The pricing of rare modern notes

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As suggested by friedsquid, I thought it might be useful to start a new thread dealing with some of the issues discussed in the recent "How much would it bring ?" poll (http://www.cdnpapermoney.com/forum/index.php?topic=5802.0).

It seems to me that paper money collecting these days can be partitioned into two essentially independent fields, i.e.,

(1) the "traditional" field, which focuses on older type material that has never been available in large quantities (even in lower grades). Most Dominion of Canada notes, chartered bank notes and some Bank of Canada 1935 notes would fall into this category. In this "traditional" field, low serial numbers are of interest to a few collectors but there is currently little or no emphasis on fancy serial numbers such as radars and rotators.

(2) the "modern" field, which focuses principally on the prefixes and serial numbers appearing on common modern type notes. In this field, the type notes themselves tend to be extremely common (as pointed out by kid_kc79 in the aforementioned poll) and they offer few "challenges" from the collecting point of view. Collectors have accordingly turned their attention to seeking rare prefixes, replacement notes, insert notes, fancy serial numbers (radars, rotators, etc.) to provide the necessary "challenge" that fuels every hobby.

The total number of notes available in the "traditional" category is never likely to change much so what was a rarity 10 years ago will likely be even more of a rarity in 10 years time. On the contrary, most modern type notes are available in huge quantities and no one knows for sure how many of the "rare" prefixes and serial number varieties have been hoarded and will appear in the future. Thus, there is a much higher inherent risk in paying big money for a modern rarity than for a traditional rarity, unless of course official Bank of Canada records are made available to confirm the rarity of the notes in question. By way of example, I have noticed that the extremely rare $1 1954 Lawson-Bouey *C/I asterisk note seems to be appearing more frequently at auction these days.

On the contrary, most modern type notes are available in huge quantities and no one knows for sure how many of the "rare" prefixes and serial number varieties have been hoarded and will appear in the future. Thus, there is a much higher inherent risk in paying big money for a modern rarity than for a traditional rarity

Nicely said Ottawa, I see were on the same page

The issue I bring forward is that many rare notes in the Chartered Banks or early Bank of Canada continue to be discovered yearly. Some of which get a few extra serial numbers tagged on to the register as others are simply new discovery notes which were not know to be issued. These notes will no doubt remain rare but the fact is new ones are popping up 70 to 100 years after being issued. This means that keeping count is an endless task which will involve many generations of collectors.

These notes are highly collectable and have great potential. With every great potential of gain comes an equal potential for loss. In no way should these more recent notes be considered “Blue Chip” notes. If the entire value of the note rests on the assumption that only 2 have survived then it could prove disastrous if a third or fourth is found.

Jason

Yes I agree with you both. Where does one draw the line with some of the rare notes is the question. If you have a very rare note in your collection and from what is documented or realized that there may only be 10 or so notes known to be left. Where do people start to worry when another note the same comes to the publics attention for the first time. Is one or two notes enough to trigger a second thought that there may be more out there and it is time to sell? Or does it take 25-50 notes to arise for people to really get nervous of the note they paid big money for? As I don't have a note with this value as of yet I can not say what I would do, but unlike you guys that do have such a rare note where do you start to take a second look or decide to sell your note in fear of more appearing. Is this a major factor in the back of your mind or not. Again everyone has there own opinion but what are some of the opinions out there?  Thanks


          Jeff

Again everyone has there own opinion but what are some of the opinions out there?

I think my biggest fear is finding out that I purchased a so called tough note for big bucks and then it turns out to be a dud...It has already happened to me once on a low end note, when a confirmed range changed and the note I just purchased was now worth 5 bucks because it was no longer in the range.
I guess that always is at the back of my mind.   
I also wonder since some people are in the loop more than others, do they have the heads up on what is really going on. Sell before it becomes common knowledge that a once rare note is becoming more common.  Anyone think the same way

also wonder since some people are in the loop more than others, do they have the heads up on what is really going on. Sell before it becomes common knowledge that a once rare note is becoming more common.  Anyone think the same way

Absolutely-- just as you are ahead of the common collector who doesn't tune into CPMF

Knowledge is power -- as they say. This has always been the case.

The total number of notes available in the "traditional" category is never likely to change much so what was a rarity 10 years ago will likely be even more of a rarity in 10 years time

I don't get this logic    How can something become more rare over time -- unless (heaven forbid) there was damage to a particular collection?
Hoards of old American notes are being found all the time, and I imagine it will be the same (to a lesser degree) for Cdn old notes.  However, RARE notes will always remain RARE.  I think what you are trying to say is that the demand for your #(1) Traditional field will increase -- while the demand for #(2) may vary.

On the contrary, most modern type notes are available in huge quantities and no one knows for sure how many of the "rare" prefixes and serial number varieties have been hoarded and will appear in the future. Thus, there is a much higher inherent risk in paying big money for a modern rarity than for a traditional rarity, unless of course official Bank of Canada records are made available to confirm the rarity of the notes in question. By way of example, I have noticed that the extremely rare $1 1954 Lawson-Bouey *C/I asterisk note seems to be appearing more frequently at auction these days.

I'm so confused   I did not know the *C/I (esp unmanufactured ones) were popping up all over Canada.  I doubt the *V/V $1 or the *Z/Z $2 are that common... and I'm willing to bet big $ that they NEVER will become common...as most collectors know these were indeed extremely scarce. 

I understand your tendancy to trust the value of the traditional field but I doubt the legitimacy of your claim (or rationalizations) that FIELD #2 (post 1937 series) notes won't be collected as avidly.  In fact, I believe we've seen the opposite since many new collectors don't collect notes prior to 1937.   As a collector gets older and diversifies his collecting (more experienced) - he/she may then start collecting older (pre-1937) notes -- but I doubt that there is a constant or consistent conversion to collecting the older (more expensive) notes.

While there is a more inherent risk in obtaining what one thinks is the latest rarity -- I believe a lot of collectors are willing to take that risk. After all, our sense of what is happening in the hobby (take R_P or Hudson's research on serial numbered trends) provides a sort of confidence amongst the collecting community.

I believe there is another factor you haven't taken into account here.  I believe many colllectors prefer a very rare note that is at odds with the millions upon millions of notes produced.  That's why those 1954 asterisks (or the G/R tests) or the R/S $5 test are so popular.  A series can be popular for many reasons...and if its popular and there is a very rare note within that popular series-- then it becomes all the more sought after.  In contrast-- the traditional field you're favouring-- well one is just plain lucky to get any type of note (any prefix - in a higher grade).  There is less opportunity to specialize amongst many of the older notes although low numbers, the odd radar do exist.

I don't get this logic    How can something become more rare over time -- unless (heaven forbid) there was damage to a particular collection?

Supply and demand. A note can keep the same count but grow much scarcer

Supply and demand. A note can keep the same count but grow much scarcer

Super Radars are a good example...

The same number probably survives known (if you find a new one then you are the luckiest person on earth.....)

But, as demand grown, well, the scarcity does too - relative scarcity.  2 people going for 2 notes, is different than 10 people going for the same two notes.... relatively, the "two notes" become scarcer - especially if only a dump truck full of Gold will pry the notes off the owners hands.