Bidding Strategy in 2020

So the ancient coin auction market has been very robust over the last 6 months. It seems that unless specific coins are in relatively poor condition or are very common that bids are going to be materially above the auction estimate. What are people’s perspectives on what constitutes a competitive bid these days? I would argue that these days, 10% above estimate is the real starting point in order to be competitive. 50-100% above estimate seems to be a lot more common these days as well.

 

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My strategy is to bid on things I can afford.

 

My view is the estimate is rubbish so basing anything off that is tough.

My bidding strategy is to avoid paying auction fees. Those fees can run double the rate of decimation! So for every 10 you buy that's 2 you could have gotten with fees. That math scales for quality too!

 

In my experience estimates are essentially meaningless, I just use acsearch to determine a price and bid accordingly, covid or otherwise. And it feels like whatever Covid craze there was is starting to dissipate, if the trend from the recent CNG holds through October anyways. Not to mention for some auctions the estimates have never meant anything anyways.

 

Kind of surprised, but Covid has resulted in more folks being cooped up. There also seems to be more interest in alternative investments as well as newer collectors who are driving the higher prices.

 

A good magician never reveals their tricks!

My latest coin I bought with my strategy. Ain’t she a beaut!!



Type: Tetradrachm
Date: c. 264-263 BCE.
Workshop/City Name: Seleucia on the Tigris
Metal: silver
Diameter: 30 mm
Corner Axis: 7 a.m.
Weight: 16.84 g.
Degree of rarity: R1

 

I’ve only won one coin bidding less than double the estimate and even then it was 27% higher.

If you’re going for high VF to EF/Mint/FDC Roman Imperial denarii, expect to pay 2-4x the estimate for anything under $1,000 (I don’t have the budget for coins above that amount so can’t speak to them with as much confidence).

 

All over the board. I found it interesting how CNG in their latest "printed" auction had quite a few passed coins. The common denominator seems to be good collector condition. If not in a state normal collectors want, the money is not there. However, on the other end of the spectrum, high end stuff, even if common, will bring strong prices. I hope the US coin collecting mentality is not seeping into our hobby.

If I start seeing ancient dealers touting "condition rarity" I will barf.

 

This could also be a function of corona as incomes of those looking at the entry level may be impacted more than the folks with deep pockets.

 

This is also my feeling on the subject. Know the values and you know what to bid. Ignore the estimates.

As for the current market up-swing, I think it is the result of collectors being home and more free to participate in the auctions. Perhaps there is also excess cash from saved commuting costs, and the need for "retail therapy" from COVID boredom. I don't think it is the result of changed investment strategies, because typical, mid-level auction purchases are, frankly, pretty poor investments. Unless you are focusing on value buys, like a dealer would do, you need to hold mid-level coins for about 20 years on average to hope for a full recovery of an all-in (including buyers fee) auction price.

 

My strategy is the buy from dealers and say to hell with the auctions. I have been driven to the limit in Heritage auctions so many times that I have given up. I did get involved with a couple "bid or buy" sales. I bought a few things, which may have been an error and then picked up a few pieces for the minimum at the end.

Auctions drive me crazy. I hate them. I can count on one hand the nunber of times that I got a bargain. Usually I end up paying more than retail is supposed to be if I am successuful. The situation seems to have gotten worse with the shut downs due to the pandemic.

RANT!

Edited to add - Another thing that drives me nuts in auctions is the buyers' fee. The dealers tell you, "Oh it makes no difference. All you do is set what you want to pay and use a calculator to adjust your bid."

It seems that a lot of collectors bid and ignore the fact that they are going to get hit with another 12 to 25 percent. Yep, for political items, the buyers' fee is 25% at Heritage. I've told them repeatedly that everyone else in the political items auctions business charges less, but it doesn't matter because the collectors pay just the same.

 

Buyers' fees only matter when you lose a lot to someone who did not realize they had to pay 25% more and bid more than they would have. I get tired of hearing about buyers' fees. If there is a 100% Buyers' fee, bid half as much. Consignors might have more to complain about since they get no more of the total from the higher fees. If everyone understood the way the system worked, there would be no need for the practice.

