Market activity has slowed down

News: Registration is free here at the CPMF!

I have recently been hearing from a few members saying that the market activity has slowed down a bit in the past few months! This focus was mostly on chartered notes gathered from eBay prices and trade shows.

I have noticed the same myself and wanted to know if any others like me have noticed this and what if any your theories may be?

For one I have notice a few of the regular eBay buyers slowing down.

I can't speak for others, but I can't wait to see what prices the new Charlton will bring.

Scott

I think you will see Chartered top out faster than BOC issues.

There are so many of them and they have only seemed to trade heavily more recently.

There is a top to everything but I think you will continue to see BOC notes on a gradual upward pace.

Some of the higher end material may have gotten overpriced with the exception of extremely rare material. I'd look for for changeovers ( due to the recent Charlton listings ) and 1937 Osbornes and mid-grade 1935 issues to be strong from a BOC standpoint.

From what I have observed:
there seems to be 2 general markets 1) Online
and 2) live (shows, brick&mortar stores, trades, etc)

for # 1) yes, I'd say that activity is slowing down... and I would attribute this to the quality/quantity of filler and notes that buyers just see listed over and over again.  Sellers seem reluctant to allow the market to dictate the price.   There's far TOO MANY of the "best offer" type of shucksters hustling asterisk devil's faces or other sub-par (F to aEF) rarities at 2 to 3 times UNC book value. These charlatans, as well as those who attempt to start freshly minted radars and replacements at book or above, likely turn off most bidders.  I have had a hard time tuning into eBay lately.

for market #2) I'd say this market has increased in sales for BOC notes esp at shows.  Since 2003 I've noticed most notes go up in value, and many many more coin vendors selling them.  Collectors I know haven't really slowed down in buying and selling. Stores and dealers have asked me to bring in notes to sell.  People are wising up to buying notes unseen when grading is so relevant to a note's true value. The difference between buying from a dealer you trust to buying on a leap of faith is significant...and likely finally having a positive impact on this type of market

While the market activity has slowed down as a percentage of listings on ebay, there are many more notes coming on ebay so the absolute number of sales is not slowing down. The prices are higher for Chartered notes which does not help volume either. This is likely a reflection of the current liquidity in the market, greater sense of wealth, rising home prices and the like so when you look at how much you have to pay in other equity (eg what amount of stock or what portion of your house you have to sell) to buy a given note, it is less than a few years ago. 

I have heard yet another theory today

One of the possible reasons why sales are down on some notes may be the new bidding feature eBay recently implemented. As bidders identities are hiding once the item reaches $250 and most chartered notes are priced in this range or higher. Now I was told this feature was added to prevent or slow down the number of fraudulent second chance offers but opened the door wide open for fraudulent bidding. This new feature will remain until eBay finds a better way to deal with fraud.

I am not clear what market slowdown everyone is talking about.  If you exclude all the overpriced items in ebay stores and look at just the auctions, there are probably fewer than 5 deals to be had in every 100 items won on any decent notes.  The prices that have to be paid are higher than at any point in the past.  Perhaps the acceleration in prices has slowed down dramatically as the prices have been too cheap in the past.

Those who have overpaid in the past may have a hard time to sell at a higher price, but at least they can recover their cost at current market values while they could likely not do that in the past.  As I have been told on many occasions in the past, the backbone of the hobby are the collectors, not the speculators.  One cannot expect the speculative frenzy surrounding the cheap prices in the past to be carried on by actual collectors.  Speculators pull out when the risk-reward ratio turns against them.  This is my theory for the slowdown in acceleration of prices.

Hey Everyone,

I am going to give my 2 Cents on this issue as I know there are several others who read here but do not post who feel the same way:

#1) Yes, the market is slowing down. The reason for this on many notes is that more people are keeping notes then selling them (Unless you are willing to sell your First Child for it). If you go to most Shops they are BEGGING for people to bring good notes (But there is a catch... Read On).

For one I have notice a few of the regular eBay buyers slowing down.

