You will get your answer if we go into a hard recession as we did in the early 80' under Jimmy Carters Administration.
Coins were achieving record prices then the bottom fell out and it took many years for them to get them back to those levels.
At shows back then dealers were begging me to buy something before they fell more.
One dealer said to me --help me I need to get rid of this "Sh_t". I will never forget that moment!
A scary time inflation rampant and safe Government treasuries were available at 16%!!! -why would you buy coins?
I've started thinking, how much does this compare to a house or exotic car. Either full price for more expensive items or loan payments for less expensive ones.
I've started thinking, how much does this compare to a house or exotic car. Either full price for more expensive items or loan payments for less expensive ones.
This is a comparison to items which actually have some practical use. The type of car inferred by your post and some houses are also status symbols, depending upon the price range you have in mind.
Coins are neither, except to coin collectors. This is true now and it's going to be true later.
A house can be rented to produce an income stream. No one except a coin collector would ever "rent" a coin. Whatever admission fees are charged by dedicated coin museums (like the ANA), it's immaterial to the value of the collection.
I've started thinking, how much does this compare to a house or exotic car. Either full price for more expensive items or loan payments for less expensive ones.
This is a comparison to items which actually have some practical use. The type of car inferred by your post and some houses are also status symbols, depending upon the price range you have in mind.
Coins are neither, except to coin collectors. This is true now and it's going to be true later.
A house can be rented to produce an income stream. No one except a coin collector would ever "rent" a coin. Whatever admission fees are charged by dedicated coin museums (like the ANA), it's immaterial to the value of the collection.
Yes, that's the point of the comparison.
The idea is that the coin is worth so much more than a comparable house or car because there's less of this additional benefit, so for the same dollar amount, the coin must produce more personal enjoyment.
This becomes more of an exercise of what is easily promoted which in part is related to demand arising from an effort to complete a set. A 1909-s VDB is not a rare coin... it was promoted as a rare coin and if we look at the surviving population in various grades, starting at EF40 and extending through the upper MS levels, we know that numbers capture what is important. However, there is the story, the first year of issue and the attachment collectors have with US Cents which creates demand. And with demand comes competition and support for prices. And the cycle continues over time and manifests itself into legendary status.
I have never owned a 1909 -S VDB and ownership it is simply not in my numismatic plans. Having written that, I would much rather own several of his others works that exist in medals issued from the late 1890s until the time he prematurely passed.
Seems we agree that surviving population is a critical factor that is often overlooked. And I will take it to the next level- it is also about quality for the grade within the surviving population. Holders and stickers do not change the coin but only the perception which is subject to change over time.
Take the 1923-S Lincoln... quite possibly the toughest Lincoln Cent to find nice AU and UNC pieces. You'll have no problem finding a multitude of 1909-S VDB cents in MS grades in TPG holders at a show... but even at a decent sized regional show, you'd be lucky to find even one or two 1923-S Lincolns in MS grades. And when you do find them, they're usually poorly struck dogs. (The ones that aren't command significant premiums... as you noted in your post.)
Yet the 23-S Lincoln in, say, MS63BN is nowhere near as valuable as a 1909-S VDB in 63BN (or even in low grades for that matter). Every Lincoln collector needs a 23-S just as much as an SVDB... but the vast majority of them are content with a VF to plug the hole in their Dansco album, and to them, it's just a "better date". So likewise, the market for UNC 23-S cents covers only a small portion of Lincoln collectors, and the price goes accordingly.
"You can't get just one gun." "You can't get just one tattoo." "You can't get just one 1796 Draped Bust Large Cent."
@Zoins said:
Is there a definition of "overpriced"?
When price is considerable higher than coins in the same series with similar PCGS & NGC populations.
I really disagree with that definition. The population of S-VDB cents at PCGS is about 20,000. The population of 1915 Lincoln cents at PCGS is less than 1800. Not every coin is submitted in numbers proportional to their actual population.
Looking at total populations can be confusing. To evaluate whether a coin is overpriced or undervalued one needs to look at a specific grade level. Take the Lincoln penny example, there are 1050+9 '1909 S VDBs' in RB65 @ $5,150 and 103 '1915s' in RB65 @$450. The 1915 is definitely undervalued.
Yes, the S-VDB has always been a highly prized coin. Some would claim it's overvalued. Yet, many would be happy to own only one Lincoln penny - the 1909 S VDB. The 1915 is a nice sleeper.
@Zoins said:
Is there a definition of "overpriced"?
When price is considerable higher than coins in the same series with similar PCGS & NGC populations.
I really disagree with that definition. The population of S-VDB cents at PCGS is about 20,000. The population of 1915 Lincoln cents at PCGS is less than 1800. Not every coin is submitted in numbers proportional to their actual population.
Looking at total populations can be confusing. To evaluate whether a coin is overpriced or undervalued one needs to look at a specific grade level. Take the Lincoln penny example, there are 1050+9 '1909 S VDBs' in RB65 @ $5,150 and 103 '1915s' in RB65 @$450. The 1915 is definitely undervalued.
Yes, the S-VDB has always been a highly prized coin. Some would claim it's overvalued. Yet, many would be happy to own only one Lincoln penny - the 1909 S VDB. The 1915 is a nice sleeper.
No US coin is undervalued. Far more people want an SVDB than ac1915. The market is too large and mature for things to not be properly valued.
@DisneyFan said:
Looking at total populations can be confusing. To evaluate whether a coin is overpriced or undervalued one needs to look at a specific grade level. Take the Lincoln penny example, there are 1050+9 '1909 S VDBs' in RB65 @ $5,150 and 103 '1915s' in RB65 @$450. The 1915 is definitely undervalued.
