"Investors" in R5 Mandela Coins Ripped Off

[coinoisseur 10]

Hello Everyone

 

The following article was puclished in the Personal Finance 11th May 2014. Click on link below to read.

 

?Investors? in R5 Mandela coins ripped off - Personal Finance | IOL Business | IOL.co.za

 

 

Cheers

[qball 11]

Please note, this was our official response which was mostly omitted:

 

“bidorbuy is merely an online platform that puts buyers and sellers together. (…) On auctions, buyers are the ones who determine the selling price of an item, and buyers today have at their disposal a plethora of avenues to explore and educate themselves in order to make an informed decision. They can browse bidorbuy and other websites to compare prices and they can consult coin dealers.

Since it is in the very nature of collectible items to fluctuate in value, depending on current supply and demand, as well as on other, often emotional factors, it is virtually impossible to attach a firm, long-term price tag onto them. People will always speculate on such collectible items, that is the nature of a free market society, some buyers are collectors, others speculators. It’s not really up to us to control or manage the prices as we are not the seller nor are we experts in the field of numismatics or collectibles.”

[jwither 10]

The article is correct but I consider the buyers (all exclusively "investors" for sure) equally at fault for being so willfully ignorant and choosing to be "taken to the cleaners". Additional comments that can be made on this article include:

 

Whether the mintage is 5MM or 22MM is financially irrelevant and for the SA Coin Co to imply it is ridiculous.

 

I do believe that the SA Coin Co sold an MS-69 for R2.5MM but I do not believe it was ever "worth" that much. They just made the price up and someone was gullible enough to pay it. While they may be offerring one of the current 13 MS-69 for R1MM, it isn't worth that or anywhere near it either. Recently (as in last year or late 2012), I saw one repeatedly listed on BoB for the "bargain" price of R500,000 with no takers.

 

The idea that an MS-69 will be worth R3MM in five years is a complete fantasy, whether they can find one of their customers who are gullible enough to pay it or not.

 

"The marketers claim that, because there are so few coins rated MS69 or MS68, these are fantastically valuable and will continue to rise dramatically in price. " The count for the MS-69 is "low" but the one for the MS-68 is not. NGC and PCGS have certified a combined 223 at this grade, making it a very common coin by South African standards even if this was all the MS specimens in existence. And no, I do not believe there are many if any duplicates. I am very confident that there aren't 223 real collectors or anywhere near it who are willing to pay anywhere near whatever current price they are offering it at today. A real collector can easily buy one of the 41,000+ MS-67 for a nominal price. As for their "fantastic" prospects, I'll stick with my prior claim that the MS-69 will ultimately lose more value than any other coin has ever lost in history. A 99% loss from R2.5MM would still make it one of the most overpriced coins in the world.

 

"SA Coin spokesman Eion Blignaut agrees with the statement on the SA Coin website that coins retain their value as long as the number of coins in that grade stays the same" This statement is not necesarily true and no one can demonstrate it. It is certainly not true for any coin whose actual collector demand is so much less than the existing supply, much less the much larger supply which is potentially available later.

 

“There is no lack of liquidity ... The only factor that leads to a client not selling the coin that they may have is the price that they are offered is too low.” I certainly agree with this statement, but not likely in the context SA Coin would have their customers believe. I suspect that while the bubble was still inflating, that those who bought early from them had no problem selling at their listed price, whether through them directly and possibly otherwise. Now that the bubble has burst, the "spread" between their bid and ask price is probably a chasm given the sentiments of this article. The only realistic hope one of their customers has to get this above market price is to sell it to another SA Coin Co customer. I wouldn't count on that either given that SA Coin Co. is probably a lot more interested in selling one from their own inventory for a much larger profit.

Edited May 21, 2014 by jwither

[RISadler 10]

"If [insert favourite deity here] didn't want them sheared, [insert favourite deity here] wouldn't have made them sheep." --- Calvera (from The Magnificent Seven). :laugh: