JOHN J FORD JR's VISION FOR THE SLAB MARKET - A HISTORICAL PERSPECTIVE CIRCA 1989
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Okay well I finally had to scan in a photo of my word document.
Hope it doesn't offend anyone but I always have to try something new.
The John J Ford comments are a lot like many of posts I see on the CU forum. So even though I am not opposed to slabs and actually like them I can certainly understand the purist perspective and thought I would share John J Fords attitude in this respect. CIRCA 1989.
Even though Ford didn't like the new emerging slab market I have great admiration for him and can certainly understand the many comments opposed to slabbing being expressed on the CU forum.
<< <i>Sounds like he forecast the registry craze. >>
when he said "they've been lied to."...........
or when he said "who cares?"
<< <i>
<< <i>Sounds like he forecast the registry craze. >>
when he said "they've been lied to."........... or when he said "who cares?" >>
I'm talking about the last 3 sentences of his long statement: "I can think of so much you can buy for $30000...It's a common coin." with strong emphasis on the common coin part in relation to 20th century issues. Obviously this wouldn't apply to truly rare coins in series that are in demand where very few specimens are available.
The reason that the graders started was to make the coins more marketable so his
statements aren't entirely off-base. But the market spreads between grades and the
high prices for MS-67 Monroes isn't caused by the graders; it is made possible by the
graders. The large numbers of grades were caused by market forces which are engen-
dered solely by the desire of collectors to have the finest they can afford. This trend
was well established before the services were begun.
While this trend is almost certainly cyclical like so many things it is not reasonable to
expect it to dissipate. Collectors have always prized quality and now grading and the
internet makes it available to them. No one will be spending MS-67 Monroes again.
<< <i> Collectors have always prized quality and now grading and the
internet makes it available to them. No one will be spending MS-67 Monroes again. >>
Perhaps. Yet you can change that to a more modern coin analogy -- for instance how many MS70 cents have been spent? I'm sure quite a few.
The difference between JJF and most is that he put his money where his mouth was. He believed in the historical, esoteric items, and spent large amounts of dough persistently collecting them for MANY years before they were in vogue. Who today can say the same thing?
While JJF "believed" in these sorts of items, I think it would be wrong to say that he spent large amounts of money (at least for the pieces that he collected). He was an opportunistic buyer, which may very well be what led him to appreciate esoterica so much.
Today, there are quite a few collectors and dealers who are willing to pay SERIOUS money for rare and somewhat obscure items.
edited to correct a typo.
What is now proved was once only imagined. - William Blake
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Here is another exerpt on slabbing from the Ford interview:
LEGACY: Your opposition ot slabbing and certification is well known. But considering how many people have taken advantage of by coin dealers over the past 20 years aren't investosr and collectors better off with 3rd party grading?
FORD: When you say "taken advantage of," talking about an overgraded coin?
LEGACY: Yes.
FORD: That hasn't been going on for 20 years, that has been going on for over 120 years. Ever since the first coin was sold to anybody, somebody has lied about it. The only difference is we play musical chairs now. We lie about different things at different times. Yes, there is no doubt 3rd party grading has neen of some benefit to people who have no interest in learining anything about coins, and who are motivated strictly by profit ... but ... you have opened a can of worms in other areas .... misrepresentation as to rarity .... misrepresentation as to value .... the whole 3rd party grading system is motivated by profit. It has nothing to do with what is good for anybody.
<< <i>.
the whole 3rd party grading system is motivated by profit. It has nothing to do with what is good for anybody. >>
Excuse me , but profit IS good for everybody. How we get to profit is a different story but there is nothing evil or "bad" about profit.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>Collectors have always prized quality and now grading and the internet makes it available to them >>
Perhaps what Ford meant was that the difference in quality is not sufficient to justify the price structure of top pop common coins. If a common coin is mundane, then an MS 67 is just a high grade mundane item.
CG
<< <i>
Perhaps what Ford meant was that the difference in quality is not sufficient to justify the price structure of top pop common coins. If a common coin is mundane, then an MS 67 is just a high grade mundane item.
CG >>
Granted. Ford found Monroes to be mundane but there are collectors for everything, including Monroes.
