April 16, 2017

"Market Basket" price index, revisited




Back in February, I updated my "market basket" price index. That created some degree of interest, especially among European dealers who felt that things were different there. I concurred that it was possible, but I needed proof. To check whether our "feelings" were correct, I had to make two substantive changes to the chart and database.

The changes

First I thought it wise to increase the sample size from 43 varieties to 100. The basic idea was to start with certificates in the year 2000 that were mid-range collectibles, ranging in price from roughly $60 to $400. The selection includes a handful of popular autographed items.

Currently, the price index includes 4,377 definite prices of certificates that tend to appear for sale anywhere from three times per year. Scarcer inclusions may appear for sale only once every three or four years. In other words, none are particularly common nor overly scarce. They are all acquirable.

Of of the current 4,377 prices in the database for the 100-item Market Basket, there are a few valid, but decidedly abnormal prices. One item sold for as low as $2 in a multi-item lot and one sold for as much as $2,238 for no observable reason. The number of prices that go into the price index is always increasing because of new sales and the adding of sales from old auctions. There are a sufficient number of typical prices that oddball prices have no noticeable effect on the overall Index.

(A special thanks(!) goes to Mario Boone who is helping me acquire prices from his oldest sales and those of his father Erik before him. Can anyone help with sales results from old FHW, Gutowski, Tschöpe and other European sales?)

Secondly, I added a way to separate price origins by continent. That was a feature I had never seriously considered before. One of my original problems, and one that still plagues the project is that my records of European sales are thin prior to about 2003. While I have many prices from that period, I still have an insufficient number to calculate five-sample moving averages for all 100 certificates in the index.

The upshot?

Even a quick glance at the chart shows that there is a strong, obvious and definite difference in the price behavior of North American certificates in Europe. While certificate prices are currently twice as high in Europe, there are measurably more sales in the U.S. Consequently, the overall value of the Market Basket has been dropping, all the while prices in Europe were increasing.

Why are American prices so distressed. In my opinion, eBay!

While eBay sales are lower than any established dealer would like, they are nonetheless valid and genuine sales. Additionally, eBay prices are so low that they have dragged down prices in ordinary live auction house sales. The number of Market Basket certificates that sold on eBay before to 2005 were insignificant. However, more and more have been appearing there since that time. Because they are scarcer than typical eBay certificates, they tend to sell quickly. However, because advanced collectors do not necessarily look at eBay frequently, they tend to sell at prices below those found in live auctions. Because of the ever-increasing number of mid-rarity items that appear for sale on eBay, eBay prices now make up 25% of the total prices calculated.

I don't like that percentage anymore than mainline dealers and auction houses. I am sure professional dealers are selling at prices above eBay all the time. Sadly, dealers do not share their sales histories, so I have no valid proof of that belief. That means I must use whatever prices are available. With the exception of Archives International auctions, publicly-available U.S. sales results, discovering non-eBay prices is getting harder and harder. Yes, I can find hundreds, or even thousands, of certificate offerings on websites; I cannot possibly learn how many actually sell at stated prices.

It is interesting to note that very few U.S. certificates in this Market Basket have appeared for sale on eBay(DE) or eBay(UK). When they have appeared, however, they have always sold at prices drastically lower than even eBay(US) prices. European dealers have told me that their customers "are not buying on eBay." It certainly appears that is true for North American certificates! Is that because advanced collectors don't participate on eBay? Or is because European sellers don't offer many medium- to highly-desirable North American certificates on eBay?

One final point

Note that U.S. sales showed a slight uptick during the last half of 2016, while European prices dipped. As I have pointed out several times before, my index is based on a moving average of five sales immediately before each six-month calculation on June 30 and December 31. That means that the graph of the Index lags actual price changes by six to possibly twenty-four months.

I cannot possibly suggest that either of these latest dips or upticks are the beginning of longer-term changes. Nonetheless, we should probably keep an eye on them.

Well, maybe one more point

Another point that bears consideration is that the chart clearly suggests that desirable North American certificates fetch better prices in Europe. Currently twice as much.

