Finding the True Value of a Coin

I've been very post happy lately and it's because I have an overwhelming enthusiasm for coins.

With that said, I feel it's best to head down another road and instead of take value, give some based of my learnings in coins so far.

I am by no means trying to come off as an expert. There are people here like Mark Feld who have been doing this for many more years than I have and to even to act like I know one ounce of what he knows would be foolish and irresponsible.

Okay, onto the meat:

In the coin world, I believe many find it hard to determine how much their coin is really worth. The biggest question I feel is, is my coin worth anything, if so how much?


Well, my answer:

I believe if you don't have a super rare coin or a coin that holds great value(gold, morgans, etc) then your coin probably isn't worth much.

Think about it this way.

We're humans, we like nice beautiful hard to find things.

We also(for most of us) like to take pride in our country by collecting it's currency.

Out of the millions and millions of coins out there, what truly determines the value of your coin?

Well, here's the answer from what I've learned so far and what my uncle (who's a classic high end car dealer) taught me:

Your coin is worth however much somebody is willing to pay for it.
Forget the guides, if your coin doesn't sell, you're not making any money bottom line.

So, if you're a beginner in this, the best thing I think would be to invest your money into coins that people want and are easy to sell now and 20 years from now.

Coins to me is much like trading stocks or currencies on the open exchange. Their are prices that people will pay and prices people feel is too high. However, some company's get little to no volume while others flourish in it. Why is that? Well, we perceive those companies to be great companies whether they are well marketed or heavily used, etc. If you can find the price where buyers agree is fair and heck, get in below that because you know ahead of time that buyers will gravitate towards that price, then you're doing the right thing.

My motto that I've adopted after making a few mistakes so far is, buy a key date commonly traded/commonly used coin for less than bid.(Preferably one that looks pretty) You may say,"wow, no way, that's impossible". It's not. There are places like Heritage, shows, and maybe your Aunt Sally might have a coin she knows nothing about. That's how you find it. No other way. Done are the days of paying premiums, and boy, that's some advice I learned getting in this.

Good deals are very rare. I mean TRUE good deals, not "Oh, I got $200 less than the redbook". Ebay is probably one of the worst places to buy coins in my opinion. The coins are heavily over valued both on the buy and sell side. Good for a seller, bad for a buyer.

Heritage, I believe is the opposite. Good for a buyer, bad for a seller.

This is all my opinion but if one doesn't appreciate and understand how to find the true value of a coin by searching how much people are willing to pay for that coin from different places, then they are missing a giant piece to this game.

I hope I did well explaining my point.

 

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I believe that is a recipe for collecting below-average key date coins that will not bring as good of returns as a group of nice key date coins.

Said another way, bargain coins are a bargain for a reason -- particularly when buying from auction sites where many/most of the bidders will have the advantage of both more experience than you as well as the ability to see/judge the coin in-hand.

A recipe for disaster, IMO.

Respectfully submitted...Mike

 

What I mean by key date commonly traded would be an 1885-cc morgan. The Morgan's were commonly used and now commonly traded coins, so that is a good coin.

Yes, bargains are bargains for a reason.

I am slowly learning that unless the coin is GORGEOUS for its grade, it will be very hard to make a fair respectable profit even in the long term.

 

I understood what you said originally. However, the phrase that made me say what I said was "below-bid key date coins". That, to me, says you are getting low-end-for-the-grade coins -- because good for the grade key dates don't get sold at a discount (or VERY rarely do).

And that's not to say you can't still make money on them long term (to the contrary, I believe that key dates are one of the few good long term investments in coins), but rather that your results will lag because you are (intentionally or not) buying "C" coins when you should be buying "A" or "B" for their better returns.

 

This, to me, is obviously wrong. Price and value are two separate concepts, and you are ignoring the possibility that something can be incorrectly priced [higher or lower], even in an auction. Sometimes price and value can differ by significant amounts and periods of time, but eventually they converge.

I've posted this idea before, I know most folks here disagree, and I'll leave it at that to spare everyone the rehash. I just want to throw it out there so that perhaps a few folks will give it some thought and perhaps see the light.

 

Let me rephrase:

Your coin is worth whatever the general market wants to pay for it at that current time. Of course price from guides is taken into effect with buying decisions, but they are not what in my eyes define the value of a coin, it's what the general public will pay.

