Would you rather be buried in a great coin or stuck with a mediocre one?

RYK · November 9, 2011 12:50AM

Purely hypothetical and not inspired by recent experience.

Which scenario do you find more/less appealing:

A. You buy a coin for your collection that is great for what it is, but expensive. Market value for the grade is $2000, and for your outstanding example, you pay $2500. For fun, you shop it around the bourse, and while there is lots of interest, the best offer is $1750.

B. You get a good deal on a coin for your collection, but you get what you pay for. Market value for the coin is $2000 and you pay $1400. For fun, you shop it around the bourse, and there is little interest. Someone begrudgingly offers $850.

Assume that money supply is finite, so by purchasing coin A, it limits your ability to buy the next coin. On the other hand, with purchasing coin B, there is still some left in the tank for the next acquisition.

mingot · November 9, 2011 12:54AM

So far I've not had a coin I loved in hand and had a bad feeling that I paid too much for it.

I might know I paid too much for it, but it's not that bad feeling you get when you look at the coin you paid the "right" money for and don't like.

So I'd rather be buried.

Moldnut · November 9, 2011 12:55AM

I bet if you shop "B" around enough you'll end up getting what you put into it faster than "A".

Unknown · November 9, 2011 12:55AM

This content has been removed.

Captain_Morgan · November 9, 2011 12:57AM

<< Happily BURIED.........never grow tired at admiring it and studying it since no intent on selling it. If after the end and if ever go to sell and get less, oh well, there is no free lunch, enjoyment has its price. >>

steveben · November 9, 2011 1:04AM

<< 

<< Happily BURIED.........never grow tired at admiring it and studying it since no intent on selling it. If after the end and if ever go to sell and get less, oh well, there is no free lunch, enjoyment has its price. >>

>>

+1 more...but one day mine will be sold

GeorgeKellogg · November 9, 2011 1:22AM

I would tend to go with the high-priced, great coin. I have paid strong prices for great coins in the past and will continue to do so. Over time, I believe that the "buried" situation will be less and less of a factor.

Here's a case in point. In 2000, I bought an 1852-D half eagle (PCGS VF35) from the S. S. Central America, one of only five Dahlonega pieces recovered from the ship. I consider this to be a great coin, not for its condition, but for its superb backstory and rarity as a "Central America Dahlonega." I paid "triple Trends" for the coin, as I knew that this was likely the only chance that I'd ever have to own one. In 2011, Trends is now more than I paid. Low mintage Central America coins continue to bring prices significantly in excess of Trends.

MsMorrisine · November 9, 2011 1:22AM

bury me deep

keyman64 · November 9, 2011 1:28AM

A - If you were willing to pay up for it, eventually someone else will be willing to pay up for it when it comes time to sell. There always seems to be a market for GREAT COINS. Mediocre ones can only survive in a GREAT MARKET where everyone is buying everything.

AnkurJ · November 9, 2011 1:42AM

Because im in it for the long haul, option A. Ive overpaid for quality before, and the coins have caught up in value to what I paid.

fiveNdime · November 9, 2011 1:48AM

<< buried. >>

mediocre...

morgantype · November 9, 2011 2:11AM

I would take option A.

I think paying strong money for a rarity or a great coin is the norm rather than the exception.

relicsncoins · November 9, 2011 2:35AM

<< buried at least I can enjoy the coin. >>

Agreed, and a great coin has more potential to dig you out. A mediocre coin will always be a mediocre coin regardless of the price is sells for.

MikeInFL · November 9, 2011 4:22AM

Buried in the great coin would be my preference.

The thought being, if I'm going to take a bath on both coins should I sell, I might as well be really happy with my burial.

renomedphys · November 9, 2011 4:30AM

Buried. Money after all, is only money.

johnny9434 · November 9, 2011 4:31AM

just bury me deep with a coin that i like

shorecoll · November 9, 2011 4:38AM

A it 'tis. Buried (except for the final one) is relative.

ambro51 · November 9, 2011 4:46AM

Ill take being buried in a great coin that I just outbid 18 people to buy.

