Thoughts on Heritage auction archive

[toyonakataro]

I really enjoy viewing their auction archive.    Just viewing great coins auctioned in the past makes me happy.

I also use their archive to check if the coin I'm going to bid on had been auctioned at Heritage in the past......at what grade.

Sometimes, viewing their auction archive makes me scared, though

 

[toyonakataro]

Another images from their auction archive

[coinman_23885]

I try not to think about it anymore.  Crack-out artists have existed since the inception of the grading services, but it appears (to me at least) that the upgrades are far more common today because of grade inflation.  This is part of the reason prices are plummeting and why I intend to sell off most of my holdings.

As for the archives, those are good too.   I wish the filters weren't glitchy though.  Sometimes the system will temporarily omit a significant number of the listings for some unknown reason.  It is a recurring issue that pops up a few times a year that usually resolves within a few hours.

[World Colonial]

The HA archives are the best tool around.

As for the examples provided, sounds like a great reason not to buy that type of coin.

[RWB]

Heritage's archive photos allow you to see what happened - thus helping to avoid overpaying.

With nearly all "grading" now in the hands of 2 or 3 companies, the auction houses can only report and illustrate.

[LINCOLNMAN]

Nice piece of research, thanks for sharing. Attractive toning seems to add more market value today than in recent history, at least there's a lot of focus on toners, AT vs, NT in the forums (or just common and modern?).  I wonder whether the looser standards today have more to do with color than strike or surface marks, at least on MS coins.  As a collector and observer my sample is small. 

[MarkFeld]

3 minutes ago, LINCOLNMAN said:

Nice piece of research, thanks for sharing. Attractive toning seems to add more market value today than in recent history, at least there's a lot of focus on toners, AT vs, NT in the forums (or just common and modern?).  I wonder whether the looser standards today have more to do with color than strike or surface marks, at least on MS coins.  As a collector and observer my sample is small. 

I don't think that non-color coins are any more immune to gradeflation than toned coins.

[MarkFeld]

2 hours ago, World Colonial said:

The HA archives are the best tool around.

As for the examples provided, sounds like a great reason not to buy that type of coin.

I wouldn't avoid that type of coin more than any other. Those just happened to be a couple of specific examples which were provided.

[World Colonial]

1 hour ago, MarkFeld said:

I wouldn't avoid that type of coin more than any other. Those just happened to be a couple of specific examples which were provided.

You are right, this was a specific example.

My interpretation of his post is that it isn't isolated.  I actually meant that I would avoid coins where the TPG grade accounts for a disproportionate or outsized percentage of the coin's value where the coin is also "expensive".  This is predominant with US coinage but also exists with world coins that are favored by US collectors.

In the series that I collect, I don't buy these coins either, though the premiums between grades are much smaller, few higher MS coins exist and I am not aware of "gradeflation" because the price level and price structure don't provide much motivation for crackouts.  However, the financial risk is still higher on the few higher grade coins which exist and it is disproportionate to the actual quality difference.

[numisport]

Even better I like using the Newman Numismatic Portal encyclopedia which shows highest grades and latest sales first not to mention coins of similar grades sold by different auction houses. Just open highlighted pieces to view.  Images shown seem to be mostly Heritage coins but what a great resource !

[numisport]

Also be aware that along with coins that sell for 'scary ' low prices there are the ones that are high end attractive pieces with gorgeous eye appeal that go for way high money. These are the ones that get tucked away not to be seen for a while. Some get the Star designation. You might find these lurking in PCGS plastic. It certainly helps to look at as many as you can before layin down the dough.

[World Colonial]

4 hours ago, numisport said:

Also be aware that along with coins that sell for 'scary ' low prices there are the ones that are high end attractive pieces with gorgeous eye appeal that go for way high money. These are the ones that get tucked away not to be seen for a while. Some get the Star designation. You might find these lurking in PCGS plastic. It certainly helps to look at as many as you can before layin down the dough.

What is an example of a "scary low" price to you?

Let me provide one that is a candidate, the 1885 Liberty Head Nickel in MS-66.  More recent sales listed in the HA archives have been below $10,000.  This is from 2016, as I don't see any this year.  Sales within the last five years were over $15,000 with one at $25k+ in 2008.  The latter coin looks nicer than the others from the image but in the overall scheme of things, any quality difference between any of them is spitting hairs considering the price.  As a "key" date, I suspect (but do not actually know) that it's a candidate for gradeflation.  I randomly pulled up the 1/5/14 sale where the listing states 24 in PCGS 66 but the population report table below records 51.

