Thread ATS about "rampant gradeflation"

Great points...I think this is why I can understand the TPGs sometimes doing market grading vs. technical grading.

Suppose everyone thinks like you and says: "I don't want any contact on high points, including the nose, even if luster and bag marks are worse."

Let's assume the TPGs say: "Tough luck, we're giving those coins a lower grade than low-bag marks/high-luster coins with some rub marks on the nose and other high points."

If that shows up in the marketplace, then you'll have MS-65s with low-rub/low bag and contact marks, but MS-64's with low bag/contact marks and high-rub areas...and the MS-64's could theoretically command a higher price (if enough people thought like you)!!!

So....the MS-64 sells for $2,000 and the MS-65 sells for $1,700 in the marketplace because most buyers agree with you and value the MS-64 more than the MS-65. This is the quandry that the TPGs would find themselves, in this extreme example: the higher-graded coin is LESS valued !!

That's not a likely scenario, but it IS what could be happening in this hypothetical, and to a smaller extent, with high-quality AU-58's vs. low-60's MS's.

 

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I don't understand your example at all. The only time I see lower graded coins selling for more than coins graded higher is when the assigned grade appears to be wrong or the coin has exceptional eye appeal. Perhaps you could find some photographs to illustrate your point.

 

I'm not saying that is what is happening exactly, I said based on JCP's example you could envision it happening if enough people thought and acted that way.

I said that JCP and others who valued NO RUB MARKS on high points would be willing to tolerate what TECHNICALLY is more damage in the form of bag marks, loss of luster, etc. If enough people thought that way you would have excess demand for the lower-rated MS-64 and it might out-price the MS-65.

Others have said that some AU-58 coins sometimes are higher-priced than MS-60's or MS-61's.

 

I don't think that is what he is saying; he is talking about a specific series of coins, Saints, which all suffer some measure of high point rub. He has a very specific standard regarding the way he collects Saints. To extrapolate his view in order envision lower graded coins valued more than higher graded coins is not very realistic IMO.

Btw, I would really rather not get into a debate about roll friction and Saints again on this forum as I have had this argument at least twice in the past. Please read the following thread if interested in the debate.

totally-confused-difference-between-proof-and-ms

And you certainly don't need to convince me about the virtues of AU58 coins, I wrote a thread about that subject a few years ago as well.

The Secret to Collecting Key Dates (The Elusive AU64 Slider)

I will say that the reason why AU64 coins drive a premium over the lower MS grades is for one of two reasons. First, people believe the coin is actually an MS coin with cabinet/roll friction. Second, the eye appeal of the coin is superior to that of a lower MS coin. But the majority of AU58 coins across all series sell for lower prices than MS60-MS61 coins because they don't have the requisite eye appeal to drive a premium price.

 

Some of this already happens as you've already cited with the AU-58 vs. low MS 60's example.

The part I've underlined actually does happen in a way, except for them possibly uttering the "tough luck part". It's why coins in the same grade sell for different prices. How many times when looking at a coin do you think it's overgraded? Undergraded? Either a judgement was made to market grade it or a grading error was made.

When I go to buy a coin, I filter my search and then examine each coin looking for the best example. Often times, none of them meet my requirement, so I move on.

In the MS64 vs. 65 example, it gets complicated. I was trying to give you an example of how I judge the coin and how it might relate to Art.

Here are two MS65 saints, sold in 2015. I wouldn't buy either because of the head. One has a shot to the nose and one has no nose. Otherwise, very nice coins.




There are certain things on coins I don't like that others may ignore. It's not that I'm right and they're wrong, it's a matter of taste. There are flaws on coins that bother people, but maybe not me. It's similar to art.

 

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This page two you cite to only serves to illustrate the fundamental difference between the way you conceive of wear and the way we conceive of wear. I throw in with Doug, there, as I conceive of wear, in the same, exact way. Click on the link and look at his top post on that page. I just explained that, in another thread, almost word-for-word, to Goldfinger.

In short, we conceive of wear from a condition standpoint, while you conceive of it from a source standpoint. We want to know how much less the condition of the coin is for the wear, while you want to know whether the cabinet or cash register was the source of the wear. If you adjudge the wear to have sourced from the cabinet, you differentiate same as "friction," "abrasion," or "roll," so as to keep you in your comfort zone. We think that's plumb silly, as wear is wear, and the condition suffers for it, regardless of the source.