Yes, the S-VDB has always been a highly prized coin. Some would claim it's overvalued. Yet, many would be happy to own only one Lincoln penny - the 1909 S VDB. The 1915 is a nice sleeper.
No US coin is undervalued. Far more people want an SVDB than ac1915. The market is too large and mature for things to not be properly valued.
"No US coin is undervalued."
Agreed.
The information posted above is easily accessible to anyone online. If the 1915 is undervalued, why aren't buyers driving the price up by snapping up the coins whenever they're offered at these "bargain" prices?
The information posted above is easily accessible to anyone online. If the 1915 is undervalued, why aren't buyers driving the price up by snapping up the coins whenever they're offered at these "bargain" prices?
Well, there are only 103 '1915' Lincoln pennies in PCGS RB65 and they don't come up for sale very often. Great Collections has only sold 9 in the last 12 years.
The information posted above is easily accessible to anyone online. If the 1915 is undervalued, why aren't buyers driving the price up by snapping up the coins whenever they're offered at these "bargain" prices?
Well, there are only 103 '1915' Lincoln pennies in PCGS RB65 and they don't come up for sale very often. Great Collections has only sold 9 in the last 12 years.
If they're undervalued based on population reports and auction records, why aren't they selling for more? It's not like that info is a secret.
@JRGeyer said:
CAC is joining the TPG ranks to further make US Classic coins a commodity, which is how they are going to be sold to the younger generations of "collectors." For various reasons, that reality is often lamented here, but it has kept the hobby alive and thriving the past 35 years. I think CAC's main goal is to solidify condition and absolute rarities which will make US coins more attractive investment pieces, and will ultimately increase the amount of eyes on the coin market and drive prices up overall.
I think short term, there will likely be a dip in pricing. Times are getting tough for the average person. Demand for coins in the set I've been collecting the past 18 months seem to be softening, and I expect a slight dip in pricing.
Can't possibly be more of a commodity than when coins were traded by the roll.
The information posted above is easily accessible to anyone online. If the 1915 is undervalued, why aren't buyers driving the price up by snapping up the coins whenever they're offered at these "bargain" prices?
Well, there are only 103 '1915' Lincoln pennies in PCGS RB65 and they don't come up for sale very often. Great Collections has only sold 9 in the last 12 years.
If they're undervalued based on population reports and auction records, why aren't they selling for more? It's not like that info is a secret.
Buyers are slaves to price guides? It's more of an issue with overvalued coins.
I really don't know if classic US coins are overpriced, historically speaking. I don't have the span in the hobby. There were a few dissuasions on valuation ATS, and I was in disagreement (maybe even offended) with some of @WCC 's points in that discussion. However, I have spent some time reflecting since that and have realized that many of his points are very valid, and it was my emotional attachment to coins that were clouding my objectivity.
But... how do we make this assessment? Are we saying "overpriced" compared to other coins? Other hobbies like collecting Beanie Babies or figurines from the Franklin Mint? Boating or RVing? Doing jigsaw puzzles or model airplanes?
Most hobbies... one does not look for anything in return but enjoyment. I know coins are different... but it really depends on what we are comparing the valuation to in order to better understand what is under/overvalued.
I know this is likely a "beginner" outlook, and that's fair (I am). But, I am not sure... even if I had the history in this hobby and was an expert, could a accurately answer the question.
I am a newer collector (started April 2020), and I primarily focus on U.S. Half Cents and Type Coins. Early copper is my favorite.
The information posted above is easily accessible to anyone online. If the 1915 is undervalued, why aren't buyers driving the price up by snapping up the coins whenever they're offered at these "bargain" prices?
Well, there are only 103 '1915' Lincoln pennies in PCGS RB65 and they don't come up for sale very often. Great Collections has only sold 9 in the last 12 years.
If they're undervalued based on population reports and auction records, why aren't they selling for more? It's not like that info is a secret.
Buyers are slaves to price guides? It's more of an issue with overvalued coins.
I didn't say price guides, I said auction records. Buyers are bidding up to a certain point and then stopping. If a coin is really undervalued, they'd keep bidding. But they don't, which is how you can tell the coin is accurately valued.
As far as overvalued coins go, how many of the people on this thread who say they are, are selling their coins now in order to buy back later when the prices fall? Are you?
The information posted above is easily accessible to anyone online. If the 1915 is undervalued, why aren't buyers driving the price up by snapping up the coins whenever they're offered at these "bargain" prices?
Well, there are only 103 '1915' Lincoln pennies in PCGS RB65 and they don't come up for sale very often. Great Collections has only sold 9 in the last 12 years.
If they're undervalued based on population reports and auction records, why aren't they selling for more? It's not like that info is a secret.
Buyers are slaves to price guides? It's more of an issue with overvalued coins.
I didn't say price guides, I said auction records. Buyers are bidding up to a certain point and then stopping. If a coin is really undervalued, they'd keep bidding. But they don't, which is how you can tell the coin is accurately valued.
As far as overvalued coins go, how many of the people on this thread who say they are, are selling their coins now in order to buy back later when the prices fall? Are you?
Auction buyers often rely on price guides to tell them when to stop bidding.
In my areas of interest I often find it's the overvalued coins that are offered for sale. The undervalued, not so often. Coins are not like the stock market. If someone is selling overvalued coins, it's more likely they've decided they have gone as far as they can go and it's time to concentrate on collecting a different series. In fact, that's what I'm doing right now with the coins I bought when they were undervalued.
I think some are overpriced but not all. In the areas I collect I think the common classic gold is overpriced compared to bullion. Dollar gold is only a bit overpriced but demand has been much stronger in the last few years.
@DisneyFan said:
Auction buyers often rely on price guides to tell them when to stop bidding.
