Isn't it pretty obvious that TPGs should be non-profit organzations, and not...

[cpm9ball]

I have heard rumors, and I've never researched it to know if it is true, that Heritage and Teletrade are both partially owned or in business with NGC. I also know that Teletrade and Heritage bid on the coins that people send for auction ( which in itself is straight up schill bidding)..These big auction companies also solicit raw coins and offer to send them for slabbing before auction....

 

Oh what a tangled web they weave...so yes, it actually IS possible that TPG's may also be grading coins that they draw profits from when sold........

I am confident that NGC and Teletrade have no such affiliation. And if/when Teletrade and/or Heritage bid on coins that others have consigned to auction, that is NOT shill bidding.

 

Mark, what would it be called then? They have a double interest - they are auctioning the coin for buyer and sellers fees, and they are bidding on those coins? They have every incentive to get the bid up because the higher it goes, the more they make. Isn't that a shill? I don't know if they are doing this just repeating allegations from jackson64, but if this is so, it is very disturbing, or is it justified somehow? Seems like a very clear conflict of interest if the house bids on its own auctions.

If an auction house bids on consignors' coins and wins them at prices that are too high, the extra commission they made due to the higher price realized, will be more than offset by their bad purchase.

 

A number of auction companies include in their terms of sale, language that they might place bids on consignors' coins, including those that they have consigned. I don't call it shilling, but you and others are free to do so. Either way, they disclose it and are not secretive about it.

 

Mark,

 

What I don't understand is why a consignor would agree to allow this. Let's suppose that I have a coin that I want sell, and I offer to sell it to ABC Auction Co. for $1000. They decline to buy it outright but agree to put it in their auction. Then, they bid on it and win it for $1000, but ABC charges a seller's premium of 15%, so instead of me getting $1000, I only get $850.

 

Chris

Chris, auction companies don't typically buy coins - they sell consigned ones. Yes, a seller might do better or worse by consigning to an auction than by selling outright.

 

As a consignor to an auction house, I much prefer that the auction house be allowed to place bids - it can only help consignors, not hurt them.

 

I guess I'm just too dense. If an auction company doesn't typically buy coins, then why would they bid on them? And, if they happen to be the high bidder, what then? Do they pay less for the coin because they can deduct their percentage?

I guess bidding on a coin, whether or not they have any intention of trying to win it, is different from buying a coin.

 

Chris

Heritage auction company doesn't bid on and buy coins, buyers for the rare coin company division of Heritage do. I don't know if they pay less or not for their wins, but if they do, it means the auction division nets less, to offset it.

 

Okay! I'm learning slowly but surely, so please bear with me.

 

Heritage Auctions and Heritage Rare Coins are two divisions within the corporate structure. Let's assume that HA does not charge HRC a buyer's or seller's fee on any auction transaction, and it is simply recorded as an appropriate debit/credit notation on the financial statements.

 

HRC declines to purchase the coin, and it is consigned to HA where HRC bids and wins it for $1K. HA charges the consignor 15% (I don't know what the actual percentage should be.) In effect, they would be getting a $1K coin for the $850 which is paid to the consignor.

 

So, let's take it one step further. Suppose that HRC places the coin in the next HA auction, and once again, it sells to another buyer for $1K. Again, HA charges the buyer $150. HA has now made $300 for the corporate structure on a $1K coin, for which, HRC only paid $850. Instead of receiving a combined 30% in buyer's and seller's fees, the corporate structure has received 35.3%.

 

Does this make sense?

 

Thanks for putting up with me.

 

Chris

 

Chris, yes, it can be said that as bidders in Heritage Numismatic Auctions sales, Heritage Rare Coin Galleries has an advantage over other bidders. But, as I said previously, you might do better or worse by consigning, vs. selling outright. And, it's not as if you have to offer coins only to Heritage or consign, only to Heritage. If that were the case, I could understand your concern a lot better.

 

It's not a great concern, but I was just trying to understand the scenarios that might take place. Heritage isn't any different from any other (numismatic or otherwise) company. They are in business to make a profit, and should always be looking for ways to maximize that profit without risking the loss of their clientele.

