Questioning Price Guides

I became interested in building a Mexican centavo type collection a few years ago. At the time, I purchased David Harper's "2010 North American Coins & Prices". I went through the book and made a spreadsheet with prices per condition for all the coins that I was interested in acquiring. Since that point I have decided to only buy NGC graded coins for the collection, and noticed that even when graded these coins go for muuuch less than what is listed in the book. These NGC graded coins tend to sell for 20-40%, and very rarely over 50% of the prices listed in the book.

So I figured that I might get a better indication of accurate values if I updating the spreadsheet with prices listed at the NGC site, and that's when things got weird! I went through all of the coins in each of the denominations, and the prices listed by NGC are the same as those listed in the book. I'm not talking about similar, I mean number for number exactly the same for each grade of every coin! This obviously means that either the book copied NGC's list, NGC copied the book, or they both copied the same source. NGC states on their website that their price guides are maintained by Numismedia, and and the publishers of the book are Numismaster. I'm not sure if these organizations are one in the same, but if they were then I guess this would make more sense.

But what doesn't make sense is that the book was published in 2009, and it is now 2012. Am I led to believe that there has been zero market fluctuation over that time? I understand that tracking Mexican coins is probably more difficult, and not as profitable as actively tracking US coins. But 3 years? Since I purchased my book the 2011, 2012, and 2013 versions have been published. I'd be curious to see whether Mexican coin prices have been modified at all from issue to issue, or whether US coin prices have changed for that matter.

-Are the price guides at the TPG websites not based on sales data for that company's graded coins?

-Why the discrepancy between price guide-sale price of Mexican coins? Have they taken a dive recently? Or were these price guides never accurate to begin with?

-Should these findings reflect on the trustworthiness of US coin price guides (Greysheet, Redbook, etc)? I use these to determine what to spend on coins, and dealers use them to determine price. I would like to think that people are actively, continuously compiling data in support of these determinations.

 

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Price guides are just that: "guides".
Just about every published guide is out of date even before it's published and most I use are, to say the least, a bit optimistic on pricing.
The Redbook is widely known to have wildly optimistic pricing for most of the coins listed.
The price guide I find closest to reality is Haxby's "Coins of Canada" with the Charlton Catalogue a close second.
Bear in mind the prices in those catalogs are for probperly graded coins with NO problems and good eye appeal.

 

I know that they are only meant to be guides, and they all go through the trouble of explicitly stating that fact on the first page. But, they do end up representing the only means by which the average person can determine the appropriate buy/sell price for a particular coin. In this respect, if they are going to claim to be a guide, make the guide available to the public, and/or charge money for the publication, then they are assuming an obligation to keep the guide as accurate as possible.

I've been cataloging the sale of graded Mexican coins over the past 4-5 months. I am not even close to being an expert in the field, and my knowledge base with respect to Mexican coins is limited at best. But at this point I'm absolutely confident that I could produce a Mexican coin price guide that is more accurate than what is currently listed at the NGC site (and in the book). I'm not saying that my price guide would be truly representative of the entire market, or that it would be based on a sufficient number of documented sales, but it would be more accurate than what is currently available. That to me represents a problem.

 

That simply is not the case.
The magazine stands near me carry coin prices magazines, Coin World and other numismatic publications.
If a person has more than a passing interest in pricing their coins, the means to do so are readily available.

 

There's also the internet. Auction houses list their recently sold items. You can find 99% of what you need with a few keystrokes.

There are also many sites that specialize in world coins:

http://www.wcoins.com/
http://www.calgarycoin.com/modern/world.htm

 

Thanks for the links diggit, not sure if I've been through them yet, but I'll check them out when I get home. I know that there are multiple sources for obtaining coin pricing information, and for determining appropriate coin prices based on sales records. When it comes to US coins, these sources tend to be fairly consistent with one another, and typically are pretty representative of actual sale prices. But I do not think that this consistency and accuracy extend to non-US coinage.

I'm not overly concerned about the price guides that I mentioned as they pertain to MY purchases. I do my homework before buying a coin, referencing multiple pricing sources and checking recent sales records before determining what to spend. The problem is that the existence of these highly inaccurate price guides could be used to exploit people that lack the required knowledge. It could be said that a person who fails to properly educate themselves will get what they deserve, but the exploitation tool is available non-the-less. I just feel that if an organization represents themselves as a provider of pricing information, then they should assume the responsibility of making the information as accurate as possible.

The existence of these price listings also makes it difficult to buy coins at fair market value. Just look at eBay, a lot of people have their graded Mexican coins listed at the NGC price guide value, and NONE of them sell. I contact them to make a fair offer and they feel as though I've insulted them. They say, "This coin books for Blah dollars", at which point I simply say, "Well, those price guides are wrong". A buyer has every right to ask whatever they want for their property, and to them it seems reasonable to expect what is listed in the guide. If the price guides were more accurate, then the buying and selling process would be much more efficient.

 

Cherd, if you really are using price guides to determine what you should pay for coins you are in trouble. I do not mean that a bad way, its just there are systemic problems with all price guides, and then on top of that specific problems with each guide. THEN you have the issue of a superlative coin will always be worth more, so if you always limit yourself to only guide prices you will pass on exceptional coins.

Price guides are best used as a START to personal knowledge. You are experiencing this yourself now, you are more advanced than the guide, so you will profit from that knowledge. Yes, I will look at a price guide if I know nothing about a series to get a general idea, but then will research myself before spending any real money.

 

You also have to remember that the guides are written, sometimes a year in advance which makes them obsolete (price/value-wise) by the time they hit the shelves. Magazines are put together up to 3 months depending on the company but they'll give you a better idea of prices. Again, they are just going to give averages or highs and lows. They may not even include varieties which may have an astromical difference in price.

