POLL: Mainstream coin collecting pricing/costs (hypothetical)
mercurydimeguy
Posts: 4,625 ✭✭✭✭
Context, I sort of think I live in a bubble (maybe you as well?) and thought it might be helpful to better understand the mindset of a mainstream coin collector when it comes to their preference of which coin to buy at which price point. So I developed this hypothetical scenario in hopes that it can shed light on buying behavior/patterns.
Also, if you can provide your input via reply (not only vote), that would be helpful.
<---hypothetical scenario--->
You are a collector of US type coins (e.g. mainstream, readily available, US classic coins), you try to collect AU58-MS63 coins because you want coins with nice eye appeal, yet you have bills, financial obligations, and such that would preclude you from spending more than $2k on a coin (about your maximum outlay limit, which for what you are collecting is a good ceiling to have).
You find a coin for sale that could fill a hole in your type set. It is $900. It is graded PCGS MS62 and it is also CAC, and frankly the coin is dripping with luster, oozing eye appeal. You can't stop looking at it.
You go to Heritage archives to do some research and you learn that they have only ever sold 2 examples in CAC at this grade level (and NGC piece and PCGS piece). NGC was sold for $870, PCGS sold for $1,040. You see that non-CAC coins at Heritage have sold for $650-$950 in the past 2 years. The Wholesale price according to Heritage is $700, the PCGS price guide is $1,000.
You go to eBay and see there is one CAC coin listed (same grade, PCGS). It is a BIN with a $1,000 price. There are at least 12 other BIN's (NGC and PCGS) with pricing that ranges from $750-$1,200.
Now you have to make a decision...you are looking to fill a hole in your type set. You can buy a coin from between $650-$1200. You are not an expert grader but do know that the $650-$800 coins do not look as nice as the $900 62/CAC coin, but you are also very cost sensitive and want to make sure you get a good deal.
<---end scenario--->
What do you do as a collector, I mean what do you really do in practice, not philosophically. Because there is philosophy (what should I do) and then there is reality (what will I do).
Do you buy the cheap coins at $650-$700 to try to get a coin at wholesale levels so you can tell your friends how you got a great rip and are buying coins at dealer levels (also provides insurance because you can quickly flip the coin at break-even if you want to sell it)? Do you buy the 62 CAC and tell you friends about the beautiful coin you bought but you paid more than $200 above what they are selling for (forget filliping it to a dealer because he/she will offer you generic money at around $650)? What is your primary motivating factor for buying a coin...price, quality, etc?
Also, if you can provide your input via reply (not only vote), that would be helpful.
<---hypothetical scenario--->
You are a collector of US type coins (e.g. mainstream, readily available, US classic coins), you try to collect AU58-MS63 coins because you want coins with nice eye appeal, yet you have bills, financial obligations, and such that would preclude you from spending more than $2k on a coin (about your maximum outlay limit, which for what you are collecting is a good ceiling to have).
You find a coin for sale that could fill a hole in your type set. It is $900. It is graded PCGS MS62 and it is also CAC, and frankly the coin is dripping with luster, oozing eye appeal. You can't stop looking at it.
You go to Heritage archives to do some research and you learn that they have only ever sold 2 examples in CAC at this grade level (and NGC piece and PCGS piece). NGC was sold for $870, PCGS sold for $1,040. You see that non-CAC coins at Heritage have sold for $650-$950 in the past 2 years. The Wholesale price according to Heritage is $700, the PCGS price guide is $1,000.
You go to eBay and see there is one CAC coin listed (same grade, PCGS). It is a BIN with a $1,000 price. There are at least 12 other BIN's (NGC and PCGS) with pricing that ranges from $750-$1,200.
Now you have to make a decision...you are looking to fill a hole in your type set. You can buy a coin from between $650-$1200. You are not an expert grader but do know that the $650-$800 coins do not look as nice as the $900 62/CAC coin, but you are also very cost sensitive and want to make sure you get a good deal.
<---end scenario--->
What do you do as a collector, I mean what do you really do in practice, not philosophically. Because there is philosophy (what should I do) and then there is reality (what will I do).
Do you buy the cheap coins at $650-$700 to try to get a coin at wholesale levels so you can tell your friends how you got a great rip and are buying coins at dealer levels (also provides insurance because you can quickly flip the coin at break-even if you want to sell it)? Do you buy the 62 CAC and tell you friends about the beautiful coin you bought but you paid more than $200 above what they are selling for (forget filliping it to a dealer because he/she will offer you generic money at around $650)? What is your primary motivating factor for buying a coin...price, quality, etc?
