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youliveyoulean

Help Understanding the Value of Certain Coins

25 posts in this topic

Hi all,

something that's been bothering me for some time now is the value placed on certain coins and how they came to be. Can we agree, generally speaking, scarcity and condition are the driving factors (although not always)?

As an example (and apologies in advance if I'm bad mouthing a coin in your collection!), I can't for the life of me work out why say an 1821 Secundo Crown can be valued so highly when compared to an 1896 LIX Crown. In high grades, one goes for thousands and the other for hundreds.

It's older yes and possibly more attractive but undoubtedly much more common (see population statistics with TPGs, no. of appearances at auctions, ESC attribution).

Whenever I see 6 of these come up at just one auction, I always wince.

Can anyone explain or give similar examples as food for thought? 

 

 

 

 

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Coins 728x90

People who don't have a huge amount of money might only want one example of a reign.  That's how I started with shillings.  I aimed to find the first issue of a monarch and then first issues of any major design changes.  That might in part explain the 1821?

Yes, condition and scarcity affect prices.  But so do other things.  Such as breadth of the potential collector base.  As happens with Newark (hammered) shillings.  They appeal to shilling collectors, those interested in the Civil War, they have a romantic aspect (kept as 'souvenirs' by survivors of the siege).  Makes them far more popular (and so sell for far more) than you'd think, based on how many examples survived.

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1 hour ago, youliveyoulean said:

Hi all,

something that's been bothering me for some time now is the value placed on certain coins and how they came to be. Can we agree, generally speaking, scarcity and condition are the driving factors (although not always)?

As an example (and apologies in advance if I'm bad mouthing a coin in your collection!), I can't for the life of me work out why say an 1821 Secundo Crown can be valued so highly when compared to an 1896 LIX Crown. In high grades, one goes for thousands and the other for hundreds.

It's older yes and possibly more attractive but undoubtedly much more common (see population statistics with TPGs, no. of appearances at auctions, ESC attribution).

Whenever I see 6 of these come up at just one auction, I always wince.

Can anyone explain or give similar examples as food for thought? 

 

 

 

 

You're probably failing to take into consideration length of reign, George IV 10 years, Victoria 63 years. Crowns struck for George IV was for 1821 and 22, Victoria was over 10 years, so in essence there in an over abundance of Victorian crowns compared to George IV. So compare the mintage of crowns, George IV maybe 500,000 in total, Victoria maybe at a guess 4 million for the older head Crowns

Edited by azda
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Thanks Tom - I would consider scarcity and breadth of collector base to be directly related (ie the more collectors, the more scarce something is).

If you don't have a huge amount of money, why would you try and 'type' collect crowns in high grades?

Do type collectors still always home in on the 1st year of issue then regardless of cost, scarcity? I've read in the old days they used to....this only makes sense at the time if you don't know how many years a coin will be issued. Now, with the benefit of hindsight, would they still collect the first year of issue? 

Forgive me, I know nothing of hammered coinage - so are you saying you see 6 of these shillings pop up at every auction similar to the Secundo? That would suggest they're not very scarce unless the collector base is particularly high? 

Good point about the length of reign Azda, but again I still contend these are very common and there are more sellers than buyers unless the 'churn' rate of these coins is high (fickle collectors buying and selling extremely quickly).

The only other conclusion would be prices are kept artificially high by the auction houses by refusing to sell below a certain price (and thus stockpiling) or a sudden onslaught of fakes which would skew the supply-demand relationship in the short  term but I'm sure the auction houses know what they're doing with regards to that.

I contend therefore that somebody somewhere must be sitting on hundreds of these crowns and prices will inevitably drop!

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If they don't folks will know who to blame LOL

 

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9 minutes ago, youliveyoulean said:

Thanks Tom - I would consider scarcity and breadth of collector base to be directly related (ie the more collectors, the more scarce something is).

If you don't have a huge amount of money, why would you try and 'type' collect crowns in high grades?

Do type collectors still always home in on the 1st year of issue then regardless of cost, scarcity? I've read in the old days they used to....this only makes sense at the time if you don't know how many years a coin will be issued. Now, with the benefit of hindsight, would they still collect the first year of issue? 

Forgive me, I know nothing of hammered coinage - so are you saying you see 6 of these shillings pop up at every auction similar to the Secundo? That would suggest they're not very scarce unless the collector base is particularly high? 

Good point about the length of reign Azda, but again I still contend these are very common and there are more sellers than buyers unless the 'churn' rate of these coins is high (fickle collectors buying and selling extremely quickly).

