Coin market in the last decade - how has it changed?

LOL. Yes, well, as I said before people have gone bankrupt by never 'overpaying'

People overpay all the time. I stumbled on this just now. I am pretty sure the person who bought this coin in January and then sold it in May, felt like they overpaid (see upper left and lower right quadrant of this photo.



You can explain to them that they really didn't overpay in theory, but in practice.......they overpaid. Why? I explained it in a previous post.

Peace.

 

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Well, perhaps I do see the point. I guess I am looking at it from the point of view of an experienced collector who knows better. In retrospect I paid too much for the first coin I ever bought (as I was ignorant, but it never happened after that).

But in your example above, thats a whole different ballgame. Rich people who spent those amounts of money on coins likely could care less how much they paid nor what it later sold for.

And then again it is extremely important to point out that a published 'price realized' does not always equate to an exchange of goods. People would likely be surprised to know how much material has reserves.

 

Sometimes what happens (at least as my dealer explains) is that buyers of coins that supposedly hammered for a certain price at an auction never pay for the coin, and the coin is relisted at another auction later. In cases like this, the auction house isn't going to admit it was stiffed. So it's possible that the coin that hammered for $70K in January was never paid for, and then later listed in the CNG auction at which it sold for $45K.

Of course, this may not be the case -- the January buyer may have just gambled and overpaid, but if this were the case, I would have expected to see the coin's estimate in the May auction to be a little higher than $50K.

 

LOL I know rich people (they let me mingle with them....) they may be able to bear the loss, but that does not mean they don't feel like they overpaid. Especially in this example...when they take a 66% haircut in 4 months. But then, I know smart, rich people. A competitive bunch. Maybe dumb, old money doesn't care, but in general, rich people care about their money.

Don't be deliberately naive, just to support your point. You are smarter than that.

And yes, I know about reserves, but the archives are littered with other examples at numerous price points.

A rose is a rose.

 

Very possible. I can point to specific cases on both sides. But I won't.

 

Living in London means I can collect in person from a few auctioneers and recently I was thanked for paying so promptly. Auctioneer went on to share quite a few horror stories about non-paying clients. Al-Thani was famous example in coinland. Elsewhere, the world record set by Van Gogh's 'Irises' was disputed because buyer didn't pay. It was later sold privately to the Getty. And the biggest buyer of top-end French furniture, Riahi, fell way behind in payments. I think the repossessed stuff sold in a named sale by Christie's was a world record.

 

I dont think I was being so. I know (and have known) rich folks just like I said, and two that I can remember specifically told me they didn't care what they paid or what anything later sold for. Maybe I should have qualified my statement by saying 'some'. My apologies.

I was going to use him as an example as to how auction results can be skewed. At least one auction house that I recall re-listed many of the coins he 'bought' at the end but never paid for (and this was mentioned in the later auction catalog). Even now some smaller houses will relist coins with a note referencing the previous auction but 'not paid for'.

The point I was trying to make is that raw data gives us an uninformed snapshot, though I would suspect that if one were to average out a type you would get very close to the approximation of values and pricing trends. The retail market is far more difficult determine....

 

Related to the topic at hand and touching on issues raised in several recent threads, the internet has made researching sales and prices pretty easy.

This really makes me wonder about dealers who buy coins at the same auctions collectors attend, and then immediately offering them for sale. Does it really work often enough to make it worthwhile? Do those sellers count on buyers who don't know or care that they can easily check for prior sales and prices? I can understand dealers scouting for relative bargains for quick flips, but in many instances the dealer acquisition price doesn't appear to leave much room for profit.

Here's an example: bunches of coins from yesterday's CNG auction already listed for sale by Palmyra (Vcoins store). Below is a screen capture of the first handful of "new listings" (click to enlarge). These were all in yesterday's CNG auction. In red, "E" was CNG's estimate and "H" is the hammer. I'd say the dealer is crazy but two of them already sold-- I hope not for the amount stated. Surely they expect and accept much lower offers? Are there really that many collectors who are so averse to participating in auctions that they willingly pay such a high premium to buy the coin from a dealer the next day?




