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Chapter Two Posted! - The longest and scariest thread you will ever see!

MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
Karl doesn't want me asking so many questions and Seth wants me to tell stories, so we're going to take a different approach with this new thread. Over the next month I will tell you a story, start to finish. There will be some good guys, some bad guys, lots of coins (all but one fictitious), heated debates and a big surprise ending. You may learn more from this story than you ever wanted to know about the coin business. Consider yourself forewarned!

There are a few of you who will recognize the story. Please don't ruin it for everyone else. You can participate, but PLEASE don't give any hints on where this is all going.


Chapter one begins our story:

Long Beach Coin Show, 1989

Guy, a PNG dealer and "Pretty Nice Guy" (hence, his fictitious name) shows a raw uncirculated 1813 half eagle to Mark, a very sharp coin dealer. (It will later become clear how our second character got his fictitious name.) He explains that he has the coin on consignment and wants a second opinion on the coin before offering it to a good retail customer "back home".

Mark looks very closely at the coin, loves it, and rather than giving his free opinion he tries to buy it. Under some pressure from Mark, Guy reveals that the coin is on consignment to him at 25K and that he was going to charge his customer 30K. Mark convinces Guy to sell him the coin instead, at the same 30K, which at the time was about an MS64 price. A deal is consummated. Mark is thrilled because he thinks it's a 65 worth 100K. Guy pays the consignor 25K and both he and the consignor are happy.

Before we continue to Chapter 2, a few questions:

1. Did Guy have a moral obligation to give his retail customer first crack at the coin?

2. Did Mark have a moral obligation to give Guy his honest opinion about the coin instead of trying to "rip" the coin?


CHAPTER TWO (Posted Tuesday, April 22 at 4:20 PM)

Several weeks have passed. Mark has sent his 1813 half eagle to both major grading services. Both have bodybagged the coin for "Altered Surfaces". (In fact, the entire coin was probably very lightly whizzed.) Although Mark still thinks the coin looks great, he realizes that he made a big mistake paying 30K for the coin. He now has many options, including the following:

1. Accept that he made a mistake and sell the coin for what it is, a 20K+ loss.

2. Try to return the coin to Guy for a full or partial refund.

3. Without saying what the coin graded, tell Guy a story about needing money. Consign the coin back to Guy and let him try to sell it to the original "customer back home".

4. Put the coin in an auction, raw, hoping that someone else will make the same mistake.

5. Send the coin to ACG with a required "minimum grade" of MS 65.

What should Mark do?
Andy Lustig

Doggedly collecting coins of the Central American Republic.

Visit the Society of US Pattern Collectors at USPatterns.com.
«13

Comments

  • mnmcoinmnmcoin Posts: 2,165
    1. No
    2. No

    morris <><
    "Repent, for the kindom of heaven is at hand."
    ** I would take a shack on the Rock over a castle in the sand !! **
    Don't take life so seriously...nobody gets out alive.

    ALL VALLEY COIN AND JEWELRY
    28480 B OLD TOWN FRONT ST
    TEMECULA, CA 92590
    (951) 757-0334

    www.allvalleycoinandjewelry.com
  • NicNic Posts: 3,340 ✭✭✭✭✭
    1. No
    2. Depends if they were friends and coin buddies or just two dealers. If the latter, no.

    K
  • If they aggreed on a price and paid for it, it is ok. Did the dealer submit it to PCGS?

    Cameron Kiefer
  • Morality...Coin Dealers...I'm not sure I see the connection
    That humanity at large will ever be able to dispense with artificial paradises seems unlikely. Most men and women lead lives at the worst so painful, and at the best so monotonous, poor, and limited, that the urge to escape, the longing to transcend themselves, if only for a few moments, is and always has been one of the principal appetites of the soul.

    Aldous Huxley

    Yabba dabba doo.

    Fred Flintstone

  • SethChandlerSethChandler Posts: 1,697 ✭✭✭✭
    1) No. Only if the dealer did NOT inform his client he had a nice 1813 Half Eagle waiting for him.
    2) Nope, its just business as usual.

    Thanks Andy, this my kind of thread. Personalities, great coins, big dollars, and the delicate balance of ethics.

