Are modern day replacements RARER than in those in other series?

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I have been bricking for 30+ years and was around when getting silver dollars was as common as day old donuts...I also remember going into a bank and asking the tellers for any notes with stars on them and more than likely they could pull a handful out of their till. Some I kept and still have to this day and others were spent. As time passed, from the 54 asterisk notes, we had the "X" notes which were still easy to pick out at a bank or in your change...it was not until the Journey series came out when replacement notes became impossible to see if you weren't aware of the ranges in which they existed and no bank tellers could pull them out without this knowledge. Some dealers started bricking and made profits selling these notes and talked about their rarity and how difficult it was to find them, but in time many of these individuals for one reason or another lost bricking privileges in part due to tougher banking policies and because of their inability to get bricks and could no longer profit from the promotion of finding replacement notes in turn seemed to discourage and not defend the existence of modern day replacements as they once had.
I also believe (and this is my opinion) that many dealers have such an extensive stock of asterisk and "X" notes that they claim their rarity in order to sell an over abundant inventory...In fact, as time passes we begin to see some notes that were once deemed to be scarce as the *N/Y has shown up in abundant supply...in fact runs of 10 -15 notes in sequence have been reported on this site and have appeared on other sites as well...Even of the ones that had appeared and were graded were in CH UNC condition ....so how many are still in the desks of tellers that just don't know what they have...
I have found that many of the older replacement notes are available if you have the money to buy them, so although many may be over priced they are not by any means scarce...
IN comparison look at some of the tougher or scarcer Journey SNR replacements ...for example AOM AOR AOP...all tough to find, and rarely offered for sale here or on other sites....
I have never found an AOP but have found AOR and AOM...but they are scarce in my opinion.  Of having over 45 AOM bricks I had only found 2 AOM SNRs; in fact it was the time I got 6 consecutive bricks and there were 2 AOM snr in only one of those bricks...the first two had nothing the third one had the 2 notes and the next 3 had none as well...
In the case of the AOR it was exactly the same when I had 8 consecutive bricks and only the fourth brick had the 2 AOR snr...
Again likely over 25 bricks of AOR and no luck...
In this regards, I feel that many of the Journey Series replacement notes are much scarcer and rarer than many of the older types of replacements yet many collectors just don't see it... If you consider a 1 K SNR range as the maximum..how many have been found and of that how many in new bricks that were unc or better...in fact many of these notes were found in tightly banded bricks were band tear(s) were evident making finding that ch unc or gem even more unlikely especially because of the location in the bundle/brick that these notes were found...that being said I still believe that some modern replacement notes have rarity and value, way beyond those of the past..Of course this is my opinion....I would appreciate yours....I know many collectors will say its only a number, but I can easily say...it's only an "X" or only a star...
 

Two points:
- Rarity and value are only loosely correlated.
- You can't make people want certain notes.  Even with the power of sellers to set the prices they want, they can't make people pay those prices if buyers are not interested.

Popularity is a stronger variable at determining value.  That's why you can't compare two different notes of equal rarity and say that because one is worth such-and-such amount, then the other one must be worth about the same.  If one is popular and the other is not, then chances are the popular one will be worth more.

On the second point, it's no secret that efforts to keep the prices high for certain notes have backfired.  I am thinking specifically of the Lawson-Bouey X notes.  For a long time, they have catalogued much more than subsequent X notes, and I am guessing that this is due to a long-standing perception that they are scarcer because fewer were saved before their identity as replacements was recognized.  However, it appears enough of them were saved to supply the soft market, and people who speculated on them keeping their value or going even higher are feeling burned.  It takes a long time for people who paid too much for a certain overpriced note to accept that their investment was a bad one.  They will keep asking the same high price for a long time, then give up if they can't find a sucker.

