My thoughts on the meaningless ASPECTS of price guides and tpg grading

[MikeKing]

disclaimer: I am not saying price guides don't have a role, I'm just saying they are over-rated. I am not saying tpg's arent good, I'm just saying you CANNOT and MUST NOT rely on them to tell you in any way the value of a coin...only you can determine that.

 

In my mind. And I know, well, I expect most will disagree with me, but this is just a statement about how I really feel.

 

First and foremost I am a collector, and I define that withint that context, there are going to be financial gains, financial losses, significant expenditure to develop what you visualize and a strugle to develop skills in determining what is important in a coin, know when to make exceptions and when to adhere to strict strategy.

 

In all honesty, the last time I looked at a 'red book' was when I was a teenager and my mom bought me a copy, not even knowing what that book was about, just because she knew I had an interest in coins.

 

I kept that book for years, and finally discarded it about 7 years ago during one of my 'purges' during a move.

 

I'm not saying this is not an important book, I'm saying that I have no idea, no recollection of what's in it, hear about it often on the boards, and have no interest in looking at it. That doesn't mean I'm doing the right thing, this is just the way it is.

 

Another honest statement is that I simply do not know the difference between blue book, or grey book or whatever names people call what I imagine are lists of the 'values' of coins wholesale or retail.

 

I never look at that magazine that gives coin prices (PCGS just started sending it to me...I don't know why...it went directly into the trash can. I simply don't have the level of concentration to spend time with stuff like this.

 

Again, I'm not saying this is right or this is wrong, I'm simply telling you the way I see it...and do it.

 

I'm bringing this up because there was a recent post about 'book values' and it just seemed to go way over my head. But on the other hand, I have no idea what the big stink was about to begin with.

 

In my mind

1. The market determines the prices.

Period.

It's the market.

And I view the market through auction archives (at least three) and what private dealers are charging for coins.

 

2. I understand clearly that...and particularly as I believe I am progressing (though some might feel I'm regressing), but I believe as I understand the value of a particular kind of coin, I will likely have to pay more and perhaps way more than what that particular date and grade go for. And not infrequently, a particular coin may have such a rare appearance in public auction, that it becomes impossible to determine what the 'usual' price for such a coin is, and I therefore have NO credibility in any source that does. At that point, I just have to a. extrapolate from the data I collect b. judge comparitively where the coin I'm interested stands, and then determine a price I'm wiling to pay.

 

3. I make mistakes all the time. They are becoming less financially stupid as I continue to learn, but I make mistakes all the time.

 

4. I've made great strides in 'cherry picking' by knowing value, and knowing what to grab when it falls in my lap.

 

5. I never forget that I'm a collector, I have an 'idea' abou what I want to create, money is an issue, but a secondary one. That's just my feeling. It is not advice by any means.

 

6. I've learned enough that I can now determine when junk is going for thousands of hysterical dollars based not on the coin but the holder. It is the ability to understand this that will minimize losses when I go to sell, but also enable me to determine that when I spend so called 'strong' money, it will be on a coin that I genuinely believe is spectacular, though, other's may not, and I may still suffer a loss upon selling. Generally though, I believe I would do well.

 

e.g. a rare wiped dipped faintly retoned coin that I want in terms of date, but cannot accept what is available, that someone else is spending in excess of 4,000.00 for when the coin is a piece of junk. A really good one is going to be a very very hard find, and I'll probably have to pay a substantial premium when I find one or one falls into my lap (which is the way it usually happens).

 

7. Grade can be important insofar as a higher grade may have better eye appeal, but the true understanding will be yes, this, +, grade and eye appeal are not necessarily congruous in that one does not imply the other. therefore, collecting based on grade can be (I repeat this from before), the fools road to eye appeal.

 

e.g. An XF45 Bust half could have far greater eye appeal (and therefore be that much rarer) than the same date at MS level. This is a plain and simple and irrefutable fact. To understand this is an advancement in collecting, and also could be a financial negative, due to the fact that higher grade coins go for more money, and paying a premium on a lower grade coin risks (I think) a greater chance at not recouping your intial investement.