0
Comments
That is what this hobby is all about.
And, if you have a trained eye, the chances are good that the next owner of that coin will enjoy looking at it and will pay for the privilege.
Eye appeal means everything. If you obsessively focus on price, one day you may wake up and discover that you made lots of mistakes. Buy nice coins---you will be better off from both aesthetic and financial points of view.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
<< <i>If dripping with luster and wonderful eye appeal, I pay the $900. >>
You get what you pay for. The coins are obviously not scarce. Based upon the APR's the $900 is reasonable for what is presumably a nice coin.
Latin American Collection
<< <i>If dripping with luster and wonderful eye appeal, I pay the $900. >>
This.
Lance.
Since this is a " mainstream, readily available, US classic coin" I would think the dealer would be flexible on the price.
P.S. I find it hard to enjoy a nice coin for which I overpaid.
mbogoman
https://pcgs.com/setregistry/collectors-showcase/classic-issues-colonials-through-1964/zambezi-collection-trade-dollars/7345Asesabi Lutho
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
And I voted for option #2. I'm a guy who's as happy with a nice AU-58 as I would be with a nice MS-62, so I would wait for the coin that matches both my price and quality requirements.
(This is a general attitude....but there is some slippage and adjustment in special cases, which might apply in this case. But I figured my general attitude was more important to the question than the whims that might strike from time to time).
By design, that means I'll never have a "world class" collection. But I, and many others, enjoy the hobby with that as a given.
It's difficult for me to put myself in another person's parameters when I know I would "step" up, despite budgetary constraints…. because of my own stupidity.
``https://ebay.us/m/KxolR5
What is your primary motivating factor for buying a coin...price, quality, etc?
I buy coins because I like looking at them
the coin is dripping with luster, oozing eye appeal. You can't stop looking at it.
sold
Liberty: Parent of Science & Industry
Another factor not mentioned, is that there may be an issue with the coin that novice is overlooking, such as indications of a light or not-so-light dip. Novices often like shiny, and many dipped out coins will be shiny, at least to the novice.
If the coin meets my standards for my collection and it is an opportunity to acquire a distinctive coin that gives me a thrill, no way that $100 would matter. I agree with the other comments about eye appeal valuation.
BTW - while I appreciate the "fill the hole" requirements of a particular collection approach, I advise that your acquisitions be about taking advantage of a great coin in whatever timeline order in which they appear. Thus, patience in that regard will serve you well in terms of satisfaction and limiting turnover. In essence, don't compromise your standards.
"Got a flaming heart, can't get my fill"
Granted, it's partially because I restricted my answer to my general attitude and methods instead of the stated scenario. (I agree that $100 in this scenario isn't that large a stretch. I did a similar "stretch" for a nice 1889 3-cent nickel recently).
But then again, maybe I'm an outlier in setting a "cost per coin" limit in my collection. But I am pretty firm on $300-$400 for type set coins, until I get to the EARLY dates; $200 or MS-64, whichever comes first for my Walkers; and $200 or MS-63, whichever comes first for my 3-cent nickels.
Anyone else have similar pre-defined limits....at all?? Am I wandering in left field all by myself?
Anyone else have similar pre-defined limits....at all?? Am I wandering in left field all by myself?
yes, in collecting Browning varieties of quarters 1805-1828, I've tried to pay under $400 per coin, and usually around $200. I've had to stretch a little for some of the better varieties, and gotten a few fun pieces for under $100, but now I'm down to the few rare marriages that tend to start over $500 in even the lowest grades and with problems, and of course do not yet have the real toughies like the 1796 and 1804, for those keys I'll need to wait a while until I can afford a higher budget. Most of the group was bought 2000-2006, and the grades range from AG-Fine
Liberty: Parent of Science & Industry
As a disclaimer, I'm definitely #1 personality
I had a fixed budget of $3,500 for a coin for a year, and then just 2 weeks ago spent $4,600 because a coin spoke to me
So much for my budget ....
