What style of grading for technical AU58 coins would you prefer from the TPGs?

Due to the recent discussion about CAC's technical grading evaluation of market graded coins, I'm creating this poll out of curiosity to see what the general consensus is.

I'm talking about AU58 as per ANA Grading Standards, which if my memory serves me is generally defined as having some signs of wear; high-point abrasion.

The question here is basically how high are you comfortable with a TPG grading a coin that has some signs of wear or high-point abrasion (as per the ANA definition of AU58).

• Choose Conservative Technical Grading if you believe these coins should be strictly capped at 58.
• Choose Current Market Grading if you are comfortable with those coins generally being graded up to 62 (and in some exception cases higher as with Saints, etc.).
• Choose Progressive Market Grading if you are fine with these coins theoretically grading as high as 69, as long as it is commensurate with the quality/eye appeal of the coin.
• Choose Another Grading Style if you prefer a different option than one of the three above.

 

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An interesting thought. I will think about it more as I go through my day but I do believe in conservative grading. I don't buy MS62 Morgans with worn breast feathers. Typically, I try to get coins which I feel are undergraded, or at the least debatable.

 

I'm actually gathering coins the past year with the hope of sending a few to PCGS- and the best of the best to CAC afterward. It's a risk I'm willing to take for my collection.

CAC is great - cant think of the last time I saw on undeserving CAC sticker

 

I fall in the other category. If a coin has circulation wear, it belongs in the AU grading category and should not be market graded into the uncirculated grades. However, if a coin has high point friction that can be defined as either cabinet friction or roll friction, then I accept those as an exception to the rule and would allow those coins to be graded uncirculated. Keep in mind, that these coins are usually series specific and the high point friction is almost always limited to a very specific area of the design. For example, the breast & knee on a Saint Gaudens Double Eagle, or the lower leg on an SLQ.

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@Jaelus

IMO, a poll posted WITHOUT a description of terms is worthless. So...could you please post your definition of a "technical grade." It would make the poll much mor interesting/informative if posters answered knowing what you consider a technical grade to be.

I just looked up the word.

@Lehigh96

Great Post!

 

Sure that's reasonable. I've answered your question by way of editing my original post up top.

 

@Insider It seems technical grading has come up often this past week. I even put up a GTG using technical grading in the title. I had thought originally that conservative was the best word, but it really isn't in my opinion. Conservatively IMO would be defined as maybe being to harsh on a coin. IE downgrading a coin due to either to much wear or not enough luster, weak strike, too many contact marks etc.
Technical standards are what most of us were taught. One big technical standard is the presence of wear no matter how the coin was handled/stored, It doesn't get upgraded because it sat in a cabinet, It also doesn't get MS just because it is evident that it was stacked.
Conservatively= harsh/tough on the coin.
Technical= grade based only on its merit's.
Market= overlooking one aspect and rewarding it for another.
Also Market grading is tricky, one day the market says X characteristic is appealing and another day Y is appealing.

 

I chose the first option because (of) the wording included..."conservative" and "strictly" are mostly associated with the term/word, CONSISTENT...and it's CONSISTENT grading that is sorely needed most of all. Not grading for the current market, not other grading for the progressive market and still other grading just for "generally"...and still yet other for just "whim" grading by mood for hour of day and day of week, etc. Needs to be ONE set of standards adhered to by all TPGs...the same for all and all for the same. Heck, we saw recently that the top TPG service can't even standardize their internal label nomenclature for graders as to what is a scratch, a scape, a cut, gouge, etc. What does THAT say for their actual grading...? Try "details-mark" or "details-marked" to eliminate the debate and second-guessing opinions as to which it is, should be, etc...and a single set of universal grading standards that everyone is trained in, follows and applies at/across all TPGs. Not for progressive market v. current market, general, VIP or other...ALL the same.

 

Pickin and Grinin, posted: "@Insider[/USER] It seems technical grading has come up often this past week. I even put up a GTG using technical grading in the title. I had thought originally that conservative was the best word, but it really isn't in my opinion. Conservatively IMO would be defined as maybe being to harsh on a coin. IE downgrading a coin due to either to much wear or not enough luster, weak strike, too many contact marks etc.
Technical standards are what most of us were taught. One big technical standard is the presence of wear no matter how the coin was handled/stored, It doesn't get upgraded because it sat in a cabinet, It also doesn't get MS just because it is evident that it was stacked.
Conservatively= harsh/tough on the coin.
Technical= grade based only on its merit's.
Market= overlooking one aspect and rewarding it for another.
Also Market grading is tricky, one day the market says X characteristic is appealing and another day Y is appealing."

