I'm wanting to build a coin index to track the coin market over time. Any ideas of which coins and how many should be tracked for the best representation of the market as a whole? Do you think it beneficial to separate the coins into categories such as a high/mid/low end coin markets as determined by value?
I understand your desires, but I really question how viable it will be to pick out particular coins to use as market indicators. High quality coins may continue to do well, while the bottom may drop out of 'junk' or lower grade coins. Is one any indication of the other? I doubt it.
IMO you would quickly find the task SO onerous that: - you would give it up as a lost cause AND/OR - you would lose the joy of collecting. Get yourself a subscription to something like Coin World and follow along with their analysis. (Bearing in mind it's to their benefit to be as positive as possible.) And if your budget only allows up to $50 coins, an analysis of $5000 coins (which most are) will do you no good.
Many have tried over the years, to little or no success. It's a neat idea, but like was mentioned, the variables are so great and diverse you'd have to be Good Will Hunting to figure out a formula thats usable, if one even exists. Guy~
Since May 1, 2008 I've tracked PCGS coin sales on E-bay. I have approx. 75% of the LHC's (09-34 only), IHC's, Barbers and buffalos saved in excel since May 1. I also have samplings ( maybe 10%-30%) of Merc's, MD's, PD's, SLQ's, WQ's(32-64 only),WLH's and FH's. I can't begin to tell you how much work it's been, but it has been enjoyable. I wanted to see for myself how accurate various price guides are. Heritage, Teletrade, DLRC, etc. save their sales info which is readily accesible. E-bay does not; unless you pay for it. Even then it's a mess. Also, the major auction houses sell mainly MS and better date circ coins. I wanted data on everything. Any price guide is an average. Individual coins in all grades can sell for plus/minus 20%. I haven't noticed a total decline in selling prices. Some averages have dropped a bit. Some dropped last fall, and have recently come back up (1909 VDB RD in 64-66). I have noticed more "leakers" recently. I've always seen deals, just a few more recently.
Why reinvent the wheel ? PCGS has several market indices : http://www.pcgs.com/prices/frame.chtml?type=coinindex&filename=index Poke around in there and you'll find what coins comprise each index. Thay've got "20th Century", "Generic Gold Coin", "Proof Type Coin", "Morgan and Peace", etc etc etc. In general, they are more high end than most folks. Be careful... the chart scaling is "zoomed in" so it makes it appear swings up or down are much more dramatic than they are.
I've doing the exact same thing on my website: www.cointrends.org. I've managed to automate the collection of ebay,heritage,and teletrade data into a price guide. I'd be interested in hearing how you collect the data. I'm currently looking for the best ways to report on the data.
I'm confident that the Heritage and Teletrade data you get is reasonable. I'd be interested to hear how you collect from eBay, particularly your rejection criteria.
My rejection criteria is currently as follows. All criteria must match Bids must be at least 1 reserve must be met seller feedback must be 100 positive feedback score must be 99.5% PCGS number must be valid I've spotted a few slabs on ebay with numbers that don't register on PCGS.
I would suggest that an index could be constructed by taking one or two fairly high end coins and one or two circulated coins for each type. The specific coins selected in the index should not be so rare that they infrequently trade. You want to capture changes in the price of the coins that typical collectors are likely to buy and sell. It might also help to weight the coins by the frequency at which they trade so that morgan dollars are weighted more heavily than, say, trade dollars.
Do you adjust for varieties ? For instance: in Heritage price histories, sometimes they seperate a given issue into various specialized die varities, sometimes they don't. In cases where they don't, a stack of sales data will mix coins of differing rarity. One can have an r.1 in with an r.2 or r.3, which is not always obvious. Clearly, this throws off the numbers.
I would suggest if you really wanted to make a list of prices, coins over a period of time, acquire a complete or almost complete set of the Red Books. They have been around since 1946. Even if you got only every other edition you could pick any coin you wanted, compile a list of the prices in those books to present. You could do this with a cent, nickel, dime, etc. The problem is when you get all done you just have a list of certain coins and thier prices over a 60 or so year time. It would mean nothing for tomorrow though.
Quite reasonable. I would suggest considering NGC coins also. I would expect the eBay coins to vary more in price than the other two sites, maybe considerably more. But with enough data that should smooth out. And I would expect that the higher the price of the coin, the less the variability would be. Sound good to me.
I group by variety as well as type. Check out my Lincoln price page for an example. http://cointrends.org/price.php?cointype=lincoln_cent&coingrade=60-70
