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Higher populations soften modern values
RYK
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Don't blame me, it's a direct quote from the article so-titled by Mark Ferguson in Coin Values this month. Frankly, I am not sure that I follow his reasoning in this and other valuation issues, but I thought it would make for some lively discussion. 
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Russ, NCNE
I enjoyed his other article Prices fall when supply exceeds demand
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since 8/1/6
<< <i>Prices fall when supply exceeds demand >>
I wonder how much research he had to do for that one.
Russ, NCNE
and it sets us apart from practitioners and consultants. Gregor
Lincoln Mem Cents, MS Red (combined PCGS and NGC):
2003, 69 grade: 115
2005, 69 grade: 716.
While I am sure that the total number of 69's has increased, the numbers do not take into account:
1. Resubmitted coins.
2. Grading disparities between the two services.
3. That certain dates that were condition rarities in 2003 are still (likely) condition rarities in 2005.
4. Anything else that I cannot immediately think of.
Oh, yeah, for Russ:
Kennedy Halves:
2003 MS-69: 759
2005 MS-69: 1074
2003 MS-70: 134
2005 MS-70: 141
2003 Proof-69: 43,612
2005 Proof-69: 125,698
2003 Proof-70: 2028
2005 Proof-70: 3769
*Please note: the dates 2003 and 2005 are not for coins of that year but for all coins of the type with the 69 or 70 grade that had been graded by the year 2003 and 2005. It is confusing as presented.
<< <i>Higher populations soften modern values >>
Collector since 1976. On the CU forums here since 2001.
Much of the increase is in later coinage and in specific dates that were already known
to be relatively common.
The article isn't that far off really. Text
<< <i>Kennedy Halves:
2003 MS-69: 759
2005 MS-69: 1074
2003 MS-70: 134
2005 MS-70: 141 >>
Interesting thing about those numbers is that PCGS has graded only a total of three MS69 business strike Kennedys - ever - for all years combined, and no MS70's. Not sure where the author is coming up with his numbers, because NGC hasn't graded any MS70's either, and only a handful in MS69.
<< <i>2003 Proof-69: 43,612
2005 Proof-69: 125,698
2003 Proof-70: 2028
2005 Proof-70: 3769 >>
The vast majority of the proof Kennedys in PR69DCAM are, and always have been, nothing more than commodity coins selling around $15 a crack.
Sure glad this guy has come up with his startling revelation.
Russ, NCNE
<< <i>Is there like an SMS half or something that has been graded 69 and 70? >>
Yes, which of course makes the numbers quoted by the author pretty useless.
Russ, NCNE
Russ, NCNE
<< <i>Sure is hard to get a flamewar going lately.
Russ, NCNE >>
Why bother? Everyone knows everyone else's position on this. Yet there is one member, if he were logged on, would be throwing flames with just the appearance of my name.
<< <i>Why bother? >>
Because RYK and I are bored.
Russ, NCNE
<< <i>Check out the posts under "Confused about cent grades and market prices." Perhaps we could start a flame war over there. I stated that paying the difference between $45 and $3,500 for a 1956 cent for one grading point is pure insanity. That might get the flame throwers out.
Geez, how could that start a flame war. Paying that kind of difference is insane.
(Was I convincing enough?)
<< <i>Check out the posts under "Confused about cent grades and market prices." Perhaps we could start a flame war over there. I stated that paying the difference between $45 and $3,500 for a 1956 cent for one grading point is pure insanity. That might get the flame throwers out.
...And what coin would you rather pay this difference for?
What is really being said when such statements are made is that these coins
shouldn't be collected. While cautioning about the sustainability of such dif-
ferences might sometimes be indicated, it serves no purpose to insult people
and tell them high grade coins are not collectible if they are rare relative to
lower grade coins.
This is a very simple concept which has been stated in thousands of different
ways. Still there are many who don't seem to understand. They can understand
paying a $100,000 premium for a high grade that they collect but can't understand
paying a $3,450 premium for a coin they consider crap.
I guess on some level it almost makes sense.
<< <i> Geez, how could that start a flame war. Paying that kind of difference is insane.
