Left Behind, or A Tale of Two Markets?

[VickySilver]

OK, I guess I've been left behind like all of the other old fogeys, but I was absolutely shocked yet again by prices fetched in the recent Heritage Long Beach Sale:

Examples (all in USD) -

1853 6d proof65 1938

but, wait.......1839 6d proof66 2350!

1845 Crown MS62 7050!

Worse to come......

1887 Jub 2/6 proof66 4112!

1887 Dbl florin proof66 4700!!

1887 Jub 1/2 sov proof64 Ultra cameo 4406

1893 Currency crown Regnal LVI MS66 2232

same, in MS65 1468

1893 crown, ordinary proof63 4993!!

1902 crown matte proof62 5287

1937 5 pounds proof66 16,450

same, in proof65 9,450

same, in proof64 8812

I am absolutely astonished at these prices, yet again. I actually have bought from Heritage in years past and got an 1893 Regnal LVII at 600 USD net, and an 1887 1/2 sov in proof63 Ultra Cameo at 545 USD (only 3-4 years ago)...

What say readers about the implications of these sales? I just can't take them 100% seriously, but I believe they are. At the least, I would imagine that these type of sales will create something of a vacuum on the market.....

[jaggy]

I bid on a gold 1887 pattern sixpence about a month ago at the Heritage Signature Auction. I bid $5,000 which was around the auctioneers estimates. It finally went for $15,000 ($17,625 with BP).

Heritage can be funny. Sometimes you can pick up nice coins at fair prices even sometimes a bargain. And, yet, some coins just go through the roof. I do buy from Heritage but I am not willing to let 'auction fever' get the better of good judgement.

[Michael-Roo]

All this is way beyond what I'd be likely to spend on a hobby!

Scott. How about your tuppence worth then eh?…..

[Nick]

$5287 for a 1902 crown PF62 can't be right - can it?

[VickySilver]

Ooops, the 5 sov.

[Nick]

Ooops, the 5 sov.

Ah ok, that's a little more credible. Otherwise, I have a couple of very nice 1902 proof crowns that anybody can have for the bargain price of just $4k each.

[Peckris]

Ooops, the 5 sov.

Ah ok, that's a little more credible. Otherwise, I have a couple of very nice 1902 proof crowns that anybody can have for the bargain price of just $4k each.

I'll have one!

Oh, wait...

[jaggy]

OK, I guess I've been left behind like all of the other old fogeys, but I was absolutely shocked yet again by prices fetched in the recent Heritage Long Beach Sale:

Examples (all in USD) -

1853 6d proof65 1938

but, wait.......1839 6d proof66 2350!

I bought an 1839 6d proof at London Coins 18 months ago and slabbed NGC PF 65 for £538 ($887 approx including BP).

Edited September 7, 2014 by jaggy

[coinkat]

Seems that Victorian coinage is as popular as ever.

[azda]

I never bother with Heritage due to this very fact, overpriced due to grade given and would most probably not Hit the same grade in UK terms, so no thanks, i have to interest in over inflated coins

[Nicholas]

I do. When selling.

[Paulus]

Given the results they get, surely it's an option when selling highish grade slabbed stuff?

[VickySilver]

That is really one of my points - this may be a draw on the market pulling coins over into "their clutches". Quite frankly I think it likely crazy not to if you have,say, a higher grade 1893 proof 5 pounds to NOT consign to them, but better have the slab grade. Like it or not, this does create a market force; I think it will gradually squeeze most of us out of many of these coins. Not that I collect big gold, but just saying....

[Nicholas]

I put it mostly down to market theory. The US is the biggest market and therefore "truest" market. DNW, London Coins, St James, Baldwins and even Spink are limited markets (sorry guys). I'd very much like to know the number of participants that attend each auction, but I have a strong suspicion that Heritage is the biggest for coins in the world by far. I know - painful comment. If anyone knows these figures I'll start collating and comparing ...

