Buy the coin, not the slab

I actually am appreciative that one of the major coin grading services has a dedicated ancient service that serves the needs of a market that wants their ancients slabbed. I don't like buying slabbed ancients for a variety of reasons and break out any that I do buy, but I think it serves a market desire and probably opens up ancients to new collectors so for that reason alone I'm supportive of it.

I do think their evaluation of the condition of the coin is sometimes quite poor. For those of you who are buying graded and slabbed ancients, you must not rely on the description and grade on the slab alone in your decision. I have screwed myself royally by believing the slab grade is correct when bidding sight unseen. I want you to learn from my mistakes.

Here is a developing case and point. A lot being offered in the upcoming NYINC Heritage auction can be seen in the link below. It's been graded by NGC as Choice XF★ 5/5 - 5/5. I would assume that means it's essentially perfect with exceptional eye appeal because it's got the ★ modifier. As an ancient coin collector, however, I don't know what XF means but I would assume that means EF in English. I wish NGC would use the language ancient coin collectors use, but I digress...

http://coins.ha.com/itm/roman-repub...044-224006.s?ic4=GalleryView-Thumbnail-071515

This coin has surface damage and I doubt it would be considered EF (if that is what XF means) by most. I think it could be argued too that it's not a perfect 5/5 strike. This coin was sold by CNG last year and described accurately as "Good VF, toned, some old scratches on the obverse." and it sold for $500. On the CNG photo, you can see the scratches on the obverse which are not insignificant for a perfect grade coin. I wonder what type of premium this coin will end up bringing because it now has been vouched as virtually perfect by the slab? I'm going to watch this one for fun to see.

So, feel free to buy slabbed coins if that's your gig, but don't rely on the grade. Heritage and most other dealers will not point out something in conflict with an NGC grade if it's higher than it should be. If you buy a slabbed coin at auction, your options to return it are probably limited though you may have a better chance buying it retail directly from a dealer.

You will learn the hard way if you don't learn the right way.

 

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Rating surfaces on a 1 to 5 scale is not detailed enough to describe a coin even if it were done well. The MS70 system for US coins has all the integers from 60 to 70 (11 grades) to describe coins supposedly without wear based on wear alone. However, for ancients if a firm reserves "1" for a terrible surface and "5" for excellent surface, that leaves only 2, 3 and 4 for surfaces in between. How does "4" differ from "5"? Well, with all ancient coins somewhere on the scale, "4" must be well below perfect and then, even if surfaces could be placed on a linear (one-dimensional) scale (and, they cannot), there would need to be some less-than-perfect surface (4.6?) that still gets a 5. I am old enough to recall when US coins were said to be "uncirculated" or not. Then there was "BU" and intermediate MS numbers, 65, between 70 and 60, then 63 between 60 and 65, and 67, then 61, 62, 64, 66, 68 and 69. And, that is for wear alone, whereas in ancients we have to deal with scratches, patina, porosity, etc.

Clearly surfaces do not all fit into five categories. Even if they were on a linear scale they would be on a continuum. As noted in the original post of this thread, "5" does not mean perfection. If perfection is what you seek, even if the slabing is done well, you need to look very closely indeed at anything called "5" lest it really be "4.6" rounded up.

 

Here is another good example, and a lesson I was able to learn at no cost...as I returned it for a full refund. Boy, did I learn my lesson quickly. Coming from US coins I expected better from, and trusted NGC to get it right. You guys kept me from getting a black eye with this puppy.

It is graded as VF with 5/5 strike. This more realistically an aVF, and calling it 5/5 strike when part of victory's head and body are off the flan is a mean joke from NGC designed to sucker a newbie like me into leaning an expensive lesson.



These days I think that NGC and PCGS stand for "Making coins into expensive commodities by inflating the grades and finding variances that don't exist, one coin at a time."

