Where does CAC buy and sell coins?

It is a conflict of interest if company-owned coins are more likely to be stickered than non-company-owned coins of comparable quality. I'm not saying this happens. I would just like some evidence that the trading and grading departments have a wall between them.

"Making a few extra dollars" by treating company-owned coins better than others is "substandard work."

Cal

 

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Not if you only buy coins that would sticker. Them trading in what they sticker means they back their work and a large reason why they are so successful. Photoseal does the same thing.

Their market is 100 of millions of dollars. A couple dollars here and there means nothing to them. They don't even charge collector members for coins that don't sticker, that is not how a company just chasing a buck operates. You will be hard pressed to find anyone that deals with them who would question their integrity.

 

It's about fairness to folks who aren't part of the company. Their coins should get the same consideration in grading as company-owned coins. Really doesn't matter how much they are charging, whether the trading supports the grading, whether they make a profit, etc. Even if it were free, a collector would hope that all coins would be treated equally. Given the volume of company-owned coins that CAC grades it would not take much of a bias to significantly increase their bottom line. The bias doesn't have to be intentional, but if grading and trading aren't well separated, it might exist.

If CAC graded only their own stock, I wouldn't have an issue. But if they are grading other folks' stock, then all stock should be graded in a system that doesn't allow bias to creep in.

Cal

 

A better analogy is to postulate that safety testing for automobiles is completely unreliable, and as a result car dealers band together to test cars on their own so they can only offer the safest cars (regardless of how the testing agency has evaluated them), avoiding ruinious lawsuits for selling unsafe vehicles. In CAC's case, their system only works because they're as conscientious as possible in identifying those coins most worthy of the given grade - anything else would cause their businesses to crash and burn.

Like I said, a vested interest for the same reason as any other business - the bottom line. I freely acknowledge the validity of your points, but disagree that they apply in this case. CAC only works if they do it right.

 

Even though you admittedly have never dealt with them this seems to be the conclusion you have come too and nothing will change your mind about that. There are numerous threads and comments on various forms about how you can discuss why coins didn't sticker with them, how they put notes on some coins with an issue that was missed so you are aware such as PVC that wasn't seem when graded ect. If you want to believe that that they don't give coins a fair shake if they don't own you are free to believe that, those of us that have sent them coins know that is not the case.

 

I don't mind CAC buying and selling coins. I even like Rick Snows photo seal(http://www.indiancent.com/index.php/photoseal/) process. Like with any TPG sometimes I agree and sometimes I don't - the don't agree with CAC and Photo Seal are a lot fewer than the do agrees. My own 2 cents worth of input for the day.

 

You inferred that, but I never said it. I simply don't know and can't find out how impartial their grading is, but hope that it is and think they should make public how it is.

I own multiple green-stickered slabs and am happy with them. The market too believes they are doing a good enough job so that green stickers bring a premium. None of this invalidates my earlier point.

Cal

 

Of course CAC grades coins! They look at a slabbed coin and decide if it meets the grade on the slab. Then they go a step further and decide whether it's in the upper echelon of the grade. So not only are they grading, but their measuring stick has twice as many notches as those of the primary grading services.

If they are going to buy an un-stickered coin, but only if they know it will sticker, then they have gone through the process above, i.e. graded the coin. Un-stickered slabs that will receive a sticker don't come with a green halo around them. Someone at some point had to evaluate the coin to make the go/no-go decision on a sticker. This scenario does not remove the possibility of bias in grading company-owned (or about-to-own) coins versus coins submitted for grading by outsiders.

It would be like Moody's deciding to establish a trading section within their rating department, but saying it's OK because they'll only purchase unrated bonds that they know will receive a AAA. After SEC officials stopped rolling on the floor, they would try to decide how many millions the fine would be.

Cal

 

You seem to have made up your mind it is not impartial. No matter what anyone says you just keep coming back that it's not.

 

Evaluating the condition of a coin is grading whether it's in a slab or not. The primary grading services grade lots of coins that are already in slabs, e.g. crossovers and reconsiderations. CAC happens to be a service that grades only coins already in slabs.

Cal

 

I'm quite familiar with the facts you present about CAC and agree with them. We appear to have different perspectives on what constitutes grading. Grading can happen even without a physical coin present; happens every day on this forum. And, I do distinguish between "grading" and "grading company." Are all companies that evaluate coins and give opinions (go/no-go on a sticker for CAC) grading companies? Don't think we'll agree on that or the potential conflict of interest at CAC, but I respect your opinions completely.

I really appreciate your work as a moderator. I'm new the forum but have collected coins for many years. I've participated in several non-numismatic forums over the years. Even participated back the telephone modem BBS era, which gives you some idea of my age. This forum is certainly one of the best. Folks in the forum are very knowledgeable, but more importantly, helpful and considerate. The relative lack of cursing, flame wars, personal attacks, ads, off-topic posts, and trolling is a tribute to the owner and moderators and very refreshing. Am I getting off topic?

Cal

 

Given that PCGS is part of a publicly traded company, I assume there are procedures to prevent graders from knowing the origin of coins from anyone in management or major stock holders, or perhaps these folks are not permitted to submit coins. If not, they are taking an awful chance of lawsuits, severe regulatory action, and possibly criminal charges. It would be similar to S&P rating the bonds of a company in which S&P's CEO is a major stockholder. Such conflicts of interest are permitted to some extent in private companies, but not in publicly traded companies.

Cal

 

I would guess David Hall doesn't have coins graded at PCGS unless it's done so the graders don't know the coins are his. Regulatory authorities would likely take a dim view of the president of a publicly traded company having such a clear conflict of interest. If a grader knew a coin was owned by Mr. Hall, don't you think there could be a wee bit of favoritism? Even more so, if the grader knows Mr. Hall knows or can find out who's grading his coins.

Cal