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<p>[QUOTE="robp, post: 4801538, member: 96746"]I'm not convinced by the graphs above as they cover too short a period. December to March is essentially pre-Covid, but since then prices have appreciated because the only place to buy coins for the collection (or stock if you are a dealer) is at auction. Everyone has to go to on-line auctions to buy, so Covid has produced a market boost. More buyers = higher prices, possibly due to an increased number of rose-tinted spectacles because people see what they want to see. A lot of people are off work with more time to occupy. There are many factors coming together here capable of producing better prices. </p><p><br /></p><p>On the other side of the coin you say that estimates are too low. This is a case of trying to find a number high enough to keep sellers happy, whilst at the same time providing bidders with a possible bargain which will encourage them to competitively bid prices up. If the estimates are too high, then you end up in the position Baldwin's found themselves a few years ago. Estimates were essentially set at retail with opening bids 20% below. The result of that was you put in a bid at opening level if you wanted the coin, as you would then pay retail after commission was added. If you really wanted the coin you might bid an increment higher and pay over 'book' (whatever that means given no two coins are equal). An additional effect of the higher estimates was a higher pass rate because it could no longer allow for overgraded coins, nor the psychologically defeated buyer with the smaller pot of money to play with who will more readily say 'I can't afford that'. A lower estimate will frequently produce a higher end price because it produces more prospective bidders, some of whom will get drawn in. An estimate is also likely to reflect the 'book' value to some degree, which essentially means flat estimates throughout the year, rebased following the yearly price update.</p><p><br /></p><p>Estimates rarely reflect what the market will pay on the day. </p><p><br /></p><p>For every collecting area there will be specialists willing to pay a [sometimes large] premium for a particular variety which may or may not feature in the main market price guides. For the specialist, a guide price is not as important, whereas the general collector will be looking for an acceptable example at something around the 'book' value - and will often lose out as a result. </p><p><br /></p><p>If only for the above reason it shows how important it is to know the market for the coins of interest. Once a collector knows the market they can and many will happily bid maximum values that are both lower than estimate, or several multiples of it. It's horses for courses.</p><p><br /></p><p>The point you make about insurance valuations and not wanting CNG to do it is a red herring. Sums insured will either be for purchase cost (probably index linked), or replacement cost (for which read market value) and would never be based on auction estimates.[/QUOTE]</p><p><br /></p>
[QUOTE="robp, post: 4801538, member: 96746"]I'm not convinced by the graphs above as they cover too short a period. December to March is essentially pre-Covid, but since then prices have appreciated because the only place to buy coins for the collection (or stock if you are a dealer) is at auction. Everyone has to go to on-line auctions to buy, so Covid has produced a market boost. More buyers = higher prices, possibly due to an increased number of rose-tinted spectacles because people see what they want to see. A lot of people are off work with more time to occupy. There are many factors coming together here capable of producing better prices. On the other side of the coin you say that estimates are too low. This is a case of trying to find a number high enough to keep sellers happy, whilst at the same time providing bidders with a possible bargain which will encourage them to competitively bid prices up. If the estimates are too high, then you end up in the position Baldwin's found themselves a few years ago. Estimates were essentially set at retail with opening bids 20% below. The result of that was you put in a bid at opening level if you wanted the coin, as you would then pay retail after commission was added. If you really wanted the coin you might bid an increment higher and pay over 'book' (whatever that means given no two coins are equal). An additional effect of the higher estimates was a higher pass rate because it could no longer allow for overgraded coins, nor the psychologically defeated buyer with the smaller pot of money to play with who will more readily say 'I can't afford that'. A lower estimate will frequently produce a higher end price because it produces more prospective bidders, some of whom will get drawn in. An estimate is also likely to reflect the 'book' value to some degree, which essentially means flat estimates throughout the year, rebased following the yearly price update. Estimates rarely reflect what the market will pay on the day. For every collecting area there will be specialists willing to pay a [sometimes large] premium for a particular variety which may or may not feature in the main market price guides. For the specialist, a guide price is not as important, whereas the general collector will be looking for an acceptable example at something around the 'book' value - and will often lose out as a result. If only for the above reason it shows how important it is to know the market for the coins of interest. Once a collector knows the market they can and many will happily bid maximum values that are both lower than estimate, or several multiples of it. It's horses for courses. The point you make about insurance valuations and not wanting CNG to do it is a red herring. Sums insured will either be for purchase cost (probably index linked), or replacement cost (for which read market value) and would never be based on auction estimates.[/QUOTE]
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