Does anyone know how the PCGS Price Guide works?

WingedLiberty1957 · August 19, 2014 4:58AM

So I realize that the Guide Price shown is typically the value of an average PCGS graded coin in that condition. But what about the case where you are talking about a population 1 coin, where there is no "average" coin ... only the single coin known. Should the PCGS Price guide always jump to (or drop to) the last known auction price for that coin? Or is there some sort of "analysis" done by PCGS on whether the last auction led to an overpriced or underpriced coin -- so the market value should be different than the last auction price.

For example, on this 1909 VDB, the PCGS Price Guide says $200,000 (and I think it's said $200,000 for at least 4 years). In the sale of this coin in 2010, it sold for $235,000 ... and in 2014, it sold for $258,500.
Should the PCGS Price Guide adjust? Or is PCGS saying that they think this coins market value is $200,000 regardless of how much it sold for in the last two auctions?

ModCrewman · August 19, 2014 5:07AM

I'd say 2 things impact the answer to that question.

1. I think they evaluate when they get around to that series periodically; perhaps only a couple times a year; so the updating would take some time until the series came up for evaluation again.
2. That coin has exceptional eye appeal, and they may think that's why it brought the premium price. I believe the guide is intended to reflect what an "average" coin of that grade would sell for. Although there is only a single coin; others may keep submitting their 67 trying to get the 67+ if they think an average coin of that grade would bring the $258k.

Just my thoughts on the matter; may be completely wrong.

WingedLiberty1957 · August 19, 2014 5:12AM

That makes sense, I suppose.

19Lyds · August 19, 2014 5:27AM

Price Guide values are set by Jaime Hernandez and are a based upon auction sales and input from acceptable sources. The "input" can be based upon "opinion" if a coin has never gone to market. It SHOULD be based upon actual, documented sales to keep it at a certain level of reality instead of a generalized "perception" of value.

Besides, the Price Guide is only that, a Guide. Reality can often times be the exact opposite of what is published in the Price guide.

WingedLiberty1957 · August 19, 2014 5:39AM

If I was in charge of the Price Guide, I would probably bump this coin up to $235,000 at least ... which was the price it sold for in 2010. That would at least get it closer to it's 2014 auction price.

Dennis88 · August 19, 2014 5:41AM

Do you know who to contact if you think a PCGS price guide price is way out of line?

I'm talking about a coin with multiple recent auction closes above $500 ($680 in one instance) that has been valued in the price guide forever for only $400.

Dennis

TommyType · August 19, 2014 5:46AM

One thing to keep in mind...(and I'm only being partly tongue-in-cheek):

You can make the case that any price guide entry for a one-off rarity should list a price BELOW what it just sold for. Afterall, only one guy on the planet was willing to bid that high...and he currently owns it! Any attempted sale held the day after the item is sold would almost surely result in a lower sale price.

Really, though, for true rarities, (condition or otherwise), the price guides are just ball-park figures anyway. Any serious attempt to put a value on it is just guessing...

BryceM · August 19, 2014 5:50AM

The price isn't determined by the winner, it's determined by the underbidder.

illini420 · August 19, 2014 5:53AM

<< One thing to keep in mind...(and I'm only being partly tongue-in-cheek):

You can make the case that any price guide entry for a one-off rarity should list a price BELOW what it just sold for. Afterall, only one guy on the planet was willing to bid that high...and he currently owns it! Any attempted sale held the day after the item is sold would almost surely result in a lower sale price.

Really, though, for true rarities, (condition or otherwise), the price guides are just ball-park figures anyway. Any serious attempt to put a value on it is just guessing... >>

You can also make the case that the Price Guide should be higher than the auction price realized. It's not entirely accurate to say that only one guy on the planet was willing to bid that high (in fact he may have been willing to go much higher). The winner was simply the guy who was willing to pay the most out of the relatively small group of people who knew of the auction and availability of the coin. Surely there are people out there in the rest of the World who did not know of the coin being available for sale during this couple month window. And there's a decent chance that at least a few of those billions of people who didn't know of the sale would be willing to pay more for the coin. Many many dealers make their money based on that premise as not all collectors have the time/ability to view every coin in every auction and many things are missed and sell for less than full retail. Heck, many coins are missed by even the best dealers. Just too many auctions out there to see everything, especially since the items are only available to be looked at for a couple of weeks to a couple of months at best.

TommyType · August 19, 2014 6:01AM

<< 

<< One thing to keep in mind...(and I'm only being partly tongue-in-cheek):

You can make the case that any price guide entry for a one-off rarity should list a price BELOW what it just sold for. Afterall, only one guy on the planet was willing to bid that high...and he currently owns it! Any attempted sale held the day after the item is sold would almost surely result in a lower sale price.

Really, though, for true rarities, (condition or otherwise), the price guides are just ball-park figures anyway. Any serious attempt to put a value on it is just guessing... >>

You can also make the case that the Price Guide should be higher than the auction price realized. It's not entirely accurate to say that only one guy on the planet was willing to bid that high (in fact he may have been willing to go much higher). The winner was simply the guy who was willing to pay the most out of the relatively small group of people who knew of the auction and availability of the coin. Surely there are people out there in the rest of the World who did not know of the coin being available for sale during this couple month window. And there's a decent chance that at least a few of those billions of people who didn't know of the sale would be willing to pay more for the coin. Many many dealers make their money based on that premise as not all collectors have the time/ability to view every coin in every auction and many things are missed and sell for less than full retail. Heck, many coins are missed by even the best dealers. Just too many auctions out there to see everything, especially since the items are only available to be looked at for a couple of weeks to a couple of months at best. >>

Further fuel for the "it's all just guessing" stance....