This is just another personal attact on collectors.
It is also an attack on the coins they collect since obviously the author believes such coins can't warrant more demand than supply. It follows that demand isn't warranted at all.
<< <i>
<< <i> Geez, how could that start a flame war. Paying that kind of difference is insane.
This is just another personal attact on collectors. >>
It was in no way an attack on collectors of coins. Collectors of slabs, well maybe. To me the insanity has more to do with the fact that the "difference in value" is based upon an ever changing opinion of condition as detemined by a TPG. The reality is that a coin holdered in a 67 slab could be cracked and resubmitted over and over again and the resulting grades would be a crap shoot. I would prefer the nice MS66 cent for $45 that if submitted over and over again would someday find itself in a 67 slab.
That is where the insanity lies. Obviously if a coin was recognized as a superior condition through collector community consensus, it may well be worth the difference in value. But to assign that value by a "lucky submission" is absurb.
When the plastic and the number on it is the driving force behind the price, in my opinion it's time to look at something else.
Collect what you want, modern or classic, but be smart about it. Don't pay for plastic.
Russ, NCNE
<< <i> what's insane is that if you crack probably ANY of these top pop ultra high grade moderns out and sell them raw.........what do you think they would realistically sell for? Collect what you want, modern or classic, but be smart about it. Don't pay for plastic. >>
I happen to collect a lot of moderns. Just to set the record straight, my comments above pertain to all coins, not only moderns. One needs to ask the same question whether its a Silver Eagle or a Bust Half.
(Note to Russ: Is this sort of statement helpful?)
I usually follow and agree with your points, Cladking, but I am having a tough time with this one. The author never states that demand cannot increase, and even if he did, it would not necessarily follow that any demand is unwarranted. He is only stating, that for type purchases, supply appears to be exceeding demand.
<< <i>It is also an attack on the coins they collect since obviously the author believes such coins can't warrant more demand than supply. It follows that demand isn't warranted at all.
I usually follow and agree with your points, Cladking, but I am having a tough time with this one. The author never states that demand cannot increase, and even if he did, it would not necessarily follow that any demand is unwarranted. He is only stating, that for type purchases, supply appears to be exceeding demand. >>
I am actually impressed that I could say so much with 7 little words. Damn I'm good.
<< <i>Crap or not, as a rule, I avoid the big price jumps. >>
Many people do and I tend to do the same. This is not so hard and fast a rule when the jump is at the top of the scale.
<< <i> It was in no way an attack on collectors of coins. Collectors of slabs, well maybe. >>
It is certainly an attack on the sanity of anyone paying the difference.
<< <i>
To me the insanity has more to do with the fact that the "difference in value" is based upon an ever changing opinion of condition as detemined by a TPG. >>
People collecting the finest coins are seeking these coins raw or slabbed.
"The opinion of value" imparted by the third party graders are no more changing
for modern coins than for any other. Indeed, the opinion is less changing since
surface conditions is not as major a factor in the grading of these. When moderns
appear unc, they are.
<< <i> The reality is that a coin holdered in a 67 slab could be cracked and resubmitted over and over again and the resulting grades would be a crap shoot. I would prefer the nice MS66 cent for $45 that if submitted over and over again would someday find itself in a 67 slab. >>
There will be some variation with all coins. People look for the finest coins in the
MS-67 holders. Where should they look, in the lowest grade holders?
A really nice MS-66 might end up in a 67 holder but it will never be nicer than a
nice MS-67.
<< <i>That is where the insanity lies. Obviously if a coin was recognized as a superior condition through collector community consensus, it may well be worth the difference in value. But to assign that value by a "lucky submission" is absurb. >>
Community consensus is now and long has been that these coins are crap. I'm
very sorry that I don't agree.
<< <i>what's insane is that if you crack probably ANY of these top pop ultra high grade moderns out and sell them raw.........what do you think they would realistically sell for?
When the plastic and the number on it is the driving force behind the price, in my opinion it's time to look at something else.
Collect what you want, modern or classic, but be smart about it. Don't pay for plastic. >>
Certainly most will agree with your conclusion.
But it is not the slab driving the price it is the desire to have the finest coupled with the
simple fact that many of these are quite scarce. There are high grade coins of all eras
which are being traded raw. In fact, in all probability there are more moderns being traded
this way since grading, authenticity, and doctoring are not as large a problem.
It is true that more moderns will trade raw at smaller percentages of their true value than
classics. Mostly this is because it's a tiny niche market still and many just aren't interested
in them or have no customers for them. A dealer with a modern that lists at $300 will likely
assume that this means that it's worth at best $150 if he can find a buyer. So he might of-
fer it at $100 and accept $75 even if it's slabbed. Raw, he might put it in the case and sell
it for $10. In point of fact, however, some moderns are worth far more than listed prices.
The fact that they can be found raw at face value or found for sale at a fraction of market
prices does not mean that the coins are junk. It means that few people take these coins ser-
iously.
A solid for the grade modern will sell in or out of the holder to people who know the market
and grading.
How many maxed out classics will bring as much money out of the holder than in it?
Buy the coin, not the holder.
<< <i>I have a collection of moderns that I obtained on my vacation. I kept buying things with bills, and they kept giving me moderns back with my purchase.
(Note to Russ: Is this sort of statement helpful?) >>
This is the greatest strenght of moderns; they're widely available.
If I had to write a serious article with that title I certainly wouldn't be using Lincoln Memorials graded MS69RD by PCGS as part of any example. I would probably also avoid making a complete mockery of statistical analysis. I use pop report numbers and their trends in many series as a general guideline to identify relative values. When I deconstruct the pricing structure of a classic series and then modify the results based on real-world knowledge of inacurrate or misleading data points...well that's "insightful" and "impressive". When i do the exact same analysis of a modern series...well then I'm just a kool-aid drinkin' hack.
I used to be far more enthusiastic about the modern crap in high grade market; these days I'm spending way too much time messing around with minor, trivial die varieties to keep up with the massive increases in the populations of high grade moderns that's occuring. Far less flaming going on in die varieties too...probably a good indication that its a stagnant market with little or no upside potential, and a good place to just kick back and enjoy the peace and quiet.
Now if Mark would just get around to completing his followup article where he explains how the explosion in combined population levels of Morgan dollars in MS65 at PCGS, NGC, and NTC is leading to price erosion of key dates in the series in high grade...that one might just spark a good flamewar.
Can anyone track down the first "Stupid price for a Lincoln" thread on these boards? They all seem identical lately, but maybe they have changed in subtle ways over the last few years...I would like to compare a few from then and now...and I think it would be fun to see what kind of stupid predictions I made at the time.
RELLA
Edited twice: once for minor corrections because I can't spell (or type) and because I somehow "signed" my post twice; and the second time because I forgot to write this explanation of my first edit during that first edit.
who boasts of twenty years experience in his craft
while in fact he has had only one year of experience...
twenty times.
<< <i>
<< <i>It is also an attack on the coins they collect since obviously the author believes such coins can't warrant more demand than supply. It follows that demand isn't warranted at all.
I usually follow and agree with your points, Cladking, but I am having a tough time with this one. The author never states that demand cannot increase, and even if he did, it would not necessarily follow that any demand is unwarranted. He is only stating, that for type purchases, supply appears to be exceeding demand. >>
>>
Saying that it's insane to pay a large premium to obtain the best is literally saying
those who pay it do not have control of their minds. It also suggests that no matter
how many are in existence that the demand can't exceed the supply. Obviously any
coin could be unique in the highest grade. Any market demand for such a coin would
cause the price to go up markedly. It would seem to follow that those who make such
statements don't believe there should be any demand.
This is generally only applied to moderns despite the fact that there are numerous clas-
sics with large jumps in the highest grades.
But do you realize you're now working on the dregs of the crap. While it
might be a great place for a real collector it will gain you little respect a-
round these parts.
Hey, I got a gem PL '81 type "d" quarter. The high grade nonsense might
be hard to escape completely.
Duh.
Birds fly and fish swim too.
There are probably tons of untapped hi grade moderns laying around--looks like a fool's game to me!
