Congratulations on Paying more than Other

If you won "X" lots out of Z" lots in an internet auction, as my Sicilian grandmother would say, " Mazel tov" . You paid more than every other coin collector on the planet in your field wanted to pay for every item you bought that day. Perhaps your judgment is durable.
. Let's concentrate on the coins and where they fit in a collection.

 

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. I haven't participated in a real auction other than a Harlan Berk BIN sale since the late '90s. It's fixed price or bust for me.

 

In theory (game theory) yes, in reality no

Theory assumes a perfect world where everyone has the exact same information and acts rationally. Neither is true in reality.

 

and "never the twain shall meet"

 

Exactly. Because I have studied my subspecialty area extensively, I recognize certain coins as being rare, though they may seem to be run of the mill to others. Even though I pay more than anyone else participating in the auction, I get a good deal.

This difference in knowledge is the entire basis for cherry-picking. We all have our cherry-picking tales to tell and we feel clever, not foolish. We are acting rationally in light of our knowledge.

The converse is also true. Two bidders with more money than knowledge may become enamored of a coin and have a bidding war over a coin readily available at half the price at full retail elsewhere. They are acting irrationally out of ignorance.

 

I have now decided to focus all my monies on your collecting area, just to mess you up. I am being an irrational rational. Just to do it.

 

The winner is not the person who values the coin more but the person who values the money paid for it less. A dollar or a million, it makes no difference. Those who have excess cash to spend on coins (as opposed to food and life for their family) are hardly on an even field with money launderers and newly made billionaires with no real grasp even on the reality that faced themselves a short time ago. Right now, we are seeing an excessively 'real' reality in Ukraine where the human tragedy far outstrips questions like how many of those victims lost or left to looters their possessions along with their human dignity. This is hardly new in the history of mankind or even of 2022.

 

It doesn't matter if you value a coin you buy more or the money you spend less. Those are the two sides of the same equation. There is only a limited number of ancient coins and demand/supply determine prices in an open market. It will always be easier for wealthy people to buy the things they want.

But that wasn't the question. The question was if you're always "overpaying" if you win an auction. And the answer to this is no.

 

Not in the least. It it were, auctions could be held with bidders offering not dollars but a percentage of their net worth. That is obviously absurb but there is a considerable difference in 'value' to those who fund their existence picking up recyclables at a dump and those who made a billion when their stock went up a cent.

 

Doug made a good point in another thread recently that the price is set by the second underbidder (the bidder beneath the underbidder). This is important to keep in mind and can help avoid overvaluing coins.

The key notion is that the underbidder may have just spent all of their money on the following lot and can no longer afford your coin. Or, perhaps they were briefly struck with auction fever, or they just didn't want to see you buy another coin, and after the hammer, came to their senses and now won't buy it even if you need to sell tomorrow.

Their underbidder, however, stayed out of your battle and represents a "support level" where some calmer head was interested.

Now, all of this changes if one of them buy an example of the type before you sell. The list of buyers anywhere near your price level may quickly evaporate if they are successful in acquiring suitable pieces in the interim.

All this to say: valuing coins is not straightforward and requires understanding why a coin sold where it did and what the market and players thought at the time (even better is an annotated catalog listing the buyer and anyone in the room taking notes/remembering underbidders: some sharp dealers will do this).

A particularly infamous example of this was the Sheikh who didn't remember that he gave a bid on a big coin to two different dealers and ran himself up by many bid increments. Not exactly the smartest move but at least the consignor was happy!

 

I like the Harlan Berk approach. If you see something that you have been looking for, for a while, you have a chance to buy it without the auction hassle. Some people will tell you that auctions are the place to buy coins because the results reflect “the real market.” I can tell you that I’ve seen items sell for higher prices at auction that the price the same item could have been purchased for in a fixed price listing.

I think that auctions yield some of the highest prices of all, especially for “widgets” that can be found on fixed price lists and at shows. True rarities can be another matter. There an auction might be the only venue where you can purchase a truly very scarce or rare item.

Getting back to Harlan Berk, I have purchased quite a number of pieces at the “buy price,” and I have purchased a couple of items at the minimum, after they went thought their two month, or whatever it is cycle. I guess one might say that I overpaid each time. I either paid too much because I bought it outright, or I paid too much because people didn’t want it for the lower price.

At any rate, that’s a lot more fun that getting driven to the moon in an out of control auction. I’ve been the immediate underbidder more times, than I want to remember. Coming in second in an auction leaves me quite unhappy after spending all the time to the do the research and other preparation work to avoid getting caught up in “auction mania.” An yes, I’ve allowed myself to get caught up in the frenzy of an auction and later regretted it.

