Slaney 2

[Coinery 1,157]

Perhaps Nicholas has in part answered the question?

There must be a price that an overseas buyer would see as reasonable for a trusted assessment of a lot/lots that they are interested in? Am I close?

[Nicholas 51]

From my experience you're in much safer hands with your buyer present at the auction and even better if you are on the phone to them during your lots. It's better from so many angles from assessing the coin in person to estimating its value to reading the room and bidding in person...

Online you take more risks.

[Coinery 1,157]

From my experience you're in much safer hands with your buyer present at the auction and even better if you are on the phone to them during your lots. It's better from so many angles from assessing the coin in person to estimating its value to reading the room and bidding in person...

Online you take more risks.

Thanks, Nick, Totally agree!

Do you think the fee is one of an unconfirmed gratitude, or an industry percentage standard?

[Coinery 1,157]

And once again, this is a serious enquiry, as I am trying to compare costs/percentages against the above conversation, online bidding, or personal attendance on 2.5k+ coins?

[Prax 80]

Could I ask what are the mechanics of buying for clients? What is it that prevents them bidding/buying for themselves? They are obviously very serious collectors? Is it simply about having so much money that they don't even need to attend?

I'm genuinely curious?

Stu, Having worked in the City, I have been studying the City's involvement on coins for about 7 years. These are my observations

i) There is big group of well to do investors that has no interest in coins but sees coins/antiques as a means to achieve financial diversification.

ii) Most of these guys don't care about coins all they care about is multiplying their investment. They don't know much about coins and certainly won’t be able to tell a fake 1905 halfcrown from a real one or a polished bronze penny from an uncirculated coin.

iii) These guys either use brokers to help them invest or buy shares in funds operated by specialist Numismatic Investment Firms. You won’t believe how many of these exist today and believe me there are many Investment Firms that deal purely in coins. The reason why we see dealers buying on behalf of their clients is obvious when you consider these things (1) to pick genuine coins and 2)to ensure correct grade attribution).

iv) One group depends on brokers to acquire choice pieces for them. This is also why NGC/PCGS graded ocins are important for these guys because then they can dispense with dealers and make a significant saving. Then there are others who depend on firms like LCA that offer a CGS portfolio to its clients with a guaranteed return on funds based on an predefined entry level and a tie-in period (http://www.londoncoins.co.uk/?page=InvestWealthCreation).

v) The 'Numismatic Investment Firms' have specialist brokers/dealers who tie-up with big auction houses and source coins for their masters. They operate a fixed-list/rota technique.

vi) The technique is simple - they have a list of coins that are either unique or extremely in demand (such as your 1934 crown). Their list (GB200) contains 200 such coins. When a coin from that list becomes available they collude to either notch up the price or acquire the lot below the index valuation. Regardless of how much the numis references value these GB200 coins or how much collectors feel they are worth the punters have their own valuation.

vii) Once they acquire a coin from the GB200 list the shareholders see an increase on their investment based on either how much below their index valuation the coin was acquired for or in case of a sale they calculate the profit to be the value above the index valuation that they sold the coin for. These profits are shared across the pool as return on stakeholders' investment.

viii) One observation I have made is that these investors never go for circulated coins that way it is currently safe for collectors who go after variants.

There are other indices such as the GB350 and GB500 that are being offered by the likes of Citicorp. Soon collectors will start noticing that certain coins are always impossible to acquire. This is why I have stopped selling coins and have started swapping them with other 'Penny Boys'. Somehow I have not come across a 'Penny Girl' so far. Back in the good old ebay days (... and before the days of the snipers) there used to be a fiona.freeserve who used to beat me on pennies consistently. However she used to buy silver and other junk too so maybe there are some genuine Bronze Gals too

Edited May 17, 2015 by Prax

[Coinery 1,157]

Could I ask what are the mechanics of buying for clients? What is it that prevents them bidding/buying for themselves? They are obviously very serious collectors? Is it simply about having so much money that they don't even need to attend?