The "race to the bottom" brought on by ultra-low eBay prices is not doing certificate collectors any favors. If things don't change, North American collectors will wake up some morning and wonder where the good certificates have gone. "Uhhh...Europe!" So, how are they going to collect such items? "Duhhh...Pay the price!"

March 16, 2017

Boone Auction 58, April 1, 2017


As usual, Mario Boone (Booneshares.com) has come up with another great selection of certificates for his upcoming auction 58 in a couple weeks. Mario deals in certificates from around the globe, so his selection is always wide-ranging. Regardless of your specialty, you will always find something of interest.

I want to stress to my American collectors that Mario grew up surrounded by global certificates. That long experience allows him to buy and sell things that most of us will only see in photographs. That experience also means that he is exceedingly competent in shipping items everywhere on the planet. I say this to suggest that you should feel comfortable in dealing with Mario even if you have never bid in European auctions.

Having said that, I need to point out that prices in European live auctions are different than those encountered in the U.S. There are a couple key reasons.

First, Price history strongly suggests that, on average, European collectors are less enamored with vignettes on certificates than American collectors. On the other hand, they tend to pay substantially more for rarity. Second, collectors will learn that the selection of North American railroad certificates available in Europe is different. That means that some certificates are much more common in Europe than here – and vice versa!

These two significant differences routinely compound to offer opportunities to acquire certain rarities that are underpriced by American standards. Those are the items I want American collectors to consider in this and other European sales.

Let me give a couple hints.

My readers interested in railroads will find forty-two certificates from North America in Auction 58. (3 each from Canada and Cuba, 1 each from Honduras, Puerto Rico and Mexico, 33 from the U.S.) And yes, your will quickly see a few from that number that are relatively common in the U.S.

At the same time, you should be able to spot some terrific rarities. One of those is an 1870 aid bond issued by Barbour County, Alabama to purchase stock in the Vicksburg & Brunswick Railroad. Minimum bid: €200. I'm sorry, you cannot currently find this certificate listed in my database; this is the first time I have ever encountered it.

On the same page in the catalog are two bonds from the Maxwell Land Grant & Railway Company. I have recorded prices for such bonds that range from a high of $3,750 in 2003  to a low of $1,225 in 2005 (on eBay). The last price I saw was $2,000 in 2015. Mario's starting bid for each bond is only €300 (about $318.)

Now for the kicker!

Both were signed on the back by Thomas Scott as trustee. Additionally, both were also signed on the front by William Jackson Palmer as president. For people unaware of Palmer, I'll merely mention that if sold in the State of Colorado, his autograph would probably fetch a couple hundred dollars as an ordinary 'cut signature.'

Maxwell Land Grant bonds are scarce; lots 1254 and 1255 represent two of eight bonds that I have recorded since 1999. However, they are downright common compared to lot 1266. That happens to be stock certificate from the Wharton Railroad Switch Company. In thirty years, this remains the only example I have ever seen. Start price? €80.

While you're at it, why not take a look at lot 1272, another item with a minimum starting bid of €80. It is a stock certificate from the Wilkes-Barre & Wyoming Valley Traction Company and is also the only example known to me!

Yes, I know that not everyone is impressed with potential one-of-a-kind items. I get it. And I am certainly NOT saying those two lots are genuinely unique. It is always possible others might appear at some time. But they are definitely worth a look,

While you're at it, why not take a peek at an item that is three times as common. (i.e., three examples known.). Lot 1202 is an 1854 certificate from the Honduras Interoceanic Railway and possibly the oldest stock certificate from Honduras. Mario tells a good story of the company and how it ultimately gave Honduras one of the the highest per capita debts in the world. This is an historic piece with a start price of €700.

I always recommend acquiring a physical catalog (170 pages, full color.) However, since time is a little tight for the start of the auction on April 1, you can see and bid on all items at Booneshares.com.
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February 04, 2017

"Market Basket" price index updated to the end of 2016.



