Harry Laibstain e-mail market report...
MrEureka
Posts: 24,362 ✭✭✭✭✭
I received his e-mail today, as I'm sure many of you did as well. He brought up an interesting subject for conversation.
He said:
" Once again the Market was extremely mixed at fun. The Auction, one of the largest of the year continued to break records in both directions. Some super collections which often dominate the FUN auction had competitors fighting over great coins. My favorite was the 1885 trade dollar that brought nearly 4 million. The Gem chain cent was yet another super cool coin to cross the block at a seven-figure price tag. The downside of this equation is there isn't enough liquidity in the market to absorb 50 million dollars at once. Some lots don’t get the attention or competition they deserve. Often coins placed in the auction are ones dealers could not sell and their quality and lack of competition can spell new lows for an issue. Particularly if multiples are offered. While these trades may not be reflective of the overall market the public nature of these trades drives valuations. I believe we’re at a point where this effect has become overblown and many issues are very desirable at current levels. Especially when you can buy nice quality."
My thought, which I'll bounce off the crowd for a reality check. Harry says there's isn't enough liquidity to absorb $50 million at once. I think there is, and that the real problem is is that bidders simply don't have enough time to figure bids on all of the coins they might buy under less time-limited circumstances. Still, there's no doubt that he's right that low auction prices lead to lower market prices for similar coins. Which all leads me to think that the market would be a whole lot stronger and healthier if auctions were smaller but more frequent.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Comments
Harry Laibstain is a very intelligent man. His analysis here , in my opinion, is brilliant.
I agree that it’s wearying to be quoted typical auction “comps” when selling really nice coins.
I find that for every 1 awesome coin of a certain series that sells at HA there are 10-15 garbage coins sold, so the awesome coin price is labeled an “outlier” and discounted. This has the effect of pushing prices lower and lower.
For some reason, I never seem to be able to capitalize on this effect when buying! I mush be a bad negotiator.
I think the point he is trying to make is all the C coins are dominating the auctions these days. i tend to agree. No way am I selling my A coins for C prices! Pay my price or buy a POS! That's my motto these days! Yeah...a few do slip through the cracks...missed one tonight due to a personal phone call.
LOTS of coins slip through the cracks.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I got mixed messages in the middle part of the paragraph - dealers selling material they can't sell retail, in multiples. Sounds like low quality material being blown out and it should bring low prices. Then, the last sentence suggests you should buy good quality coins at these new lows (if offered). Well, duh......
What am I missing??
You missed this line:
"While these trades may not be reflective of the overall market the public nature of these trades drives valuations."
By which he means that once a coin sells cheaply, the price record becomes a drag on the market for all coins of the same grade, even if PQ.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Your argument doesn't make sense to me. If you research things ahead of time, set a max bid, and sit through the session or pay for a representative, exactly how is time an issue? There are many dealers that will lot view pretty much all non-widget coins in an auction at lot viewing. If money is an issue and the bidder needs to constantly reanalyze his or her budget, a spreadsheet on a laptop while phone bidding would do wonders.
There are thousands of lots in most major auctions. Viewing them all
and pricing them all woukd take weeks, even as a full time job.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Perhaps my comment was too general and was a slight exaggeration, but I assume that most collectors and dealers have specific niches. Well off collectors putting together collections of six and seven figure coins aren't likely wasting time with cheaper coins. Widgets, type below a certain grade (MS67 or so), other non-CAC common dates, problem coins, and disfavored series can be quickly excluded. Someone bidding on an 1885 Trade Dollar probably isn't wasting his time buying most Morgan Dollars, generic gold, bullion, blast white classic commemoratives, etc., you get the picture. Many are taking the CAC only path anyway except for ultra rarities and a small number of other coins. That would limit the number of coins to a few hundred, in the upcoming Long Beach sale for instance, making it easier to further reduce the list from there.
Yes, highly selective bidders won’t have time constraints. But the people - mostly dealers - who might bid on almost anything can’t, because there’s just not enough time. Easy to see how the more uninteresting and uglier coins can slip through the cracks.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Well, I'm just not sure I agree... Some of those big numbers include 1 or 2 coins that can make up 20% of the sales numbers at one auction. The big ticket stuff is for elite bidders I will never compete with. On some level I would like to buy a a cool cool coin at a big auction with a big name for provenance. I guess that's the collector in me. For making money only, then sure! A smaller auction with fewer bidders would be optimal..
