Question about the Libertas Americana medals and the “Ford effect”
Longacre
Posts: 16,717 ✭✭✭
I was reading CW and John Kraljevich’s article about the Colonial coin market. Here is what he wrote about the Libertas Americana medals and the “Ford effect”:
“The flip side of the “Ford effect” is that coins of typical quality that bring high prices in a major “pedigree” auction do not tend to change the value of other typical coins. In other words, if a coin is pretty much the same quality as most of the stuff that appears in the marketplace, just because a couple sell for high prices in a big fancy auction will not make all the rest of those coins worth more.
The lone exception I have ever seen to this converse of the “Ford effect” is in the marketplace for Libertas Americana medals.
One piece sold in a famous collection for more than $10,000 despite the market being a third of that, but that “fluke” price became the new level, a level that has remained now for well over a year.”
Questions/Comments:
(1) The author is a pretty experienced numismatist. Does anyone else think it is interesting that the Libertas Americana market is the lone exception to the converse of the Ford effect? Does anyone else know of other areas of numismatics where this converse also holds true?
(2) What is special about the Libertas Americana market that makes the converse of the Ford effect apply? In other words, why would a single obscene price for a medal create a new market floor for these pieces?
(3) Do certain dealers or market makers predict (or even force) the converse to the Ford effect for a particular series (assuming this is possible) to set a new floor for market prices of a particular series?
PS. Before I get a nasty response to this thread, I know that John K. is a board member here and I could have sent him this in a PM. However, in my opinion, understanding how the markets work is very important (a lot more important than memorizing pop reports), and perhaps it could be educational for everyone to get a discussion on this issue. Lastly, others who know the Libertas Americana market are also free to reply!
“The flip side of the “Ford effect” is that coins of typical quality that bring high prices in a major “pedigree” auction do not tend to change the value of other typical coins. In other words, if a coin is pretty much the same quality as most of the stuff that appears in the marketplace, just because a couple sell for high prices in a big fancy auction will not make all the rest of those coins worth more.
The lone exception I have ever seen to this converse of the “Ford effect” is in the marketplace for Libertas Americana medals.
One piece sold in a famous collection for more than $10,000 despite the market being a third of that, but that “fluke” price became the new level, a level that has remained now for well over a year.”
Questions/Comments:
(1) The author is a pretty experienced numismatist. Does anyone else think it is interesting that the Libertas Americana market is the lone exception to the converse of the Ford effect? Does anyone else know of other areas of numismatics where this converse also holds true?
(2) What is special about the Libertas Americana market that makes the converse of the Ford effect apply? In other words, why would a single obscene price for a medal create a new market floor for these pieces?
(3) Do certain dealers or market makers predict (or even force) the converse to the Ford effect for a particular series (assuming this is possible) to set a new floor for market prices of a particular series?
PS. Before I get a nasty response to this thread, I know that John K. is a board member here and I could have sent him this in a PM. However, in my opinion, understanding how the markets work is very important (a lot more important than memorizing pop reports), and perhaps it could be educational for everyone to get a discussion on this issue. Lastly, others who know the Libertas Americana market are also free to reply!
Always took candy from strangers
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
0
Comments
I do not know this 'Ford effect' of which he is discussing, but it seems to me there are other prices realized that back the value up.
Laura and others have been saying this for years. Don't get caught up paying Big Money™ in a fancy, schmancy auction for something that you can buy more reasonably on the bourse, by mail, etc.
I personally think that the Libertas Americana medal is something that is scarce, is of extraordinary historical significance, and relatively under the radar screen. Its appearance in a major collection raises its profile. Newer collectors learn about it, appreciate that it is far more interesting than another high-grade Morgan dollar and want one, thus raising the price.
Before I get a nasty response to this thread...
Nasty PM sent!
What is now proved was once only imagined. - William Blake
Importantly, that was the first Libertas Americana medal ever sold with a "slab grade" - PCGS MS65 - and it was offered in a prime location at the beginning of a session of mainstream US coins (i.e. Cardinal's Dollars). I say "slab grade" in quotes because it appeared in the catalog as PCGS MS65, but was not actually in a holder - it was in a Capital Plastics mount with the label attached.
My own personal theory is that readers of that catalog and participants in that sale may not have paid much attention to Libertas medals before, but upon seeing a PCGS graded piece, in silver, in a significant auction, bid with great enthusiasm.
And once the auction record of this silver piece was established at a new record (by a mile) $115,000, subsequent sales of copper Libertas Medals increased by 4 or 5 fold overnight.
In other words, it was the TPGs slabbing these pieces and introducing them to the mainstream collectors that fueled the price rise. The Ford results were much later and merely followed the trend that had already been established.
When were the Ford Libertas medals sold?
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
TDN's copper piece sold in March, 2006 - noteable because this was only the second TPG graded Libertas to hit the market.
The Ford Libertas Medals were sold in May, 2006.
John Adams is writing a book on the Comitia Americana series right now - watch the prices continue to zoom when it comes out. I predict much interest will result in the whole series, with the Libertas continuing in the forefront.
As far as the Ford sales, the Libertas was already selling for strong money. Obviously the Ford sales didn't hurt but I wouldn't consider it a major factor.
For all the MCA members, I have some more French translations regarding the Libertas that will appear in an upcoming MCA newsletter - one based on source material I've not seen anyone else refer to.
I believe I have been misinterpreted. (Sorry Longacre!)
My column's reference to Libertas Americana medals was referring to the Cardinal sale of 2005. THAT was when the price took a giant leap ahead -- not Ford.
The "famous collection" was Cardinal, when an unspectacular bronze specimen brought over $10,000. At that point, the medal was probably "worth" $2000-3000, but ever since that sale, $10,000 has been the norm.
The price for Cardinal's silver was shocking and started all of this. Perhaps I should have been more specific, but it's difficult to single out one person in print and say "you were the first jerk to pay too much!" Thus, the semi-oblique reference. I have not checked my original manuscript to see if my original words were adopted verbatim in the CW column.
Hope this explains this a little bit.
Betts medals, colonial coins, US Mint medals, foreign coins found in early America, and other numismatic Americana
The bronze specimens are not all that rare, and I needed the $ at the time. I was definately regretful the minute I sold it and always told myself that I would just upgrade and make it up to myself. It's become a broken promise, as you would imagine.
I just can't believe the prices! If I had the $, I still wouldn't fork out 10 grand for a bronze example. Of course when they're selling for 100 grand, I'll still be whining about it.
Actually, the buyer and I sort of became friends, and remained in contact for years. We've since lost touch though, when he moved from Hawaii to Kentucky. I can't even recall his name. If yoiu know a libertas Americana collector in kentucky from hawaii (and betts Medals) PM Me!
<< <i>The "famous collection" was Cardinal, when an unspectacular bronze specimen brought over $10,000. At that point, the medal was probably "worth" $2000-3000, but ever since that sale, $10,000 has been the norm. >>
It is true that the bronze medal in the Cardinal sale hammered for 10K, but that was immediately after the silver one hammered for $100,000. I can almost picture some dealers looking at each other during the session and saying 'heck, if a silver one is 100,000, a bronze one ought to be 10,000, right?'.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
That one and the Cardinal example were both exceptionally beautiful pieces.
<< <i>I believe it was CCU that was the buyer of the (higest price paid at auction) MS-64 (PCGS) silver L A medal in the 2007 ANA sale, lot 1537.
That one and the Cardinal example were both exceptionally beautiful pieces. >>
I loved that one we had. It went to a collector, and I think it is unlikely to appear on the market again in our lifetimes.
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