    Seth
    Collecting since 1976.
  • Andy,
    That's the dumbest question ever....everyone knows dealers have no morals. image

    So the answer is no.
  • dorkkarldorkkarl Posts: 12,692 ✭✭✭
    1=no, 2=no, however, did "mark" buy the coin because "he loved it" or because "he loved it for it's business potential". significant difference

    btw, you realize of course that the "why...question" thread was a compliment, right???

    K S
  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    Karl -

    Mark loved it as a coin AND as a business deal? Why does that matter with respect to the morality issues?

    (Yes, I knew that your post was in fun. And don't worry, I'm not going to have the platinum half "fixed". I was able to get it slabbed just the way it is!)
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • Dog97Dog97 Posts: 7,875 ✭✭✭
    Guy wanted 25k-Guy got 25k.
    Mark's a greedy weasel.
    Change that we can believe in is that change which is 90% silver.
  • Dog97Dog97 Posts: 7,875 ✭✭✭
    Mark's a sleazy weasel.
    Change that we can believe in is that change which is 90% silver.
  • No and No.........Ken
  • DCAMFranklinDCAMFranklin Posts: 2,862 ✭✭
    1. No.
    2. No.

    The early bird gets the worm.
  • CalGoldCalGold Posts: 2,609 ✭✭
    Guy met his obligation to the consignor by getting him the $25K consignment price.

    Guy was checking with Mark to see if the coin was good enough to offer to his client for $30K. Client had no vested interest in the coin.

    By the way, Guy was marking up a coin 20% that he had on memo, with no capital invested, so he was not exactly giving his client a great deal in the first place, unless the market value is greater than $30K. But if it were worth substantially more than $30K, he was not advising the consignor well either.

    CG
  • I'll give you 26.5 for the coin right now, and I'll throw in a fire extinguisher for your kitchen, but if you tell either Guy or Mark I said that, I'll deny it.
    Singapore
  • #1 no, did the customer know about it?
    #2 yes
    #3 It's nice to see a dealer screw another dealer for a change. There must be certain dictionaries that don't have the word ethics in it.image
  • Singapore- Where this story is heading, you may need quite a bit more than a fire extinguisher.

    Dog- Why exactly is Mark a greedy sleazy weasel? He did not try to get the coin for a lower price. Is it a crime to try and make a profit?
    David Schweitz
  • coinguy1coinguy1 Posts: 13,485
    In the absence of additional informatiion, such as a conversation about the coin between Guy and his client or a prior understanding/history between Guy and Mark:

    1) no and 2) no

    For the record - I am Mark but not the "Mark" in this thread. And, I think I know where this tale is heading but will refrain from guessing out loud, out of respect for Mr. Lustig's wishes.
  • CoinosaurusCoinosaurus Posts: 9,614 ✭✭✭✭✭
    Nothing wrong here so far........we are all anxiously waiting to see where this story is headed image
  • NoGvmntNoGvmnt Posts: 1,126
    1.) No, Guy intended to offer the coin to offer the coin to one of his good retail customers, as of that moment the "good retail customer" had no knowledeg of the existence of the coin, no harm, no foul. But, after considering the easy offer made by Mark, it would be good business sense for Guy to obtain a number of opinions from numerous informed individuals.

    2.) Yes, an honest opinion is what Guy asked for and that is what Mark should have provided prior to making an offer. Again, if Guy had an iota of business sense, he would/should have obtained numerous opinions, he owed it to himself and his consignor to do so.

    AND, although you did not ask, the consignor should have performed a little due dilligence of his/her own considering the perceived rarity of the piece.

    It is also in Guys' best interest, ie: good business sense, to keep his "good retail client" happy by offering him/her first crack.

    Just my humble opinion, Jim
  • nwcsnwcs Posts: 13,387 ✭✭✭
    If I was asked for my honest opinion and was told the coin was promised to another, then Yes and Yes. My integrity would be in question otherwise. If I was asked in a vague manner, and there was a vague reference to a customer... then I would think it's up in the air as to whether the coin was promised and I wouldn't have a problem with convincing them. And if I was asked for an opinion on a coin, I'll give it. But if I was asked only if I liked the coin or what I think about it, then I'll probably give a general answer.

    Neil
  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    an honest opinion is what Guy asked for and that is what Mark should have provided prior to making an offer.