Unlike the OP, at least you made an attempt to describe technical grading; however, a strict line between AU and MS is NOT what defines "true technical grading" as it was formulated in the beginning. You see, that strict line (no trace of wear for MS coins) existed before the "author" of that grading system was born. You were taught the "bastardized" version from folks who did not have a clue when they adopted that descriptive word "technical." I have sent an article based on a CT discussion off to be published in Numismatic News. After publication, I'll comment further.

Until then, the amount of wear on a coin is only one of its surface characteristics.
Before the ANA "screwed the grading pooch" by combining the amount of surface marks and wear for grades from AU down; the amount of detail that remained on a coin was what determined its grade - once there was a trace of friction wear. If the coin had no trace of wear it was MS. Most of the difference between a technical grade and commercial grade took place in the 60 to 70 range. Until coin dealers started a TPGS, the majority of coins grading MS by ANA or INS WERE JUST THAT.

The commercial market demanded a change and that's why this discussion exists. A coin is either FULL MINT STATE or it is not. It does not matter what your personal standard is or what is market acceptable. The only thing that matters is that you learn to grade like the rest of them by the study of TPGS coins, and classes.

That's another reason IMO this poll will be fun. Aside from a continuing misuse of the word "technical" for conservative, what we want the TPGS to do will not change anything. They got us and the interpretation of grading standards starting in 1986!

 

This is well said, however, it makes me consider another point, which is that differences on opinion as to what system of grading should be used are likely due at least in part to differences in what people consider the purpose of coin grading to be.

Is the purpose of coin grading to describe the state of preservation of a coin, or is its purpose to describe the quality or market value of a coin?

My opinion on TPG grading style is very much driven by my belief that the biggest value is obtained by the experts grading on quality and not preservation state.

Let's say I have the coin in hand and I'm buying or selling it. I can see the preservation state for myself, and so can the other party. In this scenario the grade really isn't all that helpful. I don't need to have paid an expert to tell me information I can readily see. People will say this coin is undergraded or this coin is overgraded and heads nod North-South and deals happen. Where do the real premiums come from? PLUS designation, STAR designation, CAC stickers, PL or DPL designation, UCAM/DCAM. Why? The market is obviously starved for expert opinions on a coin's quality. If that was not the case, these designations wouldn't have such a dramatic impact on pricing.

Ok so let's talk about selling or buying coins online. It's not really the technical grade that is useful here. What is happening is that the buyer and seller are both trying to come up with a commonly understood value to facilitate an online transaction and they're using the grade as a tool to do that. The buyer is unable to inspect the coin in hand, so they use the grade on the slab to form an understanding that can be translated into value. The problem here is that due to relative quality of the coin, without market/quality grading, there can be two coins with the same technical grade that are wildly different in quality and price. So why not just pay an expert to evaluate the coin in hand and render a grade based on quality in the first place. It is what is actually useful here, unlike a technical grade.

AU58 coins are way too difficult to buy and sell online, and it is a serious problem. Even as an advanced collector, when I see a listing for an AU58 it is frequently very difficult to price unless there are exceptional high-res images accompanying the listing due to the inherent difficulty of grading from photos on the internet. This is because an AU58 can have such a wide spread of quality that the grade is almost useless for determining value. Is the coin really just a step above a 55, or is it virtually a 67 with a touch of non-distracting rub? Having a technically correct but largely uninformative grade on a slab is a disservice to collectors. Someone paid for expert in-hand evaluation of the coin, and yet they are left with a grade that confounds pricing, which is a real shame. In some instances where the coin is stunning in hand despite a touch of rub, a 58 can be a death sentence to salability, removing it entirely from the market for collectors that only want MS coins.

 

There is no value in knowing the "conservative" grade of a coin for the sake of knowing the "conservative" grade of a coin. You're just lauding the merits of a self-licking ice cream cone.

People want to know the grade of a coin for two reasons: The first is establishing value, for which knowing the quality of the coin is the key, not knowing the "conservative" grade. The second is establishing a hierarchy between like coins so they can be labelled as better or worse for purposes of upgrading in a collection, or for comparison in a registry set or the like. For this, "conservative" grading is also a failure, as AU58 coins are of indeterminable relative quality from the grade.