 

I know these various "guides" are nothing more than that, but I find Cherd's discovery that many of their prices haven't been updated through several publishings to be quite disturbing. I'm suspecting that these subsequent publishings have done nothing more than add the next year to the list.

I also know that they spell out that they are just a guide in their introductions, so I don't expect them to be spot on, nor can I sue them if they are not. However, I do expect them to make a honest attempt to list the most accurate prices possible at the time of publishing and I think many other people out there do as well. Listing the same prices they've listed for several years is not what I would expect.

Thanks for the heads up Cherd.

 

The "Trends" section in Canadian Coin News is fairly accurate for the retail prices of properly graded coins.
I know because I check their prices against auction results all the time.

 

...yet everyone wants one.

I get this all of the time with ancients, people asking me "how do I tell how much its worth"? I recommend Sear, not because the prices are very useful, but at least they are an order of magnitude. I will just casually peruse one of his books, (doesn't matter if its 30 years old or printed last year), and like the look of a certain coin, then look at the "price". If he put $100 I will think about keeping an eye out for an example, if its listed at $15,000 at least I know right away to not get my hopes up.

Its really a scale, or an order of magnitude, that is worth anything. Authors know this, but they also know they get pressure from publishers because EVERYONE wants to buy a book with "prices" in it. Maybe its a function of the Redbook being so ubiquitous, maybe its just the human condition and laziness built into it, but they are horribly popular and in demand, yet few understand how they are effectively worthless except for letting you know the difference between $100 coin and a $15,000 one.

 

Coin prices are generally market-driven, supply and demand. My first thought would be that the coins you are currently collecting are not in high demand, so book value verses market value is irrelevant. It's what people are willing to pay that sets the price. If nobody really wants a particular coin, then it will probably be cheap. If everyone wants it, the price goes up.

Like others have said, research is the key to buying smart. I recommend the Red Book but only for information, not for the pricing. Guides are just that, guides. Nothing is set in stone. There is no "manufacturer's suggested retail price" for coins. Again, it's market-driven.

But I also sense you're not merely questioning the prices in the guides as they pertain to you, or me, or other collectors. I have seen a surge in coin buying over the past couple years due to the recent upswing in silver pricing. These types of collectors who simply jump on the bandwagon look for the fastest and easiest guide to pricing, becoming instant experts. Venues like eBay make it very convenient for these new buyers and sellers. These new "collectors" are the ones using the "price guides" as gospel truth when buying and selling certain coins. I have been to auctions where prices have been bid to ridiculous levels by people holding one of those guides, be it the Red Book or one of the monthly magazines. As a knowledgeable collector, all you can do is know what it's worth to you. There is nothing you can do to prevent others from using those guides to set the prices. You're not usually going to beat them, nor are you going to educate them (after all, they have THE BOOK). The same is true of sellers, who set the asking prices based on these guides, without doing any research on what the items actually sell for. As far as the publishers, they are out to make a dollar, just like any good business. They're really doing nothing wrong, and they do provide a starting point (gotta start somewhere). They provide the disclaimer, but again, how many people actually read those.

 

I agree, I have found that the Greysheet is the most consistently accurate representation of actual selling prices. But then there's an issue, does the Greysheet reflect sale prices, or do sale prices reflect the Greysheet? It's easy to be accurate if everyone is using your values to determine price. Another issue is that Greysheet only pertains to US coins.

I joined 2 years ago and made a few posts in the roll searcher's forum, but I've really only been active in the forums for the last few months or so. I do not recall a specific instance, but I'm sure that you have said these things many times before. For future reference, I would never ignore you Man!!

I already had a general understanding about price guide accuracy, and was not intending to make that the general point of the thread. The specific issue that I was addressing was the innate in-accuracy of the Mexican coin price guide listed at the NGC website. Based on the identical nature of the book-website values, it is clear that this listing has not been maintained. It is also clear that the prices do not reflect reality.

This isn't some JoeBob's coin publication or website, it's NGC. Since there is not a Greysheet equivalent for foreign coins, it would make sense for collectors to assume that the NGC website would be a reliable place to go for making price determinations, especially for NGC graded coins. So the specific issues that I was addressing were:

-Why is the price guide so horribly inaccurate when it would be fairly simple to improve?
-The current price guide obviously hasn't been updated for at least 3 years, doesn't this point to an apparent problem?
-If they are not going to maintain the accuracy of the price guide then why do they continue to post it? It's junk, either put some effort into maintaining it or do the responsible thing and take it down.

 

Cherd, two things.

One, all price guides are historical. The greysheet is historical, but more accurate since its more current historical. Make no mistake, though, the market drives the greysheet, not the other way around.

Two, if I were to sum up this entire conversation, I would say the day you seriously question price guides is the day you can say you are finally beginning to understand coin collecting. Its your privately researched knowledge that will make this hobby both enjoyable and potentially profitable.

 

Worthless? No.

They have their use in determining relative value among coins in a series and they're great for establishing value if making an insurance claim (I'm thinking Redbook here)

 

Sweeping generalizations are usually wrong
As I've pointed out earlier, there are price guides that are fairly accurate (CCN Trends, Haxby, Charlton) as guides for RETAIL prices.
I will admit that the Red Book is just about useless for determining prices in most instances but insurance companies will accept it as a valid reference, so it has at least that use.

 

I agree, it would be extremely difficult to produce an "accurate" price guide. But, it would be simple to create a guide that is MORE accurate than the one listed at NGC. Heck, multiply every centavo price in every grade by 0.5 and the resulting guide would be MORE accurate. It wouldn't be based on anything concrete, but it would be a better representation of reality.