#2) People do not willing to pay anything close to the value for notes, PLAIN AND SIMPLE. This is what is causing problem #1. People "Looking for a FANTASTIC deal" are getting out of control. No one will pay more then 50% of Trend for an item these days. Many Dealers (Shops) also "Need" to give their regulars a discount of some kind so this will shave right off their buying price as well.  So this is ALSO leading to problem #1.

# 1) yes, I'd say that activity is slowing down... and I would attribute this to the quality/quantity of filler and notes that buyers just see listed over and over again.

#3) There have been MANY good notes go by on eBay and hardly got noticed. There are the few usual buyers we all see and they are out for the Extreme deal (Investments), So their bidding is reflected. I know several buyers who refuse to sell online now due to the Low Bidding, High Fee's and time involved in selling items.  It is just not worth it. I Know I feel the same way.

I hope there is a turn around but I feel we will not see any significant turn-around until the end of July. Many People are just packing up and sitting on their notes till then. And if you Say No-Way then look again. Summer is on the way, people find other things to do, their Investments will gain their value in the next Edition and people will get back into the swing of things in the fall with even higher prices.

People have also gotten tired of the "Let the Market Decide" theory. People just end up losing good notes for really cheap prices. There is also many people who do not like the "Send in your bid and I will let you know if you win" attitude. This is not a proper way to sell a note. Put a price on it (Trend, Catalog, What it is worth to you.. WHATEVER!) it does not matter. Then if someone is willing to buy the note for your asking price then they will have an idea what they are spending and go from there. It's like going to a Store and everything does not have a price. When you ask how much a particular item is they look you over and tell you how much it is (Depending on who you are). Who likes to do business like that? I sure would like to know because that is there I quit wasting my time and leave!

Prices have gone up, making it less affordable to have a very diverse collection.  So most collectors of modest means are either ditching chartered notes altogether or they are SPECIALIZING in certain institutions, certain types of notes, etc.  In other words, they are getting pickier.  Less demand overall will cause prices to flatten out.

Agreed Chartered has taken quite the turn this last year. So I would not expect the world in the next Charlton.

# 1) yes, I'd say that activity is slowing down... and I would attribute this to the quality/quantity of filler and notes that buyers just see listed over and over again.  Sellers seem reluctant to allow the market to dictate the price.   There's far TOO MANY of the "best offer" type of shucksters hustling asterisk devil's faces or other sub-par (F to aEF) rarities at 2 to 3 times UNC book value. These charlatans, as well as those who attempt to start freshly minted radars and replacements at book or above, likely turn off most bidders.  I have had a hard time tuning into eBay lately.

Agreed, this I am sure have left people with a bad taste in their mouth. Why buy online with STUPID prices when they can buy from Dealers or Privately for "Normal" Pricing.

Ok, I am getting off my Soap Box now... 

I agree with you in general.
In all of numismatics, the main driver is buying and selling. If the demand increases, thus goes the prices. Charter notes are soft right now, top quality Bank of Canada notes are still firm. Catalogues and trends are a guide line for estimated retail prices, not a bible. Those that can get above cat. prices will do so as long as they can. Those buying simply won't pay the asking price, and prices tend to fall.
Same thing happens with coins. Highly regarded key date coins graded well, get top dollars. Those with little demand need to be sold for less or tucked away for better days.
Precious metal prices have a direct bearing on coins, but pose a weakening of paper money prices.

Rick

I have recently been hearing from a few members saying that the market activity has slowed down a bit in the past few months! This focus was mostly on chartered notes gathered from eBay prices and trade shows.

I would have to agree with the above comments. Rare and unusual items continue to do well but "commodity" type of material can be problematic. I consigned some of my notes to the TOREX February 2007 auction and results were very mixed. Lot 1066 (Dominion of Canada $1 1878 DC-8e-ii in original VF+ but with a bias cut) was estimated at $2000 but sold for a mere $750 (I paid $1300 for this one last year!). However, Lot 1067 (another DC-8e-ii, not mine, in Choice VF but better centered) was estimated at only $1750 but sold for $2000! Perhaps collectors are starting to finally appreciate the importance of good centering on notes, which I applaud. My Bank of Upper Canada $1 1861 with the unique "OTTAWA" overprint did well at $1700 despite being only VG with a repaired three-inch tear. This one cost me only $150 about 8 years ago so what you lose on the roundabouts you gain on the swings, i.e., "It all comes out in the wash"!

