THE FALLACY OF A ONE WAY MARKET IN MODERNS
wondercoin
Posts: 16,905 ✭✭✭✭✭
"The "Fallacy" of a one way market in moderns.
The Greysheet ( CDN) lists a bid and ask, every 2 weeks, of over 500 different modern coins, including $1 Silver Commems, $5 gold commems, Proof Gold Eagles, Proof Silver Eagles and more.
TENS of Millions of dollars of these moderns trade each year among dealers active in THESE markets.
Let take Proof Gold Eagles, as an example.
Greysheet bid is $1070 for a 4 coin PR Set.
I will buy any you want to sell at $1,010 per set.
I will sell you the same items at $1,100 per set.
95-W Silver Eagles. GS Bid is $2,725 for a raw coin. I will buy up to 50 at $2600. I will sell at $2800
PCGS PR69 95-W Silver Eagles- buy up to 50 at $2850.
Sell, when in stock, at $3100
For Dealers that actually buy and sell these coins, whether raw or in PCGS holders, these 500+ items trade every day at established ,PUBLISHED price ranges.
Are there moderns where the market is thinner than these? Of course.
Just as there are more esoteric areas in Classic Coinage.
The modern market is a thriving, vital market.
The U.S. Mint has sold almost 750,000 Proof Silver Eagles for 2004.
Last year, they sold out of the 750,000 they minted.
Think about that. Seven Hundred and Fifty Thousand Proof Silver Eagles, in ONE Year.
The Combined U.S. Mint sales of Proof Sets, both Clad and Silver, Proof Silver Eagles, Proof Plat Eagles, Proof Gold Eagles, Modern commems, and Mint Sets, add up to over 100 Million Dollars In Sales Each Year.
And, these items have a 2 way market-some higher than Mint Issue price and some lower.
But, it is a 2 way market for Hundreds of Millions of Dollars worth of Moderns.
I hope the above information clears up some of the misinformation presented in some threads on moderns.
Wondercoin
(edited to add - buy and sell prices are todays quote - tomorrow is another day).
The Greysheet ( CDN) lists a bid and ask, every 2 weeks, of over 500 different modern coins, including $1 Silver Commems, $5 gold commems, Proof Gold Eagles, Proof Silver Eagles and more.
TENS of Millions of dollars of these moderns trade each year among dealers active in THESE markets.
Let take Proof Gold Eagles, as an example.
Greysheet bid is $1070 for a 4 coin PR Set.
I will buy any you want to sell at $1,010 per set.
I will sell you the same items at $1,100 per set.
95-W Silver Eagles. GS Bid is $2,725 for a raw coin. I will buy up to 50 at $2600. I will sell at $2800
PCGS PR69 95-W Silver Eagles- buy up to 50 at $2850.
Sell, when in stock, at $3100
For Dealers that actually buy and sell these coins, whether raw or in PCGS holders, these 500+ items trade every day at established ,PUBLISHED price ranges.
Are there moderns where the market is thinner than these? Of course.
Just as there are more esoteric areas in Classic Coinage.
The modern market is a thriving, vital market.
The U.S. Mint has sold almost 750,000 Proof Silver Eagles for 2004.
Last year, they sold out of the 750,000 they minted.
Think about that. Seven Hundred and Fifty Thousand Proof Silver Eagles, in ONE Year.
The Combined U.S. Mint sales of Proof Sets, both Clad and Silver, Proof Silver Eagles, Proof Plat Eagles, Proof Gold Eagles, Modern commems, and Mint Sets, add up to over 100 Million Dollars In Sales Each Year.
And, these items have a 2 way market-some higher than Mint Issue price and some lower.
But, it is a 2 way market for Hundreds of Millions of Dollars worth of Moderns.
I hope the above information clears up some of the misinformation presented in some threads on moderns.
Wondercoin
(edited to add - buy and sell prices are todays quote - tomorrow is another day).
Please visit my website at www.wondercoins.com and my ebay auctions under my user name www.wondercoin.com.
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Comments
Liberty: Parent of Science & Industry
But, let me generally say this -
The discussion is about a 2 way market for HUNDREDS OF MILLIONS OF DOLLARS in Modern coins. As stated, some Classics and Moderns are more liquid than others. It is impossible to list EVERY Possible Modern or Classic and the relative liquidity of each one. While the examples I listed are made of silver and gold, bear in mind that there is SIZEABLE Registry presence in these coins as well, both for PCGS-PR70DC and PR69DC coins.