 

Sorry, but I get tired of people telling me that buyers' fees don't matter, and that the biders don't end up paying any more. If you are a collector and you have been have been chasing something for a long time, and it comes up in auction, you are going to be more desperate to buy it. The buyers' fees are less important to a collector.

A dealer can play the calculator breakback the bid game because they are willing to buy anything in the auction that goes for a total price that lets them make their required return. A collector usually has a much narrower focus that the whole darn auction. Having been both both a dealer and collector, I can tell you that's true. Some things can slip through the cracks in an auction, but if you are collector, you odds of getting the bargain are lower.

As for the consigners, if they are big enough, they are going to get more than the hammer prices. That's part of the negociation with the auction house.

 

This is not 100% true. As has been confirmed in another thread on this site, there are cases in which the consignor receives part of the buyer's fee -- extraordinary, to be sure, but it happens occasionally based on the coin and/or collection.

This argument has been presented fairly frequently here on CoinTalk in various threads, and I'm still uncertain regarding the thrust of this argument.

(a) Are you looking for a "bargain?" If so, it's possible but unlikely you'll find one at a well publicized auction.

(b) Does the auction have a coin you've been "chasing" for some time that you can't find from a retail dealer? If so, you'll probably be bidding against a dealer(s) who wants the coin for his/her inventory, and if you don't want to pay a dealer retail price for that coin, you'll have to bid more than a wholesale price (including buyer's fee) that's been calculated to allow a dealer to make a reasonable profit on that coin. You might not pay the equivalent of full retail but you'll certainly end up paying more than wholesale.

(c) Are you bidding against another collector with the same "narrow focus" as you? Is this a coin he/she has been chasing for a while? If so, neither of you will end up paying the equivalent of a dealer's wholesale cost; the more desperate collector will probably end up paying the most.

I'm not sure what you expect from an ancient coin auction, other than that it should be fair and adhere to the auction's published terms and conditions.

 

There are a certain number of collectors who think that they are "buying at market prices" when they go nuts in an auction. They aren't. They are in a rarified little world where a comparatively small number of people with a lot money keep pushing prices higher and higher. They think that they are “insolated” from making a bad buy because someone else is bidding against them. WRONG!

Here is a recent example. This button commemorated or made fun of ** the first time a President of the United States invited an African-American to dine at the Whitehouse. In circa 1902, Theodore Roosvelt invited Booker T. Washington to dine with him. I bought this button at a political show for $3,520 which was really strong money. Somebody paid $5,250 for the same button at a recent Heritage auction. This is only one example. The hammer price was more than I paid.



** I'll explain tomorrow if someone is interested.

I don't know about the other major auction houses, because I've stopped bidding, but things at Heritage are really tough for collectors these days. I guess you might might argue that if everything in the world were consigned to Heritage, everything would sell for those prices. It would be an interesting experiment.

 

To be able to win 1 out of 5 VF or GVF non-rare greek coins I bid for without having to go over 2 times the CNG estimate. Instead I have Clio cliooing me on everything, the Chilean clioing Clio and everybody if his advisor discovers a provenance and there is even a third person clioing everybody on electrum coins. I just collect animals so this is far from being a narrow focus.

 

I am still rather new to the AH house game but have been basing my bidding on what I can afford, What I really want, and estimates from other sales. I try to set a limit for myself so that I do not go over board bidding.

 

I don't know if my bidding strategy this year differs from previous years. Basically, if I find a coin that I like I, and it enhances the collection, I will place a bid - low if it is not high priority, higher if it is more desirable. Generally I will not bid over estimate by more than 25% - 50%, depending on the estimate, which can be really low, which I think is a ploy to encourage bidding.

I try to avoid "blow out" bidding, but, as a mere mortal, sometimes I get drawn in, especially if the coin is really rare and is in my areas of interest.

There are good buys out there, especially with coins with no bids and are placed as post auction fixed priced coins. It takes research and time though, but the rewards can be really nice.

 

Don't forget that some people got so rich as result of covid. Jeff Bezos of Amazon is one of such guys.

 

Personally I won really go much above 20%. That way if my tastes change over time I am not taking an enormous haircut to offload. I get that 20% means I would mostly lose out, but I don’t believe in giving away all value at auction and buying into a major loss.