Regardless, the oldest sale in 1996 is for $2200 and I'd call recent sales in "nose bleed" territory considering that this coin isn't even scarce.  I expect coins like this to lose more value, with or without gradeflation.  A lot more.

[orifdoc]

Grades are only shorthand valuation appraisals.  The numbers are not founded in objectivity and reflect current market whims, manipulation, evolving thinking, and "refinement" by the grading services.  Except for registry games, the exact number on the slab is only important on the day you buy and the day you sell.  Unless a hidden hoard shows up, your 11th finest example at MS65 will still be the 11th finest example when it's living in a hot-off-the-press MS83++*** holder with 4 stickers, 6 holograms and an implanted microchip in a couple decades.

As long as grades are subjective and a profit motive exists to play the crackout/regrade game, it will be easy to find examples like the OP posted.

[numisport]

13 hours ago, World Colonial said:

What is an example of a "scary low" price to you?

Let me provide one that is a candidate, the 1885 Liberty Head Nickel in MS-66.  More recent sales listed in the HA archives have been below $10,000.  This is from 2016, as I don't see any this year.  Sales within the last five years were over $15,000 with one at $25k+ in 2008.  The latter coin looks nicer than the others from the image but in the overall scheme of things, any quality difference between any of them is spitting hairs considering the price.  As a "key" date, I suspect (but do not actually know) that it's a candidate for gradeflation.  I randomly pulled up the 1/5/14 sale where the listing states 24 in PCGS 66 but the population report table below records 51.

Regardless, the oldest sale in 1996 is for $2200 and I'd call recent sales in "nose bleed" territory considering that this coin isn't even scarce.  I expect coins like this to lose more value, with or without gradeflation.  A lot more.

Generally scary low prices are hammered for coins that have gem grades but have problems. I'll refer to coins I might collect such as cameo proofs from the fifties. Many of these coins are in PCGS holders as they tend to be more technical in grading. For example a 1952 nickel graded 67 Deep Cameo is a rare coin. But why would a spotted hazy looking coin be in a 67 holder to start with ? So rather than 5k, coin sells for 3300. This is no longer phenomena but common place and is what I consider gradeflation. I find that the real solid coins are won by dealers who bid right up to hammer time to win a coin I bid on with limited funds and had to stop. Any one see the '36 Walker in NGC Pf 66 Star that sold a few weeks ago ? I just missed it but know it was resold at nearly twice the hammer price because it had that cameo look. That one may not resurface for a while. So lets just say choose wisely my friends.

[World Colonial]

1 hour ago, numisport said:

Generally scary low prices are hammered for coins that have gem grades but have problems. I'll refer to coins I might collect such as cameo proofs from the fifties. Many of these coins are in PCGS holders as they tend to be more technical in grading. For example a 1952 nickel graded 67 Deep Cameo is a rare coin. But why would a spotted hazy looking coin be in a 67 holder to start with ? So rather than 5k, coin sells for 3300. This is no longer phenomena but common place and is what I consider gradeflation. I find that the real solid coins are won by dealers who bid right up to hammer time to win a coin I bid on with limited funds and had to stop. Any one see the '36 Walker in NGC Pf 66 Star that sold a few weeks ago ? I just missed it but know it was resold at nearly twice the hammer price because it had that cameo look. That one may not resurface for a while. So lets just say choose wisely my friends.

I would call your example a "nose bleed" price as well.  By your own description, the coin is unattractive which implies to me that the primary distinction is the label on the holder.

More generally, concerns over gradeflation are the result of the higher emphasis on the financial aspects of collecting, aka financial buying.  There are presumably a very low number of buyers who don't care but most of them wouldn't ever pay what they did without the expectation of getting most, all or even more of their outlay back.  This is entirely logical since the prices are completely disproportional to the relative numismatic merits under any sensible standard.  In other words, not the current standard which exaggerates the significance of these differences even though in most instances, dozens, hundreds, thousands and in some instances, even tens of thousands exist which are similar or essentially identical.

