There seems to be so much focus on "when it comes time to sell...."

[James_OldeTowne]

It's all auction companies talk about - getting top dollar, reaching the most potential bidders, holding out for the absolutely highest bidder, getting the maximum number of bids. A lot of dealers talk the same way - they will help you get the best price for your coins, assist with getting them in the "right" holder, making sure the deepest pockets get a chance to make an offer, etc. And of course, there's no end to the hype and inflated and expansive claims about how to get the most money for your coins - look at how much advertising you get from just the largest coin dealer in the country! Full page ads, double page ads, glossy brochures, videos, online appraisals, and on and on and on.

 

And then, there are all the services available to help you sell your coins - slabs, stickers, online presence, direct mail, national ads, "official auctioneers", bidding networks, selling agents, crackout specialists, the list just goes on. There are so many things out there to help you "when it comes time to sell".

 

Why is there just such an outlandish focus on selling your coins for the most money - but a virtual dearth of information on how to buy coins for the right amount of money? Isn't there supposed to be a two way street in the coin market?

 

It is remarkable that in a hobby called "coin collecting", the dominant theme has become how to get "the most money" for your coins (when it comes time to sell, of course), rather than how to buy them. One would think that "collect" should imply "buying" far more often than "selling".

 

Doesn't anyone else grow weary about the overwhelming number of times that we are bombarded with the idea that all that matters is to "get the most for your coins"? It seems to me that if everyone is getting "the most" for their coins, that can only mean that those who are actually trying to collect must be forced into spending the most for coins, and I have yet to see an explanation of how that makes this a better hobby.

 

There is so much talk geared to "when it comes time to sell". What about when it comes time to buy?

[DirtyGoldMan]

The hobby is about collecting coins and is comprised of folks like you and me. If you want to produce and distribute a video to help me become a better coin buyer, I will be more than happy to receive it and will watch it with great interest.

 

The business is about selling coins and is comprised of folks like Heritage and Scotsman. They are in the business of making money first and foremost, and if they can help you or me to find a coin that we would like for our collection, that's all the better.

[supertooth]

James---- The idea is to help you to SPEND your money---not to save any of it---not to get a good deal for your money but to make you spend as much as possible to obtain the coins that you desire. Not in ALL cases you understand---but definitely the majority of transactions.

 

By the way, I want to congratulate you on many of your posts on the CAC threads. You have put forth "many" valid points. I have chosen to stay out of it for now. No reason to stir the pot even further. Bob [supertooth]

[MarkFeld]

An auction house that focused its advertising on how cheaply its bidders could buy coins would likely hurt for consignments.

[jesbroken]

James,

If collectors were as ready to spend money to learn to better collect and buy their coins/currency as they are to better sell their coins/currency then there would be a plethora of companies spending great amounts of money advertizing for the buyer. That is not currently the case, so it appears to be a onesided street(there will always be a two sided street as one cannot sell without someone to buy). One side appears to be paved and the other side consists of dirt, yet the road goes on and on and on.

Jim

[James_OldeTowne]

An auction house that focused its advertising on how cheaply its bidders could buy coins would likely hurt for consignments.

What are the checks and balances for auction houses - or aren't there any?

[Tradedollarnut]

An auction house that focused its advertising on how cheaply its bidders could buy coins would likely hurt for consignments.

What are the checks and balances for auction houses - or aren't there any?

 

Other auction houses ... and major dealers.

[WoodenJefferson]

"Madison Avenue 101"

 

It is often used metonymously for advertising, be it coins, rhubarb or crab grass killer.

 

Advertising contains all the same hype; truth & misrepresentations.

 

It is your job to fluff the pillows and it is our job to figure out which one to believe.

 

Fluff a pillow too much and one can readily see it contains mostly air.

 

 

[NPCoin]

An auction house that focused its advertising on how cheaply its bidders could buy coins would likely hurt for consignments.

What are the checks and balances for auction houses - or aren't there any?

 

Other auction houses ... and major dealers.

 

That would be like saying that the House of Representatives is the checks and balance for the Senate, and that the Congressional aides and lobbyists are the checks and balance for the House. Checks and balances necessarily need to be outside of the others' influence.

 

What you allude to is more along the lines of cartel, not checks and balance. And I think this is pretty much what the original question centers around. Why does there seem to be a cartel in numismatics pushing the "collector" to spend more and more and more to feed the investment monster?

