Auction price the new Retail?

Proofmorgan

This may have been discussed already, but are the auction prices becoming the new retail prices?

Observations:

-Collector presence in major auctions has seen a significant increase.

-Getting outbid in auctions at prices that I believe dealers would have no place to go if they were buying (more often).

-"Online" bidders paying huge prices for photos that are significantly different than in hand viewing at the auction previews. I would assume these are collectors in my first hand experience.

-Personally buying coins from dealers for less than auction prices less than a year later.

I know there are exceptions and I can't completely generalize the market, but I see a shift in that direction.

With the typical auction-to-dealer-to-customer flow dissolving, and the wide use of the internet...where is the future of numismatics headed?

I had recently read Robert Shippee's book called "Pleasure and Profit" in which he built a close to complete type set and sold most it for close to a 50% profit. What struck me is that most of the set was purchased 3 years prior to the sale in major auctions. He did also purchase a significant portion of the collection about 9 years before. This all took place in the 90's and early 2000's.

No doubt Robert Shippee has a good eye. That said, I feel like he was one of few collectors competing with dealers at major auctions at the time. Based on the above, I think he would not have nearly as much success in today's market.

What do you guys think?

roadrunner

Timing is everything....next to a good eye. In any case, you could have bought most anything decent looking "rarer US coin" in a top tier holder in the 1994-2003 period and done very well with it by 2007-2008. Try that same trick in 2006-2008, or 1989-1990, 1978-1980, etc. and you probably don't come out in one piece. The time frame is critical if you're doing it only 10 years. For those with a longer horizon of 20-40 years the market may be able to smooth out the cyclical bumps.



Well-selected coins purchased in the 1995-2002 period probably should have doubled, tripled, and even quadrupled by 2008. So the author's 50% gain after commissions isn't all that impressive. Had they been buying in 2006-2008 they'd have probably been incinerated selling into 2009-2011. But, if you loaded up into the 2009-2010 crash, you'd probably be A-OK today. A MS65 PCGS seated dollar was $20K or less in 1998-2003....and $60K by 2008. This was not some exception either. An MS66 1854 arrows seated half was $10K-$12K in 2002.....$35K-$45K by 2008.



Wherever the good coins are showing up....you go there and compete for them...at auction, internet, bourse, etc. That hasn't changed. If you know how to grade and price the dealers or other collectors can't consistently shut you out from buying what you want/need....no matter the venue. Considering some of the biggest dealers still buy lots of big coins at auction, it obviously can't be the new "retail" as they have customers waiting for them at higher price levels.

Unknown

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