Wondercoin
The primary source of value for a SAE or GAE -- including the proof coins -- are their metal content, and these coins, just like their business strike bullion brothers, are greatly influenced by spot metal prices.
For conditional rarity business strikes of Lincolns, Jeffersons, Washingtons, Kennedys, etc., their markedly increased value is not derived from their metal content, but by their perceived rarity. Thus an MS67 Lincoln from the 1970s doesn't sell for $150 because of its copper content, but because modern collectors believe there are only small numbers of coins in these lofty grades.
You also referenced modern commemoratives. Not sure how to define these.
$2,850 for $7 in silver?
Wondercoin
I have no idea what they're worth if I wholesale the duplicates when thet come back from PCGS. Thanks--
Come now, the 1995W is a wayward data point -- unless you subscribe to the notion that exceptions swallow the rules. When you remove the 1995 W, and you look at all the proof eagles, gold and silver, from 1986 to 2004, is it not the case they generally trade within a tight range?
I agree with your basic premise, but I don't think modern bullion makes the case -- I simply do not see the numismatic value associated with these coins. For example, if gold's spot price were cut in half, you can bet your bottom dollar the value for modern proof GAEs would tumble. I don't see the same thing happening with old Saints.
Then again, I'm biased against slabbing bullion, hence perhaps that's why I piped up.
and it sets us apart from practitioners and consultants. Gregor
Very well said!
tend to be hard to find and prices are low, it's actually easy to do better than bid when wholesaling
these rolls. Indeed, this may be the one area of numismatics that arbitrage is actually possible. One
can buy most of these at 90 to 100% of bid (even retail) and find buyers paying ask or more. How's
that for a two way market? Most of these BU and PR rolls can also be assembled from mint and proof
sets even cheaper!!!! You can pay retail for some sets, bust them up and sell the parts at wholesale
for a profit!!!
There's no such thing as an original proof roll because no moderns have ever been sold this way. Some
of the BU rolls also don't really exist as original rolls. Try to find a '71 quarter roll if you don't believe it.
This roll is quite scarce but will cost the princely sum of $31 (bid) if you can find one.
There is also an active market in mint and proof sets. These generally trade at 80 to 110% of bid, but
motivated wholesalers often will pay more for those they need currently. These used to be available
by the truckload at nearly any major coin show but you'll find far fewer now days. There are no longer
any major quantities of most of these available anymore. The largest wholesalers and retailers will
rarely have more than about a thousand of any given date in stock. These will not be available at whole-
sale prices generally because there is now an active and growing retail demand. While many can still
be picked up a few at a time at 100% of bid, it is getting far more difficult to find quantities for sale or
to check. When you consider that the modern "money coins" might require one to look at many hundreds
or thousands of sets, you can see just how few of these coins remain. There are not huge numbers of
these sets sitting in the basements and garages of the original purchaser simply because that was too
long ago. The disappearance of the sets from the marketplace was not caused so much by increased
demand as it was from decreased supply because these sets are continually being destroyed. There is
no huge number of coins set aside for future needs because people didn't collect the coins and almost no
one believed they'd ever be collectible much less scarce.
It is these high grade coins that many people mistakingly believe exist only in a one-way market. In point
of fact there are growing numbers of collectors who are assembling sets of raw or slabbed high grade mod-
erns. There are some extremely good dealers (WonderCoin comes to mind) who service these markets
and do buy and sell these coins. Obviously they don't do this as a charity and will not pay large amounts
of money for common coins. They do have customers for scarce coins and if you don't believe it then just
offer them something they need. Offer WonderCoin an '81-S MS-67 dollar. Offer him a choice gem '69 25c.
Offer him a PR-69 DC '70-S half. If you want to see a two way market just learn a little about the coins
and do it.
All collectors should sell a coin once in a while. Don't offer it to the dealer you bought it from. Offer it to
someone who's never seen it before. This is when you'll learn what it's really worth. Whether the coin
is classic or modern you might find there's more to collecting than just looking for the lowest price or the
hottest coins. Buy coins because you enjoy them but learn about what you're doing as well as the coins
themselves. One thing you'll learn is that you'll get the best price from the dealers and collectors who spec-
ialize in what you're selling. While you can sell a choice better date Morgan almost anywhere and there
will be little spread in offers, this will not be true for most coins, tokens, and medals.
