A set of four R5 coins minted in the year 2000 was listed on bidorbuy auction at the starting price tag of over half a million Rands. The jury is still out on whether the offer is a serious one, or merely a promotional ploy
South Africa’s biggest auction site and online marketplace bidorbuy is used to having valuable coins listed on its site. In August this year, a set of thirty South African coins dating from between 1892 and 1900 was sold for R325,000. A month earlier, another set of eleven 1892 ZAR coins went for 170,000. And in July last year a single rare 1892 ZAR coin reached the price of R210,000.
Currently, the valuable coins offerings on bidorbuy include a R120,000 Kruger Half Pond from 1896 and a R125,000 “Burgers Pond Coarse Beard” from 1874.
Although bidorbuy is therefore no stranger to high-value coin transactions, the October 2008 listing that asks R540,000 for four coins minted as recently as the year 2000 was bound to raise some eyebrows.
The listing specifies that there are only twenty of these coins, referred to as “the historic R5 set”. It also claims that the particular rare set on offer is numbered ten of the twenty. The seller justifies the high starting auction price by claiming that the set has achieved the astonishing growth performance. However, it can be argued that the asking price is founded more on future expectations than on past performance.
The seller also admits that the listing on bidorbuy.co.za is at least partially purely promotional. “Not many people know about this set and those that do never get a chance to see it. Only twenty where made and I am sure they are all locked away in safekeeping as heirlooms. I have taken it upon myself to introduce it every now and then on bidorbuy, to give the public the chance to view it”.
Some coin dealers would strongly disagree with such promotional methods. In their opinion, it is not fair to list coins at unrealistic prices in order to create stir. “Listing items at inflated prices only confuses people and sends the market into a turmoil”, one of them says.
The seller is adamant that the appreciation of the value of the set, backed up by the jump of the catalogue pricing, justifies the high figure in the bidorbuy listing.
“The 2006 Hern catalogue placed the value of the set at R5000. Only two years later the guideline price rose to R70,000. And we all know that catalogue prices are already outdated upon their release. Last year a set like this was reputed to have sold for R210,000. I have personally received offers of R180,000 and R210,000 even before the 2008 catalogue was released. In my opinion, one day in the future this set will sell for a million rand. However in this point in time, I believe the price I have set can be fair to a prestige buyer.”
All four R5 coins in question were struck in the year 2000. One sports the old Coat of Arms. Another has the old Coat of Arms and a “CW” mintmark. Yet another has the new Coat of Arms. And there is also one with the face of the former President Nelson Mandela. “The fact that a Mandela proof coin is part of the set is especially exciting. We all know the special touch he adds to value of items”, says the seller.
Value of rare coins - and especially the future expectations of that value – is, of course, a slippery ground. Catalogue values are only a guideline. The price at which the goods actually exchange hands is a matter of negotiations: the point at which a seller is willing to sell, and a buyer to buy. Past experience has shown that rare coins can be as good as, or better than some other investment opportunities. However, even past experience does not necessarily justify the future expectations. Some people who invested into rare coins have been disappointed. Others have been extremely pleased. That is why a reputable coin dealer will always say to an anxious prospective buyer who is seeking assurance that a particular coin purchase is a good investment: “I sell coins, not investments. For investment advice, you should go to your financial adviser”.