I don't know if I agree with the complaint that low end problem coins affect the prices for properly
TahoeDale
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Brandon and Laura have posted recently on this subject, more or less saying that the overgraded, problem AT coins that are in the market(and it's the grading services fault, acc. to Laura) are bringing down the prices for the better coins.
While I agree that there appear to be too many low end/problem coins in many series, how does that make the choice for properly graded coins cheaper?
I and the dealers I trust avoid the bad ones and still pay up for the good ones. When I sell, I take less for the ones that are "just okay", and really score on the PQ for grade examples.
One thought-- if the 1799 AU 55 early dollar is not nice, and brings only $8000, does that reported transaction limit the price to be obtained for the pq AU55? I don't tnink so.
IF there are so many traps for the unwary in MS 65 Saints, a collector who does not get help may overpay for a ratty one, or may just not buy any. If not knowledeable, get some help.
While I agree that there appear to be too many low end/problem coins in many series, how does that make the choice for properly graded coins cheaper?
I and the dealers I trust avoid the bad ones and still pay up for the good ones. When I sell, I take less for the ones that are "just okay", and really score on the PQ for grade examples.
One thought-- if the 1799 AU 55 early dollar is not nice, and brings only $8000, does that reported transaction limit the price to be obtained for the pq AU55? I don't tnink so.
IF there are so many traps for the unwary in MS 65 Saints, a collector who does not get help may overpay for a ratty one, or may just not buy any. If not knowledeable, get some help.
TahoeDale
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That being said, when a collector gets into this expensive material, if he or his rep can't distinguish between an ugly, low end coin versus one which is average, and one which is choice for the grade, imo, he has have no business buying any of this material in the first place.
I spent four years looking at MS 65 & MS 66 business strike Barber Halves before buying one. I needed to be current on my tetanus vaccination before handling many of them, because they had teeth and they bit; they were that ugly. Some were even offered to me in back of bid, and it was obvious as to why. As Bo Diddley would have said, "man, that thing is so ugly, it would have to sneak up on a glass of water."
I remember when you auctioned your Liberty Nickels. The really nice ones sold for much stronger money than the coins which were just okay for the grade. That's how the market works. Four years ago, I bought a Draped Bust 1/2 Cent in MS 65. I had two coins to choose from. The super nice one went for 30% over one which was okay for the grade. That's normal.
If low end problem coins are lowering prices for say, properly graded Bust $s, I'd like to know about it, because it just isn't happening.
"Seu cabra da peste,
"Sou Mangueira......."
As for getting "help," unfortunately the novice will have just as difficult a time finding a legitimate dealer as they do finding a high end MS66 Saint at a fair market price. Many dealers are more than willing to talk a good game and appear to be helpful, when all they are helping themselves to is the customer's wallet.
A novice has little way of distinguishing between an honest dealer, and a scammer who does a nice song and dance. Often it is the scammer with a far better story line, because sizzle is all they have to sell--they don't have the coins to back up their bluster. The honest dealers sometimes have poor customer relations, but customers put up with that to get access to decent coins. If those are the two choices, most novices will buy from the scammer 9 times out of 10. The scammer will cast a spell on the novice and make up all sorts of stories why the other dealer is the wrong dealer for them. The customer may not know they have been taken until many years down the road.
AT coins have diminished the scarcity of old time natural toners. There are ten newly created toners for every toner that has toning that is twenty or more years old. To think that this doesn't have an effect is naive.
The best thing collectors can do is to avoid the high cost, high grade coins, until they become confident in their own grading. For each person, high cost has a different meaning. Folks on this board are most fortunate, because they can ask about certain dealers, they can post pictures and prices of coins they have purchased. Most novices don't have access to that kind of feedback. Many get taken to the cleaners every day.
While there are undoubtedly a lot of people who seek high end coins who can completely ignore the spread, for most people they look at the spread and compare it to some mental comfort level. As the spreads increase, some people's comfort level will be exceeded. Essentially, this is the opposite of "a rising tide floats all boats". Here we have the tide (prices for average coins) dropping and that leaves the upper tier coins sticking up out of the water that much more. Some subset of buyers are now uncomfortable with the spread and prices have to adjust for the reduced demand at this level. How much they adjust will depend on how big the subset of uncomfortable buyers are. For some markets the impact is negligible. For others, it is more noticeable.
