Pricing Questions?

Roger,

Short-answers are all-well-and-good to press a point to be made ... but short answers, do not assist with reasoning for such things...

Since we are stepping-out to some degree from the topic at hand ... by stating what is collected or owned...

I do have a very large quantity of high-end 1¢ and 5¢ pieces, but I am embarrassed to sell these coins at the prices that are presently suggested ... so I don't...

dts...

TPG Services appear to be directly involved as being the main factor to determine availability of the higher-end etc ... but as we all know, such services do not hit the bulls-eye (grade) with every bullet (coin)...

Population-reports (a TPG product) appear to carry the most weight when it comes to determining the availability of certain coins and coins in certain grades ... but this is directly related to Services that we honestly have no-way of knowing what the true-percentage of the hobby is that actually utilize such...

As we also know, coins are cut-out and re-submitted all the time in hopes of obtaining a higher-grade ... good for the TPG Services, but not so good for obtaining accurate figures...

So as it stands and basically speaking ... for the privilege of having "bragging-rights" to high-end grades and possibly being the one to own the highest ... hit their pocket-book as hard as you possibly can : )...

Although I do admire the concept, I have something a little more accurate and a little more realistic in mind...

And I do see that a formula will have to be arrived-at for certain grades ... but one that is not as disjointed as presently is...

dts...

cbu - Why don't you use trends (or some other quasi-realiable source) and do an analysis on how the price of various grades compares to some benchmark (say VF-20, EF-40, or AU-50)? If your benchmark is EF-40, then factor up (or down) the price of every coin in every grade so that EF-40 is always worth $40. Then average out the values of all the other grades, and see if a F-12 is generally worth $12, and a MS-60 is generally worth $60, etc.

If you want a mathematical approach that gives you a best estimate on how the value of grades relate to each other, this would give you a reasonable idea of it.

E.g. I'm going to pick two coins arbitrarily and show you what I mean.

In my May 22, 2012 issue of CCN, a 1896 Large Cent has the following values (from VG-8 to MS-65Red), 5, 6, 9, 15, 35, 75, 115, 270, 550, 1625. In the same issue, a 1907 Dime has the following values (from VG-8 to MS-64), 8, 16, 40, 75, 150, 350, 500, 750, 1350.

Looking at the range they have in common (VG-8 to MS-64), and setting EF-40 to $40, I get:
1896: 13, 16, 24, 40, 93, 200, 307, 720, 1467
1907: 4, 9, 21, 40, 80, 187, 267, 400, 720

Averaging these out, we get:
8.50, 12.50, 22.50, 40.00, 86.50, 193.5, 287, 560, 1093.50

Your logic holds up well on the grades VG-8 to EF-40 (8.5 v. 8, 12.5 v. 12, 22.5 v. 20), but deteriorates badly on the higher grades.

If you expand this out to all coins, or a certain denomination/time range, you might be able to come up with some decent rules of thumb. Maybe you could even turn this into your own grading system that doesn't run from 1 to 70, but allows consistency between value and grade points.

I personally don't see this methodology ever being perfect. I think grade rarities will play a big factor in it. If MS-63 is the highest known grade of a certain coin, then that coin is going to sell for more than this methodology would ever dictate.

As for TPG services... I completely agree that they are not perfect. However, I believe that most high end coins have been graded by some grading company, at some point, and that the population reports would be the best estimate we could make as to how many coins exist in certain grades. It would be impossible to do a census, so using these reports would be the best we could do.

Coins are often cut out and sent back in, I'm guilty of this myself. However, in the analysis you're seeking to do (assign a value per grade point), I don't think true population matters. I think relative population is the key (e.g. how many AU-50s are there per MS-60). So long as each coin is about as likely to be resubmitted as another, this wouldn't affect what you're trying to do. Also, if we assume that coins are resubmitted until they receive the best grade they could get, then relative to one another, each coin should be graded properly (this assumption is flawed, but once again, so long as each coin is as likely to be resubmitted, there would be no material impact to your work).

One can hypothesize all one likes about what prices SHOULD be. But the market (eBay, the major auctions and dealer sales) will tell you what prices ARE.

Eye appeal is a key factor.

Look at recent small cent activity. TCNC has been trying to sell the solo ICCS highest graded 1929 MS66 cent for a couple of years. They are now asking $2900 and it can probably be had for less. But it sits unsold. Why? Many MS65s look better.

The solo 1920 MS66 recently sold at a price that was well less than you would think. Why? Ugly toning. Again many MS65s look better.

Putting any mathematical model on such a thin and subjective market is doomed to fail I would say.

That being said, I am a big fan of the TPGs. Of course they make mistakes and I and others don't agree with their approaches on certain factors. But I think they are intellectually honest about what they do. I would rather buy a TPG graded coin than an ungraded coin any day. If I don't like the grade I can ignore it or cut it out of the holder.

bosox - I want to clarify that I'm not in favour of this system. I'm just trying to view this from cbu's perspective that grade points should be proportional to value for a coin, and explore how this could be done.

I'm not necessarily suggesting that we take ICCS or PCGS's word as the authority on anything such as grade. I trust them both, but it is beyond the scope of this.

What I would suggest as a possibility is that people could determine the grade of the coin excluding its eye appeal (i.e. the ICCS way) by examining the strike, any marks, damage, etc, and assign a grade to the coin this way. Second, people could determine the grade of the coin solely based on its eye appeal. Neither of these have to be on a 1-70 scale. Then a matrix could be created that determines the "grade factor" of the coin, where the grade factor is multiplied by a base value for that particular coin, to come up with the value. Maybe an ICCS MS-66 with an eye appeal of 4/10 has a factor of 500, and an ICCS MS-65 with an eye appeal of 10/10 has a factor of 1250. If the base value of the coin (say for a coin in VG-8 condition) is $2.00, then the MS-66 would be worth $1000 and the MS-65 would be worth $2500.

These factors above would have to be determined through market analysis, but they could ultimately be determined.

I don't think that this is ever going to become the norm (I certainly wouldn't use it), but if cbu wants to put the time into it and develop a system where he can relate the value of the coin to the "grade", then this grading system could work.

It would be interesting to know how overstated the populations of near gem coins are. I suspect over time that many, many MS62 to MS64 coins have been removed from their holders for regrading by the same or a different TPG. How overstated do people think poputations are? 25%? That would be my guess but who really knows.

Sometimes it is best to simply show an end result : )...

But, getting back to my original question about the 1953 5¢, Shoulder fold/strap far-leaf (Mule)...

This particular difference, has shown to be more readily available than the current pricing would suggest...

I am going to lower the suggested value for this coin, when I expand the dts Average...

What I am extending ... is an opportunity for others to provide constructive input towards this direction that will be taken...

Current suggested prices are simply NOT realized when this difference is offered for sale ... any thoughts as to where this pricing would be better set, are welcomed...

dts...

^^^ Wow. Great deal, even with the extra $12 paranoia shipping.