I was recently reminded of how much in numismatics is more science than art.
At a recent auction, I saw two apparently identical lots appear on the block. Now when I stay identical, they were essentially the same coin and year, with the same grade.
They both sold, but one sold for close to double that of the lot that followed.
That got me to thinking about the challenges of trying to figure out what something is actually worth. If I were to try and plot both items on Trends, they would be in the same box, and so theoretically sell for around the same amount. Does that mean the true value is an average of the two transactions? Only if one buyer overpaid and the other underpaid. What if one buyer paid the correct amount, and the other either overpaid or underpaid? If one buyer was a collector, he or she might feel comfortable paying close to retail, while if the other buyer was a dealer, he or she would want to pay wholesale.
Of course, that is sheer speculation, because the buyers were only identified by bidder number.
If the first buyer was determined and prepared to bid aggressively against another determined buyer, the coin could have gone up much higher than normal, leaving the second coin to be sold to the collector who missed the first time, but is now not up against a determined adversary.
In other words, trying to use auction transactions to determine a current valuation is an exercise in futility.
I have not yet even talked about the coins themselves.
The elephant in the room when it comes to talking about coin values is always eye-appeal.
There is no denying that if a buyer considers a coin attractive, he or she will pay a bit more, and if it is ugly, pay a bit less. It is also possible that one was a problem coin, with some distracting mark or other imperfection that technically may not alter the grade, but is still there.
To be honest, I didn’t examine them before the sale, so I can only go by photographs. Based on that, one item was a bit prettier, and it is possible the bidder took that into consideration. It is also possible that one photograph just wasn’t as pretty as the other.
If this column sounds like it is moving in circles without coming to any conclusion, then you got my point.
Determining the value of a coin, or other numismatic item, requires the ability to correctly assess the attribution, and the grade, and the market demand. Even then, it is only a very well-educated guess.
When it comes to analyzing auction results, all too often we miss the vital information needed to make a full assessment based on one or two transactions.
What we do know for sure, is what those two coins were worth that day, in that sale.