19 different PR Silver Eagles.
Lowest greysheet Bid is $23 for a date- high Bid ( not including 95-W) is $172. Average bid among the 19 coins ( Not including 95-W) is about $60 - closing in on 9x spot across the board for the coins.
$1 Silver Commems-Low price about $8 -High price (5 different coins-Over $200 each) with 50 coins worth $50 or more each. Sorry, but in NO WAY are these coins bullion related in Any way.
Just demand by the end user, the public.
Wondercoin
someone who's never seen it before. This is when you'll learn what it's really worth. Whether the coin
is classic or modern you might find there's more to collecting than just looking for the lowest price or the
hottest coins. Buy coins because you enjoy them but learn about what you're doing as well as the coins
themselves. One thing you'll learn is that you'll get the best price from the dealers and collectors who spec-
ialize in what you're selling. While you can sell a choice better date Morgan almost anywhere and there
will be little spread in offers, this will not be true for most coins, tokens, and medals.
Wow, Cladking, you are on a roll. Lot of timeless collecting wisdom in that paragraph...for everyone.
<< <i>But, it is a 2 way market for Hundreds of Millions of Dollars worth of Moderns. >>
If that is the case, there are many more "hundreds of millions of dollars worth" of other moderns not listed in the CDN or made reference to, for which there is NOT a "2 way market".
If that is the case, there are many more "hundreds of millions of dollars worth" of other moderns not listed in the CDN or made reference to, for which there is NOT a "2 way market".
Mark: Please name what coins/and or areas you are talking about that account for hundreds of millions of dollars. Please enlighten us.
Wondercoin
<< <i>Mark: Please name what coins/and or areas you are talking about that account for hundreds of millions of dollars. Please enlighten us >>
Mitch, I am going to give you and other forum members the benefit of the doubt and presume that no "enlighten"(ment) is needed on this often-discussed subject.
Still, if you need a bit of help in that regard, just think about some of the modern examples/areas you did not mention in your initial post to this thread.
By the way, if you or someone else had started a thread about classic coins and given (only selected) examples in support of that segment being a 2 way market, I would have made similar comments. So, I'm not picking on moderns, but merely noting your inclusion of examples in support of your point, while ignoring many other areas/examples which would run against your argument.
Classics are yesteryears moderns.
Lou
ANA Life-Member
But, you say I am "ignoring" many of the areas/examples of moderns. Which ones am I ignoring that add up to "hundreds of millions of Dollars" that are not a 2 way market?
Wondercoin
I like collecting toned moderns because no one is paying any attention to them, they're reasonable and I get a helluva lot of enjoyment out of them. When I get ready to sell, I may have some of the most beatiful and desirable moderns available, or I might have bullion. Either way - Im enjoying them NOW.
At the risk of polluting an interesting thread with something no one wants to read, I justify modern pricing as follows: If I'd rather pay the price for the coin holdered than search for one raw, the price is fair to me. I believe a 69 Kennedy in PR69 Dcam is worth $50, because that's what I'd pay to avoid holdering one. A PR69 Dcam 1970 half is more valuable to me, around $300. The right 65 half would make me go to the safety deposit box. I expect in the end, that pricing will prove pretty accurate. Perfect price equilibrium for me doesn't come from the number extant, the number holdered, the pop reports, the CDN, or advice threads. It is based on what I'm willing to pay. There are, and will always be other collectors who see values differently. Anyone who pretends they are immune to loss collecting coins is deceiving only themselves, modern or classic, so in the end, I'm quite content buying coins I like for money my experience searching tells me is fair.