Price guides get their prices from what people are paying for coins. Under your scenario (buyers depend on price guides to know what to pay), prices in the guides would never change.
@DisneyFan said:
Auction buyers often rely on price guides to tell them when to stop bidding.
Price guides get their prices from what people are paying for coins. Under your scenario (buyers depend on price guides to know what to pay), prices in the guides would never change.
The key word is "often." Many times bidders go over price guides too.
@DisneyFan said:
Auction buyers often rely on price guides to tell them when to stop bidding.
Price guides get their prices from what people are paying for coins. Under your scenario (buyers depend on price guides to know what to pay), prices in the guides would never change.
The key word is "often." Many times bidders go over price guides too.
So- buyers often rely on price guides but many times, don't? Ok.
The information posted above is easily accessible to anyone online. If the 1915 is undervalued, why aren't buyers driving the price up by snapping up the coins whenever they're offered at these "bargain" prices?
Well, there are only 103 '1915' Lincoln pennies in PCGS RB65 and they don't come up for sale very often. Great Collections has only sold 9 in the last 12 years.
If they're undervalued based on population reports and auction records, why aren't they selling for more? It's not like that info is a secret.
Buyers are slaves to price guides? It's more of an issue with overvalued coins.
I didn't say price guides, I said auction records. Buyers are bidding up to a certain point and then stopping. If a coin is really undervalued, they'd keep bidding. But they don't, which is how you can tell the coin is accurately valued.
As far as overvalued coins go, how many of the people on this thread who say they are, are selling their coins now in order to buy back later when the prices fall? Are you?
Auction buyers often rely on price guides to tell them when to stop bidding.
In my areas of interest I often find it's the overvalued coins that are offered for sale. The undervalued, not so often. Coins are not like the stock market. If someone is selling overvalued coins, it's more likely they've decided they have gone as far as they can go and it's time to concentrate on collecting a different series. In fact, that's what I'm doing right now with the coins I bought when they were undervalued.
If we look at this for all collectors, can it be taken to mean sets, or some coins in those sets, that are generally easier to complete are sold more often, and thus more overvalued?
The information posted above is easily accessible to anyone online. If the 1915 is undervalued, why aren't buyers driving the price up by snapping up the coins whenever they're offered at these "bargain" prices?
Well, there are only 103 '1915' Lincoln pennies in PCGS RB65 and they don't come up for sale very often. Great Collections has only sold 9 in the last 12 years.
If they're undervalued based on population reports and auction records, why aren't they selling for more? It's not like that info is a secret.
Buyers are slaves to price guides? It's more of an issue with overvalued coins.
There are likely far more of this coin outside of a holder than in one, proportionately at least. Same for most other dates in this series. I've seen estimates for the 09-S VDB that are much higher than the pop reports, but my inference is that it is concentrated in circulated grades.
Most collectors will pay market price for an "overvalued" coin, as long as they have an expectation of recovering most of their cost at resale.
@NeophyteNumismatist said:
I really don't know if classic US coins are overpriced, historically speaking. I don't have the span in the hobby. There were a few dissuasions on valuation ATS, and I was in disagreement (maybe even offended) with some of @WCC 's points in that discussion. However, I have spent some time reflecting since that and have realized that many of his points are very valid, and it was my emotional attachment to coins that were clouding my objectivity.
Sometimes my comments come across as harsh, but it's not meant to be that way. On this type of subject, I try to frame my comments from the point of view of those who are either not collectors (at all) or collect something else other than the topic under discussion. Since I do not collect US coins, I don't discuss the coins I collect on this side of the forum. But even when I do, I don't extrapolate my preferences to anyone else. (I know they don't prefer the coins I do, that's why they collect something else.) That's what most people tend to do.
But... how do we make this assessment? Are we saying "overpriced" compared to other coins? Other hobbies like collecting Beanie Babies or figurines from the Franklin Mint? Boating or RVing? Doing jigsaw puzzles or model airplanes?
There is no absolute value and by definition, in an "efficient" market, current value is always market value and therefore, not "overvalued". I don't believe in efficiently priced markets, but in coinage, US classics (as a whole) are as close to one as exists.
Value can only be measured relatively. Usually, I can come up with an explanation for relative prices, though it might not be the right one. Generically, I think most collectors ignore what they don't collect and will pay current market price, as long as they treat it as a consumption expense or have an expectation of getting most of their money back.
Same concept applies when comparing coins or anything else to another area. Two different sets of buyers who are mostly oblivious to what else is out there and current relative prices, and wouldn't care if they knew, unless evaluating potential "investments".
While some collectors may come across as harsh in discussions of valuation on the U.S. coin market, if they are objective, it can be a good discussion to have.
For example, in these discussions, often a comparison is made comparing U.S. coins to coins from other countries. While U.S. coins can be priced relatively higher for the same grade, denomination, composition, etc., that doesn't necessarily mean they are overpriced, but it can mean they are less affordable. When comparing prices of coins like this, I like to compare collector populations including: population trends, disposable income trends , inclination to buy coin collectibles, maturity of the collecting market for those coins, etc. Normally, when I see underpricing at this level, it has to do with understanding a population is going to have much more disposable income in the future paired with an inclination to buy coins. This has played out several times and is exciting to watch.
Assuming buyers are using discretionary income on this hobby (and I hope the majority do) then I think the perceived market valuation is irrelevant. One buys a coin because they are passionate about its acquisition and price becomes less critical (up to a point). So no, I think the present market reflects demand along with inflationary pressures as do other markets. So therefore, not over valued.
Seated Half Society member #38 "Got a flaming heart, can't get my fill"
Increasing price does not mean that the prior price was too low. It just means the market has changed.
