Currency Auction Insanity!
dsessom
Posts: 2,473 ✭✭✭✭✭
I was born in Pecos, Texas and my mothers parents were ranchers and lived in the Davis mountains, near Balmorhea State Park. I owned the property until April of this year when I sold it to my cousin because she is local to Fort Stockton.
I actively seek Texas and Oklahoma National notes (I live near Fort Sill, OK). Both can be rather expensive! In fact, a very rare 1929 series Pecos, TX note came across the Heritage auction block on November 11th. It was the first $20 from this Charter to be offered at auction since 2011! (A $10 was sold in 2022)
Small sized notes from Charter 8771 have averaged about $500 at auction, with the last one (The $10 note) selling for $504 all in.
Large sized notes from this Charter average around $1000.
I was prepared to pay stupid money for it, and ran it up to $3,200 ($3,840 with juice) and gave up. It ended up selling for $4,080. I was absolutely heartbroken, AND confused because someone had just paid $4000 for a $500 note! ($1000 at best)
Here are the actual past sales of all Pecos, Texas notes, large and small:
https://currency.ha.com/c/search/results.zx?term=Pecos,+Texas&si=2&dept=2021&archive_state=5327&sold_status=1526&mode=archive&page=25~1&sb=3&ic4=SortBy-071515
, 
_I was and still am utterly dazed and confused as to what transpired 4 nights ago! Can anyone explain this to me? _
Dwayne F. Sessom
Ebay ID: V-Nickel-Coins
My V Nickel Registry Set - https://pcgs.com/setregistry/alltimeset/71874
Comments
Nobody?
Bueller... Bueller... Bueller...
The best explanation that I could come up with is that two very passionate morons (me being one of them) bid this thing to the moon! I'm not sure about my competition in this bidding war, but I'm on like TEN new medications since I got home from the hospital (multiple VT heart attacks), and that is MY excuse, and I'm sticking to it!
Dwayne F. Sessom
Ebay ID: V-Nickel-Coins
My V Nickel Registry Set - https://pcgs.com/setregistry/alltimeset/71874
The explanation is that two participants got caught up in a bidding war, and you were one of them. I see a note that probably should have sold for around $850, wound up selling for $4,080 which is just crazy. If the buyer one day decides to sell, I don't think the note will come anywhere close to sold price. Who would be your competition for it? Was there a third party anywhere in the running? Maybe they dropped out when the note got close to $2000, and he was probably right to do so.
Family, Neighborhood, Community,
make the World a better place.
I have seen plenty of collectors overpay for notes, but this is one of the more extreme cases I've seen. Although due to this extreme case. However with rare notes without much sales history, the market kind of shapes the value with each sale. So I might bump my estimate for a 29' Ch 8771 in VF20 to about 1000-1200 based off of this sale. Now if the next one also sells for moon money, then I might have to bump it up again. But the history had been at pretty consistent levels prior to this sale.
Family, Neighborhood, Community,
make the World a better place.
--
So, what you are saying is that in my quest to obtain one of my "dream notes", my stupid butt actually forced the value, and future sales prices to increase dramatically?
I kind of knew that in my mind but it's weird saying out loud (or typing it out, I should say).
Great...
Dwayne F. Sessom
Ebay ID: V-Nickel-Coins
My V Nickel Registry Set - https://pcgs.com/setregistry/alltimeset/71874
I don't know that I can shed much light on the mystery of your auction results ... other than to share the old warning "Beware of thin markets." It's easy to pay up (by a lot!) bidding against one or two other specialists when chasing a rarity, then lose mightily when selling and those other(s) are no longer in the hunt.
As consolation, I'll share this Pecos TX small size $10 that I handled a while back. It is an honest Fine that I bought in October 2007 at a show I set up at in New England, and sold it on eBay about 5 months later for $460 + shipping.
(In full disclosure, I should add that before I sold this note on eBay in March 2008, I'd consigned it to the January 2008 FUN Sale, conducted by Heritage, via our very own @JimFitz
, where it went unsold. https://currency.ha.com/itm/national-bank-notes/texas/pecos-tx-10-1929-ty-1-the-first-nb-ch-8771/a/456-15904.s?ic4=GalleryView-ShortDescription-071515 )
@dsessom What I am saying is that before this sale, I would have valued that Ch 8771 Pecos Texas PMG 20 at $850. After your bidding war, I now place a value of about $1100 (1000-1200) on the note. If another 29' Ch 8771 sells for moon money, I will bump it up again, maybe to about half of what it sells for. And if it happens a 3rd time, we now have the beginnings of an established market for the note. Right now that sale is an outlier. Note that markets change, and sometimes drastically. In sportscards you saw this with Mark McGwire 85' Topps Olympic card. There was a time these were going for $150-$200 each in Nr Mint condition. Today you can get a PSA 8 for about $35. Roger Clemens 84' Fleer update was at one time an $800 card in Nr Mint. Today a PSA 8 goes for about $275. The same thing happens with currency where an outlier sale might bump the market, but subsequent sales bring the market back to more realistic levels.
Family, Neighborhood, Community,
make the World a better place.
I think with such a narrow market it all depends on that crucial 2nd underbidder (if any). If that second underbidder doesn't exist or doesn't value the note highly - then if another example goes up for auction you could be the only serious bidder and get a note for a cheap price relative to what it sold for in the crazy auction. If however the second underbidder is as hot for the note as you and the auction winner were - well it would then be established as worth the "insane" price - as presumably you and the 2nd underbidder would again drive the price up.