 

However, the same can be said for the consignor. If a consignor had a quality collection to place at auction, why shouldn't he try to maximize his return as well? Granted, you can't force people to bid what you would like to get for the collection, but why couldn't they negotiate better terms with the auction company? Is this ever done?

 

Chris

Yes, the seller's commission can absolutely be negotiated. Among other things, it depends upon the nature of the consignment (value, desirability, etc.), whether the coins are being sold unreserved or not, if not, what % of the value of the coins meet reserve, the relationship of the consignor with the auction house and the knowledge of the aforementioned on the part of the consignor.

 

Thanks for taking the time to explain, Mark!

 

Chris

[cpm9ball]

Loving the 20-nested quotation of the entire thread in each post, guys.

 

I only count 11 or 12.

 

Chris

[comicdonna]

I just went back and shortened my last post.

[Dcoin]

Even non-profits have agendas and biases.

[Coindude]

Loving the 20-nested quotation of the entire thread in each post, guys.

I only count 11 or 12.

Chris

It is getting to the point where it's so ridiculous that it's funny to watch. Keep going, I'm gonna contact the Guiness people to see if we get the record. But now they might consider this pre-conditioning or something. Would that taint the record?

[grade it-migration]

Isn't it pretty obvious that TPGs should be non-profit organzations, and not market makers? How can a company be unbiased in its coin grading opinions if its primary goal is to profit from the sale of the coins they certify?

 

I do not believe it is possible to render a valid, unbiased grade opinion on a coin if one has a financial interest in it's sale. That's just the business model that "self-slabbers" use. It's a blatant conflict of interest.

 

This is a valid point made by James. He is suggesting a solution to the problem.

 

If you agree with the problem but disagree with his solution then by all means post your suggestion here

 

[James_OldeTowne]

Even non-profits have agendas and biases.

I agree. In fact, anything derived or created by mankind will have built-in bias. But I wonder whether it is possible to limit it?

 

Due to my terrible wording in the OP, this thread did not go quite the direction I'd expected, and I apologize for ruffling more than few feathers. Nonetheless, there was a lot of value in the discussion, and I appreciate it.

[Conder101]

From what you wrote, I gather that this is outright FRAUD! To be the high bidder when the auction closes...To have them not honor your bid?

Does Teletrade allow or use undisclosed reserves?

 

So, let's take it one step further. Suppose that HRC places the coin in the next HA auction, and once again, it sells to another buyer for $1K. Again, HA charges the buyer $150. HA has now made $300 for the corporate structure on a $1K coin, for which, HRC only paid $850. Instead of receiving a combined 30% in buyer's and seller's fees, the corporate structure has received 35.3%

But they have also had to run the coin through two auctions with the advertising, photography, hall rental etc etc in order to get that profit. (They would get roughly that same profit if they didn't buy it and it was reconsigned in the future.)

 

Also if Heritage bids on a consignors coin and wins it, that still results in the consignor getting more money than he would have if they hadn't bid on it.

[MarkFeld]

From what you wrote, I gather that this is outright FRAUD! To be the high bidder when the auction closes...To have them not honor your bid?

Does Teletrade allow or use undisclosed reserves?

 

So, let's take it one step further. Suppose that HRC places the coin in the next HA auction, and once again, it sells to another buyer for $1K. Again, HA charges the buyer $150. HA has now made $300 for the corporate structure on a $1K coin, for which, HRC only paid $850. Instead of receiving a combined 30% in buyer's and seller's fees, the corporate structure has received 35.3%

But they have also had to run the coin through two auctions with the advertising, photography, hall rental etc etc in order to get that profit. (They would get roughly that same profit if they didn't buy it and it was reconsigned in the future.)

 

Also if Heritage bids on a consignors coin and wins it, that still results in the consignor getting more money than he would have if they hadn't bid on it.

Yes, to your Teletrade question.

[Coindude]

Mark, isn't it more of a customer buyback option? Or at least that's the way I understood it.

[MarkFeld]

Mark, isn't it more of a customer buyback option? Or at least that's the way I understood it.

You can call it whatever you want. But, if it's a price, below which, the coin won't sell, I call it a reserve.

 

And either way, the amount is undisclosed and bidders don't even know whether they are bidding against the owner or not. I have suggested to Teletrade that they change that policy, but...