Earlier in the thread, it was suggested that a 1915 Lincoln graded PCGS 65RB was undervalued.
In the last year and a half, there have been four sales between Heritage and GC, for these amounts: $552, $536, $492, $372. PCGS price guide says $450. Based on that, it looks like buyers are mostly valuing the coin above the price guide. Is a coin "undervalued" when buyers are actually paying more real dollars for a coin than what a guide says it's worth, when the guide is neither buying nor selling them?
@Zoins said:
Hindsight is supposed to be 20/20 so if we look back historically:
can we identify periods when coins were under priced?
can that information be used to identify if coins are currently underpriced?
No one has yet to identify what the term means.
Increasing price does not mean that the prior price was too low. It just means the market has changed.
But if you could have predicted the price increase…..
Predicting the price increase does not require finding something "underpriced". It requires determining future market direction.
We need to get to some definitions
If a coin is regularly selling for $450 to $500 and someone lists one for sale at $300, that's underpriced. Calling something underpriced based on its future price turning out to be higher than today doesn't tell you anything since there's no way to be sure today which direction the price will go tomorrow.
@Zoins said:
Hindsight is supposed to be 20/20 so if we look back historically:
can we identify periods when coins were under priced?
can that information be used to identify if coins are currently underpriced?
No one has yet to identify what the term means.
Increasing price does not mean that the prior price was too low. It just means the market has changed.
But if you could have predicted the price increase…..
Predicting the price increase does not require finding something "underpriced". It requires determining future market direction.
We need to get to some definitions
If a coin is regularly selling for $450 to $500 and someone lists one for sale at $300, that's underpriced. Calling something underpriced based on its future price turning out to be higher than today doesn't tell you anything since there's no way to be sure today which direction the price will go tomorrow.
If an underpriced coin is one that’s selling less than it regularly sells for, how does one have a conversation about the market being underpriced? Or is it not possible by definition?
@Zoins said:
Hindsight is supposed to be 20/20 so if we look back historically:
can we identify periods when coins were under priced?
can that information be used to identify if coins are currently underpriced?
No one has yet to identify what the term means.
Increasing price does not mean that the prior price was too low. It just means the market has changed.
But if you could have predicted the price increase…..
Predicting the price increase does not require finding something "underpriced". It requires determining future market direction.
We need to get to some definitions
If a coin is regularly selling for $450 to $500 and someone lists one for sale at $300, that's underpriced. Calling something underpriced based on its future price turning out to be higher than today doesn't tell you anything since there's no way to be sure today which direction the price will go tomorrow.
If an underpriced coin is one that’s selling less than it regularly sells for, how does one have a conversation about the market being underpriced? Or is it not possible by definition?
I don't think it is really possible for a large developed market like US coins. Smaller niche markets are not efficient at pricing. But a large market will efficiently do price discovery. The only segments of US coins that may be over or underpriced are the true rarities that rarely change hands.
@Zoins said:
Hindsight is supposed to be 20/20 so if we look back historically:
can we identify periods when coins were under priced?
can that information be used to identify if coins are currently underpriced?
No one has yet to identify what the term means.
Increasing price does not mean that the prior price was too low. It just means the market has changed.
But if you could have predicted the price increase…..
Predicting the price increase does not require finding something "underpriced". It requires determining future market direction.
We need to get to some definitions
If a coin is regularly selling for $450 to $500 and someone lists one for sale at $300, that's underpriced. Calling something underpriced based on its future price turning out to be higher than today doesn't tell you anything since there's no way to be sure today which direction the price will go tomorrow.
If an underpriced coin is one that’s selling less than it regularly sells for, how does one have a conversation about the market being underpriced? Or is it not possible by definition?
Unless you define "the market" awfully narrowly, I don't think you can have a meaningful conversation on the subject. I just looked at the first page of the PCGS price guide (for the record, I think actual sales are a better gauge of current value than a price guide but I'm not going to do a research project of prices realized for this post) for Lincoln cents. There are both green up arrows and red down arrows, mostly green right now. That would seem to indicate that the market is generally "up" but if you own a bunch of the red arrow coins, not so much. So- based on that, are early Lincolns underpriced or not?
Earlier in the thread, it was suggested that a 1915 Lincoln graded PCGS 65RB was undervalued.
In the last year and a half, there have been four sales between Heritage and GC, for these amounts: $552, $536, $492, $372. PCGS price guide says $450. Based on that, it looks like buyers are mostly valuing the coin above the price guide. Is a coin "undervalued" when buyers are actually paying more real dollars for a coin than what a guide says it's worth, when the guide is neither buying nor selling them?
A coin is undervalued considering it's TPG population relative to other coins in the same series. A coin is approaching fair value when buyers, who believe coin is undervalued, are paying more than the price guides.
A coin could be underpriced because a seller realizes a coin is overvalued. It's TPG population is higher than similar valued coins in the same series.
Earlier in the thread, it was suggested that a 1915 Lincoln graded PCGS 65RB was undervalued.
In the last year and a half, there have been four sales between Heritage and GC, for these amounts: $552, $536, $492, $372. PCGS price guide says $450. Based on that, it looks like buyers are mostly valuing the coin above the price guide. Is a coin "undervalued" when buyers are actually paying more real dollars for a coin than what a guide says it's worth, when the guide is neither buying nor selling them?
A coin is undervalued considering it's TPG population relative to other coins in the same series. A coin is approaching fair value when buyers, who believe coin is undervalued, are paying more than the price guides.
A coin could be underpriced because a seller realizes a coin is overvalued. It's TPG population is higher than similar valued coins in the same series.
That puts say too much importance on TPG population and way too little importance in the actual market.
