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Abandon the Ego and Sell the Coin!

Originally published on February 10 2018

Is Price Paid Important When Selling Collector Coins?

Since working with a host of consignors, on a personal level, one of the common themes that is regularly discussed is the price paid for a coin as a guide to the asking price. Unfortunately, there are numerous occasions where the price paid becomes a road block towards divestment and rechallenging monies into other uses.

Let's step back a moment and argue that the price paid for a coin has no bearing on its current market price. Actually, this is the stark reality of buying and selling any asset. Markets are dynamic and constantly moving up or down based on demand and asset availability. Housing, farming commodities, and equity prices ebb and flow based on regional and global linked events. Owning a physical asset provides basic needs, like a home, investment potential, like stocks and bonds, and finally hobby items, that provide enjoyment and balance to one's life. But in all cases, when the time to liquidate comes, the selling price has no direct connection to the purchase price.

This issue is confronted in today's Blog as I see many collectors struggling with the divestment of numismatic assets that are no longer central to their core pursuits. Yes, as human beings, we have egos. In numismatics, a satisfied ego requires that an asset be sold for more than its purchase price, even if only a few percent more. Then the owner can say to friends, in true honesty, that "I made money on the coin". But what happens if a collector is buried in a coin? Buried in a coin is a common term used to describe "paying too much" for a coin and having to sell at a loss in current market. Let's take this further and honestly ask why we "paid to much" for a coin as this is a hindsight assessment.

Collectors purchase coins for roughly the same set of reasons. Collections are constructed as a past time and hobby for most individuals. Others may be more sophisticated and are attempting research and require physical artifacts for examination. The thrill of the hunt and sense of accomplishment with completing a substantial project are important motivating factors for the casual collector and the specialist. Perceived time horizons and financial means often guide purchase decisions. Availability of the hunted coins is another parameter to consider. Collectors spend monies for coins based on their best judgment at the time of purchase. Those with self education and experience will probably make wiser decisions than those just entering a hobby. Attending a four year college to secure a degree is expensive. Learning the ins and outs of the coin market is a financial investment and there is no free lunch in numismatics. One must spend money towards education. Taking time away from work to attend the ANA Summer Seminar for gaining grading expertise is an expensive undertaking. Selling coins below purchase price due to grading inexperience is another approach to the same end.

GFRC's role...

When helping consignors achieve their divestment goals, my role is to examine their coins and suggest pricing that is consistent with the current market given the quality characteristics of the product. What the consignor paid for the coin has no bearing in my evaluation process. In parallel, I ask consignors to conduct their own self evaluation and suggest retail asking prices. Most of the time, the consignor and GFRC have similar pricing outcomes. But there are times where the consignor will request a price above the market due to a high cost basis and the coin sits on the price list. Reasonable market offers arrive below the asking price and are rejected. My question to the consignor returns to why should the price paid for a coin be a critical factor for the collector's self assessment of fair market value?

Bottomline...

Holding on to assets in order to avoid a financial loss is counter productive thinking if the monies are needed for a new enjoyable pursuit. Abandon the ego and sell the coin. I can assure you, from my own experience, that there will be a sense of relief once that asset is gone. Just the fact of not having to think about, and struggling with, the sale at a price below cost basis is worth moving the coin out of your life......

My 10c for the day.

Customer Feedback

Hello Gerry,
I could not agree more with the points you made in today's blog "Is Price Paid Important When Selling Collector Coins?"

Recalling a few coins I have sold, I still remember that sinking feeling in my stomach when that great coin I was sure would be loved by one and all was declared "unclean unclean!" by dealers and other collectors. What was wrong? Well there was hairlining under that nice looking tone, or the tone didn't look quite right, or the coin was "white" and so therefore it was obviously dipped, or "did you notice the penknife marks paralleling the eagle's wing?", or any one of a hundred other things. Then there were those I simply paid too much for.

What to do? I manned up and sold them anyway, sometimes what one buyer did not like was no big deal to another, but on many I simply took my losses and turned that money back into other and better coins. The loss was the cost of education. Call me crazy but for me even that is part of the fun of numismatics.

And, those coins I purchased from the proceeds of those vilified coins? Many of them are now favorites and when I have shown them to fellow collectors there are always positive comments. I will do well by them. Their predecessors? Forgotten.
Gerry,
I debated responding to your Saturday blog but, decided to. I agree it's tough to sell coins for less than you paid for it. Been there done that! However, I also realize that the market goes up and down. What's hot today will not be hot tomorrow. I sold coins and have taken some losses in the hundreds of dollars. But, also sometimes it could be what I call "coins of shame!" I think every collector has some of those. Most won't admit they bought coins they should never bought at the price they paid or the condition the coin was in. Mine is a 1921 Peace dollar that I bought about 35 years ago. Not long after buying it, I came to realize the coin was played with. IT WAS WHIZZED!!! I still have the coin in a Capital holder to remind me of being stupid. Luckily I only paid $100.00 for it but it still bugs me. Bottom line, sometimes it hurts to sell coins at a loss but once done, move on.
Gerry, excellent thoughts - 
I think somewhat differently from you. - here are my thoughts - if you consider your coins as an investment, you buy when you believe coin will increase in value and sell when you maximized your gain. As a collector, you buy a coin to build a collection typically without investment considerations. When selling, a collector typical sells upon death, debt or divorce. I would add another time to sell, when you wish to pursue another collection and don't want to allocate more net worth going to coins. When its time to sell, move on, enjoy the collection that you built and sell. Remove the collectors emotions and let the investor emotions take over.Losses on coins are like losses on stock - remove the emotions and use the money to buy something else that will create enjoyment like the collection that you are selling or invest in something that will increase in value. Time to move on.
Morning Gerry,
I wanted to give you some feedback on today's blog. 

You are absolutely right on a lot of points you made on consigning a coin and setting a price for that coin. You show (from first hand experience) tremendous insight into selling a coin and the reasons in the first place for buying a coin. I think it is an important lesson for many and likely a rude awakening for others. Although I have not sold many coins in my numismatic decades, I appreciate why I purchased a coin in the first place and the reason for departing with it. You simply pointed out a lot of good sense and I hope I can follow your advice when the time comes.
Hi Gerry:
Your blog today was on point. If anyone has coins, stocks, etc. that's not working out, they need to sell, salvage what they can, and move on. Then move into something that is profitable.
Hi Gerry, 
Just back from the Charlotte show and reading your blog. It's gotta be one of the best ones yet! Perfect take on the Olympics "today" and dismissing one's Ego when selling coins. Very well written....thanks for summarizing things so well.