That's exactly why I stated I don't and never will buy these coins in high or "uber" grades with outsized price differences between one or a few points in MS or PR.  If I don't get most or all of my money back with what I own, I may be dissatisfied but I certainly won't be as nearly as dissatisfied because the coins I own have a lot more substance to them.

It's also why I expect many (maybe most) to be money losers in the future because the price level makes it uncompetitive versus the alternatives.  Due to declining economic conditions, I also don't see the likely economic demographic being either able or willing to pay current prices, not in current numbers.  I expect most of these actually common coins to remain preferred by US buyers but the price decline to occur from the marginal buyer opting to buy something else, whether in US coinage or otherwise.  Because for $3300 or $5k in your example and up to 10k in mine, a lot of other coins are much better.

If my sentiments seem unduly negative, I believe Coinman's comments above are representative of the mindset of those whose collections are most likely to be impacted by gradeflation.   Far better to get out early than late.

 

[coinman_23885]

4 hours ago, numisport said:

This is no longer phenomena but common place and is what I consider gradeflation. I find that the real solid coins are won by dealers who bid right up to hammer time to win a coin I bid on with limited funds and had to stop. Any one see the '36 Walker in NGC Pf 66 Star that sold a few weeks ago ? I just missed it but know it was resold at nearly twice the hammer price because it had that cameo look. That one may not resurface for a while. So lets just say choose wisely my friends.

I did and bid on the coin.  There was some nice frost, but I felt the price realized was exceptionally strong given  how weak the contrasts looked on the reverse. The 1936 proof star walkers that sold for the largest premiums on Heritage seemed to have more contrast.  It would be surprising if a dealer grabbed it.  I think the coin sold for full retail.  Twice that amount would be insane and would put it at $14k.  A PF 67 example I am aware of that just did miss a cameo designation previously sold for a small percentage more.

[coinman1794]

One and two point changes in grade are not uncommon, especially within a specific range. If you have a 63 or "Choice MS" that goes 66 or 67 "Gem+ or Superb-gem," then you have a real problem. Granted, I have seen those types of swings

I would also suggest that these early holder coins are often prime target for upgrade, due to an occasional reluctance to grade anything above MS65 in the early days.

[World Colonial]

55 minutes ago, coinman1794 said:

One and two point changes in grade are not uncommon, especially within a specific range. If you have a 63 or "Choice MS" that goes 66 or 67 "Gem+ or Superb-gem," then you have a real problem. Granted, I have seen those types of swings

I would also suggest that these early holder coins are often prime target for upgrade, due to an occasional reluctance to grade anything above MS65 in the early days.

To clarify my prior post, I wasn't claiming that two point changes occur on regrade of crackouts.  If it happens, I would expect it to be very unusual, except for the gradeflaton over a longer period of time as expressed in the concern in this thread.

My position is that I don't consider these differences represented by a one or multiple point increment significant, period.  I'm not saying it isn't noticeable at all but that its nonsensical as occurs today in US collecting to assign significance to so many coins predominantly because of the grade or even eye appeal unless the coin has a lot more than that to create a distinction.  This is a very unpopular view which is not accepted by hardly any US collectors for three reasons:

First, the whole US price level and economic model is based upon these differences being considered significant.  To paraphrase a well known statement, it's hard to convince anyone that these differences aren't significant when the value of their collection depends upon it.  It isn't going to happen, even if it takes the existing rationalization (which is exactly what it is) to do it.

Second, most coins (especially US coins) are either common, incredibly common or even if not, aren't remotely hard to buy,  So an artificial challenge represented by registry sets and other specialization has been invented to create one.  For anyone who doesn't believe this, it isn't a coincidence that outside of varieties, none of these practices exist elsewhere with the only exception being a few countries where TPG is also prevalent or at least widely accepted.  One I know is South Africa and though the coins are much scarcer, they also exaggerate the significance of TPG grades but in this case, predominantly for financial reasons since an outsized proportion are financial buyers.

Third, many coins which would have been affordable in the past (certainly up to the early 70's) are now so hopelessly out of reach that the choices available to even relatively affluent collectors exclude a substantial proportion of the available options.  This combined with the financial motive has resulted and if not, at least substantially contributed to current US practices.  In most other countries, the proportion of coins available to the average collector is much higher, so there is no need for any of it.