Factoring in the 18 years of opportunity costs, and a person buying a Monroe for $30,000 in 1989 would be down about 70% in real terms. So good call for Mr. Ford. A Monroe PCGS 67 traded for under $5,000 in 1996 before the current bull market in coins, if that coin can be sold for $20,000+ that would certainly be a winner for the eleven year holding period.
If a person was a typical newbie coin investor, he/she might likely buy near the top and sell near the bottom ($30,000 to $5,000 less 10% in fees, in seven years, ouch that would hurt).
There have always been folks against slabbing, always will be. It is a big hobby, there is plenty of room under the tent.
The market is driven in Europe it seems more off of a coins rarity than a coins grade rarity. In the U.S market (highly slabbed) the difference between one point can mean 70, 90 or even multiple hundreds of percent. Darkside stuff doesnt have that strain on grade rarity (yet) although it is growing.
It really is all in ones perspective. There are some that feel the same way about coins that JJF did, and some that dont. Bottom line, duped or not, is that the market exists nearly twenty years later. It is not a false market.
siliconvalleycoins.com
and it sets us apart from practitioners and consultants. Gregor
I think this thread has stayed remarkably well on track. Most of the discussion has been Condition vs Rarity issues.
The below is extracted from the first post and probably sums up Ford's perspective on collecting, as so far debated on this thread.
I can think of so much you can buy for $30,000 in numismatics that's a better investment, a better piece of history, and appeals more to the intelligence. A Monroe Doctrine half dollar is nothing, It's a common coin.
I know I certainly get the feeling that I am the Monroe Doctrine guy when I think of the high prices I am paying for bust half dollars.
<< <i> if he were alive today and assembling a collection with the same zeal, what would he pursue?? >>
Sales tax tokens, coal and lumber company tokens, depression scrip, saloon tokens, food stamp change tokens. Of course this is assuming he didn't already collect them. (I don't have a full set of all the Ford sales so I don't know everything he collected.)
<< <i>Without arguing the merits of absolute vs. conditional rarity, many traditionalists were caught off-guard by the direction the market took, and frustrated the market became focused on a valuation different than their own. Since that excerpt was written in 1989, it's fair to say those that bet against condition rarity for the last 18 years were fighting the market rather than embracing it. Perhaps they'll eventually be proven right, but for the last 18 years they weren't. JMO >>
I agree.
It would also be interesting - though of course impossible - to know how Ford would have reacted to the sale of his holdings (99.9% raw, with the exception of one gold territorial for some reason), and the fact that many were subsequently slabbed and then resold for multiples of the auction prices realized.
I suspect he would have been delighted to see his coins in slabs when he sold them if he knew they would bring that much more money.
<< <i>The MS-67 Monroe is a top-pop coin, with only 4 recorded. Hardly, a common coin
But a counterpoint can be made that a 66 is very nearly as nice for FAR less money. I think that's what Ford was getting at, that at some level it seems insane to pay several multiples for a barely nicer coin. Apparently, Ford had a better idea. QDB often alludes to the same point in his CW column, that a typical collector would be better off with an MS-64 at $300 than an MS-65 at $2,000.
I like this part, though. "A Monroe Doctrine half dollar is nothing. It's a common coin." Because...
<< <i>Sounds like he forecast the registry craze. >>
...it sounds like he also forecast "widgets."
<< <i>
<< <i>The MS-67 Monroe is a top-pop coin, with only 4 recorded. Hardly, a common coin
But a counterpoint can be made that a 66 is very nearly as nice for FAR less money. I think that's what Ford was getting at, that at some level it seems insane to pay several multiples for a barely nicer coin. Apparently, Ford had a better idea. QDB often alludes to the same point in his CW column, that a typical collector would be better off with an MS-64 at $300 than an MS-65 at $2,000.
I like this part, though. "A Monroe Doctrine half dollar is nothing. It's a common coin." Because...
<< <i>Sounds like he forecast the registry craze. >>
...it sounds like he also forecast "widgets."
