What's It Worth? The Law Of Supply And Demand
Supply and demand is a time-tested theory that determines the price of commodities and precious metals. However, when it comes to valuation, this rule is even more significant.
The antiques and collectibles market has always been skittish. We often see examples of a painting or a fountain pen or a certain scarce-date silver dollar that has recently sold for a finite amount, and suddenly a cache of the same item comes into the market and completely ruins the value. Several years ago, this was the case when a Nevada coin dealer found several bags of uncirculated CC silver dollars. The market plummeted for over three years until the silver dollars could be assimilated into the hands of collectors.
Today, I thought I’d write about two examples of this where we were closely involved.
About six years ago, a woman brought in 18,000 Indian pennies. It took my staff and me
three days to accurately sift through them to find the rarest ones for the customer. Ultimately, we found one for the client worth more than $800, and several others worth over $100 each. For the remaining nearly 18,000 coins, we called one of the big operations that package such things and resell them in magazine and TV ads. They had a “buy price” of $1 each and had been advertising to pay that amount for over eight years in the trade. However, after buying our 18,000 coins, the buy price was immediately lowered to 50¢ each – where it remains today.
Another market that we ruined, a number of years ago, is the autograph market on George Gershwin. We had been fortunate to have many autographs from his brother, Ira, that routinely wholesaled for $20-$50. Ira lived a long life, passing away at 86,
so there were plenty of his autographs available. One day, a woman came in with a George Gershwin autograph in perfect condition. We quickly offered her $1,000. We knew we could sell it for $1,200-$1,500 because they were so rare – since he only lived to the age of 38. She was thrilled to sell this signed bank check, and we were thrilled to have it.
However, the next day, she came back with 45 more, and asked for $1,000 each. It turns out that her grandmother had lived next door to George, and
had found cancelled checks in his trash – and had the foresight (or criminality) to ‘rescue’ them. We knew there would be repercussions on the wholesale market, so we negotiated for $750 each. The effects on the market were immediate. We only made money on five of them, because there weren’t that many collectors. It took six years to sell them all; we finally sold the last 12 for $500 each.
Today, you still see them sold on the internet for $700 - $1,000. Sometimes it’s true that the longer you hang on to something the more valuable it gets – but often it’s quite the opposite, when the old law of supply and demand comes into play.
We are always buying rare autographs and coins, and are one of the top buyers in the U.S.
Stop in or call 727.896.0622 for an appointment.
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Hess Fine Art - Fine Art, Auction, Watch and Antique Experts Since 1984