Are dealers and collectors slaves to APRs

Boosibri · July 25, 2014 5:14AM

When sub-par quality coins litter the auction prices realised, are collectors and dealers so paralysed by this fact that they cannot mentally process the premium attributable to a wonderfully original coin? It seems to me that many default to a mindless exercise of comparing one price to another without the depth of thought to consider what a premium piece us worth.

Any takers?

TommyType · July 25, 2014 5:49AM

<< When sub-par quality coins litter the auction prices realised, are collectors and dealers so paralysed by this fact that they cannot mentally process the premium attributable to a wonderfully original coin? It seems to me that many default to a mindless exercise of comparing one price to another without the depth of thought to consider what a premium piece us worth.

Any takers? >>

I think your thesis requires that we believe any coin has a value that is substantially different than the price it can be sold for.

LindeDad · July 25, 2014 5:52AM

Some pieces of art are that way to.

Boosibri · July 25, 2014 5:54AM

No, my point is that quality on rare coins is a big deal. When crappy coins sell they give a false impression on the accurate price levels for quality coins. I see this not being appreciated and people rationalising prices to be paid for quality coins based on APRs for crappy coins.

Elcontador · July 25, 2014 6:02AM

<< When sub-par quality coins litter the auction prices realised, are collectors and dealers so paralysed by this fact that they cannot mentally process the premium attributable to a wonderfully original coin? It seems to me that many default to a mindless exercise of comparing one price to another without the depth of thought to consider what a premium piece us worth.

Any takers? >>

You can flip the above around to the situation when a someone pays stupid money for a coin, how many people actually take the bid seriously? For the same coin in the same grade (it was Liberty Nickel in a PC 6 holder), I've seen prices ranging from $3,000 to $8,000.

A premium is warranted for a quality coin. How much depends on who is bidding and how much they want the coin. However, from what I see, most of the coins being hawked as PQ, are not. Caveat emptor.

steveben · July 25, 2014 6:03AM

<< No, my point is that quality on rare coins is a big deal. When crappy coins sell they give a false impression on the accurate price levels for quality coins. I see this not being appreciated and people rationalising prices to be paid for quality coins based on APRs for crappy coins. >>

that's when it's time to send the coin in question to auction.

CoinJunkie · July 25, 2014 6:13AM

Some are, many are not.

Place me squarely in the latter camp.

coinbuf · July 25, 2014 6:33AM

<< When sub-par quality coins litter the auction prices realised, are collectors and dealers so paralysed by this fact that they cannot mentally process the premium attributable to a wonderfully original coin? It seems to me that many default to a mindless exercise of comparing one price to another without the depth of thought to consider what a premium piece us worth.

Any takers? >>

Why does a coin have to sell for a premium just because the seller likes it? Did the possibility that not everyone thinks that what you find wonderfully original is as eye-appealing to them as it is to you? Take Ricko as an example, if you have a toned monster that your asking 20X's bid for do you really expect that he should or would attach a premium to such a coin? I have seen many an original coin with ugly toning that I would not buy at a discount; and to be honest I have really never met or seen a dealer offer a premium when buying, only when selling.

LochNESS · July 25, 2014 6:39AM

I typically sell one coin at a time, and I don't agree to the final price until I've done my due diligence. So I don't feel this affects me, no. But for bulk dealers, who do large quantities, I could see the OP scenario playing out sure.

Edit to coinbuf: if you build a relationship with a dealer, they just might accept your reasonable premium to buy. I've sold premium coins to dealers with whom I have a relationship for a reasonable premium price. The key word is reasonable.

gsa1fan · July 25, 2014 6:49AM

I may be wrong but I feel a PQ coin for the grade was the thinking behind new plus grading. I agree with OP there is a big difference in coins that fall in same technical grade. When it comes time to sell or upgrade you will learn real quick harsh lesson in buying ugly coins.

LochNESS · July 25, 2014 6:58AM

I believe the plus grades were PCGS' attempt to curb/slow the upward trends of market grading. Has it been working?

