The Pricing Panel

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Give a guy an inch and he takes a mile but I can't let you get away with this one  

2).English $25 Original Unc $11,000

- nope, please add approx 15% on the English and at least 20% on the french to be competive in the offline and online market.

3).Osborne/Towers $1000 Original Unc $8500-two please!!!

- nope, to be competitive in a list of people waiting for this note in the online and offline market you will need add, on a good day 25%, on a bad bad for you 35%.

4).1935 $1000 English Original Unc $9000

- sorry, the market (offline and online) is paying 27.5%-30% more than that on this note.

But you know this already, that's why you want em, you little devil you!

The other 2 I would have to defer to someone else who have greater sales experience in the issues and on the current market landscape for the notes but I am of the opinion that the $2 Osborne appears to under-valued at $950, I would need to check with the market before sounding as sure I normally do before voicing an opinion with a high degree of confidence.

A pricing panel member who might see the above may think, you have to be kidding me about the prices above, no I am not. Welcome to the power and influence of the Internet which not only by definition has the online (mass) market but it has greatly impacted values in the offline market. My concern is who there understands the relationship between the two markets and what is going on in each and based on what credentials and set of current experiences? Now push that aside, assuming such a person exists, what weight are they being given to influence pricing decisions; is it 1/10 of the say, 1/5th, 1/2? What weight should the online market be allocated versus the offline market, how do we adjust for the fact that month over month and year over year the Internet is having an even greater affect?  How do we get good data if we are going to attempt to modernize and account for this?

These questions are some of the key ones at the heart of the concern raised in this thread. If the panel is unable to raise or answer these questions internally then they need to bring someone inside who can, at least on an advisory level.

Troy

Troy,

I know this is off subject a bit but I would appreciate an explanation of the term " original uncirculated ".  

Gary

I know this is off subject a bit but I would appreciate an explanation of the term " original uncirculated ".  

Gary

As I understand it, this refers to a note that was, and remains, UNC when it was issued - i.e. it has not been pressed, washed, trimmed, etc.  It is a note that is UNC as printed...not an EF note that has been doctored by an unscrupulous person so it will look uncirculated.

I think one thing need to be brought to everyone’s attention before this post gets too far out of hand.  Many sales on the internet, mostly ebay are bought by hard core aggressive collectors, which I would include myself in that category.  Many of them including myself will almost pay an unreal amount for a note to fill a void in my collection.  With bidding aggressively for a certain note, it almost artificially inflates the value for that particular note.

Here is a hypothetical scenario.  Say I paid $1000 for that note that books for $750, because I needed it, then I happened to upgrade that note for one from a show, dealer or online.  Then I was to put that original note back up on ebay, that note may then sell for book value.  This might happen because I then am taken out of the line of bidders for that note.
OR
I had bought the above mentioned note and another one shows up on ebay.  I am again out of the line of bidders.

In any type of collecting, be it paper money or bottle caps, there are true collectors and then there are speculators or investors.  The speculators or investors are in it for the short term investment.  Many of them have not quite grasped the  grading thing or the true rarity of certain notes.  They rely on what the seller says in the description or the write up in the ad.  As we all know that many so called uncirculated notes on ebay are now termed “Ebay Unc”.  Probably an AU or sometimes at best EF.  Also, I have found that many of the rare notes that I have seen on ebay or at shows have been processed.  Either by washing, bleaching and or trimming notes to make them appear better than they were originally.  If the uneducated buyer gets one or more of these notes, they don’t know the true real collector world grade until it is time to sell the note(s).  A true hard core collector most likely receive the “Ebay Unc” note grade for him/her self and naturally send it back, where the speculator or investor probably would not.  If the market becomes full of notes that were originally over graded or processed, then the sellers will whine, because the speculators or the investors are trying to sell their notes on the real market and will not get any return on their “investment”.  Where the educated collector will generally come ahead a bit and show a little profit to help to build or upgrade his/her collection.  

If the prices of notes rise to dramatically, the collector will eventually give up, and the investor will keep on going.  This has happened before in the past in other collectables, where investors have dove in, buying up all of the high grade items, hence raising the prices up high.  The true collector sees the high prices in the guides and understands that it is now impossible to finish their collection because of the high prices and bail’s.  Selling their collection and then other collectors do the same, flooding the market or crashing the market and then this takes a long time to recover.  This leaves the investors or speculators who caused the prices to go through the roof holding a cold poker.  

Paper money as a collectable is just nicely chugging along.  Prices are increasing at a nice rate where generally the collector will make enough from selling their extras or ones that have been upgraded.  We don’t need to have the values artificially inflated just because some think the prices are too low.  Get it going too fast and then the true collectors will bail.  It is too fragile to mess with too much.  

