How does Numismedia calculate their "Fair Market Value" prices?? Their explanation feels a bit wishy-washy. The reason I ask is because I've been using the Red Book (which, in retrospect was a mistake in this particular situation) to price out the low-grade coins that I can afford on my budget. That means I buy a lot of G4 to VF20 Indian Head Cents because they're fun and cheap. When I recently priced out everything in Numismedia via NGC's coin management software, I was surprised to find that many of my lower grade coins were valued at about 1/4 of what I thought in G4 to VG8 and closer to 1/2 in F12 and then converging more closely in the middle grades. So what's the deal here? I know every collector uses different sources and there's no "go-to" or "best" guide but why such an enormous disparity between them? What metrics do Numismedia and others use to compile values and how are different inputs weighted?? .... I'd just hate to think that the entire hobby for me is arbitrarily priced :desk:
I think Numismedia has slightly more accurate pricings (did I just make up a word? it has a red line under it) than the Red Book. The best way to check for these kinds of common, low grade coins is eBay. For "Good" IHC, eBay auctions tend to run high, $2-$3. You can buy one for around $1 or less if you look around.
The Redbook should be used as reference only,there is alot of good information in it, but way way off on price's as it is printed 6 month's prior to the new year. The best way to get a good idea of the value is to do completed ebay auctions results for the grade,year and type of coin your looking for. For better date coins and grades do a combination of searches from ebay,teletrade and Heritage auctions.
Every price guide there is tells you how they arrive at their prices. More than a few of them list only the very highest price ever realized for a given coin in a given grade. Others compile their prices based on what certain dealers around the country are asking for that particular coin. And others will take realized prices from all kinds of sources, average them all together and list that price. But there's a bigger problem than any of this. Many people have this idea that any coin of a given grade is worth the same amount every time. This is simply not true. And a look at realized prices from any source, every source even, will show you this. You can look up realized prices for a particular Morgan dollar say in MS65 and what you see is that the prices realized for that coin will range from $300 to $700. So how do figure out what that coin is worth with a range like that ? You don't. You just know what the range is and that's the best you can do.
Thanks all, this gives me a very different perspective on pricing than when I started out. Can you link me to where Numismedia explains their calculations? ie are they weighted more towards recent, is there averaging, is it just auctions, etc? I found their definition of FMV, which I didn't find very explanatory...
It's right on the front page of their site - second paragraph. The pricing information we report comes from all over the numismatic market including many reliable dealers known for their unbiased market knowledge and information.
Overall, price guides are troublesome especially at low and high ends. Why? Well, for low end coins many times you are paying a "have to get out of my chair" price, meaning their is a minimum price a dealer will charge for anything. Too many new collectors think that if they have 100 $1 coins they are worth a $100, when they may be together only worth $40. Price guides always overprice common coins. There are nefarious reasons too, but just assume its for common reasons. The high end moves quickly at time, and the "good" reason prices guides are off here is that the market can just move quickly. Hope this helps.