The other part is about slabbing (that has commoditised the coin business in the US to broaden the market) and so grade number must be high to increase rarity. Hence modern machine made coins get better prices. The US market uses the slabbing population reports to rate rarity. Hmm. Well firstly there are 2 companies with their own population of coins and then not all coins have been stabbed yet. So rarity will decrease as more coins are slabbed. Oops. (Then there's those people who crack them out..not me of course..)

Edited September 8, 2014 by Nicholas

[jaggy]

I put it mostly down to market theory. The US is the biggest market and therefore "truest" market. DNW, London Coins, St James, Baldwins and even Spink are limited markets (sorry guys). I'd very much like to know the number of participants that attend each auction, but I have a strong suspicion that Heritage is the biggest for coins in the world by far. I know - painful comment. If anyone knows these figures I'll start collating and comparing ...

The other part is about slabbing (that has commoditised the coin business in the US to broaden the market) and so grade number must be high to increase rarity. Hence modern machine made coins get better prices. The US market uses the slabbing population reports to rate rarity. Hmm. Well firstly there are 2 companies with their own population of coins and then not all coins have been stabbed yet. So rarity will decrease as more coins are slabbed. Oops. (Then there's those people who crack them out..not me of course..)

I think you make a very interesting point. As someone who does bid fairly regularly at Heritage, the grade given by the TPG usually makes a huge difference to the price a coin fetches. The idea of the grade becoming a proxy for rarity had not occurred to me. That may work very well for US coins where a large proportion - or at least the more desirable ones - are probably slabbed. But I think the proxy breaks down for British coins where the majority are probably not slabbed. So US buyers of slabbed British coins are applying a faulty standard which is causing them to overpay for coins. If greater numbers of British coins start to be slabbed and graded by the likes of NGC then we could possibly see prices stagnate or even fall as a result.

[Rob]

I think you make a very interesting point. As someone who does bid fairly regularly at Heritage, the grade given by the TPG usually makes a huge difference to the price a coin fetches. The idea of the grade becoming a proxy for rarity had not occurred to me. That may work very well for US coins where a large proportion - or at least the more desirable ones - are probably slabbed. But I think the proxy breaks down for British coins where the majority are probably not slabbed. So US buyers of slabbed British coins are applying a faulty standard which is causing them to overpay for coins. If greater numbers of British coins start to be slabbed and graded by the likes of NGC then we could possibly see prices stagnate or even fall as a result.

The latter unquestionably happens in the US for British coins. You only have to think back a few years when someone paid $600 for a 1901 penny simply on the basis of 'finest known' - Spink price at the time was either £15 or £30 in UNC. Other silly prices included $400 for a WW1 shilling as I recall.

[coinkat]

The aforementioned observations as to the 1901 1d that was graded MS66 Red is exactly why I have used the greater fool theory in describing market activity. That coin, even in 66 red, will not likely maintain that value. There is the potential that a significant quantity still exist and more will be graded. While an argument can be made that it is a condition rarity, the valuation is still off even for those that are obsessed with having to have the finest. There are a few similar factors at play: 1. Those collectors that have to have the finest; 2. The surviving population of the coin in various uncirculated grades; and 3. Determining the valuation of a GEM that is among the finest known in contrast to an average uncirculated example.

These factors have been considered for decades in the US as to US coins. I doubt that the same analysis and thought has been applied to the British, French or German coins. And for certain British coins, we are going to develop a better understanding and appreciation for both rarity and condition rarity.

[Gary1000]

The aforementioned observations as to the 1901 1d that was graded MS66 Red is exactly why I have used the greater fool theory in describing market activity. That coin, even in 66 red, will not likely maintain that value. There is the potential that a significant quantity still exist and more will be graded. While an argument can be made that it is a condition rarity, the valuation is still off even for those that are obsessed with having to have the finest. There are a few similar factors at play: 1. Those collectors that have to have the finest; 2. The surviving population of the coin in various uncirculated grades; and 3. Determining the valuation of a GEM that is among the finest known in contrast to an average uncirculated example.