BillJones · July 25, 2014 6:58AM

I don't see where this is a limiting factor for the advanced collector or savvy dealer, except in those instances where the photos are either very bad or doctored. Yes, going by photos is a limiting factor, but at least recently I've been able to predict which coins I would like in an up-coming auction from them. For example at the last Heritage summer FUN auction the coins on my want list that really grabbed me from the gold dollar section were the 1852-D in PCGS AU-55 and the 1855-D in PCGS EF-45. As it turned out those two were the best pieces from the photos and a personal examination. The others that interested me were okay, but I was not going to pay moon money for them. Fortunately, with one exception, the other bidders agreed with me, and I won them in the auction.

Some collectors have to have every coin in Premium Quality grade. That's okay if you endless financial resources and endless patience. I don't have those attributes to a "B coin" or even a "B- coin" that is not on my "A list" for top quality is okay by me for a price. After you have seen some astronomical prices for the Premium Quality piece, the second tier coins begin to look a bit better.

There are some coins that really I want to locate in really attractive condition. One of them is the 1838-C half eagle. So far I've seen nothing, and now that that the current cycle of off grade coins have been absorbed, it's looks like I will not be seeing any more for a long time to come.

I'll tell you thing that is confusing or misleading however, are the listings in the "Coin Facts" auction histories by grade. Unfortunately the coins that are listed in grades like "EF, details" with some problem get listed with the rest of EF graded coins. I'll see a cheap price realized and wonder what is going on. When you get the auction, you find out that the coin was not an EF; it just had the detail of an EF with problems that brought down the price.

Boosibri · July 25, 2014 6:59AM

<< 

<< When sub-par quality coins litter the auction prices realised, are collectors and dealers so paralysed by this fact that they cannot mentally process the premium attributable to a wonderfully original coin? It seems to me that many default to a mindless exercise of comparing one price to another without the depth of thought to consider what a premium piece us worth.

Any takers? >>

>>

Why does a coin have to sell for a premium just because the seller likes it? Did the possibility that not everyone thinks that what you find wonderfully original is as eye-appealing to them as it is to you? >>

I guess I'm thinking more of the rare gold market I participate in. In simple terms coins are either scrubbed up processed crap, mildly crappy, ok, nice, really nice or F'ing amazing. Pricing the latter two in line with the former three is what I am referring to.

Consider there are 100 coins extant, 60 are awful, 20 are decent, 15 are nice and 5 are beautiful, don't the final 20 deserve to be separate from the other 80?

291fifth · July 25, 2014 6:59AM

As the coin market shrinks the lower quality pieces will drop in value sharply while only the really choice material retains its value or increases in value.

I have posted before that it is time for collectors to tighten their standards. From what I see being lauded on many posts on these boards it appears that few collectors are heeding that advice. They continue to congratulate buyers (or potential buyers) for wanting sub-par material.

Do the best coins need to rise in value or do the inferior pieces need to drop even further?

LochNESS · July 25, 2014 7:02AM

Not everyone can have the best everything. There is nothing wrong with a collector appreciating the beauty of a coin which you believe to be sub-par to finest known premium quality.

To believe otherwise is naive.

BillJones · July 25, 2014 7:06AM

<< Consider there are 100 coins extant, 60 are awful, 20 are decent, 15 are nice and 5 are beautiful, don't the final 20 deserve to be separate from the other 80? >>

An usually they do bring the money. The survival statistics for the 1855-D gold dollar are just about what you described above. I just paid a stupid price for this one, mainly because I figure I'll never have a chance to buy one the better ones. The two kickers are the fact that the coin has original surfaces, and the reverse is more sharply struck than what you see on the majority of Type II gold dollars that the Philadelphia mint made.

RedTiger · July 25, 2014 7:08AM

The quick answer is no. Quality tends to be rewarded at auction. Low end coins tend to sell low or not at all. The old cliche of ownership adding a point applies. Most sellers think their coin is high end for the grade, but by definition most coins are not. There is at least a subset of bidders that tend to be masters, not slaves. The masters know quality when they see it and bid up.

Potential bidders can rate their own grading skill. Is the bidder in the top 10% of all graders participating in the auction? Has the bidder taken the ANA or PCGS grading courses, or otherwise spent time with an experienced mentor, and looked at thousands of coins in person? If the answers are all no, while there are a few exceptional savants with immense talent, the odds are against that person being an expert grader.