There is simply nothing actually useful from "conservative" grading. All it lets you know is the "conservative" grade. So what? It is literally never more useful to know the "conservative" grade over the market or quality grade in any real world scenario.

 

It depends:

Buying: Very to ultra conservative.

Owning or selling: Very liberal, or Market grading.

 

Jaelus, posted: "...it makes me consider another point, which is that differences on opinion as to what system of grading should be used are likely due at least in part to differences in what people consider the purpose of coin grading to be.

Is the purpose of coin grading to describe the state of preservation of a coin, or is its purpose to describe the quality or market value of a coin?
My opinion on TPG grading style is very much driven by my belief that the biggest value is obtained by the experts grading on quality and not preservation state."

AMEN! Great question and answer as that's the way it is.



Jaelus, posted: "There is no value in knowing the "conservative" grade of a coin for the sake of knowing the "conservative" grade of a coin. You're just lauding the merits of a self-licking ice cream cone. [???? Tell that to the guy trying to sell an AU graded as 64 to a knowledgeable buyer. Those days were supposed to be over long ago.] People want to know the grade of a coin for two reasons: The first is establishing value, for which knowing the quality of the coin is the key, not knowing the "conservative" grade. The second is establishing a hierarchy between like coins so they can be labelled as better or worse for purposes of upgrading in a collection, or for comparison in a registry set or the like. For this, "conservative" grading is also a failure, as AU58 coins are of indeterminable relative quality from the grade. [Excellent comments showing a deep knowledge of coin grading. However, introducing "strict or conservative" into the mix HAS ABSOLUTELY NOTHING to do with the two reasons for grading a coin. They are only subjective opinions that are changed by a large number of variables.] There is simply nothing actually useful from "conservative" grading.
[Absolutely 100% false as both purposes of grading you stated are rendered. Now, if you wish to defend AU coins being now considered MS - that's off topic. ] So what? It is literally never more useful to know the "conservative" grade over the market or quality grade in any real world scenario."

Unfortunately, what you have done IMO besides misusing "technical" is to take the original discussion in another thread off track (although in a quite informative way here) . The original post was not about conservative grading or technical grading. It was about market grading (value). The OP's thread that started this poll was about one of the best commercial graders in the country who founded both NGC and CAC telling his customer that his COIN WAS OVERGRADED!!!

 

Yes, clearly you are right, however, when I say there is nothing useful from "conservative" grading, I mean it in the same way that a stack of books is not useful to reach a high shelf when you have a stepladder. This is not to say you can't stand on the books but rather why would you bother when there is a superior tool at hand.

All that aside, my real problem here is and has always been the AU58 and MS60 coins.

We have a linear grading scale for circulated coins 1-58, and then we have another linear grading scale for uncirculated coins 60-70. On their own they are wonderful perfectly reasonable grading scales! The problem is that they are combined one on top of another and you cannot do that because the two scales are not measuring the same thing. Not only are they not measuring the same thing, but they are in direct conflict with each other when you try to use the resulting grade to produce a value for a coin. Unsurprisingly the problem occurs right around the point where the scales connect to each other.

On the circulated grading scale, AU58 is the absolute top quality coin. The problem is that there is an enormous quality spread for AU58 coins. The very best AU58 coins, both in terms of value and quality can surpass many MS coins.

On the uncirculated grading scale, MS60 is the absolute worst quality coin. The problem is that the quality and value of these very worst MS coins can drop below that of many circulated examples. I know I've passed on some real dog MS60s in favor of gorgeous AU55s.

So as I said - which you agreed with - that one of the primary reasons for grading is to establish a hierarchy for like examples. Well when you combine these two scales together you lose the hierarchy because there is significant overlap in quality from one scale to the other around the area where the scales join together, but the way the scales are combined cannot and does not reflect the reality of this overlap. A hard and fast "conservative" approach to grading only makes this problem worse, as the more conservative you get, the less meaningful the grades around AU58-MS60 become.

The other problem is that we don't just have a grading scale from 1-70, but we have those prefixes to the grade that represent the level of wear, and people lose their minds over these prefixes. Since MS represents mint state and it is attached to the 60-70 grades, assigning a grade of 60-70 brings along with it the baggage of the MS prefix. So to call a coin with wear MS62 rubs people the wrong way (pun intended) because the grade isn't just a 62 but it's got that pesky MS tagging along with it and well, it's just not a mint state coin so you can't correctly give it a grade prefix that says that it is Mint State. And likewise with AU. I get it. I really do. The need to accurately reflect the quality of the coin for the purpose of constructing this hierarchy of like examples is at odds with the assignment of the grade prefix.

