
Except for niche areas, stamp collectors saw the value of their collections evaporate rather dramatically (and quickly). Other than face value and bullion content, there is theoretically no floor to the potential future value of numismatic coins...... yet they would still have considerable worth to many collectors.
Transaction costs are real and much higher than many other asset classes.
The degree of mental gymnastics and rationalization that many collectors use to justify their actions is fascinating.
As David Hall oft repeated, "Have fun with your coins." As a collector, I truly think there can be no better advice.
Fantastic post! For the record, I do not view my coins as an investment and I believe most collectors should not. That being said, I apologize in advance for being pedantic but...
Vanishingly few collectors will realize a greater return on investment (ROI) with coins than they would with other asset classes. "Getting you money back" or "making a small profit" is actually a significant loss when you consider the opportunity cost and time value of money.
You are absolutely 100% correct. However, in the equity/bond/alternatives/commodity markets, past performance does not guarantee future results...just like sales prices in coins.
But more importantly, the assumption that a collector-investor would take money that they believe they are "investing" in coins and instead invest in a "better" long term investment is, in my experience, unlikely. I could go on forever regarding people's poor investment decisions that they believe are guided by logic and wisdom. And I could go on even longer about many, many people's lack of understanding of the time value of money, opportunity cost, and compound interest.
What I'm saying, in short, is that, while you are correct, the average chance of real world application is shockingly low.
@dsessom said:
I have been known to pay a premium for coins that I find very appealing. My "specialty" is Liberty nickels. I have collected several sets in various grade levels over the years, and I always tend to look for solid strikes first and foremost, because soft strikes are the norm for the series - some years are worse than others. Secondly, I look for unusual - but not crazy toning.
A couple of years ago, I was browsing Ebay out of sheer boredom and happened across this very common year, and low-MS graded V nickel. It was an 1883 "no cents" graded in MS62. The current collection I'm working on are all MS64's, so ordinarily, I would no even give it a second thought, but this particular specimen was toned in a way I thought was spectacular. At the time, the price guide on this coin was only $70, but the Buy It Now price was $135. Small potatoes, but nearly 2X price guide...
I didn't hesitate to pay it either. As meager as this coin is as far as value, it remains one of my favorites despite the fact that many coins in my collection are thousands of dollars. Anyway, coins are worth what we feel they are worth. The value of what we as collectors are willing to pay is what drives the market in numismatics.
I can’t care about the worth of mine. When I‘m gone my coins morph into pairs of women’s shoes. If my wife were to get one-fourth of the value she would be happy because that’s all that I told her that I paid. I hope that someone does not have to dicker over them.
@Fraz said:
I can’t care about the worth of my mine. When I‘m gone my coins morph into pairs of shoes. If my wife were to get one-fourth of the value she would be happy because that’s all that I told her that I paid. I hope that someone does not have to dicker over them.
It wouldn’t bother you if (because you lied to her) your wife would be happy getting 1/4 the value of the/her coins when you were gone?
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
No, @Mark, I would not. She has more spreadsheet savvy than I. If she were to market them she would do a better job than I. I might make a profit from a coin by casuality.
The weight if organizing of a penny hoard suffices; much greater is the onus when you add the preoccupations of what happens after life is done. We have no heirs—it’s easier for us.
Worth of our coins? We subscribe to the jkrk valuation model.
For our internal net worth calculation, we are only concerned with the number of ounces we carry at the end of the year.
WE simply multiply the number of ounces of gold/silver/platinum by the years closing price. Thus we are marking down all DE's we have in inventory to melt (we are cheating a bit as we are not using a 96.75% content but considering the coins as an ounce). Modern gold doesn't have that issue.
We are not talking about IRS reporting (on sales) which obviously is done at cost vs price realized. AS the price of gold has risen in recent years we have sold off about 10% of our holdings to adjust our weightings in the asset class.
An investment? For us? Yes. After adjusting for short futures we have 10% of our net assets in metals.
@pcgscacgold said:
I’m surprised there are not more hobbyist or collectors here that see value in pride of ownership or value in finding that coin that has only come to auction once in the last 25 years, etc.
My explanation for this is a couple of things.
First, to most collectors, most coins are interchangeable with many others, even if many or most on this forum don't think so. (The views on this forum almost certainly represent a distinct minority.) It doesn't matter to most that one particular coin hasn't come up for sale in 25 years when they can buy another they consider essentially identical practically any time.
Second, I came to the conclusion a long time ago that most collectors don't actually like what they buy enough to take any "meaningful" (proportional) loss at resale. This is evident from posts on coin forums and numismatic articles. My explanation for this behavior is that the coin's merits as a collectible (the recreational aspect) is out of line with the market price which means it's usually bought as a quasi-investment as opposed to predominantly or exclusively as a collectible.
