Coin Pricing & Guides

I just finished reading David Hall’s article in the December Coin World in which he laments the lack of coin price guides and collectors “buying blind”. He states, among other things, that “Lately, the price guides haven’t quite kept up with the market”.

While I agree that accurate and current coin price information can be hard to find unless you are on a bourse floor, there is certainly no shortage of guides and other information sources, and when was it any better in the past? Aside from price guides, today you can search for actual auction price results.

In particular, I found it quite interesting that he failed to mention Coin Dealer Newsletter (grey sheet) that has been the traditional leader in the so-called “wholesale pricing” listings for decades. I assume that was intentional?

 

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I use several different price guides and I have never thought there was a shortage of them, plus, as you stated, we are able to see realized auction prices.
My problem with current price guides as a collector of world coins is a reliable current price guide.
With the coin market being so hot right now, I do understand that many guides maybe aren't reflecting the higher prices of many issues, but if you buy and sell enough, you should be able to deduce the price you should pay. If I'm out to buy let's say a common MS Morgan and all the dealers are offering them at around the same price, I don't need a guide to tell me, that's market price.
I think it's a bit insulting that he believes people are just buying blindly. I have a coin budget each month and I make sure to get the most out of it. Now that doesn't mean I've never overpaid for a coin or that there aren't people going in blindly buying.
I've yet to read the December issue, so when I read the article, I'll maybe have more insight.

 

Doug,

I agree. Auction prices realized is only value guide I use. However, there are multiple reasons other than laziness that folks use price guides:

1. They seem very authoritative. Afterall, if they are put out there by grading companies, coin publications (redbook, coins mags, etc), and coin organizations (ANA etc.), they’ve gotta be correct.

2. They’re simple. Laziness does enter here for a lot of folks. But gathering, processing and interpreting prices realized is intimidating for some folks who aren’t lazy at all.

Cal

 

It seems when I read the article he was referring mostly to lay and casual collectors driving prices up.

But as newer collectors enter the fold, there's bound to be some errors overpaying. I certainly did when I was a new collector, probably from the thrill of getting new coins.
There are some things that only come with experience especially failures.

 

True, I certainly learned from mine.

 

Maybe this is just me, but frankly, I think price guides are useless, utterly useless. I have a "Brad's coin play money" budget every month. I think it is up to me to learn how to grade a series and get the best coin for that budget. I don't care if the "guide" tells me I overpaid or underpaid. It all comes down to what I am willing to spend to make me happy with my collection.

 

I am not big fan of using auction prices exclusively as a price guide, especially for less than really scarce material. It seems to me that some people bid a lot more in the auction setting than they are willing to pay if the same coin were offered to them at coin show or even a store. The prices realized in some these auctions are crazy, especially when you add the buyers’ fee, which some people seem to ignore.

If auctions were truly the panacea that their advocates claim, then everything would be sold at them, and the dealers would go out of business.

If you are talking about something that really is hard to find, then yes, auctions can be the best indicator, but not the only one. Watch out for outlier prices that are way ahead of other results.

Edited to add that there are some dealers who overcharge as a matter of policy. They say that the prices guides are all wrong, and the “real prices” are two, three or more times the price guide numbers. I have seen this, especially with the British coins I collect. I don’t know how they stay in business, but some dealers try to charge these inflated numbers.

The price guide might be inaccurate, but most often, it’s not THAT wrong. In a dealer is quoting you numbers like that, back away. There are times when the market is overheated, and that is true. But those might be the times when you need to keep your powder dry, and watch things develop.

 

One of the reasons that I posted this was to point out that it seemed obvious that the writer intentionally snubbed Coin Dealer Newsletter (grey sheet). While it's ultimate worth and accuracy can be debated, and I do not subscribe anymore, I have found it to be much more accurate than PCGS Coin Prices and Coin World, both of which seem to be high retail+, more often than not.

 

Yes I got burned using the PCGS price guide. It is often higher than the auction prices realized.

But to make the point I made above, I know of one dealer, who has been around for years, who charges way more than those prices. When I go to a show, if he has a coin that I need, my heart sinks because I know I won’t be able to buy the piece from him because of the price. If you shop the floor, you can often get the same thing for less. Yet, he stays in business.

 

my opinion, all the price guides are terrible and out of date before they are printed. and so are auctions and ebay listings skewed by the bidding action. every coin is unique, and I think the Greysheet, which is wholesale dealer to dealer bulk, is a good price point as a start, with up to a 30% markup for retail, so anywhere between greysheet up to +30% markup could work, HOWEVER not all coins are created equal even if equally graded, and that's up to the buyer deciding where the coins falls and then the dealer could certainly price much higher than 30%, there's that, depends on their overhead and all that of course.

Just spitballing but if a coin greysheets for $100, it should be priced UP TO $142.86 for retail, Now I may not like the coin at full retail, but that dealer isn't going to let it go for below greysheet usually either. this is what I'd call the "haggling window". If it's nice, or hard to come by, maybe even nicer for the grade, maybe you want to just go full retail on it or even higher. stale inventory don't make money when it's overpriced, a negotiation could be had to get it at 10% markup $111.00, or meeting in the middle for 10-20% and the dealer makes some money and moves an item.

I'm not a coin dealer and everyone is different, but it does help if you know what they would pay for it to buy it at wholesale. in order to know where it should retail or know when it's retailing high, or low, if you intend on spending money on coins over the course of a year, I like the idea to buy the single issue of greysheet twice a year for $35, it might not be totally accurate in the later months, like the monthly or quarterly issues even, but it's $70 and not $120, or $270. this knowledge, heck it might even save you that money for the issues and more for you pocket by knowing where you need to be.

it does give a buyer an idea of where they need to be to haggle effectively and actually get a good deal while the dealer still makes some money also.

Just my opinion on it though, I used ebay and auction listings, but they are just all over the place and not really representative of the actual market but more representative of the "gotta have it now, and gotta win the auction" market. redbook and sites, just miss the mark completely. Just my 2 cents.

 

I use a number of sources for deciding what I think a coin is "worth" in the market. And what I use and how much weight I give to the various sources depends almost exclusively on what the specific coin is. My thoughts below don't pretend to be the end-all, be-all for how to price the market and I speak only as a collector and only for myself.

For slabbed, common, vigorously traded US coins I find the Greysheet is useful as an approximate floor supplemented by information from CDN Retail, CDN CAC, and PCGS price data. IMHO, it is pretty much pointless to search auction results for low-priced, common coins in easy-to-find conditions. For example, why search auction records for a 1938-D Buffalo Nickel in MS-65 if the actual coin in question is a common-as-dirt MS-65. It would only pay for your time if this coin is an uncommon super sharp strike, luster-bomb with attractive toning in which case the price guides make no pretensions to represent this coin.

Also, common but high-priced coins such as 1877 IHC, 1909-S VDB, 1916-D Mercs and the like are pretty well represented in the price guides, at least in circulated grades. They trade often, everyone knows how the TPGs grade these keys in the mid-circulated grades so the price guides can treat these agglomerated prices in the markets as a generic pricing and you can use that data to inform your decisions. Of course, these coins in high AU and MS are so pricey and can be of such quality variability that I would not recommend the use of just the price guides in the higher grades.

If you are in the raw coin market, then the only price guides of any value that I am aware of are probably eBay auction results. If there are other raw coin markets that provide pricing signals then I am not aware of them.

Auctions are particularly good and may be the only decent pricing source for coins that meet one or more of the following criteria:

1) Coins that don't trade often enough to allow the creation of a valid database.
2) Common but conditionally rare,
3) Rare date and mm but conditionally rare or with other unique attributes that the price guides cannot capture,
4) Rare die marriages and/or die states.
5) Details coins, particularly those that are rare or unique in some other manner.

For example, I would say the primary pricing source my die-attributing friends in the Bust Half Nut Club use is Sheridan Downey's auction results, since he focuses pretty much exclusively on the Bust Half Dollar. While Heritage, et. al. could be useful to these guys for the more common die marriages and Red Book varieties, anything rarer than about R-5 is probably best priced from Downey's auctions.

OK, the boiled-down gist of what I am saying is that we should be sophisticated consumers that know how and where to gather the best information possible on pricing commensurate with how much time and effort the coin merits to us individually. That resource dedication tolerance will be different for each of us depending upon our goals and limitations.

 

You make several excellent points. The more information you can compile, and knowledge acquired, the better. I used to subscribe to CDN monthly, but determined that was a waste of resources, as I collect sporadically, lesser as the years have passed. I do buy the occasional issue for $35, as I do think it is helpful for US Gold, type coins in circulated condition, generic coins and for a feel for the market as a whole. Of course, in the final analysis, the ultimate value of any collectible is what it is worth to the collector.

 

My LCS pretty much pays Greysheet -15% for coins so when I buy I keep this in mind for the price I’m willing to pay. You have to be sharp trading collectibles like coins or baseball cards where 80% of the value is in 20% of the material (and like a dealer friend of mine says “and the 20% is rarely available) or you’ll never get your money back when it’s time to sell.

 

Guides are just that. GUIDES. They aren't meant to be definitive, nor can they be. They're always going to be a step behind the market. So I don't get what all the fuss is about.

I used to be a stamp dealer. One thing I learned from that is that you'd be surprised at how many people collect WITHOUT a price guide of some kind, and this forum also often proves that. Another thing I learned is that I based my pricing and markups pretty much on what I paid for the item, not what it lists for in the Scott catalogue or whatever catalogue I was using for stuff not listed in Scott. Rare was the occasion when I charged full catalogue value for an item. And just as in the coin market, there are several sources to get an idea of what an item should sell for.

 

It's not a retail guide and never was supposed to be.

 

My perception of the Scott Stamp Catalog was that it became useless many years ago because the prices listed in it were at least 5 times what the retail market was.

 

Not sure what your point is here. I am well aware of what the grey sheet is and is not. My comment was, and is, pointing out that Hall seemed to have an agenda in that regard.