 

I agree that there truly is such a focus on "when it comes time to sell". In fact, there is a whole breed who already make the plans "for that time" even before making their purchases. These are the hardcore speculation investors. Their whole intent is to make the profit turn around in the shortest amount of time possible. It's a pretty big money maker. And the auction houses, dealers, and especially Third Party Graders see the profits that can be made by catering to these speculators.

 

More casual investors and collectors are simply an afterthought to the whole equation, which takes us from dealer to TPG to dealer again to the auction house. In his 1981 book, Investing In Rare Coins, Dennis Steinmetz made a few rather interesting comments. Some could even say that the current trend in "when the time comes to sell" had its roots in a conspiracy started almost 30 years ago.

 

From the book:

 

pg. 27

Major coin dealers are linked by a complex teletype system that provides instantaneous quotes on coin values and smoothes the way for trades and exchanges among dealers. There also are major shows and auctions and there's an informal dealer network among the larger firms.

 

pg. 34

The major dealers, by their transactions and their appraisal of a coin's condition and desirability, often determine its value... ...Their decisions, when averaged with the estimates of other major dealers, determine the value of the coin... ...The influence of the major dealers, however, often transcends pricing. By his buying and selling activities, a major dealer may attempt to influence some of the more speculative issues and affect prices for a wide variety of coins in the market.

 

pg. 38

I foresee large chains of brokerage houses - not unlike those now selling diamonds - that will deal exclusively in rare coin investment. They'll have all the trappings of major investment institutions - computerized communications, instant pricing and availability, expert grading evaluations and detailed investment portfolios. The small corner coin shop of the 1960s will seem like a Model T by comparison.

 

pg. 100

While we recognize that there will always be a strong collector interest in the coin world, we also feel that the fastest growing area of interest in coins will be in the collector/investor and investor sector.

 

pg. 101

Thus we welcome new collector/investors and investors as colleagues, fellow collectors and coin world enthusiasts. But we do not like to encourage those who see gloom and doom, economic chaos and civil strife in the future. As in many areas, prophecies of this sort can be self-fulfilling.

 

Why such a focus on "when it comes time to sell"?

 

Well, one could say that it's a decades long conspiracy that has finally come to fruition.

[James_OldeTowne]

SMS,

 

Yours is a remarkably astute post. Thanks very much.

[MikeInFL]

To attempt to make the astute meter to point in the other direction:

 

There is so much talk geared to "when it comes time to sell". What about when it comes time to buy?

 

Because it's all about the money?

[MikeInFL]

On a more serious note, and in my opinion, I think just about all of you are missing the point.

 

The answer to James' question lies in who exactly the auction houses' core clients are -- and it is consignors NOT buyers.

 

It goes like this: Auction houses attract consignors, consignors bring coins, coins attract buyers. So in a sense, the auction houses are attempting to market to their clients effectively by focusing on the sell side of the equation -- because if they do, the buy side (and their revenue) will take care of itself.

 

A prudent marketing move, IMO, and nowhere near the consipracy theory espoused by some (and with all due respect to the consipracy theorists in the house).

 

Respectfully...Mike

 

p.s. as for why more focus isn't on the buy side -- remember, the best bidder isn't a smart and poor guy, it's a dumb and rich one.

 

[James_OldeTowne]

I think that once again, I did a poor job of explaining myself.

 

I realize that an auction house is going to promote only the selling aspects - how to get the most for your coins. That's perfectly understandable, and expected, and for that matter, time honored.

 

My question is, what is there to give us checks and balances on all the effort put into selling? Is there no entity bent on teaching us how to buy coins prudently? To learn when too much is, well, just too much to pay for a coin? Of course it would not be an auction house that would take on this role. I am wondering if anyone does, though.

 

In short, I thumb through pages and pages of ads in Coin World, and nowhere do I see something along the lines of "we will help you learn how not to overpay for coins", or something to that effect.

[MikeInFL]

what is there to give us checks and balances on all the effort put into selling? Is there no entity bent on teaching us how to buy coins prudently? To learn when too much is, well, just too much to pay for a coin? Of course it would not be an auction house that would take on this role. I am wondering if anyone does, though.

 

I know that I've learned the most on this topic from (a) forums like this, and (b) inter-collector communication.

