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A grand for a farthing though,that has to be some sort of record

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A grand for a farthing though,that has to be some sort of record

No, way short. You won't pick up a Cromwell for less than 6 or 7.

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What I don't understand is that if that particular farthing made its way onto a dealers website any time within the next 12 months priced at any more than say a couple of hundred quid it would probably sit around for a while.

So what is truly the value of these pieces that skyrocket in auction?

I was under the impression that a lot of common coins in high grade were being picked up by the buy-slab-whack-on-ebay "dealers" (the 1819 crown slabbed MS64 that came out of London Coins (as aUNC) for £600 and then re-appeared on ebay.com for £2500 being an example (can't find the link)). But that requires at least some level of restraint, which we didn't see in Kunker, so the assumption is that the collector market itself is very strong (and very wealthy) right now.

What can we expect to see over the next 5 years? Do all the best pieces get snapped up and put under lock and key for another 20 years with the odd trickle out, or do a few sizable collections make their way onto the market at once to level things out?

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Gut feeling is that nobody is selling, more people are entering the hobby, and prices are a reflection of the new entrants desire to build a collection. Very often, it appears they have no reference points from past sales as you regularly see people appearing at auction who you have never seen before and they bid higher than one might expect. If you supplement those people with dealers acting on commission for collectors, it soon becomes apparent that the general market has moved higher for all the quality pieces. The ebay side of things is taken care of by people who bid on multiple bulk lots, again at prices that make you wince in the saleroom. I look at what I can realise from the components of a bulk lot and frequently find that it sells for the same price, sometimes more. I don't feel there is anywhere for me to go buying at that level.

The sharp end is rising to fill the lists of people like Baldwins or CNG. They get good prices for what they list or auction off in the case of the latter. There is a ready market for anything of good quality, but alongside that I think there will be a number of new collectors who haven't taken time to do a bit of background research who are paying way over the odds for common material. Eventually the wheels will come off the bus, just as they always must do. In the context of a long collecting period, a few OTT prices will not do any harm, but anyone looking for a short term investment/gain is likely to be on a sticky wicket as they will not have the benefit of time to offset the recent purchase costs. Examples of this are known.

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What I don't understand is that if that particular farthing made its way onto a dealers website any time within the next 12 months priced at any more than say a couple of hundred quid it would probably sit around for a while.

So what is truly the value of these pieces that skyrocket in auction?

I was under the impression that a lot of common coins in high grade were being picked up by the buy-slab-whack-on-ebay "dealers" (the 1819 crown slabbed MS64 that came out of London Coins (as aUNC) for £600 and then re-appeared on ebay.com for £2500 being an example (can't find the link)). But that requires at least some level of restraint, which we didn't see in Kunker, so the assumption is that the collector market itself is very strong (and very wealthy) right now.

What can we expect to see over the next 5 years? Do all the best pieces get snapped up and put under lock and key for another 20 years with the odd trickle out, or do a few sizable collections make their way onto the market at once to level things out?

Collections tend to hit the market as collectors die off (as we all must do sooner or later). So I think we will continue to see a flow of decent quality coins at the major auctioneers. The real issue is what is going to happen to prices. Will they continue to increase as they have been doing? Will the gap between high quality and the rest continue to grow as is so evident in the prices at Heritage (e.g. an MS65 vs an MS63)?

And there is an opportunity for knowledgeable dealers/speculators to make money by exploiting market differences and the premium that slabbed coins can bring in certain markets. The buy at London Coins, slab and sell at Heritage phenomenon.

Also, there are collectors/investors who will pay well over the odds if it is the coin they really want. You may recall the unsolicited offer I received for an 1853 proof sixpence which I sold for almost double what I paid and just two months after winning it at Heritage. And if you take the long view then they may be right. The coins I was buying 20 years ago are worth substantially more now than I paid for them then.

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Will the gap between high quality and the rest continue to grow as is so evident in the prices at Heritage (e.g. an MS65 vs an MS63)?

This is an interesting (and to me, slightly worrying) question.

I say this because during the last few months I have offered some dealers a couple of very rare Charles I shillings. Both were quite acceptable examples of coins that will perhaps only come onto the market once every five years. In each case I was told the equivalent of 'not for me, thanks'.

It seems to me that the market for rare but not top grade coins (or those I collect, at least) has either evaporated or dealers are not willing to take a chance unless they have a buyer in mind.

This is in contrast to most dealers' sites where they are crying out for 'high grade' and 'top quality' material.

So where is the market heading I'm wondering? Surely an 'only the best will do' strategy is unsustainable; there are after all only a limited number of 'top' coins (particularly with hammered) and when they have been bought, what will dealers sell then?

Plus what happens to the collectors like me who are interested in the varieties that can only be found in 'mid-grades'? If dealers start to feel that buying anything below the top 10% in terms of quality is a risk, will it become increasingly difficult to source new material other than from other collectors or eBay?

:unsure:

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Will the gap between high quality and the rest continue to grow as is so evident in the prices at Heritage (e.g. an MS65 vs an MS63)?

This is an interesting (and to me, slightly worrying) question.

I say this because during the last few months I have offered some dealers a couple of very rare Charles I shillings. Both were quite acceptable examples of coins that will perhaps only come onto the market once every five years. In each case I was told the equivalent of 'not for me, thanks'.

It seems to me that the market for rare but not top grade coins (or those I collect, at least) has either evaporated or dealers are not willing to take a chance unless they have a buyer in mind.

This is in contrast to most dealers' sites where they are crying out for 'high grade' and 'top quality' material.

