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What’s at root of top coin prices?

If there were no such thing as the organized numismatic hobby, would coin prices be vastly lower than they are now?

I have been thinking about this question lately.

I am asked from time to time why it is a good idea to join the American Numismatic Association, a state numismatic organization, or a local coin club.

I have been asked why a guide book should be purchased, or a hobby paper read.

Education is the mission of the national organization and in one way or another most other non-profit or for-profit hobby institutions. We simply cannot exist without it. Sure there is a social aspect. We all like to know what others are doing and thinking. But if you think about it, copying others is one form of obtaining an numismatic education and the people it is most beneficial to copy are generally part of the hobby’s organizations.

Creating educated collectors and dealers is what gives most of us the confidence to do what we do: Acquire the coins that interest us.

The existence of this educated core has inspired others to write books and create products that both spreads this knowledge of numismatics and attracts others to it.

In this way the knowledgeable core is enlarged.

How would I have known as a kid that the 1909-S VDB was the key Lincoln cent without the educational infrastructure provided by Whitman and its coin albums and books?

It is awfully hard to put a price on something if you have never seen it before and there is no place to turn to find out the necessary information.

In the past, dealers found that the most effective selling method was to educate customers about coins. Their research let buyers know they could confidently pay more for this coin because it was rare in their experience and less for that coin because it was common.

But this research often was provided as a story that compels the reader or listener to want to own the object of it.

I think the most telling aspect of the impact on prices of hobby infrastructure has been the advent of registry sets recorded by the major third-party grading services.

Prices of the best coins gained remarkably as collectors vied with each other to put the best sets together.

Knowing what the best coins are is the basis of the activity and this could not have been possible without the grading service infrastructure.

So if you cannot think of any other reason why you should join something or buy something, consider that your very act of doing so keeps the chain of events in motion that allows all of us to continue collecting and buying coins with confidence. This will help keep up the value of your sets until the time you decide to sell.

It has been said that knowledge is power, but it also gives us the confidence to pay high(er) coin prices.

That all-important knowledge is at the center of organized numismatics. Be a proud part of it.

Buzz blogger Dave Harper is editor of the weekly newspaper “Numismatic News.”

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One Response to What’s at root of top coin prices?

  1. Tom Snyder says:

    People with no knowledge like to attend State auctions of abandoned safe deposit box contents. I attended a few myself just to see what transpires. There might be 3 to 6 floor bidders for a coin you could buy at any shop for $10. Each bidder there believes he is stealing the knowledge of the previous bidder and throws in the next bid. It’s amazing to see the uneducated driving the price up to $50 – $60 for the offered item. I think this is similar to what goes on with the TV home shopping sales. The “treasure” goes home until it becomes boring, then is offered to a coin dealer who reveals the truth and becomes the lambasted messenger. This is the peril of being more interested in flipping than actually becoming educated.

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