If a person is not an expert, playing the quality game and bidding significantly higher for common coins is a game with poor odds. A non-expert often gets too excited and may miss something when bidding up for quality. Dealers often tell stories of collectors who come with coins to sell. Coins that were bought at auction for very strong money. Often times the quality oriented dealer gives the potential seller the unfortunate news, that the collector probably paid too much, and may now be a bag holder, often with an average coin bought at a super premium price. Perhaps another non-expert grader drove up the price, perhaps getting too excited about one factor, but missing something else when looking at overall quality.

Boosibri · July 25, 2014 7:35AM

Red tiger...I have not taken a grading course, while I may one day I think that the ability to gauge the "right" look is more important than the exact grade. If more collectors focus in this manner the hobby would be better off.

pennyannie · July 25, 2014 7:40AM

Defining premium and quality are hard to figure. Every dealer I run across only carries premium quality coins that are better than the grades on the slabs.

I would almost say 99 percent of the collectors would be better off buying low end coins for the grade at greysheet prices than buying premium quality coins at prices that are pulled out the the air.

pennyannie · July 25, 2014 7:50AM

<< As the coin market shrinks the lower quality pieces will drop in value sharply while only the really choice material retains its value or increases in value.

I have posted before that it is time for collectors to tighten their standards. From what I see being lauded on many posts on these boards it appears that few collectors are heeding that advice. They continue to congratulate buyers (or potential buyers) for wanting sub-par material.

Do the best coins need to rise in value or do the inferior pieces need to drop even further? >>

I agree with you and I am hard on a lot of the things I see posted on this site, but I do not find these sub par widgets selling at steep discounts anywhere. I just see coins sitting.

PQ is totally over used and severely oversold.

291fifth · July 25, 2014 8:08AM

<< 

<< As the coin market shrinks the lower quality pieces will drop in value sharply while only the really choice material retains its value or increases in value.

I have posted before that it is time for collectors to tighten their standards. From what I see being lauded on many posts on these boards it appears that few collectors are heeding that advice. They continue to congratulate buyers (or potential buyers) for wanting sub-par material.

Do the best coins need to rise in value or do the inferior pieces need to drop even further? >>

I agree with you and I am hard on a lot of the things I see posted on this site, but I do not find these sub par widgets selling at steep discounts anywhere. I just see coins sitting.

PQ is totally over used and severely oversold. >>

It has been my experience that when you "just see coins sitting" a market peak has been reached and passed. The holders of such coins do not want to believe that they are now buried in such material and often hold them for a long, long time while they wait for the market to recover. If the coins they are holding fall out of favor during the time they hold them they will never live long enough to see a recovery. I can think of several long-time local Sunday bourse dealers who literally died with their coins because they would never lower their prices.

telephoto1 · July 25, 2014 8:08AM

I have posted before that it is time for collectors to tighten their standards. From what I see being lauded on many posts on these boards it appears that few collectors are heeding that advice. They continue to congratulate buyers (or potential buyers) for wanting sub-par material.

I've seen threads aplenty where folks are congratulated on new acquisitions, cherrypicks, and the like, but I guess I missed the threads where people are congratulated for "wanting sub-par material". This comment on the face of it reads a bit elitist, and I'm sure that wasn't the intent of it. Who is the arbiter of what is "sub-par" anyway? Not all collectors have the same goals, budget, or mindset. If one is building an MS65 collection then XF is "subpar" but it is spot on for an XF collection, yes? Or in that same XF collection, a scarce date in a details holder may be acceptable to one collector but "subpar" to another. The fun thing about this hobby is that there are no rules...it's about collecting what YOU like and enjoying yourself while doing so.

sparky64 · July 25, 2014 8:21AM

In the past I've ignored the APR's and paid up for what I thought was exceptional.

However, I've also been lulled to sleep by the APR's and let great opportunities slip by.
Very recently, in fact, and I've been kicking myself about it.