On the question of whether Journey series inserts are scarcer... Well, some are, and some are not.  Again, it's not scarcity that determines value.  Certain prefixes and ranges have gained popularity.  Many have not.  I think that insert notes as a whole suffer from the "so what" factor, meaning collectors look at them and don't feel a need to have them.  Part of that is probably the simple and obvious fact that inserts look like regular notes and were printed like regular notes.  Only after they were printed, they were set aside from the rest of the regular notes and used to replace defective notes.  That really amounts to nothing in the grand scheme of things because all the notes are put into circulation, and the only difference is a few notes from a few select ranges were put out to circulation in a different order from the norm.  I doubt that anyone is trying to collect one note from every ream issued.  Some people try to collect one note of every prefix, and when you tell a prefix collector that a run of 1000 notes in prefix AOP was used as SNRs (7.075-7.076), that person is probably not going to say, "Wow!  I simply must have a note from THAT particular range!"  Instead, they will probably say "Well, I can achieve my purpose by buying almost any other AOP note."  The point is, AOP notes as a whole are not scarce.  There were 10 million of them printed, and 9.999 million of them catalogue $6 in Unc while one run of a thousand notes catalogue $400 apiece.  You can put one regular AOP note next to a replacement AOP note, and unless you have a catalogue or insert note list in hand, there is nothing to distinguish the two notes.

Nobody wants to be a sucker, and everyone wants to get into a good investment on the ground floor.  Maybe a lot of collectors look at insert notes and think there is no ground floor.  From the minute an insert range is confirmed, notes from that range sell at a price set by whoever finds these notes.

Trust is also a factor.  The big question insert collectors have to ask themselves is, "Are all notes from an insert range issued like true replacement notes?"  From time to time, huge runs of insert notes are found like regular notes, prompting us to believe that the answer is no.  Even without such compelling evidence, simple logic tells us that if a bunch of notes set aside for use as inserts is not used up because there were not enough defective notes needing replacement, then those remaining notes are then issued like regular notes.  And why would they not be?  They were not part of a separate printing order; they were part of a regular note order and were simply put aside for another purpose.  To complete an order of a certain number of notes, the printers have to make a few more notes to make up for the defective sheets/singles removed, and this appears to be why a lot of series end in smaller reams than expected.  I would propose that it is those end-of-the-series reams that are the true replacements because there is a strong probability that they were not printed at the same time as the rest of the notes that preceded them.  Insert notes simply make up for missing sheets/singles; they are not actually replacing anything in the entire order.

Think about it like you are the Canadian Bank Note Company.  You get an order from the Bank of Canada for 100 million notes.  This will take a few weeks, and your well-paid quality control staff (QCS) are not sitting around smoking cigarettes while waiting for you to finish the order.  They are pulling out defective sheets at a rate of 0.4%.  You are too busy filling the order to print up replacements, so your QCS use notes from the same order to fill up bundles and bricks.  They keep tabs on the number of defective notes removed, which in this case is 400,000.  You can't ship 99.6 million notes to the Bank of Canada and expect them to think you sent them all 100 million notes.  Hey, you are in the business of printing money, but you can't just print your own profits!  So you make another order of 400,000 notes.  No problem, that's one ream of 360,000 notes (45 notes per sheet multiplied by 8,000 sheets) and one ream of 40,000 notes (45 x 1,000 sheets).  If there are any defective sheets in that smaller order, you use the extra 5,000 notes you printed in that small end ream.  If you have leftover notes, those go in the furnace as it's doubtful the Bank of Canada is going to let you hang onto notes that are unaccounted for.  So in the end, you printed 100.4 million notes to fill an order of 100 million.  Those 400,000 notes your QCS used as inserts could have come from anywhere in the order.

Compare this to the old days when replacement notes were printed separately.  Those notes were the actual replacements in the order, meaning you did not have to print up more later to make up for defective notes.  Unfortunately, this means you always have to keep a surplus of them to avoid running out.  And if you really mess up a lot, you're going to run out.  On the other hand, if you do a really good job, you end up with a lot of extra replacements that can't be used, meaning you wasted a lot of paper for nothing.  You're screwed either way!  The modern insert method makes a whole lot more sense because you only ever print up as many extra notes as you need afterwards, so there is no guess work and no having to switch back and forth from printing regular notes to replacement notes and back to regular notes, etc.

Two points:
- Rarity and value are only loosely correlated.
- You can't make people want certain notes.  Even with the power of sellers to set the prices they want, they can't make people pay those prices if buyers are not interested.

I definitely agree with you on these two points and true, popularity is a strong variable at determining value, I guess because I am a diehard modern day replacement collector and bricker I realize how difficult some notes are to find or buy...and of course
someone who has no interest in these types of notes will not have the same point of view as I do.

