lessons from an auction

seatedlib3991

I recently participated in a Heritage auction. The auction was of particular interest to me because it targeted my main collection pursuit. Here are a few facts.
One of the things I noticed first is that this auction had dozens of coins in the exact grades I am looking for.
In fact, the day of the auction I actually discovered that all most all of the coins I was tracking were coins I bid on and lost within the last two years.
Second, when I checked prices I discovered that every single coin was also the coin with the highest price paid in the last two years.
Third, the coin I won was at a loss to the seller of 120 dollars. I am not bragging, I just thought it was interesting to see if the price paid would be sustained or be higher.
Fourth, I did not do a breakdown of the entire auction, but did check about 30 coins. the sellers gained on about 4 but lost on the rest. This is a straight comparison of price realized before auction fees and does not reflect insurance, mailing etc.
Someone would have to do a breakdown of the entire auction to get actual results and I am not willing to do that. However it does present me with several questions. Was the time from purchase to relist too short? Can one buyer make a difference in the market and then prices just revert? Is it a mistake to put too much of the same material up for sale at the same time? I will mention though, this auction had a broad amount of material. I am use to seeing a large variety of coins from multiple sellers being jumbled together on a site like Great Collections, but this sale had everything from common date low grade details coins, to mid grades to high grades to proofs. I think it would be an interesting sale for someone to analyze. James

oih82w8

There was one coin last night at Heritage that I have been watching. My desire for the coin suffered for the lack of funds in my slush account...and it went for almost twice the PCGS guide value.

It really depends on those that are viewing at that particular time. Sometimes people get caught up in the moment and let their ego outpace their checkbook. When two bidders want an item, the sky is the limit.

ctf_error_coins

How was the photography on those coins. Were they Truviews or Heritage in-house photos.

This makes a huge difference!!!!!!!!!!!!!

ricko

Auction results can vary for sellers, from losses, to unexpected sky high profits. So much depends on the material first, and the bidding audience second. It only takes two determined bidders to get the testosterone war going.... Cheers, RickO

Grantu

I had the opportunity to snag a coin I’ve been watching for a while now at a decent price. James just as you have described the coin previously sold a couple hundred dollars higher in its previous showing. But I think last night could have just been an off night or some other factor. Although, I still would be interested to see an analysis of the auction as well.

rays

@seatedlib3991 said:
Can one buyer make a difference in the market and then prices just revert?

Depending upon the material, the rare coin market can be remarkably thin, such that the absence of just one active participant can have a significant (I’ve seen as high as 75%) effect upon auction prices realized.

airplanenut

There are many reasons prices could generally drop in a short time frame. Here are a few I can think of:

1- The market has changed

2- Previous bidders acquired the coins they wanted elsewhere and are no longer bidding, at least not at the level they did previously. Clearly the previous highest bidder is no longer involved because he's selling.

3- New photos are lower quality, or they're better quality but show flaws not previously seen

4- Bad night for whatever reason (people on vacation, distracted by life, etc.)

kirkmink

Just post-Tax day perhaps.....seen a lull around that time in available funds for all sorts of collectors.

WCC

Two years is a short holding period for what is generally a not very liquid asset, e.g., most coins. By "not very liquid", I'm referring to the buy-sell spreads, not whether it can be sold for "quick cash".

jmlanzaf

@WCC said:
Two years is a short holding period for what is generally a not very liquid asset, e.g., most coins. By "not very liquid", I'm referring to the buy-sell spreads, not whether it can be sold for "quick cash".

Yeah. I'm not sure why anyone would expect prices to be constantly rising.

DCW

There could be a variety of factors, many of which have already been stated.
But all it really takes is for one serious buyer to avoid bidding, and you can have drastically different results at auction. The coin community is a rather small world. People tend to remember coins they've seen for sale, and some become suspicious when they reappear after a short time.

BillJones

@oih82w8 said:
There was one coin last night at Heritage that I have been watching. My desire for the coin suffered for the lack of funds in my slush account...and it went for almost twice the PCGS guide value.

It really depends on those that are viewing at that particular time. Sometimes people get caught up in the moment and let their ego outpace their checkbook. When two bidders want an item, the sky is the limit.

I don’t think I would ever pay twice the PCGS price guide unless some sort of rare die variety is involved that the price guide does not cover. My experience has been that if you bid those amounts, you are often in good position to end up with the lot. Unless it’s something that is really rare and seldom offered, I’d wait for the next one.