I can tell you that the collector who consigned the Chain Cent went for 7 figures was not pleased with the result. He claimed that he turned down a lot more money for it a few years ago.
In that sense, perhaps some of these high prices aren’t that high.
Given that description, perhaps they are selling for low prices because they are "uninteresting and ugly" and not because they are simply over looked.
Demand for "ordinary" and "so-so" material is dropping and prices are, and should be dropping as well. Most US coins are actually quite common and the profusion of such material in auctions just confirms that commonness.
Just what is it that is going to bring demand for the common material back? That is the question that dealers should be asking.
Actually, dealers know the answer: new collectors.
But what those of us who are kool-aid free are concerned about is that this is not a temporary dip.
Part of the problem might be the decline in grading standards. When you get less coin for the same grade, prices will come down.
When I was working on a set of gold dollars from 1880 to 1889, I dreamed of getting them all in MS-65, which years ago that gave you some awesome coins. After buying a number of dates in old holders, I got down to some of the slightly better dates in new holders. The grading was not as strict and a dealer friend agreed with me. Prices have come down, but so has the quality of the coin for the grade.
This 1882 is in an MS-65 holder.
Ever since I've been a full time dealer, the vast majority of auction lots went to dealers for inventory. Back in the day, Martin Paul alone could buy 10-50% of any particular sale. As the internet, along with the transparency in auction results became the norm, most dealers today won't buy nearly the amount of material out of sales that they once did. I can't tell you the number of times I've had both dealers and collectors say about a particular coin " you bought this out of XX auction, and you paid YY. I won't give you a 5-8% profit because, apparently what it brought at auction is all that's it's worth." Buying nice product out of auction is a complete disincentive to dealers in this day and age. IMO, this is one of the big reasons for the decline in many issues. Quality issue? Not really an issue...all sales (usually) have an average amount of "stuff" and nice quality material. As for time constraints? Really not an issue either for most dealers.
I would rather spend $1,000,000 buying nice material on the FUN bourse floor than $1,000,000 out of the sale.
Gradeflation? I think this is way overblown. Undergraded coins have ALWAYS been cracked out and resubmitted (since the inception of PCGS/NGC). The BIG difference today from, say 20 years ago, is that all these coins are now imaged and can actually be tracked because of the transparency of auction results and the ability to access information that was once unavailable years ago. Nothing has changed....except now all the information is available for all to see.
Agree. It may not prices on specific coins are going down.
But it could end up being a very risky "opportunity".
Information being available for all to see is a good thing. If the only thing propping up prices is misinformation or lack of information, that's not a sign of a healthy hobby.
TDN bought the Dexter 1804 Dollar from Lipton after he purchased it from auction. In the much lower 4 figure range, I've knowingly and happily paid double what a dealer purchased at auction, twice. There are other pieces I'd be happy to pay double or more what it went for at auction previously, including a HA Make Offer to Owner I just did a couple of weeks ago.
The good thing about having the market information is that collectors can make judgements on how much over market rate they are willing to pay and what it would take to unwind a position or sell a coin.
My inference is that the coins being lumped into this category are in many instances common, frequently still not cheap and not particularly interesting to most collectors especially when losing value. I believe most US collectors badly overestimate the "typical" collector's affinity for what they buy and collect.
What most US collectors buy from US coinage is actually common and quite easy to buy. If the outlay is material to them, they aren't going to treat it as a consumption expense either. It is much better to spend less now or not buy at all and wait until it is cheaper later.
I didn't say it was a bad thing at all. And there are certainly examples of coins trading for more than their auction prices afterwards. There are times someone will give the buyer a good profit from an auction purchase. I'm just stating my opinion, and I think, overall, many in the industry would agree with me. And I'm trying to explain a big reason (my opinion) of the generally declining auction prices for many issues.
It may be that coins going up are the exception and coins are generally declining, but you're right, it may be a reasonable, and expected situation if declining coins were previously only able to sustain their prices due to a lack of information.
I believe that newer collectors who started with the internet recognize many coins as being overpriced for the merits as a collectible. The internet and the TPG data has exposed how common the most widely collected US series are versus past perception. US coins also now have to compete with world and ancients on a more equal footing and there is also a flood of NCLT which wasn't available before. The communication limitation you described artificially restricted what collectors could buy.