I guess what I find disturbing at times is when I go to a show I have gotten many comments from dealers (maybe not in so many words), that have said we don't deal in modern day replacements because there is no market for them, and either try to sell you an asterisk note from there hidden stockpile of common replacements, or may inquire as to what I am looking for or ask if I have something for sale. It is at this point I find it funny that they all of a sudden are aware of some notes like AOM AOR AOP APV BTZ snrs that have high book values and are interested to let them know if I ever come across any they would consider buying them. Clearly profit is the motive here, and not whether it is an asterisk, X note, or modern insert; they will sell what they have when they can can putting all personal judgement on the side for that moment...
I have even attended shows with a friend who I had intentionally go from dealer to dealer asking about modern day replacements and in the majority of cases, dealers discredited these notes and tried pushing asterisk notes because of there so called value in the future, and how hard they are to get (Obviously, they don't circulate anymore) and they are always in great demand, yet when you try to sell them back to dealers you are lucky to get 40% of book.  I know no matter what I say people cannot be convinced to collect what they don't want to collect (in most cases) and this is not the point of the topic...what I am interested in is just people's opinion's especially those that collect modern day replacements as to why they do, or why they stopped, or any other feedback on the topic. I know I have a list of collectors both off and on the forum that provide me with want lists of notes that they are seeking any in many cases they are notes that I personally do not even have in my collection or have never seen come up for sale , but does this make them rare or scarce, or are collectors just hanging on to them until they are ready to sell?

Collectors tend to be more candid about what they have and what they want in personal conversations, not in public forum postings.  At least that's my observation, even though I am neither an insert collector or brick hunter.  However, I would be interested to hear what they have to say as well.  Until they do, you're stuck with me in this thread. 

There are two distinct variables at play for determining the rarity of inserts...
- Since inserts are not visually distinct, their discovery depends on the work of brick researchers, and it's safe to assume that not all ranges are ever found.  So that would mean confirmed inserts as a whole would be scarcer than older series of X notes and asterisks.
- The probability that some notes from confirmed insert ranges are not issued as true inserts, meaning that big runs of them could reach circulation and be discovered, means that certain insert ranges could be much more abundantly available than expected.

The assumption that entire bricks and entire reams of notes are set aside for the intent to use them as inserts is exactly that, an assumption.  It's a logical assumption as insert ranges need beginning and end points, but there are glaring problems.  For one, we know from research that some Journey notes are printed with very large skip intervals compared to past series.  The larger the skip interval, the larger the number of sheets in the ream (where the ream is defined as one interval of continuously-numbered notes).  And the larger the ream, the less likely that every note in that ream would be used as true inserts.  Then there is the problem that a brick is no longer made up of 1000 continuously-numbered notes, at least for notes printed by CBN.  It's not logical to assume that bricks used for SNR inserts were purposely kept nicely in order while all the rest of the regular notes were mixed up.  So if a brick used for SNR inserts is mixed, then notes belonging to several ranges would come from that brick, and the end result, if brickers find those inserts, is several SNR ranges thought to represent several thousand notes of potential inserts.  So the end result is the same: only a few true inserts from each range, and the remaining notes in the range are distributed like ordinary notes.

Unfortunately, there is absolutely no way to tell true inserts from regular notes if those notes belong to the same ream or "brick" (where a "brick" is now just a theoretical concept of a 1000-note run).  If you collect inserts from small ranges, you just have to hope that someone does not get their hands on huge runs of notes from the same ranges and puts those notes on the open market.  That kind of uncertainty makes insert collecting a huge gamble with not much of a reward.  Rare notes that prove to be rare over time keep their value and slowly appreciate in value over time.  Notes thought to be rare but that become abundant over time lose their value in big chunks in small intervals of time.  I can't really blame collectors for wanting to avoid those kinds of risks.  Collectors tend to want what they want right now, and that runs contrary to the necessary precaution of sitting back and waiting for the information about the supply side to become clear.  Even if you wait, there is no guarantee that once you find and purchase the note you want, a note that took you years to locate, that some jackhole with 100 consecutive notes identical to yours finally opens the vault and dumps his notes onto the market.  But that kind of thing could happen with any series of note, not just with inserts.  A popular note could withstand the downward forces caused by a sudden glut on the market.  And rarity doesn't always breed popularity.  The 1935 series $25 note is not rare at all, but it is very popular, and even if a hoard of high-grade examples were to show up tomorrow, these notes would not lose their value.  This is ironically due to the fact that these notes were never rare to begin with.

