Why many high end coins are not being sold/auctioned today
TahoeDale
Posts: 1,785 ✭✭✭
Doug Winter recently wrote about the present lack of good to great coins coming onto the market, and a recent thread on this forum has discussed this situation, at length.
But many of the responders have missed Doug's analysis.
Simply put, many of the better coins are being held out of the market due to the concern of the owners that their coins will not command appropriate pricng. Why? Perhaps, because recent sales, and guides are
reflecting prices for lesser examples within the grade.
Let's discuss some specific coins and grades, with resulting prices obtained. ( hypothetical only)
MS Liberty nickels in 66-- if fully struck and high end, value, in my opinion, is 20 to 50% more than is being paid for low grade 66's. Guides do not reflect the high end/true Gem plus coins.
Gem CBH's--truly nice examples should bring 13 to15,000, but there are so many that are really upper end 64's, and are bringing 40% less than 65 money.
I do not call these coins that are lower end "dreck", but their presence on the market and the prices they realize can discourage collectors from selling at auction,
or dealers from paying pq money. If price guides reflect auction results and sales for the lower end 65's, it is difficult to get the new buyer to pay up.
PCGS has improved this discrepancy, somewhat, with pricing for plus grades. But CAC approval does not not follow-up with a price guide.
Auction results are helpful, but every coin is unique, and without viewing that coin in hand, it is difficult to appreciate the difference in prices obtained.
Laura at Legend coins has been hammering us to pay premium dollars for PQ examples (upper end for grade ) coins for years. But even this constant reminder
isn't enough. We really need a more reliable pricing gude that will decribe the upper and lower price ranges for all grades.
One more example: AU 58 Early Dollars. True 58's should be priced at MS 60 money, and that price should be removed from all guides. Average and lower end 58's should have a range between present 55 and 58 pricing.
All comments welcomed.
But many of the responders have missed Doug's analysis.
Simply put, many of the better coins are being held out of the market due to the concern of the owners that their coins will not command appropriate pricng. Why? Perhaps, because recent sales, and guides are
reflecting prices for lesser examples within the grade.
Let's discuss some specific coins and grades, with resulting prices obtained. ( hypothetical only)
MS Liberty nickels in 66-- if fully struck and high end, value, in my opinion, is 20 to 50% more than is being paid for low grade 66's. Guides do not reflect the high end/true Gem plus coins.
Gem CBH's--truly nice examples should bring 13 to15,000, but there are so many that are really upper end 64's, and are bringing 40% less than 65 money.
I do not call these coins that are lower end "dreck", but their presence on the market and the prices they realize can discourage collectors from selling at auction,
or dealers from paying pq money. If price guides reflect auction results and sales for the lower end 65's, it is difficult to get the new buyer to pay up.
PCGS has improved this discrepancy, somewhat, with pricing for plus grades. But CAC approval does not not follow-up with a price guide.
Auction results are helpful, but every coin is unique, and without viewing that coin in hand, it is difficult to appreciate the difference in prices obtained.
Laura at Legend coins has been hammering us to pay premium dollars for PQ examples (upper end for grade ) coins for years. But even this constant reminder
isn't enough. We really need a more reliable pricing gude that will decribe the upper and lower price ranges for all grades.
One more example: AU 58 Early Dollars. True 58's should be priced at MS 60 money, and that price should be removed from all guides. Average and lower end 58's should have a range between present 55 and 58 pricing.
All comments welcomed.
TahoeDale
0
Comments
The only way I see for true high end coins to breakout of not being lumped with inferior same grade specimans
is to consider each coin for its uniqueness.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Look at it this way: Few are going to pay $120k for a PCGS top pop none finer when you can readily buy the same grade in another holder for $70k or less. And yet the quality difference is readily seen.
<< <i>This is stuff nicer than the typical next grade up coins that you usually see! >>
Can't they just get the CAC gold sticker and then sell it for the premium that it deserves? Wasn't that the original purpose of CAC?
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>
<< <i>This is stuff nicer than the typical next grade up coins that you usually see! >>
Can't they just get the CAC gold sticker and then sell it for the premium that it deserves? Wasn't that the original purpose of CAC? >>
No, the original purpose of CAC was to screen out the bad coins. That's kinda the opposite.
When I sold the majority of my small cent collection 6 years ago, the same analysis applied in a GOOD market. Why pay 50K for a beautiful 1857 flyer P65Cam when a ugly one could be had for 20-25K? Or a beautiful 1856 S3 flyer for 100K when a so-so S9 in the same grade at the time brought 30K.
Those who DID step to the plate were/are very happy with their purchases.
I recently bought a beautiful territorial for at least 50% over "coin guide" money and felt lucky to have been offered the coin. When really great coins are offered, the price guides are irrelevent.
Edit to add: I believe this has slowed my collecting because some of the keys I need are being hoarded. They are already trading for many times guide and still aren't offered, thus my argument.
I totally agree that when top notch coins are being offered, they do bring prices way over guides, in many cases.
But the problem is getting the owner to let go of these great coins, esp. at auction, taking the chance that they will not make reserve( and become stale), or sell for common mid-grade levels.
Or the situation where, as recently occurred, a 1796 quarter in 64 brought only 80K.
I am betting that the territorial you bought was a private treaty sale. And you are very knowledgeable in this area. Would you agree to put this coin in a no reserve auction today?
No, I'm agreeing with you completely. I wasn't clear about my examples earlier - none were at auction.
Coins are product to most people who sell them. They make money when they move product. It is easier to move less expensive coins for the grade than the higher end material.
The other issue is with changing grading standards over the years, what does one expect in a CBH in MS 65 today? Unless someone plans on holding onto a coin for a long time, there aren't many who will pay really strong premiums for a really nice coin for the grade.
Finally, the last issue is that people try to upgrade really nice coins for the grade. I don't think many are having much success at doing so these days. For this reason, I try to buy a coin which is solid for the grade, and maybe pay a small premium (under 20%) for this, rather than sticking my neck out on a "shot coin" and being buried in it.
"Seu cabra da peste,
"Sou Mangueira......."
Premium examples tend to bring very strong prices, often 2x price guide. Average coins not so much. The conundrum is that almost everyone thinks they have premium examples. Unfortunately, it just can't be, by definition average is the middle, and many coins are in the middle or slightly above or slightly below. Owners don't believe the market because many of them paid a premium. The market will for the most part reveal the quality of the piece as part of the auction process. The coins that don't cut it, tend not to be in the top tier. Of course the market makes mistakes, but complaining about price guides seems to be a fools game. Very few high end quality oriented buyers depend on price guides, except to place a percentage multiplier behind the guide price.
You want a better price guide? It already exists in the form of auction results. The high end coins typically hammer for double or triple what low end coins sell for, same grade, same company's holder. The wide range tends to be an accurate reflection of prices vs. quality. A further refinement of printed guides will only increase expectations, because like I started with, virtually every owner thinks their coin is top tier.
The current owners had to pay a substantial sum for the coins. If they can afford to pay that sum, they can afford to keep them. If you buy something you like to own, and you don't need the money, why would you ever sell?
Ron
Edited to add: I have always tried to buy coins I felt were above average for the grade but then again I might fall into the 80% that just doesn't have a clue. I see coins all of the time on the internet that I would not pay the money which is asked. I even see some of these coins with a bean on them that I don't like.
Sugar has trade up and down 20% in the last 2 weeks.
Much uncertain times are ahead.
Overall I think many of the coins went too strong and see a lot of high bids on ok coins.
From what I am seeing on the 5K + coins, PCGS coins are much stronger than otherTPG's overall. I am seeing MS67 NGC coins sell for PCGS66 money. Having not seem the coin I can not form an opinion but won't buy 64's or better sight unseen without a green bean. To me a picture is really sight unseen in Gem coins.
I have a double row box of slabs purchased at auctions I overpaid and don't like. I would sell them all back of realized prices.