    Just because Guy asked for an opinion doesn't mean that he is entitled to it. Besides, Guy didn't HAVE TO sell the coin to Mark. He could have simply declined the offer and looked elsewhere for another opinion.
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • 1. No
    2. No

    Business is business, nothing more, nothing less.

    Nobody should feel obligated to reveal their hand in this high stakes poker game.
    Buy/Sell/Trade Rainbow Morgans
  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    Nobody should feel obligated to reveal their hand in this high stakes poker game.

    Thank you, I think I'll use that line on my site!

    Now, we return to our thread, already in progress.
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • BigMooseBigMoose Posts: 1,466 ✭✭✭
    1) No, unless Guy had already talked to his retail clientback home about the coin.
    2) No! Any attempted "rip" carries significant risk with it. Guy received what he asked for, getting a 20% markup on a consignment coin, the consignor got what he wanted and Mark got what he wanted. Mark was under no obligation to tell Guy he thought the coin would grade 65. This appears to be a straightforward deal.
    TomT-1794

    Check out some of my 1794 Large Cents on www.coingallery.org
  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    Just because Guy asked for an opinion doesn't mean that he is entitled to it.

    Wait a second! Mark agreed to give his opinion BEFORE he was even allowed to look at the coin! You bet Guy was entitled to an honest opinion!


    (Don't you just love arguing with yourself?)
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • Dog97Dog97 Posts: 7,875 ✭✭✭
    2. Did Mark have a moral obligation to give Guy his honest opinion about the coin instead of trying to "rip" the coin?
    For everybody that said no to #2:
    Say collector Mr. or Mrs. AOY (Any Of You) approach me at a show with a $25,000 MS64 Morgan. You know that I'm a legend in my own mind; I grade tough, bash fingerprints & poorly dipped coins and know a little bout my series, and ask my opinion on your coin. I look at it and I'm thinking, man that's a 65 worth $100,000.
    So I tell AOY, friend that's really nice, I think you should spend $25 and send it in for a possible upgrade.
    If I tell you other wise I not only ripped the coin, I ripped AOY.
    Mark, a very sharp coin dealer is a sleazy weasel.
    Change that we can believe in is that change which is 90% silver.
  • "The longest and scariest thread you will ever see!" Oh....I thought this thread was about "WHY DO PEOPLE LOVE FRANKLINS SO MUCH?"image
  • coinguy1coinguy1 Posts: 13,485
    For anyone who wants to bash "Mark" for being unethical, etc. in the scenario Andy has presented, please re-read what Andy said below. As I read it, "Guy" shows the coin to Mark BEFORE he mentions that he wants a 2'd opinion. That makes a difference - to me, at least. "Mark" did not represent that he would give an opinion. And, no where does Andy state that "Guy" ever actually asked Mark for his opinion..



    << <i>Guy, a PNG dealer and "Pretty Nice Guy" (hence, his fictitious name) shows a raw uncirculated 1813 half eagle to Mark, a very sharp coin dealer. (It will later become clear how our second character got his fictitious name.) He explains that he has the coin on consignment and wants a second opinion on the coin before offering it to a good retail customer "back home". >>



    Dog97's scenario is quite different - in that one, an opinion is actually solicited. And, it is asked by a collector. While I believe that we should all be fair, up front and ethical in our dealings, I feel that an even higher duty is owed by a dealer/expert to a non-dealer/non-expert.
  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    CoinGuy -

    Does it really matter if the coin was shown before or after the request for an opinion was made? It's not like there was any consideration offered in exchange for the opinion. Come on, you know the law, help us out!

    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    I did not originally read it that way

    Actually, neither did I, but CoinGuy is right. Anyway, I don't think it's relevant.

    Besides, when you see me arguing both sides you should probably ignore me.
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • 1. No
    2. No
    Glenn
  • I think if he got the coin with a specific client in mind he should hold the coin to show them first. After all he got it on consignment with the idea of selling it to that one person. I would also say that Mark should have not tried to b uy the coin as he was asked his opinion. In my way of thinking it should have been handled like this.


    Very nice coin. I think you may be under the money on this one. I would try your client at $40,000, as I would gladly pay the $30,000 myself.
    image
  • coinguy1coinguy1 Posts: 13,485
    Andy, it makes (at least) some difference to me.