This is especially true for collectors whose grading skills are marginal. I see plenty of relative new collectors on this board who can barely grade, buying high cost, high grade coins. Unfortunately, if they are average collectors, many of them will end up with maxed out coins that are low end for the grade and not really worth the full price of the grade on the label.
That is why, in my opinion, one of the most dangerous cliches in the hobby is "buy the best grade you can afford." If a person can't grade, that is a good way to lose money and lots of it, in a market flooded with maxed out coins, many of which are being hawked at full retail price. If a person knows their series, and knows their coins, paying up can be a smart move. However, many collectors with marginal grading skills, get sold a bill of goods and get buried on marginal high grade coins, often paying full retail for coins that are not worth the money because the coins are low end for the grade.
Apparently many in the numismatic community have a less than wholesome outlook on Ford and one person started a thread in response to this thread. Interesting reading as there have been some first hand personal accounts of meeting or knowing Ford posted on the below thread.
ANTI JOHN FORD LINK
Indeed- many collectors collect with their wallets, rather than with discrimination of quality and value. Registry collecting versus coin collecting, and I wonder about what that says about the long term prospects for numismatics...
I suspect he would have been delighted to see his coins in slabs when he sold them if he knew they would bring that much more money.
I don't think so. I suspect that's why he took his coins to his grave; he would rather keep his coins in the traditional manner vs. having them slabbed. Of course everyone likes to take a profit, but to a purist like Ford, it would have been a difficult thing to watch his coins go into plastic. I can hear him saying now, "those fools don't even know what they're buying. The bloody sheep are just buying the labels. They deserve to pay double the true value. Bah!"
These people make me sick.
IMO, their evil activities are ugly enough to destroy any credit they might otherwise deserve.
<< <i>it's really hard to make a valid comparison between what Mr. Ford was able to do in his day and what a present day collector is able to do with a proportionally equal amount of money, collecting the same types of items. if he were alive today and assembling a collection with the same zeal, what would he pursue?? >>
He would probably be spending money in the more esoteric areas of numismatics like he had before. I think certain dealers tend to get a bit jaded and bored with everyday coins that they see day after day and devote more of their private collecting interests to
the more off the beaten path areas. Dave Bowers and his collections of obsolete currency and counterstamped coins are an example.
<< <i>I suspect he would have been delighted to see his coins in slabs when he sold them if he knew they would bring that much more money. >>
I don't think so. Ford was still alive when the sales started (Or at least when they were contracted for), and he knew that the material would bring more slabbed. He'd been in the business too long not to know that. But he detested slabs and he didn't need the extra money, so I don't see it as any surprise the material has been sold raw. (Now what does surprise me is that once Ford passed the estate hasn't started insisting that the material be slabbed in order to maximize the return.)
<< <i>Factoring in the 18 years of opportunity costs, and a person buying a Monroe for $30,000 in 1989 would be down about 70% in real terms. So good call for Mr. Ford. >>
At that time he could have thrown a dart at any high grade commemorative and been proven correct. It was the peak of the frenzy in that market.
Russ, NCNE
<< <i>But he detested slabs and he didn't need the extra money, so I don't see it as any surprise the material has been sold raw. >>
If not for the "extra money", what do you suppose was his motivation for selling classic and essentially irreplaceable rarities like a high grade George Clinton Cent and a 1717 French Colonies coin in the 1980s - 90s?
I think that if he saw the prices his coins realized, and then the aftermarket prices once slabbed (ranging from 10-15% higher to multiples higher) he'd have had a different view.
I believe Stack's thought the best way to maximize value was to sell the coins raw back then. But once seeing the phenomenon I described above, they had a different view when selling the Norweb Washingtonia last fall.
I know Ford was alive when Stacks started selling his material but I thought Ford had Alzheimers disease. If Ford was, indeed, dying of Alzheimers, it's not a surprise that he didn't insist that his coins be slabbed.
I agree, however, with the point that it is surprising that Ford's heirs haven't requested that his coins be slabbed....
Slabbing actually leveled out the playing field between Dealers with the 'gift of Gab' i.e. no conciense VS. the Dealers who had trouble telling fibs to sell metal.
I'll bet he was crushed when it started to take off.
Thank God!