So where is the market heading I'm wondering? Surely an 'only the best will do' strategy is unsustainable; there are after all only a limited number of 'top' coins (particularly with hammered) and when they have been bought, what will dealers sell then?

Plus what happens to the collectors like me who are interested in the varieties that can only be found in 'mid-grades'? If dealers start to feel that buying anything below the top 10% in terms of quality is a risk, will it become increasingly difficult to source new material other than from other collectors or eBay?

:unsure:

Well, firstly I have to say I think the current 'trend' of quality is simply that, a trend, which will eventually change, maybe overnight, maybe over time, but it will alter to accommodate in time.

When it comes to rarities of a particular area it is most probable that an offer to sell is rejected in most part because the 'quick' profit is blinded by the buyer simply not knowing what is seen. My prime example for this would be a rare Tower crown I offered to a 'once very reputable coin business, soon to merge' (at a fair) a few years back for which I got an answer "sorry not the grade for us"....this 'snap' decision was made because (I hope) of the 'look' of the coin (and not the look of me) without asking it's history or even looking at the tickets, I eventually sold the coin on to another main London dealer who had a bit more time for me. I noticed this coin was with another dealer around a year later for DOUBLE what I sold for, and it sold! so the rarity and provenance was recognised because someone see the potential!.......

So really I would say, as a true collector, I am not worried with this current trend, it has to change, the 'collector' has the upper hand with a much lower risk of fingers being burnt in time, and on a larger scale very reputable businesses 'most probably' going backwards!!

The 'gap' will narrow in time, even if the 'top' end stays high..................IMHO.

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There is a large gulf opening between the top pieces and the rest. The top pieces sell quicker than you can list them, but anything below is increasingly difficult to shift. There is very little incentive to buy in lesser material if you are going to sit on it for a long time, hence the reluctance to buy on the part of dealers. Anything will shift if priced cheaply enough, but then a dealer will have to buy in at an even lower price. Dealers will always be willing to sell pieces that give them a return. I get asked if I want to buy collections almost on a daily basis, but the majority get rejected because of the prices asked. As you are usually asked to take the collection in its entirety, prices have to reflect the pieces that won't sell easily as well as the desirable ones. It isn't an exact science.

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Which I guess brings me back to how sustainable is this Rob? Dealers will have to continue to pay higher prices for the top pieces, leaving nothing to enable them to pick up lesser, but still good, coins that can be held as stock. Everything will become shorter term as they need to find buyers for expensive pieces to release funds for the future ...

OK, I know there aren't many dealers that have 'basements' like Baldwins. Heck, even Baldwins may no longer have a basement and the idea of holding on to something for five years, let alone 50 or more, seems increasingly unrealistic.

But most markets depend on the dealers having stock that's available for some time, not just a few days. And customers at 'lower' levels who gradually upgrade their purchases so keeping some fluidity.

If the housing market only consisted of the purchase and sale of million pound properties I couldn't see it lasting long. That seems to be the way the coin market is heading ...

.

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Dealers are reacting to what the market is demanding, not the other way round. If sufficient buyers of decent middle grade or better don't appear, then no one is going to hold stock. The VF - gVF area is the biggest problem. It is where the price curve gradient starts to take off appreciably.

Take something that often crops up in sales such as Chas 2 crowns. Spink prices these at a couple hundred in Fine, with a VF going for about 3 times that. The gulf is in the next jump to EF where previously a multiple of 2 or 3 times the VF price was about right, but now it is 6 or 7. That's where the reluctance to pay too much comes into play, be it dealer or collector. The potential difference in value for an almost imperceptible difference in quality gives both parties a pricing headache. If in doubt, leave it out, is the general rule adopted. Of course, vendors don't want to sell too cheaply, so put on a reserve which isn't met. Buyers are afraid to pay too much for a potentially sub-standard coin as perceived by the market and so don't bid. It's a real chicken and egg situation.

Another point that seems to apply is that grading in auction catalogues is often taken as gospel, possibly with the bidder having relied on images on his computer when deciding how much to pay. This is also going to cause a headache further down the line because there are a lot of things in my opinion that are either very fully graded or overgraded - something which can only be determined by many hours spent looking at different grades of coins in hand. The marketing effect of a higher catalogue grade cannot be overstated. As a rule of thumb, I reckon on marking down at least 10 coins (and probably more) for every one that I feel is undergraded, though many have to be said are ok. Just depends on whose auction catalogue you are looking at. This factor I believe has led to appreciably higher prices at the top end where an EF coin looks uncirculated to the untrained eye. Bids are then made according to perception.

Edited by Rob

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'Another point that seems to apply is that grading in auction catalogues is often taken as gospel, possibly with the bidder having relied on images on his computer when deciding how much to pay. This is also going to cause a headache further down the line because there are a lot of things in my opinion that are either very fully graded or overgraded - something which can only be determined by many hours spent looking at different grades of coins in hand. The marketing effect of a higher catalogue grade cannot be overstated. As a rule of thumb, I reckon on marking down at least 10 coins (and probably more) for every one that I feel is undergraded, though many have to be said are ok. Just depends on whose auction catalogue you are looking at. This factor I believe has led to appreciably higher prices at the top end where an EF coin looks uncirculated to the untrained eye. Bids are then made according to perception.'

Rob's words here are not to be taken lightly in my opinion, ignore the auction pics, grade, and estimate for anything significant and do due diligence, they have a vested interest in getting the highest price after all!

Just like any auction really!

Edited by Paulus

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