The only other conclusion would be prices are kept artificially high by the auction houses by refusing to sell below a certain price (and thus stockpiling) or a sudden onslaught of fakes which would skew the supply-demand relationship in the short  term but I'm sure the auction houses know what they're doing with regards to that.

I contend therefore that somebody somewhere must be sitting on hundreds of these crowns and prices will inevitably drop!

I think the other point to make on this is that American collectors/flippers tend to fight out over a raw high grade in the hope that the eventual slab number will make them a tidy profit. In my mind i'd prefer a Secundo to say a Jubilee or Widow head, also look at the 1934 Wreath crown, 934 minted but there's always one available somewhere because people think they have a potential of growth but because they are so often for sale i think that's stagnated a little.

Between the 3 of these types i'd buy the Secundo, just my personal choice, i have one Viccie Jubilee head Crown and only because it had huge eye appeal, haven't ventured for a Secundo yet and i won't touch a 34 Wreath whether slabbed by LCGS, PCGS or NGC, it's such a boring design and has nothing going for it for me. Also take into account how many of the 500k Secundos are around in high grades, i'm guessing not a lot due to the amount you see in low grades.

Edited by azda

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The 1934 Wreath is another great example - always around at auction for hefty sums - and yet not very scarce. Are scarcity and mintage figures being confused by buyers? Another artificially priced coin?

FYI 94 Secundos graded at MS63 and above with PCGS and NGC - I don't know about CGS. There will be some duplication in those figures with crossovers but still typically 5 - 10 times higher than most crowns for the high grades.

As mentioned by Tom, numbers are very high for all the first year of issues - I understand why they're high but do not understand the pricing of these coins as they're all so readily available (relatively speaking!).

Looking across the board, without doing the Math because I don't know how, there appears to be a very strong correlation between scarcity (represented by population figures) and prices realised with notable exceptions.

 

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35 minutes ago, youliveyoulean said:

Thanks Tom - I would consider scarcity and breadth of collector base to be directly related (ie the more collectors, the more scarce something is).
As Azda says, people flip (buy and try to sell at a profit) some coins more than others keeping a ready supply in the market.  And there's relativity.  I have a few coins for which there are less than 10 examples known.  But if there are only 5 active collectors in that field and each has an example the prices (and apparent scarcity) might not reflect just how rare those pieces are.

If you don't have a huge amount of money, why would you try and 'type' collect crowns in high grades?

'Huge amount' is relative I guess.  People are advised to buy the best they can afford of course and (as with me) may not be able to afford the full diversity of a series but still be able to pick up enough 'good' examples to make it worthwhile..  a collection can, after all, be a handful of coins or thousands.  Different collectors feel.. differently.  (67 for me, including 'spares')

Do type collectors still always home in on the 1st year of issue then regardless of cost, scarcity? I've read in the old days they used to....this only makes sense at the time if you don't know how many years a coin will be issued. Now, with the benefit of hindsight, would they still collect the first year of issue?  

Again, for myself when I started it was a way to tick off a reign.  There's something (again, for me) about the first type issued that appealed .. but then I wasn't concerned about issue numbers or rarity when I started.

Forgive me, I know nothing of hammered coinage - so are you saying you see 6 of these shillings pop up at every auction similar to the Secundo? That would suggest they're not very scarce unless the collector base is particularly high? 

Hammered coinage is of course different from milled coins surviving by the thousand.  I just mean that if you want an example, by checking current auctions and dealer lists, you should be able to find a few to pick from with little difficulty.  Unlike some (admittedly hammered) coins where you (I) can look for years without seeing a single example turn up.

Good point about the length of reign Azda, but again I still contend these are very common and there are more sellers than buyers unless the 'churn' rate of these coins is high (fickle collectors buying and selling extremely quickly).

The only other conclusion would be prices are kept artificially high by the auction houses by refusing to sell below a certain price (and thus stockpiling) or a sudden onslaught of fakes which would skew the supply-demand relationship in the short  term but I'm sure the auction houses know what they're doing with regards to that.

I contend therefore that somebody somewhere must be sitting on hundreds of these crowns and prices will inevitably drop!

I've come to realise that rarity can only ever be guesstimated since we never know quite how many examples of a particular coin are currently held in collections around the world.  Is there a cache of crowns somewhere?  Possibly.  But they would of course be unwise to try to release them all on the market at the same time!

 

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15 minutes ago, youliveyoulean said:

Looking across the board, without doing the Math because I don't know how, there appears to be a very strong correlation between scarcity (represented by population figures) and prices realised with notable exceptions.

