Collector hypotheticals: How price-sensitive (and grade-sensitive) are you?
RYK
Posts: 35,799 ✭✭✭✭✭
Scenario A:
A legitimately scarce, popular, and expensive coin is offered to you by a dealer. It is a coin that is extremely nice and original for the grade, but not likely an upgrade candidate. You have wanted (ie. "needed") one of these for your collection for some time. The selling price that is offered to you is Trends plus 10% and is firm (Greysheet is irrelevant for these). You have not seen this coin in this condition on the open market for at least two years. There is very little recent price history for such a coin in this grade, and when you search Heritage archives you realize three things: 1) If you buy it, you are probably paying more for this issue in this grade than has ever been paid before; 2) The example offered to you is easily nicer for the grade than the examples in the archive; 3) This issue has gone up in price across all grades dramatically in the last five years, easily twofold, maybe threefold. While you can afford to buy it, buying this coin might result in your inability to buy something else in the near future because of the price differential you are paying compared to what you expected to pay for it. If you pass, it might be a couple more years before a similar coin is available to you. Do you buy coin A?
Scenario B:
A legitimately scarce coin, but not nearly as popular as the example above, and one that you need for a date set, is offered to you. It is solid for the grade, but not spectacular. The example offered to you is in a grade two steps higher than you were hoping to buy the coin. This results in the coin costing about 60% more than you anticipated paying for this issue, but the price is very reasonable for the grade offered. In the past twelve to eighteen months, of the handful of these coins have hit the market, they have been either: too low grade, too expensive, lousy coins, or more than one of the above. You can afford the coin, but buying it might result in having to pass on another coin in the near future because of the price differential you are paying compared to what you expected to pay for it. If you pass, you do not know when you will get a shot at the coin that is both in your preferred grade (and price point) and that meets your quality standards. Do you buy coin B?
Scenario C:
There is a scarce coin that you need for a date set that is offered to you. You do some research and find that it was purchased at Heritage in the last six months and has since been upgraded one step. The coin appears nice and the grade seems reasonable, but you are not one who would quibble about one grade step at this part of the curve. The coin is offered to you at a price that is good for the new grade, high for the old grade, and 25% higher than the price the coin fetched at auction. More importantly, you have been looking for more than a year and have not found a decent example of this coin in any grade. You can afford to buy the coin, and the price difference will likely not upset your coin budget significantly. Do you buy coin C?
A legitimately scarce, popular, and expensive coin is offered to you by a dealer. It is a coin that is extremely nice and original for the grade, but not likely an upgrade candidate. You have wanted (ie. "needed") one of these for your collection for some time. The selling price that is offered to you is Trends plus 10% and is firm (Greysheet is irrelevant for these). You have not seen this coin in this condition on the open market for at least two years. There is very little recent price history for such a coin in this grade, and when you search Heritage archives you realize three things: 1) If you buy it, you are probably paying more for this issue in this grade than has ever been paid before; 2) The example offered to you is easily nicer for the grade than the examples in the archive; 3) This issue has gone up in price across all grades dramatically in the last five years, easily twofold, maybe threefold. While you can afford to buy it, buying this coin might result in your inability to buy something else in the near future because of the price differential you are paying compared to what you expected to pay for it. If you pass, it might be a couple more years before a similar coin is available to you. Do you buy coin A?
Scenario B:
A legitimately scarce coin, but not nearly as popular as the example above, and one that you need for a date set, is offered to you. It is solid for the grade, but not spectacular. The example offered to you is in a grade two steps higher than you were hoping to buy the coin. This results in the coin costing about 60% more than you anticipated paying for this issue, but the price is very reasonable for the grade offered. In the past twelve to eighteen months, of the handful of these coins have hit the market, they have been either: too low grade, too expensive, lousy coins, or more than one of the above. You can afford the coin, but buying it might result in having to pass on another coin in the near future because of the price differential you are paying compared to what you expected to pay for it. If you pass, you do not know when you will get a shot at the coin that is both in your preferred grade (and price point) and that meets your quality standards. Do you buy coin B?
