A very insightful quote from the Eliasberg sale...it was in the catalogue of gold coins and someone
saintguru
Posts: 7,727 ✭✭✭
This was in the descrition of a 1914 Saint. There's no particular reason as to why it would be there in particular but I always found this to be very true, in particular when buying more scarce coins....
"Auction records are interesting. For the sake of illustration let us say that coin “X” is considered to be worth $10,000. It may be the case that an example of coin “X” has not appeared on the market for many years. The $10,000 valuation can be ascertained by looking back to the last sale record which might have been many years ago and might have been for an inferior specimen, and then by adding a reasonable amount to allow for inflation, the rise in the coin market, the grading difference or whatever, an estimate of the current value can be arrived at. By this formula the coin might be estimated to bring $20,000 at auction. But, suppose the coin brings $40,000? What then? A new level is set. While the purchaser of item m “X” has broken into new territory, the fact remains that he or she actually owns the piece whereas the underbidders and interested spectators are still without one. Now that a price of $40,000 is set will one ever be available again at $20,000? F history is an indication the answer is an emphatic “NO!” The valuation of any subsequent specimen coming to the market is apt to start at $40,000 as an estimated value and perhaps sell for more. So in the way, the purchaser of a rare or especially desirable coin at an auction which realizes a record price solidifies its value at the same time. Often today’s price is tomorrow’s bargain. Over the years we have sold coins for several thousand different consigners. Many record prices have been obtained. In reviewing past performance, often the coins which sold for record prices later turned out to be the best buys of all. Hey sold for record prices because they offered a combination of rarity, quality and other factors of desirability. As the market has strengthened, these factors have been intensified with the result that subsequent offerings of similar coins that have usually brought more."
Perhaps it's not ALWAYS true, especially in this era of volatility, but it certainly has been far more true than not. The rarer the coin, the more it rings resonant.
"Auction records are interesting. For the sake of illustration let us say that coin “X” is considered to be worth $10,000. It may be the case that an example of coin “X” has not appeared on the market for many years. The $10,000 valuation can be ascertained by looking back to the last sale record which might have been many years ago and might have been for an inferior specimen, and then by adding a reasonable amount to allow for inflation, the rise in the coin market, the grading difference or whatever, an estimate of the current value can be arrived at. By this formula the coin might be estimated to bring $20,000 at auction. But, suppose the coin brings $40,000? What then? A new level is set. While the purchaser of item m “X” has broken into new territory, the fact remains that he or she actually owns the piece whereas the underbidders and interested spectators are still without one. Now that a price of $40,000 is set will one ever be available again at $20,000? F history is an indication the answer is an emphatic “NO!” The valuation of any subsequent specimen coming to the market is apt to start at $40,000 as an estimated value and perhaps sell for more. So in the way, the purchaser of a rare or especially desirable coin at an auction which realizes a record price solidifies its value at the same time. Often today’s price is tomorrow’s bargain. Over the years we have sold coins for several thousand different consigners. Many record prices have been obtained. In reviewing past performance, often the coins which sold for record prices later turned out to be the best buys of all. Hey sold for record prices because they offered a combination of rarity, quality and other factors of desirability. As the market has strengthened, these factors have been intensified with the result that subsequent offerings of similar coins that have usually brought more."
Perhaps it's not ALWAYS true, especially in this era of volatility, but it certainly has been far more true than not. The rarer the coin, the more it rings resonant.
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At the same time though, you have to set some kind of maximum and stick with it...
I respect your opinion as you've purchased such rarities, and I have not. For the sake of your upcoming sale, I hope it is true.
I am certainly interested in reading other more knowlegable posters opinions.
Andrew
Please visit my website Millcitynumismatics.com
I've been following territorials for a while.
The Garrett T. Reid $5, EF 40, sold for 200K in 1979. The current price guide suggests $250K. Nothing comparable has sold at auction since.
If the Garrett coin came to auction, it would likely be a million dollar coin and worth every penny.
<< <i>I think that is more than likely true in a steadily rising market. I wonder if the same holds true when a market is in decline. I've read many stories here about coins that were once high fliers only to be resold at a loss. Maybe there is an arguement to be made for collector mentality versus investor mentality, I'm not certain.
I respect your opinion as you've purchased such rarities, and I have not. For the sake of your upcoming sale, I hope it is true.
I am certainly interested in reading other more knowlegable posters opinions.
Andrew >>
Over the years, countless great and/or truly rare coins have been sold at "spectacular" losses, due to the fact that the buyers paid "too much" and/or that the market corrected. Many of us were badly spoiled by the market conditions which persisted for several years, until things changed approximately eighteen months ago.
<< <i>This was in the descrition of a 1914 Saint. There's no particular reason as to why it would be there in particular but I always found this to be very true, in particular when buying more scarce coins....