 

I think that's the thing that is part of subjective grading and not part of the official ANA grading method (at least I assume it's not): should a mark on a highly-visible location (like your Nose Job) count for more than the same mark in an out-of-the-way location ? How much less ?

 

That's an excellent point, one on which I go back-and-forth on.

In theory...in theory...bag marks are going to do less damage than circulation damage. But suppose we tracked 2 coins....one circulates for weeks and months but mostly lays at the bottom of a cash register...the other is moved daily in a bag from Mint at some bank.

3 months later, we check them and the condition of the circulated coin is much nicer, better eye appeal, much less dings and marks and scuffs, better luster, than the kept-in-the-original-Mint bag.

OK, that's an extreme outlier, I freely admit. But I guess that the TPGs are saying that's what they are trying to incorporate at times even if official, technical, by-the-book grading of ANA should NOT allow for it.

But again...if the TPGs and ANA co-jointly wrote the book, maybe they would have allowed for this leeway had they known about it ? Or similar deviations from a 100% strict by-the-book grading regimen ?

I'm not making any excuses for MS-63's or MS-64's which go up 3 grades over a decade. That's totally separate. I'm talking about the OPINION of WEIGHING different deviations from MS-70 perfection with all of these variables (among others):

• Luster or shine
• Bag marks...how many ?
• a single big dent or gouge
• marks away from key devices vs. marks on faces or Eagles etc.
• wear on high points but the rest of the coin is somehow flawless
• strong vs. weak strike
• overall eye appeal: how the coin looks in the first 10 seconds when you look at it....vs. how it looks when you study it CLOSELY for 1-2 minutes.....vs. how it looks when you take out a loupe or lens for a minute or two.
• Toning: I hate it, but others love it. How do you split that sentiment ?

Again, I have never read the official ANA guide -- I will ! -- so maybe this will be alot clearer to me after I read it. But it's possible I may feel the same way, namely that while I don't like the egregious examples posted by Rick Snow and others about coins going up multiple grades and screwing things up, if you DON'T upgrade the ANA official guidelines (when were they first devised, 1980's ?) then how do you incorporate something like toning -- again, I hate it -- which 30 years ago may have cost you tons of points on the grade ("It's discolored") and today it's considered a PLUS and worth lots of $$$ if it gives the coin a nice look.

Hey, I know I'm stirring up a can of worms here. Entire face of a Morgan Silver Dollar rainbow colored ? High grade coin, lots of $$$ !! Single copper spot on a Saint ? 2 demerits, back of the class, no soup for you !!! NEXT !!!

Let's face it, if we can't agree among ourselves -- and this is 1 message board of dozens, a fraction of a fraction of a fraction of serious collectors -- how can the TPGs be expected to please ALL of us ?

 

I don't see it as them using them with intent, just as being forced into it because they didn't have a choice.

 

Let's take that philosophy further. Since wear is wear, then a detrimental condition is a detrimental condition. It doesn't really make sense that 1-58 are circulated grades and 60-70 are uncirculated grades anyway. It leads to scenarios like the AU64. As you pointed out, it is sometimes impossible to tell if the coin is actually circulated or not, and why should it matter what the source of wear (or any detrimental condition) is anyway?

So let's say a coin has very light cabinet rub and that would equate to a detrimental condition equal to a one step deduction. Then you have another coin with a bag mark that would equate to a detrimental condition equal to a one step deduction. Why should the minor detrimental condition of very light cabinet rub take an otherwise MS70 all the way down to an AU58?

Why differentiate between minor conditions like "wear" and a "bag mark"? That's plumb silly, as a minor condition is a minor condition, and the condition suffers for it, regardless of the source.

 

If it is silly, why do the TPGs and practically everyone else in the numismatic world disagree with you and Doug? Your precious "wear is wear" philosophy is an absolute. Most people speak in absolutes as a matter of hyperbole, but you espouse this absolute with 100% belief. And like every absolute, there is an exception to the rule. An exception that is exceedingly easy to understand; there are coins that have never seen circulation that have high point wear.