Lakesammman · July 25, 2014 8:23AM

That would have to be true more for generalists rather than specialists who know their area well.

tradedollarnut · July 25, 2014 8:29AM

I will happily buy a subpar for the grade coin .... if the price is right and it's special enough, you can downgrade it to the correct grade, get it stickered and enjoy a PQ coin!

stman · July 25, 2014 8:39AM

OK, so who low-balled Boosibri?

pennyannie · July 25, 2014 10:17AM

<< I will happily buy a subpar for the grade coin .... if the price is right and it's special enough, you can downgrade it to the correct grade, get it stickered and enjoy a PQ coin! >>

So that is how to make a pq coin? All undergraded coins are pq coins?

While I know what you are saying.....

Most undergraded coins I find they want two grade higher money.

TwoSides2aCoin · July 25, 2014 10:29AM

Show me the coin and if I respond with "Yes Master", you will have your answer.

CoinJunkie · July 25, 2014 11:33AM

<< I will happily buy a subpar for the grade coin .... if the price is right and it's special enough, you can downgrade it to the correct grade, get it stickered and enjoy a PQ coin! >>

Sorry, but some coins are just dogs no matter what the grade on the holder. You may be able
to flip the coin for a profit if purchased for a low price, but "enjoyment" would be a stretch.

tradedollarnut · July 25, 2014 11:53AM

<< 

<< I will happily buy a subpar for the grade coin .... if the price is right and it's special enough, you can downgrade it to the correct grade, get it stickered and enjoy a PQ coin! >>

Sorry, but some coins are just dogs no matter what the grade on the holder. You may be able
to flip the coin for a profit if purchased for a low price, but "enjoyment" would be a stretch. >>

Very true - but that would fall under the provision of not being special enough

CoinJunkie · July 25, 2014 12:34PM

<< 

<< 

<< I will happily buy a subpar for the grade coin .... if the price is right and it's special enough, you can downgrade it to the correct grade, get it stickered and enjoy a PQ coin! >>

Sorry, but some coins are just dogs no matter what the grade on the holder. You may be able
to flip the coin for a profit if purchased for a low price, but "enjoyment" would be a stretch. >>

Very true - but that would fall under the provision of not being special enough >>

True. I missed that wrinkle on first reading of your post...

ms70 · July 25, 2014 1:32PM

I think most people's minds work like the gray sheet. This is it and this is the price.

Boosibri · August 5, 2014 9:21PM

So further to this thread...

I walked a gold coin around the bourse yesterday which has the following APRs since 2012:

2 EF45's achieving $3,800 each. In fact it was the same coin and should never have straight graded due to rim filing partially hidden in the holder.
1 AU55 which was scrubbed to death for $6,500.
1 AU58 which was very nice and solid for the grade $20,000.
That's it.

PCGS price guides list EF45's at $4k, 50's at $6k, 53's at $8k, 55's at $14k and 58's at $20k.

My coin is a N53, wholesome with natural color and surfaces and likely in the top 10 known.

EVERY dealer was paralysed by the AU55 APR. So based upon the above info, which is what most non-specialists have to go with, what is a fair price to ask for a high end 53?

BarberFanatic · August 5, 2014 10:23PM

Easy method for determining PQ from non-PQ in the marketplace:

If a dealer has a coin in his inventory and is trying to sell it to a collector, the coin is PQ WITHOUT QUESTION and is priced accordingly.
If a collector has that exact same coin and is trying to sell it to the dealer, it is non-PQ WITHOUT QUESTION and the dealer's offer will be priced accordingly.

Boosibri · August 5, 2014 10:38PM

<< Easy method for determining PQ from non-PQ in the marketplace:

If a dealer has a coin in his inventory and is trying to sell it to a collector, the coin is PQ WITHOUT QUESTION and is priced accordingly.
If a collector has that exact same coin and is trying to sell it to the dealer, it is non-PQ WITHOUT QUESTION and the dealer's offer will be priced accordingly. >>

I don't think that generalisations about dealers or collectors are helpful to the hobby. My point us more about pricing mechanics and how the market is operating. The few dealers I work with are class acts. Maybe you should reevaluate who you are working with.

