Congratulations on Paying more than Other

Uh-uh, no, nope, not I. I'm not into live auctions they take too long to many studders, if you fart you've made a bid, and most are boring. I enjoy the competition of internet bidding you can bid, pass, or ignore. I like your thought, it's what you're bidding on that matter! Thanks.

 

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This doesn't make sense. Not every collector has equal access, equal funds, or equal knowledge.

There are plenty of good deals to be had at auctions.

 

That's a very good point. To my understanding overpaying is if you pay more than the current market value and you have to expect to make a loss if you sell again just a few moments later. This is, however, only true if the market value reflects all the available information (this is said to be the case with stocks) and buying/selling comes at a cost.

But what is the market value of an ancient coin? It's hardly possible to determine "the" value (or even a useful range) for some/many/most (?) ancient coins as you have pointed out, @IdesOfMarch01.

That's where the personal value comes into play. Do you have any "insider" information (e.g. a lost provenance or knowledge about a small detail that makes the coin a great rarity)? Do you have some kind of personal relation to the coin that makes it more valuable to you? Do you even care about market value and overpaying or do you just "need to have" that one coin and you don't have to worry about the kind of money it takes, as has been pointed out by @dougsmit?

For me personally there are both coins that
a) I'll take if I have the feeling I can make a good deal and
b) I will gladly overpay since I have been looking for that d*** coin for many years and I just need to have it, *my precious*. That's when things are getting not only irrational but insane.

 

I might be missing the point here, but I assume most on this site purchase their coins to keep in their collections. Not with a view to reselling to make a profit. (I have sold coins I've bought by the way, but only after a few years and only because I've decided to move onto new coins, certainly not profit driven).

Anyway, I have a very small but select collection. Less than thirty coins. You could make an argument I overpaid for every one of them. I think you could equally argue I paid under market value for many of them also.

At the end of the day, they are the coins I want in my collection, at a price I could afford, and I'm very happy. I don't look at any of them and wish I hadn't bought them because they weren't a bargain.

And I enjoy watching live coin auctions also, even if I'm not actively taking part, it's fun seeing great coins sell for lots of money. That's just me though.

 

Well, as a fallible mortal, often I have fallen into the auction trap, where I bid more than I planned. As I become older, I become more philosophical with the outcome, for, as I believe, what is done is done. Bemoaning past errors serve no real purpose, except to make one more miserable.

I think it best to learn and move on. Of course we are creatures of habit and varying temperaments, which helps make each of us unique individually, and this can determine how we approach situations that make us unhappy.

Perspective helps, at least for me; in a world where there is so much strife and suffering, whether I win a lot for more than I planned on, or if I was "sniped" at the last millisecond on a lot, all of that is a minor glitch in life, relatively speaking, so move on and enjoy what we have.

 

Couple of thoughs:

1. Value is subjective: For any purchase to materialize the buyer must value the coin more than the money and the seller must value the money more than the coin. A rich collector may value a certain sum of money less than a poor collector, but that does not have to be the case. A rich miser may find it more difficult to part with a certain amount of money than a relatively poorer person.
2. Auctions and fixed price lists are both markets: If you win a coin in auction or buy it from a fixed price list is basically the same thing. In both cases you are the only person - of those who considered the deal - who's subjective valuation let to a transaction.
3. Auctions are efficient, but not perfect: Auctions minimize buyers' and sellers' rents. Hence, the auction price is always only one increment above the price which somebody else was willing to pay. This is not necessarily true with a fixed price list, where often coins find no buyer in months. However, by far not all potential buyers participate in every auction. So auctions are only efficient among the group of people who considered the offer.

 

I'm not sure what "overpaying" really means. It's really just relative to time and place. In 2003, in a room with every major dealer in the world, I underbid this lot, and I stretched my bid a bit to push it to $30,000. At the time I thought the bidder was crazy. I could sell that lot today for $150-200,000. Did the bidder overpay?

https://www.coinarchives.com/a/openlink.php?l=42682|46|800|44c115ec4cfd1287a92e824ff941aa3e

Barry Murphy

 

Interesting analogy, but rather a very broad stroke no?. It's doubtful that "every other coin collector on the planet in your field" was bidding in the same auction on the same item.