[cpm9ball]

From what you wrote, I gather that this is outright FRAUD! To be the high bidder when the auction closes...To have them not honor your bid?

Does Teletrade allow or use undisclosed reserves?

 

So, let's take it one step further. Suppose that HRC places the coin in the next HA auction, and once again, it sells to another buyer for $1K. Again, HA charges the buyer $150. HA has now made $300 for the corporate structure on a $1K coin, for which, HRC only paid $850. Instead of receiving a combined 30% in buyer's and seller's fees, the corporate structure has received 35.3%

But they have also had to run the coin through two auctions with the advertising, photography, hall rental etc etc in order to get that profit. (They would get roughly that same profit if they didn't buy it and it was reconsigned in the future.)

 

Good point!

 

Also if Heritage bids on a consignors coin and wins it, that still results in the consignor getting more money than he would have if they hadn't bid on it.

 

Please explain how.

 

Thanks,

 

Chris

[comicdonna]

From what you wrote, I gather that this is outright FRAUD! To be the high bidder when the auction closes...To have them not honor your bid?

Does Teletrade allow or use undisclosed reserves?

 

So, let's take it one step further. Suppose that HRC places the coin in the next HA auction, and once again, it sells to another buyer for $1K. Again, HA charges the buyer $150. HA has now made $300 for the corporate structure on a $1K coin, for which, HRC only paid $850. Instead of receiving a combined 30% in buyer's and seller's fees, the corporate structure has received 35.3%

But they have also had to run the coin through two auctions with the advertising, photography, hall rental etc etc in order to get that profit. (They would get roughly that same profit if they didn't buy it and it was reconsigned in the future.)

 

Good point!

 

Also if Heritage bids on a consignors coin and wins it, that still results in the consignor getting more money than he would have if they hadn't bid on it.

 

Please explain how.

 

Thanks,

 

Chris

If Heritage didn't bid, the final sale price would be lower. Nobody except Heritage would know how much. It would depend on the maximum bid of the other bidder, and the maximum bid of the person under him.

[cpm9ball]

From what you wrote, I gather that this is outright FRAUD! To be the high bidder when the auction closes...To have them not honor your bid?

Does Teletrade allow or use undisclosed reserves?

 

So, let's take it one step further. Suppose that HRC places the coin in the next HA auction, and once again, it sells to another buyer for $1K. Again, HA charges the buyer $150. HA has now made $300 for the corporate structure on a $1K coin, for which, HRC only paid $850. Instead of receiving a combined 30% in buyer's and seller's fees, the corporate structure has received 35.3%

But they have also had to run the coin through two auctions with the advertising, photography, hall rental etc etc in order to get that profit. (They would get roughly that same profit if they didn't buy it and it was reconsigned in the future.)

 

Good point!

 

Also if Heritage bids on a consignors coin and wins it, that still results in the consignor getting more money than he would have if they hadn't bid on it.

 

Please explain how.

 

Thanks,

 

Chris

If Heritage didn't bid, the final sale price would be lower.

 

You don't know that. It's possible that there were other bids identical to the HRC bid, but the HRC bid was placed first.

 

Chris

 

 

[comicdonna]

The odds are in favor of a higher end price. Is that better?

[$ilverHawk]

Ditto Could possibly be a record.

 

$ilverHawk

[$ilverHawk]

Actually it was 10. Still very impressive quote line.

 

$ilverHawk

[cpm9ball]

Actually it was 10. Still very impressive quote line.

 

$ilverHawk

 

It would be interesting to see how far the taper continued. Would it taper down to no more than the width of a 4- or 5-letter word? I wonder how many logical sentences you could construct with nothing but 5-letter (or fewer) words and still remain on topic?

 

Chris

[coinman_23885]

Actually it was 10. Still very impressive quote line.

 

$ilverHawk

 

It would be interesting to see how far the taper continued. Would it taper down to no more than the width of a 4- or 5-letter word? I wonder how many logical sentences you could construct with nothing but 5-letter (or fewer) words and still remain on topic?

 

Chris

 

It would be analogous to the writings of a mentally challenged elementary school kid.