Mowgli · November 9, 2011 4:53AM

Maybe a reflection on my coin collection but I'd rather do "B". If its market value is $2000, I'd have a better chance of getting back $1400 than $2500 in the long run. Over time all coins seem to go up in value. Today with only well-heeled folks buying coins, the nicer coins will sell but eventually "dreck" will sell when everyone is back to buying coins. To date, all my previous bargains have sold for more than I paid for them (although I do not expect this always to be the case). IMO the board leans towards nicer coins and a lot of people will pay a premium for them. I love finding a bargain.

Justlooking · November 9, 2011 5:20AM

Assuming you don't HAVE to sell the coin for some reason, I would rather have a really nice coin and just enjoy the heck out of it.

Any coin is worth what you paid for it, until you sell it. Then it's worth what someone else will pay for it.

MidLifeCrisis · November 9, 2011 5:39AM

I'd rather be buried in a great coin. In fact, I might be buried in quite a few right now!

But you can't put a price on the enjoyment of owning a great coin. So it all works out in the end.

yellowkid · November 9, 2011 5:42AM

<< 

<< Happily BURIED.........never grow tired at admiring it and studying it since no intent on selling it. If after the end and if ever go to sell and get less, oh well, there is no free lunch, enjoyment has its price. >>

>>

Every time! I've overspent on pieces many times over the years, antiques and coins. I don't get much enjoyment out of mediocrity.

keyman64 · November 9, 2011 5:52AM

I JUST BURIED MYSELF IN A COIN REALLY GOOD AT THE HERITAGE AUCTION...OH BOY! At least I practiced what I said earlier. I did not want a mediocre example of the coin I bought so I paid up. I paid MORE than PLUS money for a non plus coin that has no bean.

The wound will be healed tomorrow morning when I wake up.

DrPete · November 9, 2011 5:56AM

These scenarios remind me of the addage: How do you make a million dollars in the coin market? Start with $2 million.

ColonialCoinUnion · November 9, 2011 6:00AM

Better to be buried in an expensive coin that 20 people want to buy and argue about the price, than to own a mediocre coin that no wants to buy.

MidLifeCrisis · November 9, 2011 6:01AM

<< These scenarios remind me of the addage: How do you make a million dollars in the coin market? Start with $2 million. >>

Yes, most collectors lose money on coins when it comes time to sell.

But how much do we spend on things for which the enjoyment is only short term?

If you own a coin for five years, add up the cost over those five years of life's other short-term pleasures for which there is little to no hope of getting any of your money back.

When you look at it that way, this isn't such a bad hobby after all.

CoinJunkie · November 9, 2011 6:14AM

You're buried either way. Why not take the coin you'll enjoy owning at least?

DIMEMAN · November 9, 2011 6:20AM

Greg, tell us what wonderful new toys you are buried in!

BryceM · November 9, 2011 6:24AM

The answer to this question is the same as the answer to another question:

"Are you a coin collector for whom the primary source of enjoyment is turning a coin for a profit or are you a coin collecter who enjoys having nice coins for the sake of having them?"

Barndog · November 9, 2011 6:31AM

Buried! I paid too much for this one, but guarantee that a dozen people or more would line up for it if it was for sale...until they heard what I would "need" for it if I asked for my cost or a bit more

DIMEMAN · November 9, 2011 6:34AM

Pretty Barndog.....and I'm not even into commens.

keyman64 · November 9, 2011 6:39AM

<< Greg, tell us what wonderful new toys you are buried in!

