Specialized Knowledge Beats General Knowledge Every Time

I had a client ask me earlier today "You must meet a lot of cranks in your business - how many people have the wrong idea about the rarity of the coins they have?"

His question reminded me of observations I see regularly - most of us make many of life's decisions based on impressions, assumptions and inferences rather than cold and hard facts. I shudder to consider the quicksand my own life has probably been built on!

When answering about the general population and coin values, I figured that 27 out of 30 people contacted us after seeing something online about a coin or note they have. 

77% Isn't 90%, But It Is Still A Majority

The reality is my estimated ratio was a little harsh - our CRM shows that of the 780 questions we've received via our website over the past year from people looking to sell something, "only" 77% of them were from people who were acting based on what is effectively misinformation - I know this because I track it as part of our records. 77% isn't 90%, but it is still a majority.

This number confirmed my hunch that most people only ever contact us because they've seen something on the internet. They're not sure if what they've seen is true, so they decide to get the lowdown from someone who knows what they're talking about. They'll often ring us, contact us via our website or visit our office because they "know" their coin is rare and valuable.

The American author Napoleon Hill might have described this as people with general knowledge seeking out specialized knowledge.

Hill defines general knowledge as any level of understanding that is "available to the masses through common or low-cost means". The Cambridge Dictionary defines general knowledge as being "information accumulated over time through various media and sources."

When it comes to general knowledge about coins, most people are aware that collectors are prepared to pay for rare coins they want to add to their collection, that there is a market for collectors to buy and sell valuable coins, and that sometimes non-collectors can get lucky and find a coin that's worth a fortune.

Non-collectors can also regard unfiltered "facts" on Google as general knowledge; same with a grab from an exciting video on Youtube or a listing on eBay - information like this can grab someone's eye and send them down a rabbit hole of research and investigating.

For the sake of our discussion here, let's rename general knowledge as "stuff I know because I saw it on the internet."

Stuff I Know Because I Saw It On The Internet

Hill went on to define specialized knowledge as knowledge that is directly applicable to a specific field or profession. Hill asserted that specialized knowledge can only be obtained with extensive training, often only through experience and mentorship.

For the sake of our discussion here, let's refer to specialized knowledge as "insider information from someone who's seen it all and has a lot of experience in their field."

The process I see most people go through when researching the value of their coins is that they don't always treat the information they get from someone with specialized knowledge any differently from the information they get from any other source! 

I see people all the time start off believing numbers they see on Google and eBay, then they ring a few dealers like ourselves. In some ways, it doesn't make sense that someone would credit a story in the Daily Mail or on TikTok with greater authority than an assertion from someone who is an expert in their field, in other ways, I'm not surprised.

They see a story online with their own two eyes so have no reason to disbelieve it, and presume that any dealer buying and selling for a living only makes money by handing out self-serving information. They might accept an opinion different to what they've seen online as possibly being correct, but will only accept it as verified after having it confirmed a few times.

So they might stalk and maybe post on a few Facebook groups, and then go back to trawling the internet. Finally, if they're dedicated they visit a coin show and if they aren't clear by then I expect they give up.

Now none of this is a hanging crime - while the decisions I make about numismatic trades are informed by decades of experience, some of the choices I've made when it comes to my health and diet as an example are without doubt grounded in just as much conjecture. (Carnivore diet, mouth tape and ice baths anyone?)

I'm constantly at work on a script I can trot out when I meet people who are in the early stages of their numismatic journey. I believe my role as a dealer is to help people understand that while it's reasonable for us to start off reasoning using assumptions we make on the sparse information we've unearthed online if we want to be making correct decisions when it comes to money, we need to do so based on accurate information that people with real-world expertise will accept.

There Are Better Things To Do In Life Than Pursue a Hare-Brained Idea

If there are better things to do in life than spending days or even hours pursuing a hare-brained idea, how are we supposed to avoid wasting our precious time on this earth indulging ourselves in baseless fantasies?

I have no idea how to do that when it comes to diet or health, but here are a few suggestions I'd make when it comes to coming to terms with the market for rare coins:

The information we see on the internet is just the first layer of knowledge about the coin market, and we need to go further than that if we want to deal with reality effectively.

Advertised prices on eBay are just that - an indication of what one particular person wants for their coin or note. Sometimes it's not even that, their ask price might simply be the number they think they need to put out there to haggle back to the number they want.

Videos on YouTube or TikTok about your coin that "Could Be Worth Up To $20,000" are not intended to be anything more than initiatives to generate excitement. Some coins obviously can be worth many tens of thousands of dollars, but most of them are not! There's nothing better to cool excitement than boring facts, so don't expect to get any meaningful details from a 30-second video clip.

Treat Most Information You See Online Like You're Playing Chinese Whispers

Online price guides and social media posts about rare coins or notes are mostly posted by people sincere about sharing stories they think others will find interesting. It is incredibly hard to track market values for a large number of coins or notes in a range of quality designations, so most of that information is prepared quickly rather than thoroughly.

The mainstream media (radio stations; TV stations and the main news websites) base most of their stories about valuable coins on social media posts they see trending earlier in the day. Trending news posts need to be posted quickly, so fact-checking is overlooked in the haste to be first to "print".

So rather than immediately booking tickets to the Bahamas based on something you've seen online about a coin in your pocket, here are a few ways to transition from general to specialized knowledge:

Check whether sold prices on eBay are in line with the advertised prices you've seen. Sometimes they are, most of the time they're much lower.

Fact-check any information presented in an attractive online video. Just because something could be valuable, it doesn't mean it's likely to be valuable. If a particular coin has a certain characteristic that makes it rare, find out how it differs from the others it looks very similar to.

Treat anything you see in an online news story in much the same way you might play a game of Chinese whispers - it might sound right, but most likely has been lost in translation.

After all, there are many better ways to spend one's spare time than going down a rabbit hole of online detective work.