I'm genuinely curious?

Stu, Having worked in the City, I have been studying the City's involvement on coins for about 7 years. These are my observations

i) There is big group of well to do investors that has no interest in coins but sees coins/antiques as a means to achieve financial diversification.

ii) Most of these guys don't care about coins all they care about is multiplying their investment. They don't know much about coins and certainly won’t be able to tell a fake 1905 halfcrown from a real one or a polished bronze penny from an uncirculated coin.

iii) These guys either use brokers to help them invest or buy shares in funds operated by specialist Numismatic Investment Firms. You won’t believe how many of these exist today and believe me there are many Investment Firms that deal purely in coins. The reason why we see dealers buying on behalf of their clients is obvious when you consider these things (1) to pick genuine coins and 2)to ensure correct grade attribution).

iv) One group depends on brokers to acquire choice pieces for them. This is also why NGC/PCGS graded ocins are important for these guys because then they can dispense with dealers and make a significant saving. Then there are others who depend on firms like LCA that offer a CGS portfolio to its clients with a guaranteed return on funds based on an predefined entry level and a tie-in period (http://www.londoncoins.co.uk/?page=InvestWealthCreation).

v) The 'Numismatic Investment Firms' have specialist brokers/dealers who tie-up with big auction houses and source coins for their masters. They operate a fixed-list/rota technique.

vi) The technique is simple - they have a list of coins that are either unique or extremely in demand (such as your 1934 crown). Their list (GB200) contains 200 such coins. When a coin from that list becomes available they collude to either notch up the price or acquire the lot below the index valuation. Regardless of how much the numis references value these GB200 coins or how much collectors feel they are worth the punters have their own valuation.

vii) Once they acquire a coin from the GB200 list the shareholders see an increase on their investment based on either how much below their index valuation the coin was acquired for or in case of a sale they calculate the profit to be the value above the index valuation that they sold the coin for. These profits are shared across the pool as return on stakeholders' investment.

viii) One observation I have made is that these investors never go for circulated coins that way it is currently safe for collectors who go after variants.

There are other indices such as the GB350 and GB500 that are being offered by the likes of Citicorp. Soon collectors will start noticing that certain coins are always impossible to acquire. This is why I have stopped selling coins and have started swapping them with other 'Penny Boys'. Somehow I have not come across a 'Penny Girl' so far. Back in the good old ebay days (... and before the days of the snipers) there used to be a fiona.freeserve who used to beat me on pennies consistently. However she used to buy silver and other junk too so maybe there are some genuine Bronze Gals too

Goodness me, many thanks for that insight. I wasn't expecting anything like that length of response.

Certainly something to chew over!

[azda 979]

Maybe a few of us here should club together and do something similar?

[declanwmagee 122]

Christ, what's happened to our little hobby?

[Rob 3,152]

Christ, what's happened to our little hobby?

It's still alive and well, just that a few people with a lot of money and nowhere to use it have muscled in. There has always been more coins available than collectors to absorb them, just the most desirable pieces are increasingly sought after. This is the area where the pressure lies.

[Coppers 58]

Not the first time 'investment firms/funds' have been involved in the hobby....

http://www.independent.co.uk/news/uk/millionaires-coin-sale-unsettles-money-market-a-huge-investment-collection-goes-to-sothebys-tomorrow-its-sale-could-undermine-world-prices-geraldine-norman-reports-1509860.html

[mhcoins 95]

Funnily enough the biggest buyer of the day at the slaney sale was a representative of an consortium. Infact there were two their often bidding against each other. The main one bought most of the expensive coins offered.

[VickySilver 836]

Excellent post Prax! I wonder that these consortiums don't collude - maybe keeping prices down is not in their overall interest though...

[azda 979]

What i don't get is if these coins were already overpriced and as a few here have stated "of average quality" why were they bidding to excess, where do they believe any profit will come from and how long do they expect to hold onto these investment coins before a profit can be made.

