When Mrs. Christopher Collection and I looked to buy an existing home 20 years ago in the overpriced market we live in (a crack house goes for what a mansion would in Omaha) we looked at dozens of two bedroom, one bath homes as that was all we could afford. In looking at listings one day I had a revelation – you could buy twice the house for only a 30% premium over what a 2/1 house costs. That was a hole in the market. A 4/3 with that 30% price premium put the mortgage in what was then called “jumbo” territory. That limited potential buyers and created a hole in the market. So, with great trepidation and a few tears from Mrs. CC ("I'll have to buy all my clothes from Target!") we decided to stretch and purchase a 4/3 home. That purchase proved a great value as the property tax people can attest. I approach coin buying with lessons like that in mind.
I purchase most coins at auction (never eBay). I look at population reports and auction histories for every coin I plan to bid on. Price guides are only a starting point – auction history is the real data. This is one example of a market hole that appears with some regularity. I was bidding on a 34-D 67RD CAC that I needed. PCGS says 41 in that grade and only one finer. It went for over $3k. There was a 36-D 67+RD CAC Lincoln in same auction. It is a top pop coin with only 23 certified in that grade. It is a better grade with half the population and a top pop coin to boot. It went for under $2k as have all the others at recent auction. This is a market hole. Even though it has a lower population half a dozen of the 1936-D coins have hit the market the in last year while I could only find one of the 1934-D. If you are “investing” in coins buy the 36-D. Top pops are always in demand by registry collectors. The only time I may speculate on coins is for top population CAC stickered beauties. Tuck them away until none have hit the market for a year and then put up for auction.
Despite all the auctions each month the coin market is actually very thinly traded which creates all manner of pricing anomalies. As I revisit this post in September 2018 Heritage and Stack’s Bowers realized over $20 million each at the ANA show. How can a market generating such auction results be thinly traded? It’s because coins come in thousands of varieties. Only a handful of people want a 1934-D Lincoln in a top grade at any given point in time (because of price, need and desire). If the hobby got serious about growing then things would change very quickly. The market is not fair or unfair, it is simply the nature of the beast. No doubt some have quit collecting in a huff when a prized coin sells for less than they thought fair. I doubt they thought of quitting when the same dynamic worked in their favor.
Sometimes great coins hit in waves. One time I witnessed three (all CAC) top population coins (14 total population in that grade) on the same auction site over two weeks. That naturally depresses prices and is a good buying opportunity. Likewise, some coins that population reports say should appear with regularity never appear! I am thinking of the 1943 Lincoln in MS67+ or MS68. The 43-S is much rarer in those grades but the market is full of them. I’m sure it has happened but I can’t remember a single NICE 1943 MS68 (PCGS population 43 but only 8 in CAC) Lincoln that has hit the market in the last two years. PCGS auction history shows the last CAC sold was in 2013! When a MS68 CAC appears it will blow away the $2,350 listed in the PCGS price guide. (UPDATE SEPT. 2018 - One did come to auction at HA and went for over $4,000). (UPDATE JAN. 2019 - Another coin came up on HA, a nicer one in my view and realized over $5,000 or more than double the PCGS price guide).
If a collector is willing to be patient and wait for buying opportunities they can build a set for less. I do not pretend to practice what I preach in this area.