What was the deal with Mexican Cap and Ray 8 reales at the September 2011 Heritage sale?
gscoins
Posts: 292 ✭✭✭
Some of you may have participated in today's StacksBowers Collectors' Corner Sales with a number of pretty Mexican Cap and Rays 8 reales. I was interested in several pieces, so did a little research on pricing before the sale.
In the course of that effort, I discovered something I was completely unaware of: the enormous prices reached at the September 9, 2011 Heritage sale, which included a number of nice pieces. Compared to today's market, the sale prices seem extraordinarily high. An 1868 Go YF (a pretty common date) in NGC 66 went for $6900! That's a high grade for sure, but Cap and Rays 8 reales graded at MS 66 are not anywhere near that level now. This sale had 3 MS 66 ($6900, $6325 and $5750), a host of MS 65, which went anywhere from $4312 (!) to $1495 and even MS 64s that were as high as $862 (and 9 in all that sold for at least $546).
As I said, I do not recall that sale at all. Does anyone on the board remember what was going on? Was it a live, in-person auction? Were there some big collectors in the room fighting each other for these coins? I would really be interested in how these prices were achieved.
Thanks.
Comments
Can't say for sure about this particular auction but, around that time, buyers in China began bidding up high grade examples, often with little regard to the date/mint/assayer. This brought a ton of stuff out of hiding, to be sent in for grading in an effort to cash in on the increased demand.
I was at the sale and remember it well. A Mexico 1840-DoOMC 8R pattern (silver plated) in AU sold for $12,000 and skewed the market for years! Never before and probably never again.
We believed it was the Chinese as that was the period of insanity of Chinese buying.
That was also the sale in which the Dr Norman Jacobs collection of Japanese and Korean coins came to market. Great sale!
Cap & Ray 8 reales were sent to and circulated in China so the Chinese in fact. did bid this series up.
Then they stopped and the market came to earth again.
One of the reasons I am buying now ..... a lot cheaper .
I give away money. I collect money.
I don’t love money . I do love the Lord God.
At the 2011 ANA Pittsburg show I had probably 60 or 70 Mexican Cap + Rays 8 Reales in my case, some of them better dates and grades. The 1st day of the show a Chinese gentlemen walked up and asked how much my 8 reales were. I said it depends on the date and the grade. He then replied how much for all of them. I added them up, he handed me the cash and walked away what seemed to be very happy!
Edit to add: evidently many of them have made the journey across the Pond. They used to be everywhere and a dime a dozen prior to 2010! I only see the occasional piece here and there now.
Similar story to @amwldcoin. I had about 25 common Cap and Rays that I took to the 2011 Fall show in Pittsburgh to sell if I could get a good deal. A friend mentioned that a vest pocket dealer he knew might be interested. Long story short, I started by asking for what I felt was a strong price. The guy immediately said “sold” and pulled out the cash.
Always wondered if I missed something, but there were no rare dates or varieties that I could see from my research. After reading this thread, it makes a lot more sense
BTW: That money helped pay for an MS66 Antietam Commem. Oh well, sell high, buy high.
Somewhat earlier dates in better MS grades are definitely not common. Later dates (maybe back to 1880 depending upon mint) are a lot more common to my limited recollection.
Not specific to this series but I have noticed with the coins I buy and others I follow somewhat. The liquidity for most world coinage is so thin that a coin believed to be much scarcer can sell for a "high" price but if a few more show up, subsequent sales can be flat to a lot lower for years.
When I first started looking diligently for a wider variety of world coinage in the early 2000's, I saw many "old" coins in quality I thought could not exist. Later, I found out that most coins are a lot more common than I ever thought possible.
To provide one example, Rudman's 1732 Mexico 8E in XF sold for about $86,000 in 1985 (or near it). Fast forward to when he sold it in 2016 and it realized almost the same price, a huge loss adjusted for price changes. The coin didn't become any more common (measured by known examples), he just paid a very high price for the time and it probably flatlined because "quality" is king now and circulated grades aren't really in favor, regardless of the coin's merits.
I have also seen some of his pillar coinage sell for lower prices. Buying at a "name" auction increases the risk of overpaying. Don't be surprised if many of Cap & Ray 8R in that sale sell for less or a lot less the next time.
"Don't be surprised if many of Cap & Ray 8R in that sale sell for less or a lot less the next time."
What sale?
I give away money. I collect money.
I don’t love money . I do love the Lord God.
But you think they will return to those lofty levels. I don’t.
Possibly, all depends on the chinese collecting habits or others collecting that the series.....more fun than morgans
I give away money. I collect money.
I don’t love money . I do love the Lord God.
@bidask mimics the reason I collect the series.
@pruebas it wouldn't fool me if 10 years from now this series didn't offer a heck of a Return on Investment. I consider them part of my daughters college fund and a tangible investment for me.
"He is no fool who gives what he cannot keep to gain what he cannot lose."