To get off my soapbox, the solution to this problem is, for anyone who is concerned with the financial consequences of gradeflation, don't buy coins whose numismatic attributes are totally "out of whack" with the price.  This is subjective of course but longer term in the internet age, its entirely logical to expect coins whose prices are substantially above the merits to financially underperform others whose numismatic value proposition is much better.  In the example of the PR DCAM Jefferson nickels, I'd buy it in a 65 or maybe a 66 grade for a fraction of a 67.  Or, those with stronger mirrors that are in a CAM holder.  I expect most coins in this series to lose value longer term, but if treated as a consumption expense at a much lower outlay, it will matter much less. 

 

[RWB]

Most reasonable, WC.

[LINCOLNMAN]

Well said WC. I believe many long-time collectors would agree with you, I do. Collecting US coins has always had a significant financial component, at least it has over my 60+ years. May take a number of generations to change this, if ever. Perhaps all this started because collecting US coins (maybe collecting many things) has always been a treasure hunt, along with the other pleasurable and more noble aspects of the hobby.

[coinman_23885]

wrong thread

[World Colonial]

On ‎6‎/‎19‎/‎2017 at 2:35 PM, LINCOLNMAN said:

Well said WC. I believe many long-time collectors would agree with you, I do. Collecting US coins has always had a significant financial component, at least it has over my 60+ years. May take a number of generations to change this, if ever. Perhaps all this started because collecting US coins (maybe collecting many things) has always been a treasure hunt, along with the other pleasurable and more noble aspects of the hobby.

My comments are somewhat off topic, but not entirely.  And though my posts may come across as "anti" US coins, that isn't so.  I like a lot of them but just like others more and don't buy them because of budget constraints and the price level.

I agree with you that what I described isn't recent, though I expect its news to those who aren't familiar with practices prior to TPG.  My oldest Red Book copy is the 1963 and though I can't say it was completely reflective of actual prices, I believe it was a lot more accurate than it is now and the recent past.  A lot of coins even then were very or quite expensive for the time, considering contemporary incomes, living costs and "wealth" levels.

However, to my recollection, the only ones which were far out of line (compared to other US coinage) with their numismatic merits were the widely collected 20th century "key" dates.  The difference then though is that because of communication limitations, collectors didn't know then what they know now.  I'd say knowledgeable collectors are aware of the relative numismatic merits of the coins I describe, they just ignore it.

The reason I wrote this last post is because its primarily or even entirely those who are concerned about their "investment" in their collections or a specific coin they own who are also concerned about "gradeflation".  The only other reason why anyone else would care is because they consider their ranking in the seemingly infinite number of registry sets significant and even if true, its entirely secondary to the financial aspects.

To anyone who disagrees with my comments, I am not the one who owns these coins with inflated prices.  Its probably you.  Even if you do not like my comments, you should at least be aware of the price history of these common "key" dates.  About nine months months ago, I looked at a small sample for the Lincoln cent in "UNC" from 1963 or 1965 as a baseline.  I am aware that the coins now assigned higher TPG grades (65 or above) have done well.  However, adjusted for price changes, all of them in MS-63 and lower were either financial losers or big losers.   These coins, while not cheap today, are a lot more reasonably priced now than then.  But its probably not much consolation financially to most who bought them a long time ago at the prior prices.

In the next 20 to 30 years I believe the exact same fate awaits most of these inflated coins for a variety of reasons.  Gradeflation will just make it worse.

[kidrootbeer]

Does anyone understand, even remember, WHY the Industry (nee Hobby) needed Third Party Grading (not including ANACS PhotoCerts in this discussion)?
Why a national network of Coin Dealers was created to Buy and Sell certified coins "Sight Unseen"?                                                                                                                                                                                                                                                                      Why certification has transformed the collecting landscape, at least from the Price/Grade equation offered by Dr. Sheldon for his Large Cents?
Why 'Buying Cartels' target(ed) The Top Pop Coins (that's why a 2011 Cent brings 5 figures); and when they don't need 'em anymore..                         

Why truly common coins, such as MS65 Morgans, en masse, continually rise in price whereas truly rare coins, don't?

[MarkFeld]

38 minutes ago, allmine said:

Does anyone understand, even remember, WHY the Industry (nee Hobby) needed Third Party Grading (not including ANACS PhotoCerts in this discussion)?
Why a national network of Coin Dealers was created to Buy and Sell certified coins "Sight Unseen"?                                                                                                                                                                                                                                                                      Why certification has transformed the collecting landscape, at least from the Price/Grade equation offered by Dr. Sheldon for his Large Cents?
Why 'Buying Cartels' target(ed) The Top Pop Coins (that's why a 2011 Cent brings 5 figures); and when they don't need 'em anymore..                         