Buying top quality Seated Dimes in Gem BU and Proof.
Buying great coins - monster eye appeal only.
<< <i>there is also the possibility that the owners of the "high end coins" for their grade simply overpaid for them. that is an aspect of the market that is rarely talked about, that during the past 10-15 years as things were really rolling along collectors paid too much money for their coins as a result of their zeal to own the finest. as is usual in the world, it is sometimes better to blame someone or something else instead of looking within and accepting some personal responsibility. >>
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Rather than seeking current price levels for average and below average for the grade coins and substantantially higher prices for high end coins for the grade.
I appreciate the comment by Melvin289.
So if you believe you have coins that should bring higher prices.........you may have to work harder to make the necessary dealer, auctioneer, or collector connection to sell the coin for what its worth.
Otherwise don't sell.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
that such a problem exists. After all, now we need secure plus, +, CAC, etc. to help us better refine so-so coins from good ones. Auction results bear this all out. The price of a MS65 capped bust half at auction can range from $5K to $15K, covering the grade range of about 64.5 to 65.8.
It has everything to do with the current market. I compare this current malaise to what happened in 1980-1983. Grading standards went under a change and by the time the shakeout ended, a lot of people knew they had been taken. The market has to work its way back out from under those same circumstances but it's a lot harder today with 35-40 MILL coins having been graded. The price guides and general auction results do continue to drag down the prices of the good coins. There's no way to ignore it. And if I were a potential seller of good coins I would be very concerned about putting my coins into that type of auction environment. And this is not a riskless excercise. If one just starts "showing their coins" around the bourse or puts them up for auction with a safe reserve, the coins start to get stale. You cut your own throat in that scenario.
We had these same discussions back in the 2003-2004 market. But then a rising inflationary trend lifted all boats and the problem was sort of swept back under the rug for the time
being. Well, it's back again, with nothing having been resolved other than making it easier to identify the not so good coins out there. There many topics in the forum back in 2004-2007 to get out from under all your potentially lower end coins while the getting was still good.
The only true solution is to resolve the grading problem yet again as first claimed back in the late 1980's. But we're not going to get there without a 180 degree course change. And how likely is that? It was fairly easy to change course in 1983 because there weren't 40 million graded coins out there. For now, we're just going to have to wait until market conditions improve and new buyers for rare coins show up....just like they eventually did in the 1980's and then again in 2004-2006.
roadrunner
what's news about that?? it should always have been like that from a pricing standpoint.
Dreck will always be a bargain except when someone's getting screwed. Not-so-nice is your standard. There are many who find some virtue where you might find fault.
There has been a bifurcation of focus for collector/investors. The big bucks are chasing the cream, and as the definition of cream has tightened then so has the demand for what currently meets that narrowing set of criteria.
More and more coins are now generic. Common date proof gold in 64 or less without cameos languishs without premium, as do burnt-out PR66 Barbers and Morgans with residual cameo trading at discounts. Ordinary nice white MS67 Walkers will not be in demand for a while.
Many people who bought in these areas and others are buried for the next 3 years at least, when the possible rising tide will float second-rate material. Then they will only lose 15 percent.
In the meantime, knowledgeable collectors will have fun with the nice and value-rich coins the previous owners bought by semi-accident.
Some really great coins will show up no matter what. But expect longer holds by tangibles buyers, who usually spread their investments and risks around and calculate opportunity cost versus ROI, and knew they weren't selling in 2013 when they bought.
Coin-flipping and house-flipping have both taken a hit. The velocity of money has gone down for everything but the higher tiers of rarity and more common extreme quality.
Isn't it ironic that the dealers who have most heavily stressed quality are now hungriest for what they've salted away? They've done too good a job and must now suffer for it. I can name two dealers who will make me suffer for this remark in Balt.
As well they should
In honor of the memory of Cpl. Michael E. Thompson
what's news about that?? it should always have been like that from a pricing standpoint.