About every six months, I update my price index to show how railroad-related collectible scripophily prices have been doing. As you can see from this chart, prices continue to decline – AT LEAST FOR THE 43 CERTIFICATE VARIETIES THAT MAKE UP THIS INDEX.

The index, on December 31, 2016 was $3,386, down from the high of $6,913 at the end of 2003. While not particularly stunning news, I can say that prices are currently up about 1.3% since the first of the year.

Please read more at the page on the Coxrail.com website titled, Railroad Certificate Price Index.

January 10, 2017

Numismatic Collector's Series Sale 329 approaching


The latest Spink auction to feature North American railroad stocks and bonds is coming up January 17 and 18. The sale will take place at Spink's New York offices as well as online.

I count thirty rail-related lots, 27 of which are multi-item lots.

It appears that this auction should appeal strongly to small and medium-sized dealers. Because dealers always need to bid with their eyes on profiting through resale, collectors who like buying multiples should have a field day. I know I am being selfish, but I would love to see all these lots sold so buyers can send me images of some of the scarcer certificates I see sprinkled throughout the lots. (Okay, I admit that was a shameless plug for images for my online catalog.)

Standouts among the singles and smaller lots are three lots that feature certificates autographed by Otto Mears and Jay Gould. The descriptions of the items included in two of those lots are a little unclear, so I recommend calling Spink for confirmation before bidding. Consider this a great opportunity. Anytime there are questions about auction contents, lots tend to sell for less. (Bad for sellers; good for the buyers!)

Another lot features two variations (a proof and a specimen) of a rare Nevada Central Railway bond. I am reasonably sure that the both certificates are unique. Even in this market, I will go out on a limb and suggest Spink's sale estimate is a bit on the low side.

As mentioned above, multi-item lots make up most of the sale. Only two lots include large numbers of duplicates – 500 Illinois Central certificates in one lot and 50 1963-vintage Pennsylvania Railroad certificates in another. All the remaining 25 lots are enticing, well-mixed selections, including large numbers of both issued and unissued certificates. All those lots appear ideal for resale inventory or for bolstering collections at affordable prices.

To purchase a physical 142-page color catalog ($20), email Spink at catalogues@Spink.com. You can normally download a PDF copy of the catalog, but the link is currently broken. (I have sent Spink a message to that effect, so it should be repaired by the time most of you read this.) You can always view the catalog online at Spink.com (Rail-related stock and bond lots start at lot 998.) There you will find info on how to bid remotely.


October 18, 2016

Auction 57 from Mario Boone, October 28-30


Another wonderful auction catalog arrived last week from Belgian dealer and auctioneer, Mario Boone (The Scripophily Center). This is now the 57th sale from Mario and his father, Eric, before him. Sale 57 features 1,490 lots of individual stocks and bonds from around the world, all in color and all viewable online. Included this time are 29 lots from the U.S. railroad companies plus seven more from Cuba (4), Honduras (1) and Mexico (3). In a time when the U.S. market is inundated with dreadfully common material and remainders, it is refreshing to get glimpses of items that are truly rare and seldom seen offered for sale.

Accepting that my readers and I will naturally find different things that interest us, humor me as I describe some of my favorites. (And yes, there are many North American certificates representing companies other that railroads. As much as I may like them, they are not my purpose here.)

My first item of interest is a 1918 Cuban 1000 peso bond from Compañia Ferrocarril del Noroeste. Offered as lot #1439, this bond is only the fourth to come to my attention since I started this project. Its start price is only €100.

Another item that should interest Carribbean specialists is a 1920 preferred bearer stock certificate from the Cuba North & South Railroad (Compañía Ferrocarrilera del Norte y Sur de Cuba.) Like the previous certificate, this is only the fourth time I have encountered this type of certificate from this rare company. Mario is offering this lot (#1444) with a €200 minimum. Please be aware that he sold a similar certificate for $400 (~$363) in March, 2005.