This second one is subjective, but my general rule of thumb is that if a coin was expensive pre-1986 (before PCGS) and especially the 70's when coins were first widely bought as "investments", it's a coin the buyer is more likely to like for what it is, not because of the quality represented by the holder label or sticker which accounts for most of the price.
Comments
Thanks @Catbert
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Well, you have vastly more experience than I do, but the vast majority of coins are close enough to commodities as to not make a difference (responding to a different post). I mean all silver eagles are, of course, unique, but rolls of, say, 2006 silver eagles are traded as such. Likewise (modern) proof sets or low grade 90%. I've seen an awful lot of small dealers (who are unlikely to have even a single four figure coin, and certainly not many) who act this way.
Of course if we have a coin with special toning, or a rare error or something then it's not a commodity and the dealer can believe that there is someone out there for whom the coin is worth $800 and can justify holding out for that, but really the "$800 coin" is costing the dealer money every day it sits in inventory, and it may be better to sell at $600 and do 10 flips making $20 each with the $600 in the time he'd be waiting for the $800 buyer.
Not at all. A working definition would be "Someone who has done some basic, independent, research to learn what similar items can usually be acquired for." I say "independent" because someone who sees platinum plated statehood quarters on the Home Shopping Club for just $250 for a P&D set and the pitchman waves a computer printout purporting to show them selling on eBay for $800 is not a knowledgeable buyer.
Few coins are so infrequently traded that you can't find good comps. Few of anything are.
Agree.
What I like about eBay is that you can see what each bidder's high bid was.
I see these prices as being from 3 separate, approximately normal distributions:
A. PCGS MS-65 toned non-CAC: 2760, 2640, 2880
B. PCGS MS-65 CAC: 3720
C. NGC MS-65 untoned, with very few marks in fields: 5040
@MFeld listed [Edit: the slab] attributes, but later posters have left them out.
As for worth of coins, economics defines several different types of values.
In the example of an auction, the winning bid X indicates the underbidder was willing to pay X-increment,
and the winner was willing to pay at least X.
So only the underbidder's full valuation is revealed.
For insurance purposes, we could use "replacement value", i.e. what it would cost to get another if this one is lost or destroyed.
For the purpose of selling in the future, we might want to estimate the distribution of what the coin might sell for at some point in the future.
If the coin will be auctioned, there needs to be that underbidder again, plus the winner who values it more.
So we know this auction attendance can be a significant source of variation.
For holding a coin, we are essentially paying the opportunity cost - what the buy price could return over the time period if invested in some other asset. The full calculation also involves the capital gain or loss.
These all involve uncertain quantities, but we can make a rough estimate.
Also factoring into the amount a person is willing to pay for a coin are their budget and the competing things they are buying with their money. If you have a large budget and are already very happy with your house, car, vacations, etc. then you are happy to spend a lot on coins to get the marginal utility from coins equal to that from the other goods you bought. So the willingness to pay depends on lots of things in addition to how much you like coins.
I just listed prices realized, without regard to whether the coins were toned.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
A lot of the posters on here will pay over market for a coin/note they feel is worth it. I myself won't. I use greysheet as a guide. I have gone above grey sheet but on average I try not to. I know what dealers will pay and I don't want to get stuck on the losing side of an eventual sale. So I pay what I feel is fair and that could be below grey sheet or slightly above.
But I'm also not a player in the registry set, I have no desire for top pops or crazy high grades that cost thousands more than a comparable coin.
But as to what something is worth, its worth what someone is willing to pay. In some cases its below market and in others its above market. Only you can feel comfortable with what you pay.
My current registry sets:
20th Century Type Set
Virtual DANSCO 7070
Slabbed IHC set - Missing the Anacs Slabbed coins
Available and disposable income is a driver of perspective often in what one collects and in perception of value. I don’t think there are many killer whales who would be satisfied on a diet of zooplankton.
"Got a flaming heart, can't get my fill"
To a point. Having disposable income doesn't mean that you are going to spend it on coins. I took 2 vacations this year and am planning another soon. My next car is going to be an A5 Cabriolet, but I wouldn't spend $500 on an ugly toned common date 1964 50 cents. Heck for MS63, I would pay spot.
My current registry sets:
20th Century Type Set
Virtual DANSCO 7070
Slabbed IHC set - Missing the Anacs Slabbed coins
Blue whales can eat up to 16 tons of plankton daily.
The orca or killer whale (Orcinus orca) is a toothed whale belonging to the oceanic dolphin family, of which it is the largest member. So its not really a whale.
