If Patterns can be manipulated, how can they ever be undervalued by definition?
Longacre
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I was reading the latest market report of an excessively prominent dealer. In it, the writer states:
“Pattern are [sic] genuinely rare. They are neat as heck and some are just too gorgeous. Most of all-they are GROSSLY UNDERvalued. Working with the Standard Series lately (see the Simpson Patterns we will be selling in May), these coins actually are RARER and cost LESS then [sic] examples of the same date and grade. Collectors should NOT be afraid of this area-it is NOT manipulated (that was 20+ years ago).”
Let’s assume the writer is correct that patterns are currently undervalued. Let’s also assume that the prices of patterns have been manipulated in the past.
If the increasing value of patterns is dependent on manipulation (be it a Well-Managed Promotion™ or otherwise), how then can they possibly be undervalued, by definition? In other words, what market circumstance is keeping the price of patterns down, in order to consider them undervalued? A stagnant price (or a somewhat level price, adjusted for inflation) in the last 20 years since the last manipulation would lead one to believe that it is impossible to say that the current prices of patterns are undervalued at all.
Please discuss, and provide support for your conclusions.
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The same market reports for the past 10-15 yrs or so have also identified things like Proof 64/65 Barber type coins or gem original commem PDS year sets as consistently very under--valued. I have a feeling the answer for patterns is not much different from the proof Barbers. Pops for both might be quite low relative to much other more common material. It still comes down to the number of collectors available for each.
If one person can buy a big chunk of the upper end of the pattern market, that's potentially another form of "maneuvering" or "guiding" the market. And if indeed there was manipulation with patterns 20 yrs ago, it's certainly just as achievable today. I wonder what was so special about the 1995-1997 bottoming period of the earlier coin market decline? Who would have been interested in manipulating patterns in an environment where real buyers for even quality material were scarce?
Words like "Under-valued" are marketing words. I don't think there is some magical base level "proper value" for ANYTHING related to numismatics.
What RR wrote.
This firm has been heavily involved in promoting patterns to collectors. Who was doing the manipulation that this dealer alluded to?
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
I can't really answer this particular question, but I'm glad you are posting again.
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Today, it is surely much harder to find "under-valued" areas of the market vs. say 20 or 40 yrs ago. From the 1970's to the mid-2000's better date circ seated was way under-valued, at least per all the price guides. All you had to do was find it and sit on it. Or if you preferred, flip to a seated dealer for a nice profit. It wasn't hard to find the stuff and then triple your money instantly. The erroneous price guides helped you do that. While nothing is probably truly under-valued between 2 fully knowledgeable players....that's rarely the case when transactions occur. Someone almost always has the edge. There are still numerous "mistakes" in current prices guides. So I would say plenty of things are still "under-valued." I can think of some items off hand but would prefer to find them first. PF64/65 Barber type is probably not undervalued.
While nothing is probably truly under-valued between 2 fully knowledgeable players....that's rarely the case when transactions occur. Someone almost always has the edge."
It would be VERY difficult to make money buying and selling coins were this not the case. Well-managed promotions, undergraded coins purchased and then successfully upgraded, etc., are manifestations of this. The fallback would be to wait for more demand to materialize as the collector base expands.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
Don't fall for this type of marketing hype.
Patterns have low mintages and populations by definition . They were experimental pieces whose designs didn't make it to general circulation because they were rejected. Some patterns had their mintages increased because the mint administrations of the time could sell them to contemporary collectors.
Patterns have their place in some collections, but they are more like specialty collectors' coins. I collect types. Three coins in my collection have been called "patterns" at some point, but two of them were issued in such quantities and are seen in the circulated grades enough times to make them into regular issue coins, the 1836 Gobrecht Dollar with the "coin turn," and the 1792 half disme. My only true pattern is an 1836 gold dollar, which I own because I am a gold dollar fan.