Mexican scripophily enthusiasts should enjoy an 1857 5% bearer bond from the Vera Cruz & Mexico Rail Road (Camino de Fierro de Veracruz a México). This is one of five certificates I've recorded, three of which (including this one) sold on eBay in 2007 in the range of $250. Considering that eBay is a wholesale to sub-wholesale marketplace, Mario's €500 start price for lot #1460 seems reasonable.

Hands down, the rarest of the North America certificates offered in this sale is a bond (pictured at left) issued by the State of Pennsylvania, issued to aid the building of a "Pennsylvania Rail Road." This is a 5% $1000 bond issued in 1829 and is now the earliest rail-related security I have encountered from the United States. See lot #1493. Start price €2,000 (~$2,200 plus commission.) Be aware that the railroad mentioned in the bond was actually the Allegheny Portage Railroad and not THE Pennsylvania Railroad, which was not formed until 1846. The Allegheny Portage Railroad (1834-1856) was a state-funded, 36-mile long adjunct to the Pennsylvania Canal system. It consisted of a series of ten inclined planes (five on each side) that hauled wheeled barges over the Allegheny Mountains between Hollidaysburg and Johnstown.

Lots #1517 and #1518 are £100 bonds issued by the Maxwell Land Grant & Railway in 1870. These two desirable lots now represent the 6th and 7th such items I've seen offered for sale. I have recorded sale prices between $1,225 and $3,750, so Boone's €500 (~$550) start prices seem reasonable, if not low. Never mind that both items carry signatures of William Palmer (president) and Thomas Scott (trustee.)

The item that I think will be most desirable to the majority of collectors is a custom-vignetted stock from the Enos Electric Railway Supply Company, dated 1886. The company was incorporated in Maine, but built its monorail in New Jersey. The vignette shows a monorail and car 20-plus feet above a city street with horses and carriages. I consider this particular certificate a "can't miss" item. See lot #1536. Start price: €200.

Another keeper is lot #1543, offering an 1894 capital stock certificate from the Atlantic & Western Railroad Company (of Florida.) Unissued remainders from this company can be acquired on eBay, occasionally for as little at $20. However, when issued and signed by its president, Henry Morrison Flagler, these certificates tends to sell for about $2,000. The highest price I have seen was $3,536, realized from a 2006 FHW sale in Germany. Boone's start price is €1,400 (~$1,540).

Sale 57 will take place Saturday and Sunday, October 29 and 30, in Belgium, with a special one-hour session offering 99 multi-item lots on Friday evening, October 28. You may bid online and you may view all the lots online at www.Booneshares.com. Please contact Mario Boone or his staff for a printed copy of this beautiful catalog at (0)9.386.90.91 or mario.boone@skynet.be.

September 29, 2016

Spink Auction in October


"When it rains, it pours." That is an old, old American idiom that means when things happen, for good or for ill, they tend to happen all at once. Well, I wish I could shout, "It's raining, friends!" but I can't. It's barely a sprinkle, but at least there is another auction of stocks and bonds coming from Spink in mid-October in New York. Don't blink. The sale will pass very quickly.

This particular sale is one of the continuing series of Spink's "Numismatic Collector's Series" sales that offers a little bit of everything, from coins to currency to documents to rare, rare, rare financial books. Truth be told, coins take up over 60% of the sale of 1,453 lots. Of the remainder, Spink is offering 83 lots of scripophily. Sadly, only six (!) lots involve American railroads.

But let's talk about those six lots.

Four of the lots are somewhat forgettable. They are certainly worth acquiring if you don't have them, but nothing to cry about if you miss them.

On the other hand...

Lot 1411 is a stock certificate from the Colorado Monorail Company. It is a generic certificate, but quite atypical. In underprint is a line drawing of the company's support structure with a single guide rail that the car rode on. And then, in the bottom left corner where the company seal normally goes, is a photo of the monorail system and car. This particular certificate is from the collection of John Herzog, previous owner of R. M. Smythe. This certificate is one of only three known to me, all of which were sold by Smythe back in 1998. Spink is estimating this issued and uncancelled item will sell for $100 to $150. I would expect a much larger bid IF this sale offered scripo items. Because the sale is so lean in that department, someone is going to walk away with a terrific buy.

