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Rare Coin Market Report – Garbage IN/Garbage OUT

Dear Rare Coin Enthusiast,

With the great Baltimore Coin Spring Show just a couple of weeks behind us, I am curious as to what direction the U.S. Rare Coin market will go in April. Tax season is not kind to the coin business. Taxes have to be paid and that desirable coin might have to wait until next month if it is still available. With the gold and silver market down, activity at Baltimore was surprisingly good. This show venue is just fabulous. Folks love coming to Baltimore and the great people at Whitman, especially David Crenshaw and Lori Hamrick, really go out of their way to make this show work. Attendance was really good and business was brisk.

I have written extensively about my belief in a coin market that ‘will explode’ eventually. I believe this to be the case for several reasons. First, there are lots of really great coins that are trading at or near all time low price levels in the last fifteen to twenty years. Second, few truly nice coins are available at current levels. Wait a second Vic, what about all the coins in the Stacks/Bowers auction? Yes, there were some great coins in the Stacks/Bowers auction, but how many didn’t sell, were bought back, or brought WAY less than current Coin Dealer Newsletter bid prices. Oh, and NOW you have to pay a 17.5% buyers fee!

Have you ever heard the saying about ‘manure running downhill’? Crappy coins bring crappy prices, especially when they are crammed into a phone book sized auction catalog and sold at no reserve. Nicer, one of a kind coins bring great prices, but ‘run of the mill’ stuff, partly because dealers are consigning coins in large numbers at no reserve, is bringing nothing or not selling at all. This causes a whirlpool effect almost like a toilet flushing. Because so much ‘stuff’ is being consigned to auction and so little of it actually sells at reasonable levels (like Coin Dealer Newsletter bid), bids drop.

The double whammy is that Coin Dealer Newsletter, where 75% of the coin pricing information ‘comes from’ doesn’t have a qualified numismatist on staff and hasn’t had one in their employee for years.

When crappy coins bring crappy prices at auction, these prices are monitored by CDN-Coin Dealer Newsletter and reported as lower levels. YET, the record prices for a small handful of rarities are reported on the front page of the CDN Greysheet. The problem with this system is the totally baseless quantification of quality. Greysheet is reading prices realized from auction, accumulating the data, and selling it to dealers and anyone else who will subscribe.

The quality of the data itself is the problem. In computer programming the term they use is GIGO-Garbage In/Garbage Out. If you get bad or flawed data, accumulate it and then report it, what arey ou going to publish-GARBAGE. Without a competent numismatist on staff, Coin Dealer Newsletter is publishing GARBAGE.

Yes, they have added some new features listing CAC price levels and trades. Yes, Bluesheet was created years ago to list the ‘sight unseen’ bid levels for slabbed, mostly PCGS and NGC, coins. BUT, and here is the rub, how is it interpreted?

Let me give you an example. Morgan Dollars are by far the most popularly collected U.S. coin. Morgans graded by PCGS bring nice prices, but would you believe that the same Morgan Dollar date in the same grade can have a price disparity of over 50%. It really isn’t that unusual. In the past, the Greysheet was for ‘sight seen’ coins. For YEARS, this meant nice coins for the grade, usually untoned/white or brilliant coins or nicely toned coins with attractive color. For the last couple of years the Greysheet bid for many Morgan Dollars is completely meaningless. Once CAC coins started hitting the market, the Greysheet picked up bids for CAC coins and published those as the NEW ‘sight seen’ levels.

CAC has done nothing wrong. In fact, CAC has put a magnifying glass on the disparity in price between crappy coins and nice coins. BUT, Greysheet didn’t distinguish that their Greysheet sight seen bids were for CAC coins and many dealers have taken advantage of this. Does that mean that just because a coin does NOT have a CAC sticker that it CANNOT be worth at least Greysheet bid. Frankly, for many dollars this has become the case. The fault is not with CAC. The fault is in the GARBAGE being reported.

Sherri and I travel extensively to buy really nice coins sight seen. We usually have to pay ‘greysheet’ levels for NICE coins. Because I am buying coins on a daily basis as a dealer, I usually know when the greysheet bids are BASELESS, but do you know?

Over the last several years dealers have started using Auction Prices realized information, in addition to the Coin Dealer Newsletter information, to determine the price levels for coins. So does this information ‘better’ represent what a coin is worth? NOT! In a significant amount of cases it is more GIGO-garbage in/garbage out.

If coins bring nothing at auction does that mean the prices are crashing? Yes, sometimes it does,but…often the lower prices at auction are purely the result of way to much ‘crap’ and even nice coins are being offered in a venue where no real buyers have the wherewithal to participate. Frankly, dealers especially have so little time at major shows that participating in an auction that runs until one a.m. isn’t a great option after working for ten hours on the bourse floor.

Let’s be realistic here.

The Russians used propaganda to great effect. For example if the Russians and the U.S. were competing in a big dual (two participant) event and the Russians lost, their media would report the next day that the ‘Heroic Russian Athletes took Second’ in a great International sporting event. Actually, didn’t they finish LAST-more GIGO-Garbage In/Garbage Out.

Vic Bozarth
Vic Bozarth
Vic Bozarth is a member of the Professional Numismatics Guild (PNG), the ANA, the CSNS, FUN, and many other regional and state coin clubs and organizations. Vic has extensive experience buying and selling coins into the mid-six-figure range. Both Vic and his wife Sherri attend all major U.S. coin shows as well as most of the larger regional shows.

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