 

Not always, at least with hammered.  Scarce coins that are listed as scarce will attract attention.  But some are very difficult to find and not recognised by most people as rare and so command low prices.  And condition (unlike I believe 30, 20 or even 10 years ago) beats rarity all the time.  A very rare battered coin will never reach the price of a common coin in uncommonly good condition.  A recent sale (Lyall) had rarities flounder unsold and yet a £500-£600 coin go for £2000+

(Might have been useful if I'd realised that a decade ago!)  :P

Edit:  I've just remembered that, for me, there was a vast difference in perception when I first started collecting from today concerning rarity.  If I could not find an example of a coin I'd noticed in a catalogue for a few months I was keen to snap up the first example I could find.  Now I've realised that it might be years before I see a particular variety or type and even then it might be so unappealing I can't bring myself to buy it!

People have heard of the '34 Wreath and it's 'rarity'.  Maybe (lack of) patience and beginners over-enthusiasm comes into play more than we (I) realise in these things?

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37 minutes ago, youliveyoulean said:

The 1934 Wreath is another great example - always around at auction for hefty sums - and yet not very scarce. Are scarcity and mintage figures being confused by buyers? Another artificially priced coin?

FYI 94 Secundos graded at MS63 and above with PCGS and NGC - I don't know about CGS. There will be some duplication in those figures with crossovers but still typically 5 - 10 times higher than most crowns for the high grades.

As mentioned by Tom, numbers are very high for all the first year of issues - I understand why they're high but do not understand the pricing of these coins as they're all so readily available (relatively speaking!).

Looking across the board, without doing the Math because I don't know how, there appears to be a very strong correlation between scarcity (represented by population figures) and prices realised with notable exceptions.

 

What you have to remember is that not everyone wants to slab a coin, the 1887 crown i have remains unslabbed because i enjoy looking at it without plastic around it. The prices for the Secundos in high grades are quite healthy, better than the Victorian crowns apart from the Proofs, how many proof Victorias do you see slabbed for 1887 and 1893, i bet a few more, hence the reason IMO there are more of these slabbed than you'll see of the Common Victoria crowns.

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Population for proof older head crowns, looks different now, the proofs are more worthy of a slab due to prices they command, Secundos are in the same league of price in top grades, this is why people chase a high grade so it can get slabbed in the hope it reaches top end

Screenshot 2017-02-17 16.43.55.png

Edited by azda

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And now NGC

Screenshot 2017-02-17 16.50.41.png

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I'm a firm believer that the more expensive the coin, the quicker the turnarond for collectors. Many collectors concentrate on finding the cheapest and easiest pieces first and only after a while do they concentrate on the more expensive pieces. It's silly really, but perception is everything, and with prices usually changing as a percentage means holding off a purchase is a red hering. On a personal level, I just buy the coin that ticks the necessary criteria. An expensive coin doesn't suddenly drop 90% in value just because you bought it.

Another point to consider is that an auction purchase in the main will be worth 30% less in the immediate aftermath of the sale than you paid should you have an enforced disposal.

Different coins, different prices. If there was any rule to be applied it is that there are no rules. Worry about that one too much and you won't collect anything. Whilst there are various 'book' prices for coins, these are just an approximation for a spread of values applying to examples of that coin, but no two coins being equal, all are valued more or less than  'book' values, which for all their imperfections, do broadly reflect the market.

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This is an interesting discussion. 

As a collector of sixpences, I have a pretty good feel for which coins show up often and which ones hardly ever show up. And this has very little to do with what ESC says the rarity is or with book values. To a large extent it is a question of experience and knowing your field. 

When it comes to prices it really depends. For auction prices it is all about who is bidding on the day. Sometimes the prices go high, sometimes you can get a good deal. Sometimes a dealer can be cheaper for the same coin than an auction when all costs are considered. Again, it becomes a question of experience and also of researching past prices to get an idea of market value. After that you need to know how much of a premium over market you are willing to pay to get the coin.

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Agreed Jaggy. Not too keen on ESC myself these days as I've gained more experience over time and the population statistics with TPGs get larger. Surely, eventually, physical evidence by TPGs, ebay listings and auction houses etc. should outweigh an opinion by the authors formed from a time before the internet! That's no disrespect to the work they did but we're at a different point now.

Am I right in thinking something that is rare (a measure of frequency) and something that is scarce (implying demand) are two totally different things yet ESC uses them interchangeably?

As someone already mentioned, you may have a very rare coin but unless there are more collectors than coins available, it is not very scarce.

Not every rare coin is desirable and rightly so. Every coin is unique after all..........

 

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Too rare and it is impossible to build a collector base unless as part of a broader collection.