Cougar1978

My big pic overview:

I think whether buyer or seller your YMMV. On the sell safe - It can be a function of how many well off bidders show up that are spending money. Ones competition from other bidders if buying for inventory procurement can vary based on market conditions. Don’t forget that many had to shell out money for their tax bill to IRS at this time. For me it’s been a good time to buy. My last batch (a fav auc house) got for about 10 pct back of bid after adding fees and shipping. Can’t imagine the beating the sellers took. The largest ticket item got for 67 pct PCGS CF (and this after fee and shipx cost allocation).

oih82w8

@BillJones said:

@oih82w8 said:
There was one coin last night at Heritage that I have been watching. My desire for the coin suffered for the lack of funds in my slush account...and it went for almost twice the PCGS guide value.

It really depends on those that are viewing at that particular time. Sometimes people get caught up in the moment and let their ego outpace their checkbook. When two bidders want an item, the sky is the limit.

I don’t think I would ever pay twice the PCGS price guide unless some sort of rare die variety is involved that the price guide does not cover. My experience has been that if you bid those amounts, you are often in good position to end up with the lot. Unless it’s something that is really rare and seldom offered, I’d wait for the next one.

This particular coin was the only AU58+ for the date. Very possible for a registry set.

BStrauss3

If this is the auction you are talking about, https://coins.ha.com/c/auction-home.zx?saleNo=63222

https://coinweek.com/stephenville-collection-of-seated-liberty-coins-offered-by-heritage/

On Monday, April 24, at 6 pm CT (7 pm EST), Heritage Auctions will have their first live session for the Stephenville Collection of Seated Liberty Coins. Half dimes to silver dollars are being offered in this first sale, with grades ranging from Everyman to Superb Gem. To learn more about various Seated Liberty coins, you can explore these articles on half dime, dime, quarter, half dollar, and dollar varieties.

It doesn't sound like a particularly note-worthy collection and there doesn't seem to be anything else about it on the web, nor does it show up in a registry set search, so it's probably one of those 3rd tier or made-up provenance.

I did score a circulated 1861 Half Dime - paid a little over guide with the juice and shipping, but I've been casually looking for a while and it's not a common coin to see. PCGS has just 26 in XF.

seatedlib3991

I agree. As I said it seemed to be the most eclectic assortment of coins. The part that surprised me was that the same bidder had won over 30 coins (At least) that I had tracked and bid on in the last two years.
Both the time frame and the bidding philosophy puzzles me. James

BryceM

If it's a narrow part of the market (varieties, top-pops, stunning toners), one strong bidder who is active over a few years can absolutely impact the market or sometimes even become the market. If you're competing for coins to round out a top-10 registry set in a popular series, you really need certain coins when they come up, and it's often necessary to set new auction records to get them.

But, even busy and popular markets go up and down. Little fluctuations (10-20%) are to be expected, some higher, some lower. Buying a number of expensive coins and then consigning them to auction within a short time period will almost always result in a net loss.

Years ago I assembled a top-10 Registry set of Peace dollars. I worked my tail off and spent a bunch of money (on regrades, photography, etc) when it was time to sell and I ended up making a small profit on the venture. However, the new owner paid a bunch more for them than I did. I used a dealer who sold them on consignment, and was happy to have his help. The net to me was better than it would have been if I had auctioned them.

seatedlib3991

What strikes me about this particular auction is that it did not contain just top pop coins, it did not stress varieties, the coins were of every possible grade and look. If the point was just to make money than paying the highest price in the last two years, (Sometimes 2 and 3 fold), than you violate my old business partners mantra. "You make money buying not selling". Unless they thought we are in an upward market spiral. Even then you must take in to account that some of these coins were purchased as late as November 2022. how many coins increase in that short of a time frame?
One idea is that they just wanted to create a large collection of material so they could attract the largest variety of collectors and investors to one sale. But, even within that parameter the time frame is too short and many collectors such as I could not pursue more than a coin or two. I could have spent a years income on just the coins in this auction. I had to whittle my tracking list down to 6 coins. My first 3 choices all, ironically, sold for more than the previous price. I won coin number four for 10% less than my max bid. Coin six was my possible top pick on some other day but was now my one coin is better than none at all, and so went unbid on because I won coin four. as I say. What is their philosophy? Even if the idea was just to amass a large collection you gave yourself no time to enjoy it. Just my opinion. James

Bikergeek

I'm not a Seated guy and this thread is all I know about this auction. But I'll weigh in: you never know what a person is going through. It may have been the owner's intention to buy, hold, upgrade, and cherish this set for a long time - and something may have come up in his life that required it to be divested. Ya never know.

seatedlib3991

They appear to have at least two more auctions scheduled. Seems planned to me. They also did some sort of review with PCGS, (I found 2 upgrades), so wonder if they ever even saw these coins. Go figure.