Local coin shop shocking score

When it comes to prices, you throw the Red Book out the window no matter what. All the time, every time.

I suspect you got that coin at that price because it's a problem coin, it's scratched rather heavily, damaged. And that's all it's worth.

$300 + or - is the going rate for a VF30, problem free example. So whoever bought that coin for $300, they paid way too much.

 

Major auction records over the past couple of years show 3 sales in lower circulated grades at $259 in VG08 in Nov 2012, at $322 in VF30 in May 2012, and $499 for a VF35 in Oct 2012.

The coin above looks like a slightly problematic VF35, net VF20. Therefore, I think you got an incredible deal, and the buyer still has a little bit of room.

 

I sure would not use ebay completed auctions as a guide. Way too many buyers there who don't know anything about coins and paying way more than the coins are worth.

Heritage and the other major auction houses are the only sources that one should ever use to research the value of a coin.

And as already noted, even the Grey Sheet has its limitations. But for average coins that are average for the grade, it's a usable resource.

Make note though, the prices listed in the Grey Sheet are for sight seen coins only ! (and sight seen does not mean looking at a picture, it means looking at the coin in your hand !) And the prices apply equally to raw coins and slabbed coins.

 

Don't lose sight of a few very important things . . .

• Major auctions are attended and / or participated in only by a limited segment of the market, typically those willing to spend a thousand dollars or more on the traveling expense alone, and that's before even buying any coins. Most of those are dealers who will subsequently sell those coins to end users paying additional profit on top of the dealer's investment. Therefore, be careful not to assume that auction prices realized necessarily represent the high price in the market . . . often it is even higher.
• There are just as many overzealous bidders paying too much for the wrong coins at major auctions as there are savvy buyers who pay the right prices for coins outside of major auctions. Prices realized at major auctions are most certainly not the only reliable source for pricing information. I referenced that information in my prior post because it is easy for others to research for themselves, and confirm my claims.
• As are all price guides, Grey Sheet is merely a guide. It is published based on surveying the transaction results submitted by a select few dealers of the large number in the marketplace, and often poorly reflects the actual market. As you implied, for sight-seen, generic dates in generic condition for the grade, Grey Sheet is a usable resource . . . in fact probably remains the best resource, but only for those coins.

- Mike at toughcoins.com

 

Major auctions may only be attended by those willing to spend travel expenses, but they are participated in by thousands of others. Many have a dealer or other attendee acting as their agent at the auction. Many others participate by phone. And in some many participate via live web site. And still many others will send mail bids.

And I strongly disagree, very strongly in fact, that there are just as many paying too much at major auctions as there are at ebay or anyplace else. The vast majority of those participating in major auctions know what they are doing and know the market. The vast majority of those participating on ebay do not. The proof of this is legion.

Yes I will readily agree that there are savvy buyers who buy strictly from trusted & respected dealers. But sadly, those people make up a very small portion of the market. many times I have given the advice that is what smart collectors should do. But sadly few listen. And I am well aware of what the Grey Sheet is and what it represents.

And I will also agree that realized prices at major auctions are not the only reliable source. But they are the only the only reliable source that the average collector has access to, for free. Sure, you can check the electronic dealer networks, IF you have access to them. But the average collector doesn't even know they exist, let alone have access to them. And you can also use private sales, if you have access to the information - most don't.

It's easy to point to specifics and say such and such is not true because of those specifics. But exceptions to the rule do not disprove the rule, that's why they are exceptions. In general, realized prices at major auctions are the single best resource to which most collectors have free access.

But sadly, all too few use that resource.

 

It comes down to the difference between educated buyers and uneducated buyers. An educated buyer will only pay so much for a given coin. An uneducated buyer will more often than not pay too much for that given coin.

People always ask - what is the value of a coin ? The answer is not the highest price ever paid. Several reasons for that, not the least of which among them is that prices can vary greatly, by 100-200% even in either direction, at given points in time. The value of any given coin is what an educated buyer will pay for that coin at the present time.

Another reason is that somebody who knows little about coins may pay say $500 for a given coin. It happens every day. But take that same exact coin, offer it to 10 or 20 educated collectors and or 10 or 20 dealers the very next day and the best any of of them will pay is $200. What is that coin worth, $500 or $200 ? It's worth $200.

There are literally hundreds of thousands of examples on ebay of people buying coins in any of the scam slabbers slabs and paying outrageous prices for them. Is even of those coins actually worth that much ? No, of course not. There are thousands and thousands more examples of people buying obvious fakes and counterfeits, altered coins, problem coins, etc etc - are any of those coins actually worth what was paid ? No, of course not.

The same holds true for any uneducated buyer paying too much for a any given coin, anywhere at any time.

A coin is only worth what an educated buyer will pay for it, at any given time.

 

Everybody is entitled to their own opinions. But what I have been suggesting and explaining is what the smartest and most experienced dealers & collectors do. You, or anybody, can either choose to follow their lead, or not.