RIP Life Savings of Franklin Collectors

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While the guy that convinced the TPGs to label the coins as FBL is a speculator and semi-con-man, you can't argue that a fully struck coin is superior to a weak strike. Some of the premiums are large, but I vastly prefer full strikes to mushiness.

 

Curious do you also think things such as full heads on standing liberty quarters, full horns on Buffalo nickels, full bands on Mercury dimes, etc are in a similar category? While I certainly see how a market was essentially created by certain coins getting special labeling depending on the strike characteristics like the FBL Franklins. I also think that even without the labeling that extremely well struck specimens i.e. FBL coins would be getting sought out anyway.

 

That is unequivocally false. ALL of the PCGS authorized dealers are charging more then their book value prices. The prices are being set 100% by recent auction trends only. Dealer asking and selling prices are not factored at all.

Alot of the replies in this thread may actually show what the real problem is. I saw MANY posts about how PCGS price guide is over priced. It absolutely, positively, without question WAS. BUT if there is a sudden shift to represent auction values or slightly above then that tricks the market into thinking "well if that "overpriced" price guide shows value X then I don't want to pay anywhere near it". Maybe we are not understanding each other but that is the entire point I am trying to make.

Lets pretend for a second giving me the benefit of the doubt that PCGS somehow made their price guide fully accurate representing a fair price for every coin......Yet the market just continued to assume that the guide was over priced as it always has been. Do you really not see how this might place an artificial ceiling on the coins?

Because unfortunately PCGS price guide is not accurate in many different coin types. So someone familiar with the price guide would just assume (correctly so) that PCGS price guide is inflated and that they should pay considerably less. Now when they lower the prices back to reality then people unfamiliar with the day to day drops continue to assume the values are inflated, hence my position that the guides cause an artificial ceiling.

This is not about Franklin's alone. PCGS spent the last 2 years doing this to Lincoln Cents. The result is that the coins are simply not collectible anymore. All major auctions have massively cut back on the sales and listings of Lincoln's that have been devalued to nothing. MS67RD Lincolns were a very hot item until monthly price guide slashes. This was never a market correction, the market went cold the second PCGS lowered the values. The price guide drops are the cause and NOT the effect.

Well struck Franklins are very rare. Most auction catalogs will be loaded with tons of high end walkers, seated halves, bust havles etc.....But when it comes to Franklins only a hand full in each auction of 66FBL or above. I am not complaining about $5-$25 dollar drops on the low end common issues many of your respective logics would certainly apply there.

How many of those that replied to tell me I am wrong engage in the day to day trading of conditionally scarce coins?

 

At the risk of offending collectors, I think the FBL designation was put in place to add spice to an otherwise mind-numbingly boring series.

I understand a premium for well struck coins but the PCGS videos put it at what, about 15% of determining a grade? If you look at these designations on the Franklin Half you have the FBL adding thousands to the value of a coin. To me that has crossed over into something a bit weird.

This could be done with any series. Pick out a detail, pretend it is the be-all-end-all of worth on a coin and then hype it to no end. I'll avoid series with this kind of nonsense. Cool if you like it, but I don't see how a person doesn't get burned with it.

 

It seems to me that a person with day to day trading in conditionally scare coins would have a finger on the pulse of availability and demand thereby rendering any price guide more than 24hrs. old as dated.

Although I don't deal with conditionally scare coins I can tell you that the price guides have always been way high in my estimation. If Coin World and Numismedia cut their prices by 30% they'd be much closer to what I actually pay for Peace Dollars. The reality I'm seeing has no relationship to the price guides, except perhaps, relative cost.

 

You are absolutely right. That is why I made the post. These drops are idiotic to me because I see the sales of them day to day. Agree with me or disagree with me as you read though the thread I have cited sale prices and trending prices. I have also cited the sale of recent rarities. I know about them because I am very passionate about the series.

Some reply to this thread and say oh now PCGS price guide is just high but have never actually bought any of the coins, or even appreciate the full strike designations.

You can buy beautiful toned later date MS66 examples under $100 and I can understand why they would think that the FBL designation is not worth the premium....But that does not have anything to do with price guide values for the many that do care about strike rarities.

Another example 1963 MS65FBL recently lowered to $1250 in this "inflated" price guide. I sure don't want to pay more due to the "artificial ceiling" placed by the price guide.....The only problem is that it is difficult to find one under $1400. Why? Why are these common, abundant "time to drop the price guide" coins not available for price guide if the price guide is correct? Further why are there only a few for sale? Maybe those that keep telling me how wrong I am can tell me why? I would be interested to know.

Heritage realized prices for the 3 that sold the last few months are NGC MS65FBL 1560, PCGS MS65FBL 1500, PCGS MS65FBL 1320. Why lower the price to the inflated $1250 and how is that inflated? This is happening to MANY coins? The fact is these drops are artificial. PCGS is either finding the lowest auction prices to compare or just doing % drops across the board because they are too lazy to look at the already compiled data. YES I know the lower grades are selling for less but I am talking about rare dates only....Hence the title RIP to the investors and registry set collectors.

If the 1963's are selling at no reserve sight unseen coins are selling for $1500 then the price guide should be no less then $2000 as a retail price to leave room for negotiation and dealer purchasing. It should also be noted that most MS65FBL 1963's are heavily die polished, marked up, and rarely appealing. So a nice would should bring an even greater premium. Those recently sold were definitely not appealing coins.

