Could you affect the value of a coin...

Wondo · April 21, 2004 12:35PM

by taking the pop off of the market?
publically destroying them?
bidding them up to a stupid price?

Take the 1882 or 1886 $20 Lib. If you got rid of 5-8 of the known 15-30 examples at a cost of $150-200k, could you make a profit on others? Perverse minds wanna know.

MrEureka · April 21, 2004 12:50PM

You would need to buy far more than 5-8 pieces before it would pay to melt some of them.

solid · April 21, 2004 3:27PM

My guess is that holding them effectively for ransom would not sit well with most collectors.

darktone · April 21, 2004 8:59PM

I think some coin series have had their value affected by all the air time they get on this forum such as the 1964 proof Kennedy's and Franklin halfs. mike

CapAnson · April 21, 2004 9:43PM

Theoretically no.. The demand related to the supply should adjust to reflect the true value, and the sum of the total shouldn't increase. If fact it would probably be lower. Consider.. what is the value of all 2004-P lincolns? something like 500 million dollars right? Now suppsoe they were all destroyed but one.. would that one be worth half a billion dollars? Not likely.

keets · April 21, 2004 9:49PM

hey Wondo

why would you destroy them when you could just hold them off the open market and achieve the same goal??

al h.

tjkillian · April 21, 2004 9:52PM

Didn't some person try to do that with the "Little Orphan Annie" dimes (1844)? He had over 600 of them and it still did not affect the price?

Tom

MrEureka · April 21, 2004 9:59PM

We've had this discussion before. Last time, it was 1884 Trade Dollars, mintage 10. It trades for FAR less than half the price that an 1885 Trade Dollar, mintage 5.

Why? Imagine a sinking ship with 8 passengers and ten life preservers. If auctioned, the life preservers would not bring much because supply exceeds demand. Now, imagine that there are only five life preservers. If auctioned, they would become very valuable. Especially if there are six very wealthy passengers. But if half of the passengers are wealthy and the other half penniless, the life preservers will still bring very low prices. 1884 Trade Dollars are no different.

MrEureka · April 21, 2004 10:03PM

why would you destroy them when you could just hold them off the open market and achieve the same goal??

Because if you hoard the coins many people will wait for you to sell rather than let you shake them down.

keets · April 21, 2004 10:40PM

hey Andy

so what do you propose to do in this fantasy situation, have a big announcement that you'll be destroying the coins so everyone knows?? it would seem that by hoarding the coins it would serve multiple purposes----drive up the price at purchase, protect the price paid because the coins still exist in your possession and drive price over time because the demand will outstrip available supply.

it seems it would be just as effective and much more sensible. of course, it's still only a fantasy.

al h.

Wondo · April 21, 2004 10:43PM

<< <i>why would you destroy them when you could just hold them off the open market and achieve the same goal?? >>

Just listing methods of removal, but people could know that the pop had physically down. Would definately tick them off!

Andy,

I liked your life preserver analogy. I tend to think of demand as the number of folks willing to buy something without factoring the price at which they can/will buy. Thanks.

Aethelred · April 21, 2004 10:50PM

Threads like this are what makes this forum so darn fun!

lathmach · April 21, 2004 11:02PM

Sure you can alter the going prices for coins.
This happens all the time due to someones hoarding certain coins.
The 1844 dime is a historic example as it's only an R1 coin. Look at the price guides and see what it sells for. It's been horded by different people since the 1930's.
A couple years ago Larry Briggs let me know I should grab all the 1854-O huge O quarters because they were being hoarded. Look at what's happened to the price on this variety that is only "scarce", not rare, over the last couple years. (There's a low grade piece on Ebay right now being sold by Bob Foster. Watch the auction and you'll see stupid money being paid.)

Ray

edsondl · April 22, 2004 12:18AM

On the surface the idea of hoarding of key dates seems to be a good way to drive up price and make money. But the one thing that I don't understand about that logic is (unless you hold them long enough to have inflation kick in where key dates rise in value faster than common dates) how do you really come out ahead?

So let's say that you are hoarding a coin of which ten exist. The first two or three would be at standard market price. By the fourth coin, other collectors would be willing to bid higher if they really needed an example of the coin. So in order for you to win it, you would need to bid more than anyone else. This would continue as any subsequent example entered the market. So in essence, you, the hoarder, would be the person willing to spend the most on these coins and essentially drive the entire market for them.

In other words, no one else is willing to pay what you already paid for them (otherwise you wouldn't have won them)

Now buying coins is always the easy part, you just have to spend more than anyone else. The hard part is selling and convincing others that the coins are worth even more than you spent for them. This is only accomplished through hype (creating a market demand that didn't exist).

Looking bask at the coins you bought in your hoard, let's assume that every auction you won had the same underbidder. He really wanted the coin, but each time you beat him out, so every time he was willing to spend a little more. In this case, no other collector except you and him have interest in these coins at this level. Without hype, when you sell the first coin from the hoard, he will not be bidding against anyone else and will get the coin for less than you bought the last one. Now the only other person willing to spend that amount is no longer in the market. How do you unload the rest of the hoard at more than the cost of your first (cheapest) coin? Without generating new demand and hype, the market has been removed as the underbidder is satisfied and you are no longer buying.

Long ramble short. It is easy to hoard, all one needs is money. But at some point, the hoarder becomes the sole driver of the market while buying. Unless increased demand is created by hype, (or by simultaneously selling every coin in the hoard to a bunch of different dealers all at the same time, so that each doesn't know that the market is now flooded) when the hoarder stops buying and goes to sell, the market will collapse. Exit strategy is key.

MrEureka · April 22, 2004 1:25AM

BTW, to take the life preserver analogy one step further, if I was the auctioneer of 10 life preservers and I had 8 wealthy passengers, and if I wanted to maximize my revenues, I'd hide or destroy three of the life preservers before the auction.

Edited to say: Actually, I'd only destroy two. I'll keep one for myself, thank you.

louiskeller · April 22, 2004 1:30AM

Amen to that,

that is if you are a real capitalist!!

Could you affect the value of a coin...

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