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The recent discussion of variety valuation got me thinking that each of us likely uses a different algorithm for valuing varieties for sale or purchase. I'd be very interested to hear how my fellow specialist collectors (SCs) do this, as I am sure my methods are both different and potentially either more or less "accurate" than those of other SCs.
My belief is there is a fairly fixed valuation for a variety that depends on a number of relatively objective "baseline" factors. Then on top of this there is a set of both objective and subjective "market" factors that either increase or decrease the baseline. My further belief is this baseline value is what should be published in the valuation guides, and that this gives a starting point for setting a final selling price when the additional factors are considered.
Of course the concept of "worth" is a variable as well, since we are a widely-ranging group of folks with an even wider range of "individual" factors that come into play when deciding how much to pay for a coin, or even to want it at all. So up-front I'd like to define the target of this valuation discussion. Let's say that the baseline value published in the price guide, and in consideration of the market factors, is such that when a coin is offered for that price, it will be of interest to 10% of SCs, and that at least 3 SCs would bid on the coin. If you have a different suggestion for the valuation target, please speak up.
Considering all this, I would make the following definitions:
price = (baseline value) x (market factors)
worth = price x (individual factors)
where the baseline value is based on mostly objective factors related to the coin itself, the additional factors are a combination of objective and subjective factors related to the market, and the individual factors are mostly subjective factors that determine how interested a given buyer is in purchasing the coin at the offered price.
To explore this, I'd like to know how the 1956-D RPM#1 shown below should be priced. What should its baseline value be? What factors do you consider when setting the baseline? What additional factors do you consider that would skew the baseline based on the current market conditions?
I believe the discussion of individual factors should be left out of this study, since they are personal as well as extremely variable. This is the reason I set the target audience of 10% interested, and at least 3 ready bidders. For this discussion, please put your own individual factors aside and focus on the baseline and market factors only.
By the way, at the end of this discussion I will put this coin up for sale at the price we will hopefully agree on.
My belief is there is a fairly fixed valuation for a variety that depends on a number of relatively objective "baseline" factors. Then on top of this there is a set of both objective and subjective "market" factors that either increase or decrease the baseline. My further belief is this baseline value is what should be published in the valuation guides, and that this gives a starting point for setting a final selling price when the additional factors are considered.
Of course the concept of "worth" is a variable as well, since we are a widely-ranging group of folks with an even wider range of "individual" factors that come into play when deciding how much to pay for a coin, or even to want it at all. So up-front I'd like to define the target of this valuation discussion. Let's say that the baseline value published in the price guide, and in consideration of the market factors, is such that when a coin is offered for that price, it will be of interest to 10% of SCs, and that at least 3 SCs would bid on the coin. If you have a different suggestion for the valuation target, please speak up.
Considering all this, I would make the following definitions:
price = (baseline value) x (market factors)
worth = price x (individual factors)
where the baseline value is based on mostly objective factors related to the coin itself, the additional factors are a combination of objective and subjective factors related to the market, and the individual factors are mostly subjective factors that determine how interested a given buyer is in purchasing the coin at the offered price.
To explore this, I'd like to know how the 1956-D RPM#1 shown below should be priced. What should its baseline value be? What factors do you consider when setting the baseline? What additional factors do you consider that would skew the baseline based on the current market conditions?
I believe the discussion of individual factors should be left out of this study, since they are personal as well as extremely variable. This is the reason I set the target audience of 10% interested, and at least 3 ready bidders. For this discussion, please put your own individual factors aside and focus on the baseline and market factors only.
By the way, at the end of this discussion I will put this coin up for sale at the price we will hopefully agree on.
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