WH
<< <i>A novice has little way of distinguishing between an honest dealer, and a scammer who does a nice song and dance. >>
Can a novice simply ask for a list of recommended dealers on these forums or ATS? What about starting with Dealers who buy coins back strong?
So, yes, I believe that crappy coins for the grade are hurting the values of truly nice coins.
<< <i>The number of collectors who can truly distinguish between coins within a grade is shrinking every day. This limits the demand for any PQ coin. Throw in the fact that in most cases its easier to sell a low end coin for 20% back of bid than to sell a high end coin for 20% over ask and the result is shrinking demand for PQ coins.
So, yes, I believe that crappy coins for the grade are hurting the values of truly nice coins. >>
So crappy coins for the grade may be hurting the value of PQ coins but that seems to be just a symptom of another issue, that a growing number of collectors cannot tell the difference between a crappy and PQ coin. Do these collectors care about the difference?
One solution that has been suggested has been to eliminate crappy coins for the grade to help improve the values of PQ coins but that doesn't address the underlying issue of people "buying the holder, not the coin." Does this solution rely on perpetuating the "buy the holder, not the coin" phenomena?
Large price discrepancies for coins in the same grade slabbed by the same TPG already exist anyway. In addition to the individuals I described above, there are boatloads of collectors out there with more money than common sense who will pay obscene premiums for nice coins. Look at the auctions in the last year or so. I wonder why I even bother with them anymore, because these kind of people are usually the ones who get the material that interests me.
In the last Heritage Auction, a nice coin that should sell for between $1,000 and $1,200 went for just under $2K. The only way the purchaser will get his money out of the coin is if it upgrades, which it probably won't.
Lastly, in some series, those in the know realize that the sheets are a joke for a particular grade. Ie., try to buy a nice MS 65 Capped Bust Half in a PC holder for greysheet bid. It's just not going to happen.
"Seu cabra da peste,
"Sou Mangueira......."
This does not make sense. Perhaps what you are seeing is a shrinking demand for the series of coins in question.
If the total number of collectors is held constant, and the number of collectors who can truly distinguish between coins within a grade is shrinking, that means that the number of collectors who cannot truly distinguish between coins within a grade is growing.
If that is the case, then you would expect demand to be spread equally among all of the coins in that grade. Therefore, if demand is being limited, it must be because demand is shrinking, in this specific scenario.
I knew it would happen.
I liked it more when TPGs were useful in authentiating, weeding out the AU sliders and the altered coins, and weren't an absolute crutch for grading. But this is the reality of the hobby now, particularly since sight-unseen trading is so common with the prominence of the internet.
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If the proper pop is 15, but there are another 35 coins that really don't make the grade, then the pop reports show 50 MS 65 coins graded.
That could decrease, overall, the price and demand for the date.
But I do not believe one needs to upgrade a pq coin in order to justify the premium you will pay for the nicer coin. It does take years of experience to develop the confidence necessary to pay up, and know that the next buyer will also pay the piper, in order to get the beauty.
<< <i>The number of collectors who can truly distinguish between coins within a grade is shrinking every day. >>
This is what happens when people rely on TPGs to evaluate coins for them and thus never really learn to grade or evaluate quality for themselves.
Buyers today are glued to the CDN, blue sheet, and other price guides. Probably only 10% of the dealers out there can grade within a PF/MS grade. That allows them to trade amongst other dealers and wholesalers and profit accordingly. Joe Collector is not going to pay that "stupid" premium until the coin ends up with a large national retailer. Then the coin sells on the advice and expertise of the retailer. Because of this I can only take my PQ coins to a Baltimore, ANA, Long Beach or FUN show to sell. I could put the same coins in front of most collectors and they won't touch them at less money. They'd rather pay the full retailer all the money where their comfort level of doing business is higher. They can buy at auction the same way and feel more confident (even if often it's a false confidence as the underbidder is their twin brother with the same skillset).