 

These are just some thoughts and beliefs that contribute to my ever growing and changing philosophy on coin collecting.

 

I have no idea, literally, what blue sheet and grey sheet are, don't care, don't want to know and have done perfectly fine without either of them.

[Zoins]

It's amazing how much of this hobby is driven by price guides. It's kind of mind numbing when half of every coin magazine is a price guide.

[World Colonial]

I have not looked at the "Red Book" in years either, but here are a couple of examples that I believe are still valid where it does matter:

 

The 1879 gold Flowing Hair Stella is actually a faily common pattern with a reported mintage of 400. Yet it still sells for above six figures at least partly because $4 gold is included in the Red Book.

 

The 1866 "No Motto" Liberty Seated coinage have reported mintges below five I believe and are not regular issue coinage. I believe they are fantasy pieces because they could not even be patterns since this was the first year of the "With Motto" issues. But they are almost certainly worth more money because they are in this book and I read once that one owner of these issues conviced the editors to include them for that purpose.

 

The 1836 Reeded Edge Capped Bust half is listed in the Red Book and as J-57 in the Judd book. I think I agree with Bowers that it was intended for circulation as there are many circulated specimens, but if it really is a pattern, it is still worth more by being listed in the Red Book.

[TomB]

In my opinion, point seven of your list is the most important in that grade and eye appeal do not have to be linked in any linear manner. This is something that many folks appear to disagree with and they invoke the "buy the best you can afford" quote. Again, in my opinion, the best you can afford in this scenario is the nicest coin, regardless of grade, and that will almost always be a choice, original EF rather than a ratty, suspect low-end MS.

 

As for price guides, it would be nice to be able to ignore them completely. However, I think that you are setting yourself up for a fall if you do not take them into account since your collection is not an isolated entity and the dynamics of how your collection will change over time can and will be influenced to some degree by the larger market. It only makes sense to me to be prepared, regardless of whether or not one embraces the source, as long as that source might be considered reliable.

[Dcoin]

Price guides have their place.

 

You are correct, they are not the 'be all' of coin collecting. However they offer a good starting point for the collector that needs a little support when setting prices during coin purchases.

 

The art of the hobby is knowing when to offer more, or less, than a guide quotes.

[bsshog40]

It's amazing how much of this hobby is driven by price guides. It's kind of mind numbing when half of every coin magazine is a price guide.

 

This just doesn't pertain to coins. If you have any other hobbies, then you know that there are many other collectible areas that are value guided. There may not be guides to go by, but market values basically do the same thing.

[WinstonWare]

I agree with point 7 as well. I don’t go by grade.

 

Greysheet would be good to have although whenever I reference those numbers dealers never seem to care. Redbook is a nice guide to U.S. coins but it is not reliable when it comes to pricing.

[Zoins]

It's amazing how much of this hobby is driven by price guides. It's kind of mind numbing when half of every coin magazine is a price guide.

This just doesn't pertain to coins. If you have any other hobbies, then you know that there are many other collectible areas that are value guided. There may not be guides to go by, but market values basically do the same thing.

Even so, I think the "feel" of a hobby is a lot different when every magazine for the hobby is overwhelmed by a price guide and many collectors live and breathe price guides. Many other hobbies do not exhibit pricing in this detail so you don't "feel" like you're in a hobby dominated by pricing minutia.

 

In any event, I don't buy coin magazines because I don't value the price guide that comprises a lot of the pages, so that's more money for coins. I think I would be a lot less interested in coins if I was looking at price guides all the time. The nice thing is, I think the rarer a coin is, the less price guides matter.

[ibyandsellsmith]

The redbook is good for common variety's, also it gives the mintage of most U.S. coins I like the redbook for reading purposes. As far as value it's worth what your willing to pay. How bad do you want it, how many people are looking fo it, and how difficult is it to obtain. Goes back to mintages, hence,(redbook). The greysheet is just as worthless as any other value guide, unless your willing to wait for a buyer who is willing to pay. The funny thing is, seems like, auctions are now filled with people who bring there Redbooks and value guide magazines. It makes it rather difficult to buy coins at a resonable price anymore. Damn! those catalogs.