When I was collecting as a kid in the late 1970's, there was one shop in my area which carried early US classic silver and copper. It was the only place I could see coins like that. In 1987, I went to the ANA in Atlanta and for the first time saw coins which anyone can see now on the internet. Today, I can buy many of the coins I only dreamed about buying as a 12 year-old but none of it has the same mystique it did then.
The internet has turned many coins which used to be considered "special" into "ordinary".
I think you are both right about the Internet and the spread of information. I got back into collecting about 10 years ago when the Internet was well under way, and my view of many, more common coins is that they may still be overpriced, and need to fall more, not that they are sadly declining.
The last line is a good quote and I will add that while the Internet may have turned coins that used to be considered "special" into "ordinary", it has also turned many coins that were previously broadly "unknown" into "special", such as Morgan toners, errors, So-Called Dollars, etc. A recent, personal example is that I like colonials and have been looking at them for years, but rather than pick up what may be a common coin, I recently picked up my first two which happen to be errors. Here, rare can mean not being able to find any photos on the Internet other than the sale I'm looking at. This would have been much, much harder before the Internet.
It's my opinion that the more widely practiced specialties can be substantially attributed to US collectors being priced out of what they would rather buy. And by rather buy, I am not referring to coins which were always out of financial reach of most collectors. I am including circulated "collectors" coins which weren't cheap when I started collecting but have increased at least as much and usually (a lot) more than the median income.
Common early large cents are an example. My step grandmother gave me an 1803 in 1975. I don't remember the variety but I traded it to my local dealer as a VG at the Red Book price of $10. Last time I checked, Heritage results ranged from $100 to $300 for a VG-8, also depending upon variety. I also remember a local dealer offering a 1795 FH half in fine for $325 in 1977. I believe it sells for eight to ten times this price now. Both are nice "collector" coins but certainly not "special" by my standards.
My biggest problem is when trying to offer A quality coins to dealers instead of using the auction route, they want to start pricing at latest auction results, which include many b- and c coins folks above are referring too. Some who know quality will often step up, but some still try to buy priced on the lower quality level if they can. In my personal box of 20 sort of speak, I have nothing left but A quality pieces, and often sell a piece here and there. A good friend of mine, a national dealer stopped thru on way to FUN and asked if I had any coins I wanted to liquidate. I showed him two, one he bought outright at pretty close to my asking price, the other he was trying to buy at latest auction results which were for mediocre pieces. I told him no but he could take it with him and try at my price. Well, he sold it for even more than he expected as I expected he would based on the quality of the coin in question. I would have lost 20% if I had just accepted the offer which was based on avg quality, vs the piece I sold.
Thee is clearly 2 different markets in coins - 1- the coins that are premium and 2- those that are not premium. Premium coins have always sold for premium prices. Unfortunately, if a collector or dealer sees a premium coin that is offered to them either for direct purchase, then either they don't know what a premium coin is or they want to take advantage of the seller. Hence, if you own that premium coin, make sure the buyer recognizes that or just move on.
Perhaps in general and in the past, but I think the Internet may have changed this too. Part of this is that the Internet has shown that many "collector" coins, even in the 4 and 5 figure range aren't rare. If one likes rarity, absolute or condition, there are other areas that have more opportunity. In addition to rarity, being photogenic has also become more important with the Internet. So, if one prizes rarity and photogenics, those may be additional reasons other than price to choose specialties over common collector coins.
I haven't done this with coins but I did it with a classic Porsche. I sold it through a consignment shop and after some time they recommended I lower the price. I told them to trust me as I know there will be a buyer at my price, and sure enough, the right buyer who would treasure that car came along, and I'd rather the car be with that person than someone who was just trying to get a good deal.
Me too. Not that I want to collect them, but ripping and flipping isn't a bad way to line one's pockets.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Laura is going to have a mini-strike when she reads this - that's heresy.
How is the market for dreck/widgets? What percent back of bid? 
