I recently sold an interesting coin (details to follow) and the entire process, which was reasonably quick and painless for both myself and the buyer, got me to thinking: can a coin get bad karma and if it does what does it take for it to regain its mojo? The coin in question has to remain anonymous but it was a very rare silver piece, dated in the 1820's, which was both a condition rarity and an absolute rarity. The trouble with the coin was that a few factors had combined to give it a bad reputation within the specialist community. Was this reputation deserved? Partially; but not really because of the coin itself, more because of a number of external factors. The collector who bought the coin from me saw through its bad karma to realize that, at its new price level, it would be a great addition to his set. And I have to say, I think it was a pretty savvy move on his part.
So how exactly does a coin get bad karma?
I can think of at least five ways and I'm sure that other dealers/collectors can double the size of this list.
1. A Coin Is Perceived To Be Overgraded.
Grading is subjective but there are some big-ticket coins in third-party holders which have acquired a reputation for being overgraded. I can think of a certain 1804 dollar whose grade has inflated many times over the years. I'm not certain that the concept of "grade" applies to a seven-figure rarity like an 1804 dollar but the perception that it is more-than-fully graded has circled this coin for years and it might scare off a few potential buyers.
Why would a coin be overgraded by one of the services? It could have been part of a fresh deal that excited the graders and the final grades were on the high side. It could have been the "right" coin submitted at the "right" time and it acquired a grade during the submission process that probably would never be equaled again if it were to be re-submitted. Or perhaps it was doctored and a substance which was applied to the surfaces changed the appearance and the coin is now overgraded. There are many coins in holders which simply don't look properly graded (even though they might be) and their slab is an albatross.
If the coin in question has a value of $100 and the perceived grade is off by a point, it isn't saddled with bad karma. If the coin is worth $10,000 or $100,000 or $1,000,000 than the perception of whether or not the grade is accurate is very important. In the case of the coin I sold, the grade was probably off by just a point. But with an expensive coin, a point can equal tens or hundreds of thousands of dollars.
2. A Coin is Overexposed.
This is not something new. While doing pedigree research on branch mint gold coins, I have found specific pieces which appeared in four or five Thomas Elder sales during a five year period in the 1920's or five Stack's sales within five years during the 1970's. The problem was Tom Elder's sales weren't on-line and the PCGS auction archives doesn't list all the Stack's sales from the 1960's and 1970's as they do with today's auctions.
For a number of reasons, a coin can be overexposed and become tired. It might go unsold in three consecutive Heritage or Stacks Bowers auctions before it finds the right buyer. Or, it might bounce around between three or four major dealers and be advertised on different websites. An internet-related phenomena is when the same coin appears on five different dealer"s websites over an extended period. It's only one coin but to the new collector, it looks tired.
In the upper end of the coin market, the perception of freshness is incredibly important. For many of the top buyers, be they dealers or collectors, if a coin is not perceived as being fresh, its can become extremely hard to sell; even if the coin is accurately graded and reasonably fairly priced. For these buyers, nothing can kill a sale faster than finding out that not only are they not getting first shot but the coin recently went unsold in two consecutive Heritage auctions.
3. A Coin is Overpriced.
As a buyer of high end, rare coins I am sometimes offered pieces which are so insanely priced that they almost immediately are Bad Karma Candidates. I'm not talking a $50,000 coin which s priced at $55,000; I'm talking about a $50,000 which is priced at $100,000 or more. This sounds hard to believe but it happens more often than you think.
I'd like to think I'm a pretty savvy buyer and the owner of a great coin is certainly entitled to take an epic shot at me when he is pricing it. I try not to take this personally and I try not to hold it against the coin if it mysteriously is offered to me again later at a show for a number which is more in line with what I'm thinking.
Collectors tend to be more emotional and if a $50,000 coin which is priced to them at $100,000 might no longer be worth $50,000 if it is reoffered under different conditions.
4. The Coin Has an Evil Owner.
As a dealer, I find myself buying coins from people who I don't really care for. They may be Red Sox fans or they might have political views that don't mesh with me. But collectors are able to be a little more discriminatory.
Funny story. The upper-end Dahlonega gold market is small and when a new player enters the market, the other big fish tend to approach the new player with suspicion. Around 20+ years ago, a new Dahlonega collector burst on the scene and he was, to put it kindly, lavish with his spending and harsh with his criticism of other people's coins. After he had pissed off one of my other Dahlonega clients for the third or fourth time, I got a call which basically told me to "never, ever offer me a coin again which Collector X has owned, even if it's a great deal."
Today, in this internet-driven world of numismatics, I think this is still the case. Don't you have a nemesis who you dislike and whose coins you don't want despoiling your collection?
5. Bad Pedigree
I've written a number of articles about coins with good pedigrees. But there are coins with bad pedigrees.
I'm not going to slam any specific collections here; that's not a cool thing to do. In my many years of specializing in branch mint gold, I've come across collections which had bad reputations. They may have been filled with overgraded coins or they might have had a number of recolored/doctored pieces. Perhaps they were assembled by a dealer with a bad reputation and the perception, deserved or not, was that the collection became a burial ground for some unfortunate individual.
So, there you have some of the ways a coin can acquire bad karma. How can a good coin shed this bad energy and get back its mojo?
1. Time Heals Most Wounds
Most dealers and some collectors have great memories. But its funny how some coins which were perceived as being overgraded ten years suddenly don't look so bad today. Stories about a "bad" coin can be forgotten or conveniently lost/overlooked and the Bad Karma 1847-D quarter eagle of the late 1990's becomes a decent coin in the market environment of 2013. Trust me, it happens more than you think...
2. Coins Are De-Pedigreed and Re-Holdered.
You take a coin with a bad pedigree in a scratchy holder and make a few changes...send it to the grading service of your choice, remove the pedigree and put it in a spiffy new pronged holder. Voilà, new coin. Well, maybe not a "new" coin but one whose bad karma might suddenly go away.
3. The Right Owner Buys the Coin.
I saw plenty of sketchy coins in the Bass sales but once you slapped that Bass pedigree on the coin and put it into a PCGS holder, I didn't mind that Bass bought the coin from a dealer I know was a sleaze ball or that it was in six Stack's sales between 1968 and 1973.
4. Downgrade the Coin.
You see a coin in an MS67 holder that pretty amazing but your perception is that its just an MS66 at best. If you run the numbers and it makes financial sense, why not send it to PCGS or NGC and downgrade it a point? Sounds crazy, I know, but it is a trend which is rapidly gaining traction amongst smart dealers and collectors.
5. Keep the Coin Off the Market For a Generation.
Every collector makes mistakes. But as I said in #1 above, time heals most wounds. I guarantee you that Bass, Norweb and Eliasberg made plenty of mistakes but they overcame them by holding the coins they bought for many years.
Do you think a coin can get bad karma? If you do, how can it get back its mojo? Add your comments below or contact me by email at firstname.lastname@example.org.