and it sets us apart from practitioners and consultants. Gregor
<< <i>I, for the most part, am a modern collector and I can appreciate the fact that there are some dates that are either rarities because of low mintages (1995-W ASE, 1998-S Matte Proof Kennedy, The Jackie Robinson $5 gold, etc.). To me these are well documented and will continue to hold their prices in my opinion. However, paying hundreds or even thousands of dollars for an Ike, or a Kennedy, or anything else that has mintages in the millions, or hundreds of millions or even billions, just doesn't make a whole heck of a lot of sense. Now I say this, because it doesn't make a whole lot of sense to me. Just like plunking down $7 million for a 1933 Double Eagle, or $1 million for any coin, rare, classic, modern, unique, what have you - to me it doesn't make a whole lot of sense. However, my reasoning is quite different in both cases. In the case of moderns, I can't see spending over what I considet to be ridiculous money, i.e. $20 for a roosevelt dime in PR70 condition when in fact, you can buy a raw proofset for next to nothing and if you search hard enough, I'll bet you will find a dime that looks pretty darned astounding. And I think this is what the classic guys are saying - there are just way too many coins out there that haven't been graded and when the next IKE or SBA craze hits, and people start to really look at their coins, and perhaps sending a few in to get graded, the price of what was once a pop 1 coin tumbles when it becomes a pop 20, and God Forbid a pop 20/1. In the case of plunking down $1 million for a Chain Cent or a CAL quarter eagle or what have you - well - I can think of a helluva lot better things to do with $1 million than to have it tied up on a round piece of metal.
I like collecting toned moderns because no one is paying any attention to them, they're reasonable and I get a helluva lot of enjoyment out of them. When I get ready to sell, I may have some of the most beatiful and desirable moderns available, or I might have bullion. Either way - Im enjoying them NOW. >>
If you're talking 1964-D cents then yes, there are lots of uncs out there that
haven't been graded or checked. But this certainly does not apply to '69 quarters
or '82 dimes. There probably aren't as many '64-D cents as most people assume
because time has not been kind to them. Many thousands of bags of these were
saved and over the years many have been lost to time, cherry pickers, corrosion,
floods, fires, and people tired of owning something that just takes up room. While
the coins are hardly scarce and the gems are hardly common, it's a safe bet that
more gems will be found. People didn't save '82 dimes. There are no '82 mint sets.
The huge hoarde of '82 dimes everyone talks about is in circulation. While these
coins may be collectible, they are circulated. There are no gems and no uncs among
them.
I advertised to buy '82 and '83 gem quarters all through the late '90's. I offered
the unheard of price of $40 per coin. In those days $40 would buy a BU roll of any
of these coins. A few people wrote to tell me they checked their coins but just didn't
find anything worth sending. A few people sent me VF's from circulation and waited
for my check. Almost no one ever sent me any coins. I got a small handfull even
though I offered far over market value and plenty enough to make it worth most
peoples' time. And what lofty grade was I looking for? MS-64. In all those years I
sent back only a couple coins because they weren't good enough quality. One of the
guys told me he just happened to check ten rolls and found three or four of them.
These are not the toughest moderns!!! there are plenty of circulation issues which
are simply unavailable in choice condition much less gem. There is no simple way to
acquire all of these coins because they don't necessarily appear in mint sets and some
are rare in rolls and the rolls themselves are scarce.
There are now some people putting together sets. This is truly a new phenomena and
was virtually non existent before 2000. Each year even more people have started sets.
Even if this trend weren't to continue, there is still enough demand to continue to push
the prices of the scarce coins higher. The number of people collecting the coins is still
very small and could grow substantially. The simple fact is that there are not enough uncs
to supply even a small market by classics standards. A mass market would have late-com-
ers having to settle for nice looking VG's from circulation. While this may well all be little
more than idle speculation, the fact remains that there will be a new generation of collec-
tors in twenty years and most of the individuals will have gotten their starts with moderns.
Whatever the future holds the only reason moderns are so low priced is that there is very
little demand.
Yes, WonderCoin is right that there is a mass market in moderns and lots of money in it.
But he is talking about the entire market from bullion to rolls and sets and commems. The
tiny market I'm referring to is the modern circulating coinage. The prices of these are pred-
icated on a few hundred "serious" collectors and several thousand "newbies". Compare
this to the millions who collected "moderns" in 1964 or the thousands who collected current
coins in the 1870's. Better yet, compare it to the number who collect the exact same series up
to 1965. How many tens of thousands advanced nickel collection end at 1964? How many gem
Washington collections end at 1964?
Sure, there are lots of things in the world that don't make sense. (lots of people think paying
more than face for any coin makes no sense) But just because collecting coins minted in the
billions doesn't seem to make sense doesn't mean that others won't do it. And it certainly
doesn't mean that it isn't fun.