I also think there are many coins which have gone up tremendously in the last 20 years, even though their value may have
dropped some in the last few years. A couple of examples - 20+ years ago I made the the 2nd 1909SVDB 1c in 67RD. this was before the Set Registry concept. I couldn't get 8500 for the coin and finally sold it for 7500. The coin was worth 125-150K with a higher pop a few years ago, and now is probably worth around 50K, which still is a nice increase. Another example is a 1794 $1 which is now graded P62+ (sold as a 62) I sold to a collector for 230K at the Portland ANA in 1998. Today it's worth over 7 figures. These are both key coins obviously, but many people don't realize how quickly the values went up on many coins over the last several years, and have still "appreciated" nicely if you held them for a good period of time. If you evaluate many areas of the market from 20 years ago, you'll see many coins are worth multiples more today.
I do agree with Harry that many areas represent great buying opportunities today, especially with 19th and early 20th Century type coins. Also, as Andy has said, there are thousands of coins that slip through the cracks every week. You just have to put in the time to do research and scour the listings of available coins.
very informative post. thank you
@Zoins:
Very true. Even "rare" coins are more easily found with the internet. Most R-6 (13-30 known) and some R-7's are usually on the web for sale somewhere. Around the year 2000, I could not find a decent VF 1801 or 1802 half dollar. They were "out there" at national shows and some B&M shops, waiting for the right buyer. Now they go on the web, many are available.
Compounding this is collector hold time is shorter, turnover is quicker. More places to sell than getting lowballed at the neighborhood B&M. This all adds to the supply of coins for sale.
All of this is good news for collectors looking to form or improve their collections.
Mr. Laibstain is one of a dwindling number of professional dealers who have earned that moniker. His integrity and intelligence are matched by few in the business.
Prior to the internet, even common coins were much harder to find. The most widely 20th century US key dates were available but many or even most US album collectors presumably never saw or had access to it, or else the prices would never have been so high. At the 2006 ANA convention, a collector told me that prior to about 1996, they couldn't find Mexican pillar dollars above VF even though the series mintage is in the tens of millions. After that, the coins became easy to find, though "nice" examples are much scarcer.
As for the turnover, I also agree with you but I also think it has a lot to do with the financialization of the hobby.
Have to disagree with the above. Look at an MS 66 business strike Liberty Nickel graded 20 years ago and compare it with one graded two years ago. You're looking at the newly graded coin, which might grade MS 65 back then, maybe lower. Have you looked at many 12 S Nickels in MS 66 holders? I have.
Not many 67s are being made now. This means you have a huge continuum of what is in a 66 holder. Most people are inclined to look at the lowest auction pricing on a coin in a particular grade as a benchmark, which drags down the pricing of the nicer coins for the grade. Dealers often ask strong premiums for some 6 + coins, but will not offer strong premiums to buy them. I generally avoid these coins for this reason.
This has served as dis-incentive for me to buy anything except a few specific very scarce coins which are truly rare, expensive and hard to find. To this end, I haven't found anything I've been looking for since the fall of 2016.
"Seu cabra da peste,
"Sou Mangueira......."
Even if a particular drecky widget is only saleable at 60% of CDN bid, you can make a 20% profit buying it at 50% and selling at 60%. And doing that is a whole lot easier and far less risky than paying 150% for "the right coin" and trying to sell it for 180%. Which is not to say that the cheaper coin would be a better choice to buy and hold.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I have no problem giving a dealer 5%+ for something just bought of auction, if I want it. They got there first, it's only fair.
You can read about him here:
Good luck running a business on a 5% gross margin
Andy - seems the longer you hold dreck , the less it is worth
The other factor is what do you tell your customer when they want to sell you back the dreck you sold them ?
This is why you need to change your phone number a lot
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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......
Me either, except with the coins I buy which are not US coins, it's more like 50% or 100%.
You obviously have not met my mother.
The super expensive coins different animal (subject to whim of wealthy buyers) than overall market. It will take influx of new investors drive overall market higher. I am skeptical this will happen unless triggered by some external event or higher income levels. The new world of work is much more unstable than what it was 15-20 years ago. Like being on planet close to a flare star. Corp Downsizing, quirky less friendly work environments, more advanced ERP (which facilitates big brother monitoring), and AI down the road. People are scared, tightening belts.
At some point especially if market tightens further one of the 2 major TPG in order to survive will make a breakthrough to further corner TPG market (or acquire) via considerably lower cost slab process (say $10) and some other innovation.
I do agree one can often find better deals off the floor of a show than auction.
I get the liquidity issue on rarities. A dealer had a lot of certified rarities ending on ebay yesterday that did not meet their reserves, some were pluses and high end. FUN auctions usually represent a good shot at top dollar.