A coin is undervalued considering it's TPG population relative to other coins in the same series. A coin is approaching fair value when buyers, who believe coin is undervalued, are paying more than the price guides.
A coin could be underpriced because a seller realizes a coin is overvalued. It's TPG population is higher than similar valued coins in the same series.
That puts way too much importance on TPG population and way too little importance in the actual market.
Are we talking about total TPG populations or TPG populations in higher grades?
A coin is undervalued considering it's TPG population relative to other coins in the same series. A coin is approaching fair value when buyers, who believe coin is undervalued, are paying more than the price guides.
A coin could be underpriced because a seller realizes a coin is overvalued. It's TPG population is higher than similar valued coins in the same series.
That puts way too much importance on TPG population and way too little importance in the actual market.
Are we talking about total TPG populations or TPG populations in higher grades?
I'm talking TPG in general. That might with for 5 figure coins. For 3 figure coins, even mid 3, the submission percentages can be fairly low.
But I don't care if the coin is a legitimate pop 1 and seeks for half of a pop 5 in the same series. The market has priced them and is far more important than the population because it considers the demand side.
You would consider SVDB cents to be overpriced because their price is higher than lower pop coins in the same series. But it isn't. The price is higher because the demand is higher.
Only a very thin market can contain over- and under- priced coins because they don't trade very often and the last sale could be an outlier. But for mature markets with active trading, the value is well established.
There is not a single Morgan dollar that isn't priced correctly. There is not a single Lincoln cent that isn't priced correctly. That doesn't mean that some won't be higher in 5 years and some lower. But they all trade frequently so the market has determined the value.
After reading these threads, I still think classic coins overall are undervalued.
For example, a mint state Capped bust Half dollar should be worth around $40k not $6k or so. I can go on but you get my thinking. Obviously there are great eye appealing coins that should be worth alot as well. Coins are valued based on supply and demand. Why should 30 year baseball cards be worth alot more than classic coins 100+ older.
@EastonCollection said:
After reading these threads, I still think classic coins overall are undervalued.
For example, a mint state Capped bust Half dollar should be worth around $40k not $6k or so. I can go on but you get my thinking. Obviously there are great eye appealing coins that should be worth alot as well. Coins are valued based on supply and demand. Why should 30 year baseball cards be worth alot more than classic coins 100+ older.
If coins values are based on supply and demand and a CBH should be worth $40k and not $6k, what can change on the supply and demand sides for that to happen?
There is not a single Morgan dollar that isn't priced correctly. There is not a single Lincoln cent that isn't priced correctly. That doesn't mean that some won't be higher in 5 years and some lower. But they all trade frequently so the market has determined the value.
Earlier in the thread, it was suggested that a 1915 Lincoln graded PCGS 65RB was undervalued.
In the last year and a half, there have been four sales between Heritage and GC, for these amounts: $552, $536, $492, $372. PCGS price guide says $450. Based on that, it looks like buyers are mostly valuing the coin above the price guide.
And asked
Is a coin "undervalued" when buyers are actually paying more real dollars for a coin than what a guide says it's worth, when the guide is neither buying nor selling them?
There is not a single Morgan dollar that isn't priced correctly. There is not a single Lincoln cent that isn't priced correctly. That doesn't mean that some won't be higher in 5 years and some lower. But they all trade frequently so the market has determined the value.
Earlier in the thread, it was suggested that a 1915 Lincoln graded PCGS 65RB was undervalued.
In the last year and a half, there have been four sales between Heritage and GC, for these amounts: $552, $536, $492, $372. PCGS price guide says $450. Based on that, it looks like buyers are mostly valuing the coin above the price guide.
And asked
Is a coin "undervalued" when buyers are actually paying more real dollars for a coin than what a guide says it's worth, when the guide is neither buying nor selling them?
I'm not sure what you mean by that response. That shows the price of a 1915 65 RB to be $485 (the average of the 4 prices). It says nothing about "over" or "under" and is reasonably close to the PCGS guide (not that I consider the PCGS guide to be the most accurate). FWIW the CAC CPG is $468. So, all the price guides and the sales are in the same ballpark.
I still maintain that coin is accurately priced by the market and is neither over or under-priced.
I absolutely say yes
Let me offer my opinion
The collectors market has “has grown significantly” but driven by “flippers” only looking to profit. I bought three coins over $11k each and the guys had no interest in the sport/collecting at all. They told me they had 17 people trying to purchase coins from the mint at drop date. Prices are being driven by demand, yes.., but that demand is only being driven by the sheer number of people / bots turning coins into cash cows. I don’t see that this is good for collectors at all. New flippers selling to flippers selling to flippers finally maybe selling to a collector while doubling the price.
PS5 retail $499 selling to gamers at $1k
Vehicles $10k over sticker
Base box of Pokémon’s $400k
On and on
Eventually prices rise so high that you price out of the collector market and flippers will learn the hard way / end up crashing.
@johnny010 said:
I absolutely say yes
Let me offer my opinion
The collectors market has “has grown significantly” but driven by “flippers” only looking to profit. I bought three coins over $11k each and the guys had no interest in the sport/collecting at all. They told me they had 17 people trying to purchase coins from the mint at drop date. Prices are being driven by demand, yes.., but that demand is only being driven by the sheer number of people / bots turning coins into cash cows. I don’t see that this is good for collectors at all. New flippers selling to flippers selling to flippers finally maybe selling to a collector while doubling the price.
PS5 retail $499 selling to gamers at $1k
Vehicles $10k over sticker
Base box of Pokémon’s $400k
On and on
Eventually prices rise so high that you price out of the collector market and flippers will learn the hard way / end up crashing.
Except that there is always a final retail buyer. This is the process if price discovery. With new issues, the market price isn't the release date price because of initial artificial scarcity. But 6 months or so later, the market has determined the price. The coins don't trade among flippers forever.