As a case study, it is only in the last two or three years that thrymsas have become collectable. This is due to the still small, but larger numbers than before the metal detectorists meaning that the dozen varieties can now be assembled, whereas previously you would have been lucky to acquire more than one or two. It is for the same reason that many avoid proofs and patterns which are frequently only known in single figure quantities for any given variety. As a consequence, the denomination collector will likely acquire one or two examples only of the commoner types, if at all.

Forget the ESC rarity values. There are R6s and R7s with double digit populations. Conversely there are Rs and R2s which never appear. Do your homework. The rarities are likely to be highlighted in auction catalogues, so all you have to do is work out which ones appear, how often, and how many of these are the same pieces reappearing.

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1 hour ago, Rob said:

I'm a firm believer that the more expensive the coin, the quicker the turnarond for collectors. Many collectors concentrate on finding the cheapest and easiest pieces first and only after a while do they concentrate on the more expensive pieces. It's silly really, but perception is everything, and with prices usually changing as a percentage means holding off a purchase is a red hering. On a personal level, I just buy the coin that ticks the necessary criteria. An expensive coin doesn't suddenly drop 90% in value just because you bought it.

 

I guess as beginners, most of us like the feel that the collection is growing so picking up what's available is a way to ensure that.  Of course, those expensive gaps will need filling eventually.  But I know for myself there was also reticence to spend serious money and I'm pleased that in some cases that meant I waited until I had more knowledge.

Generally my more expensive coins will be the last to go because I know how difficult it would be to replace them!

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Thanks Rob. Interesting.

How is it do you think that an R6 or R7 could end up with a double digit population? To first classify something as R6 or R7, wouldn't you need confirmation from the mint itself?

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2 minutes ago, youliveyoulean said:

Thanks Rob. Interesting.

How is it do you think that an R6 or R7 could end up with a double digit population? To first classify something as R6 or R7, wouldn't you need confirmation from the mint itself?

Because the rarity values were assigned by Rayner years ago, possibly in conjunction with one or two collectors' opinions which in itself introduces bias. A database of sales and images to accompany the list will give a better idea on population size.

The problem with all references is the inference that they are 'complete', though we all know they aren't and that new varieties come to light every year. It is a case of where do you draw the line in assigning variety status. Given that the lists are not complete, it does not take a great leap of faith to say that the rarity values are also not a true picture. The original populations of any given variety are only known in a very few cases, these being mostly special strikings. In the case of currency pieces there is no data on the variety numbers, only the mint records for numbers struck in the year, nor is there any data for those that have been subsequently melted, so again, 'how long is a piece of string?'. That is why you have to do your homework to get any feel for rarity.

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The other issue is that we only really have an idea of rarity and population by what comes to market. But there are probably plenty of collectors who are buyers but not sellers; myself included. Coins I bought in 1985 and subsequently are still in my collection. I can count on the fingers of one hand how many coins I have sold over the period. While TPG populations help, they are necessarily a very incomplete guide.

Edited by jaggy

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15 minutes ago, jaggy said:

 While TPG populations help, they are necessarily a very incomplete guide.

No kidding. I have single-handedly reduced the combined NGC & PCGS MS slabbed populations of one type by 30%. At one point it was 4 from 9, but maybe the two coins I subsequently released back into circulation have found their way back into the statistics via a resubmission. :ph34r:

So who knows how accurate the figures are?

Edited by Rob

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Demand created in part by the perception of rarity shapes the range in value for coins. And rarity is often misunderstood because collectors often look at mintage figures instead of evaluating surviving populations. Then we have condition rarity which is also misunderstood because quality does not always mean the highest grade which seems to capture the egos of some collectors that throw  money at coins seeking the so-called finest known examples. Understanding this is problematic mainly because trying to explain the rationale for market dynamics can defy common sense. 

Edited by coinkat
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There are three factors that must be taken into account to value a coin:

  • condition 
  • rarity
  • popularity

The third is as important as the other two. It explains why 1933 pennies - which are not only very rare, there being only 7 of the normal type, but also have a legend around them - would now fetch probably 6 figures if one came up for sale; compare this with possibly unique proofs of Victorian bun pennies which might fetch a few thousand if you're lucky. It also explains why fairly common or mildly scarce coins like 1912H pennies or 1902LT pennies fetch prices well in excess of their rarity.

As for the first year of a monarch's reign, these are generally lower in value than rarity might suggest, as ordinary non-collector members of the public would put specimens aside for their novelty, and so they survive more commonly in high grades than do later years.

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2 minutes ago, PWA 1967 said:

1933 penny sold not long ago Peck for £150K

Wow. Doesn't surprise me though!

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