"Bidding in an auction from a dealer's point of view" - results 4-22-12

[Oldtrader3]

E1CNR, Does this mean that you really know anything about this issue with Stacks's and CAC? I seriously doubt that Stack's sent many less than $2500 coins to CAC during this period which was did not meet a special criteria for sale or condition which would benefit from the time lost and other issues with a CAC submission.

 

I doubt that you know more about these coins than Stack's did or even what I bought! Have you ever bought ANYTHING from Stack's at auction with Green bean or otherwise, and do you even have any standing with Stack's for your remarks? I have had a 40+ year relationship with Stack's and Bowers. Plus, I maybe have some insight as to their sales and the overall condition of thier coins with an appraisal of value they handle daily. Do you?

[AnkurJ]

Re: Heritage, a higher up told me that most coins are sent to CAC.

[BillJones]

You're most welcome.

 

I feel comfortable placing my bids on line, well in advance of the auction, and do so in the vast majority of cases.

 

I believe that there are advantages and disadvantages, both in bidding early and in bidding late. I prefer to bid early. It can reduce the chances of getting caught up in auction fever, and it means I need not worry about things such as computer glitches, my being unavailable at a key moment, etc. I like that peace of mind.

 

When I have an interest in a lot, even when I know that I will attend the sale live, I place a bid. That bid is usually way below the ultimate winning bid. The reason is that I have "marked my spot" on the computer so that I can more easily access that specific lot when I sign-in to the site.

 

The advantage to entering you maximum bid on-line is that it provides with an opportunity to execute your maximum bid no matter what. Here is an example. Some time ago I spotted a lot I wanted in a Heritage sale. After doing some research and deciding what the lot was worth to me, I decided that $50,000 was my maximum bid. Once you reach this level, the bidding increments on the floor are $5,000. Therefore if I ended up on the wrong side of the back and forth between floor bidders, I could be on the $55,000 side which was more than I wanted to pay. Yes, I know about cut bids that would allow me to bid 52,500, but $50,000 was my number and not a penny more. (This was incidentally a record high price for the item.) As things turned out a floor bidder, who I knew, (He was not a shill) bid $50,000 but my bid superseded his because my bid was “on the book.” His client had set his limit at $50,000 also, so I got the coin. A day later he came up to me and offered me a small profit on the piece from his client, which I declined.

 

The bottom line is that one has different strategies for different coins. I too am concerned that the auction houses upon seeing a high bid might shill the piece up to that bid. I have placed absentee bids and gotten the lot for less than my maximum, but it’s still a concern for whatever reason.

 

[BKW]

So my question is how is the service that you provide any different than what the CAC provides? Furthermore, keep in mind that if & when I sell a coin, telling a prospective buyer that a dealer confirmed the TPG assigned grade does not go nearly as far as the CAC sticker.

 

As relationships with a dealer develop over the years they will learn to know what you like and don't like in a coin. This relationship can not be developed unless there is some buying, selling and possibly trading involved with a dealer. It takes a leap of faith by most of us. I will say I have never been disappointed in a coin that I purchased from Mark or one that he viewed in Auction for me. He has told me on more than one occasion, "don't buy it or it's not for you," even though I thought it was a nice coin.

 

This is an excellent point leeg. In comparing Mark's eyes (or any trusted dealer with whom you developed a relationship) to CAC's eyes is apples to oranges in my opinon. That's because CAC stickers coins that meet its standards, while a dealer with whom you've developed a relationship with will pick out coins that meet your standards.

 

This is not a dig against CAC. They serve a valuable purpose; esepcially if your goal is to invest and/or flip. But, if you're looking to collect and plan on keeping that collection for an extended period, the personal touch of a trusted dealer's eyes cannot be beat, IMO.

 

 

[e1cnr]

E1CNR, Does this mean that you really know anything about this issue with Stacks's and CAC? I seriously doubt that Stack's sent many less than $2500 coins to CAC during this period which was did not meet a special criteria for sale or condition which would benefit from the time lost and other issues with a CAC submission.