 

BNB, I think you are in the LA area. Why don't you see if you can find a shop that you might apprentice in for a time. If I lived in an area with several high end coin stores, I would try to wrangle an in, to see how things are really done by the pros. There are several posters on the forum that are employed by coin shops and they seem to be learning at such an accelerated rate. In the long run, it might be the most inexpensive education you could have.

Jim

 

Didn't read the entire thread yet cause I'm swamped at work, but I think it's more accurate to say that at an auction your coin is only worth one bidding increment more than the amount the underbidder is willing to pay.

But that doesn't necessarily mean that's all the coin is really worth. Many times at auctions I was willing to pay a ton more than I ended up winning a coin for because there just wasn't an underbidder around that valued the coin as much as I did.

For example, I won a coin at auction on one occasion for $80... at that auction I was willing to pay up to $1500 for it, but the underbidder only bid the item up to $75 on that day, so I won it for $80. Was the coin only worth $80 then??? Heck no!!! I later sold that same coin for $2000 cash.

 

I think what he was saying was that it was worth 2k since that is what you sold it for. If you continued to hold it then it sold for 1k then it is worth 1k. Only worth what you sell it for.

Me - I collect what I like and yes I do believe he is correct in some respects. A 1878 proof shield nickel is rarer than something like morgans(not all dates), but the demand for these currently is not as high as morgans. My opinion is do the best you can to buy what you can afford and what you like. As a collector I buy the coins I like; yes I would like to think they would hold value or increase in value, but when I am gone my heirs can determine what to do with them.

 

Maybe true... but on the day I bought it the coin was without a doubt worth more than $80.

 

I agree - those are the kind I like to buy. Now if I could just get 1 of these a month.

 

I once had a Kingdom.
Now I have a Horse.

Go Figure.

Location/Location/Location?

Be Careful what ya ask for ya just might have to buy it.:mouth:

 

Well said, but who is the general public? Uninformed eBay buyers? Heritage buyers with deep pockets? People who buy coins on Home Shopping Network?

Unlike the old days when we bought and sold coins at local dealers, the Internet has changed not only the way we buy and sell but also has caused a great deal of disparity between price and value. I think it would be incorrect to assume that most coin buyers these days are value-conscious or value-knowledgeable — or even care about value.

I've lost eBay auctions because I was outbid by people who obviously had no idea of the value of the coin -- even on bullion. Does the price paid become the new value? It does to the guy who was second-highest bidder and many people who were watching the auction. They now know what to bid the next time around if they expect to win.

 

Right, your first set of questioning was well received. That's another point you bring to the table and for specificity sake, that's a great question one might ask.

For strategic selling purposes, I would think getting an average of the lowest offer on all of those places would be the best real value price of the coin at current market value.

 

Right-o. And that reason usually ain't good.

"Bargain" is the most dangerous word in numismatics.

 

Right-o. Key dates are the most high-profile, high-demand, well-known coins of all.

Why would someone sell "A" keys for less than FMV ? It would have to be very unusual circumstances.

 

A price on a coin is like the price of anything that has no manufacturers suggested retail price. And even those types of items are basically what someone will pay for them.
Take Walmart or Kmart. The sell shoes for say $25/pair. The season for those runs out so they mark them down, down, down until they are now selling for $2/pair. Kmart blue light specials I mean. So does that mean the shoes are only worth $2/pair? Of course if you tried to resell them at a flea market you might get $10/pair so does that now make them worth $10?
This is the same thing with a coin. Someone I know that is into cameras told me at a camera show a Mamia large format camera started out as $900, resold from dealer to dealer until it was sold to a custome for $2700. So what was the camera worth?
A coin is the same. It's value is what you want it to be. It's worth is what you can sell it for.

 

Not really, JC. A camera is a tool. If you'd watched JFK through your viewfinder at the right time in Dallas and had clicked the shutter at the right time, someone might care. Without the tool you could talk about it but have no evidence.

Someone might care enough to make you well off......and/or someone might care you are just....offed. Same thing with a coin that might fit into a public phone (remember those?) before something bad happened to someone bad/good somewhere without hope of assistance.

Now one can use their cell phone to call 911 to ask "Hello? I'm stuck in a my wrecked car, it's on fire. What should I do?"

&/or they can tweeter it before/during there Photoshoping same event hoping someone is bored enough to care.

It Varies!:desk:

 

I like shinny big old :hug:dollars that sing when you flip them in the air.

I know they say they are worth $1 on them but I'll give you twice that for any ya got extra.