"Auction records are interesting. For the sake of illustration let us say that coin “X” is considered to be worth $10,000. It may be the case that an example of coin “X” has not appeared on the market for many years. The $10,000 valuation can be ascertained by looking back to the last sale record which might have been many years ago and might have been for an inferior specimen, and then by adding a reasonable amount to allow for inflation, the rise in the coin market, the grading difference or whatever, an estimate of the current value can be arrived at. By this formula the coin might be estimated to bring $20,000 at auction. But, suppose the coin brings $40,000? What then? A new level is set. While the purchaser of item m “X” has broken into new territory, the fact remains that he or she actually owns the piece whereas the underbidders and interested spectators are still without one. Now that a price of $40,000 is set will one ever be available again at $20,000? F history is an indication the answer is an emphatic “NO!” The valuation of any subsequent specimen coming to the market is apt to start at $40,000 as an estimated value and perhaps sell for more. So in the way, the purchaser of a rare or especially desirable coin at an auction which realizes a record price solidifies its value at the same time. Often today’s price is tomorrow’s bargain. Over the years we have sold coins for several thousand different consigners. Many record prices have been obtained. In reviewing past performance, often the coins which sold for record prices later turned out to be the best buys of all. Hey sold for record prices because they offered a combination of rarity, quality and other factors of desirability. As the market has strengthened, these factors have been intensified with the result that subsequent offerings of similar coins that have usually brought more."
Perhaps it's not ALWAYS true, especially in this era of volatility, but it certainly has been far more true than not. The rarer the coin, the more it rings resonant.
Am I correct to assume that your win in the investment contest last year was playing on this observation?
For the numismatic delicacies that are in the offing, today's selling price is the opening bid in tomorrow's auction. The red carpet is rolled out for you as the auction firm's guests at the various auctions, and many coins are once in a lifetime opportunities to add to your collection. If you purchase a coin, it is safely in your collection, while others who did not take advantage of the opportunity still have a hole to fill.
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)
QDB always says that. It makes sense.
For the numismatic delicacies that are in the offing, today's selling price is the opening bid in tomorrow's auction. The red carpet is rolled out for you as the auction firm's guests at the various auctions, and many coins are once in a lifetime opportunities to add to your collection. If you purchase a coin, it is safely in your collection, while others who did not take advantage of the opportunity still have a hole to fill.
I think that is a bunch of auction company hype and blather.
I am with Mark on this one. In an up market (coins, real estate, stocks, art, etc.), even my brother-in-law is a genius.
<< <i>
<< <i>I think that is more than likely true in a steadily rising market. I wonder if the same holds true when a market is in decline. I've read many stories here about coins that were once high fliers only to be resold at a loss. Maybe there is an arguement to be made for collector mentality versus investor mentality, I'm not certain.
I respect your opinion as you've purchased such rarities, and I have not. For the sake of your upcoming sale, I hope it is true.
I am certainly interested in reading other more knowlegable posters opinions.
Andrew >>
Over the years, countless great and/or truly rare coins have been sold at "spectacular" losses, due to the fact that the buyers paid "too much" and/or that the market corrected. Many of us were badly spoiled by the market conditions which persisted for several years, until things changed approximately eighteen months ago. >>
You cite the exception case, not the long-term pattern. This was written 27 years ago and has certainly been almost 100% acccurate in that span...and it could have been written 100 years ago and still been ~100% accurate. Your comment reflects a short-term reflection in what must be seen as a long-term market. "Great collections are just "begun" in the first decade" I believe was the old expression?
<< <i>Incite - to stir, encourage, or urge on; stimulate or prompt to action: to incite a crowd to riot. >>
<< <i>Insightful - characterized by or displaying insight; perceptive. >>
I know. Picky, picky.
Here, i'll make 'ya feel better. I'll spell Aliasberg wrong.
[edit]
A'ight.
<< <i>
<< <i>
<< <i>I think that is more than likely true in a steadily rising market. I wonder if the same holds true when a market is in decline. I've read many stories here about coins that were once high fliers only to be resold at a loss. Maybe there is an arguement to be made for collector mentality versus investor mentality, I'm not certain.
I respect your opinion as you've purchased such rarities, and I have not. For the sake of your upcoming sale, I hope it is true.
I am certainly interested in reading other more knowlegable posters opinions.
Andrew >>
Over the years, countless great and/or truly rare coins have been sold at "spectacular" losses, due to the fact that the buyers paid "too much" and/or that the market corrected. Many of us were badly spoiled by the market conditions which persisted for several years, until things changed approximately eighteen months ago. >>
You cite the exception case, not the long-term pattern. This was written 27 years ago and has certainly been almost 100% acccurate in that span...and it could have been written 100 years ago and still been ~100% accurate. Your comment reflects a short-term reflection in what must be seen as a long-term market. "Great collections are just "begun" in the first decade" I believe was the old expression? >>
Jay, believe it or not, I think long term, also. Often, when coins are sold many years later for large profits, the effects of inflation are not factored in. And, we are probably far more likely to hear stories about big profits that were made, than we are big losses that were suffered.