>>

PM Sent

BigMoose · November 9, 2011 7:35AM

I will take the burial--five or ten years from now, yesterday's burial may be considered today's bargain, especially if that super high end coin eventually upgrades. Plus, you get to enjoy that coin every time you look at it.

rhedden · November 9, 2011 7:58AM

Chances are that you won't be buried in the great coin 5 years from now. You'll still be buried in the unattractive one. Sometimes you've got to overpay for the coins that are the best long term investments.

airplanenut · November 9, 2011 7:59AM

I can't remember trying to sell a coin I may be buried in, but I can remember the difficulty I've had selling coins that weren't quite up to par. It's the nice ones that the strongest buyers want, and they're more fun to have, too. Plus, when I really enjoy a coin, I don't think of it in terms of how much I overspent, but how much coin I got. When a coin isn't so great, I think about the money a lot more.

CalGold · November 9, 2011 8:21AM

The market “growing into” the premium price paid is (a) a long term perspective, (b) in many cases wishful thinking, and (c) more likely to come to fruition for buyers of select high grade scarce and rare coins rather than either esoteric, thinly collected series few people collect, or the widgety stuff that most collectors buy. But if you need the money now, it does not matter what the coin might be worth in 10 years if all goes well in the market. Witness the consignor in the 2009 Central States sale who paid aggressive prices and then lost millions, including six figure losses on genuine rarities.

Your loss is the dealer's gain. That is how it works. The dealer who buyers your PQ piece at a spread below sheet will then mark it up to a PQ premium price and sell it to some other hapless coin junkie.

The advantage of buying the premium product is that it should be easier to sell, albeit at a loss, and maybe you got to WOW your friends at show and tell sessions, or maybe you just got to WOW yourself sitting in a cold dark room rotating your coin under a lamp.

CG

DaveG · November 9, 2011 8:24AM

From what I can tell, Great Coins only trade at prices that leave the buyer "buried".

(as in: the seller says "Someone will have to offer me stupid money to get me to sell this coin!")

OnlyGoldIsMoney · November 9, 2011 8:40AM

Option A - so many of the coins where I supposedly overpaid are my favorites.

RedTiger · November 9, 2011 8:44AM

I would choose Option A in this example. The caveat is that the price points skew towards that answer. 33% is a normal loss when paying full retail price and selling at realistic cash wholesale. A $2000 market value coin with a wholesale of $850 because the coin is a dog, is an exceptionally bad coin, so the $1750 price paid was a burial price to pay. A fairer price for illustration might a similar 33% loss retail to wholesale margin, or about $1275 for that coin B, either that or overpaying a full 100% or $3500 for Coin A so the losses are both 50%.

With all that, even with similar percentage losses I'm sure the quality oriented, deep pocket crowd on this forum would still overwhelmingly choose Option A. In the rest of the world the percentages in any vote would likely be very different from the answers here on this forum. I think this forum skews so much towards quality, that even if the choices were paying $3500 for coin A (a $1750 loss), and $1050 for coin B (a $200 loss), the votes would still likely skew towards coin A on this forum.

Lakesammman · November 9, 2011 8:49AM

I would rather be buried in a great coin (and I do have a few).

spendabuckeye · November 9, 2011 9:27AM

i want the quality coin and i constantly upgrade. I am a type collector from 1850-1939 and have started taking my cams and upgrading to dcams. the pleasure of looking at a great coin in my era of collecting is still a big thrill.

SeattleSlammer · November 9, 2011 10:51AM

I'd pick A. Put it on the BST with a good photo and you'd likely get your $2500 back.

jayPem · November 9, 2011 11:07AM

<< 

Your loss is the dealer's gain. That is how it works. The dealer who buyers your PQ piece at a spread below sheet will then mark it up to a PQ premium price and sell it to some other hapless coin junkie.

The advantage of buying the premium product is that it should be easier to sell, albeit at a loss, and maybe you got to WOW your friends at show and tell sessions, or maybe you just got to WOW yourself sitting in a cold dark room rotating your coin under a lamp.
>>

Nice post. A bit dark, a little bitter maybe, but I like it....

