Coin research advice

[Proudtoown]

Im looking for some of your suggestions for a research paper I'm about to begin. I'm taking a history research class and would like to center it on the prices of coins. First of, I àm retired from the Air Force and now going to school for a degree in History. As I work threw my courses, as I can do so, I want to pick research projects for my class that has to do with coins, currency, and collectibles.

For this semester I'm wanting to compare prices of gold coins and Morgan's. I'm guessing getting 3-5 back years of the grey sheet, which would give me good wholesale data. Numismedia is another source, hopefully they can provide old data. Maybe have to use heritage for actual sales figures.

I want to compare common, semi-key, key, and rare.

 

Of course this is the end of the first week of brain storming before class starts , do it could change a lot. I would welcome anyone's thoughts, input, criticts, anything. The more I hear the more I can learn.

 

You can drop in hear and offer something, PM me, or email me at RAB3Group@cox.net. These will be just between us if it has to be.

Plus, as a bonus, I will give everyone who helps out a final revised copy free. This could be a learning experience, and since I'm getting graded on it, why not seek out help from some of the most coin knowledgeable people in the hobby.

[skippy]

Realized prices at Heritage is your best bet, IMO. All of the other guides are just best guesses - Heritage is actual dollars spent.

[mtnstyne]

Don't forget the NGC price guide, it has some past auction data as well as upcoming data and if you click a specific grade you get a nice chart.

 

1878 CC Price Guide

 

MS64 Price Chart for 1878 CC Morgan

 

It will also let you compare one coin to another on the same chart.

[Dcoin]

The PCGS site has a service called CoinFacts. I'm not sure about historical pricing but it will have a ton of info on the actual coins.

 

Good luck.

[Conder101]

The problem I see is that you are looking at too short a time period. You say this is for historical purposes, but 3 to 5 years is effectively little more than a single data point and currently is affected much more by precious metal prices than numismatic values.

 

To really study true value trends you need to go back and chart from say 1987 to date. Even then you are going to have to be aware of the effects of the PM values as well. I wouldn't go back before 1987 because non "standardized" grading means that you really can't say that the grades before that point equate to the grades after, so you may be comparing prices of "oranges and apples".

[DunderChief-migration]

I agree that the time period needs to be longer. Say from the start of the state quarter era which seems to be the trigger for the increase in popularity of coin collecting. The rapid rise of precious metals will most likely skew any data over the last few years. Also, rare coins are not sold often and so much of the price has to do with condition, eye appeal, and timing.

 

I would lean more to doing research on the precious metals themselves and the effect of the coin act on pricing.

 

Whatever you come up with I'm sure will be very interesting.

[RWB]

Just a thought – your original posted project seems too small and does not appear to involve much research or analysis. Maybe this idea will be of assistance:

 

Collect data from the 10 years before and after restrictions on gold ownership were lifted in 1974. Data would be the London closing price of gold and the market price of some generic U.S. gold coin, such as 1928 double eagles.

 

Your research will be the data collection, normalization and reporting, and your analysis will be of the interaction of an open gold market to the perceived market premium on a generic gold coin. Significant political and economic events would also be included and that will permit discussion of their effects, if any.

 

I hope this will be helpful.

[DaveG]

Just out of curiosity, what is it that you are attempting to demonstrate with your project?

 

So far, it seems like you're describing a beginner's Excel project, so I'm guessing there must be more going on.

[JIM F.]

If you are simply looking at common silver and gold coins, it would make most sense to normalize your data by the price of silver/gold to perform a meaningful relationship between the two (assuming that is what you are attempting). As suggested by another poster, unless this is a beginner's Excel project, then some brainpower can be employed by looking at the first and second derivatives of the data if a semi-empirical predictive method for future trends is what you are attempting to achieve.

 

I concur that the farther back meaningful data can be used, the better.