I've seen a lot of up and down markets over the years since I have collected so many things. To a very real extent "overpriced" merely means it is very difficult to obtain current market value. If this persists then market value will drop but it will still be difficult to sell. It goes on long enough then the coins will trade at fire sale prices. "Underpriced" is the opposite.
Now days in many real ways the grading services affect this equation. As it becomes more difficult to sell coins the services define the supply and in order to keep up with value based pricing they tighten up. Recently graded coins are worth more making the price guides even slower to respond to market conditions. Of course this too is opposite what happens when coins are "underpriced".
A lot of the coins that had been owned by baby boomers have already been dissipated into the market yet it remains strong due to a quarter century of growth in demand. I don't see this changing in the near future unless some unforeseeable macroeconomic force sidelines it.
There definitely can be a food chain. Dealer A buys estate flips it to Dealer B. Dealer B flips to vest pocket trader who flips to Dealer C who specializes in that issue. Dealer C retails it online or at a show. This can be an indicator of a healthy market. When the food chain breaks down it’s possible for prices to fall.
Many now paying more for cars, entertainment (PS5), food, housing may curtail coin expendures. Survival trumps RCI.
At a show I flipped a low pop PCGS 19th century Mexican silver coin procured from Auc house to dealer setup nearby for a really good margin. I had not been able move it at my price for sometime so let it go. Later in show he sold to a collector. I then went to a wholesalers table who knows me and picked up some US slabbed material around bid for retail to customers.
A fall in prices means I can get stuff cheaper. The 89 crash was a bonanza for me bc in 1990 could get new stuff had been priced out of. Made my table at shows look better too. Many went bankrupt during that period.
In a lot of ways the coin Mkt can be a lot alike like the good, the bad, and the ugly. I liked that movie, western when it came out 1969 ish especially the theme song. Clint Eastwood one of the stars.
Comments
You will get your answer if we go into a hard recession as we did in the early 80' under Jimmy Carters Administration.
Coins were achieving record prices then the bottom fell out and it took many years for them to get them back to those levels.
At shows back then dealers were begging me to buy something before they fell more.
One dealer said to me --help me I need to get rid of this "Sh_t". I will never forget that moment!
A scary time inflation rampant and safe Government treasuries were available at 16%!!! -why would you buy coins?
classic coins are way too cheap.
Compared to what?
I've started thinking, how much does this compare to a house or exotic car. Either full price for more expensive items or loan payments for less expensive ones.
PCGS 3000 Index is about where it was Pre Covid
PCGS Key Date Index is up about 30% from the depth of Covid and about 10% higher than pre covid.
I would think a major recession would knock down prices for some key dates.
Probably more a case of who needs cash.
Probably 30% for common dates.
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This is a comparison to items which actually have some practical use. The type of car inferred by your post and some houses are also status symbols, depending upon the price range you have in mind.
Coins are neither, except to coin collectors. This is true now and it's going to be true later.
A house can be rented to produce an income stream. No one except a coin collector would ever "rent" a coin. Whatever admission fees are charged by dedicated coin museums (like the ANA), it's immaterial to the value of the collection.
Yes, that's the point of the comparison.
The idea is that the coin is worth so much more than a comparable house or car because there's less of this additional benefit, so for the same dollar amount, the coin must produce more personal enjoyment.
Take the 1923-S Lincoln... quite possibly the toughest Lincoln Cent to find nice AU and UNC pieces. You'll have no problem finding a multitude of 1909-S VDB cents in MS grades in TPG holders at a show... but even at a decent sized regional show, you'd be lucky to find even one or two 1923-S Lincolns in MS grades. And when you do find them, they're usually poorly struck dogs. (The ones that aren't command significant premiums... as you noted in your post.)
Yet the 23-S Lincoln in, say, MS63BN is nowhere near as valuable as a 1909-S VDB in 63BN (or even in low grades for that matter). Every Lincoln collector needs a 23-S just as much as an SVDB... but the vast majority of them are content with a VF to plug the hole in their Dansco album, and to them, it's just a "better date". So likewise, the market for UNC 23-S cents covers only a small portion of Lincoln collectors, and the price goes accordingly.
"You can't get just one gun." "You can't get just one tattoo." "You can't get just one 1796 Draped Bust Large Cent."
Looking at total populations can be confusing. To evaluate whether a coin is overpriced or undervalued one needs to look at a specific grade level. Take the Lincoln penny example, there are 1050+9 '1909 S VDBs' in RB65 @ $5,150 and 103 '1915s' in RB65 @$450. The 1915 is definitely undervalued.
Yes, the S-VDB has always been a highly prized coin. Some would claim it's overvalued. Yet, many would be happy to own only one Lincoln penny - the 1909 S VDB. The 1915 is a nice sleeper.
No US coin is undervalued. Far more people want an SVDB than ac1915. The market is too large and mature for things to not be properly valued.
"No US coin is undervalued."
Agreed.
The information posted above is easily accessible to anyone online. If the 1915 is undervalued, why aren't buyers driving the price up by snapping up the coins whenever they're offered at these "bargain" prices?
Well, there are only 103 '1915' Lincoln pennies in PCGS RB65 and they don't come up for sale very often. Great Collections has only sold 9 in the last 12 years.
If they're undervalued based on population reports and auction records, why aren't they selling for more? It's not like that info is a secret.
Can't possibly be more of a commodity than when coins were traded by the roll.
Buyers are slaves to price guides? It's more of an issue with overvalued coins.