    Sometimes a dealer might get the opportunity to look at and/or buy a given coin in exchange for giving an opinion, recommendation, thoughts, etc. If that is part of the bargain, than the one who agrees to give that information should follow through on his end.

    In your precise scenario, it is my opinion that "Mark" did nothing wrong, ethically or legally. And, I would say the same, even if he had a different name.image
  • au58au58 Posts: 1,288 ✭✭✭
    I don't know what happens in the rest of the story, but what has been described so far usually happens many times at nearly every coin show with national representation. In 1989, when this story started, and when everything was hot (i.e., being hyped), lots of mistakes were made on both sides of the buy/sell equation.
  • Reading this type of thread all the time; you get a sense of who you want to deal with, and feel like you are being treated fairly. Being a reborn newbie, it's not much different than it was in the 60's. But I'm back anyway. got a lot to learn.
  • 1. No
    2. No

    Although if I was Guy, I would have been a little suspicious of Mark's sudden interest in the coin, thinking maybe there was something I was missing, and looked for a couple more opinions.

    Andy image
    We are finite beings, limited in all our powers, and, hence, our conclusions are not only relative, but they should ever be held subject to correction. Positive assurance is unattainable. The dogmatist is the only one who claims to possess absolute certainty.

    First POTD 9/19/05!!

  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    I would try your client at $40,000, as I would gladly pay the $30,000 myself.

    Wisconsin, BOY, do I want to play poker with YOU!!!
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • Maybe I am th eonly one that thinks this way, but when I buy something and have a client in mind, I will not price it or sell it to anyone else until that person has seen the item. Yes, I could have maybe gotten more money from time to time, but I look at it this way. I have a potential customer looking for this item, and they would be glad to get it, They have been buying other things regularly, and why not give them the chance at the good stuff. There will always be somebody to pay a bit more on the rare or underpriced items, but if there is going to be a bargain, I'd like to see a regular good customer get it. After all there is the good chance I will get it back again someday.
    image
  • Dog97Dog97 Posts: 7,875 ✭✭✭
    coinguy1 I just reread what Andy said in case I missed something. He said that he has the coin on consignment and wants a second opinion on the coin.
    I don't see how that is quite different from my scenario other than Mark the Weasel is a dealer and I'm not.
    Now comes the part where everybody says a dealer in the business should be knowledgable if he wants to stay in business so it's Guy's fault because he couldn't properly grade the coin and didn't realize what he had.
    So now comes the double standard-it's not fair to weasel a collector but a dealer is fair game?
    Or am I missing something like Guy shoulda wondered why Mark the Weasel didn't want to give his opinion but rather buy the coin @ full price instead? Maybe Guy knew his cosignor had already submitted it 15 times and it had NGed for cleaning 2 times and been downgraded 3 & took 10 more times to get the 64 grade back and Guy was really shanking Mark, who really wasn't so sharp after all.
    I still say Mark is a weasel and I don't like him.
    Change that we can believe in is that change which is 90% silver.
  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    They have been buying other things regularly, and why not give them the chance at the good stuff.

    So if you were Guy and Mark suggested that you quote your customer 40K, would you? image
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    I still say Mark is a weasel and I don't like him.

    Come on, Dog, the story's just getting started. Give poor Mark a chance!
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • C'MON!! Part II please....image
    We are finite beings, limited in all our powers, and, hence, our conclusions are not only relative, but they should ever be held subject to correction. Positive assurance is unattainable. The dogmatist is the only one who claims to possess absolute certainty.

    First POTD 9/19/05!!

  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    C'MON!! Part II please....

    Not yet, but I'll tell you how it graded (or didn't) tomorrow. That will be Chapter 2 of about 10!