[grade it-migration]

I have auctioned coins though Teletrade . I hesitate to explain the dynamics of how their program works.

 

Would ask a poster here, who has submitted coins to a Teletrade auction, more eloquent then myself to explain the procedure and the reserve question.

 

HRC maybe similar but have no first hand knowledge....

[Oldtrader3]

Loving the 20-nested quotation of the entire thread in each post, guys.

 

I only count 11 or 12.

 

Chris

 

Just think how much fun the rest of us have trying to follow these threads with 12 nested quotations on each and every post!. Oh! Maybe that is the point? Can these guys follow the drift without all of this quotation nesting? You can delete all but the particular entry that you are referencing but I guess that would be too straightforward and would require some editing effort by these posters. Plus, it would help to make these diatribes legible and readable which apparently is not important.

[comicdonna]

Actually it was 10. Still very impressive quote line.

 

$ilverHawk

Actually, it was 12. One of them failed to quote properly but, still counts!

[jackson64]

From what you wrote, I gather that this is outright FRAUD! To be the high bidder when the auction closes...To have them not honor your bid?

Does Teletrade allow or use undisclosed reserves?

 

So, let's take it one step further. Suppose that HRC places the coin in the next HA auction, and once again, it sells to another buyer for $1K. Again, HA charges the buyer $150. HA has now made $300 for the corporate structure on a $1K coin, for which, HRC only paid $850. Instead of receiving a combined 30% in buyer's and seller's fees, the corporate structure has received 35.3%

But they have also had to run the coin through two auctions with the advertising, photography, hall rental etc etc in order to get that profit. (They would get roughly that same profit if they didn't buy it and it was reconsigned in the future.)

 

Also if Heritage bids on a consignors coin and wins it, that still results in the consignor getting more money than he would have if they hadn't bid on it.

 

As to your Teletrade question..from someone with first hand experiences with this and who knows the policies: Yes, a consignor can place 1 "bid" before the auction starts that acts as the reserve. Once the auction starts the initial, minimum bid you must go an increment above is the consignor's reserve/bid. Hence, any bids above that starting bid is automatically higher than the reserve....Consequently, when you are bidding against Teletrade who has the coin in hand to look at, takes the pictures ( good or bad) that draw buyer/bidder perusal, writes the description, and has a 15% discount when bidding built in ( after all, they are not charging themself 15% buyer fee), you will either lose the coin or lose a lot more money than you had hoped to win it.

 

NOTE: There is no way to tell who is bidding against you until a week or 2 later when the coin is re-selling by Teletrade with newer, sharper images--small icons like "registry", "toned", "rainbow", longer definitions/descriptions and of course..higher opening bids...

 

 

[Conder101]

You don't know that. It's possible that there were other bids identical to the HRC bid, but the HRC bid was placed first.

In that case the consignor still get the same amount they would have gotten if Heritage hadn't bid. In fact without Heritage's early bid the final bid might still have been lower. (It wouldn't be higher because if that was the case it would hve been and Heritage woun't have won the auction.) In either case the consignor does not get hurt, and possibly helped by Heritage bidding.

 

 

[Frank Provasek]

An auction house's duty is to get the highest price for their consignors. If the house itself happens to want the item more than any of the bidders, it benefits the consignors.

[Frank Provasek]

i can assure you that NGC and Heritage are not affiliated. -Russ

 

This was posted ATS yesterday from David Hall:

 

I was reading Scott Travers' new book, The Coin Collectors Survival

Manual, 7th edition, and on page 147 it mentions the Jim Halperin and Steve

Ivy (the owners of Heritage) owned 24.254% of NGC as of 2005, but in recent

years have increased their ownership position to 30.3%.

 

I knew that Jim and Steve and/or Heritage owned about 30% of NGC, but

I just wondered if everybody else knew that. I'm not saying there's anything

wrong with that. In fact, coin dealers, including me, own shares of

Collectors Universe, the PCGS parent company. PCGS (Collectors Universe) is

a public company and anyone can buy the shares. So Heritage (or actually the

owners of Heritage) owning a huge stake in NGC is not neccessarily good or

bad. But I don't think everyone knows that the world's largest coin dealer

owns 30% of the a major grading service.

 

So there's the information. Make of it what you wish.