 

Auction houses, and I truly believe most (but not all) dealers, would prefer you to be uneducated and unquestioning -- self-interest is the strongest of motivators.

[NPCoin]

what is there to give us checks and balances on all the effort put into selling? Is there no entity bent on teaching us how to buy coins prudently? To learn when too much is, well, just too much to pay for a coin? Of course it would not be an auction house that would take on this role. I am wondering if anyone does, though.

 

I know that I've learned the most on this topic from (a) forums like this, and (b) inter-collector communication.

 

Auction houses, and I truly believe most (but not all) dealers, would prefer you to be uneducated and unquestioning -- self-interest is the strongest of motivators.

 

The real point, in my opinion, is that there really is no checks and balance. To give you the government analogy again, (a) and (b) would be likened to the People being the checks and balance within the Government. Here in the States, we are supposed to be OF the People, BY the People, and FOR the People...however, the government is not "The People". The checks and balance must come from within the Government itself.

 

That is to say, the checks and balance, in this case the push and tools needed for "when the time comes to buy" should come from within "the industry", not from the collectors. True, collectors are able to share knowledge and know-how in order to help each other in their buying endeavors. But, the help should come from within, for instance, the auction houses and major dealers.

 

In the quotes I gave in the earlier post, the author made the statement that the small time dealer would, for the most part, become a thing of the past. The unfortunate thing about it is that these small time dealers, who do not necessarily rely upon the big auction house mentality to turn a profit to live off of, are the ones from within that a collector is able to build a relationship with. These small dealers ARE the checks and balance. But, they are becoming more and more rare.

 

A number of the small dealers that have survived the advent of the universally accessible big auction houses are sucked into the same mentality, and themselves become members of the "investor" class of numismatic citizen foreseen by Steinmetz. The only "insider" we have left, would be the analysts. Information we get from analysts come from the publication sector.

 

Unfortunately, there is so much digging through the hype and propaganda, that very little is really able to be gleaned from so much "information". Numismatic magazines, numismatic societies and guilds, books, etc, are our checks and balance. That alongside (a) and (b) gives us our best checks and balance. It is a pretty sad state to be in, because we are, as collectors, left to the mercy of the collector/investor and their big auction house outlets.

 

Even "tools" such as pricing guides are tools created by these big "when the time comes to sell" players, and are very manipulative of the market. The PCGS "Price Guide" is a prime example.

 

There is really no easier way to put it then the fact that we are on our own here. As collectors, we really do not have any power over the big auction houses and collector/investors. Because collector/investors and speculators exist and continue to utilize numismatics as a pure investment tool, and because the big dealers and auction houses continue to profit from it, the only thing we can do is resist the urge to pay more than we are absolutely willing to pay for a coin.

 

Abstinence is our only check, and knowledge is our only balance. This only makes collecting what we like without over paying all that much more harder. The more often you overpay for a coin, the more often you are helping the big dealers and auction houses, as well as the collector/investors that are catering to them, to make more profits and continue to push the "when it comes time to sell" mentality in the market.

 

Eventually, the market should slow down and balance itself out with regards to coin prices, if we as collectors slow down and not get caught up in the one sided "buy knowing you're going to sell", "protect your investment through this plastic", and all the rest of the hype and hoopla, then eventually, the collector/investors should begin to lose their market, and the big dealers and auction houses will be forced to once again consider the collector and swing back toward a "when the time comes to buy" mentality.

 

But, then again, as collectors, we are somewhat fanatical and addicted, so that will never happen.

[NPCoin]

... Is there no entity bent on teaching us how to buy coins prudently? To learn when too much is, well, just too much to pay for a coin? ...

 

In short, I thumb through pages and pages of ads in Coin World, and nowhere do I see something along the lines of "we will help you learn how not to overpay for coins", or something to that effect.

 

I believe that the local TRUSTED dealer that you have built a relationship with is the only one who would possibly do this for a collector. The small brick and mortar dealer would usually have a pretty good grasp of the actual market, and be able to advise you without all of the hype and hoopla.

 

Where I live, we need to travel for two hours or more to get to the closest coin dealer. And I would not say that I would even really trust any of them...yet.

 

My day job pays for the mortgage, utilities, food, etc. But, part time, I do numismatic consulting in our small community. We have no dealers, no clubs, no associations, just a bunch of old westerners with any number of different coins they have accumulated and appreciate and have numerous questions about.