To an extent CAC has really helped separate A and B coins in certain series and has helped nice coins sell for a premium (Gem Saints, Early Gold). What would be interesting is if CAC came out with a certification for "would sticker one grade down". This would be a big help in separating "original and over graded" from "unwholesome at any grade". Probably not completely practical today as 75% of stickers would be peeled off but there is a trend starting of downgrading nice coins into the appropriate grade and this service could have legs someday.

BillJones · August 5, 2014 10:39PM

Some of you are giving coin dealers too much credit. There are a fair number of exceptions, but by in large a fair number of coin dealers are not a lot better than many middling collectors when it comes to picking out the best coins. They depend more on the slab grade, CAC stickers and first impressions than you might think.

Want some proof? Years ago Beth Diesher, the former editor of "Coin World", was out the publicize the Chinese counterfeit problem. She and couple of other people went out to the winter FUN bourse and offered some Chinese counterfeits to the dealers. Believe it or not, they got offers to buy these things. If you can be fooled by a Chinese counterfeit that easily, you are not the sharpest knife in the drawer.

Check out the coins in the inventory of some of the largest show circuit dealers. One guy has had the same coins at the same high prices for many months. All of the coins are low end for grade, but that does not stop him from asking premium prices. After coming up empty for certain date and mint mark combinations, I was tempted to fill some holes from his case, but fortunately I resisted temptation.

Purfrock · August 5, 2014 11:00PM

As a collector, I'm willing to pay up for a premium piece. I think it's pretty easy to do a search on Heritage to find how much over the PCGS
price guide, let alone greysheet, people are willing to pay. I see this a lot when major collections come to auction, and pedigree is involved.

In my case, I do my best to evaluate the coin in the holder and believe that there are definitely distinctions to be made within a grade, and premiums
to expect for those distinctions. As a copper collector and EAC member, we talk a lot about surfaces of a coin. For example, choice surfaces versus average
surfaces can dramatically affect what I'm willing to pay for a copper coin, regardless of the grade. I know toning and luster also factor in.

Catbert · August 6, 2014 2:51AM

Boosibri - great thread.

Regarding your N53, have you considered crossing/CACing it and then setting your price?

Unknown · August 6, 2014 5:19AM

This content has been removed.

Catbert · August 6, 2014 5:41AM

average price realized

shorecoll · August 6, 2014 5:55AM

I would cross & CAC it, or at least CAC it. If you don't do one of these and it's a series that NGC is known to have issues with, you are likely out of luck on a good price. If it's one that NGC is respected on you may be OK. The other alternative is to go to a specialist and ask for strong money, a specialist should look at the coin, not the plastic. If they won't pay it, ask why...they may give you a specific reason why they think it isn't worth it, even if it's that it would take too long to re-sell it at the high values.

roadrunner · August 6, 2014 5:58AM

<< No, my point is that quality on rare coins is a big deal. When crappy coins sell they give a false impression on the accurate price levels for quality coins. I see this not being appreciated and people rationalising prices to be paid for quality coins based on APRs for crappy coins. >>

This same concept has been applied to non-PCGS slabs in general. Because they don't as a rule bring as much as PCGS coins when comparing identical quality, then that has evolved to all other coins where even nice NGC coins have a tough time fetching more than average to low end PCGS coins.

PCGS price guides list EF45's at $4k, 50's at $6k, 53's at $8k, 55's at $14k and 58's at $20k.
My coin is a N53, wholesome with natural color and surfaces and likely in the top 10 known.
EVERY dealer was paralysed by the AU55 APR. So based upon the above info, which is what most non-specialists have to go with, what is a fair price to ask for a high end 53?

With spreads that big for only 2 AU grading points are you sure the dealers aren't paralyzed by the price guide, or maybe the holder? After, all they have to resale the coin and will deal with the same question, "why isn't in a PCGS holder?" It's a fair question in today's market. After all, PCGS price guide is based on PCGS coins, not NGC. Is it stickered? Even if the coin is stickered it may not fetch equivalent PCGS money. If the coin is natural and nice I'd suggest a different holder followed by a sticker. In the current holder you probably have to sell it to a very knowledgeable gold specialist or dealer as an N53...someone who can look past the holder and know if there is any downside risk. Without even looking at the coin I'd be hesitant to pay anything over 53 money for that coin. There just isn't all that much difference between a 53 vs. 55....especially a 75% price difference...or 37.5% per point. At this kind of price level PCGS and NGC pricing diverge....as they aren't generic coins.