<< <i>There are probably tons of untapped hi grade moderns laying around--looks like a fool's game to me! >>
Excellent. In addition the usual cast of characters in the debate, we've now added a doofus to the mix!
Russ, NCNE
<< <i>Higher populations soften modern values
Duh.
Birds fly and fish swim too.
There are probably tons of untapped hi grade moderns laying around--looks like a fool's game to me! >>
This is the common wisdom and in the last few years some of the pops
have doubled. ...from one to two.
In point of fact, the supply of raw moderns is not inexhaustable. Many
of these coins were simply never set aside in rolls or as singles. Try find-
ing a nice original roll of 1969 quarters. They virtually do not exist. On the
very rare occasion that a roll is seen it will be put together from mint sets.
Even coins which were saved in substantial quantities often were made so
poorly that almost no gem examples are available from this source. Mint
and proof sets are nearly the sole source for many modern gems and the
number of these surviving drop every day. Even now there are some which
sell for less than face value. How many of these do you think can remain
after decades of being less than worthless?
When the day comes that there are not enough of these to fulfill current
demand there will be great stress on the market to satisfy the still growing
demand.
Many of the moderns have total fewer than a million coins extant in unc.
Some of these are almost all vry poorly made and very unattractive. There
were two million nice attractive '50-D nickels that got up to $130 each in
today's money. What is the potential for a scarce high grade coin if the de-
mand outstrips the demand by ten or a thousand to one.
There are literally tons of ungraded moderns but if you think this means all
these coins are easy then it's a certainty you are not looking.
I have perused the Morgan dollar section in Trends and cannot find a similar 78-fold jump in price between any two grades. Someone please help me.
Edited to add: I will never buy a coin at a grade in which the next grading point down is 1/78th the price, or 1/10th the price, or even one-third the price.
<< <i>I will never buy a coin at a grade in which the next grading point down is 1/78th the price, or 1/10th the price, or even one-third the price. >>
Neither would I. I look for threshold coin grades. The grade and price which is just below the spot where prices go up by geometric proportions.
Bill, thats actually a good point, an acid test. I suppose its easy enough to say pops of MOST moderns will increase and their values diminish. I fully agree. In the Kennedy series, which is my primary modern focus, the top four money coins are quite expensive. They are as follows:
1967 MS 68 Dcam - $6500 pop 6
1964 AH PR68 Dcam - $6800 pop 8
1965 MS67 Dcam - $7500 pop 8
1966 MS68 Dcam - $11500 pop 4
During the last few years, three coins have made it into those ranks. Russ' 64 AH, my 66, and one other members 67. The pops have changed by ZERO in the last year. Hardly the erosion described in the article. My 66 holdered MS68 Ucam at NGC and crossed as MS68 Dcam at PCGS. It was the ONLY MS68 Ucam SMS half NGC had ever graded. Some like to believe only a handful of collectors can tell the difference in MS67 and MS68, but I can assure you its easy with a coin like that in hand. 4 graders and two finalizers sure could. When I read threads telling me the pops are exploding, I always wonder why the author doesn't discuss the coins that seem to singe so many classic collectors eyebrows with the money they fetch. Perhaps the pops of the real money coins don't get as enthusiastic a response. Just for fun, ask Russ if he knows whether his AH is a 68 and why.
For the last 5 years, I've been hearing how the pops would explode, and during that time only one 66 in 68 Dcam has been holdered, despite the bounty. You guys know something I don't?
and it sets us apart from practitioners and consultants. Gregor
<< <i>The pops have changed by ZERO in the last year. >>
Actually, it's closing in on two years now. Your MS68DCAM 1966 was May of 2003, my PR68DCAM AH was April of 2003. It's been well over three years for the MS68DCAM 1967.
Russ, NCNE
and it sets us apart from practitioners and consultants. Gregor
<< <i>I wonder if we could substitute the word "registry" for "modern" in these discussions, without changing substantively the various arguments. Personally, I think this is often really the issue--not whether the coin is from 1780, 1880 or 1980. >>
I think I'll reply with "I Agree".
I look forward to cladkings return so he can articulate exactly what I'm really saying with these two words.