 

I doubt that you know more about these coins than Stack's did or even what I bought! Have you ever bought ANYTHING from Stack's at auction with Green bean or otherwise, and do you even have any standing with Stack's for your remarks? I have had a 40+ year relationshipo with Stack's and Bowers. Plus, I maybe have some insight as to their sales and the overall condition of thier coins with an appraisal of value they handle daily. Do you?

 

I have bought nothing from Stack's and have no information about them at all - just my interpretation of Ankur's statement.

 

I actually doubt if many auctionhouses send coins to get CACd, and sell as received - but have been wrong many times, so don't really care.

 

 

edit to add that a few years ago, many people felt Stack's frequently cracked coins out of slabs to sell for higher price.

[Oldtrader3]

Not being picky, just careful. Before the Stack's, Bower's merger at the beginning of 2011, I dealt with ANR and Stack's regularly. The merger blindsided me a little and adversely affected my ongoing relationship with them. Que sera!

 

Stack's and ANR were always most gracious and helpful with me as a customer. I appreciated the friendly demeanor and their willingness to help me answer whatever few questions that I asked of them. I was actually somewhat chagrined that the merger took place in the fashion that it did and to the extent of service changes which were made. This affected my collecting habits quite a bit but obviously was not part of their business model.

 

They obtained some nice coins for me and I certainly appreciate their support over the years of mine and my dad's coin collecting days back to the start of Bowers and Merena.

[x2rider]

Maybe Mark should have a Feldini sticker

[MarkFeld]

1- Do you view all lots at the auction viewing or just those that pass initial internet scanning?

 

2- Are there certain areas/series of numistmstics that you do not feel comfortable having as inventory?

 

3- Do you follow the idea that there must be a certain amount of eye appeal to have interest to have any interest or that every thing could be a good deal at a certain price level?

 

4- I frequently have more 'interest' in lots than available money on hand - does this ever apply to you and/or do you have funds/quick access to funds to cover $400,000 in possible winnings if you get everything at max bid?

 

5- What percentage of bids are for inventory vs fill want lists?

 

6- What would you do if one of your regulars called now and asked about a coin that you have placed a bid on, and would like you to view it and give a recommendation?

 

7- What is the most expensive coin that you have ever bought at auction?

 

As always, if any of these are too personal or would give away to much about your business model, go ahead a skip them

 

In answer to the above questions:

 

1) I generally view any lots from among the areas that I deal in, including type, 20th century singles, Morgan and Peace dollars, gold and silver commemoratives, early gold, superior gold type coins, etc. At the same time, I usually don't look at colonials, errors, modern coins, patterns, more generic types of coins, lower grade coins, etc. In a typical auction, that might mean that I view approximately half of the lots.

 

2) See above for areas that I typically don't deal in, due to lack of knowledge and/or interest.

 

3) I don't look for coins that might merely be good deals. I try to buy coins that are appealing looking and which I am satisfied or happy to have in my inventory.

 

4) I have never bought so much that I didn't have the money to pay for it. And I know from experience, that if I bid on $400,000 worth of coins, I will end up spending less than half of that.

 

5) I don't know the exact numbers, but for most auctions, more than 90% of my bids are for inventory.

 

6) That has happened a number of times. I tell the client that I viewed and liked the coin and have placed a bid on it. He is free to bid against me or have me raise my bid on his behalf.

 

7) Probably in the $50,000 range, though I have bid on higher priced ones a number of times.

[MarkFeld]

There have been discussions lately about whether auction prices, given true public accessibility and ease of participation, have begun to represent retail prices. How do your clients feel about a dealer marking up a coin that they possibly could have just as easily purchased themselves? Granted, an extra bidder in the auction could lead to a higher price, but it's also possible that it was a coin you wouldn't have bid on had it not been a request, on a want list or something similar. What are your thoughts on auction prices vs retail prices?

 

Knowing you already have a willing buyer for a coin, how does that affect your aggressiveness in bidding, or do you try to always stick to your pre-planned price point?

 

Thanks!

 

My clients don't seem to mind buying coins from my lists or website for (an average of) roughly 10% over the price realized at auction. In a number of cases, they would have had to pay more than that if they had bid against me.

 

If, on the other hand, they ask me to view the lots in advance and represent them, they pay me 5% commission or less. And that is only in the event that we are successful.