One thing to do is to add up all the ranges from each series with the total notes printed to get an idea of how high the spoilage rate is or was in the past. This gives you a beginning but the rest can be much more difficult to calculate/estimate. Personally I would say non identifiable replacements are the most scarce. I should mention that I personally like the idea that the notes look just like regular notes, in fact that's much more interesting to me than what I consider an obvious star replacement. Finding one of those requires nothing other than pulling them out and saving them. Today's tellers have no idea how pull replacements out of bundles like they once did in the past for stars and X's. As for the *NY  price disaster I would expect more of these in the future. Values really are a different beast but when endless ranges are coming out higher than they ever have, personally I would say watch out because most will get cleaned out. The new Polymer SNR's that enter the book at $400 is alarming. Yes you might have a few that 10 years from now might be worth that amount but most won't.

As for my own personal numbers. I have done my fair share of bricks over time and can say from my records that I would find 1 replacement note per 166 notes which is a rate of 0.60% when past series average out to about 1.27%.

Regards,
MG

On the second point, it's no secret that efforts to keep the prices high for certain notes have backfired.  I am thinking specifically of the Lawson-Bouey X notes. 

I agree with you mmars regarding the Lawson-Bouey X notes. I took a quick look at these in isolation from the rest of the TRN Index and they look terrible.


Den.      Date   Sign / Prefix
 $1.00    1973   La-Bo;  AAX
 $1.00    1973   La-Bo;  AAX
 $2.00    1974   La-Bo;  ABX
 $100.00    1975   La-Bo;  AJX
 $1.00    1973   La-Bo;  EAX
 $1.00    1973   La-Bo;  EAX
 $10.00    1971   La-Bo;  EDX
 $50.00    1975   La-Bo;  EHX

At their high these notes would have cost you  $12,328 or today in Unc they book for  $6,150 , 50% lower. Personal I see these making their way to 1/3 of their high. The 2 you really wish you didn’t buy to speculate with are the La-Bo;  EHX and La-Bo;  AJX which would have cost at the high $8,786 now worth $4,100 and had a disappointing loss of $4,686.

As just an observation, everytime I'm offered a "Rare" note I'm always sold on the fact that "It's a great future Investment" If I didn't do the math myself, I just might have believed them.


MG   

  As for my own personal numbers. I have done my fair share of bricks over time and can say from my records that I would find 1 replacement note per 166 notes which is a rate of 0.60% when past series average out to about 1.27%.         

Do you know what your rate was regarding sheet and snr notes...this I believe is important since that in most instances the harder to find snrs have been found in usually very limited amounts and in many case only 1 or 2 at a time whereas in the case a of sheet replacement a run of 20-30 is possible.

The truth is I have found many more SNR’s then I could have imagined. How could that be right? Well I have found runs of 10 to 40 sheets most often layered throughout the brick with endless patterns. The SNR's were very different. I have found entire bundles of them. I was shocked at first and even returned 2 full bundles of SNR’s I had found. At the time experience wasn’t on my side and had thought this to be an improbability. Having seen this particular instance repeated several times over makes it a variable. No one should believe that most SNR’s are found in full bundles that would simply be a gross over exaggeration but is no different of a reality as someone asking the value of 10 plus * notes. With bundles being 1 extreme the other extreme is 100 bricks no SNR’s. What’s interesting now is that there are significantly more SNR’s ranges than sheets. I just can’t imagine hundreds of SNR ranges with average prices of $100 plus per range. On the merit of being an SNR alone in the past these were given much higher values, now there is no end in sight for these and they not only keep coming out but there more expensive then most other series. Yes I consider them rare on an individual basis but when you look at them as a whole they are not rare.

MG

...The SNR's were very different. I have found entire bundles of them. I was shocked at first and even returned 2 full bundles of SNR’s I had found. At the time experience wasn’t on my side and had thought this to be an improbability. Having seen this particular instance repeated several times over makes it a variable.

Given what I said above about bricks being mixed, this is hardly surprising.  The bricks from which SNR inserts are taken are mixed just like the regular notes.  This means there will be entire bundles of notes from the same 1000-note range inside other bricks.  This is not a hard concept to understand.