 

Maybe just older "designations" are being phased out by lower income available "designations". Why have common coins with "Split skull" " Speared buffalo" "Lincoln in Jail", and all of the supposedly Double dies from single squeeze striking? They all are obviously to enhance the hunting and discovery of coins that can be claimed to be special.

Then what is the fuss? I certainly don't carry a device to look up PCGS prices or any other sources at a show or auction, I look at the coin and if I want it bad enough, I will buy it. If not, I pass and don't moan and groan about the pricing of today ...as they say, this is not my first rodeo, I know the prices will go up and will go down over time. PCGS could multiply the prices by 10X and it wouldn't affect any except those, counting on the investment reserve of the specific coin.

Jim

 

Even in you example you are not showing that PCGS is dropping the guide price and causing the market to drop. You are showing that the market has dropped and PCGS then lowers the price guide to reflect the market. Since dealers try to buy at auction for less than the guide prices they then bid less than the new guide. If they are successful that becomes the new "market price" and since the PCGS uses auction prices to set the guide prices the guide drops again. So it isn't PCGS forcing the market down, it is the market pulling the guide price down.

 

When a coin I want for my Franklin set comes around I don't care what price guide is, I'm going to win that auction or click buy it now without even thinking about price guide.
Price guides are pretty irrelevant to a lot of people. They don't set the market, the market sets the market.
Also, if the Lincoln series is so dead as you claim, it's because the market interest for them is deflated, not because pcgs slashed guide prices.

 

I'm just having a hard time getting past the title of the thread. The idea of a person's life savings being tied up in Franklins (or any other collectible) makes me shudder. Not even the junk silver variety deserves the 'life savings'.

Life savings belong in investments, not collectibles.

 

Doug, I think what he is saying is that there is a negative feedback loop.

People think the PCGS price guide is overvalued.
So, they pay less than the price guide value.
PCGS lowers the price guide value.
People pay less than the price guide value.
PCGS lowers the price guide value.
And so on.

To a certain extent, this may be true - but that's always going to be true in a down market (according to everything you've been saying, we're in a down market). At some point, there will be a bottom and a recovery.

The question becomes: is PCGS intentionally trying to screw Franklin collectors? Is it a conspiracy?

Is the PCGS price guide lowering causing the market to lower? Or is the market lowering causing the price guide to lower?

I think that we are saying the market is lowering and the price guide is responding; I think he is saying that it's a massive conspiracy and PCGS is causing the market to collapse.

 

Here's an idea.. if the pcgs prices are based on dealers average asking prices, then the issue lies in the population that the dealers used in this pool to find an average. In other words, If the market, say for Jefferson nickels minted between 1938 and 1963, starts slowing down because most collectors have a good, full or nearly full collection of the ones they want in their collection, and not too many new collectors are going for these, with the exception of picking up one for a 7070, will those pcgs dealers be likely to substantially reduce their asking price to the point they are actively selling again and can then start thinking of raising prices again? I would say that behavior goes against what a dealer is out to do... maximize profit and not lose his inventory for less than it both cost him to acquire, but also including the costs of holding on to them and marketing them, etc.

In fact, you also have a cohort used where there may be no actual policing of their prices other than what they say they are asking. Therefore, the price guide reflects more what dealers want and think they should be able to get, based on, at least partially, how liquid they have to be with that stock. In times of rising demand, dealers are likely ready to recognize if they sold too cheap, so prices are able to rebound and not stay deflated in times of quick sales and demand. but conversely, less likely to cave in to perceived lower demand and quickly lower their asking price. So it seems that financial considerations by dealers is more likely to favor higher prices in the price guide, ones perhaps that no dealer is actually getting for non-pq coins in a grade than to favor a lower price than the coin is generally sold for.

 

Kasia, let me get this straight.... you're telling me that in a free market, supply will meet demand at an optimal price point? And that when demand goes down, the price will also?

Damn, that's revolutionary!

(sarcasm, in good fun, of course)

 

Question...

I can't seem to locate info for this, but wasn't there a reason that both PCGS and NGC were 'required' to provide a free to the public price guide? I have some vague memory I read that this was not done out of the goodness of their hearts or to forego possible subscription based 'info' and it had to do with being able to (possibly) be considered a top tier tpg for eBay?

 

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Part of what I am saying is that dealers are more invested in getting a profit from a coin and not devaluing things that are already seen as valuable than to lower prices because they don't seem to be selling at the price they are asking.

There are certain stores that are known to take merchandise in great condition and ruin it with all sort of unremovable substances and throw it in the trash can rather than sell it below a certain point they are asking, or even to donate it... possibly for a few reasons...

You donate good clothes to a charity where the clothes get sold cheaply and worn, and that encourages shoppers to pass some items by until they could get it much cheaper, thereby taking away part of your customers and losing business.

Trashed merchandise has a higher markoff value to the company than donated things.

This encourages employees to not steal the items marked for disposal because the good still have value that can be used as a price point in pressing charges.

--- that is not coins.. slabbed coins aren't clothes or something at a store. A dealer usually is more willing just to hold on to most items until their price is met, and things in stock could be there for a long time if it is not moving.

 

The eBay thing was having a searchable data base for the certs. PCGS and NGC didn’t have to do anything to meet their requirements. I believe ANACS and ICG were the ones that had to build it out some to meet that which they both did. The price guides are older than the eBay requirement too