It hasn't always been like that. That's more of a 2005-2008 symptom. From 1987-1990 or so it definitely wasn't like that. Back then 90% of the coins basically traded in a 10-30% band around a base price. At least from my point of view the grading was fairly consistent. Maybe it helped that there weren't a lot of coins graded in 67 or higher as the TPG's were
saving those grades until more coins were seen.
Once grading standards slipped and supplies increased dramatically that capped bust half spread became the norm. In the first few years of grading the spread was much tighter. That
current $5K to $15K range for a MS65 would probably have been $8K to $12K. Certainly the "elongation" of the grading spectrum from 60-66 to 60-69 has contributed a lot of
those changes.
Colonel Jessup makes some good points. I remember back in the late 1980's when Ellesmere used to publish a list of 635 coins that had a reason to go up in value. And as the years went by and pops started to soar, the coins making that list needed a higher and higher grade. The list from 1988 probably looks nothing like the list from 2008. It takes more and more
coin these days to excite the end users. That means higher grades, more dazzle and color, etc. This will always be the case as pops increase and overall collector/investor demand stays about the same.
roadrunner
<< <i>I have first hand experience with some proof gold coins off the market for 15 years that are fresh and vibrant ... not the typical dipped and shiny stuff you see these days. PCGS held the line on grading them and now they aren't worth what was paid ... simply because the current crap on the market is pulling down their value. This is stuff nicer than the typical next grade up coins that you usually see!
Look at it this way: Few are going to pay $120k for a PCGS top pop none finer when you can readily buy the same grade in another holder for $70k or less. And yet the quality difference is readily seen. >>
By this reason, it's clear that you're better off purchasing the $70k coin. If the TPG's are going to have credibility behind the grade, then of course this is going to happen. The current market is not so hot. The collectors who have those $120k coins are going to have to hold or they are going to sell at a loss. If you like to flip the top end for the grade coins, the music has stopped and you don't have a seat.
......of speculators!
Leo
The more qualities observed in a coin, the more desirable that coin becomes!
My Jefferson Nickel Collection
Bear doesn't talk to himself.......does he?
Leo
The more qualities observed in a coin, the more desirable that coin becomes!
My Jefferson Nickel Collection
PCGS has systematically decreased the value of gem copper coins to avoid buying back over graded ones at a high price. I would never sell gem copper at their "price guide" levels. As a result PCGS has closed the door on grading gem copper. If one wishes to buy gem copper one must pay "MY" price.
Sometimes it is difficult to tell perspective buyers that the PCGS price guide is irelevent.
Stewart Blay
i think it's more difficult to tell prospective sellers that MY price guide isn't irrelevent.
<< <i>I have first hand experience with some proof gold coins off the market for 15 years that are fresh and vibrant ... not the typical dipped and shiny stuff you see these days. PCGS held the line on grading them and now they aren't worth what was paid ... simply because the current crap on the market is pulling down their value. This is stuff nicer than the typical next grade up coins that you usually see!
Look at it this way: Few are going to pay $120k for a PCGS top pop none finer when you can readily buy the same grade in another holder for $70k or less. And yet the quality difference is readily seen. >>
Tdn-
Im not sure I get your post. How long were the coins held that the value dropped so tremendously?
The Heritage Fun auction only 2 months ago had some super fresh nice proof gold that was cac'd and brought VERY strong money. The not-as-nice pieces brought not as nice money.
Quality has become a demand by so many more dealers as well as collectors. When "dreck" goes to auction it will probably sell for "dreck". when quality goes to auction it brings quality prices.
If the coin is truely a rare coin then people who can afford the 70k and 120k would pay the difference for the coin.
TDN how many times have you "paid up" to get a quality coin? example being that 1796 quarter and 1797? half.
And tahoe-
THe 1796 quarter that just sold for 80k did not appear to be an exceptional piece (just from pictures). It sold at a price right in line with another specimen that sold for the same price in the jan 2011 sale.