No doubt the swill brings down the price of the cream. I find myself being affected by what the sheets say as well. If a gem PF trade dollar is listed at $8000, then you can be sure I'm not paying $10,000 for one unless it's upgradeable or the prettiest damn coin in the world. And $7000-$7500 will buy you a lot of acceptable quality pieces that will sell much faster. Dealers can snap those up and flip to their customers at under bid or near bid......bargains galore! But if I have that same PQish trade dollar I can possibly move it for $10-12K to a crack dealer who is thinking 66, 66* or 67. But as the years have gone on I see less of the dealers who I know can grade paying out extra for top coins. They'd rather have run of the mill stuff in holders than they can flip. They are as tired of beating the PQ or solid for the grade drum as I am. The number of places to take that material is drying up (and this includes some of the retailers who say they specialize in this sort of material...they want it at bid too or pretty darn close). One could even state that the price for real nice type coins is dropping as the schlock clutters up the market. Dealer X only sells great coins, while everyone else sells schlock. Problem is that 90% of the dealers use that same line.
Elcontador mentioned trying to buy a real gem PCGS bust half for bid.
The odds of doing that locally as a coin surfaces from the 1990 market is actually realistic. Your local dealer as a rule doesn't know this coin from a conserved one (ie he'd rather have the dipped one).
Once said gem bustie makes it to the big show, forget buying it for less than "shot" money. But I know these types of coins filter into the bigger dealers all the time. It's too bad they don't get to me or EC first where the sellers could reap part of that PQ factor. But those same sellers are more comfortable selling for less to a "name" dealer...even if they get less.
And certainly the schlock has killed liquidity which slows down the sales of nice coins for strong money.
roadrunner
I felt this way, too, mostly because of the price difference between coins that are good for the grade and coins that aren't. In how many threads have we discussed the Bifurcated Market™ (I believe the trademark belongs to RYK)? Wayne's explanation certainly helps me to understand the problem better.
The coins that bring the very strong money are typically shot or upgrade coins - even if only 2 people see them as such. That kind of activity is usually reserved for the auction room.
Basically, it's all about raw coins again. Welcome back 1984.
roadrunner
Collectors seem to be the underlying problem here but most of the "solutions" do not address them. Perhaps that's because that seems to be too tough of a problem. However, is getting the TPGs to buy up a lot of their product, essentially to do a voluntary recall, really an easier task, or does it just seem easier but isn't?
The other related part of the problem that has been raised before is that perhaps price guides that give a single price per grade are becoming less useful in today's market.
isn't that good for collectors of the cream?
Liberty: Parent of Science & Industry
<< <i>
<< <i>No doubt the swill brings down the price of the cream >>
isn't that good for collectors of the cream? >>
From a pure price perspective, that's good for people accumulating but bad for people selling, including dealers.
However, if people really can't tell the difference between a LQ dipped/stripped/retoned coin and a PQ coin with original skin, more coins might also get conserved. This might be especially true when a dipped and stripped coin gets a grade bump.
<< <i>However, if people really can't tell the difference between a LQ dipped/stripped/retoned coin and a PQ coin with original skin, more coins might also get conserved. This might be especially true when a dipped and stripped coin gets a grade bump. >>
True. But a lot of people are telling the difference and it's reflected in that so-called "bifurcated market."
On one hand, I hate that the nicest coins -- good eye appeal, original skin and all that -- are increasingly selling for way over sheet value and thus harder for me to stretch for.
On the other hand, it's good for the hobby overall as this trend would seem to favor not screwing with nice coins. The more 'original skin' is rewarded, the less likely the coin doctors will be to ruin them for profit.
<< <i>I hate that the nicest coins -- good eye appeal, original skin and all that -- are increasingly selling for way over sheet value and thus harder for me to stretch for. >>
Perhaps the people are arguing that the market isn't bifurcated enough and that nicer coins should sell for even more over sheet value than they do?
<< <i>Perhaps the people are arguing that the market isn't bifurcated enough and that nicer coins should sell for even more over sheet value than they do? >>
Well, seeing that there seems to be no end in sight to the multi-tiered sale prices of coins within a grade range and (if anything) the spread is increasing, I'd say that's exactly what they're saying.