 

I understand your point, Doug. But we are talking about different values. You talk about personal value and I talk about market value (a cumulation of everyone's personal value). A homeless person probably won't spend any amount on a coin collection since they have a hard time meeting their basic needs (see Maslow's hierarchy of needs). But that does not mean that they do not understand the market value of a coin because of its beauty, rarity, etc.

 

I always liked having a bottom line I'll pay in mind and bidding and winning for a lot less.

Not true

 

I also save a ton of money. If I don't know what's going on in the auction sites, I'm not tempted by anything and I do not bid.

There's more than enough stock on vcoins to keep me happy. Sure, I'm probably missing out on high end coins which don't make it to vcoins. However, those would be out of my price range anyway.

 

I think there are a few good buys to be had in every auction. The question is, does it fit your collection? My collection has become big and broad, instead of impressive and restrained. Has that affected my joy from collecting, and reduced me to a bargain hunter? I don’t know. I don’t think so. I think I have learned a lot that way. But I’m heading for a point where I want to specialize, with the risk of «having» to have some choice objects at auctions. And that looks expensive these days. Even a bit risky.


Constantine I the Great AD 306-337. Cyzicus BI Follis. Bearded(?) head left, and in consular robes holding mappa. It may seem like a minor coin to some, but I find a lot of numismatic pleasure for 18€.

 

It's hard to remember 25 years back, but I think 90% of my auction 'wins' were remainder lots.

Let's say one's budget is $1,000. How's one going to do that in a modern auction? Even pretending it was a pre-covid auction and the bidders were more sane, one would either have to focus on one lot or spread that between several lots.

I never could understand why people would put early bids in on ebay;it just drives up the price. Snipe it at the end. I suppose one can't do that with coin auctions.

 

In my Dombes niche, since I know more than many others, I've been able to spot, and acquire, coins that are unique to date (even two gold ones), either by private pruchases or at auction : whatever I paid for them, even though I paid more than any other bidder was willing to pay, I consider a bargain, as there's (and probably won't be in my lifetime) no other way to get them.

My last one


Louis II de Montpensier (1560-1582), Demi-pistole - 1576
Atelier de Trévoux
+ LVDOVI . D . MONTISP . D . DOMBAR Ecu de Bourbon couronné
+ DNS . ADIVT . ET . REDEM . MEVS . 1576 : Croix feuillue
3.29 gr -
Unique exemplaire de ce millésime à ce jour
Ref : Divo Dombes -, Friedberg -, Poey d'Avant -, Mantellier -, Sirand -, Boudeau -
Provenance : collection Fernand David, vente Gadoury du 12/03/2022 # 545

Q

 

..i find all arguments valid...

 

While there are a lot of interesting viewpoints and insights in this thread, it appears to be fundamentally about "overpaying" for ancient coins in public auctions.

Yet nowhere does anyone posit a mutually agreeable definition of "overpaying" in the context of ancient coin auctions. I challenge anyone here to attempt such a definition that does not assume the conclusion that the poster wants to prove.

Many of the posts appear to argue that the winner of a coin in an auction overpaid because that individual paid more than the poster thought was a rational hammer price, or more than other bidders were willing to pay at that time, for that coin, at that auction. Neither of these definitions seems particularly objective, at least to me.

The problem of defining "overpaying" is compounded by the fact that no two ancient coins are truly alike, and small variations might make a material difference to bidders. While modern coins can be generally graded on well-defined criteria, establishing and applying similar criteria for ancient coins is much, much more difficult and ultimately somewhat subjective.

I couldn't agree more strongly with this observation. Regardless of one's definition of "overpaying," that definition shouldn't assume that everyone has exactly the same information and is acting rationally.

 

This is a great set of points as well and I absolutely agree. It applies not only to coins but also to real estate (many people will have seen/considered the property but the buyer was the highest offer; and a house has a similarly unique set of attributes to a coin), stocks (someone had an informed reason to sell at that price for you to be able to buy so any exch), bitcoin, and almost any exchange or market where the price isn't specifically defined.

Coins are not necessarily unique in this sense and the terminology of overpaying is a bit unfair. It all falls under the notion of hindsight: it's possible to overpay for 6 minutes or 6 months and then have the same coin/asset/etc. be a steal in hindsight.

If anyone knew the answer and could definitively say that the house, stock, or coin would be worth more tomorrow than today, their clairvoyance would be most impressive!