Speculating on Rainbows.

[Afterword]

GreatCollections currently has a toned MS 66+ 1881 S Morgan Silver Dollar up for auction. So far $1,425.00 has been bid on this coin, which is a little more than three times what the NGC price list indicates it should fetch.

 

Approximately $1,000.00 is the premium being paid for the rainbow toning the coin exhibits. This premium could very well rise even higher – perhaps much higher.

 

My question is how likely is it this coin will sustain this kind of premium over time?

 

http://www.greatcollections.com/Coin/254805/1881-S-Morgan-Silver-Dollar-PCGS-MS-66-Toned

 

 

 

 

[RWB]

Pretty coin, but how pretty depends on your wallet.

[jom]

People have been paying premiums for toned coins as long as I can remember so it is nothing new. I'm not sure if that helps give you an idea of how long it can be "sustained" though...that is speculation and something most people aren't good at.

 

As to the coin going for more than 3X you have to make sure you compare apples to apples. You can't compare wildly toned coins to plain white ones in price. That doesn't work. What you should try to do is use Heritage archives to find similarly toned coins and compare prices there (or another source/archive).

 

jom

[coinman_23885]

As to the coin going for more than 3X you have to make sure you compare apples to apples. You can't compare wildly toned coins to plain white ones in price. That doesn't work. What you should try to do is use Heritage archives to find similarly toned coins and compare prices there (or another source/archive).

 

jom

 

I agree, and will add that I have seen that coin somewhere. Whether it was on a coin forum in a sales thread, a dealer website, or auction, there should be some pricing history out there for it.

[Afterword]

I have done my research on the topic and have come to the conclusion that toned coin demand is stable and will likely stay that way indefinitely. The price one pays for such coins will fluctuate somewhat and what is deemed the most desirable colors and/or configurations will change over time but the demand for toned coins will always be strong.

 

Toning is inherent in coinage and, as such, one can dislike a certain manifestation of toning or cherish a certain manifestation of toning but never avoid making that distinction.

 

To answer the question posed in my opening post, it is unlikely the premium for the coin in question can be sustained. It can only rise or fall as influenced by the qualities of the toned coins that are desired at the time.

 

However, what I am interested in is the opinions of others on the subject.

[Raisethis2]

Realistically, that's very eye catching rainbow toning on an otherwise well struck common coin. The multiples in value may subside but my guess is that it will continue to increase over time.

 

As an owner of such a coin selling for a loss would not be a proposition I would entertain.

[michael]

Speculating on Rainbows.

 

 

My question is how likely is it this coin will sustain this kind of premium over time?

 

http://www.greatcollections.com/Coin/254805/1881-S-Morgan-Silver-Dollar-PCGS-MS-66-Toned

 

part one answer-- from my personal experiences with others in the coin game for decades most all speculators lost money or at best case scenario broke even

 

now I have no doubt that a few have made a killing but I and most all people don't run in those circles and it involves a combo. of insider coin marketing and grading arbitrage

-----------------------------------------------------------------------------------------------------

part two answer--- from what I see of this particular coin in the auction I will sum up my answer to your question like this

 

YAWN

[brg5658]

It doesn't seem to be all that special IMO. Yeah, it's pretty, but it doesn't knock my socks off - which is what it better do for that kind of premium for a super common coin.

 

But, people go crazy for toned Morgans -- just not my thing.

 

To each his/her own.

[Afterword]

Some of you might find this interesting.

 

 

http://www.stacksbowers.com/archivedetail.aspx?productid=1876756&ResultCount=9908&sourcePage=archivesearchresults.aspx

[wdrob]

 

Gradeflation?

 

I just do not see it nor understand the premium so far. Maybe it takes some folks back to their childhood and a state fair.

 

 

 

[coinman_23885]

Gradeflation

 

No, the coin looks blatantly under graded for when it was in its MS65+ holder. Looking at the Great Collections images, I would have guessed (if doing so blindly) MS67, so there is still room for a potential upgrade.

[Afterword]

I agree.

[WoodenJefferson]

Anytime I read about a 1881-S Morgans, it had better be nicely toned or I'm disappointed (I don't collect toners, I'm a Ricko blast white aficionado, so I don't care what they sell for)

[TonerGuy]

That coin is a steal as compared to this $2500 toned Peace $.

 

http://www.ebay.com/itm/331503326631?_trksid=p2060353.m1438.l2649&ssPageName=STRK%3AMEBIDX%3AIT

[coinman_23885]

That coin is a steal as compared to this $2500 toned Peace $.

 

http://www.ebay.com/itm/331503326631?_trksid=p2060353.m1438.l2649&ssPageName=STRK%3AMEBIDX%3AIT

 

If the coin looks anything like the images, that Peace Dollar is worth much less than the asking price.

[coinman_23885]

To answer the question posed in my opening post, it is unlikely the premium for the coin in question can be sustained. It can only rise or fall as influenced by the qualities of the toned coins that are desired at the time.

 

However, what I am interested in is the opinions of others on the subject.

 

I think coins with phenomenal eye appeal, be it due to attractive toning or other factors, will always be in a demand and command premiums over generics. The amount of premium, however most certainly will change especially at the very top end of the toned Morgan Dollar market. There are a handful of major players that are responsible for setting some of the prices and if one or more of them leave, yes I expect that the premiums for the very top (i.e. the common date MS65-MS67 selling for 5 figures or just a bit below) will be lower. I still think they will be worth significant premiums. In light of the recent auction prices, I am keeping what I have, but have decided that many of the coins I find attractive are not worth the auction prices I am seeing (at least to me personally). When a certain collector or two retire or what not, I expect the market will be flooded and prices will eventually stabilize to more reasonable levels in the next 10-15 years.