[michael]

one big question i have is with third party grading and you see this over on the pcgs boards the screaming yelling and calling bloddy murder on what grades their coins came back as...actions speak louder than words

 

think of it this way my friend

 

these and most all people who send their coins to, the so called grading services are not looking for grades they already know the grades.....................

 

for example msgr. greg the blue copper tone doctoring guy could care less about his grades he just wants these SPECULATOR PRICING SERVICES TO do just that PRICE HIS COINS

 

this is all HE ALREADY KNOWS THE GRADES BUT THEY CANT BE SOLD FOR ARBITRAGE (making something more out of nothing quickly to make money over and above the normal means of reasonable markups) PROFITS UNLESS THEY ARE HOLDERED HENCE PRICED BY THE THIRD PARTY PRICING SERVICES really for investors/spectulators

 

as this fuels the speculation

 

think about it

 

just the way it is..... a free market exchange of the coin game

 

private third party for profit spectulator pricing services

 

feeding on the greed of others in a free market coin game

 

 

and also the price guides what are they based on?? a holdered coin, the coin itself, the eye appeal??

 

you can have for example three 1806/5 bust halves all pcgs for example pcgs graded xf45

 

one is rather low end and cleaned with that pasty white look okie eye appeal to many.... but crappy eye appeal to me

 

the second is properly graded and cleaned long ago with okie eye appeal not great not poor just average eye appeal and hairlines underneath the secondary golden toning with some extra circulation marks solid for the grade

 

the third is extremely high end really au50 in an xf 45 older pcgs holder and prooflike and totally original and a gem circ and with killer amazing eye appeal

 

so if the pcgs price guides say that a pcgs xf40 is worth 2250 and an au50 is worth 5000 retail\

 

what are these coins worth??

 

 

well the market for me as this is one of my speciality coins and i know what i can sell this coin for to a buyer easily

 

the first coin i really do not want at all i guess if i had to sell it i would sell for 1900

 

the second one i would again not want but i would sell for 2300

 

the third one i can easily sell for 3250 now and someone is getting a great deal as one day this coin will be in an au50 holder then what is it worth?? i can sell it for i think in an au50 pcgs holder for 4300+ easy possibly 4600

 

so the price guides are guides and based on what??

 

based on nothing in my opinion

 

nothing zero nada

 

they do not buy or sell coins the only price guide for me is my experiences and what i can sell the coin for and/or what i want to buy it at within reason paying market prices for good coins

[BillJones]

The only things the Red Book is good for in today’s market are that it is a source for looking up the markers for the MAJOR varieties and mintages. The prices in it are useless except from a relative sense. The Red Book will tell you that the 1877 and the 1909-S are key coins in the Indian cent series, but the prices themselves are old and outdated.

 

I don’t agree that all price guides the useless. The point that many people miss are that they are guides. They are not numbers that are carved in stone. Some coins that are graded properly in the slabs and have great eye appeal are worth more than the price guides say. Other coins that are graded properly, but lack eye appeal are not worth what the prices guides say. Some pieces are so scarce and trade so infrequently that it’s hard to get a handle on what they are really worth. Some guides are totally out to lunch in certain areas. For example the early copper pages of the Gray Sheet are useless IMO. You can’t buy decent copper for anywhere near those prices, and if you use them to price coins you are selling to a dealer, chances are you short changing yourself. If want to get a handle of copper prices, guides like “Robinson’s Copper Quotes” is as close as you can get for retail numbers.

 

The only way to price coins is to use a combination of the guides and what you see in the market. That’s hard for a lot of collectors to do since they only go to shows occasionally. But that’s the way dealers do it.

[Oldtrader3]

IMHO, price guides such as Heritage auction-prices-realized are a useful guide to give you a range of recent trends of (for) grade price paid, based on a range of average to very nice specimens of a particular coin. Most other price guides are pretty meaningless. Grey sheet pricing certainly does not address coin quality.

[DonHeath]

If you're buying a coin, the only guidance that matters is your own. If you're selling, the guidance your buyers use is important.