There's really two ways to handle it that I see. The first (and the one I advocate for) is to drop the prefixes altogether and just have the numbers 1-70 where it is a linear quality scale. Coins with wear and coins without wear will naturally overlap somewhat commensurate with their quality around the high 50s to mid 60s. Naturally, apparently circulated coins will still be towards the bottom of the scale and better mint state coins will be towards the top of the scale. This is a linear representation of coin quality/value that accurately describes the coin populations how they actually are; higher quality coins (some of which are circulated) and lower quality coins (some of which are uncirculated).

The second way to fix it is to embrace the prefixes, but treat the scales separately, as we do with proofs. Extend the AU grades from AU58-AU69 and extend the MS grades down to maybe MS50 (though you likely won't see AU examples go that high or MS examples that low). People don't seem to have a problem understanding that a PF64 is graded differently than a business strike, and the comparable numeric grade means something quite different in terms of appearance, handling, and value. I trust they would likewise very quickly understand the implications of an AU64 or an MS58. You might even create a new market for collectors of AU60+ graded sets.

 

Too busy so will reply in parts to your full post above:

Jaelus, posted: "...however, when I say there is nothing useful from "conservative" grading, I mean it in the same way that a stack of books is not useful to reach a high shelf when you have a stepladder. This is not to say you can't stand on the books but rather why would you bother when there is a superior tool at hand."

First Reply: Absolutely correct. Why grade coins with the naked eye or 5x when there is/should be a MUCH SUPERIOR TOOL at hand? Beats my five aces. Perhaps that may be why some folks cannot tell the difference between an AU coin and one in MS when they try to place a value (commercial grade based on a bunch of variables) on it as it is graded. So who is correct? The guy who sees the loss of original surface due to friction CAC or the guy who either does not see it or the guy at the TPGS who decides to ignore it because they made the "new" rules.

 

Ok so let me clarify. I'm saying wear must be nondeterminitive of grade, because wear based grading is never as useful as market grading in every real world application. I'm not saying you don't need to know the amount of wear on a coin in order to produce the grade, I'm saying you don't need a grade produced solely from the level of wear on a coin. Just as you need to have awareness of hits on a coin, but you don't need to produce a hit-based grade. It is only one part of what describes the quality of a coin. A holistic quality based grade where wear is a factor but in and of itself is nondeterminative of grade will always be superior.

 

Dang...I still refer to my B & D grading book...

 

Jaelus, posted: "Ok so let me clarify. I'm saying wear must be nondeterminitive of grade, [Since when? Better: Wear must be nondeterminative of MS grades. That's because MS coins SHOULD NOT HAVE FRICTION WEAR!] because wear based grading is never as useful [to whom?] as market grading in every real world application. I'm not saying you don't need to know the amount of wear on a coin in order to produce the grade, I'm saying you don't need a grade produced solely from the level of wear on a coin. [True for a MS coin but the amount of wear determines non-MS grades].Just as you need to have awareness of hits on a coin, but you don't need to produce a hit-based grade. [Since the # of hits is one of the major determinations for assigning a MS grade, I think most of us do use a hit-based system similar to one in the ANA grading Guide] It is only one part of what describes the quality of a coin. [True, especially for MS coins] A holistic quality [??] based grade where wear is a factor but in and of itself is nondeterminative of grade will always be superior." [True, as long as the actual condition of the coin does not matter to a buyer. Using your reasoning is why certain very rare and desirable coins that were once graded XF+ and AU are now considered to be MS. ].

And let me clarify...I could play the AU = MS game with the best of them but I don't have to. As long as folks understand the game, I'm extremely happy. I admire a professional dealer/knowledgeable collector/seminar instructor who can look at a coin, understand why and point out that it is an AU and then explain what it should be graded in the coin market. Many times in 2021, that will be MS-Something.

I don't admire someone who thinks an AU coin is an undergraded conservative mistake because the amount of friction wear on it is not as important as its eye appeal.

PS Hope you'll continue to comment as I reply to your original post. I already have more "meat" for another grading column.

 

I have a problem distinguishing light wear from a weak strike. I know familiarity with the years striking characteristics helps, but I ain't that knowledgeable.

 

I wouldn't mind seeing an AU59 grade for coins that would be gem uncirculated but for a tiny bit of wear.