[Afterword]

I suspect there will always be enough wealthy collectors to absorb whatever enters the market. Would not a changing-of-the-guard be a more likely scenario?

 

If these coins are desirable, the collectors with the most money will want them and the competition generated would keep the prices at a high level. There are probably wealthy collectors waiting, just as you are, for this flood – for this changing-of-the-guard.

 

Desirability is what determines value. For value to diminish, desirability must diminish as well.

 

[WoodenJefferson]

I wish kryptonitecomics was still active here, he could shed first hand experiences with this market. Shane if your out there...

[Afterword]

The coin in question hammered for $2,116.60 ($2,328.26 WBP).

[coinman_23885]

The coin in question hammered for $2,116.60 ($2,328.26 WBP).

 

If the coin has a lot of luster to make the colors pop in hand and if it upgrades to MS67 as I think is possible, I think the buyer can potentially flip the coin for a profit especially if well marketed IMHO.

[brg5658]

The coin in question hammered for $2,116.60 ($2,328.26 WBP).

 

If the coin has a lot of luster to make the colors pop in hand and if it upgrades to MS67 as I think is possible, I think the buyer can potentially flip the coin for a profit especially if well marketed IMHO.

 

Because God forbid the coin actually went into a collection of someone who cares to keep it for longer than 6 months and isn't most worried about the "flippability" of it.

 

So is this what the toner market has condensed down to -- a battle to the maximum inflated graded holder, eventually ending up in the collection of some "end user" at 10-20 times its auctioned value 2-3 years ago?

[johnny9434]

pass.

[coinman_23885]

Because God forbid the coin actually went into a collection of someone who cares to keep it for longer than 6 months and isn't most worried about the "flippability" of it.

 

So is this what the toner market has condensed down to -- a battle to the maximum inflated graded holder, eventually ending up in the collection of some "end user" at 10-20 times its auctioned value 2-3 years ago?

 

The thread was questioning the stability of the premium of toned coins, and the OP made some comments about the premium based on the holder grade. I was simply stating that I think the coin could upgrade, and that in the grander scheme, although there was a sizable premium, it probably isn't as much as many would think. In other words, I think the buyer could make a profit if he or so chose to do so. That's all. I'm not implying that he or she should flip the coin.

[brg5658]

Because God forbid the coin actually went into a collection of someone who cares to keep it for longer than 6 months and isn't most worried about the "flippability" of it.

 

So is this what the toner market has condensed down to -- a battle to the maximum inflated graded holder, eventually ending up in the collection of some "end user" at 10-20 times its auctioned value 2-3 years ago?

 

The thread was questioning the stability of the premium of toned coins, and the OP made some comments about the premium based on the holder grade. I was simply stating that I think the coin could upgrade, and that in the grander scheme, although there was a sizable premium, it probably isn't as much as many would think. In other words, I think the buyer could make a profit if he or so chose to do so. That's all. I'm not implying that he or she should flip the coin.

 

Kenny, my reply wasn't a negative reflection on anything in your statement. Sadly much of the numismatic "big boy" sandbox nowadays is just shuffling of material between dealers until coins are maxed out at grades that no one in their right mind would crack and resubmit. These maxed out coins then (sadly) end up in the collections of collectors who have been led to believe that these types of coins are the best thing since sliced bread.

 

Of course, between the stage when a coin first comes on the scene and is holdered the 1st time, there is a lot of hand waving, smoke, mirrors, hot air blowing, and marketing hype. In the end, all of this shuffling of these types of coins back and forth between dealers does nothing for the hobby. Sure, the visibility and marketing and recurrence of the coin on the auction block puts money in the dealer's pocket -- but in the end, much of this churn is at the detriment of the eventual true collector who ends up with the coin -- I call these "end user" collectors. They (or their heirs) are the ones who can't then sell many of these over-hyped coins downstream.

 

That was my lament...that these supposed "special" coins must not be all that special considering no one wants to hold them in their collection for longer than 6-12 months at a time. I put many of these "crack-masters" on the same level as the Home Shopping Network hucksters in terms of their business ethic. They aren't catering to collectors -- they are catering to hype and pipe dreams.

 

And, just to clarify, I'm not referring to the real monsters in the hobby. There will always be competition for the truly unique and irreplaceable coins. But, c'mon, this is an 1881-S Morgan. Yeah, it's "purdy" but it isn't anything special.

 

 

OVER

 

[e1cnr]

What makes you feel the high prices are from people speculating? maybe they know the market and are paying at or below market price.

[coinman_23885]

Sadly much of the numismatic "big boy" sandbox nowadays is just shuffling of material between dealers until coins are maxed out at grades that no one in their right mind would crack and resubmit. These maxed out coins then (sadly) end up in the collections of collectors who have been led to believe that these types of coins are the best thing since sliced bread.

 

To a large extent, I agree and it makes me concerned about the stability of many areas of the coin market when many coins derive a good bit of their value from plastic and labels. I absolutely think that the toned market is falling more and more susceptible to this phenomenon sadly, although I don't think it has always been that way.

 

And, just to clarify, I'm not referring to the real monsters in the hobby. There will always be competition for the truly unique and irreplaceable coins. But, c'mon, this is an 1881-S Morgan. Yeah, it's "purdy" but it isn't anything special.

 

I agree that it doesn't "knock my socks off" either.