Can you determine a market trend from one auction result? A few mixed results from a recent coin auction caused a number of clients to call me and ask me this question. My answer(s) were that, in each case, I did not feel that changes in the market could be determined from these results. Let me be more specific. In the November 2006 Heritage sale there was an 1845-O quarter eagle in NGC AU53 offered as Lot 1937. If you’ve read any of my articles on New Orleans quarter eagles, you’ll know that I LOVE this date and almost always try to buy it. But this coin was an exception to the rule.
Although you couldn’t really see them in the Heritage online images, this 1845-O quarter eagle had some really detracting marks on the surfaces. They were the sort of marks that, eight out of ten times, NGC would have no-graded the coin in question for “damage.” Which was sort of a shame, as the coin, with the exception of the marks, was not bad looking. But I decided to pass on the coin as I though the marks made it too hard to sell.
The coin was reserved for somewhere in the $5,000 range which means that it could have been purchased for $5,750 including the 15% buyers charge. In my opinion, $5,750 for an AU53 1845-O quarter eagle is very reasonable. Except in this case.
After the sale, a client called me (one who owns a nice AU58 example of this date, by the way…) and asked me if the fact that this coin didn’t sale indicated a weakness in the market for 1845-O quarter eagles. I told him that I didn’t think so, given the fact that the coin in question was not very nice.
Another lot in the same sale provided another interesting test case. This was an 1879-O double eagle graded AU50 by NGC and it was Lot 2570.
If you follow New Orleans double eagle prices at all, you know that nearly any 1879-O that has been offered at auction in the past four or five years has sold for full Trends or, in many cases, considerably more. But the 1879-O in this sale sold for around 75-80% of Trends. Did this suggest, my client asked, that the market for this date was getting weak and could he finally buy one for a reasonable price?
I had viewed this coin in person and hated it. I thought it had zero eye appeal. It was not only overgraded, in my opinion, but it had some detracting spots as well. Apparently other bidders agreed with me as well as it brought at least $5,000 less than what a nice looking example would have.
Does this weak auction result mean that the market for 1879-O double eagles is tanking? Not in the least. Now, if this trend continues for the next two or three times that an 1879-O is offered, my opinion would change. Especially if any of the future coins that sell cheaply happen to be nice for the grade.
The bottom line is this: I do not think you can make any profound analysis about values decreasing (or increasing) for a specific issue based solely on a single transaction.