No doubt the swill brings down the price of the cream
......isn't that good for collectors of the cream?
Yes. You as the collector can buy that cream cheaper in many instances. But the downside is that the cream will be offered FAR less to you and everyone else until some sheet reflects the true market price of CREAM. Maybe we need a new "white" sheet to price only solidly graded/cream or PQ coins? Most everyone is factoring in their own % price above CDN to reflect the value of honest coins.
For me, I'd rather have more opportunities to buy the cream, than far less chances to steal a carton or two. The first choice imo works far better for all of us.
Coin market pricing was indeed nearly continuous prior to slabbing or the mass marketing use of numbered grades. Many buyers still buy on a continuous pricing basis, but they are becoming fewer and fewer each day. In previous bull markets the average collector got pushed out of the way as prices climbed on the sheets.
This is happening again only it's the market pricing doing the pushing. The newbie to the market buys off the sheet and sees his buying prices stagnant. He buys that schlock at discount at counts his paper profits based on the best coins being sold at auction.
roadrunner
<< <i>For me, I'd rather have more opportunities to buy the cream, than far less chance to steal a carton or two. >>
It's not stealing if the market overall values PQ coins less. Your analogy might fit better with cherry picking (which isn't technically stealing either) than buying PQ coins in a market where PQ coins generally sell for less than some people feel they should.
roadrunner
Or should LQ coins that may be over-priced be brought into the discussion? Can an argument be made that high end PQ coins are driving up the prices of LQ coins with the current price guide structure? If so, could it be that unknowledgeable collectors are getting ripped buying LQ coins because of PQ coin pricing?
When a nice coin becomes available locally, your average collector doesn't see it. That's the problem.
People keep saying how there is a bull market in coins, however, again as Roadrunner has mentioned, the bullishness is very selective. For most pre 1835 material, this is true. However, there has been little movement -- and often the movement is south -- for much problem free mid to late 19th century type in MS pick your grade. I remember being offered a nice MS 1883 N/C Nickel for $1K about six years ago. Picked up one just as nice for $650 three years ago. Problem free Seated Dimes in MS 65 & MS 66 have also dropped. Ditto re Barber Dimes. And, Shield Nickels are the numismatic necrophiliac's delight, they have been dead for as long as I can remember.
I don't see the situation changing, as the TPGs are not going to do a massive recall.
1) They don't have to do this; people are still buying their coins
2) IMO, there is too much out there to make this idea practical.
You also have to realize the dynamic in the numismatics. Dealers make money by selling coins. They are almost always better off selling highly liquid material than sitting on an expensive rare coin which eventually, someone may want for a set. Ie., I think the worst thing any dealer or collector can do is to put a lot of $ into an expensive semi-key coin or condition rarity of a less than popular series, like a Barber Half, or maybe a Seated coin with arrows.
"Seu cabra da peste,
"Sou Mangueira......."
<< <i>No doubt the swill brings down the price of the cream
isn't that good for collectors of the cream? >>
Isn't this similar to "Gresham's Law"???? An observation that “bad money drives out good.”
Uh oh. I sunk money into a top notch rarer date MS66 arrows half 5 years ago. I'm definitely not losing anything on this one but then again, I haven't tried it selling it either.
El Contador's points are well taken. If I find one worthy coin a year now I consider myself lucky. David Hall once called gem Barber quarters the "IBM of the rare coin market." My how times have changed since 1990. What is it today?
Actually I can think of a number of arrows dimes, quarters or halves
I'd love to own in gem:
1853-0 dime
1854-55 quarter - any date.
1873-s quarter
1855 half
1855-s half (there's only 1 and probably locked up tight)
roadrunner
<< <i>Collectors seem to be the underlying problem here but most of the "solutions" do not address them. Perhaps that's because that seems to be too tough of a problem. >>
Zoins, I think you condensed the problem nicely there.
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<< <i>
<< <i>Collectors seem to be the underlying problem here but most of the "solutions" do not address them. Perhaps that's because that seems to be too tough of a problem. >>
Zoins, I think you condensed the problem nicely there. >>
Sure, it'd help if all collectors were more discriminating. But c'mon, it's a supply-side problem.