 

More often, I get the appraisal request. But, I do also get the questions about whether a certain coin online or in hand is worth buying for a certain price. I do not make money off of any of the consulting, it's all pretty much a value-added portion of what I do, but I will not hesitate to answer someone's question. And not necessarily from a "when the time comes to sell" side of things either.

 

This is what we currently have missing from the industry. Like I said previously, the only inside checks and balance that exist in any form today are the publications. Publications are what give us our information and knowledge. Even sharing amongst each other as collectors, somebody had to first learn it somewhere. And publications are usually where the information is obtained first.

 

In a way, these very fora are publications, and a very good source of sharing the knowledge we obtain as collectors. My very goal is to eventually have in place online such tools that are needed to help collectors for "when the time comes to buy" as well as "when the time comes to sell".

 

Until these kinds of sites begin to pop up, we're all we have.

[michael]

since coins have become more about the money

 

IE. INVESTING

 

and many top registry sets are being sold and turned over at an alarming rate with holding periods less than 2 years if barely a year's hold

 

 

the auction companies are just catering to their audience where profit/return on investment in the main purpose of sellers

 

so they try to capitalize on this

 

cant blame them

 

not good or bad just the way it is in the reality of the situation

 

 

just take a look at most all of the posters on pcgs read theit threads and see their motives it is all businesss/investment

 

it is all about getting a coin and then getting it in a certain holder with a certain grade and designation

and chi-ching it is all about the money and holder then off to be sold

to the highest sucker/bidder holder buyer on sleezebay

 

in fact one of the biggest thread starters on the coin and registry set boards at pcgs is sleezebay

[lehigh96]

 

p.s. as for why more focus isn't on the buy side -- remember, the best bidder isn't a smart and poor guy, it's a dumb and rich one.

 

Hey, I resent that comment. I am not rich at all.

[BillJones]

The goal for an auction house is get as much money as it can for its consignors. But I will tell you as I buyer I find the whole process to be a turn-off. I once tried to participate in an Internet – live auction that Heritage was running for some political medalets. I soon found that buying the items for anything less than outrageous prices was impossible. First you had to be top bidder in the Internet side of the auction. Then the items were sold in a live auction with the highest Internet bids as the starting point. I came to the conclusion that I could do better via coin show purchases and auctions run by smaller firms. The Heritage auction is great for consignors, but it’s a turn off for collectors such as I.

 

It seems that there are some bidders who are willing to pay almost unlimited amounts to buy certain lots. Rational people are advised to look elsewhere.

 

[coinman1794]

It's all auction companies talk about - getting top dollar, reaching the most potential bidders, holding out for the absolutely highest bidder, getting the maximum number of bids. A lot of dealers talk the same way - they will help you get the best price for your coins, assist with getting them in the "right" holder, making sure the deepest pockets get a chance to make an offer, etc. And of course, there's no end to the hype and inflated and expansive claims about how to get the most money for your coins - look at how much advertising you get from just the largest coin dealer in the country! Full page ads, double page ads, glossy brochures, videos, online appraisals, and on and on and on.

 

And then, there are all the services available to help you sell your coins - slabs, stickers, online presence, direct mail, national ads, "official auctioneers", bidding networks, selling agents, crackout specialists, the list just goes on. There are so many things out there to help you "when it comes time to sell".

 

Why is there just such an outlandish focus on selling your coins for the most money - but a virtual dearth of information on how to buy coins for the right amount of money? Isn't there supposed to be a two way street in the coin market?

 

It is remarkable that in a hobby called "coin collecting", the dominant theme has become how to get "the most money" for your coins (when it comes time to sell, of course), rather than how to buy them. One would think that "collect" should imply "buying" far more often than "selling".

 

Doesn't anyone else grow weary about the overwhelming number of times that we are bombarded with the idea that all that matters is to "get the most for your coins"? It seems to me that if everyone is getting "the most" for their coins, that can only mean that those who are actually trying to collect must be forced into spending the most for coins, and I have yet to see an explanation of how that makes this a better hobby.

 

There is so much talk geared to "when it comes time to sell". What about when it comes time to buy?

 

Coins have increased in value so drastically that a new paradime has developed, where it's not possible to find coins in change and virtually everything must be bought at a premium. And, as with any monetary expenditure, careful thought should be given to making sure it is a wise investment. Thus, everyone is concerned with value, and a cottage industry has developed around helping people identify and solidify their assets (coin certification) and help them ultimately to realize top dollar for them (hype of auction companies).