A couple of decades ago having a 19th century coin be an MS-66, MS-67, or MS 68 was such a rarity that when it happened it was a national news story. It's been mentioned that you can take an old coin in one of the old holders, graded MS-62 or MS-63, and submit it today and probably get back an MS-66. Grade inflation has crept in as coins become commodities. The rare MS-67s of 2 decades ago are not that rare today thanks to grading standards softening up a little. And it seems like there are new variations popping up all the time thanks to these grading services (which equals more hype and more expensive coins). When you need a microscope to see the "variation" there is a problem.

Unfortunately, it seems NGC is trying to do the same to ancient coins...overly generous grading, probably to convince Ancient Coin Dealers to submit the coins to them to get an inflated grade to turn their $200 ancient into a $1000 ancient. It is working...look at the number of ancient slabbed coins now.

Anyway, that's my opinion. Feel free to disagree.

 

I couldn't agree more. I've purchased only two slabbed coins and both were freed immediately upon receipt, and neither met the grade established on the slab. I only kept the last slab which graded the coin Choice Fine 4/5-4/5. I would never grade this coin in this manner, but, as Warren says, what are the differences in the scale? If "5" is a perfect coin, then if follows that 4 is just less than perfect in some way. My coin shows a lot of wear, no where near to perfect or even close, but is more than acceptable to me.

 

That's not to say that your coin isn't a great coin for the right collector. The grade is not accurate. That's my problem.

 

I do wonder how long it will be before NGC starts grading ancients in a 70 point scale and starts issuing limited edition labels. Perhaps in the near future we could have the privilege of purchasing a common antonianus of Emperor Probus graded MS-68, with a limited edition Julius Caesar portrait on the tag, and all for the bargain price of $200. Perhaps even sold in one of those late night coin shows at the home shopping network or whatever, for 4 easy payments of $60 and a "free" presentation velvet slab case.

It's not that far fetched. I'm already getting ads when I go to websites telling me to "invest in ancient graded coins." Unfortunately these are the built in ads in websites that ad block doesn't block.

 

I have only bought one slabbed coin and only because I could not find a raw example. As you can see I did bust it out of its tomb. I know I have posted this before but I thought I would post it anyway.

I will not buy another slabbed coin unless I cannot find a comparable raw example.Even then I would think twice. The grading system just does not make sense for ancients. I buy my coins from reputable sources that I trust.




Claudius Denarius

 

What was the grading on that one? Accurate or inflated?

 

It was F strike 4/5 surface 2/5. light erosion
To be honest I think F describes it which includes the obvious wear to the portrait and especially to the legend on the obverse. I am not sure how they determined that the strike was 4/5- I am just not sure what that means in the context of my coin.

 

I think the grade on your coin was pretty accurate. The obverse suffers from a bit of a tight flan but the obverse is slightly offstruck. I'm not sure how NGC grades a short flan, but I wouldn't think that should go against the strike so I would consider the obverse a 5/5 given the metal it had to work with but the reverse is slightly off so the overall grade of 4/5 seems appropriate to me.

Grading coins is admittedly subjective. Ancients more so because every coin is different.

 

That's very well put. The Sheldon Scale is asinine, and quite bewildering especially for people outside the US more familiar with the 'Poor-XF' scale.

 

This is the only thing I disagree with you about.

I think slabbing is a pernicious trend. It is motivated by purely monetary reasons and has little to do with protecting a coin or helping new collectors enter a hobby. Slabbing also obscures some of the details that allow a person to determine authenticity. Since a slabbed coin is not deemed authentic, then slabbing actually helps disguise fakes. I think the whole concept of slabbing coins stinks.

A weighted list of costs and benefits for slabbing ancients pretty much shows the costs exceed the benefits.

The message to newbies should be, "buy from a reputable dealer" not "buy a false sense of security by getting a slabbed ancient"

There is a Corinthian (?) stater sitting in a slab right now that is either unique or fake but nobody is willing to question it because it is slabbed. I don't see how that helps any part of this hobby.

Anyway, I agree with you 99% of the time. I have to take issue with this 1%.