I will never forget when I was first starting to collect, after making some real stupid decisions, a very knowledgeable collector friend stressed to me…… “You have to educate yourself, don’t believe everything you hear”.

Now being done with my venting, I want to hear reasons why some here are so adamant for huge price increases.  Real reasons not that the market demands it, because that is a load of bull.
Reply in simple terms, not using large words to make it sound like you are so “educated”, in 3 or 4 sentences.


Tom

 As Tom said, this market is chugging along just fine. I have no real complaints about the Charlton catalogue. Yes there are still some under priced notes in the new bible, I have an idea what they are, & l'll buy them at catalogue price if l find them. There are also some over priced notes in the catalogue, that l wouldn't buy unless l was getting the deal of the day. I know that, & you know that !
This catalogue is a guide line as to roughly how much each note is worth, the real price comes from the buyer when he reach's for his cash in his pocket.
All in all, if you don't like the prices in the catalogue, throw the thing out & make your own prices, or even better use some white out in your new catalogue, cover up the low prices & make your own. IT'S JUST A GUIDE LINE !  
 The new book will be out in a year, hope your investments do better for you. l'm in it for the hobby, the fun, meeting people & darn it, Canadian paper money is the most beautiful money printed in the world & lastly these crazy conversations on The Canadian Paper Money forum. 5 good reasons to enjoy this hobby.

RS_dude

Hi Tom,

Now that I have shaken off the most amazing outdoor event I have ever seen, a Rolling Stones concert with about 90,000 people there, let me say that I think your last post is really good one and represents precisely the right kind of resistence and challenge which is healthy for the market. I also personally appreciate you investing the time to craft the reply that you did. There are a lot of people, many of whom are advanced collectors and dealers, watching this thread carefully.

The issue is raised is not whether the price guide is a guideline (as RS_Dude said), that is understood by everyone, so let's get that off the table. The issue is also not grading, which is imperfect in every market, so lets get that off the table. This issue is not as simple as whether or not time is needed to compile info, print texts and distribute them, if this is part of the problem then that needs to be corrected with forward thinking. Everyone understands this too, so let's get that off the table.

The issue raised (as evidenced by the title of this entire thread) by someone other than me is and was the credibility of the pricing panel and how accurate the prices are as presented to us, by them, in an ever changing market. Leadership will become an even more difficult challenge as the market continues to grow internationally, the market has historically considered those on the panel very credible leaders. The market now has an increasing level of questions and concerns it is asserting.  A pure and important issue to many at the heart of the hobby and industry that will no longer tolerate being swept aside, canned responses that used to work are not going to cut it anymore.

I think if I had to take this one on in the format you suggested Tom, 3 or 4 sentences, as simple talk as possible on a topic that has some complexity, it might go something like this (bear with me, its early, and I have had about 5 hours sleep):

1) Times have changed, the Internet (what I call the Mass Market) has increased demand more than any other time in the history of our hobby/industry, supply is at an all time low, yet prices reflected in the guide do not reflect an increasing year over year growth rate which correlates with the increase in demand (10% might the # used unjustiably and incorrectly every year to appreciate a rare key issue when demand for it has grown by triple to quadruple digits/%'s).

2) If all (or nearly all) available notes from a very rare, very key issue are presold at prices 20-40% above 18th edition price to advanced collectors (note these people are not idiots and have been collecting their entire life, many are "Connoisseurs") who also consider their collectables investments (like most collectors who are closet investors do too), then this is what the note is worth and should be priced as such in the guide.

3) The market is no longer "chugging along" as the train it once was, it is flying now because of the Internet and its ability to bring in a huge # of new collectors and investors; the market needs the right fuel and pilots to keep it in the air; if it doesn't receive this the entire market and those leading it are going to lose credibility as confusion worsens about which market is right, the B&M or Internet, and the failure to bring solutions and harmony to this will indeed create new publishing business opportunities and new market leadership opportunities as those who potentially drop the ball, despite all the signs being there, are pushed aside.

4) When similar markets like the USA and Australian (and other former and existing British Commwealth countries) have experienced a similar increase in demand the price guides and experts who compile the pricing have shown no unnecessary hesitation when providing prices in their guides which actually reflect what the market will pay, 30+% yearly increases on very rare key notes in very strong demand & vanishing supply has not resulted in panic, it has instead created a healthier dynamic market (in a market economy panic selling happens when prices are too far ahead of demand resulting in falling not increasing pricing; with increased prices you will get some people selling to realize gains and market attrition, sure, and so what says economics 101).

I hope this provides a framework for further constructive discussion and I apologize for not keeping this in a simple, easy to follow, step by step analysis/argument in posts prior. And if I am one of the guilty ones you were referring to I will also avoid appearing to be educated or articulate to the best of my ability as I don't want to lose focus of the issue at hand.  I am willing to work with determination within the framework you requested, as long as it takes, so long as you believe the approach you suggested is in the best interest of the market and of this forum.

