How do you handle cognitive dissonance in the market?

[shirohniichan]

Have you ever tried to sell a coin, only to be told by someone you're "crazy" because of your asking price when you are selling it at the current market value? How do you deal with collectors or dealers who can't accept recent changes?

 

I find it funny how some self-appointed experts will look at an item and claim it's "not worth nearly that much." When confronted by the fact that others are selling at that price now, the reply is usually along the lines of "Well, those buyers are stupid to pay that kind of money." It's even funnier when they go from seller to seller trying to buy the item in question for what they think it's worth, only to find no one with a problem-free one won't take their offers. "It's a conspiracy! You guys are all in cahoots! You're trying to rob me!"

 

Obviously you don't sell your coin to "experts" like this, but how do you get them to just move along and stop bothering you?

[World Colonial]

On one occassion, I had someone offer to buy one of my eBay listings for the Krause list price, acting like they were doing me a favor. None of these coins (South Africa Union) sell for those prices from any knowledgeable seller and I think this guy knew it.

 

I told him that if he really believed that his prices were so reasonable, to send me a list of HIS coins that he would sell me for comporable prices and I would gladly buy them from him. I never heard from him again.

[michael]

On one occassion, I had someone offer to buy one of my eBay listings for the Krause list price, acting like they were doing me a favor. None of these coins (South Africa Union) sell for those prices from any knowledgeable seller and I think this guy knew it.

 

I told him that if he really believed that his prices were so reasonable, to send me a list of HIS coins that he would sell me for comporable prices and I would gladly buy them from him. I never heard from him again.

 

 

 

my response exactly

[James_OldeTowne]

I told him that if he really believed that his prices were so reasonable, to send me a list of HIS coins that he would sell me for comporable prices and I would gladly buy them from him.

That's exactly how I handle it. When a "dealer" offers me "sheet" for a nice, original bust quarter, I calmly pull out a pen and my checkbook, and tell him that I'm currently paying at least 15% over sheet and would like to buy some of his.

[Dcoin]

"Cognitive dissonance" is common in many markets.

 

When I sold my last house it was "on the wrong block, with afternoon sun exposure and sandy soil". The house we bought was "on a prime block, with morning sun and loam soil".

 

Whatever you sell, will suck to the buyer so I wouldn't read too much into anything a buyer says.

[JCM-Houston]

I'm a collector, not a dealer, so maybe my approach is different.

 

I often see areas that I collect in where the asking prices get incredible high. When that happens I sell that part of my holdings (assuming they are not part of my core collection). As an example there have been some very high prices paid for British Trade Dollars recently so I was not able to add to my small collection.

 

However since I was only collecting these as a sideline, because they were pretty, I put mine up for sale ( all early dates in MS64). Coins I was buying 3-4 years ago for $135-150 sold over the past couple of weeks for over $1k each. I hope the buyers are as happy as I am, and when/if the prices go back to what I consider reasonable I'll buy some more of them.

 

For me that's one the big advantages of having a couple of different areas to collect. When one gets priced above your level of comfort you can work on the other collections.

[World Colonial]

I agree with you except that the example I have is somewhat different. In this same series (South Africa Union), the price spreads between AU and MS - basically any MS - are to put it kindly, excessive. The same applies to the ZAR series.

 

I have told many SA collectors this but they do not seem to care. They are so enamored of buying a coin in an NGC (few PCGS coins are available) MS holder that they do not care if they pay 5, 10 or even greater multiples to an AU-55 or AU58 specimen. I have told them that makes no sense given that the AU frequently look better.

 

Given current prices, I have been selling most of my MS coins and to the extent I am buying any graded coins at all, I am only buying AU-55 or AU-58 from the scarcer dates. Like you, when the premiums shrink or (like I expect) prices fall, I will be back in the market as a buyer. And if not, I'll simply buy coins from one of my other series which represent vastly better value at this time.

 

An additional reason I expect this to happen is because most current SA collectors are apparetnly operating under the logical fallacy that the census contains most available specimens. As I have told them, this might be true for the scarcer dates because they are worth more but it is almost certainly not true for the more available dates. Many of the coins I have sold in the last year have had substantial (proportional) increases in the population and almost certainly already sell for less now.

[shirohniichan]

The more I think about it, the more I figure the reason for so much confusion in the market is buyers and sellers unwillingness to let go of bad or old information.

 

I sell cars for a living, and I see this every day. A couple of years ago new car sales were very slow, and many buyers began their conversations with, "I know you dealers are really hard up for sales." Right now we have the opposite problem-- not enough inventory and fewer incentives. When customers begin with that same old line, it shows that they are either ignorant of the changes in the market or dishonest.

 

I wouldn't doubt that the same holds for the coin market. Those who preface their offers with, "I know that these things only sell for 25% below Gray Sheet," (or "40% of Krause") think they're being smart, but they actually show themselves to be ignorant. It doesn't matter what you used to be able to buy (or sell) "these things" for. What matters is what they sell for right now. You can stomp your feet and wail about how "stupid" other people are for paying "those kinds of prices," but you can't go back in time to get it your way. Sorry.

 

By the way, I had a customer scold me in an e-mail for not selling a particularly hot vehicle to him for the price he wanted. I didn't tell him that I ended up selling for more than I offered it to him. It's best to simply be polite and move on.