In fairness, I have not gone through each of these coins to see if yesterday's acquisition price was a an exceptionally good deal. At a glance though, I didn't find the hammer prices to be "wholesale".

It really bothers me that two of these have already sold, less than 24 hours after someone could have acquired them for half as much . Maybe I'm making incorrect assumptions about the game being played here. Hopefully one of CoinTalk's dealer members can weigh in on this.

Also, in case you're thinking, "yeah, but don't forget about the buyer's premium"-- I'm under the impression that dealers get a discount on that when buying from many auction houses.

 

That's what we call Capitalistic Economy

 

@TIF most of the dealer are relying on novice buyers or collectors inability to follow every auction. I guess that's how they do business and survive. Even if they don't get their asking price, they would normally never accept less than 85-90% of listed price. Not a bad profit.

 

Yes, you assume the best in people. Lassiez-faire has no conscience.

 

I think that some auction houses (not all) give dealers a percentage of the buyer's premium as a dealer's commission, since if the dealer is bidding for a client, that dealer is bringing additional business to the auction. But I don't think this discount/commission is very high (maybe a few percent?) so it probably doesn't affect the dealer's bidding very much.

Your illustration above is really excellent, by the way, and it's helpful for experienced collectors to know that they may find the best prices by being diligent about pursuing coins at auctions.

But I'm going to swim against the tide here, and argue that the asking prices listed in your examples don't really strike me as being outrageous. Buyers can always make a lower offer than the asking price, and I suspect that the dealer you cited expects offers to come in at 10% - 25% below the asking price.

Further, markups of 50% - 100% (calculated based on purchase prices) are common in every industry, even those that sell common commodities; markups in apparel are much, much higher. So I personally don't find the asking prices to be "greedy," although I'm comfortable negotiating prices and that comfort may skew my thinking on this topic.

The bottom line is: never hesitate to negotiate with a dealer.

 

Does anyone know what discount they get? When buyer's premium was first introduced in the 1960s the trade was up in arms and even took the auctioneers to court. Totally irrational, as they dealers just need to adjust their bids down to allow for the premium. But in response the dealers were given a discount on the premium. That's mostly gone in the high-end art world; it just doesn't make sense for them to give discounts in an open auction.

I agree it's odd that they're able to flip so quickly at a good profit. But one of the roles of the trade is sucking up supply when it comes onto the market and selling over time, intermediating between sellers who want cash now and buyers who want time to decide. Doesn't explain immediate sales, of course....

 

I noticed the same as you, seems they posted the listings before they were even in hand? It is possible an offer was made lower than the asking price, in which case we would not see that. I see many owls which are hot right now, so it may be worth while to do it for them. I've been at shows where vcoins dealers asked if what I was selling had been in an auction and how long ago. Seems they were concerned about listing something that came from a recent auction. It really comes down to buying power, they buy as much as them deem resellable. Eventually it will sell.

 

Well, the answer is actually complex, and I will only comment a bit (i'm supposed to be working!). Morris may be a good example to use in your post but there are many factors involved.

In one case it is cultural. Buy something for $10, offer it for $10,000. If one haggles (as they expect) an actual price may be agreed upon somewhere in between. But for others haggling is not part of their culture and they may just simply pay the asking price. Se be it. They agreed to the price, so, I suppose that works for both parties.

Estimates and starting prices can and are all over the map. Many European auctions open the bidding at full retail and well above. It seems to work for many of them. Others, they start the auction well below retail.

