Certified population numbers, the crackout game, and hitting the jackpot

Just to quickly introduce myself, I recently got back into coin collecting after about a 10 year absence due to school/training. I started out as a type collector, but have recently started focusing on half dollars (especially through 1915). I've been lurking here for a few months now, but never really had anything to contribute.

Anyway, I thought this might be an interesting discussion topic. Whenever I find a coin that I like (especially with MS coins), I look at the PCGS Coinfacts pictures and I look through the PCGS auction archives to get a sense of what other coins in that year look like and what they sold for. One thing I've seen repeatedly when looking at seated halves (probably my favorite series), is that the same coins come up over and over again, but they are in different holders. Obviously, the result of a crackout. Sometimes the coin looks identical and sometimes it's been dipped. Usually (thankfully?), the coin is still graded the same, but there are some upgrades. (I haven't really looked carefully for downgrades, but maybe they are also out there?) The first time I noticed this was with my 1869 half dollar, which is graded PCGS/CAC MS64. It's picture is on the Coinfacts site, but it has a different cert. number and is shown as an example of a MS63. (I actually paid closer to an MS63 price for the coin, so my discovery didn't really irk me or anything).

Fast forward to today, when I was looking at Heritage's auction for next Tuesday. There is an 1876 PCGS MS65 (http://coins.ha.com/c/item.zx?saleNo=131235&lotNo=26741) that has the original look I like in seated halves, so I was looking through some auction archives and found that the exact coin had sold back in Heritage's April signature auction (http://coins.ha.com/c/item.zx?hdnJumpToLot=1&saleNo=1169 &lotNo=4473&x=0&y=0#Photo). Back then, the coin was graded NGC/CAC MS64 and sold for $1265 (w/ BP). The result of that one point upgrade (and switch in TPG?)? The current reserve with BP is over $3800, a potential $2500 appreciation in four months. Not too shabby!

I don't have any really earth-shattering revelations, but I think this story does illustrate a few things that are repeated over and over on these boards by experienced posters:

- As time goes on, the certified population numbers, especially for higher grades, are going to become more and more unreliable/meaningless. I've noticed this with seated halves (which are pretty easy to identify an individual coin), but I'm sure it's true for most series.

- When looking for a coin it's often advisable to try to find the "sweet spot" in the grading spectrum (especially if you're a beginner). In other words, buy at a grade before a huge price jump. For a lot of series, this jump happens after MS63/64.

- Buy the coin, not the slab. If you focus on eye-appealing, problem free coins, you'll be ahead of the pack (even if you don't plan on playing the crackout game).

- Looking through auction archives is highly encouraged. In addition to being a more reliable price guide than "real" price guides, you get to see what other coins are out there for that date.

 

Log in or Sign up to hide this ad.

Interesting slant on things and I must say I agree with your observations. Nice write up and welcome to the forum......

 

Thanks for the welcome. I could've also pointed out that the story potentially provides fodder for all of the hot topics on the board (grade inflation, CAC, PCGS vs NGC, the role of TPGs, etc), but I didn't necessarily want to kick the hornet's nest with my first post

 

Indeed there's potential for that.......

 

I've often thought about and wondered how inflated the numbers are getting from people playing the crackout game. The only way this could ever be solved is let the graders grade them but have computers scan the surfaces. Once the unique surface variations are recorded into the (future) database, the same coin could be submitted 100 times but it will only count as a single in the pop numbers.

I have no doubt something like this is in the works. It will be a new fee to collect on everything that's already been submitted. Everything will have to be re-submitted. The profit keeps rolling. It will solve a problem though.

 

The PCGS "Secure Plus" service does exactly this. Coins in holders with the little gold shield are "mapped", and new submissions are (to my understanding) compared to the database of mapped coins. The goal of this was to avoid resubmissions and double counting of coins in the populations -- but also to make it possible to detect coins that were stolen or doctored, etc. when they make it back to the world of plastic.

See this video: http://www.pcgs.com/Articles/Detail/6518

 

The latest issue of Coin World has an article by Bowers on some guy submitting a 1916-D Mercury dime 25 times. On the 25th try it came back MS-65.

 

He lost money on that deal.........


[edit] Or maybe not?

 

Ooooh. I've seen the shields, but I never knew what they meant. I should have known this but I guess I never looked into it. Cool!

 

At this recent ANA show in Philly, I was speaking with a highly respected author of many coin books about this very topic. The example we used was the 1995W ASE. He said that he would crack a 69 out in a heartbeat and keep on resubmitting it until he got a 70. He said he has done it up to six times before he was awarded that 70. A 69 sells between $2500-3200 and a 70 can sell upwards over $10,000. The reward is tremendous. With that kind of profit, one can keep on doing this and make tons of money.

 

This service is not free and the cost becomes prohibitive to a small time collector such as myself.

 

That was an excellent post and I think you will have plenty to contribute.

 

The only thing you have to fear though, is the good ol' pyramid scheme bubble bursting. One of these days someones gonna get left holding the bag. Won't be me 'cause I'm a collector.......

 

Yes every bubble has to burst in due time only question is whether it is going to be soft or hard landing...

 

Post deleted. Meant to edit and not repost.

 

So, here's another fun example. Here is the PCGS Coinfacts images for the 1854 Arrows Half Dollar: http://www.pcgscoinfacts.com/CoinImages.aspx?s=6279. Take a look at the 4th and 5th coins listed (cert#60192331 in MS64 and cert#21996311 in MS64). They are the same coin! It actually looks like they just used the exact same picture. Now, here is an example that just sold on David Lawrence: http://www.davidlawrence.com/inventory/viewitem.cfm/Inventory/360058. Another MS64 with a different cert#22124718. The DLRC pictures are always off, but if you compare the markings, it's the same coin again. It has never gotten that double your money bump to MS65 (no grade inflation on this coin....at least not yet), but it has gotten the all important CAC green bean (just kidding!).

I just checked on the PCGS website and the first two cert numbers are no longer valid, so, at least in this case, the pop number hasn't been artificially inflated. This example does illustrate how frequently some coins get resubmitted and I have to assume that not everyone is as diligent when reporting that they have had a coin regraded.

 

If you want to see a great example of a coin changing grade over time then check out the Lincoln commem on the PCGS CoinFacts site that had cert numbers 20784281, 25543886 and 25555850 where the coin graded MS64, MS66 and MS65.

 

See what happens when we greedy?

 

They first started doing that with their Expert system back in 1991 but dumped it after just a few months. Then they reintroduced it as their Secure plus program. There is one other thing that makes it a little less of a good thing, the coins only get scanned again if they are submitted again under Secure Plus. If they are just sent in as a regular submission they don't get recognized as a repeat of the same coin and the pop report continues to get further off.