Jim Elliot
The sale in the OP.
Yes, but how much real collecting occurs in China? I don't know the answer but what I do know is that as much speculation (aka, "investing") as there is today in practically everything worldwide, the Chinese seem to be the kings of speculation as a culture recently.
In coins, this is evident by looking at the TPG population data where NCLT accounts for a lopsided proportion of the 3MM+ coins graded to date. Not much actual collecting there I'd say. In NGC's census, about 15% are modern PRC but most of the balance (over 90%) is NCLT. Some of it is presumably due to supply constraints in pre-PRC coinage (there will never be mass collecting of it unless it's average to low quality) but not all of it. It's almost certainly for financial reasons.
The better Mexico Cap & Ray 8R is probably mostly owned by US based collectors. Most collectors elsewhere aren't used to paying TPG premiums (even if they can afford it), so they don't. That's why I outbid others in foreign actions for a coin I really want practically every single time and when I don't, invariably, I usually see it on a US dealer website in a TPG holder later.
This is a series with a high collector preference but the better quality examples and even lower quality specimens of the scarcest dates can be or are relatively expensive versus other world coinage.
>
Not trying to pick on your post but reportedly, there are over 60 million empty apartments in China bought for "investment" (what I call speculation). Most of these buyers are probably upper class economically for China but middle class by US standards. Similar financial profile to many US collectors and participants on this forum. Some noticeable proportion are probably financed (directly or indirectly) but the point is, there is no shortage of financial capacity to spend a lot more on coins in China now. More affluence isn't going make hardly anyone who isn't a collector now want to become one later.
@WCC very good point and I see your side so that's why I stated personal opinion.
I consider myself an investor more of a collector that just started doing this to have fun and diversify my investments into something tangible instead of the stock market. That being said, I never had the first interest in collecting anything and never purchased my first coin until age 38. Some of the reason was having a little more affluence to purchase these types of coins. If I had more affluence, I'd certainly purchase more coins. I feel this way not only about China, but any other country that wants to purchase these coins.
"He is no fool who gives what he cannot keep to gain what he cannot lose."
Jim Elliot
When the price run-up occurred, the date/mint of the coin was pretty much irrelevant. All that mattered was the grade on the holder. It didn't take long for the pops to significantly expand, as people were eager to turn previously ungradeable (due to low value) $50 coins into $1500 coins. As with most bubbles, it eventually burst. Will it blow back up? Personally, I wouldn't bet big bucks on it but who knows?
Thank > @WCC said:
I do not know what you own but if you become downbeat on your cap and rays collection please pm me what your willing to sell.
😊
Btw I ended up buying 8 coins from the recent stack auction ....pretty reasonable too I thought .
I give away money. I collect money.
I don’t love money . I do love the Lord God.
@bidask I added 2 from that stack auction at decent prices as well.
What I am really excited about is that I purchased a 1878 MO MH from ebay last Sunday for what I thought was a very good price. It was a 63+ and had a very dull picture at best on ebay but had a beautiful tone in the hand. I know it's a common date but it's my first Mexico City Piece in the Cap and Rays.
"He is no fool who gives what he cannot keep to gain what he cannot lose."
Jim Elliot
👍
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Don't own much and never have, though I do and have followed this design over time. I am a lot more interested in the 4R but this denomination has a noticeably lower preference in spite or maybe due to it's noticeably higher scarcity. I'd describe the prices of the 4R as "weak" recently for the most part. The availability is still quite limited as a date/MM but as a type has increased substantially.
I follow a number of series but the only focus I have and plan to have is the pillar coinage I have written about. I don't have the budget for both unless I want to prioritize collecting over something else I consider a lot more important. In other words, I could do so but choose otherwise. Collectors do this to a point but the non-collector won't, unless they believe they can make money off of it.
There is a noticeable level of this behavior by US buyers.
Another factor that most collectors overwhelmingly seem to ignore is that most coins do not have a strong enough preference where others (actual collectors, not speculators) will continue to buy it even as it becomes (a lot) more expensive than competing alternatives. Few collectors collect in a vacuum but will shift to something else if most coins or series increase in price a lot.
I have noticed that some of these coins (more 8R than other denominations) in low circulated grades sell for four and on occasion even five figures. Sure, the coins are rare or at least scarce but then, there are a noticeable proportion of Latin coinage in other series with a high preference (the alternatives at least US based collectors will likely consider) which are comparably scarce if not scarcer.
Few if any of these coins have an established price history (only when it is relatively common) which means that paying an outlier prices carries noticeable financial risk. That's what exists with the coins I buy but the price level is relatively nominal.
The key is to make sure the buyer likes what they collect enough where they won't mind losing money.
IMHO this is the only true reason. A true collector, who appreciates the coin for its history and collectibility will not lose in the long run. (The collector may not gain financially either, but that’s another story.)
The middle class throughout the world has been on the decline. Why do you think China can buck that trend long term? I don’t.