I really don't know if classic US coins are overpriced, historically speaking. I don't have the span in the hobby. There were a few dissuasions on valuation ATS, and I was in disagreement (maybe even offended) with some of @WCC 's points in that discussion. However, I have spent some time reflecting since that and have realized that many of his points are very valid, and it was my emotional attachment to coins that were clouding my objectivity.
But... how do we make this assessment? Are we saying "overpriced" compared to other coins? Other hobbies like collecting Beanie Babies or figurines from the Franklin Mint? Boating or RVing? Doing jigsaw puzzles or model airplanes?
Most hobbies... one does not look for anything in return but enjoyment. I know coins are different... but it really depends on what we are comparing the valuation to in order to better understand what is under/overvalued.
I know this is likely a "beginner" outlook, and that's fair (I am). But, I am not sure... even if I had the history in this hobby and was an expert, could a accurately answer the question.
I am a newer collector (started April 2020), and I primarily focus on U.S. Half Cents and Type Coins. Early copper is my favorite.
I didn't say price guides, I said auction records. Buyers are bidding up to a certain point and then stopping. If a coin is really undervalued, they'd keep bidding. But they don't, which is how you can tell the coin is accurately valued.
As far as overvalued coins go, how many of the people on this thread who say they are, are selling their coins now in order to buy back later when the prices fall? Are you?
Auction buyers often rely on price guides to tell them when to stop bidding.
In my areas of interest I often find it's the overvalued coins that are offered for sale. The undervalued, not so often. Coins are not like the stock market. If someone is selling overvalued coins, it's more likely they've decided they have gone as far as they can go and it's time to concentrate on collecting a different series. In fact, that's what I'm doing right now with the coins I bought when they were undervalued.
I think some are overpriced but not all. In the areas I collect I think the common classic gold is overpriced compared to bullion. Dollar gold is only a bit overpriced but demand has been much stronger in the last few years.
Price guides get their prices from what people are paying for coins. Under your scenario (buyers depend on price guides to know what to pay), prices in the guides would never change.
The key word is "often." Many times bidders go over price guides too.
So- buyers often rely on price guides but many times, don't? Ok.
Hindsight is supposed to be 20/20 so if we look back historically:
If we look at this for all collectors, can it be taken to mean sets, or some coins in those sets, that are generally easier to complete are sold more often, and thus more overvalued?
There are likely far more of this coin outside of a holder than in one, proportionately at least. Same for most other dates in this series. I've seen estimates for the 09-S VDB that are much higher than the pop reports, but my inference is that it is concentrated in circulated grades.
Most collectors will pay market price for an "overvalued" coin, as long as they have an expectation of recovering most of their cost at resale.
Sometimes my comments come across as harsh, but it's not meant to be that way. On this type of subject, I try to frame my comments from the point of view of those who are either not collectors (at all) or collect something else other than the topic under discussion. Since I do not collect US coins, I don't discuss the coins I collect on this side of the forum. But even when I do, I don't extrapolate my preferences to anyone else. (I know they don't prefer the coins I do, that's why they collect something else.) That's what most people tend to do.
There is no absolute value and by definition, in an "efficient" market, current value is always market value and therefore, not "overvalued". I don't believe in efficiently priced markets, but in coinage, US classics (as a whole) are as close to one as exists.
Value can only be measured relatively. Usually, I can come up with an explanation for relative prices, though it might not be the right one. Generically, I think most collectors ignore what they don't collect and will pay current market price, as long as they treat it as a consumption expense or have an expectation of getting most of their money back.
Same concept applies when comparing coins or anything else to another area. Two different sets of buyers who are mostly oblivious to what else is out there and current relative prices, and wouldn't care if they knew, unless evaluating potential "investments".
While some collectors may come across as harsh in discussions of valuation on the U.S. coin market, if they are objective, it can be a good discussion to have.
For example, in these discussions, often a comparison is made comparing U.S. coins to coins from other countries. While U.S. coins can be priced relatively higher for the same grade, denomination, composition, etc., that doesn't necessarily mean they are overpriced, but it can mean they are less affordable. When comparing prices of coins like this, I like to compare collector populations including: population trends, disposable income trends , inclination to buy coin collectibles, maturity of the collecting market for those coins, etc. Normally, when I see underpricing at this level, it has to do with understanding a population is going to have much more disposable income in the future paired with an inclination to buy coins. This has played out several times and is exciting to watch.
I really enjoy reading the perspectives on these threads. Thanks to all!
I am a newer collector (started April 2020), and I primarily focus on U.S. Half Cents and Type Coins. Early copper is my favorite.
Assuming buyers are using discretionary income on this hobby (and I hope the majority do) then I think the perceived market valuation is irrelevant. One buys a coin because they are passionate about its acquisition and price becomes less critical (up to a point). So no, I think the present market reflects demand along with inflationary pressures as do other markets. So therefore, not over valued.
"Got a flaming heart, can't get my fill"
No one has yet to identify what the term means.
Increasing price does not mean that the prior price was too low. It just means the market has changed.
But if you could have predicted the price increase…..
Predicting the price increase does not require finding something "underpriced". It requires determining future market direction.
Earlier in the thread, it was suggested that a 1915 Lincoln graded PCGS 65RB was undervalued.
In the last year and a half, there have been four sales between Heritage and GC, for these amounts: $552, $536, $492, $372. PCGS price guide says $450. Based on that, it looks like buyers are mostly valuing the coin above the price guide. Is a coin "undervalued" when buyers are actually paying more real dollars for a coin than what a guide says it's worth, when the guide is neither buying nor selling them?
Sounds like a definition is needed.
We need to get to some definitions
If a coin is regularly selling for $450 to $500 and someone lists one for sale at $300, that's underpriced. Calling something underpriced based on its future price turning out to be higher than today doesn't tell you anything since there's no way to be sure today which direction the price will go tomorrow.