Once they've been split from the Slaney collection the provenance of the coin obviously still applies, but would they still be as "desirable" saying they've come from Merrill Lynch for example. I've seen coins at Londoncoins sell 4 years previously come back to be sold there again and have only achieved the same/similar price or less after a few years, surely this would suggest that a collector would'nt be fooled by a previously realised price.

The only other thing i dislike is dealers selling "investment" coins, what if dealers get it wrong? I posted a short story of an Australian dealer selling an "investment" coin for several hundred thousand AU dollars, when the buyer came to cashing in his chips the coin was sold or valued at half of what he paid and successfully sued the dealer for his money back plus what they Said it would be worth, the dealer went bankrupt due to this.

So where can this GB200-350 and 500 lists be found, i think it would make interesting reading

Edited May 17, 2015 by azda

[VickySilver 836]

Perhaps these are coins not on the 200 List?

This bit is interesting and seems to explain why coins such as VF-EF Vicky silver of rarer dates do not perform exceptionally. Uhh, not that I would be interested... LOL

[DaveG38 408]

To be fair a great many of the coins on the so called GB200 list are proofs or patterns and as such are not so interesting to many collectors, even if they could afford them. I don't collect proofs so things like the gold £5 1935, whilst interesting, wouldn't tempt me to buy even if I could afford one. As I see it, it's investors who are going for these coins, not collectors. The real issue is what impact does this have on genuine collectors. Is there a trickle down in terms of prices, or is the rarified atmosphere of these coins completely remote from 'normal' collectors?

[Nicholas 51]

Ok my theory on the top end of town (say 50k plus) Big money can be made buying something listed as EF in a British auction, carry it to the US, slab it at say MS62-65 then give it to one of the big U.S. auction houses... Then watch and voila! Big profit. Oh yeah make sure it's a household name variety coin eg una and the lion or such...that means milled preferably gold. Definitely not hammered silver..remember the U.S. Market very often sells coins at the Million plus mark and some well known non US coins are heading there..

Edited May 17, 2015 by Nicholas

[Rob 3,152]

To be fair a great many of the coins on the so called GB200 list are proofs or patterns and as such are not so interesting to many collectors, even if they could afford them. I don't collect proofs so things like the gold £5 1935, whilst interesting, wouldn't tempt me to buy even if I could afford one. As I see it, it's investors who are going for these coins, not collectors. The real issue is what impact does this have on genuine collectors. Is there a trickle down in terms of prices, or is the rarified atmosphere of these coins completely remote from 'normal' collectors?

I think this is a fair comment up to a point, however, a dedicated denomination collector will in all probability try to get an example or two trophy pieces. Obviously this depends on the criteria set, but a collector of bronze pennies for example may well want an example or two of a proof bun head, or a G5 VIP assuming it is within their financial resources.

For all the reluctance of many to get involved with proofs and patterns, their value tends to hold up well and are probably more suited to the investment approach in any case as their values appreciate slowly but reasonably surely with time. This is another reason why the odd proof or pattern is not a disaster for a mainly currency collection. Currency coins may have a greater following, but their prices fluctuate far more between sales.

[numismatist 2]

google...GB200 Coin Investment list .. comes up with Stanley Gibbons Pdf list

I dont know how to show it here ----

[azda 979]

google...GB200 Coin Investment list .. comes up with Stanley Gibbons Pdf list

I dont know how to show it here ----

https://www.stanleygibbons.com/medias/sys_master/8861642424350/coinindex2012.pdf

[jaggy 528]

This has become a very interesting discussion so thanks to all the participants!

A couple of things I am taking from it.

First, the presence of investors is contributing to a general inflation in the price of coins.

Second, it is pushing the price of certain coins out of the reach of ordinary investors. For example, a pattern 1887 sixpence in gold fetched $17,625 (in BP) at Heritage.