Perhaps the real market on lower end 1796 quarters in ms64 is actually at 80k
The music for the low end $70K coin may have ended as well. It's not like quality conscious buyers are lining up for cheap, low-end coins. How many want lists are there out there for "
low-end, dipped and processed" proof gold, even at $70K? If you don't believe me take some low end coins in any series to any local or regional show and see how much interest you get. The number of buyers for low end coins is at cyclical lows. The danger for dealers buying low end stuff is that they might not find a buyer without steeply discounting the price. Hence, they have to start off by offering well under market for such a coin, next grade down is often a safe place to be. In a market recovery, the higher end coins will probably recover more quickly. It was only during the last year or two of this last run up (ie 2006-2008) where low end coins became easily saleable again as fresh buyers were more interested in plastic grade and price than in quality.
In the current world and current coin market $80K is a lot of money, even for a MS64 1796 25c. $70K is a lot of money for processed proof gold. In collectible 60's and early 70's muscle cars the effect since 2007 has been the same. Where once $125-150K was considered a lot of money for a quality hemi/6 pack car, now that number is more like $75K. And where there was once little resistance in price until most collectible cars exceeded $50K in price, now that line in the sand is around $30K. Generally, a 40% haircut has been taken across the board, 50% or more on some of the most desireable cars that just got "flipped" so often that their prices got out of hand. So $80K for a 1796 quarter today might still be strong money, esp. for lower end piece. One advantage of coins over cars is that the ability to fully enjoy them is not dependent on the price of gas. Then again, a lot of people are content to just stare at their cars, just as they do their coins. Lots of staring and tire kicking going on these days.
roadrunner
Leo
The more qualities observed in a coin, the more desirable that coin becomes!
My Jefferson Nickel Collection
Roadrunner, I like reading your posts, this one is no exception. Muscle cars definitely had a run-up in prices, at one time, coins did to. I find it hard to believe that someone spending 50-70K on a collectible car can be pushed around by the price of gas. Those cars are typically not everyday drivers. I think the music stopped playing and their were lots of people holding the keys. Not all of them wanted the cars they had, once they realized they were no longer an investment.
I don't want to put words in tradedollarnut's mouth, but you read what he wrote:
"Few are going to pay $120k for a PCGS top pop none finer when you can readily buy the same grade in another holder for $70k or less. "
That doesn't sound like an argument to invest in coins that are standouts in their holders to me.
The phenoma we are witnessing is the result of a thin market. When stocks go down, no matter the quality of the company, it is readily apparent in the daily newspaper. If stocks only traded once or twice a year, then a lower trade could be interpretted as just a "bad print", or maybe there was a specific reason for the price drop.
I keep hearing the words "Ponzi scheme" being used to describe the monetary system. I may or may not agree with that, but I am highly confident that if there is any such scheme, ALL assets are affected. Hence, the ending of such a scheme, will affect ALL assets.
Knowledge is the enemy of fear
<< <i>tradedollarnut said:
<< <i>I have first hand experience with some proof gold coins off the market for 15 years that are fresh and vibrant ... not the typical dipped and shiny stuff you see these days. PCGS held the line on grading them and now they aren't worth what was paid ... simply because the current crap on the market is pulling down their value. This is stuff nicer than the typical next grade up coins that you usually see!
Look at it this way: Few are going to pay $120k for a PCGS top pop none finer when you can readily buy the same grade in another holder for $70k or less. And yet the quality difference is readily seen. >>
By this reason, it's clear that you're better off purchasing the $70k coin. If the TPG's are going to have credibility behind the grade, then of course this is going to happen. The current market is not so hot. The collectors who have those $120k coins are going to have to hold or they are going to sell at a loss. If you like to flip the top end for the grade coins, the music has stopped and you don't have a seat. >>
That's all very interesting.
But how do I make money off of that? Is there a vulture fund for undervalued cool stuff? Any shares available, voting or otherwise?
You got to be lucky and smart. Works that way in most areas.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
<< <i>STEWARTBLAYNUMIS, if you need to explain that to a buyer, then you may already be wasting your time and theirs. True or not.