Scenario C:
There is a scarce coin that you need for a date set that is offered to you. You do some research and find that it was purchased at Heritage in the last six months and has since been upgraded one step. The coin appears nice and the grade seems reasonable, but you are not one who would quibble about one grade step at this part of the curve. The coin is offered to you at a price that is good for the new grade, high for the old grade, and 25% higher than the price the coin fetched at auction. More importantly, you have been looking for more than a year and have not found a decent example of this coin in any grade. You can afford to buy the coin, and the price difference will likely not upset your coin budget significantly. Do you buy coin C?
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Comments
"Need"..."want"....PRICE consideration...."last sale"...... Time to wait for coins that are available instead of "offered." IMO.
I'd likely buy both Coin B and Coin C.
C) Likely to purchase (I would probably know the series and how to grade said coin, so I would make my own grade assessement)
I would pass on Coin B because based on the description, it seems that with a little searching (and some time), another will come around in the grade that you really want.
I would buy Coin C because it seems solid for the grade, and the price that it sold for at auction is basically irrelevant because it graduated to a higher grade.
Of course, if I had RYK's money, I would buy all three.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Legitimately scarce, popular and nice for the grade coins are hard to come by. If it is truly that (and not a buyer falling in love with a coin because of the three reasons) then a legitimately scarce, popular and nice for the grade coin will always be a legitimately scarce, popular and nice for the grade coin. It is these types of coins that typically sell for whatever the buyer is willing to pay without much reference to some abstract pricing scheme. Buy Coin A!
I have bought Coin A in the past, and know beyond doubt that I probably paid the most amount of $$ ever paid for the specific coin at the specific grade. I was glad when I bought it nevertheless. I later sold it because I moved in to a different set and the irony is that I actually sold it for more than I paid for it.
Moral of the story -- a legitimately scarce, popular and nice for the grade coin will always be a legitimately scarce, popular and nice for the grade coin! It is easier to rationalize/justify a higher selling price to a would-be future buyer than having to make excuses for the coins quality.
Coin B would probably be a pass, also. I don't want a coin that is an anomaly within my sets.
Coin A would be my choice. Price is relative to so many different factors that I would not make it the "decision maker." If it was a coin that I absolutely loved, I would be much more likely to pay a premium. I would not pay a premium for a perceived scarcity, popularity or "upgradability." The only factor I need is my estimation of the coin's "value" to me.
https://www.pcgs.com/SetRegistry/collectors-showcase/world-coins/one-coin-per-year-1600-2017/2422
b - tempted to go for a higher grade, i like high grade stuff.
c - probably not, don't like knowing about the upgrade. i'd rather be ignorant.
B is out because:
<< <i>but not spectacular >>
Buying common looking coins only results in a common looking collection.
A. Yes
B. No
C. Yes
Joe.
A. Yes
B. No
C. Yes
Damn! That's what I did. Perhaps the hypos were written with a bias such that they would be self-fulfilling.
I thought I could shake more people out of "A" with "If you buy it, you are probably paying more for this issue in this grade than has ever been paid before."
A..Yes
B. No
C. Yes
I did not waver from A as I felt that I had better buy it now for the following reasons.
1. it doesn't appear to often
2. when it does appear, it may not meet my standards of quality and eye appeal
A..Yes
B. No
C. Yes
-- Moo
<< <i>Coin A makes sense as the best true, long term value, and C as the worst value, likely something you will get buried in for quite a while. At the Central States show in April, I bought two As and have no regret. I have bought Bs and Cs before and those tend to be the ones that induce pangs of the dreaded buyers remorse. Even though standing up while being quoted the price of an A can bring about symptoms that mimic a coronary, or at least a shout of "holy f*****g sh%t", Downey!" (true story, happened with two different buyers at the show), these tend to be the coins that bring the most satisfaction and pride of ownership. >>
Perhaps "bust guys" think differently than others on this hypothetical...any more bust collectors out there?