Since you referenced the other thread, I will pose the questions to you. How do you differentiate the quality of Saints? Since they all have high point wear, based on your philosophy, they must all be graded AU, correct?

 

I can't say for other series, but for small bust quarters, some years there were no die cracks at all. Other years they changed out the dies after only very minor cracks. For late 1835 and 1836 they rode the dies hard, some until they shattered, and they just kept on using them. Since there was a year overlap in die use up to that point anyway, they could have simply re-used dies from earlier years instead of the cracked dies. They could have made more working dies. I don't believe they were forced into it; they just though the cracked dies were "good enough" and didn't see a pressing need to change them.

 

Is it possible that when the ANA standards were devised....they didn't want to come up with loopholes, like those old Venn Diagrams which overlapped a bit (the area where AU-58's are competitive with MS-60's) ?

IOTW....they assumed that ALL MS coins would be better looking and have nicer appeal than the best AU's ??

Cabinet rub = circulated ?

That's a good question. I have to assume that if the ANA standards incorporated all these "hypotheticals" you'd have the same problem you do in the NFL with the "what is a catch controversy" (Dallas playoff game, Dez Bryant, etc.): a multiplicity of possibilities. They wanted simplicity.

But what if the wear is cosmetically/aesthetically no worse than a bag mark ?

Again...I know these are outliers, but I think that's why we're debating this issue.

It seems to me that the ANA standards and technical grading are agreed upon to be right 90-95% of the time and the flexibility some are asking for is to fill the remaining 5-10% -- or less.

 

Wear is in a special category as it relates to the state of preservation of the design. It's just like a comic book, a baseball card, a stamp or a note with wear. A tear in the comic book, a scratch in the baseball card, a fold in the stamp or note doesn't equate to a deterioration or breakdown of the design. It's that deterioration or breakdown that tells you what you have in terms of the state of preservation of the design. A bag mark is distracting and detrimental to the grade when the state of preservation or condition is MS. Does that make any sense?

 

First, as to your "hyperbole," I'm not "most people." Second, I could care less what head games the market graders need to play with wear on coins.

Did they start like that, with that high-point wear? If they didn't, their state of preservation, i.e., condition, i.e., grade is AU or lower.

 

I get what you're saying, but in reality, does a light cabinet rub really have that much of an impact on the state of preservation of the design? I'm sure you've seen an AU58 with rub so light you really had to search for it and a reverse that was perfectly uncirculated. No matter how light and insignificant the wear, or how incredible the eye appeal is on the coin, it can never get higher than AU58, even if it is otherwise an MS70 with just the slightest rub. Likewise, no matter how marked and unappealing an uncirculated coin is, it can never get lower than MS60. Of course this brings into consideration the flip side of an AU64, the uncirculated problem free coin that is so unattractive that they have to give it a details grade just because it doesn't fit in with having to give it a grade no lower than 60 because it's technically uncirculated.

If the intent of market grading is to indicate an adjusted grade based on the condition of the coin and eye appeal that is closer to the market value of the coin, then that is working at crossed purposes with the hard delineation between AU and MS, which is really only relevant to a technical grade. TPGs would be better off dropping the circulated/uncirculated concept and letting AU64s rise into the 60s and unattractive but yet uncirculated coins drop into the 50s.

 

I've never seen a coin so ugly it got detailed just for being ugly. I guess that's a case of BU meaning "butt ugly." Maybe if you sent in a coin that had gone completely black, it'd come back "environmental damage," or some such?

On the contrary, I have seen coins in 65+ slabs that were just terrible looking.

 

Well, now we're talking. It's a matter of being an informed consumer, really. It's a matter of knowing what you're buying in spite of all the marketing fluff. If the TPGs, and, as Lehigh probably very correctly puts it, the rest of the numismatic world, want to overlook that wear for their markets and their money, that's their business, I really don't care, as I rarely take their grades seriously, anyway.

 

When technically grading the coin? No.

When market grading the coin? Possibly

Or you just technically grade the coin and label it as such, say MS65 and let the market determine it's desirability.

 

No argument from me...I'm just trying to learn here...I'm like Dwayne from the 1970's TV show "What's Happening"....I'm just an innocent bystander.