Why truly common coins, such as MS65 Morgans, en masse, continually rise in price whereas truly rare coins, don't?

Truly common coins don't "continually rise in price".  In fact, their performance has been far from that, over a long period of time.

[kidrootbeer]

2 minutes ago, MarkFeld said:

Truly common coins don't "continually rise in price".  In fact, their performance has been far from that, over a long period of time.

ahhhhh, except for those that are subject to "Programs". Do you know how the Bid and Ask work?

[kidrootbeer]

Here's one: waaaay back when we bought Original Rolls of 1912 cents and 1913 Ty2 Nickels, one each. Sent out for Certification, we knew after notification that we had tripled the number of MS66RED Cents, and 4Xed the Pop o 13T2 MS66. Sooooo, we knew that Bids couldn't be filled on those two (or MS65RED/MS65), so we upped the Bids. Way upped. Then Bids came in above ours and just below; when the coins came in we filled the Bids!

[MarkFeld]

39 minutes ago, allmine said:

ahhhhh, except for those that are subject to "Programs". Do you know how the Bid and Ask work?

Coins subject to programs don't continually rise, either. In fact, they typically fall much more and faster than other coins, once the program's end. 

Please provide a few examples of common coins that you believe "continually rise". I know of none.

I've been a full time dealer since 1979 and yes, I know how "bid and ask" work.

[EleMint Man]

Most prices are dropping with collectables , obviously...especially with modern Comms. Programs? No problem...

This is no joke...http://www.cnbc.com/2017/06/12/steve-cohen-buys-roy-lichtensteins-masterpiece-for-165-million.html

https://www.nytimes.com/2017/06/11/arts/design/agnes-gund-sells-a-lichtenstein-to-start-criminal-justice-fund.html

Foundations thrive on these transactions. I love good  looking coins , artwork etc as I do eating a healthy meal.

Yup, reality check (S)

 

[World Colonial]

On ‎6‎/‎24‎/‎2017 at 9:39 AM, allmine said:

Does anyone understand, even remember, WHY the Industry (nee Hobby) needed Third Party Grading (not including ANACS PhotoCerts in this discussion)?
Why a national network of Coin Dealers was created to Buy and Sell certified coins "Sight Unseen"?                                                                                                                                                                                                                                                                      Why certification has transformed the collecting landscape, at least from the Price/Grade equation offered by Dr. Sheldon for his Large Cents?
Why 'Buying Cartels' target(ed) The Top Pop Coins (that's why a 2011 Cent brings 5 figures); and when they don't need 'em anymore..                         

Why truly common coins, such as MS65 Morgans, en masse, continually rise in price whereas truly rare coins, don't?

Generically, I agree with Mark but you seem to be using two different situations as examples.

Attempting to corner the market is invariably self-defeating.  The buyer will artificially inflate the price and when they go to sell, there possibly won't be anyone who will pay the price they did, much less more.

Te second example you are using is different because you "made" these grades for these coins (Lincoln Cent and Buffalo Nickel).  I presume you already owned these coins are possibly for a long time.  If you did, in theory, yo could release the supply slowly and it will work, but only if real demand exists.  Considering that the population reports are public, I don't even see how this would work because any prospective buyer would immediately notice the increased count and should reduce their offer.

[kidrootbeer]

39 minutes ago, World Colonial said:

Generically, I agree with Mark but you seem to be using two different situations as examples.

Attempting to corner the market is invariably self-defeating.  The buyer will artificially inflate the price and when they go to sell, there possibly won't be anyone who will pay the price they did, much less more.

Te second example you are using is different because you "made" these grades for these coins (Lincoln Cent and Buffalo Nickel).  I presume you already owned these coins are possibly for a long time.  If you did, in theory, yo could release the supply slowly and it will work, but only if real demand exists.  Considering that the population reports are public, I don't even see how this would work because any prospective buyer would immediately notice the increased count and should reduce their offer.

Ummmm. "cornering the Market"? Obviously, you didn't read closely. Not cornering, but manipulating. Do you know about how CCE works?