 

If collectors make purchases, based on images, without in-hand inspection, the odds are stacked strongly against them. And chances are that they will end up with less desirable coins, while missing out on superior examples.

 

It's no longer easy to distinguish "wholesale" from "retail" when it comes to auction results. If a dealer buys a coin, is it necessarily a "wholesale" purchase? What if the dealer outbid numerous serious collectors for the coin? On the other hand, what if a collector buys a coin out of auction, but then flips it to a dealer? Was that a "retail" or "wholesale" purchase?

 

When I know I will have a willing buyer for an auction coin, my bid is determined by one of three different means:

 

1) Some of my clients prefer to decide on their own, how much they want me to bid.

2) Some of my clients confer with me and we decide, together, what amount to bid.

3) Some of my clients ask me to determine the amount to bid. When that occurs, I still let them know, in advance, the amount I plan to bid.

 

Mark,

 

This is not a personal attack, rather I am playing devil's advocate. What makes your opinion of the coin different than that of the CAC? For cheap coins under a few hundred dollars, it simply isn't worth paying a dealer a percentage to preview coins. For expensive coins, a collector has the option of having a dealer such as yourself preview the coin for them or buy CAC verified coins.

 

You stated that "if collectors make purchases, based on images, without in-hand inspection, the odds are stacked strongly against them. And chances are that they will end up with less desirable coins, while missing out on superior examples." That statement basically means that you can't confirm the grade of the coin without seeing it in hand. But if you look at the coin for me, I still haven't seen it in hand. So what you are saying is that due to incremental grading we can't simply accept the TPG assigned grade. You are also saying that incremental grading can't be discerned from high resolution photos, due mostly to the affect of luster I assume. And lastly you are saying that having a professional opinion will solve the incremental grading problem thereby ensuring that the collector will not end up with less desirable coins.

 

So my question is how is the service that you provide any different than what the CAC provides? Furthermore, keep in mind that if & when I sell a coin, telling a prospective buyer that a dealer confirmed the TPG assigned grade does not go nearly as far as the CAC sticker.

 

Hi Paul,

 

Giving my opinion on a coin differs significantly from what CAC does.

 

CAC assesses coins in order to distinguish solid for the grade or better examples from lesser quality and/or problem coins.

 

I screen coins and provide my opinion for clients who are looking to get a better idea whether a coin will appeal to their particular taste. A coin can be accurately graded or high end, but still exhibit flaws or characteristics which some collectors prefer to avoid.

 

Regarding opinions on lower value coins - If I give a thumbs down to a coin or give it a thumbs up, but the client ends up not winning it, there is no charge. So frequently, the client gets a free opinion of the coin. That said, most of the coins I am asked to screen exceed $500 in value.

 

I wholeheartedly agree, that my viewing a coin for a client is not the same as the client being able to examine it himself. It is still a significant advantage, however, over the client having to make a decision based solely on an image.

[MarkFeld]

As relationships with a dealer develop over the years they will learn to know what you like and don't like in a coin. This relationship can not be developed unless there is some buying, selling and possibly trading involved with a dealer. It takes a leap of faith by most of us. I will say I have never been disappointed in a coin that I purchased from Mark or one that he viewed in Auction for me. He has told me on more than one occasion, "don't buy it or it's not for you," even though I thought it was a nice coin.

 

I agree with Lee. And the more feedback (about likes, as well as dislikes), that a client can provide to a dealer regarding coins, the better.

 

It is, indeed, a leap of faith, initially, for a collector to trust a dealer to screen coins. In fact, I am humbled that so many collectors think enough of me to entrust me with such a large responsibilify. And I take that responsibility very seriously.

[bochiman]

As it pertains to Mr Feld, let me just add my thoughts from working with him a bit over the years.....(last 6-7 years I think).

 

He goes out of his way to make sure the coin FITS YOU, as the collector. Some folks like a certain look and he has not wanted a coin to be "stuck" to a collector....so, I have some very nice "keeper" coins now that will be handed down to my son over the years. In particular, that many seem to like, is our 1955/55 DDO Lincoln. He bought it in a NGC MS63BN holder and it was nice anyway. I ended up using a quarterly special and put it in a PCGS Secure+ with trueview. A definite keeper....along with some nice other key coins and proof IHCs.