Collectors and dealers in Mexican material have been saying this since the 1970s due to demographics. So far (last 40 years), it hasn’t proven out. Why do you expect that to suddenly change?
If you’re an investor, historical trend is your friend. Magic pixie dust isn’t.
I agree with your conclusion and below have added some additional context to your comments.
This series or any number of others may increase noticeably in percentages, but it won't be enough to be financially meaningful to more than an irrelevant number of participants. It cannot be because the coins are too scarce in the quality most collectors who will actually pay "high prices" actually want to buy. A different outcome will require an alternate to the existing TPG model because collectors today disproportionately won't pay "high prices" for the quality in which most of these coins exist. There isn't going to be any financial scale to the collecting of this series, Mexican coins or even Latin coinage generally.
A noticeable increase in type set collecting can change the potential substantially but I'm not aware this is a common practice for this series, even by US collectors. If it increases, it probably still won't make much difference except to the highest quality examples.
I don't believe demographics, meaning a noticeable increase in the Latin population here in the US, will make much of a difference either. It does nothing to change the supply constraints but even aside from this, the participation rate of this group is much lower.
I will keep collecting this series in the highest quality and over time by date . 😀
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Collect what you like which from what I can see, you do. I'm not buying what I do with any illusions of making a windfall.
Keep in mind though that "highest quality" isn't usually equivalent to what exists with practically every single US federal coin, unless we are talking about obscure specialization.
Outside of Europe and the Anglo countries, 19th century and earlier "classic" equivalents mostly do not seem to exist in the elite quality US coins do. In Latin coinage, we are talking about MS-64, MS-63 or even better AU as "high quality". I'd rate the chances as essentially nil that elite quality examples (MS-66 or better) exist for hardly any of this coinage.
Under the US TPG price structure, price spreads are large to outsized which means that most of these coins are unlikely to develop the same price spreads we see in US coinage.
@WCC I’ll take the other side of that bet. While extremely uncommon, I think “elite” examples of many Latin issues do exist that have not surfaced in the US or global auction scene. Super high grade coins do not need to have been lovingly cared for through the years (in fact sometimes this hurts) They just need to be lost or ignored. If the prices continue to rise, I believe more will surface.
I'm not saying there aren't any, only that the number is very low compared to US or European. Some series like Cap & Ray 8R or Pillar dollars could have noticeably more (proportionately at least) because the coins were used widely in international trade and would have had a much higher probability of being set aside by collectors elsewhere.
In the only coins I buy now, I'm still waiting for the plate coins illustrated in available reference books and the few I have seen in old catalogs to surface but none are in "elite" quality to my knowledge. Some might be recorded in the TPG data and I just don't know it but otherwise, I have been waiting for over 15 years and no luck. But you are correct, if the coins exist and the owners know what they have at least to some extent, they might be waiting to sell in anticipation of much higher prices (which I don't think will come anyway).
The primary point I was trying to make with my last post is that the "best" coins graded AU-58, MS-63 or MS-64 are unlikely to develop US level premiums even as "top pops" because that's not how the current price structure works. Nobody has expressed this sentiment in this thread but I have definitely seen it implied elsewhere, many times.
"The primary point I was trying to make with my last post is that the "best" coins graded AU-58, MS-63 or MS-64 are unlikely to develop US level premiums even as "top pops" because that's not how the current price structure works."
That is why I like to buy them ......that is when I can!
I give away money. I collect money.
I don’t love money . I do love the Lord God.
@bidask wow! You’re like a coin buying machine! Brazil, France, Mexico, what don’t you have?
You must have cashed in your equities at the top!
Since the early 1990s, I have heard Mexican coin dealers with a long laundry list of why Mexican coins should soar. Hasn't happened yet.
I collect Mexican Coins (especially 8 reales) because I like them.
I like them too . I just pulled out a couple of really scarce coins that I have held for over 11 years. ( Great Britain and Turkey)
I will probably keep my 8 reales collection for at least the same amount of time so they will be as they say " off the market".
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Well since you intimated check this one out !
I give away money. I collect money.
I don’t love money . I do love the Lord God.
That is really cool. What’s the story there? I know nothing of that series. AU58 seems harsh though from the pics.
I don't think there is any higher at either TPG.
There was one that sold in a Heritage auction ( sale 3026) NGC 58 KM-293 SCH-261 same type) for $7,637.50
September 26, 2013.
https://www.numisbids.com/n.php?p=lot&sid=529&lot=23564
Not sure if this is the same coin and crossed to PCGS.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Now THAT is a series to collect!
(And PCGS should have used Annam on the holder, not Vietnam.)
@bidask I've got 1 too. Mine is overstruck on an 1809 PTS. It has a naked eye visible under date! I call it an MS 65 struck on an MS 65!
Nice !
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Latin American Collection
Nice !
I give away money. I collect money.
I don’t love money . I do love the Lord God.