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Why Coin Price Guides Are Not Accurate
Posted March, 27, 2008
By Daniel Malone coinauctionshelp.com
One must consider who decides what premiums coins are worth, most of these values are derived from dealers and major auction outlet sales. These coin venues rely on coin values to be as high as possible for the best profit margin. It's not to say these coin sellers are acting in malice, but if collectors will buy for the higher premiums; it's within any guideline of coin trading to realize these prices. Also, consider, the coin market is on fire, and it's presently much easier to push prices past levels never before seen.
However, a visit to a coin show or a look at completed ebay coin auctions, and one can see the difference in how much less a coin sells for when compared to the Book Values. Often it can be as much as 50% less than the price guide list value. Of course, there are many factors that affect these sales like poor pictures, rarity of date, denomination, metal content, or the grading company, etc. But the rule still applies, that most coin transactions are far below all of the most popular book values (BV).
It's not to say these price guides are worthless. However, there are more realistic alternatives for a collectors to determine the actual worth of a coin or a collection. One alternative is called Coin Dealer Newsletter or CND for short, commonly called the 'greysheet'. The greysheet is a wholesale price guide for dealer to dealer trading. The last coin show this author attended, everyone had a copy of the CDN and the dealers where often selling 5% to 25% below the listed CDN value! Anyone can subscribe to the Coin Dealer Newsletter, and it's recommended by this author to do so.
Another alternative is the dealer ads found in local newspapers or in the back of Coin Prices Magazine and Coin World. Some dealers list what they will pay for certain coin dates and denominations, and this is invaluable in helping determine what a coin or a collection is worth. One other alternative for more realistic coin prices is the Blue Book Handbook of United States Coins or 'Blue Book'. It's a close indicator of what one might sell their coins for to a dealer.
In conclusion, remember not to be too hung-up on the most popular price guides, and that most coin transactions do not reflect these higher premiums. These 'official guides' are just not the gospel when it comes to coin values, and it's better to look a little deeper to gain a more accurate interpretation of what coins are worth and what they can be sold for.
So, many collectors and dealers rely on coin price guides to value or hype their coins, but one thing should be apparent; a price guide is just that, a guide. A guide is defined, for the purpose of this article, as a model or standard for making comparisons. So, most of the popular coin price guides are but an example of what a coin can be worth, or the highest that particular coin sold for recently or what you can buy it for from a dealer. Not the actual value of the coins you own.
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