I can't think of really any seated quarters that jump 75% in price from AU53 to AU55. If there were potential candidates the 59-s and 60-s would have the best shot. So why do gold coins get this special treatment from 53 to 55? 30 years ago there really wasn't any price difference between a 53/55 coin...it was just a decent AU. The PCGS price guide shows the smallest % jump from 50 to 53. And the jumps from 45 to 50, and 55 to 58 are somewhat larger. So why is the 53 to 55 jump the largest by far? It makes no sense to me.

Boosibri · August 6, 2014 6:40AM

I'm completely understand the points made... CAC, NGC vs PCGS, etc. that is not my point.

Every dealer I showed the coin to went through the same motions... Look up the APRs, see the 55 price. Reject the coin. Never look up the 55 to even see if it was nice. Either way, interesting topic for the board.

Catbert · August 6, 2014 6:45AM

Well, perhaps the wrong holder/non-cac might be a "point" that further blinds potential buyers from moving beyond APR data!

AMRC · August 6, 2014 6:56AM

My concern is that Buyers look at realized prices for a given grade, and take into account some color, but s minority differentiate on eye appeal. I am constantly having offers on some of my coins predicated by "it sold at HA on xx/xx for this much, so will you take $xxx?" I will always look at the coin, but the collector almost always chooses the cheapest coin in the recent history and subsequently, more times than not, the ugliest one. I then get huffing and puffing when I say "well this is really not the same coin."

I think buyers that focus on just price get exactly that.

stman · August 6, 2014 9:10AM

<< My concern is that Buyers look at realized prices for a given grade, and take into account some color, but s minority differentiate on eye appeal. I am constantly having offers on some of my coins predicated by "it sold at HA on xx/xx for this much, so will you take $xxx?" I will always look at the coin, but the collector almost always chooses the cheapest coin in the recent history and subsequently, more times than not, the ugliest one. I then get huffing and puffing when I say "well this is really not the same coin."

I think buyers that focus on just price get exactly that. >>

Interesting and seriously I find the same thing. But just switch Buyer and collector with dealer and that's what I've ran into plenty of times.

coinkat · August 6, 2014 9:19AM

This is a problem... there are some coins that need to go to auction because of what they are. The coin you described is such a coin that should go to an auction house and let the chips fall where they may

roadrunner · August 6, 2014 10:49AM

PCGS price guides list EF45's at $4k, 50's at $6k, 53's at $8k, 55's at $14k and 58's at $20k.

Sounds very similar to an 1860-s $5 Lib with approx 100 or less known.

PCGS price guide very close to the above numbers at 3900 / $5750 / $8000 / $11000 / $20,000. And if any AU55 deserved a price of $14K it would be the 60-s since there are no PCGS AU55's currently graded. But there it is still priced at only $11K....a 37% premium over a 53.

That huge jump from $8K to $14K is not present in this particular date. And in looking at all the $5 Libs the norm is typically 20% to 50% higher from 53 to 55 for most better dates. In the case of the 60-s, it's +37%. So I'm still puzzled as to a coin with a +75% jump from 53 to 58. Even the 60-s $5 in 53+ has a price guide of $8500...only a 6% premium. So I'd still say the paralysis is a combination of holder and the very strong 75% price guide jump from 53 to 55. I would agree that the nicest and most original of the 53's should be worth more than the other coins, regardless of holder. Though that might not always hold for non-PCGS coins. An AU55 NGC coin brought $6462 in April 2014 suggesting that a 53 grade should be worth no more than that. While PCGS has only graded 5 coins from 53 to 58 (and zero 55's). NGC has 23 coins with 10 of them in 55. I can see how a PCGS AU53-55 of this date would be worth significantly more than an NGC coin. Do you want your accurately graded orig AU53 to be 1 of 6 coins or 1 of 23?

1860-s Heritage auction archives

Are dealers and collectors slaves to APRs

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