does the market overvalue plastic and undervalue coins??

[michael]

from andy lustig

 

"The market tends to overvalue plastic and undervalue coins. If that ever changes, most slabbed coins will decline in value." The basis for the second sentence was simply my opinion that PQ coins are relatively scarce.

 

In other words, a slab will tend to bring down the value of a PQ coin because its price is often compared to the prices of other coins of the same assigned grade. Conversely, a slabbed coin that's low end for the grade will tend to trade for more than it would if raw, for exactly the same reason.

 

Of course there are exceptions to the rule, but do you agree with the general premise? >>

 

I TOTALLY AGREE ......................................

 

[Arizonadesertrat]

I also agree with the general premise, but don't anticipate the situation ever reversing. After all, most collectors are now conditioned to suspect that something must be wrong (i.e., the coin would be BB'd if sent to NGC/PCGS) if a coin trading for more than $400-500 or so isn't slabbed.

Your second paragraph reflects issues with repeated submissions (leading to low-end, certified coins in many cases) that are playing havoc with the coin market. Your comment about PQ coins fetching 'ordinary' prices is spot-on---we don't see lots of PQ coins in most dealer inventories because experienced collectors quickly spot good values, and also because typical dealers won't pay more for PQ coins.

A related issue is how a PQ coin should be valued--20% over sheet, 2x sheet, etc.? At what point does buyer price resistance determine value? How many collectors would pay 2x sheet for a truly PQ coin? It seems to me that the 'market grading' nonsense that is going on is primarily aimed at lessening buyer price resistance where PQ coins are concerned. For example, calling ('grading') a technically AU55 Capped Bust half dollar with exceptional eye appeal an MS62 coin probably enables a seller to make a transaction at his desired price, which would be multiples of the AU55 value.

[Zoins]

Going by the TPG grade is easy, going by your own grade is hard. On average, most collectors will go by the TPG.

 

One possible way to end this is the coming of the CAC.

[Arizonadesertrat]

Most dealers go by the TPG grade too (not too many dealers are really experts at grading

anymore). You won't find too many dealers who will admit that a coin in his inventory is in a slab with too high a grade. As far as I am concerned, the only value of a TPG slab (NGC/PCGS) is the certification of authenticity.

 

Going back to the theme of this thread, the market for high-end contemporary coins (MS70, PF70) is entirely about the plastic holder. If the coin grades one point lower, it has very little collector premium (unless the mintage is unusually low), even though it still has essentially the same eye appeal.

[Zoins]

Going back to the theme of this thread, the market for high-end contemporary coins (MS70, PF70) is entirely about the plastic holder. If the coin grades one point lower, it has very little collector premium (unless the mintage is unusually low), even though it still has essentially the same eye appeal.

Often times this is true of any condition rarity where a coin one grade higher costs dramatically more. This isn't only for moderns and isn't only for 70s.

[Conder101]

One possible way to end this is the coming of the CAC

That won't end anything. It just adds another layer. Eventually everyone will insist that the coins be slabbed, and sent to the CAC, and then there will still be dealers selling coins as CAC, but high end or solid for the grade. Low end for the grade just won't be described as such. It happened before slabs, it happened with slabs, what makes you think it won't happen with the CAC coins?

[MBA101]

In the sense that I see many a dipped white type coin that should be toned in plastic that sells for a ridiculous amount, yes, plastic overvalues old type. On the other hand, original coins are being sucked up at very strong money as well. So I believe that the un-messed with material is and will be strong in either case, while the cleaned/dipped material may lose some of its value if all people ever catch on. Of course, I think that there will always be a strong market for cleaned coins, so I will not worry about such things. Just look at what Heritage sells on their site. Thousands of cleaned ANACS coins are selling like hot cakes. And blast white Busties bring as stong a bid as the original toned ones do.

 

And this money is generated because the coins can be displayed online with a pic, and each has an assigned 3rd party grade, so with this market boomin, it will be strong until the internet no longer exists.

 

[Zoins]

with this market boomin, it will be strong until the internet no longer exists.

Or if coins become like stamps....

[SkyMan]

Coins in the end still sell themselves. I would say that the plastic creates a level of comfort, but once a person becomes somewhat proficient with a specific series then he/she is more readily capable of putting a value on the coin. Let's take Franklins for a second. The published price guides for Franklins in MS64-7(with or without fbl) may indeed hold true for 80-90% of the Franklins out there, which in general are rather boring and can be fugly. However, a properly graded, I'm not even talking technically PQ coin, that is a nice toner or nice white coin will easily bring multiples of what the sheet says.

[jesbroken]

The only way CAC will change the market is how the customer/seller relationship will evolve. Sellers will use CAC to sell high end slabbed/stamped coins at a premium price to customers and customers will use CAC to drive prices down on high end slabbed coins that have not been to CAC. Thus both gaining benefits from the creation of CAC(have I lost my mind?) That's the way I see it.

[BillJones]

I think that low end slabs have depressed the market.

 

One of the reasons why Gray sheet prices seem low is because they have been dumbed down for the over graded and "visually challenged" (ugly) coins that one often seens in slabs. This has been going on for quite a while.

 

Sure, the Gray Sheet is a "sight seen guide," but more than a small amount of the stuff you see in the market these days is pretty disappointing.

[MikeInFL]

In general, I agree with the premise -- that the market, in general, overvalues plastic and undervalues coins, but the opposite is also true....

 

There are many coins in which the pastic actually makes the coin cheaper or doesn't really effect the value. These are the coins to buy, but the challenge is in finding them...Mike

[cladking]

I generally agree but think there is a far greater factor at work;

 

The simple fact is that one person sees as highend for the grade someone else will see as grossly overgraded. When coins are "typical" for their type, age, and manufacture then they can be put into fairly neat categories like MS-65, but most coins aren't typical and this goes doubly for older coins. These will have attributes of higher grade coins as well as attributes of lower grade coins. Trying to squeeze everything into one nice grade can't work and identifying those which are at the high end of the grade is simply ludicrous.

[TJ'S Coins]

In general, I agree with the premise -- that the market, in general, overvalues plastic and undervalues coins, but the opposite is also true....

 

There are many coins in which the pastic actually makes the coin cheaper or doesn't really effect the value. These are the coins to buy, but the challenge is in finding them...Mike

 

Well said Mike (thumbs u