Statistical Analysis of Certified Coins

Is there a source for statistical analysis of various coin series' with real time projections of investment potential of those coins based on rarity, trends in interest and promotion, also with analysis of increased value do to CAC/plus and other designations? Thanks.

 

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This sounds on par with predicting the stock markets. I happen to be a professional statistician, and this sounds like an impossible task to undertake -- given that the moment you created the data it would be out of date. Furthermore, the things you are trying to measure are highly "qualitative" (e.g., trends in interest) and there are too many variables like "eye appeal" that are not captured in any CAC sticker, "+" grading, or even NGC star for that matter. So, in short, if your goal is to strike it rich, you should start buying lottery tickets.

 

The best source for that would be old grey sheets or other price guides. Following the trends on a specific coin though out the years would be the best way to calculate growth.

Example:

Oct 1977 grey sheet bid on an 1856 flying eagle penny in "good" was $550
Aug 1987 grey sheet bid on an 1856 flying eagle penny in "good" was $1200
April 1994 grey sheet bid on an 1856 flying eagle penny in "good" was $2500

I suppose it will require some leg work but you could easily come up with a few back issues of your favorite price guide. Hope this helps

I can't help you with the CAC one though. I think CAC labels are as useful as + grades.

 

What you mention allows you to report the past, but in no way should it be assumed or extrapolated that "trends" will continue into the future. The OP used the term "projection" which implies prediction into the future. Prediction models built off of past experience for things like stock prices, gas prices, precious metals, etc. are notoriously bad. And, when I say bad, I mean orders of magnitude worse than your local weather man's ability to predict the temperature tomorrow.

 

I agree it would be a lot of work, and guess work at that, but you could calculate projected values based on past performance by using loose parameters. Take Mstng's example:

I don't know if those are real numbers or just ones he made up as an example, but lets say they are real. From that we can see the price for that particular coin rose about 110% every ten years. Because inflation and other factors vary over time, even if we assumed that coin would always adjust at least 80% every ten years, that gives you a window of near certainty of what that piece will do on down the road.

It obviously won't work for every coin, especially modern coins that are hot at the moment and have no track record beyond frenzy buying. But, I'd say projections on coins that are 100 years or older would be fairly simple. But, who's gonna do that kind of work?
Guy

 

Using that logic with Netflix stock 3 years ago would put you in the poor house today. I'm just saying, there are too many mitigating factors and unknown variables to do a decent job across all of the series and specific key dates. By that I mean, I have a day job and better things to do with my weekend and evenings than said guess-work.

 

Thats true, but unlike stocks, coins aren't propped up by poor management and idiotic decisions. They're valued based on rarity, which doesn't change, and demand, that usually changes slightly, but not much over time. But even so, I think it hasn't been done because like we all agree, it would be guesswork and a ton of it.
Guy

 

Those numbers were real.

There is no crystal ball. Even the most experienced coin dealer can't tell you what a coin will be worth tomorrow. You can look into the past and estimate. If '14 D pennies are selling for the same price they were 20yrs ago that is probably not the best coin to buy for investment. If a coin doubles every 10 years that is a safer bet.

Any projections anyone made would be based off of past data.

 

Good point. I've noticed that mid to lower-high grade morgans (XF, etc) are selling on Ebay and Heritage for 25 to 35% less than the latest red book edition price estimates - and looking through auction archives it seems that there has been a significant drop in sales prices for those type of coins in the last two years - as there has been for so many other collectible items, like musical instruments and antiques. However, since gold has increased so much in the same time period, gold coin prices are either at or above the same "book" estimates because they tell you that gold was at about $1400 an ounce when they gathered their material - so like GDJMSP says, it makes a huge difference when you start your value clock.

dt

 

Thanks for the feedback on this topic. I was thinking of it in terms of another field of interest that I am familiar with, tournament chess, where the number of books looking at openings, middle games, endgames, tactics, strategy, grandmasters, etc., are legion.

"Bluebook of Winning Chess" for example. It gives odds at every given move based on hundreds of games in that variation.

Some years ago leading computer programmers and grandmasters got together and worked on programs to beat the leading grandmasters, now the average person can pick up a software program running on modern computers and achieve 3000+ playing ability. These skills are transmissible to many analytical fields of study, certainly coins should be one of them and I am sure that Heritage, Spectrum and Rarcoa have the best programs to run a given certified coin through the system and see where their downside risk is at a minimum.

Rare date gold has not been affected much by the population increases of coins coming out of Europe and elsewhere; but the numbers of certified type gold has exploded in the last ten years.

 

Good points.

But one would hope for a source for more up to date information on coins with investment potential. Other hobbies, avocations and interests have weekly and monthly newsletters with substantial blog sites,etc.. We have Coin World and the CDN publications as well as NGC and PCGS price and population reports as well as a number of blog sites that have raised the level of education and awareness among the collecting and investing public substantially. Ultimately the transactions that matter are those involving the major wholesalers, buying inventory, getting coins graded and then the consumer buying from the dealer. Every stage of this process is important, but price sheets can be misleading. Will the consumer get the information they need before buying and selling? Are CW Trends and the CDN sufficient for doing this? Not necessarily.

 

Seems to me what you're looking for is the equivalent of technical analysis (TA) of securities. TA takes into account prices, volume, and a lot of other stuff over various time periods in an attempt to extrapolate the predicted psychology of the market. The difference with coins is that the data sources for buying and selling are all over the place, whereas with securities, the vast majority of Apple is bought and sold on one exchange, so you know exactly what the definitive current price is.

 

Nobody can predict the future.

 

I knew you'd say that. Does that mean you're wrong?
Guy

 

That depends on how far into the future you are trying to predict. The further into the future the less accurate your prediction will be.