 

 

[Proudtoown]

What i am looking for is as the price of gold changes, exactly what relationship does it have on certain coins and in what grades are relevant. It looks like i will just look at gold Indians since i only have 16 weeks. So, if gold goes up 5% in a month what effect does that have on a certain date and grades in the coin. Does a 5% increase equal a 10% increase in some coins while only increasing 4% in others? So, buying a modern bullion coin would be a better buy percentage wise in some coins. What about decreases? Does certain coins crash faster than others? If a coin in MS-63 increases/decreases at the same rate as a MS-65, then you could acheivevthe same percent of investment at a lower output.

I guess it could be simple excel, but i dont use excel everyday so its not basic to me.

[Proudtoown]

If I had to invest an additional $1,000 to get a MS-64 coin yet found out that by moving up from a 63 would only gain me 1%, i could probably put that $1,000 into a new coin that could return something higher than 1%.

Basically look at it in a fashion of picking the best performing coins in an up market and crossing that with the best coins that retain value in a down market, choosing the coins that are easy to resale, no coverage in coin world. Limited loss yet excellent upswing.

Once you have that data run what-if exercises on political/economicsl events. If we could define say Panda gold goins increase 20% when the WGC anounces a net gold balance for china and this increase last only about 3 weeks, then that gives you a window to trade it fast before the window closes. Same with us gold, find the top 10-20 coins ready to move when xyz happends and you move them and pick up the ones that dont react as fas or just hold cash.

[JIM F.]

I suggest you familiarize yourself with the proper way to do a sensitivity analysis. There are many references, here is one of them.

 

http://sensitivity-analysis.jrc.ec.europa.eu/tutorial/index.asp

 

[DunderChief-migration]

May not relate to your research, but ATS they have the generic gold index.

 

www.pcgs.com/prices/Frame.aspx?type=coinindex&filename=gengold

 

Also analysis on other issues such as Morgan & Peace dollars.

[DaveG]

Proudtoown,

 

While you can certainly study the effect that the recent price run-up in gold and silver had on common vs. key coins (the Grey Sheet will give you lots of data), I'm not sure that you'll be able to run any meaningful sensitivity analysis - the behavior of the bullion market and the rare coin market aren't directly related.

 

And, if you're looking for a model that has actual predictive power, I really doubt you'll find it - a new entrant simply won't have access to the right coins in the right grades in the right quantities at the right prices.

 

You could become an auction participant, of course, but your mere presence in that market will distort the behavior of the market - to start with, you'll have to outbid all the other participants and that simple action will distort your model.

[Proudtoown]

Here's my latest and greatest. I've researched sensitivity analysis. Maybe I will need more in depth studying, or don't know exactly how to link it up with coin data. This is what I have come up with for a MS-60 graded coin.

 

I've used data from PCGS actual auction data, so this is actual prices paid for the coin. Then what I did, I took the sales price and adjusted it with the annual CPI rate so I can see it in todays dollars (Blue). Then I took the monthly spot price of gold, multiplied that by the amount of gold actually in the coin and adjusted that to by the CPI (Green). The red coin shows the percent of the coin in relation to the value of gold in it.

 

So, by looking at this, in 2001 and up to 2004 the coin was worth over 100% of the value of gold it contained, it happened again almost in 2008.

 

In Mar 2011, the coin was valued at only 8% over the gold value. The average premium over the sales has been 65.61% with the average price paid for that premium has been $241.34 dollars.

 

I ran an annual interest rate, which comes out to a 10.02% rate of return if you bought the coin Apr 1, 2001 for $455.93 (the price was $359 but with a CPI of 1.27 that would be $455.93 in todays dollars) and sold it on Jun 1, 2011 for $920.33, thats where the 10.02% return would come from.

 

By the same token, one could have invested just in bullion at the price of $160.05 (the price of the value of gold in the coin at that time adjusted with the CPI) and sold it for $739.57, which would have been a 35.62% annual return.

 

I could have bought 1 of these coins in 2001 for $455.93 or took the same amount of money and bought 1.37 toz of gold and made a higher interest rate.