In the thread "Searching for the Bargain" National Dealer complained of mass-market sellers charging 400% over retail. Cable-TV and Sunday Supplements are the usual venues for this. In a coin store I saw a real heart-breaker. It was a series of 19th and 20th century US Type coins mounted under prints of Norman Rockwell paintings. It was an interesting concept, but one you could do yourself better for less. Buy the Rockwell print, have it framed, and buy the coins according to your best judgment. And yet... Collectors do not always keep good books on the time and effort behind those great deals. I often advise that collectors not waste their money on impulsive buys of mediocre coins online when they can save their money and go to a major coin convention. "But travel... hotels.. food... It is all too expensive!" comes the reply. My counter-argument is that you will waste that much on junk you cannot sell for anywhere near what you paid for it. A typical example is the collector who drives 30 minutes to the coin store, spends three hours looking at Indianhead Cents, and buys an XF with a rimnick at VF money and thinks they got a bargain before driving home 30 minutes. The time invested is not to be ignored. If you take your usual wage and apply to FOUR HOURS going to the coin store, you see that conventions make sense. Furthermore, that damaged XF will not sell for XF money when you offer it to a dealer. When you actually do the brutal accounting, the collector above is in the same position as the shop-at-home buyer, clicking the cable remote and buying "the coins your family will treasure for generations to come!" For many people -- millions, perhaps -- the shop-at-home alternatives on TV and in print, are a way to avoid the cost, the burden, the time, of reading, studying, joining the ANA, taking the seminar classes, etc., etc., etc. It is unfair to denigrate them in orde to puff up ourselves.
I think that a lot of people miss a few things about the newspaper and tv sales. There are a lot of people who see the "old" coins advertised and buy them. They put them away and never give it a second thought. They remember them from their youth. They want them. They buy them. They don't care about the cost or value that a collector may attribute to the ir purchase. 2) I believe that a number of people see something in one of these ads and make the purchase. They start thinking about the old coins and next thing - they're on the collector road. Some realize quickly that they "wasted" some money. Many consider it as part of the overhead of startup.
There will always be a market for the lesser grades of coins. Many people do not have the maens to purchase only the top rung coins ,but they love coins and collecting,, they take as much pride in their VF as someone else might in their MS-69 of any given type, I dont know about all of the others in this forum, but I started with pocket change ,, and a mercury dime from my uncle, Humble beginnings no doubt, but I would not trade those years spent for anything !!!! I look thru my collection today, I have all grades and conditions ,,perhaps I skrimp on other things at times to add a coin ,,, perhaps I spend 30 or 40 bucks on a handfull of coins that someone brings to me,, perhaps I spend a couple of hundred on a coin from a coin show, its all relative ,,, but the joy is not in the money spent or the profit made,, its in the coins and the people who share this hobby no matter what level they collect at. Sometimes I just get to serious . Just my beat up two cents worth.
Coin Vault I was watching Coin Vault and they offered a $20 1924 MS64 for $1249 and it was on sale. I was tempted to buy it as it is my mothers birth year so I went to Heritage to find out what these coins have been going for at auction. Seems that these coins go for between $650 to $750 and neither PCGS or NGC made a difference on the price. There is a latin saying which I can't remember or spell but it means "Let the buyer beware".
The problem doesn't lie with the collector searching for a coin. The problem comes later when this collector shows up at the coin shop or show with their bought at TV price in mind. Often I am contacted by the QVC customers as they make their home here in Delaware. It saddens me greatly to tell someone that the few thousand dollars spent on 35 years of proof sets was more than they will ever be worth in our lifetime. When someone finds that they have spent 4 to 5 times retail, they often leave the hobby for good. They believe that we should be judged with used car salesmen and pawn brokers. Very recently I was approached by a customer of a shop at home coin special. They had bought a ten piece Morgan dollar set at the unbelievable price of $49 per coin. These coins were XF to MS-60. Of course they were lucky enough to get all different years and/or mint marks. They even got the extra special half roll that included all three 1921 Morgans. All of these were in the extra special grade of Brilliant Uncirculated. The best coin in the group was an 1881-S that easily could have been graded at MS-63. Which of course is common for the year and mint. This coin had the highest value at $35. Most of the coins offered had values of $8 to $15 dollars. While it is easy to quote "buyer beware" we need to stand up and teach the others around us. Share your knowledge with as many people as you can. If you don't know it, learn it, and then share it with others. Now if you had learned that you spent near $500 for a half roll of Morgans when you could have bought a mixed full roll of BU morgans for the same price, how would your view of the hobby be effected?