RYK · November 9, 2011 11:08AM

<< I would choose Option A in this example. The caveat is that the price points skew towards that answer. 33% is a normal loss when paying full retail price and selling at realistic cash wholesale. A $2000 market value coin with a wholesale of $850 because the coin is a dog, is an exceptionally bad coin, so the $1750 price paid was a burial price to pay. A fairer price for illustration might a similar 33% loss retail to wholesale margin, or about $1275 for that coin B, either that or overpaying a full 100% or $3500 for Coin A so the losses are both 50%.

With all that, even with similar percentage losses I'm sure the quality oriented, deep pocket crowd on this forum would still overwhelmingly choose Option A. In the rest of the world the percentages in any vote would likely be very different from the answers here on this forum. I think this forum skews so much towards quality, that even if the choices were paying $3500 for coin A (a $1750 loss), and $1050 for coin B (a $200 loss), the votes would still likely skew towards coin A on this forum. >>

RT, that is an excellent analysis. I struggled with the gross numbers and percentages.

Frankly, I am surprised by the overwhelming choice of Coin A, as I have seen behavior on the forum which favors more folks choosing Coin B.

I also believe that many ignored the caveat that buying Coin A would deplete your cash on-hand and make you less able to buy the next coin than if you had settled for Coin B. Oh, well, back to the drawing board.

Coinosaurus · November 9, 2011 11:46AM

I hate ugly coins. Frankly I'm surprised the PQ/ugly spread isn't a lot bigger than it is. So I'll vote for buried in the nice coin even if it costs more.

Pokermandude · November 9, 2011 11:52AM

Like most others that have chimed in so far, I'd rather be buried in coin A. Typically I hold my nice coins for the long term. And scarcer/PQ/nice for grade coins will likely do much better than a real dog.

RedTiger · November 9, 2011 12:01PM

<< 

Frankly, I am surprised by the overwhelming choice of Coin A, as I have seen behavior on the forum which favors more folks choosing Coin B.
... >>

You must be reading a different forum than me, or have your own biases that skew your opinions of others on this forum. Perhaps this thread can open your eyes about the collectors on this forum. I didn't see one vote for option B, though again, that is in part skewed by the price numbers used in the example. What rational person would take a bigger percentage loss and also get a terrible dog of a coin? What kind of person would admit to that on this forum, a veritable salon where quality oriented, deep pocketed collectors congregate.

I would guess about a 70/30 split for collectors (not dealers or flippers that mostly care about profit) on this forum. With 70% favoring quality, with price either a secondary factor, or mostly a non-factor. At my local coin club, there might be one person that collects that way, 1 out of 30 is about 3%. I see that as the gulf between the PCGS forum and the world of the El Segundo coin club. BTW El Segundo is a relatively wealthy area, so it isn't about affording quality, it is about choosing quality and the willingness to pay for it.

clw54 · November 9, 2011 12:06PM

I have lots of coins I like that others would consider mediocre.

ranshdow · November 9, 2011 12:21PM

I suspect scenario B is more common here than most would acknowlege, including in my own collection. E-specials come to mind, as they are often priced under Trends.

RedTiger · November 9, 2011 1:42PM

<< I suspect scenario B is more common here than most would acknowlege, including in my own collection. E-specials come to mind, as they are often priced under Trends. >>

The bigger question is how many know that is the choice they have made? I suspect at least half that go the cheaper route think they have a nice or at least an average coin, not a doggy, dog dog of a coin that is only worth about 50% as much as an average coin.

Part B is how many choosing the more expensive coin are only getting an average coin, or perhaps even a dog coin? That's where double damage comes in, pay $3500 for a coin with a $2000 market value, and getting a below average specimen that might only be worth $800 in the wholesale market. Virtually nobody is going to admit to being that dumb, but almost certainly there are those out there making that mistake.

fiveNdime · November 9, 2011 6:07PM

<< Ill take being buried in a great coin >>

Would you rather be buried in a great coin or stuck with a mediocre one?

Comments

Leave a Comment