If collectors buy the right coins AND at the right time AND sell at the right time, they can do quite well for themselves. But if their timing is off, even a long term hold might not bail them out. Look at the performance of many coins that were bought anywhere near the peak of 1989-1990 - a 20 year hold will have produced some staggering losses. I'm not claiming that "often today’s price is tomorrow’s bargain" is incorrect, only that "often today’s price is tomorrow’s burial" also applies, and more frequently than you seem to believe.
And, I think you're being a contraire. History has proven this to be absolutely true. The glass is half empty in the Feld tent.
I am sharing the tent with Feld.
A fundamental analysis of the rare coin market is a very difficult exercise that I am not equipped to opine on. It is probably most influenced by demand, inflation and who know what else. It might even be GDP.
early
Mark is not a pessimist, but a conservative realist. You are just Jay, with no descriptive term available, as you cover so much ground, so fast, that you might just be a 2 legged cheetah.
I know of no known rarity that has to be priced/sold at a higher price than it realized in the last auction it appeared, depending on what it sold for, and the current market for that series or particular coin.
Will the 13 lib nickel now in auction always sell for more than it last did? No, it might not reach a reserve, and the next possible owner may be in jail, at the time. But it will probably sell for more eventually.
Inflation, and fewer truly rare coins and more buyers for the great coins will allways assist, but not require higher values realized.
<< <i>Jay,
Mark is not a pessimist, but a conservative realist. You are just Jay, with no descriptive term available, as you cover so much ground, so fast, that you might just be a 2 legged cheetah.
I know of no known rarity that has to be priced/sold at a higher price than it realized in the last auction it appeared, depending on what it sold for, and the current market for that series or particular coin.
Will the 13 lib nickel now in auction always sell for more than it last did? No, it might not reach a reserve, and the next possible owner may be in jail, at the time. But it will probably sell for more eventually.
Inflation, and fewer truly rare coins and more buyers for the great coins will allways assist, but not require higher values realized. >>
While this is true in fact, in practice the number of ultra rarities that have sold for less than they were purchased can be counted on one's fingers. The right coins purchased at the right time have proven to be spectacular investments over the decades. The right coins purchased at the wrong time and held until the right time have proven to be adequate investments over the decades. Certainly the wrong coins at the wrong time have performed poorly - but then again I don't advocate buying the wrong coins even at the right time!
I believe that SaintGuru’s point, awkwardly communicated in the cited auction lot description, is that collectors should buy choice and rare coins at auction, rather than seeking bargains elsewhere and often ending up with inferior items that are not bargains at all. One reason it is a particularly important point is that some collectors are fearful of being the top bidder at auctions because they are literally paying more than anyone else is willing to pay at the respective time.
Excellent coins will sell for market prices. Those who buy truly choice and rare coins at auction will end-up with great coins that knowledgeable buyers will strongly demand in the future.
Also, see a picture of Jay Brahin and absorb more of his wisdom in Part 1 and Part of the articles referenced below.
Collecting and Appreciating Naturally Toned Coins, Part 1
Collecting and Appreciating Naturally Toned Coins, Part 2
Collecting and Appreciating Naturally Toned Coins, Part 3
The above coin is typical of many great seated, barber, bust, registry set coins from the 1975-2005 era. The 1794 MS66 SP dollar fetched $1,000,000 in the 1989 market only to fall on its face over the next decade to under $400,000. Certainly a better coin than a gem 1914 Saint. While TDN's point is true that the uber rarities fetching strong 6 figure and even 7 figure sums have generally always exceeded their former highs, they only make up <.00001% of the general coin market value. In that respect the finest knowns in any REG series are just widgets. Even the Vermeulle and Norweb MS67 93-s dollars become corrective fodder in those environments. And they are indeed great coins.
Feld a pessimist? Hardly. Just reporting the facts. There were very few great coins that escaped the post 1980 and 1990 meltdowns....not a 1794 dollar and certainly not a 1914 saint. If more people had to sell their great coins into the depths of those markets (ie 1981-1982 and 1992-1993) they would have really seen what a loss in value entails. Most hung on for years longer until they saw the opportunity to at least break even. Not even an 1804 dollar bought at those peaks would have failed to lose money 2 years later.
QDB may be right that twice the price the day after the sale can't get another one. But sometimes waiting a couple years after the all time highest sale will get you one for a 65% discount! The job of the auction house is to get the best price. Making note that the finest known 1794 dollar lost 2/3 of it's value in it's last major auction at a market top might not whet the bidders' appetites.
Settling for the very best when it shows up and paying through the nose can get your butt kicked just as well. I did that in 1982 on a finest known seated rarity. And the 1982 market stunk where great coins were selling for a song. When I finally auctioned that coin in 2004 it didn't even double the price it fetched 22 years earlier at the very bottom of the market...and it was still the finest known gem. In that same '82 auction the Robison 1839-0 "proof" half fetched about 2-1/2 times the price of my coin. In the Queller 2002 sale it fetched almost 4X it's 1982 price. And by 2004 that likely would have fetched 5X or 6X it's 1982 level. One can certainly pay way too much for the "right" coin...at the wrong time to fill that special spot.
roadrunner