If you're like most collectors, you like to get a bargain when you buy coins for your collection. Unfortunately, most novice collectors' definition of a "bargain" is incorrect! Especially if they base their conclusions on a scenario like the following:
Robert G., a friend of mine, loves to search through the junk bins and pick boxes at coin shows and coin dealers' shops. (The types of coins I am referring to are the ones in 2x2's or similar cheap holders that are sold in a "self-serve" format, either jumbled together in mixed boxes, or sorted by type. These are usually low to mid grade coins priced under $30 each and usually a lot cheaper.) Robert G. will often have some sort of idea in mind about what he wants to buy, and might even have a checklist with him. However, upon searching the boxes, he can't resist picking up a few extra "bargains" he sees (but they're coins he isn't quite so knowledgeable about.)
When Robert gets home, he eagerly looks up his prizes in the Red Book or some other highly regarded coin price catalog, and smiles with satisfaction when he sees that he got most of his coins below catalog price. He typically came out ahead by 10% to 15% on the catalog prices (paying, say, $9.00 for a coin listed at $10.00 in the book.) Even the few he paid full price for don't bother him because he knows the coin market is going up.
Robert has his entire collection appraised, and he updates his appraisal from time to time using the price guides in those coin price type monthly magazines. If he ever had to sell all or part of his coin collection in a hurry, he has a real good idea of what it's worth. Doesn't he?
Doesn't he?
Actually, Robert is in for a nasty surprise if he thinks he can sell his collection for "Red Book" or other common coin price catalog amounts. Not only are such price guides meant to be retail price guides, Robert should have noticed that dealers often sell below catalog prices themselves! If dealers are doing this, they obviously must be paying even less for the coins. In fact, dealers know that customers like to get a "bargain," so they intentionally sell below catalog value, and often point that fact out to potential buyers. And since coin dealers are the source of the prices listed in these catalogs, doesn't it behoove them to nudge the prices up a little higher than they really sell the coins for, in order to facilitate this "bargain" on the part of the customer?
And getting back to our original point, if Robert can't trust these coin price catalogs to give him an honest appraisal of how much his coin collection is worth, then how can he determine its value? All of these questions, and more, and answered in my FAQ - Are the Coin Prices in Most Coin Catalogs Accurate?
Robert G., a friend of mine, loves to search through the junk bins and pick boxes at coin shows and coin dealers' shops. (The types of coins I am referring to are the ones in 2x2's or similar cheap holders that are sold in a "self-serve" format, either jumbled together in mixed boxes, or sorted by type. These are usually low to mid grade coins priced under $30 each and usually a lot cheaper.) Robert G. will often have some sort of idea in mind about what he wants to buy, and might even have a checklist with him. However, upon searching the boxes, he can't resist picking up a few extra "bargains" he sees (but they're coins he isn't quite so knowledgeable about.)
When Robert gets home, he eagerly looks up his prizes in the Red Book or some other highly regarded coin price catalog, and smiles with satisfaction when he sees that he got most of his coins below catalog price. He typically came out ahead by 10% to 15% on the catalog prices (paying, say, $9.00 for a coin listed at $10.00 in the book.) Even the few he paid full price for don't bother him because he knows the coin market is going up.
Robert has his entire collection appraised, and he updates his appraisal from time to time using the price guides in those coin price type monthly magazines. If he ever had to sell all or part of his coin collection in a hurry, he has a real good idea of what it's worth. Doesn't he?
Doesn't he?
Actually, Robert is in for a nasty surprise if he thinks he can sell his collection for "Red Book" or other common coin price catalog amounts. Not only are such price guides meant to be retail price guides, Robert should have noticed that dealers often sell below catalog prices themselves! If dealers are doing this, they obviously must be paying even less for the coins. In fact, dealers know that customers like to get a "bargain," so they intentionally sell below catalog value, and often point that fact out to potential buyers. And since coin dealers are the source of the prices listed in these catalogs, doesn't it behoove them to nudge the prices up a little higher than they really sell the coins for, in order to facilitate this "bargain" on the part of the customer?
And getting back to our original point, if Robert can't trust these coin price catalogs to give him an honest appraisal of how much his coin collection is worth, then how can he determine its value? All of these questions, and more, and answered in my FAQ - Are the Coin Prices in Most Coin Catalogs Accurate?
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