Define Market Grading

Interesting point about comparing grading systems in different countries. It probably shows cultural differences as well as the different historical processes that collectors in different places. So they end up with different scales and preferences.

That makes it interesting to then consider that our homegrown TPGs have now expanded into international markets.

 

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As far as EAC grading (which is much more strict—and honest IMHO), the most current explanation can be found in chapter 2 of the recently published "Grading Guide to Early American Copper Coins" http://www.eacs.org/GradingGuide/GradingGuide.html. Pricing (as it relates to EAC grades) is also discussed. As far as EAC pricing, Noyes' 3rd edition of Penny Prices is your best bet.

 

IMHO, grading should be a constant and price the variable.

The professional grading services do a disservice to the community when they don't keep their standards consistent (look at the Queller 1804 silver dollar for an example of grade inflation).
I have no problem with prices increasing over time, but I do have problems when the same coin is judged by different standards depending on when it was submitted.

 

I don't think that a Class I 1804 Silver Dollar is a good example of gradeflation. These coins are not so much graded by standards as they are ranked against each other.

The sale price in 1993 was $475,000. But the prices realized in 2008 and 2013 were pretty consistent.

The Mickley-Hawn-Queller 1804 Silver Dollar
Class I Original, PR62 NGC 2008 $3,737,500

The Mickley-Hawn-Queller Class I Original 1804 Dollar, PR62 PCGS From the Greensboro Collection, Part IV 2013 $3,877,500

That said, I don't see the need to grade that coin PR62 rather than a circulated grade.

 

Bill Eckberg (current EAC president) has done a number of comparisons between TPG and EAC grades. I've also done a few sets of comparisons myself (but not published). While there may be a few occasions where the EAC grade if higher, I doubt you could count them on both hands.
What Bill and I have found is that—on average—TPG Adjectival (G, VG, F, VF, etc.) Grades are typically one adjectival grade higher than EAC grades.

That is, a TPG EF-40 will probably be graded as a VF-20 by EAC standards, a TPG F-12 will be a EAC VG-8, etc. Not all coins will show a 1 adjectival grade difference. Typically, the variation is about a half a grade on any given coin (1±½).

My main point is that standards should be just that: a standard that doesn't change over time. That way we can compare apples to apples, not apples to things that morph onto oranges. If we allow standards to change, we do a disservice to the community.

 

I will try for brevity in my post, as this software has deleted past copious/voluminous posts.

I trust you'll pardon my position as "Devils Advocate", which I enjoy.

I cited in the "Upcoming episode ...." thread, two examples of "disparity (market/value?) grading". One of those was a 1924-D Standing Liberty quarter assigned a grade of MS67 by one of the acknowledged premier grading firms.

I stated my experience with others in determining the relative value of the 1924-D coin. Dealers assigning a low grade as VG-F.

I expect that in the future since there aren't published concise objective standards, disagreement between "premier" TPG, and laymen are now determining the value, that eventually a jury of "laymen" will establish damages to clients of the numismatic "industry".

That 1924-D coin in published documents has a MS67 value of $3500. $130 in Fine condition.
If it was determined to be "Full Head", a stated value of $45000. If it was determined to be a + grade, as I believe it to be, an increased value of ~70%, to have an ~ value of $75000.

If a jury of "laymen" can be convinced by "comparable grading", of the elevated value, the real and punitive damages on this singular coin could be appreciable.

Are there appreciable damages effected by "Market/Value" grading practices?

I rest my case to a jury of believed peers.

 

I think he wants to know if mob rule dictates grade thus value. Either that or he's given us the formula for dark matter.

 

I apologize for confusion, as you normally understand the arguments.

"Damages" generally are the funds that a jury would award because of an improper action(s).

In this specific case, a jury would probably determine that the real damages due minimally are the $3500 published by the firm as a MS67 grade value. If comparable +, and Full Head grading conditions can be established on other same type coins graded by the TPG, the real damages established for that coin could be ~$75000 plus legal fees.

The punitive damages are subjectively established by a jury dependent upon numerous factors as number of, severity of violations, deviation from a realistic grade established by published standards, offer by firm to repurchase the coin, firm stated values for condition relative to fair market sales values, etc.. It wouldn't be unexpected to hear a relatively large figure dollar amount many times that of the real damages awarded.

I hope this explanation provides some clarity to a complex process of adjudication. It may seem unfair, but when documented identical coins have anonymously been submitted to TPG on numerous occasions without any reasonable grade consensus, the system is probably too subjective.

JMHO

 

But what if a newer grading system is an improvement??? Should we be stuck the older inferior system just to maintain standards or should we adapt so we can utilize the advantages of the newer one?

For example I really like the so called looser standards of the TPG's than the grading system that you adhear to. For MS coins I am sure over 98% of them, in your opinion would go in a 64 holder or lower. That it a lot of coins for the first 5 MS grade, leaving a whopping 6 more grades for the remaining 2%. What that does, is make a lot variability for say a 64 coin. If you use the upper grades more liberally, there are less 64 coins, leaving less variability within the grade. So, what in your opinion, was a REALLY nice 64, now goes in a 66 holder and everyone knows what we are talking about. Seems a bit better to me.

 

First of all, if we are discussing an art, standards can and will change over time. The more you learn, the more you perfect your art. A scientific approach can be adhered to.

Second, if you started with a standard 30 years ago and realized that with some coins you're almost never reaching the mid to high MS grades (MS69 and MS70 excluded), change is inevitable. The standard from the start was/is to utilize as much of the Sheldon Scale as possible. They haven't expanded into MS71, yet. Let us consider that a success. As they process millions of coins and keep stats, they gain a certain understanding of which coins were stored or transported a certain way, how they were generally struck as a whole mintage and the bast grades that came across their TPG desks to date.

If you keep an open mind and don't dwell on the first baby steps of the TPGs, you can easlily factor in the possibility of grades that used to cap at MS62 - MS63, evolving and being slabbed as MS64 - MS65. If and when perfection walks through the door at an given reputable TPG, they always have that MS68 - MS70 window to utilize.

Change is a constant. Art is imperfect. I see no need for such a strict approach to grading, unless one is willing to accept a scientific standard in grading and willing to move with the times.

How can anyone seriously criticize change or inconsistency when it comes to subjective opinions? Maybe you should factor in the employee eye care plan of each better TPG, when criticizing these standards, within a so called form of art. Your so called art is abstract, live with it, accept it...

edited - forum rules

 

Just as a point, I never said I like it because my 64's are now magically 66's and worth more. The market should take care of that and keep the prices aligned with demand. If 30 years ago there were only 100 coins of a certain type\year\MM graded 66, the market would have pushed that coins value up very high. Now if there are 400 of the same coin in a 66 holder, the market will price that coin accordingly. I really just don't like the idea of jamming 98% of the MS coins in the first 5 grades. I believe if you spread them out more, it gives a more accurate representation of what the coin really is.

Now sure, I certainly agree with you, that they should publish their standards and stick to them. That just seems logical to me.