Beware of auction price manipulations.
BillJones
Posts: 34,838 ✭✭✭✭✭
There have been a lot of discussion about the $39,100 cent, and weather or not that price is a legitimate reflection of the market or an aberration. From what I can see this transaction was one that did indeed took place, but many people think that the result was way ahead of the market. I have seen other auction results, that from their appearances, seemed to be a sham with the purpose of establishing public sale numbers that could be used for marketing coins privately. Here is an example.
Back in the early 1980s I went to a sparsely attended public auction that was held on a Saturday morning. The sale was being conducted by a national firm that is no longer business. The sale consisted of a large group of California fraction gold pieces.
At the start of sale a number of bidders in the front of the room were bidding prices in the $200 to $400 range as one would have expected at the time. Then from the back of room, a man shouted “$5,000!” The auctioneer waited for another bid, and then awarded the lot to him. At the time I thought that was odd, but perhaps that bidder really wanted that lot badly and decided to make a preemptive strike to knock out the competition. Another explanation could have been that he was bidding as an agent, and he had two bidders who had authorized him to place very high bids.
When the next lot came up, the bidders in the front of the room again started bidding in the range of a few hundred dollars when the same guy yelled, “6,000!” Once again the auctioneer cried, “sold!”
This went on for lot after lot until in the end this guy had “won” almost all of the offerings. In every case his bid was thousands of dollars above any other bid that had come from the floor or the auction book.
What was going on here? This sale established a public record that these pieces had been “sold” at auction at these inflated prices. Such results could be used to show retail customers for similar items that they had sold for thousands of dollars in the past, which justified the retail selling prices now. I might add that the FTC ultimately shut down the firm that conducted this sale for charging excessively high prices.
This is why I say that honest dealers and collectors should caution new collectors, that not every high price they see for some items is legitimate . No all auctions are what they seem, especially when one has no more than the catalog and the prices realized to evaluate the result.
Back in the early 1980s I went to a sparsely attended public auction that was held on a Saturday morning. The sale was being conducted by a national firm that is no longer business. The sale consisted of a large group of California fraction gold pieces.
At the start of sale a number of bidders in the front of the room were bidding prices in the $200 to $400 range as one would have expected at the time. Then from the back of room, a man shouted “$5,000!” The auctioneer waited for another bid, and then awarded the lot to him. At the time I thought that was odd, but perhaps that bidder really wanted that lot badly and decided to make a preemptive strike to knock out the competition. Another explanation could have been that he was bidding as an agent, and he had two bidders who had authorized him to place very high bids.
When the next lot came up, the bidders in the front of the room again started bidding in the range of a few hundred dollars when the same guy yelled, “6,000!” Once again the auctioneer cried, “sold!”
This went on for lot after lot until in the end this guy had “won” almost all of the offerings. In every case his bid was thousands of dollars above any other bid that had come from the floor or the auction book.
What was going on here? This sale established a public record that these pieces had been “sold” at auction at these inflated prices. Such results could be used to show retail customers for similar items that they had sold for thousands of dollars in the past, which justified the retail selling prices now. I might add that the FTC ultimately shut down the firm that conducted this sale for charging excessively high prices.
This is why I say that honest dealers and collectors should caution new collectors, that not every high price they see for some items is legitimate . No all auctions are what they seem, especially when one has no more than the catalog and the prices realized to evaluate the result.
Retired dealer and avid collector of U.S. type coins, 19th century presidential campaign medalets and selected medals. In recent years I have been working on a set of British coins - at least one coin from each king or queen who issued pieces that are collectible. I am also collecting at least one coin for each Roman emperor from Julius Caesar to ... ?
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Comments
Tom
<< <i>There have been a lot of discussion about the $39,100 cent, and weather or not that price is a legitimate reflection of the market or an aberration. From what I can see this transaction was one that did indeed took place, but many people think that the result was way ahead of the market. I have seen other auction results, that from their appearances, seemed to be a sham with the purpose of establishing public sale numbers that could be used for marketing coins privately. Here is an example.
Back in the early 1980s I went to a sparsely attended public auction that was held on a Saturday morning. The sale was being conducted by a national firm that is no longer business. The sale consisted of a large group of California fraction gold pieces.