    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • If I got a coin and asked a dealer an opinion on what I should get for it, I would take into consideration many different things, such as does the dealer know the market, or this particular coin well? Is his suggested price still a good deal for my client?, as I don't want to put him into something at the very last dollar. I think all of us ask for help on areas we are not familiar with. How or who you decide to sell to is all your choice I guess, and we will all react different in each situation.
    image
  • au58au58 Posts: 1,288 ✭✭✭
    What's the big deal?
    There are many dealers who will rip every coin they can, whether it's from the public, long term customers, or other dealers.
    There are also many dealers (and perhaps there were more in 1989) who can't tell MS63 from MS65.
    You can question the ethics of those in the first category, and wonder how those in the second category got or stay in business, but as sure as you're reading this, they're out there.
  • coinguy1coinguy1 Posts: 13,485
    I can easily become obsessed with threads like this - thanks a lot, Andy!image

    First, while I don't think Guy had any moral obligation to offer the coin to his client, I agree with what Wisconsin/Jay said. I would offer the coin to my client first for reasons mentioned by Wisconsin/Jay and have done so in the past, turning down "done deal" sales to dealers in order to offer the coins to clients for the same price. In at least one case, we sold the coin to a really good client for LESS (and I'm talking a few thousand dollars on a $55,000 coin) than a dealer was willing to pay. Maybe some will think it was stupid, but I think it was good business and something to feel good about.

    Dog, maybe I'm being too technical, but to me, it makes a difference, as to whether "Mark" is shown the coin before or after "Guy" tells him he is seeking an opinion. And, in Andy's story, "Mark" is never asked for his opinion - instead, "Guy" decides to sell the coin to him. I have a feeling "Guy" never really wanted an opinion from "Mark", either.

    In your scenario, as I understand it, someone actually asks for an opinion and the person doing the asking is not a dealer. To me, there is a huge difference between trying to buy a coin (which is, in effect, giving an opinion) you are asked an opinion of, vs. giving an opinion and lying, while doing so. The former is ok in my book, based on the precise way Andy presented the situation. The latter is not!

    Please do not misunderstand me - I advocate fairness and honesty in all transactions (I will stand by my record of over 20 plus years in the business on this point), regardless of whether dealers or collectors or both are involved. But, I believe an even higher responsibility is owed by the expert to the non-expert.

    In my opinion, there is often a difference between what is legal and ethical and "right". I prefer to have all three going for me at the same time.

    Edited to add - it probably doesn't make any difference but... it sounds as if some posters to this thread are assuming the coin was consigned to "Guy" by a non-dealer client. It is entirely possible it was consigned by a dealer, if by anyone, at all.
  • Dog97Dog97 Posts: 7,875 ✭✭✭
    coinguy1
    I'm not catching the significance of the sequence of events. Andy said Guy showed Mark the Weasel the coin and asked for an opinion.
    So you mean if I walk up to a dealer and pull a coin from my pocket first then ask him what do you think, he is allowed to rip me
    BUTT
    if I walk up to a dealer and ask what do you think then pull the coin from my pocket he has to be honest.
    I'll remember that the next time I walk into a dealer's shop and ask him what my coin is worth.
    Dog97: Hello Mr Dealer, what is my coin worth?
    Mr. Dealer: Let me see it.
    Dog97: No.
    Mr. Dealer: Why not?
    Dog97: You might not tell me the truth.
    Change that we can believe in is that change which is 90% silver.
  • coinguy1coinguy1 Posts: 13,485
    Dog,

    The sequence/ particulars of the events makes a difference (to me) because if "MarK" had said he would give an opinion and didn't, he wasn't true to his word. On the other hand, if he wasn't ever asked, he did nothing wrong by not giving an opinion. In Andy's scenario, "Guy" never actually asked. Good night.image
  • sinin1sinin1 Posts: 7,500
    If I bought a 25K coin with someone in mind, and got a offer on the spot (for a 5K rip), it would depend on my relationship with the client I was looking for.

    I would like to be pretty sure they would want it -

    If they were frequently buying, I would want to keep the supply coming their way -

    I would like to give them some good deals (along with the others I wouldn't want to admit too) -


    Having said that, 1) no 2) no

    the original seller who had it and offered it for 25K on commission is the only person I see who has not done their fudiciary duty as of yet - lets wait fro chapter 2!
  • It seems to me that guy was asking Mark for a 2nd opinion. After all, Mark was an expert dealer. I would assume that was the reason Guy showed him the coin. Just because he showed the coin 1st, and asked 2nd doesn't change what the situation most likely was. Mark obviously didn't give an honest opinion on what grade he thought the coin was and what it what worth.. Maybe Guy should have known, but that's why he asked for a 2nd opinion.

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