If an underpriced coin is one that’s selling less than it regularly sells for, how does one have a conversation about the market being underpriced? Or is it not possible by definition?
I don't think it is really possible for a large developed market like US coins. Smaller niche markets are not efficient at pricing. But a large market will efficiently do price discovery. The only segments of US coins that may be over or underpriced are the true rarities that rarely change hands.
Unless you define "the market" awfully narrowly, I don't think you can have a meaningful conversation on the subject. I just looked at the first page of the PCGS price guide (for the record, I think actual sales are a better gauge of current value than a price guide but I'm not going to do a research project of prices realized for this post) for Lincoln cents. There are both green up arrows and red down arrows, mostly green right now. That would seem to indicate that the market is generally "up" but if you own a bunch of the red arrow coins, not so much. So- based on that, are early Lincolns underpriced or not?
A coin is undervalued considering it's TPG population relative to other coins in the same series. A coin is approaching fair value when buyers, who believe coin is undervalued, are paying more than the price guides.
A coin could be underpriced because a seller realizes a coin is overvalued. It's TPG population is higher than similar valued coins in the same series.
That puts say too much importance on TPG population and way too little importance in the actual market.
Are we talking about total TPG populations or TPG populations in higher grades?
I'm talking TPG in general. That might with for 5 figure coins. For 3 figure coins, even mid 3, the submission percentages can be fairly low.
But I don't care if the coin is a legitimate pop 1 and seeks for half of a pop 5 in the same series. The market has priced them and is far more important than the population because it considers the demand side.
You would consider SVDB cents to be overpriced because their price is higher than lower pop coins in the same series. But it isn't. The price is higher because the demand is higher.
Only a very thin market can contain over- and under- priced coins because they don't trade very often and the last sale could be an outlier. But for mature markets with active trading, the value is well established.
There is not a single Morgan dollar that isn't priced correctly. There is not a single Lincoln cent that isn't priced correctly. That doesn't mean that some won't be higher in 5 years and some lower. But they all trade frequently so the market has determined the value.
After reading these threads, I still think classic coins overall are undervalued.
For example, a mint state Capped bust Half dollar should be worth around $40k not $6k or so. I can go on but you get my thinking. Obviously there are great eye appealing coins that should be worth alot as well. Coins are valued based on supply and demand. Why should 30 year baseball cards be worth alot more than classic coins 100+ older.
If coins values are based on supply and demand and a CBH should be worth $40k and not $6k, what can change on the supply and demand sides for that to happen?
I don't collect either. However,
And asked
I'm not sure what you mean by that response. That shows the price of a 1915 65 RB to be $485 (the average of the 4 prices). It says nothing about "over" or "under" and is reasonably close to the PCGS guide (not that I consider the PCGS guide to be the most accurate). FWIW the CAC CPG is $468. So, all the price guides and the sales are in the same ballpark.
I still maintain that coin is accurately priced by the market and is neither over or under-priced.
I absolutely say yes
Let me offer my opinion
The collectors market has “has grown significantly” but driven by “flippers” only looking to profit. I bought three coins over $11k each and the guys had no interest in the sport/collecting at all. They told me they had 17 people trying to purchase coins from the mint at drop date. Prices are being driven by demand, yes.., but that demand is only being driven by the sheer number of people / bots turning coins into cash cows. I don’t see that this is good for collectors at all. New flippers selling to flippers selling to flippers finally maybe selling to a collector while doubling the price.
PS5 retail $499 selling to gamers at $1k
Vehicles $10k over sticker
Base box of Pokémon’s $400k
On and on
Eventually prices rise so high that you price out of the collector market and flippers will learn the hard way / end up crashing.
Except that there is always a final retail buyer. This is the process if price discovery. With new issues, the market price isn't the release date price because of initial artificial scarcity. But 6 months or so later, the market has determined the price. The coins don't trade among flippers forever.
I've seen a lot of up and down markets over the years since I have collected so many things. To a very real extent "overpriced" merely means it is very difficult to obtain current market value. If this persists then market value will drop but it will still be difficult to sell. It goes on long enough then the coins will trade at fire sale prices. "Underpriced" is the opposite.
Now days in many real ways the grading services affect this equation. As it becomes more difficult to sell coins the services define the supply and in order to keep up with value based pricing they tighten up. Recently graded coins are worth more making the price guides even slower to respond to market conditions. Of course this too is opposite what happens when coins are "underpriced".
A lot of the coins that had been owned by baby boomers have already been dissipated into the market yet it remains strong due to a quarter century of growth in demand. I don't see this changing in the near future unless some unforeseeable macroeconomic force sidelines it.
There definitely can be a food chain. Dealer A buys estate flips it to Dealer B. Dealer B flips to vest pocket trader who flips to Dealer C who specializes in that issue. Dealer C retails it online or at a show. This can be an indicator of a healthy market. When the food chain breaks down it’s possible for prices to fall.
Many now paying more for cars, entertainment (PS5), food, housing may curtail coin expendures. Survival trumps RCI.
At a show I flipped a low pop PCGS 19th century Mexican silver coin procured from Auc house to dealer setup nearby for a really good margin. I had not been able move it at my price for sometime so let it go. Later in show he sold to a collector. I then went to a wholesalers table who knows me and picked up some US slabbed material around bid for retail to customers.
A fall in prices means I can get stuff cheaper. The 89 crash was a bonanza for me bc in 1990 could get new stuff had been priced out of. Made my table at shows look better too. Many went bankrupt during that period.
In a lot of ways the coin Mkt can be a lot alike like the good, the bad, and the ugly. I liked that movie, western when it came out 1969 ish especially the theme song. Clint Eastwood one of the stars.