I have been closely monitoring the Canadian paper money market ever since the auction sale of the legendary Leo Meloche collection in Montreal in 1971. Many younger collectors today probably do not realize that the Canadian paper money market has gone through a number of euphoric highs and demoralizing lows since then. This cyclic behaviour is characteristic of all commercial markets. However, the rarest and most unusual material was always in demand even during the lowest of the market lows and that will never change.

Collectors should always be very cautious when they come across commoner notes that are being touted as "investment potential" material just because they have attractive vignettes, e.g., the Royal Bank of Canada $10 1913 Destroyer note and the Bank of Nova Scotia $20 Dory note. One of the most important things that one acquires through years of experience in the hobby is the knowledge of what is really rare and what is really quite common. This knowledge will come to all collectors if they stay in the hobby long enough. Such knowledge cannot be obtained in just a year or two.

One thing that I can recommend strongly is that you study every old auction catalogue that you can get your hands on, e.g., CNA Annual Convention sales from the 1950's, 1960's, 1970's and later. You will soon see what notes are really rare (maybe just one appearance every five or so years) and which are common (one or more appearances in every major sale).

A little off topic but most current auctions that take place across Canada do you have to purchase catalogues or are most available as downloads on the auction website?

Thanks
FRIEDSQUID

Shill bidding in a real auction can be a problem. The auctioneer stops it if he is aware of a setup, but often cannot tell. Ebay bidding is wide open to shills now, no improvement over previous attempts (by them), except when ebayers send in the information to them.
I asked an auctioneer once if the person owning the note or item can bid on his own item. He said its OK, as long as when they buy it they pay all the fees. He is no longer with us.
The setups in some auctions is pretty neat, including reserves, and mail bids prior to the auction. A note has a reserve of $500, and estimate of $1000, and then some prior bids by friends of the owner. Chases the note to new highs, ultimaterly the high bidder gets it, but he may have paid a bit more than he thought or wanted.
I do not know of any current auction companies doing anything funny.

Rick

Catalogues and trends are a guide line for estimated retail prices, not a bible. Those that can get above cat. prices will do so as long as they can. Those buying simply won't pay the asking price, and prices tend to fall.

Rick

This topic also brought up a lot of comments that the high asking price of many notes is driving the market down. As I have yet to be in this market for decades I am still adapting to the many changes and fluctuations. It does seam a bit odd to me that in late 2005 and early 2006 before the new chartered catalog came out the prices were outrageous in auctions. As soon as you start demanding these prices in store inventory it scares everyone off? A few of the eBay sellers were able to maintain these prices without affecting their sales have hardcore facts that these prices were achieved on multiple occasions and continue to do so. There is also very good reasoning on why they achieve these prices based on the scarcity of one note VS another similar note.

Only recently have I noticed that book prices are being taken very highly.

Collectors should always be very cautious when they come across commoner notes that are being touted as "investment potential" material just because they have attractive vignettes, e.g., the Royal Bank of Canada $10 1913 Destroyer note and the Bank of Nova Scotia $20 Dory note. One of the most important things that one gains through decades of experience is the knowledge of what is really rare and what is really quite common

I understand your point on stressing that with experience gained you realize that the price of a note is only partially determined by its scarcity. It is much easier to get good market price and book price estimates if the note shows up on numerous but not an abundance of occasions. These notes you have mention are believed to be somewhat common, nevertheless lately they are rarely presented in EF and up.

By referencing the Charlton Canadian Banknote guide since the first edition it is very simple why many would classify these notes as investment potential. While some of the scarcer notes hardly move up in price due to limited sales.

Some auction companies charge for a current catalogue, others don't.
If they know you, usually not a problem. Some insist on selling groups of their catalogues, like annual fees, most will give you one at the auction without cost.
Each company does it the way they see fit, and consider the bottom line to them.

Rick