It is possible that your approach is not the odd one out but actually mainstream. Interestingly enough, while a lot of people voted for option 1, a disproportionate number, really, what I've observed in practice is that people will actually spend $700 on a much lesser quality coin while in reality for a very small amount of money more (in relative terms), they will not spend $200 more for a clearly premium quality coin. I observe this behavior significantly more often at shows and other translations...literally people walking away from a $1,500 coin over $100 (e.g. Not spending $1,600) while knowing for $1,500 the coin they would get would be of lesser quality. They then rationalize to themselves why the coin was such a better purchase than the more expensive coin.
I happen to have some in-law relatives who also collect coins and when we get together I kind of cringe. They bring out their 83-CC Morgan in an NGC 65 holder that they paid $425 for, and it's a dog, and I feel like saying, geez, for $100 more you could buy a much nicer coin. But they are happy with what they bought...and also brag/enjoy the fact that they can probably sell it without a loss pretty easily. While chuckle at me because I have the same coin (in their eyes a slab is a slab) and I paid a $100 more for mine.
Then I realized as I meet more mainstream collectors they are more like my in-law collectors than like me, which is so counterintuitive because by looking at this poll so far it would seem like most people opt for quality...I just don't find that in the real world at large (small pockets of quality collectors for sure, but not the masses). Not eBay for sure. I watch a lot of coins out of curiously and I see super PQ coins sit for $1,200 while people buy utter dogs at auction for $950-$1150... geez, for $50 more they could have bought a real nice coin.
Anyhow...just my 10 cents
Do you really think that most people would recognize a "clearly PQ coin"?
Obviously, if someone doesn't recognize a PQ coin when he sees it, going for the cheaper coin is his logical choice.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
So what is this "hypothetical" coin anyway? These hypothetical questions are always about a real coin or situation
<< <i>
I happen to have some in-law relatives who also collect coins and when we get together I kind of cringe. They bring out their 83-CC Morgan in an NGC 65 holder that they paid $425 for, and it's a dog, and I feel like saying, geez, for $100 more you could buy a much nicer coin. But they are happy with what they bought...and also brag/enjoy the fact that they can probably sell it without a loss pretty easily. While chuckle at me because I have the same coin (in their eyes a slab is a slab) and I paid a $100 more for mine.
Then I realized as I meet more mainstream collectors they are more like my in-law collectors than like me, which is so counterintuitive because by looking at this poll so far it would seem like most people opt for quality...I just don't find that in the real world at large (small pockets of quality collectors for sure, but not the masses). Not eBay for sure. I watch a lot of coins out of curiously and I see super PQ coins sit for $1,200 while people buy utter dogs at auction for $950-$1150... geez, for $50 more they could have bought a real nice coin.
Anyhow...just my 10 cents
You said you weren't an expert grader. Now you are telling everyone that you think you know what is a dog, and what is super PQ and you often find that there is only 10% to 20% price difference on coins at the $1000 level between the dog and PQ. I may be way off base, but this sounds to me like a person fooling themselves, or perhaps more innocent, a person that is a poor observer and reporter. Another option is the very old cliche of ownership adding a point. Of course you like your coin better than the other person's--that is human nature. Might there be things you are missing, that an objective neutral expert observer might see? Might you be exaggerating to tell a nice story? The story sounds off to me.
From what I observe, the current coin market tends to price quality at a much steeper premium than what you are writing about. Quality tends to be rewarded at auction in the current coin market. From what I have observed it can cost 100% to move from dog level to PQ level. So if it is $750 for dog level quality on a numismatic coin, maybe $1000 for average quality for that grade, $1500 is often what a superb PQ coin in the same grade, same company's holder, might go for, just on quality. Of course it will vary depending on how much the next grade up costs, pops and registry. The math will also tend to be different for coins with a high bullion value such as a $10 gold piece (over $500 in bullion value sets a price floor for dog coins and skews the math).
For the MS65 1882 CC Morgan, I'm not seeing, nor have I ever typically observed in my many years, a 20% increase in price to move from a dog level coin to super PQ level that you are suggesting. I tend to be quite good with numbers, tend to have a good memory, and used to look at a lot of auction results for the coins I was shopping for. I'm not saying your story isn't true, but it doesn't match my observations of the Morgan dollar market.
One caveat for the many novices reading along: paying more does not by itself guarantee better quality. It tends to improve the chances, because there is a correlation. However, there are more than a few dealers that charge a lot for their average coins, even if they might also sell a decent percentage of PQ coins for premium prices as well. Same deal with auctions, there is a correlation between price and quality, but if several novices think they see quality but are missing something, and bid strong, the auction winner may be the bag holder of an average coin bought at premium price.