Third, the impact of investors is especially noticeable at certain specific sales (e.g. Newman, Slaney) possibly because of the importance of Provenance and/or because these sales contain more desirable coins at other 'ordinary' sales. Thus, prices at these sales tend to be considerably higher for all coins and not just the most desirable.

Clearly, as someone who has been a collector since 1985, I can see the general inflation in coin prices and especially because I still have all my auction receipts from back then. However, my financial frame of reference has also changed since then so higher prices do not shock me as much as it might some. As a result, the impact of investors has very rarely prevented me from acquiring the coins that I want possibly because my interests generally do not coincide with theirs.

The thing about the investment market is that it come and goes. For example, and with some exceptions, the value of antiques is quite depressed compared to where they were some years ago. Coins could quite easily suffer the same fate as interest in them as a diversification vehicle wanes. I also think that this could be tied to interest rates. With rates so low, investors are looking to other areas which offer a better potential return. We have our retirement dosh with a well known money manager and last year the 'alternatives' piece (not coins) of our portfolio returned 15%. If interest rates were higher, we might not be as motivated to take on the extra risk that 'alternatives' brings.

[jaggy 528]

google...GB200 Coin Investment list .. comes up with Stanley Gibbons Pdf list

I dont know how to show it here ----

https://www.stanleygibbons.com/medias/sys_master/8861642424350/coinindex2012.pdf

Very interesting. Only one coin on there that would interest me.

[Rob 3,152]

I concur.

[Rob 3,152]

google...GB200 Coin Investment list .. comes up with Stanley Gibbons Pdf list

I dont know how to show it here ----

https://www.stanleygibbons.com/medias/sys_master/8861642424350/coinindex2012.pdf

Very interesting. Only one coin on there that would interest me.

It struck me too that many of the pieces there are out and out rarities which have always created a free for all when they come around. Given these buyers are not driven by collecting motives, one can only assume that the strength outside the 'investment' pieces is simply due to increased demand from 'normal' collectors. Bit of a blurred distinction here as many 'normal' collectors don't like parting with their coins for less than they paid. Having said that, a person I am familiar with wanted to buy for investment reasons, but wasn't patient enough and so lost money on the sale. C'est la vie.

[jaggy 528]

Ok my theory on the top end of town (say 50k plus) Big money can be made buying something listed as EF in a British auction, carry it to the US, slab it at say MS62-65 then give it to one of the big U.S. auction houses... Then watch and voila! Big profit. Oh yeah make sure it's a household name variety coin eg una and the lion or such...that means milled preferably gold. Definitely not hammered silver..remember the U.S. Market very often sells coins at the Million plus mark and some well known non US coins are heading there..

Well ... yes and no. You really need an MS65 or better to attract the big money. As a regular bidder at Heritage I have noticed how prices rocket as soon as you get above MS65. Second, you need to get the coin into a 'signature' sale as they tend to attract higher prices than the more normal internet based ones do.

[jaggy 528]

google...GB200 Coin Investment list .. comes up with Stanley Gibbons Pdf list

I dont know how to show it here ----

https://www.stanleygibbons.com/medias/sys_master/8861642424350/coinindex2012.pdf

Very interesting. Only one coin on there that would interest me.

It struck me too that many of the pieces there are out and out rarities which have always created a free for all when they come around. Given these buyers are not driven by collecting motives, one can only assume that the strength outside the 'investment' pieces is simply due to increased demand from 'normal' collectors. Bit of a blurred distinction here as many 'normal' collectors don't like parting with their coins for less than they paid. Having said that, a person I am familiar with wanted to buy for investment reasons, but wasn't patient enough and so lost money on the sale. C'est la vie.

The amount of money that generally flows though investment managers probably dwarves the amount available to ordinary collectors. A lot of these funds probably have a minimum commitment of US$ 250k or more. Where you have a lot of money chasing a finite resource you get inflation.