At the start of sale a number of bidders in the front of the room were bidding prices in the $200 to $400 range as one would have expected at the time. Then from the back of room, a man shouted “$5,000!” The auctioneer waited for another bid, and then awarded the lot to him. At the time I thought that was odd, but perhaps that bidder really wanted that lot badly and decided to make a preemptive strike to knock out the competition. Another explanation could have been that he was bidding as an agent, and he had two bidders who had authorized him to place very high bids.
When the next lot came up, the bidders in the front of the room again started bidding in the range of a few hundred dollars when the same guy yelled, “6,000!” Once again the auctioneer cried, “sold!”
This went on for lot after lot until in the end this guy had “won” almost all of the offerings. In every case his bid was thousands of dollars above any other bid that had come from the floor or the auction book.
What was going on here? This sale established a public record that these pieces had been “sold” at auction at these inflated prices. Such results could be used to show retail customers for similar items that they had sold for thousands of dollars in the past, which justified the retail selling prices now. I might add that the FTC ultimately shut down the firm that conducted this sale for charging excessively high prices.
This is why I say that honest dealers and collectors should caution new collectors, that not every high price they see for some items is legitimate . No all auctions are what they seem, especially when one has no more than the catalog and the prices realized to evaluate the result. >>
Well said and it may well be true that the '63 cent wouldn't be worth its sale price even if correctly graded.
I'll be the first to admit I don't know.
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WORK HARDER!!!!
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You have a collection of obscure stuff - not much history of sales and not many of these items anywhere.
You run them through an auction - prices get recorded - about a quarter sell, the rest go home with you (or the agent you had bidding) - then over the next 5 years you sell them off piecemeal - when your total value of group increased 300-500% because of the first 'big-time' sale
I find it hard to believe or compare that this occurred with the penny -
Are you saying the seller that had the coin originally didn't like the $3000-$10000 estimate (or whatever it was) so they got a partner - the 2 of them bid it way up and they 'parked it' in someone elses registry set for a year with the plan of reselling it a year later and splitting the profits?
An interesting idea -
Thanks for posting that story. It is helpful to hear these things.
Thanks again.
that THIS IS THE FAIR MARKET VALUE FOR THIS COIN...LOOK .IT SOLD AT AUCTION FOR X AMOUNT OF DOLLARS
JUST RECENTLY. SEE? SEE? THATS THE FMV OF THIS ITEM. SEE? SEE?
Shill bidding and shill buying is a huge disservice for the average collector.
These sorts of `little dealer tricks` are what keeps most honest people out of this hobby, and what drives honest people away from the hobby.
It reminds me of how a publishing company will buy up millions of copies of its own book just to get it on the
best seller lists.
Dispicable if you ask me.
This was one small part of a much larger series of auction secessions. They already had the catalog printed and the room rented for the REAL auctions that were held before and after this one. This one was conducted at a "dead" time when few people would see what was going on.
Cameron Kiefer
<< <i>No one else in the room cryed foul? They just sat there and watched it happen?
Cameron Kiefer >>
Would you like to be physically ejected from the room? No one in the room was getting hurt except for the fact that they could not buy anything. Besides how do you really prove it on the spot? You certinaly have your opinons, but maybe the guy was just a whack job. That probably was not true, given the lack of ethics practiced by the firm in question, but hey rocking that boat would have done little good.
I recently got a bit burned on EBay, someone kept bumping my bid on a blast white Arkansas half dollar I liked. I wanted it badly enough to bid $300 for a coin that was worth no more than $250, and the other guy bid over me, so I forgot about it, thinking that some other guy was nuts. Well this over-bidder retracted all his bids, and I ended up being the high bidder. To make matters worse, I had felt that if I wasn't getting that coin, I bid on another coin from Teletrade ( one point higher in grade ) , I won that lot, then EBay notified me that I had won the coin I originally thought I wasn't getting. I couldn't get out of my bid on the first coin, as I didn't realize that I could retract my bid after a few days had passed, and then had to return the coin I won at Teletrade, pay their "vig", and generally feeling that I got burned.
I liked the coin I won on EBay, but now I really have to set limits on just how far I'll go to win a coin I want. Bidding-Fever can be dangerous.
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Coin collecting is not a hobby, it's an obsession !
New Barber Purchases
Unless a coin or token is so rare that you have little chance of finding another, my policy is to decide my top bid, post it on ebay and let the automatic system bid for me to my limit. If you don't get the item, forget about it. There are other sources.