 

I spent over an hour on the phone with David Vagi last year, talking about this. David stressed two main points. The first was that a lot of serious collectors of US coins might like to get started with ancients but simply aren't comfortable with a coin that hasn't been vetted by a reputable third party. The second followed from the first: since there clearly is a market for slabbed ancient coins, someone will see a way to make a buck. Inevitably, someone is going to grade and slab ancients; better it be done by someone who is knowledgeable about them than a US guy who can't get past the fact that they aren't even round. For what it's worth, although the grading system used is unquestionably flawed, it is something David gave a lot of thought to before putting it in place.

I hate slabs as much as anyone--hell, my own coins aren't even in flips. The only slabbed coin I've personally bought was out of its tomb within an hour. That said, I honestly can't disagree with either point. This is the direction the market is going to take. It's less stressful to try to mitigate the worst abuses and lure new collectors towards the light than simply to rail against the wind.

Phil Davis

 

I appreciate your comments and thank you for making those points, 4to. Those are reasons I don't like slabs for ancients as well.

 

A sector of the market perhaps - the market that caters to collectors who want slabs for whatever reason. I don't see it spilling over to the serious aficionados of ancient coins. If there comes a day when I have no choice but to buy my coins in over-priced slabs, I will quit collecting altogether.

 

Let's face it, Vagi makes some valid points here.

One possibility in this trend is that relative newcomers to this field will initially buy slabbed coins until they "graduate" and learn enough about ancients to purchase unslabbed coins from reputable dealers. Our field could end up segmenting into two distinct groups in the future -- as JA notes in his post above.

 

I'm new to ancients (how long do I get to say that for?) and I've never bought a slabbed one. I actually don't want people who are into U.S. slabs to move into ancients because I fear what may happen here could mirror what has happened there.

I understand and can appreciate where Vagi is coming from. Doesn't mean I have to like it though Has NGC abandoned his grading scale? I see some that have MS/AU/XF and others that have 5/5 Surface 3/5 Strike.

 

No, those old MS/AU type grade are from earlier slabs before that surface/strike was put on.

Could be those will be worth more in years to come.

Remember, slab collectors buy slabs just based on colors of paper, width of older slabs and what not, even "Old Green Holders".

Collect the plastic, not the coin is their motto!

 

As long as there's a market for heroin there will be heroin dealers, but as long as we make the heroin users feel bad about their heroin purchases every single time heroin is brought up in a thread we can keep our community relatively heroin-free.

The drug analogy is a little easy but it holds, I think. Just because there's a market for slabs doesn't mean we have to like it or accept is as part of the community/culture. I figure as long as slab sales are limited to the kind of collector that only buys one or two out of curiosity, we'll be OK, and if, when that collector gets further into ancients, we steer him/her away from slabs, that's OK.

We're just as much a part of the market forces as the people buying slabs.

 

To quote Edmund Burke. "The only thing necessary for the triumph of evil is for good men to do nothing."

Nothing against Dave but I have heard his arguments before and they fall flat to my ears. Both arguments are weak. Both are underpinned by a motivation for money and disguised as a service to the hobby. In truth, they only service the encapsulators.

As for newbies entering the hobby. I purchased my first coin from F&S, unslabbed because before I bought my first coin, I learned that slabs were completely unessential to collecting ancients. They were a marketing ploy meant to satisfy a perceived market. The key was to buy from a reputable dealer.


So let's look at those two needs set forth by Dave

First reason ....uneducated newbs need to be coddled in their ignorance. That's basically what he is saying. When they wise up, they will shed their slabs to other uneducated newbs. Meanwhile new folks are entering the hobby...meaning more money. Hurray, great for the hobby.........really?

Second Reason.......Someones going to do it anyway, why not cash in instead? Do I have to explain why this reason is the lowest common denominator for every motive that lacks higher logic.

In the end, there is a market for anything, good and bad. Why give in to the bad.......because it is easier? Tsk Tsk.

So Phil.........I guess I will rail against the wind and tilt against windmills till I save my Dulcinea. It's why I dream the impossible dream.

M


Gotta add, that while Dave has a couple weak arguments for slabbing ancients, a valid debate would consider all the down side also. He ignores that. When you weigh it all out, it seems like an artificially created market and an artificially created demand.