2019 graded set goes for peanuts

[GROOVIE COINS 13]

Good morning

An entire 2019 commemoration set (incl silver crown), all graded by NGC PF69 -70 goes for R675 on auction. What is going on?! 

regards Robert

[dcdoberman 4]

I don't know much about modern coins , except that they are worth face or billion value , so the R 675 seems very generous. 

Watch this YouTube video from coinweek , it will explain your question. 

 

[GROOVIE COINS 13]

3 hours ago, dcdoberman said:

I don't know much about modern coins , except that they are worth face or billion value , so the R 675 seems very generous. 

 

The reality is these coins sell from the mint for much more than face or bullion value. Not to mention the grading expense, truly it must have been a bitter pill for the dealer. 

[GROOVIE COINS 13]

I just checked the SAmint's website. The retail price on the entire set is R2000

Only an hour before the auction closed, a single PF69 R2 by the same seller fetched R700. One would have thought that bidders would have gone for the entire set rather than a single coin.

Edited July 1, 2019 by GROOVIE COINS

[ATA STAMP CENTRE 72]

12 minutes ago, GROOVIE COINS said:

The reality is these coins sell from the mint for much more than face or bullion value. Not to mention the grading expense, truly it must have been a bitter pill for the dealer. 

Can u post a link to the sale please

thanks

[GROOVIE COINS 13]

1 hour ago, ATA STAMP CENTRE said:

Can u post a link to the sale please

thanks

It seems I didn't read the listing correctly. It seems like the auction closed a R675 per coin and not for the entire set as I thought. 

https://www.bidorbuy.co.za/item/420848515/HOT_2019_DEMOCRACY_25YRS_SA25_8_COIN_NGC_GRADED_SET_FIRST_RELEASES.html

Edited July 1, 2019 by GROOVIE COINS

[jwither 16]

So someone paid R3200 for eight pieces of plastic?  (This is the difference between the retail price of R2000 and R675 X the eight coins.)  What a waste of money.

Even if the entire set had sold for R675, there are at least two reasons this can happen:

First, the issue price may be above the actual market value which is determined by collectors, not any mint.  Mints sell non-circulating coins above the market price all the time, as evidenced by the after market performance of more US commemoratives than I care to list.

Second, graded coins sell for less than the grading fee, all the time.  In this example, I'd guess the cost of grading wasn't much less than R675 per coin unless the submitter received a bulk discount.  Not after shipping and insurance both ways.

Most coins are not worth the expense of grading.  As times goes on, fewer coins will be worth grading in the future versus now.  I first submitted coins to NGC in 2005 when the cost of "world economy" was $13.50 per coin after a 10% discount with a Collectors Society membership.  Today, it is at least $19, as I have not submitted anything in several years.  Similar numbers for "world standard".  The cost at NCS has increased from $5 for evaluation and $15 for conservation to $10 and $20.   This cost excludes shipping and insurance which also continue to increase.

With the collapse in the South African price level since 2011, even many actually scarce coins aren't worth grading.  As an example, there is a 1925 PCGS AU-53 2/6 which Stacks Bowers sold in 2018 for $110 plus buyer's fee of $22.  It's a nice coin which almost certainly has less than 100 comparable examples (including "details" coins) available.  At this price, it's hardly worth the bother of submitting.

[GROOVIE COINS 13]

15 hours ago, jwither said:

So someone paid R3200 for eight pieces of plastic?  (This is the difference between the retail price of R2000 and R675 X the eight coins.)  What a waste of money.

Even if the entire set had sold for R675, there are at least two reasons this can happen:

First, the issue price may be above the actual market value which is determined by collectors, not any mint.  Mints sell non-circulating coins above the market price all the time, as evidenced by the after market performance of more US commemoratives than I care to list.

Second, graded coins sell for less than the grading fee, all the time.  In this example, I'd guess the cost of grading wasn't much less than R675 per coin unless the submitter received a bulk discount.  Not after shipping and insurance both ways.

Most coins are not worth the expense of grading.  As times goes on, fewer coins will be worth grading in the future versus now.  I first submitted coins to NGC in 2005 when the cost of "world economy" was $13.50 per coin after a 10% discount with a Collectors Society membership.  Today, it is at least $19, as I have not submitted anything in several years.  Similar numbers for "world standard".  The cost at NCS has increased from $5 for evaluation and $15 for conservation to $10 and $20.   This cost excludes shipping and insurance which also continue to increase.

With the collapse in the South African price level since 2011, even many actually scarce coins aren't worth grading.  As an example, there is a 1925 PCGS AU-53 2/6 which Stacks Bowers sold in 2018 for $110 plus buyer's fee of $22.  It's a nice coin which almost certainly has less than 100 comparable examples (including "details" coins) available.  At this price, it's hardly worth the bother of submitting.

I've always felt modern mint technologies generally mean coins of such a high quality that grading is becoming obsolete (in terms of modern coinage). Business strike uncirculated coins have improved to the point where they are almost mirrorlike/prooflike. And in order to distinguish business strikes, proofs are overkilled with frosted devices (step in Ultra-cameo). The novelty of having a MS/PF 69-70 begins to wear off when all coins out there are the same grade. Last time I checked the 2017 silver krugerrand figures on NGCS, there were something like over 80 000 graded MS 69 -70. The first time I saw this number, it dawned on me how high a mintage this coin is. 

That being said the market still wants their coins graded 70 (whether investors or collectors), or these would be put up for auction on a daily basis. And yes I agree that the market is starting to adjust, even though the Mint continues to set their retail price above market prices. When you see graded 68 coins going for what is retail price at the mint, you realize it's only a matter of time before the mint has to relook at the pricing structure. One example is the 2018 unc Madiba protea that was priced at R370! That's still alot for a half ounce sterling coin, but when you consider those proteas retailed for R600 prior then it's clear the mint is giving concessions to the market. This year's protea has jumped up again to R480, probably spurred on by the sales from last year, but at least not R600.

I'm not anti-grading on modern coins, and there is still a place for them. I've previously had modern toned proteas graded to preserve for generations to come from being handled or cleaned. I've seen impaired proofs that normally retail for R895 not even attract interest at R450. Somebody ignorant of handling coins removed them from their capsule. And yes a coin can be broken out of it's slab, but I feel it unlikely. 

[jwither 16]

I consider grading any recently issued coin a waste of money, but then it isn't either my coin or money.  I see no need to grade these coins to preserve it for the future.  Stored and handled properly, coins remain close to the original state for centuries.  I own an NGC MS-63 Spain 2R.  It isn't in it's original state presumably, but still "good enough".  There isn't a dime's worth of difference between proximate grades anyway except financially.  Proofs are somewhat different but the difference is still trivial.  There are also plenty of proofs from the pre-TPG era (from South Africa and elsewhere) in higher grades (such as my 1974 set).

In the US, to my knowledge, collectors will only submit NCLT to participate in the registry or if they think they can get a "70".  I don't see hardly anyone doing so to preserve it.  They will buy a "69" from a dealer but that's because the premium to an ungraded coin is minimal and irrelevant.  Dealers will do it trying to get a 70, get enough of them to subsidize the "69" financial losers and get a bulk discount if submitting in large volume.

I'd be curious to know how long the SA Mint can get away with those prices.  I'm not as up to date on prices in your market now but with the much lower price level, I know there are much more desirable Union and ZAR in better AU or lower MS grades for at or near the same price.  By US standards, the prices you quoted are nominal because the price level here is so much higher and it's comparable to what the US Mint charges, but not in SA.