 

Indeed, and the ancient coin market seems extremely inefficient in general (in sense of efficient market theory and price discovery). It's hard to say that a single price point means much of anything.

As others have noted though, the concept of "overpaying" is itself tough to define since we're not dealing with uniform commodity goods, or ones where there is generally any widespread agreement on value. What is the value of a rarity where only a handful of collectors in the world give a crap? What if there are only two collectors who care, and one of them dies. Did the value of the type just drop?

The best definition of overpaying I can suggest would be can you turn around tomorrow and resell for pretty much what you paid for it (minus fees, postage)? Or maybe given the inefficient/thin market, perhaps tomorrow is too much to ask, so could you consign the coin at the price you bought it for and reasonably expect it to sell within a year, say. All rather fuzzy.

While it's certainly ridiculous to say that you are by definition overpaying if you buy at auction, there are obviously cases where auction fever took hold and people are overpaying! $3K+ for a London Helena nummus is just too much!

 

...bottom line...that's how auctions work..

 

When I buy a coin I think of myself not as the one willing to pay more than anyone else (and thus, by definition, overpaying), but simply as the one who most appreciates its beauty. Lucky me. Lucky all of us.

 

Show me an auction where every collector in any reasonably defined ancient coin field are all paying attention and bidding at the same time.

Is the purpose of your thread to tell every ancient coin collector they are foolish for buying coins in auctions?

 

The concept of "overpaying" is just as subjective as the concept of "value". If you buy a coin today for 100 dollars and get an offer for a very similar coin (that gives you the same amount of satisfaction) the next day for 80 dollars, you have overpaid on the first coin. However, ancient coins are not homogenous goods like wheat or oil, but every ancient coin is in a sense unique and more often than not there is a reason for a price difference.

 

My definition of overpaying is paying more than what a coin type usually sells for, without the coin being extremely rare or in exceptional condition. You inherently overpay if you buy from the well-known dealers who attend well-attended auctions, buy at x2-3 times the estimate and then resell at 5-10x times the estimate. The same ones who would offer you exactly the estimate if you try to sell them back the very same coins.

 

I find live auctions most exiting. Gives me a real adrenalin kick when "my" lots come up. I participated in a live (online) auction yesterday and got all the coins I wanted, which would have been impossible with pre-bidding. Also, I don't think there is a real risk of accidental bidding.

 

According to this definition, you always overpay whenever you buy your groceries or clothing from a retailer.

 

There is no analogy

 

The ambiguity with this definition lies in the phrase "...what a coin type usually sells for..."

What is "usually?" Who is selling the coin -- an individual, an auctioneer, a dealer? As Tejas insightfully points out, by this definition any individual who buys at retail always overpays since the retailer has paid the wholesaler less than the retailer is charging the customer. How does added value of a retailer or dealer figure into the definition of overpaying?

While I personally think that there are situations where an individual has overpaid for an ancient coin, this doesn't mean that I can create a universally accepted definition of "overpaid" in the context of ancient coins!

 

I consider my entire ancient coin capital as spent on a hobby that provides joy, akin to my gym membership fee that I will never get back.

Overpaying is very difficult to quantify, and I find when people discuss it they are talking about relatively small margins of overpaying (20% or so) which shouldn't concern someone who understands you are investing in joy and should only be putting forward capital which you can afford to lose completely.

Most people involved in the hobby to the extent that they post on this forum are knowledgeable enough not to accidentally "overpay" by catastrophic amounts that really sting (50+%). I think that's a very important distinction, whether it's intentional or accidental. If you intentionally "overpay" by factoring in the joy a coin will bring you, you haven't "overpaid" at all.

I enjoy discussing prices realised and what things are worth. However, I think the anxiety that infects people surrounding money is a shame and not really becoming of such an edifying hobby.

I am of the belief that the best thing to do is buy the coins you enjoy at a price level appropriate to you, and to not allow it to bring you any anxiety. I think after sitting on a collection for many years and simply enjoying it, people will be pleasantly surprised at what costs you can recoup if it's necessary to do so. You'll also save your blood pressure readings in the long run.

 

I said that's my definition and I didn't try to convince anybody. If you believe there is an analogy between buying ancient coins in auctions and retailers buying 10 tons of flour to sell you 1 kg with a small profit then there is nothing more to discuss