The Following  is from Legend Numismatics Hot Topics, A Commentary by Laura Sperber – Editor

There are so many issues that need work on. Coin pricing guides are in my sights right now. Before I begin this article, I must make sure everyone realizes the value of a coin is determined by its QUALITY,RARITY, DEMAND, AND SUPPLY-NOT whats written in a price guide.

A RECENT EXPEREIENCE ON MIS-INFORMATION

Recently we had a very rare coin for sale. The CDN (gray sheet WHOLESALE bid/ask) on the coin was $121,000/$131,000.00. We were offered $130,000.00 for the coin by a collector. Sounds reasonable-but it was far from what the coin was worth. The collector had no other information to go on. We missed placing the coin with him, and he most likely will never buy one because they all will be too expensive.

The last example of this type of coin that sold in major public auction was for $161,000.00 only a year ago (prior to that one sold for $230,000.00). You can never find one of these coins at a show-or even in auction. Buying one for less than $150,000.00 is pretty much impossible-even with the markets off. We did end up WHOLESALING the coin immediately for much more than the $130,000.00 we were offered! An FYI: this is just one small incident. We have had MANY situations similar to this happen just about every other day.

My point is-this was irresponsible price reporting. Obviously, the bids were never updated for at least a year. I get angered when its suggested its up to me to report a sale/purchase. If these people put out information and sell subscrptions for that service, then they should have reporters gathering it who understand the market. Do you do the reporting for your local newspaper? Its was clearly obvious they didn’t even have the resolve to check auction records. The prices they had for this coin clearly were NOT reliable, nor were they meaningful as a “starting point”.

Another fav of mine is when they are publish bids for coins with LESS then 5 graded. So when a junky specimen sells for a cheap price and that gets noted, then a great specimen comes up for sale, numerous buyers are priced out from the start because of MIS-information. Any knowledgable dealer will tell you that just about ALL the prices they have published for coins with pops of 5 or less are wrong. Why even have a price when the last coin may have sold 10 years ago?

I have spoken to the people at CDN, they tell me I am the only one who complains. What they do not realize is the dealers know its a waste of time talking to them. Since I last had an encounter, nothing, not one single method of price reporting has changed-that I am aware of. Every day now I battle mis-information. It is extremely difficult to use the CDN when needing price information of real rare coins. Frankly, I have had enough of the BS, hence this article.

HOW DO YOU FIGURE A COIN THEN?

Well you should not heavily rely on price guides that are strictly meant for dealers. Dealers always need to buy cheaper. Thus, you’ll always see cheaper prices listed. Sure, you entitled to buy coins cheap, but there are just times when the prices are unrealistic.

So how is one to figure a price of a coin? On a widget or generic where there are spreads, a weekely sheet like the CDN can actually be a good starting point in this case. Those coins have very stable buy/sell spreads. BUT on a truely RARE coin, as i said before, the sheets appear to be worthless. The internet has opened up an entirely new way to broadcast information. There are many sites you can go to to see auction prices realized.

Here is why auction prices realized are far better starting point:

• You can see when the last one sold. If its been years, you know that unless the coin is dreck, most published prices are not going to be appropriate to use for a value. So you know you have to be aggressive.
• A tricky part is determining the quality of the last sold coin vs what you are buying. Theres a postive and a negative here. But, sometimes you even spot the last time the particular coin you are buying traded and for how much. If used properly, you can gain the most information from checking auctions.

Just remember, a pricing guide is just that-a guide. Recently we were buying a very large collection and the customer kept refering to the PCGS price guide. Well, that guide does not buy coins. It is my understanding that guide is to be used for buying by a collector, not a dealer. Had he checked the auction prices, he’d have seen we were more than fair. Plus, NO price guide is written in stone-they all can be changed on a moments notice.

Use “common sense” when figuring how much to pay on a rare coin. In my opinion, auction prices are your smartest and closest bet to figuring out the reality of pricing. You’ll kick yourself and miss incredible opportunities today if you miss a truely exceptional coin because you didn’t know the published ‘bids” hadn’t been changed in a very long time…

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