 

I've also asked his help a few times in the auctions. He has always given me his opinion, as asked, and it has always been up to me to make the decision to go forward or not. When we didn't win, I didn't pay. When I did win, it was a very reasonable charge. Our 1793 1/2cent is one that Mark helped us get last year.

 

Shipping has always been quick, service has been top notch, and he has been nothing but professional.

 

I would have no qualms in using Mark's services at any time in the future and, if something unforeseen were to happen to me and I were no longer around, Mark is the first one that my wife/son have instructions to contact for advice and possible sales (I have complete records on cost/serial numbers/current values/etc...and pictures of many).

 

I also have no qualms of suggesting Mark's services/inventory to others....unless I think that person may be too much of an , then I wouldn't want to subject Mark to them....

[lehigh96]

There have been discussions lately about whether auction prices, given true public accessibility and ease of participation, have begun to represent retail prices. How do your clients feel about a dealer marking up a coin that they possibly could have just as easily purchased themselves? Granted, an extra bidder in the auction could lead to a higher price, but it's also possible that it was a coin you wouldn't have bid on had it not been a request, on a want list or something similar. What are your thoughts on auction prices vs retail prices?

 

Knowing you already have a willing buyer for a coin, how does that affect your aggressiveness in bidding, or do you try to always stick to your pre-planned price point?

 

Thanks!

 

My clients don't seem to mind buying coins from my lists or website for (an average of) roughly 10% over the price realized at auction. In a number of cases, they would have had to pay more than that if they had bid against me.

 

If, on the other hand, they ask me to view the lots in advance and represent them, they pay me 5% commission or less. And that is only in the event that we are successful.

 

If collectors make purchases, based on images, without in-hand inspection, the odds are stacked strongly against them. And chances are that they will end up with less desirable coins, while missing out on superior examples.

 

It's no longer easy to distinguish "wholesale" from "retail" when it comes to auction results. If a dealer buys a coin, is it necessarily a "wholesale" purchase? What if the dealer outbid numerous serious collectors for the coin? On the other hand, what if a collector buys a coin out of auction, but then flips it to a dealer? Was that a "retail" or "wholesale" purchase?

 

When I know I will have a willing buyer for an auction coin, my bid is determined by one of three different means:

 

1) Some of my clients prefer to decide on their own, how much they want me to bid.

2) Some of my clients confer with me and we decide, together, what amount to bid.

3) Some of my clients ask me to determine the amount to bid. When that occurs, I still let them know, in advance, the amount I plan to bid.

 

Mark,

 

This is not a personal attack, rather I am playing devil's advocate. What makes your opinion of the coin different than that of the CAC? For cheap coins under a few hundred dollars, it simply isn't worth paying a dealer a percentage to preview coins. For expensive coins, a collector has the option of having a dealer such as yourself preview the coin for them or buy CAC verified coins.

 

You stated that "if collectors make purchases, based on images, without in-hand inspection, the odds are stacked strongly against them. And chances are that they will end up with less desirable coins, while missing out on superior examples." That statement basically means that you can't confirm the grade of the coin without seeing it in hand. But if you look at the coin for me, I still haven't seen it in hand. So what you are saying is that due to incremental grading we can't simply accept the TPG assigned grade. You are also saying that incremental grading can't be discerned from high resolution photos, due mostly to the affect of luster I assume. And lastly you are saying that having a professional opinion will solve the incremental grading problem thereby ensuring that the collector will not end up with less desirable coins.

 

So my question is how is the service that you provide any different than what the CAC provides? Furthermore, keep in mind that if & when I sell a coin, telling a prospective buyer that a dealer confirmed the TPG assigned grade does not go nearly as far as the CAC sticker.

 

Hi Paul,

 

Giving my opinion on a coin differs significantly from what CAC does.

 

CAC assesses coins in order to distinguish solid for the grade or better examples from lesser quality and/or problem coins.

 

I screen coins and provide my opinion for clients who are looking to get a better idea whether a coin will appeal to their particular taste. A coin can be accurately graded or high end, but still exhibit flaws or characteristics which some collectors prefer to avoid.