The baleen whales (blue whales, right whales, and humpback whales) eat plankton.
My current registry sets:
20th Century Type Set
Virtual DANSCO 7070
Slabbed IHC set - Missing the Anacs Slabbed coins
Humpback Whales Enjoying Swims In Boston Harbor
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Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
And I treated them as such. We can of course slice and dice the data however we like. I was (approximating) the range of realized values within MS65 Peace Dollars to attempt to quantify the range of values inclusive of toned/untoned/CAC/PQ/ugly/average coins. However, with enough data, we can easily do the same analysis on MS65 Toned non-CAC, NGC MS65s, or whatever to get the normal range of prices within whatever subset desired.
Was it eating plankton?
And would it buy an ugly MS63 badly toned 50 cent JFK dollar?
My current registry sets:
20th Century Type Set
Virtual DANSCO 7070
Slabbed IHC set - Missing the Anacs Slabbed coins
No, that whale is on baitfish. Obvious in the photo.
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Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
A coin is worth to me what I am willing to pay for it, but thinking way back to my econ classes I realize that answer would get me scorn from the prof and a failing grade. The prof would expect a graph with economic terms to explain my simplistic position. So I borrowed one:
Collectors operate by trying to obtain excessively high utility on a coin that will, at least for a short time, put the numismatist in a state of nirvana. For regular folks who use coins to make change, this would be some irrational perceived utility. The collector also views the coin at some perceived rarity that will yield the bizarre collecting joy of owning something that everyone else wants.
So the winner of the common Kennedy had the most delusional view of utility of all the bidders, and the perceived rarity was high enough that he thought the toning pattern could not be easily duplicated by natural or artificial means.
Ok, I had a little free time this morning to join this party.
The above illustration shows where MY coin spending fund comes from.
I have no car and walk to work. I bring supper and 2 snacks every day for breaks. I've been doing that for almost 40 years. I don't drink coffee or use the vending machines for snacks or soda. I don't have any vices like drinking or smoking or taking recreational drugs. I simply save by not spending on things that I don't need.
Until I put it on a spreadsheet for them, my wife and daughter did not realize that they spend over $20,000 per year on eating out and going to Dunkin or Starbucks on a daily basis. Now add to that fuel for their cars and insurance to put it on the road and I have myself a pretty nice coin allowance.
To answer the OP, my collection is simply worth what someone is willing to pay for it. On the other hand, the value to me is "priceless" as it is the cost of my enjoyment and it's worth every penny.
Donato
Donato's Complete US Type Set ---- Donato's Dansco 7070 Modified Type Set ---- Donato's Basic U.S. Coin Design Set
Successful transactions: Shrub68 (Jim), MWallace (Mike)
My coins all grade 4 points higher than the TPG says and are worth ten times more than any price guide...
USAF (Ret) 1974 - 1994 - The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries. Remembering RickO, a brother in arms.
I borrowed this from Penny-Wise, Vol. 32, No. 4(187)
Penny-Wise (1998) @NNM
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By Tom Reynolds
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Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
@divecchia
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
Kindly Tom Reynolds was/is a dealer and collector. I often thought his inventory was priced as a reflection of what he felt that were worth as a collector fan of early copper (if that makes any sense). Strong prices/high worth to him from a collector standpoint.
"Got a flaming heart, can't get my fill"
Interesting thread! I especially like and can relate to how some of us come up with the funds to purchase. I'm able to forgo many trivial everyday or weekly expenses through habit and to use that money that would have been "wasted" for the enjoyment of my favorite hobby.
To me when purchasing a coin my determination of what it's worth is different than once I actually own it as part of my collection. When I'm contemplating a purchase I determine the worth by factors such as how long the specific coin has been in my search list, and my budget at the given moment of availability.
Once the coin is in my collection it's part of my total outlay on all of my collection and that I value at about 50% of my costs.
When going to sell a coin I try to recover my original cost after selling expenses. I have probably bought about 20 coins for every one that I've sold, so my experience is more with buying and keeping than it is with selling.
I spend more than I should on my coins.
But I enjoy them immensely so it's worth it to me.
My YouTube Channel
I have been known to pay a premium for coins that I find very appealing. My "specialty" is Liberty nickels. I have collected several sets in various grade levels over the years, and I always tend to look for solid strikes first and foremost, because soft strikes are the norm for the series - some years are worse than others. Secondly, I look for unusual - but not crazy toning.
