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Analyzing Auction Results

Tom Becker


What are we to think when a coin that has a Trends value of $750 sells at auction for $1750?

It is possible two bidders each decided they HAD to have the coin. It was this personal and temporary demand for a specific item that drove the price to an unexpected level. After all, in the auction environment anything can happen. It's this special dynamic that makes events so interesting and exciting. Before we reach this conclusion it is necessary to carefully consider the coin that was sold. To properly make this analysis could require reviewing a long checklist of questions that must be answered. If sufficient answers to all the questions can't be found the prudent policy is to record the incident as a singular event and wait to see if lightening strikes in nearly the same spot again.

At auction it always requires two participants to set a record price. One might be the current owner of the coin. I'll leave that as a topic to consider another time. Anyway, while the hundred other people in the room are thinking this lot will bring some predictable fraction of Trends value at least two bidders have determined the coin is worth far more. What if these two bidders were working together in an effort to establish a record price for a single coin and in doing so influence the value of many similar items they owned? Yes indeed. In an auction it only takes two to Tango and those who review the prices realized may sometimes be treated to an elaborate song and dance.

When a seller offers me a coin along with information about how a similar piece performed in a recent auction I know it's time to stash the checkbook. What I'm not going to hear from the seller is that a properly graded coin like his sold for a predictable 50% of Trends plus the buyer's charge.

It would be unfair to conclude my comments without mentioning that if lots of coins in an auction sell for considerably above Trends value then these results are important and should be noted-if you were the seller.

 

Tom Becker is a regular contributor to the Canadian Coin Reference Site, you can direct your questions directly to Tom easily by E-mail:tom@tombeckeronline.com or visit Tom's website @ http://www.tombeckeronline.com

 




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