WingedLiberty1957 · August 19, 2014 6:02AM

<< 

<< One thing to keep in mind...(and I'm only being partly tongue-in-cheek):

You can make the case that any price guide entry for a one-off rarity should list a price BELOW what it just sold for. Afterall, only one guy on the planet was willing to bid that high...and he currently owns it! Any attempted sale held the day after the item is sold would almost surely result in a lower sale price.

Really, though, for true rarities, (condition or otherwise), the price guides are just ball-park figures anyway. Any serious attempt to put a value on it is just guessing... >>

You can also make the case that the Price Guide should be higher than the auction price realized. It's not entirely accurate to say that only one guy on the planet was willing to bid that high (in fact he may have been willing to go much higher). The winner was simply the guy who was willing to pay the most out of the relatively small group of people who knew of the auction and availability of the coin. Surely there are people out there in the rest of the World who did not know of the coin being available for sale during this couple month window. And there's a decent chance that at least a few of those billions of people who didn't know of the sale would be willing to pay more for the coin. Many many dealers make their money based on that premise as not all collectors have the time/ability to view every coin in every auction and many things are missed and sell for less than full retail. Heck, many coins are missed by even the best dealers. Just too many auctions out there to see everything, especially since the items are only available to be looked at for a couple of weeks to a couple of months at best. >>

This is complicated!

On the point by Illini, I totally agree that t's VERY COMMON for a monster eye appealing coin to sell for MORE than it did the first time (after a quick-turnaround return). I have seen that happen over and over on eBay. It's almost like the first action sets a base price and all the underbidders now realize how high they need to go to buy the coin. Prices for these coins often jump10 to 25% over the first winning high bid ... and this is only a few weeks after the first auction.

illini420 · August 19, 2014 6:12AM

An example is a coin I bought off eBay earlier this year in a 7-day auction. Paid about $70 for the coin and there were multiple bidders. I was willing to pay more as it was certainly worth more to me and I knew it would be worth more to the right buyer. It wasn't a variety cherrypick, just a really nice coin that went too cheap. I waited a month or so then relisted it as a buy it now/best offer for $249.95. After another month or so I sold it for $220.

Looking at auction results, the Price Guide would only show the auction of $70 and not my later sale for the offer accepted at $220... so is $70 really the real value??? I'm certain my buyer didn't see the 7-day auction a couple of months earlier or I would have been competing against him!

edited to add that having that much of a percentage gain is certainly not the norm!!!!

19Lyds · August 19, 2014 6:42AM

<< If I was in charge of the Price Guide, I would probably bump this coin up to $235,000 at least ... which was the price it sold for in 2010. That would at least get it closer to it's 2014 auction price. >>

Hey.

Why not present a well thought out story about how the coin was sold in 2010 for $235,000 but the buyer was willing to pay $100,000 more for it.

Get it listed for $335,000. Get a Coin World article on it then out it up for auction?

It worked for the 1975 No S Proof Sets.

lusterlover · August 19, 2014 8:46AM

This is an excellent question and one that I asked recently on the registry board. In addition to the VDB, many of the other MPLs shattered the price guides. Many of these never traded in their "+" grade spots before (prices were placeholders). I think ModCrew is correct in that they evalute the guide periodically. I don't think the Heritage ANA auction has been factored into the guide yet. Let's see what happens in a few weeks. Bottom line is you can't ignore an auction result.

roadrunner · August 19, 2014 8:59AM

<< The price isn't determined by the winner, it's determined by the underbidder. >>

As long as said underbidder is still in the market for that same coin. And after an auction there's really no way to know that.

BryceM · August 19, 2014 9:53AM

<< 

<< The price isn't determined by the winner, it's determined by the underbidder. >>

As long as said underbidder is still in the market for that same coin. And after an auction there's really no way to know that.

>>

I'm referring to the actual price realized by each and every lot that sells at auction, not a future estimate of value.

Casman · August 19, 2014 10:01AM

They generally set it at 50% of whatever I can sell the coin for.

messydesk · August 19, 2014 10:05AM

<< The price isn't determined by the winner, it's determined by the underbidder. >>

And since the winner already bought the coin in question, one could argue that the guide very well should be based on the second underbidder, which would presumably set the price the underbidder would have to pay if the winner is out of the market for the coin.

Cougar1978 · August 19, 2014 10:35AM

I would suggest you look at David Hall's video on how prices are compiled in the PCGS Price Guide.

One thing that can trump auction prices IMO is a dealer pricelist. If you win an auction, you paid more than anybody in the country at that time.

Lakesammman · August 19, 2014 10:47AM

I would suggest you look at David Hall's video on how prices are compiled in the PCGS Price Guide.

I can't seem to find that - do you have a link??

roadrunner · August 19, 2014 12:43PM

<< 

<< The price isn't determined by the winner, it's determined by the underbidder. >>

And since the winner already bought the coin in question, one could argue that the guide very well should be based on the second underbidder, which would presumably set the price the underbidder would have to pay if the winner is out of the market for the coin. >>

Since that's typically only one bid increment (approx 5%) it's really not a concern either way. The bigger concern is if only 2 bidders ran the price up and then shortly thereafter the under-bidder leaves the market. We saw a lot of that in 2007-2008 where many under-bidders were no longer in the market in 2009. Quite a number of 5 and 6 figure coins saw 30-50% corrections. What good is the price guide in that environment?

lusterlover · August 21, 2014 8:51AM

It looks like they made some adjustments finally. The VDB was bumped to $225,000 (should it be more?). Having said that, they are still missing the mark by a lot on a few others from the auction:
Guide sold
1911 PR66RB $2,500 $14,688
1914 PR66+RB $4,350 $8,226
1915 PR66+RB $12,500 $22,325

Does anyone know how the PCGS Price Guide works?

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