A couple of years ago, I was browsing Ebay out of sheer boredom and happened across this very common year, and low-MS graded V nickel. It was an 1883 "no cents" graded in MS62. The current collection I'm working on are all MS64's, so ordinarily, I would no even give it a second thought, but this particular specimen was toned in a way I thought was spectacular. At the time, the price guide on this coin was only $70, but the Buy It Now price was $135. Small potatoes, but nearly 2X price guide...
I didn't hesitate to pay it either. As meager as this coin is as far as value, it remains one of my favorites despite the fact that many coins in my collection are thousands of dollars. Anyway, coins are worth what we feel they are worth. The value of what we as collectors are willing to pay is what drives the market in numismatics.
Anyway, here's the coin...
Dwayne F. Sessom
Ebay ID: V-Nickel-Coins
The prices look good but now try to get that price from a dealer when you go to sell it’s always back of that price. It’s not going to happen.
Hoard the keys.
Of course not. You won't be a dealer very long if you pay retail prices for your inventory.
This is a strange, but interesting thread.
I would submit to you that:
Fantastic post! For the record, I do not view my coins as an investment and I believe most collectors should not. That being said, I apologize in advance for being pedantic but...
You are absolutely 100% correct. However, in the equity/bond/alternatives/commodity markets, past performance does not guarantee future results...just like sales prices in coins.
But more importantly, the assumption that a collector-investor would take money that they believe they are "investing" in coins and instead invest in a "better" long term investment is, in my experience, unlikely. I could go on forever regarding people's poor investment decisions that they believe are guided by logic and wisdom. And I could go on even longer about many, many people's lack of understanding of the time value of money, opportunity cost, and compound interest.
What I'm saying, in short, is that, while you are correct, the average chance of real world application is shockingly low.
Yeah, but saying it might cause a few people (including me) to think about it.
It's just like tamping down the primal urge to sell when others are buying and buy when others are selling...... Tough, but some can manage it.
Would you part with it for $160?
Joe.
I think that if you pay up for quality and buy what you like, then you will do well in the long term.
And you will learn a lot, have tons of fun, and make good, lasting relationships along the way.
Sometimes, it’s better to be LUCKY than good. 🍀 🍺👍
My Full Walker Registry Set (1916-1947):
https://www.ngccoin.com/registry/competitive-sets/16292/
I can’t care about the worth of mine. When I‘m gone my coins morph into pairs of women’s shoes. If my wife were to get one-fourth of the value she would be happy because that’s all that I told her that I paid. I hope that someone does not have to dicker over them.
Edit: typo
It wouldn’t bother you if (because you lied to her) your wife would be happy getting 1/4 the value of the/her coins when you were gone?
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
No, @Mark, I would not. She has more spreadsheet savvy than I. If she were to market them she would do a better job than I. I might make a profit from a coin by casuality.
The weight if organizing of a penny hoard suffices; much greater is the onus when you add the preoccupations of what happens after life is done. We have no heirs—it’s easier for us.
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Not a chance, sir! This is one I will probably keep until I kick the bucket, then my son will inherit my collection.
I just wish it was an MS64! LOL
Dwayne F. Sessom
Ebay ID: V-Nickel-Coins
Worth of our coins? We subscribe to the jkrk valuation model.
For our internal net worth calculation, we are only concerned with the number of ounces we carry at the end of the year.
WE simply multiply the number of ounces of gold/silver/platinum by the years closing price. Thus we are marking down all DE's we have in inventory to melt (we are cheating a bit as we are not using a 96.75% content but considering the coins as an ounce). Modern gold doesn't have that issue.
We are not talking about IRS reporting (on sales) which obviously is done at cost vs price realized. AS the price of gold has risen in recent years we have sold off about 10% of our holdings to adjust our weightings in the asset class.
An investment? For us? Yes. After adjusting for short futures we have 10% of our net assets in metals.
My explanation for this is a couple of things.
First, to most collectors, most coins are interchangeable with many others, even if many or most on this forum don't think so. (The views on this forum almost certainly represent a distinct minority.) It doesn't matter to most that one particular coin hasn't come up for sale in 25 years when they can buy another they consider essentially identical practically any time.
Second, I came to the conclusion a long time ago that most collectors don't actually like what they buy enough to take any "meaningful" (proportional) loss at resale. This is evident from posts on coin forums and numismatic articles. My explanation for this behavior is that the coin's merits as a collectible (the recreational aspect) is out of line with the market price which means it's usually bought as a quasi-investment as opposed to predominantly or exclusively as a collectible.
This second one is subjective, but my general rule of thumb is that if a coin was expensive pre-1986 (before PCGS) and especially the 70's when coins were first widely bought as "investments", it's a coin the buyer is more likely to like for what it is, not because of the quality represented by the holder label or sticker which accounts for most of the price.