Low mintages are only the beginning of value. The real test is collector demand, and on that score, patterns have not done well in recent years. It seems like "trophy coins" are the pieces that do the best. They are key dates and big pieces like the 1907 High Relief $20 and the $50 gold slugs, PLUS everything I bid upon at major auctions.
Not all patterns are tremendously rare, but a good number are.
It should be kept in mind that most coins aren't really all that rare. That's the only way you can have a "market price". Lots of transactions over many years gives a good "baseline" to determine pricing. It's always very difficult to price things that are truly rare.
How would you price the Mona Lisa if a second copy came up for sale??
How do you value an R8 die marriage? How do you price a pattern with half a dozen examples in existence? How do you price something that has no or minimal transactional history?
With the really rare stuff it is more like the unique art pieces- how nice is it and how many others want it?
People like me who used to collect patterns avidly were driven from the market by Simpson, so we moved on.
It will take a while for it to come back, especially if he continues to outbid everyone on the trophy coins and sells only the leftovers/rejects.
Uhh....that sounds like the "M" word.
Not a market I'm familiar with (yet). Predicting future market moves sounds like speculation to me. If those with something to sell really believed they were undervalued, they'd be buying, not selling.
That aside, I really like patterns, especially certain designs, and it would be fun to have a few. Many of them are superior in aesthetics to what was selected for production. If and when I decide to get some, I assume it will be necessary to pay something close to the prevailing market rates to obtain them.
If one guy is sucking up all the oxygen, it would be a good reason for me to collect something else.
I'm not very familiar with the market either, but it would seem that generalizing the series as a whole isn't very useful. Instead, each individual pattern variety/composition needs to be considered individually.
I say this because I can't imagine that there are many people trying to collect all patterns, besides Simpson maybe. Because they are so expensive, collectors have to be more selective than that. For example, someone may be interested in gold patterns only, IHC patterns only, or simply want one pattern example of a series that they already collect. It's not always about filling holes when you're collecting patterns. And this means that demand is not generalized to patterns as a whole either.
Interesting thread. Thanks!
A second version of the "Mona Lisa" depicting her with the same pose but appearing younger apparently exists. The problem lies with authentication. Has anyone heard more of this story? Has this version been authenticated, rejected or is it still in a vault somewhere in Europe?
The ancient one Seer in "Vikings" advises "stay away unless you don't value your wallet" or something like that.
291 fifth:
The painting you are apparently thinking of was the topic of an interesting book:
John Brewer, "The American Leonardo: A Tale of Obsession, Art and Money"
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
Included in this report is a great article on patterns written by Jeff Garrett
mark
https://www.ngccoin.com/news/article/5865/united-states-pattern-coins/
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
There is always conspiratorial talk of market manipulation.... a recurring topic in precious metals and I have frequently seen it in stocks as well. Is it possible? Probably... the Hunt brothers tried it with silver...Is it likely or is it often just complaining when things don't go as expected? Probably more often the latter. Rarely do you see any concrete evidence of such manipulations. Cheers, RickO
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IMHO, there is a stigma with patterns that they are expensive and for only very specific collectors. There is no "set-building" concept with patterns, best you can do is acquire other patterns. So this is not a Supply side issue, if the Demand for them is not there, the "rarity" factor becomes less relevant.
Sure I would like to own one, but there are so many other coins ahead of that line of desired acquisitions.
P.S. Welcome back.
Indeed. Complaints of "market manipulation" seem to often come down to sour grapes.
And when it comes to market reports or really any opinion given, it is important to always consider the source and their motives, viewpoints, etc. In this case, a dealer is trying to sell coins. So I would take with a grain of salt those opinions trying to convince me to buy their coins.
I also don't like the term "undervalued" as it is highly unlikely that in any widely, freely traded market something is undervalued. In nearly all cases "undervalued" really means a predict for an increase in prices in the future, and not that something is actually worth more at the current time, which is what undervalued actually means..