I'd like to see the panel address the valid concerns raised; from this good things will come.

Troy

p.s.

Gary:  I agree with what was provided already as the definition of an Original UNC by Venga adding to it, for the most part, the Charlton explanation of UNC. I also do not have anything to add to the already large body of information and education the grandmasters who built this industry haven't already said on this topic.

Seems more and more of the finest ebay sellers are stating the obvious.The guide,in their opinion,is under-valued.

Here is a description from an active add on ebay at present:

Educated collectors realize that catalogue value for the 1937 Specimen notes does not reflect the true market value of these notes.  So few of these notes ever make it onto the resale market that catalogue value is still based on the original prices realized at the 1999 Bank of Canada auction.  These notes are selling on the secondary market for between 2 to 2½ times catalogue price.  There are only 48 of the 1937 issue $2 specimen notes known to exist in private collections and the majority are part of complete sets that may never be broken up.  This is a truly unique opportunity to own a single example of this rare note at a very reasonable Buy It Now price.

 A complete set is currently being offered on eBay with a starting bid of US $12,998.00 (plus applicable tax).

Given the current Charlton states this set is $6750,someone/something is wrong,extremely wrong!

In regard to Tom's statements,a guide,or road map must get you to where you are going.Point you in the right direction,manouver you to a general location of where you want or need to be.
With the Charlton 18th giving the above price for this set,one advertised at $15k plusthe recent Torex sale of over 10k with fees,a table at Torex(this told me by a freind) showing a set for 12k,how did the pricing panel ever set a value on this SP set 100%+ what the market dictates?

Just another example to demonstrate that we must move forward.The market is advancing,expanding,and maturing rapidly.

how did the pricing panel ever set a value on this SP set 100%+ what the market dictates?

Correction:

Should state:how did the pricing panel set a value on this SP set 100%- or below what the market  dictates.

Another factor that I don't think has been captured in this discussion is that dealers often have want lists from their clients.  If a valued note is sold at auction and purchased by a dealer for say $3000, the dealer may then sell the note to his client for $3600 - $4000.  The auction sale result was on the public record, but the subsequent private sale was not.  

These days when some high profile auctions (Torex, Lyn Knight etc) are on-line, the collector himself generally bids directly rather than working through a dealer.  This phenomenon is also evident on e-bay as some very knowledgable collectors buy there and it is not uncommon for regular auctions with on-line bidding and e-bay auctions where collectors buy directly for prices to be 20% and more above catalogue.  

A factor in this price aberration may be that what previously was an  unreported "flip" of a note from dealer to collector following an auction, is now on the public record as the collector buys more and more directly at on-line auctions.

Agreed, this must also be contemplated.

Troy.

Great points eyevet.

Of particular note and interest may be the Lyn Knight auction that just took place in Canadian Paper Money.
I suspect these were retail buyers.Look at realized prices compared to the Catalogue.

Low # 0000005 1954 $1 in "Gem Unc"-sold @ $325
Charlton price-$150.00
Sale price 100% above Catalogue!

Low #0000005 1954 $2 in "Gem Unc"-sold @ $325
Charlton price-$150.00
Sale price 100% above Catalogue!
For the sake of brevity,I only listed these examples.

Something interesting.In examining my very own feelings/thoughts,I felt these and a few other notes offered would be a great addition to my collection.But I hesitated as the bidding went well above book?Why? I know the Catalogue is out of date.Most agree with that conclusion.I realized my hesitation came from the book prices listed in Charlton.
Would I have stopped myself from attaining these notes had the 18th edition listed these notes at $300? Probably not.I surely would have gone to $375 at least.
In conclusion we can wonder how many in the collecting community hesitate and defer from buying notes that go so much higher than Catalogue! And to the detriment of all concerned,many delay purchases and aquasitions because of the out-dated prices we see in our "road map"?

The market is the market.

respectfully,runningonempty

I promised one of the moderators I would stay out of this, however.

Instead of beating around the bush, who are the members of the priceing panel you don't like, and who are those that you do like?

Part two, please name those you think should be on the panel for Mr. Cross's book.

Rick

Instead of beating around the bush, who are the members of the priceing panel you don't like, and who are those that you do like?

Part two, please name those you think should be on the panel for Mr. Cross's book.

I'm going to veto this one right now. It will no-doubt lead to a situation where inappropriate comments will be made, and then we're going to be required to enforce the forum rules, etc. Let's not, OK?

And I second this, end this totally stupid discussion now.

Rick

huh?  I didn't realize we could demand a thread be shut down just because someone throws a tantrum and decided they didnt like it anymore and thought it was "totally stupid".

Troy