I know it was somewhat touched on before, but one thing that I would like to point out is that there are many occasions when a replacement note has been found, yet not confirmed due to the way confirmations are done. I know that other brickers have had this happen as well, but I can only consider my information since it is first hand.
I have had over the years about roughly 10-15 different notes that I have found (all in new sealed BOC bricks) that have to this date never been confirmed. These mainly consist of $5 and $10 denomination notes and all would likely have been snrs. Unfortunately, being the only one to find these notes is of no benefit because they will unlikely never be confirmed the longer time passes, and once the polymer notes have taken over and paper is gone they will likely never be confirmed.  It is these notes in particular that I believe are rare....but that really is only my opinion

Another thing that I am very interested in is how some replacement notes, whether sheet replacements, or snrs are so hard to get even if one is willing to pay above catalogue value for them. I can only assume that whoever has these notes is not willing to part with them, even at a hefty profit.  Although I realize that the amount of replacement collectors is small compared to other types of notes that people collect, people still must have their reasons as to why they hang on
I am only hoping more members take a few minutes to voice their opinions, although I am pleased that atleast some find this topic worthy of their time.

My personal preference is to collect identifiable replacement notes.  I appreciate the efforts of those who research and collect the "modern" replacements, but IMO, they are simply regular notes that have been added to make up an order and if they were not used as replacements, they would have been issued anyway. 

The Asterisk and "X" notes were specially printed to replace spoiled notes and that's what makes them more desirable to me as a collector. 

My personal preference is to collect identifiable replacement notes.  I appreciate the efforts of those who research and collect the "modern" replacements, but IMO, they are simply regular notes that have been added to make up an order and if they were not used as replacements, they would have been issued anyway. 

The Asterisk and "X" notes were specially printed to replace spoiled notes and that's what makes them more desirable to me as a collector. 

In your opinion, as a collector, have you found that the notes you purchased increased in book value over time, or has any of them been disappointments?
Also, although you do enjoy collecting identifiable replacement notes have you run into dealers that have exaggerated the true nature of the note in order to sell something to you or convince you of its value?

I am relatively new to the whole aspect of collecting and I am intrigued by the values published in catalogs. I have mentioned it before and I will say it again -  if indeed those values have any credence and if I were the BoC I would see a great opportunity to make a whole pile of profit like the Canadian mint is doing (e.g. with the 20 for 20 and now 100 for 100). e.g. take even the HPA, HPG, HPM, HPU, HPY, HPZ Sheet replacement at 270k times $10 above face value (that is for a mere  AU grade)  that works out to about 2.7M for each prefix or above $15M for the whole range. Compare that to the annual amount spent on bank note production and it is not that bad at all.

Personally however what it boils down to is that although I clearly understand the concept of replacement I totally do not understand the manner in which modern day replacements are determined. As an investor, I see a tremendous shortfall in investing based on the catalog prices where there is very sketchy detail provided about the manner in which these replacements are determined. It is like buying a stock without a prospectus. Who determines the replacement ranges? How are they determined? Is their insider influence happening in such determination?

Even so I can understand the notion of Sheet replacement because at least when looking through a bundle you find a note from a different prefix in a bundle and it is with the same plate numbers (positions) but SNR seems like a whole bunch of hocus pocus to me (not to take away anything from people who believe in them).

Besides production technology now exists that makes the whole concept of replacement obsolete. There is evidence that the BoC has been using this technology (see the BoC ads for people they have hired in their currency area lately or google SNI and BoC). It is being marketed as Single Note Inspection. Essentially in this technology sheets are replaced prior to printing numbers and then after printing numbers if certain notes on a sheet are found to be defective those are the only ones discarded with the rest of the notes included in the bundles. If  you google hard enough you will be able to find a very well known equipment manufacturer lay out how this is done.

Given all this I am totally amazed that there is such a market for replacement that are not specifically identified (such as an X and *).

But then I am more of a collector of unintended art in the banknotes that could result from defects or just the randomness in the process of production. Perhaps I am not savvy to understand the value of these modern day replacement notes. And therefore any investment in collecting is merely on a discretionary basis.

However, I find the discussions and passions about this topic very interesting.

As an investor, I see a tremendous shortfall in investing based on the catalog prices where there is very sketchy detail provided about the manner in which these replacements are determined. It is like buying a stock without a prospectus. Who determines the replacement ranges? How are they determined?

The replacement ranges are determined by an inside circle of collectors who report on what they find while brick hunting.

Is their insider influence happening in such determination?

I fully agree. When a note had an X or a * in its serial number there was no questions as to its status us a replacement note. I think the modern process is open to error and/or abuse and I do not trust it. Therefore I do not collect modern replacement notes.

I do understand the appeal of modern replacement notes and fully support those who do choose to collect them. I choose not to.