 

Regarding opinions on lower value coins - If I give a thumbs down to a coin or give it a thumbs up, but the client ends up not winning it, there is no charge. So frequently, the client gets a free opinion of the coin. That said, most of the coins I am asked to screen exceed $500 in value.

 

I wholeheartedly agree, that my viewing a coin for a client is not the same as the client being able to examine it himself. It is still a significant advantage, however, over the client having to make a decision based solely on an image.

 

That is a really good answer Mark, count me impressed.

[MarkFeld]

Here are the final results:

 

I spent $58,882 from total bids of $441,663.

 

I won 26 coins from among approximately 150 that I placed bids on. Of those, 13 were graded by NGC and 13 were graded by PCGS. Coincidentally, 13 were also stickered by CAC. I sure hope 13 is a lucky number!

 

My maximum bids on those coins amounted to $61,372, so I paid approximately 96% of my maximum bid total.

 

The highest price coin I won was $20,700 for an MS63 1916 Standing Liberty Quarter.

 

The lowest price coin I won was $138 for an MS66FB 1916 Mercury Dime.

 

It appears that I was the under bidder on two $50,000+ Proof gold coins.

 

If anyone else has any additional questions, please feel free to ask. And thanks for your participation and kind comments.

 

 

[comicdonna]

Thanks for posting this.

[ccinalvin]

Mark

 

What if you had hit on 50% of your bids, would that be a good thing (more coins equal more profit) or a bad thing in that too much of your cash flow is tied up at one time?

 

Corky

[MarkFeld]

Mark

 

What if you had hit on 50% of your bids, would that be a good thing (more coins equal more profit) or a bad thing in that too much of your cash flow is tied up at one time?

 

Corky

 

Corky, I certainly don't make money on every coin I buy, but your scenario would probably/hopefully be a good thing for me.

 

When placing a large number of bids in an auction, I have never won anywhere close to half of them. So, if that were to happen, it could mean, that for some strange reason, I got a lot of potentially good deals. Or it could mean that the market had taken a quick downturn and that I was unaware of it.

 

Cash flow is never an issue for me. Finding enough coins which meet my standards and are priced reasonably, IS frequently an issue, however.

[Oldtrader3]

A hit rate of 16+%? Is that about what you expect, Mark, for an auction of this size? I realise also that the material makeup of the auction may swing this mix of successful rate bidding somewhat. Just curious because I have noticed external infuences in my success rates due to season and venue. Half of the mix being CAC is also a strong statement about where the market seems to be going as well. How many of your bids do you figure get overwhelmed in bidder competition in an active action? Thanks for the info, BTW.

 

 

[MarkFeld]

A hit rate of 16+%? Is that about what you expect, Mark, for an auction of this size? I realise also that the material makeup of the auction may swing this mix of successful rate bidding somewhat. Just curious because I have noticed external infuences in my success rates due to season and venue. Half of the mix being CAC is also a strong statement about where the market seems to be going as well. How many of your bids do you figure get overwhelmed in bidder competition in an active action? Thanks for the info, BTW.

 

 

I just checked my Heritage account, so that I could try to answer your question with facts, instead of with a guess. And if I interpreted the numbers correctly, overall, for the history included on the website, I have won approximately 16.7% of the value of the coins I have placed bids on.

 

Of course, the % for the number of coins won, compared to the total number bid on might differ quite a bit from the 16.7% number above. But (and this is a guess) I expect that it would be fairly close.

 

I don't know precisely how you would define "overwhelmed", but I can tell you that approximately 10% of the lots I bid on brought double or more the amount of my maximum bids.

[Oldtrader3]

That is what I meant! I seem to lose a lot of coins by an increment or three which is probably typical for a collector.

 

I also try to maintain discipline on bid pricing and decide what the coin is worth to me at this moment and let it ride (right or wrong)? There have been only a couple that I have chased and bought but that was quite some time ago.

 

Thanks for your candor, Mark, good information.

[AnkurJ]

So was it you bidding against me on the $10 proof in NGC 60 CAC?

[MarkFeld]

So was it you bidding against me on the $10 proof in NGC 60 CAC?

 

No.