 

homerunhall

 

 

[cpm9ball]

.........and absolutely no ulterior motive at all!

 

Chris

[x2rider]

i can assure you that NGC and Heritage are not affiliated. -Russ

 

This was posted ATS yesterday from David Hall:

 

I was reading Scott Travers' new book, The Coin Collectors Survival

Manual, 7th edition, and on page 147 it mentions the Jim Halperin and Steve

Ivy (the owners of Heritage) owned 24.254% of NGC as of 2005, but in recent

years have increased their ownership position to 30.3%.

 

I knew that Jim and Steve and/or Heritage owned about 30% of NGC, but

I just wondered if everybody else knew that. I'm not saying there's anything

wrong with that. In fact, coin dealers, including me, own shares of

Collectors Universe, the PCGS parent company. PCGS (Collectors Universe) is

a public company and anyone can buy the shares. So Heritage (or actually the

owners of Heritage) owning a huge stake in NGC is not neccessarily good or

bad. But I don't think everyone knows that the world's largest coin dealer

owns 30% of the a major grading service.

 

So there's the information. Make of it what you wish.

 

homerunhall

 

 

Yeah read that ATS . It sounded to me like someone who how found out a secret and wanted everyone to know about it . School yard whispers

 

Does he honestly think that a company the size of Heritage would risk their business in trying to influence grades from NGC for higher commission prices .

 

Because between the lines that what it sounds like to me

 

Martin

 

 

 

 

[MarkFeld]

i can assure you that NGC and Heritage are not affiliated. -Russ

 

This was posted ATS yesterday from David Hall:

 

I was reading Scott Travers' new book, The Coin Collectors Survival

Manual, 7th edition, and on page 147 it mentions the Jim Halperin and Steve

Ivy (the owners of Heritage) owned 24.254% of NGC as of 2005, but in recent

years have increased their ownership position to 30.3%.

 

I knew that Jim and Steve and/or Heritage owned about 30% of NGC, but

I just wondered if everybody else knew that. I'm not saying there's anything

wrong with that. In fact, coin dealers, including me, own shares of

Collectors Universe, the PCGS parent company. PCGS (Collectors Universe) is

a public company and anyone can buy the shares. So Heritage (or actually the

owners of Heritage) owning a huge stake in NGC is not neccessarily good or

bad. But I don't think everyone knows that the world's largest coin dealer

owns 30% of the a major grading service.

 

So there's the information. Make of it what you wish.

 

homerunhall

Russ had already subsequently followed up on/corrected that post, in this thread, by saying:

 

"I may have taken the question the wrong way, i do apologize for that, they may own stock but i believed the question and or aqusation to be that NGC gives better grades because of it and that is just not true, so i do apologize for my response, i should have phrased it better"

 

 

[Walkerfan]

i can assure you that NGC and Heritage are not affiliated. -Russ

 

This was posted ATS yesterday from David Hall:

 

I was reading Scott Travers' new book, The Coin Collectors Survival

Manual, 7th edition, and on page 147 it mentions the Jim Halperin and Steve

Ivy (the owners of Heritage) owned 24.254% of NGC as of 2005, but in recent

years have increased their ownership position to 30.3%.

 

I knew that Jim and Steve and/or Heritage owned about 30% of NGC, but

I just wondered if everybody else knew that. I'm not saying there's anything

wrong with that. In fact, coin dealers, including me, own shares of

Collectors Universe, the PCGS parent company. PCGS (Collectors Universe) is

a public company and anyone can buy the shares. So Heritage (or actually the

owners of Heritage) owning a huge stake in NGC is not neccessarily good or

bad. But I don't think everyone knows that the world's largest coin dealer

owns 30% of the a major grading service.

 

So there's the information. Make of it what you wish.

 

homerunhall

Russ had already subsequently followed up on/corrected that post, in this thread, by saying:

 

"I may have taken the question the wrong way, i do apologize for that, they may own stock but i believed the question and or aqusation to be that NGC gives better grades because of it and that is just not true, so i do apologize for my response, i should have phrased it better"

 

 

Grades?? That has nothing to do with bidding or shill bidding. :shrug:

 

So I don't know what Russ means by that statement