Let me add one more thing. I realize that most of you do see this on a daily basis as I do. 7 Days a week I receive calls and emails from collectors who have been ROBBED on their coins. Now I am not referring to those who pay fair retail for their collections. I do not blame the sellers of this garbage either. The blame solely rests on those of us who know better and choose not to share this information with our friends, family and co-workers. Each time a new collectors pays good hard earned money on a quarter with a nickels worth of gold or platinum on it, my heart aches. It is time that we all stand up and demand more from ourselves and our hobby.
Perhaps the basic problem is more subtle. When people buy "money" they expect to always have the same value. A dollar is always a dollar. It might buy less over time, but that is a hidden fact. A dollar is always a dollar. With cars, to continue your analogy, we know that the second you drive it off the lot, it depreciates. That is in our common store of knowledge. With "money" we have different expectations. Even a standard retail/wholesale spread of 40% would seem like a rip-off to people who bridle at 20% credit card rates when passbook interest is 1% and CDs might pay 6% over time. TV sellers and others hype the line "... for generations to come..." and then people want to sell a year (or a few years) later. That is another problem, entirely, and may point to a very grave problem with the venue itself. On another, but related, line of thought, I have a few ancients that I bought from a very reputable firm that will not even make an offer on buying them back. "We only buy quality coins," the man said. "Yes, and I bought this from you," I replied. "Yes," he said. "But we only buy quality coins." Needless to say, I don't shop there anymore. They are not alone in that. That company's representative, and other well-known dealer have a game they play on collectors. At first, I read about it and then I saw it play out. "It is great for him over there," they say. Then the collector goes over there and gets the same line. It is unkind, in my opinion.
I agree that a problem exists. My point was only that the "knowledgeable" collector who buys an 1883 Indianhead Cent in technical XF, but with a bad rimnick, gets it for close to VF money, say $10 and then comes to you with it does not say, "I spent three hours at $17 per hour and drove 20 miles at 15 mpg at $2.09 a gallon, so I paid $70 for this coin." They did, indeed, but they know what to focus on when selling the coin. The people with the channel changers and credit cards do not see the hidden costs to them in NOT pursuing education instead of watching TV. (That problem is deeper, and perhaps not addressable.) So, they don't deduct that lost value from the value of the material. I realize that this does not do them (or you) much good, but getting the root of the problem identified may lead to a workable, permanent solution.
The Latin is CAVEAT EMPTOR. (From the ruins of Pompeii is a mosaic with a snarling dog that says: CAVE CANEM (Beware of Dog).) More to the point, you KNEW to go to Heritage. That knowledge cost you time and money to earn. You reaped the reward. People who buy what they do not understand -- what they have not invested effort in understanding -- pay more for the goods, but nothing for the knowledge they lack. We might say they pay only the correct price for the goods and they reimburse the seller for the time invested in knowledge. There are a lot of ways to look at it. Coin dealers subscribe to information services not open to collectors. I would bet that your $650 Double Eagle sells for $550 between dealers because the price of gold is a floor. With a true collector coin, say a $750 Seated Quarter slabbed MS 62 from 1843, 1847, 1852, etc., the dealer-to-dealer price is probably half of that, a 100% mark-up. About ten years ago, for an interview with the Wall Street Journal over the "Athena Fund" debacle, Harlan J. Berk said that these coins were all overpriced in the portfolio because dealers usually take only (quote - only) a 100% mark-up over wholesale. That caused a furor, but no one refuted him. I had one dealer declare that he can sell any coin at a 10% markup... as long as it was a nice example of a high-demand coin, such as a denarius of Nero. (Well, yes, of course...) Collectors do not count the true cost of shopping for a bargain. The time spent online, the time spent in coin shops, at club meetings, reading the weekly newspapers, and so on are all overhead costs. It is a hobby, after all, but the fact remains. I believe that if collectors saved their money and attended conventions, they would pay many of the same overheads measured in travel expenses. At a convention, you have 100 to 300 registered dealers, not anonymous usernames. You can see the coins live, not scanned. You bargain directly with the seller, rather than bidding against other buyers. Furthermore, at conventions, there are indeed auctions. You get a catalog (free). You can inspect the lots. Auctions are all different and I have only been to a few, but the ones I sat in on were attended overwhelmingly by dealers. I went only as a reporter, not a buyer, but when I saw the hammer prices, I started fishing in my briefcase for my number before the light of reason went on and I recognized a conflict of interest. Would you rather "win" a retail $750 coin for $550 from an online username or from Heritage? Education time is a key example of the benefits to going to conventions. At the ANA in Pittsburgh, Michael Fey gave a Numismatic Theater presentation on trends in the Morgan Dollar Markets. You can pay to go to an ANA convention, or you can pay more for that Morgan Dollar a year or two from now when the person who sat where you did not reaps their profits.