Roadrunner, I like reading your posts, this one is no exception. Muscle cars definitely had a run-up in prices, at one time, coins did to. I find it hard to believe that someone spending 50-70K on a collectible car can be pushed around by the price of gas. Those cars are typically not everyday drivers. I think the music stopped playing and their were lots of people holding the keys. Not all of them wanted the cars they had, once they realized they were no longer an investment.
I don't want to put words in tradedollarnut's mouth, but you read what he wrote:
"Few are going to pay $120k for a PCGS top pop none finer when you can readily buy the same grade in another holder for $70k or less. "
That doesn't sound like an argument to invest in coins that are standouts in their holders to me. >>
There are those, myself included, that wouldn't touch the $70k proof gold with a 10 foot pole. Who wants an NCS'd piece of shiny gold in a high grade holder??? Not me. Point being that for that collector, what we want is the original looking piece that needs to command the much higher price. BUT because the price of the shiny stuff is so low because demand is lower and supply is higher, the price disparity is huge! What needs to be realized is the supply disparity is huge as well.
ColonelJessup, you made me laugh!
<< <i>There are those, myself included, that wouldn't touch the $70k proof gold with a 10 foot pole. Who wants an NCS'd piece of shiny gold in a high grade holder??? Not me. Point being that for that collector, what we want is the original looking piece that needs to command the much higher price. BUT because the price of the shiny stuff is so low because demand is lower and supply is higher, the price disparity is huge! What needs to be realized is the supply disparity is huge as well. >>
So what you are saying is that the high end coins are not going for the prices you want because the price guides are much less than what you want to see. How exactly could this be fixed? What's your solution? Do you want PCGS to publish a price list with a CAC multiplier?
I think you may be just frustrated with a softer coin market.
We all know that every grade level has a large spectrum of coin quality. Then when a collector takes his PQ coins to a dealer to sell them he is offered the same low price that the poorest examples would command, usually based on some small percentage of Grey sheet with no reguard for quality. Not much insentive to sell nice coins.
Leo
The more qualities observed in a coin, the more desirable that coin becomes!
My Jefferson Nickel Collection
<< <i>Good points above!
ColonelJessup, you made me laugh!
<< <i>There are those, myself included, that wouldn't touch the $70k proof gold with a 10 foot pole. Who wants an NCS'd piece of shiny gold in a high grade holder??? Not me. Point being that for that collector, what we want is the original looking piece that needs to command the much higher price. BUT because the price of the shiny stuff is so low because demand is lower and supply is higher, the price disparity is huge! What needs to be realized is the supply disparity is huge as well. >>
So what you are saying is that the high end coins are not going for the prices you want because the price guides are much less than what you want to see. How exactly could this be fixed? What's your solution? Do you want PCGS to publish a price list with a CAC multiplier?
I think you may be just frustrated with a softer coin market. >>
A softer coin market is fine. I'm just pointing out that a lot of holdered crap is making transactions difficult in some cases
I believe true "high end" coins are not being sold/auctioned primarily because they are: A) Put away in collections and the collector has no desire/need/want for selling, now or maybe ever and:
There are so many coins, too many to mention, that I wish I purchased 10 years ago, later sold for DOUBLE 5 years ago, and I know, have heard, OR couldn't touch today without a 50% to 100% premium from 5-years-ago pricing. There is a couple I offered the DOUBLE price from 2006 privately - but not for sale.
It is possible (I believe not too common) the economy/personal circumstances could force those that own high end coins to sell. But go to an auction and watch the bidding of a TRUE high end coin - I could name (with fingers to spare) on my right hand the potential bidders. Subsequently going to collections that will not sell for years to come.
Andy Lustig once told me, "Don't worry Lloyd, any coin, you'll get a chance at again". I remember asking my father for a stereo for Christmas when I was 14. He said, "You'll get it". It's been 30 years. I'm still wating...
Based on what is happening in the market, I'd guess my situation is far from unique.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.