[World Colonial]

The reason why this must have happened to you is because you were competing with many bidders for items which were in great demand, but you would know this better than I because you are a more experienced collector.

 

I bought an 11 coin lot for one of my series for $488 in the last world coin auction. Five of the coins have already come back in NGC holders and I will sell three of these plus one that I sent to NCS which will pay about half of the lot cost plus grading fees. By the time I finish selling the others I do not want, I'll probably end up with two coins that I could sell for at least $600 that will have cost me about $150-$200. This is the first time I have done this with Heritage but I will be looking for similar opportunities in the future.

[World Colonial]

The auctions companies obviously are doing this because of money and because they need consignments, but I do not think that most collectors pay enough attention to the financial side of the hobby or else they might buy something other than what they currently do.

 

For me, I consider my collection a combination of a hobby and an "investment". I actually do not consider coins investments but I always buy with resale in mind. There are very few coins that I buy now (intentionally) that I would have to sell immediately for anything more than a nominal loss (proportionately unless the coin is of nominal value). The reason for this is that the primary area that I buy now is economically "inefficient" which means that I am able to use my knowledge to buy the coins cheaper than I can sell them for. Since most of the members on this board are collectors of US coins, it is much more difficult to do this because this market is far more "efficient".

 

When I started collecting again 10 years ago, I had a lower emphasis on value and resale. But now that my collection is worth a lot more, I cannot bring myself to spend what is a substantial amount on coins that will either result in a financial loss or that I will have to wait years to break even or make money. If this was my only option, I would spend substantially less than I currently do, change what I collect or both.

[James_OldeTowne]

The reason why this must have happened to you is because you were competing with many bidders for items which were in great demand

What is turning me off is all of what I perceive as "artifiical demand" - that is, the excessive hype, advertising and come-ons that are encouraging people to bid high on things they have limited interest in, while someone else who may actually have a passion for that same thing is excluded as prices go crazy. It is at least my perception that a huge amount of "casual" money has bought into coins as an investment, while serious collectors - the people on whose backs this hobby once depended - are becoming less able to compete with the excessive artificial demand.

 

Heritage alone has six full pages - SIX! - of full page ads in CoinWorld - just for one single auction, and the number of other companies with full page ads for auctions probably brings the total up to twelve pages. This doesn't count the endless parade of mail I've gotten from them advertising how mind blowing prices will be if I consign now.

 

I've looked through all their stuff, and no joke, I found absolutely nothing that talks about great opportunities for collectors wanting to buy coins.

[MarkFeld]

I've looked through all their stuff, and no joke, I found absolutely nothing that talks about great opportunities for collectors wanting to buy coins.

James, if you had found something on that subject, I suspect you would be complaining about "What is turning me off is all of what I perceive as artifiical demand - that is, the excessive hype, advertising and come-ons that are encouraging people to bid high on things they have limited interest in"

[World Colonial]

It is at least my perception that a huge amount of "casual" money has bought into coins as an investment, while serious collectors - the people on whose backs this hobby once depended - are becoming less able to compete with the excessive artificial demand.

 

I do not believe there is any doubt that this comment is accurate or in any event, I am convinced of it. That is one of the reasons I do not collect US coins because that is where the most speculative money goes which both makes the coins less affordable or unaffordable to the typical collector and increases the future risk of financial losses when this "hot" money "runs and hides". It isn't the only reason for the current prices but I believe it to be disproportionate in selective areas.

 

My comment to this dilemna is to be patient. There is nothing like a bear market to improve affordability for the real collector and I believe we are heading toward one, possibly a big one. But I do not see it happening until the last beneficiary of the credit bubble - commodoties and precious metals - has the hot air removed from it. I have been expecting this but it has not happened yet.

 

 

 

 

[James_OldeTowne]

I've looked through all their stuff, and no joke, I found absolutely nothing that talks about great opportunities for collectors wanting to buy coins.

James, if you had found something on that subject, I suspect you would be complaining about "What is turning me off is all of what I perceive as artifiical demand - that is, the excessive hype, advertising and come-ons that are encouraging people to bid high on things they have limited interest in"

I'm pretty confident that most things that appear to be full of hype are things I'd tend to complain about!