To my way of thinking the root of the problem is more the way people look at things or perceive them to be than anything else. Almost without exception - what is the very first question that is asked by a person who finds, buys or inherits a coin or group of coins ? What is it worth is the answer. They don't care about the history of the coin or why someone would have collected it in the first place. All they really want to know is what can I sell it for. Now perhaps with time, these people will develop an interest in coins as a result of their efforts to determine value - but most will not. Once they realize that the object which caused images of all the things they could buy to dance through their head is worth less than the cost of a night out - they'll likely throw it in a drawer and forget about it for the next 2 decades. And the reason they always think the coin absolutlely must be valuable is because of their perception of age. If the coin is older than they are - it is old. Therefore it must be valuable. It is this same perception which drives people to purchase these common date and hugely overpriced coins from TV, the newspapers and yes at coin shops too. There may be a few who purchase these items for their memory or historical value. But I absolutely guarantee you the primary reason for the vast majority of buyers is money. For as the man said millenia ago - money is the root of all evil. The mere thought of it drives reason from the mind. Now be honest with yourself - how many are there who honestly don't care in the least bit, about the value of your collection ? There are a few who can honestly make this statement - but very few. I know I can't. Sure I collect coins because I love the historical aspect, their beauty and I love doing the research required to study them. But I also always keep the value in mind. For when anyone spends, what to them is a significant amount on a coin, it is foolish not to keep it in mind. But the only way you can accomplish this is with knowledge. And knowledge requires effort - something not everyone is willing to expend. They would rather sit back and tell themsleves that the folks on TV could never be selling these coins for these amounts if they were not truly worth it. That the dealer in the coin shop would not be asking the price he is if the coin were not worth it. And they chosse to believe this because they want to believe that they got a good deal and they stand to profit from it at some point. And the same is true for many collectors. They just don't like to admit it. For no one wants to admit that they made a stupid mistake because they saw dollar signs dancing in their eyes. But there is nothing wrong with this - it is human nature. What is wrong is when you look in the mirror and refuse to admit it even to yourself. Don't get me wrong though - coin collecting is a great pursuit. I absolutely love it. To me it almost a way of life. I love all aspects of the hobby. But I won't ever try to fool myself into thinking that I don't care about money side of it.
This is incorrect. As a dealer I can honestly say there's no true collector coin that I make 100% on. In fact, many items are routinely traded for 10% or so and with bullion like K-Rands, 999 silver bars, etc the profit margin can be less then 5%. The seated quarter years you mention bid in the greysheet for $700 in MS63, so an MS62 coin would sell for less, unless you buy it on TV of course. Then it's probably a $2500 coin lol. Nick
Interesting discussion. I don't suppose the point in question would work well for world coins, would it?
Sure it would - it works with anything. All it takes is a good marketing campaign and the right pitchman. People will buy absolutely anything if it is marketed correctly. Ever hear of a guy named Ron Popeil ?
I just saw a show on TV tonight about the Suzanne Somers THIGHMASTER. What a great piece of marketing. The product had previously failed as excersize equipment until a smart guy was able to do some serious marketing. Seems the device also works great on pecs, triceps and biceps but of course it was Suzannes thighs that sold millions of them.
Oh, one more thought. The collector who spends 4 hours buying that coin? It's worthy of mention that most of the shop customers I have enjoy their time looking at coins and don't really consider their time there as an investment. These days we all have to catch moments of serenity however we can, and relaxing while talking coins is a great way to do it! Nick
I care very much about the value of my collection. I make notes concerning that very thing, in detail. I have no intention on ever selling my collection, unless something in my life changes and I am forced to do so. On the other hand, if something were to happen to me, I know my wife and family would not get anything out of my collection for themselves, except the value inside the binders. For that reason, I have shown my wife the spreadsheet I created, and where I keep business cards for the two 'local' dealers I like. As far as inhereting coins go, I would rather sell my collection to someone I knew appreciated them for half their value, than to see someone give my successors half value because they are looking for a premium markup from those who don't know better.
Unfortunately for all of us, as collectors (and therefore lovers) of "money", the real quote is: It's not necessarily the inheritor who wants to know, it could be the probate judge and the IRS/State inheritance tax collector.