These factors have been considered for decades in the US as to US coins. I doubt that the same analysis and thought has been applied to the British, French or German coins. And for certain British coins, we are going to develop a better understanding and appreciation for both rarity and condition rarity.

A big problem I see in this is what happens to the value of your finest known when a better one comes along, as it surely will.

[azda]

I agree that Heritage might be the best place to sell NGC slabbed English coins, but i'll never buy from them, i could'nt afford to unless i had a Lotto win.

There is sufficent material out there for normal collectors still, Americans are only interested in the top end grade coin in order to slab and sell at huge profits, let them run with it i say, i'll stick to the Coins i want too buy (unslabbed)

Edited September 8, 2014 by azda

[Coppers]

I wonder if this mania in the US for encapsulated "condition rarities" may make for some bargains for rare British coins that are not investment and/or registry grade.

[TomGoodheart]

I wonder if this mania in the US for encapsulated "condition rarities" may make for some bargains for rare British coins that are not investment and/or registry grade.

It already has. I bought this raw from Stacks Bowers 18 months ago:

Negro's head having been used as a mark for only about 10 months the coins are scarce in any condition, so £400+ would have not been unreasonable IMHO. I got it for $330.

I'm sure others have similar stories.

Conversely, a year ago I bid over £500 on a coin here in the UK, expecting to get it for a bit under my bid. A regular Charles I shilling but in rather better than average condition. It went for £1000 not including commission.

It's not just in the US that conditional rarity has become most desirable alas.

.

[Rob]

I wonder if this mania in the US for encapsulated "condition rarities" may make for some bargains for rare British coins that are not investment and/or registry grade.

They have already done so.

My 1839/41 proof halfpenny (labelled as a straight 39) is still the only one that has appeared to date (though others must be likely). It was only graded 63 so not worth having. It also had an inverted die axis (not noted). The inverted die axis example in London Coins yesterday which was a straight 39 made 700, 300 or more than the upright axis example.

A William I PAXS penny of Derby bought for less than a third of market value for a coin of that mint because it was only slabbed VF50. Furthermore, the fact that there were only 3 examples of this reading in the Beaworth hoard out of a total of 6500 coins and that this hoard accounts for probably 95% of all examples of the type means it is a good proxy for absolute rarity.

Shedloads of hammereds are rejected by the TPGs because they have peck marks, scratches etc. Helpfully, they always give details description and the reason for rejection rather than attributing the coin on the label. Fill yer boots.

I sold a proof G3 halfpenny to a collector on the PCGS forum because he wanted one for his registry set. It came back MS62 despite previously being a proof 64 and Peck devoting a full page to the description. Bad day at the office for someone and a wasted submission fee for the collector. On the plus side, if he hasn't submitted it again for rectification then there is a nice proof halfpenny available sometime with a sub-$200 ballpark price tag.

[VickySilver]

Yes, I think this phenomenon just a market reality that can not really be ignored, and we have to scurry about for lovely bits with just a bit more energy and diligence. I have a few odds that I have been thinking about selling and am back and forth about the venue.

Sometimes, as has been pointed out, they don't quite get the attribution right and/or a significant rarity slips through....

[coinkat]

In terms of buying, it never hurts to look at auction catalogs mainly because it helps establish a point of reference how often certain coins are offered and their condition. As an example, seems that a quality Gothic Crown or even a quality Cromwell Crown will surface with greater frequency than a quality George I Crown. Then, think about a specific date within a series- how often do you see a 1697 Crown? Does anyone here monitor the activity of coins of interest?

[TomGoodheart]

Does anyone here monitor the activity of coins of interest?

I certainly maintain records of coins by reference number, price, where and when sold.

I have 1510 so far. Just Charles I Tower mint shillings ... and that doesn't include all of those in auction catalogues and dealers' sale lists.

It's a full time job. But unfortunately an unpaid one.

.

Edited September 8, 2014 by TomGoodheart