Whatever the future holds in terms of demand, there will ba a maturation of these markets
and there will be a decrease in the spread between buy and sell. When the raw coins are gone
there will be some massive changes and one of the first will be a psychology change which will
allow buyers to pay a larger percentage of retail.
if that was the 1893-S in VG-10 PCGS I bought at tha ANA, then it was sold recently to a dealer for $2,300 and they sold it a month or so ago for $3,250. It depends I guess if your State Quarters have increased by 300% doesn't it?
No, apparently, it depends on whether or not dbldie55 is "enjoying" the collection of state quarters more or less than owning the 1893-S dollar. If the decision was based on "collect what you like" and the collector prefers one sort of coin over another, how can it be a bad decision, if one factors in the investment in time and enjoyment? On a strictly Return of Equity basis, yes, probably a bad decision.
Liberty: Parent of Science & Industry
Liberty: Parent of Science & Industry
Baley - The vast majority of the coins you are asking about I do not personally deal in. I am sure there are other dealers who do - perhaps the dealer you are considering buying the coins from? For example - take a 1996(p) or (d) clad Washington quarter. You are asking me about a buy/sell price for an MS65 or MS66 coin. My lowest graded coin in stock today is a PCGS-MS67 and I sell them for $19.50/coin. If a collector desired to upgrade into an MS68, I would happily accept the MS67 as a trade in at $15 credit. While I do not deal in MS65 and MS66 coins, when I get them in from time to time, I sell them at roughly $5-$8/coin in bulk lots for common dates. Is there a "two way market" at $3 or $4/coin? I assume there might be - I haven't looked into it though.
As another example, I recently sold a couple lots of PCGS-MS68 Roosies on ebay at around $15/coin. I have a bulk lot of MS67 Roosies on ebay right now from 1987 (with bidding action up to $5/coin right now!). Again, you are asking about MS65 and MS66 coins and I am selling MS67's at $5-$10/coin in bulk. As I said, perhaps you can ask the dealer you are buying your MS65 and MS66 coins from if he also buys them and at what levels. Besides that, I agree with the comments of simply educating yourself before "diving into" the pool.
Wondercoin
you've explained part of the "I don't get it" equation that many miss. it's also why i won't fill the 1970-1972 holes in my Jefferson Proof Registry Set at $250-$400 a pop for 69DCAM's. i have a fairly good chance of finding the coins raw if i search hard enough and long enough, but at $100-$150 apiece i'd probably buy the right coin. availability drives much of the confusion about the Modern market---there is an understood number of coins available as a result of high mintage which gives a misunderstood number of gems to be found.
the one and only way to solve the equation is to get into the trenches and look at literally thousands of coins. a nice example for me is my ANACS 1941 Proof Jefferson. it's nothing special at PR65, some might call it average and would consider i overpaid at $90 till they started to look at coins. at 18,720 struck i think i looked at 3-5% of the entire mintage before i located a coin with no die polish at the shoulder on the obverse. those are the things that collectors might find if they start looking for gem/high grade modern issues. assumptions can be dangerous.
BTW, if anyone believes the post by 'Huff they need to see a doctor. he's an instigator who hates wondercoin.
al h.
Wondercoin
<< <i>I sold my PCGS VG10 1893-S Morgan 2 years ago for $1000 to work on a set of state quarters in MS66. I wonder if I made a bad investment decision? >>
[/
Yes that seems to have been a bad investment. However the only older auction result i can find at heritage(pre 1970 in ms 67) is for a 1959-d Lincoln at $195.00 Here you would of doubled your money. Any other results found that are ms67 lincoln's from the same dates have at the very least retained their value. I am not sure what the morgan is worth to day, I would assume you choose a good example for your argument.
If there are so many out there and it's so easy to make a top pop, why don't all you cynics go make them yourself?
They're worth thousands and have been for awhile now. Why isn't anyone picking up all this free, easy money?
-KHayse
none of the dealers in my area that i see regularly have any idea of what the three 1972 Ike Types are even though i went through some circs with my favorite one and helped him see the differences. i have a standing offer with a couple of the guys for BU 1972 Ikesthat's way past the Grey Sheet price, had it for well over a year.
nothing has surfaced. either enough collectors/dealers know about the Types and are hoarding them or there are none available. i think it's a combination with the odds a bit in favor of none available.
al h.