Another part is as you pointed out, there are coins which are for any reason whatsoever just ignored. In todays market a dealer (well, usually US dealers) must offer a coin at an absurdly low price just to attract bidding, so low any dealer would buy (and of course they do). But if the stars align, things are just right, lots will go at half or less than honestly they are worth. I am sure most collectors have coins they know they got very cheaply (summer months are the best, and dealers know this). These profit bearing lots are less than 5% of all offered (some would say far less), so it takes a lot of experience, knowledge and pure luck to get them

Often times group lots are where dealers make their money. Sure, one collector may wish to own one example of "X", and it appears in a large lot in auction. But they may not wish to spend $5,000 to get ALL of them (and they only want one). Perhaps the buyer gets the lot at say $50 per coin, but offer them at $100 retail? Is that not kosher? There are money fees, transfer, shipping, buyers premium (and no, dealers do NOT get any discount on any fee at all, I can tell you from experience. But consignors can, and that is another discussion entirely).

Also, group lots can be simply a gamble. Often what you get is just not what you thought you would from the photo (much more common now that major auction houses say 'lot of 100' but only illustrate 5 of them). I bought many groups last years in which I lost 75% on. Sure, two or three sold for 5 times what I paid, the rest just a few dollars. Again, it is a gamble. And one that is not for everyone.

Bottom line, its not easy being a dealer. Never has been, and is much harder now than 30 years ago.

So, I love the discussion. Keep it coming and I will comment from both a dealers and collectors perspective.

 

Oh. I forgot to mention that dealers take advantage of current hoards. I think we can all figure that statement out. I will say this, if you want any electrum fractionals you simply must buy them now! No, I dont say that because I own any of them. I dont like them and dont buy them. If I get one it will be randomly. But if you want to take advantage of low prices, buy them now.

Just a dealers opinion (and as a collector as well).

 

I have no problem with a 100% markup -- that's common practice. The baffling thing is that a collector could have acquired the coin for a much lower price at auction-- yesterday.

Also, somewhat arguing against myself ( ), CNG's estimates are often low, and usually I feel pretty good about any CNG coin I can acquire for less than double the estimate. That's a generalization, of course-- I do check comps.

...

It is possible that the two "sold" coins were acquired by the dealer on behalf of a client, merely shown in the Vcoins store to bolster the appearance of sales at those prices.
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@Ken Dorney, thanks for your input.

I do want to make clear that I am not against anyone making a profit where they can. My puzzlement in this case is more over the fact that collectors are willing to pay such a premium for convenience! Although-- we have no way of knowing what the selling price (by Palmyra) was.

 

Another dealer does something similar as well and I think all collectors should be aware of it. When auctioneers like ArtCoinsRoma and Artemide Aste have unsold lots, they generally put them up on their websites available for purchase at the opening price. London Ancient Coins will then list these from several different auction houses, in their Vcoins store. Their markup is usually 50-100% of what you can still get them from the auction house for for essentially being a middle man with zero actual investment. If you see a coin for sale by LAC, look around and figure out if you can get the exact same coin cheaper elsewhere first.

FWIW, I discovered this because they listed a rare RR bronze that I needed and while the price wasn't great it was acceptable for me. I sent them an offer then later realized I could still buy the coin from the auction house. I quickly locked in the coin from the auctioneer then sent LAC a follow up email explaining I was no longer interested.

Normally I'd consider an offer to be a binding agreement to purchase if the dealer accepts but I see rewarding this sort of behavior as worse than going back on an offer and think all collectors should be aware of it.

 

Very interesting! Thanks for the heads-up.

 

I think you're on the right track with that last thought.

Let's take the "sold" Ionia Ephesos tetradrachm as an example:



- Hammered for $550 plus buyer's fee and shipping, so the dealer paid maybe $650 for it all-in.
- LISTED for $1295 but maybe that's just the dealer's personal estimate of the value of the coin.
- SOLD for what? $750? $950?

What if the dealer was bidding for a client and he just wanted to impress visitors to his website with a high-quality coin of this type? Of course he'll display it at a high price. Maybe the dealer made a 10% bidding fee and that's all.

I think you're answering your own questions here... maybe the next step is to research more of these prices on ACSEARCH and compare the hammered prices and the dealer's list prices to those found.