Now the star of the meager offering is actually a more serious rarity. I have only encountered one other such certificate and it sold on eBay in June for a whopping $20. (That's another story. I wish I had been the winner.)

The certificate is from the Chartiers Railway Company dated 1885 and issued for 120 shares, You can find it listed in my online catalog as CHA-613-S-45.

What makes this certificate special is not its rarity, per se, but that it was issued to and signed by Henry Clay Frick. You can look up Frick's biography, but suffice it to say that he was the hardcore anti-union chairman of Carnegie Steel Company in a time when unions were just coming into their own. He was so hated for his policies that he was was the subject of a failed assassination attempt in 1892. (Which included, by the way, two gunshots and multiple stabbings!)

Frick's notoriety, magnified by his close association with Carnegie, makes his autograph highly collectible. In fact, back in 2000, another certificate signed by Frick from the same company sold for $4,250 in a Scott Winslow auction. Spink is estimating this item (Lot 1409) will sell in the range of $1,000 to $1,500 and I agree, .

If you have bid in any of Spink's sales, you probably have already received this catalog. If not, contact Spink at https://www.spink.com. Or call 212-262-8400. Or download the catalog in PDF form. Or simply bid online.

September 26, 2016

HWPH auctions in October


At the end of last week, I received catalogs for two upcoming sales by HWPH (Historisches Wertpapierhous AG). As usual, there is a healthy offering of railroad certificates from North American railroads. 92 lots to be exact plus a couple more multi-item lots.

In the last couple years, the supply of scarce and rare certificates has dried to a trickle as sellers seem anxious to hold back their better material, apparently waiting for prices to improve. I, for one, am sick of seeing unissued certificates sold day after day, with many being promoted as "rare." Come on!

So, I truly enjoy a breath of fresh air when Herr Matthias Schmitt sends new catalogs. And this time is really different. There are numerous lots offered with ONE EURO starting prices! Yes, friends, you heard it here. German auctions with €1 starting prices. Unheard of!

Now I am not going to yell and scream that there are a ton of new certificates here, because there aren't. However, warm up your charge cards for bidding on a entirely new certificate from a previously unknown (to me) company named the Los Angeles, San Diego & Yuma Railway Company. This is a two-color (green and red) stock certificate issued from San Diego and dated 1890. The starting price on this item is €400 and I expect it to go at least 50% higher.

Representing another new company is stock certificate #30 from the Syracuse & Eastern Railroad. This certificate was written for 2,955 shares of the 3,000 authorized.

Another nice item is an 1839 stock certificate from the Williams Valley Rail Road & Mining Company, one of only five known to me.

Although I doubt the winning bid will originate in the U.S., an item likely to draw attention in Europe is a stock certificate from the Burlington & Missouri River Railroad Co. in Nebraska. That certificate was issued to and signed by Horatio Hathaway and items signed by him are almost unknown in the U.S. Hathaway was the namesake of Hathaway Manufacturing Company. Although Hathaway died in 1895, successive managers of the company ultimately merged with Berkshire Fine Spinning Associates in 1955 and created Berkshire Hathaway, a company now managed by Warren Buffet.

There is a substantial collection of less exotic items, many of which will be familiar to advanced collectors. Most of you know I am drawn to the more obscure. Consequently, some of the items that caught my eye are certificates from the California-Western Railroad & Navigation Co, the Chicago Iowa & Dakota Railway Co, the City & Suburban Railway Co (Memphis, the only issued example known to me) and the Galveston Houston & Henderson Railroad Co.

Thankfully, there are many more that are sure to attract your attention. Especially those with one Euro start prices.

The sales will take place on October 15 and October 17 in Wiesbaden. See the catalog online at http://www.hwph.de/historische-wertpapiere/auktionen.html. To receive your own physical copy, please contact auktion@hwph.de.