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

Sometimes a strong light source helps, and moving the coin at different angles under it. Usually the light will reflect the same off a weakly struck area as the rest of the coin for MS, and differently off the worn area for AU.

 

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I agree with your comment. I recently sent 20 coins to CAC, 19 SLC and one Lincoln cent. Of those, just 5 passed. I was really surprised with the rejection of a few of the coins for green beans but pleased that they saw my 1924-S, PCGS MS64, that had previously been graded MS65 by NGC, as deserving of a bean. It still isn't worth what I paid for it, but it's worth more than it was before I sent it.

 

Kentucky, posted: "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."

It is very easy for MS coins. It takes more experience with circs. All you need is a florescent Ott lamp and start with large BU Morgan dollars. Weakly struck coins have lost design detail BUT their surface is original. Since the planchet metal usually did not fill the die, the original "flat strike" luster is there but it looks different from normal mint luster. Check out the whiter color of the original (flat strike) surface in the image.

 

Quite a read so far, but the OP had one question:

Condition and marketability are two different things. The problem with the coin grading as it has evolved into today is that it attempts to market the coin using a technical reference. When the technical reverence does not fit into the progressive marketability, the technical reference itself is changed to accommodate, thus leading rise to a technical circulated coin being referenced as mint state.

IMHO, the easiest quick fix would be to assign the grade as a technical/marketable grade reference. You can go to advertisements from the 1800s and beyond and find many of the current technical adjectives we currently still utilized in grading. These adjectives should correctly reflect the condition of the coin. Thus, a circulated coin with the slightest abrasion on its highest point will be AU because it is not in the condition from which it was coined.

As for marketability, if the market would accept paying the same price for this AU piece as they would one that would be MS63 price, then it should be attributed an AU63 grade (technically in AU condition, but could market on the same level as a mint state of the same marketability number). This is just a beginning, however. In order to have a complete understanding of the coin (even unseen to an extent), descriptors should be made as to WHY the coin should be marketable at the level claimed.

Now, the OP referenced his question towards TPG grading. With today's technology, the TPGs can easily place a QR code allowing for over 3000 characters to be defined. That is more than enough space to give a complete reference to everything observed on the coin.

Want to complain about how long it would take for the grader? well, excuse me, but "they" are over paid already IMHO if they can do no more than give a two to four character moniker with little to no explanation. Dealing face to face with a dealer is much more beneficial in all aspects anyway. YOU, as a collector, have a responsibility to KNOW what it is you are paying your money for. A face to face encounter allows both parties to debate an issue, and for first-hand inspection to take place.

However, that cannot always take place. So, the next best thing is to have an in-depth appraisal and explanation of the coin's condition as well as its perceived marketability...and, IMHO, neither of those are consistently offered by the TPGs.

That said, I am not highly confident in the most of the grading offered by TPGs of "actual "AU58" coins...they end up being assigned grades that do not identify the actual condition of the coin nor necessarily its marketability compared to other coins given its "assigned" grade.

 

Like I mentioned in the other thread, I am open to the new system where 58s can go well into the MS level as I see your point that minor wear can be considered on par with some bag marks or other "damage" (not damage that causes a details grade but the kind that lowers a coin from 70 to something lower).

However, if I were to pick a system, it would be the conservative one. The circulated/uncirculated boundary has historically been defined by wear/no wear and I would prefer to keep that definition in tact. I do support giving the best AU coins the 58+ grade and letting the market decide the pricing (let people decide the value within the same grade using their own standards, like eye appeal).

 

Yes, but keep in mind, everything I am referring to and proposing is about AU58-MS coins. So while I am talking about wear on coins, in this context, I am only talking about AU58. I don't have any problem with how coins are graded up to AU55, nor am I proposing a change to grading any circulated coins below AU58. I apologize if this point was not clear.

Yes, "one of the", as in you're taking hits into account, but you're not grading all coins including circulated coins based on the number and severity of hits exclusively. You didn't get my point here, but it's because this was a poor analogy on my part. What I was trying to say is that a balanced approach to grading is important. One should weigh all factors that influence the state of a coin, commensurate with their severity (I'll get back to this).

Well, I'm not exactly saying that. Follow me here, because this is an important point. "Undergraded" implies that the grade should be higher than it is, but that first requires a grading system for context. That I would grade many AU58s relatively higher than many currently graded MS60-MS61 coins now if we were to switch to an ideal grading system, does not mean I think those AU58s are currently undergraded. Having said that, I absolutely believe that eye appeal (as a combination of many factors) is much more important than friction wear. That AU58 coins frequently sell for more than low MS coins seems to validate that the market believes this to a degree as well, at least where the friction wear is extremely minor.

You might be surprised to know that I have cracked out, crossed over, and resubmitted coins that I intended to reside in my personal collection for the purpose of obtaining a lower grade, when I felt they were overgraded. I have no desire to have coins in slabs with fictitious grades in my collection. I would say my grading is actually conservative.

We all know AU58 is an insufficient grade to describe the gradations of quality seen in AU58 coins in the same way that it is insufficient to describe MS coins as simply being MS60 if no grade steps were above it. After all, you can give an MS70 a touch of high point rub from contact with a velvet pad and you could do the same to a real dog of an MS60. Both of those coins would then be inadequately described with the same grade of AU58. If you view the point of TPG grading to be to identify the quality and market value of a coin, the AU/MS boundary in the Sheldon scale simply doesn't work very well.

As I said above, it's important to weigh all factors that influence the state of a coin, commensurate with their severity. When high point rub accounting for 0.2% of the surface of the coin gets it knocked down 7 steps, that's not a penalization commensurate with the severity of the issue. That's a heavy bias to the grade against wear over other surface issues. Fundamentally wear is damage to the surfaces that occurs in a predictable manner. But in terms of eye appeal it is no more or less important than any other surface detriment (again, the context is AU58 coins). I believe in an ideal grading system where any detractor (including wear) should penalize the grade commensurate with its severity, and not one where wear is weighted with 20 times the importance of other surface issues. The market believes this so much that they make up exceptions for ignoring high point wear altogether to be able to grade AU coins as MS and say they are mint state! I just want a system where the very important need behind that can be met without calling coins mint state when they are not.

 

I like your post - lots of "meat." I'll save myself a lot of time today:

An ideal grading system must be SIMPLE and PRECISE. Anyone can learn it and it is unchanging over time. Unfortunately, WE DO NOT HAVE such a system but decades ago we came very close.

If you wish to place a value on a MS coin (very complicated and fluctuates for too many reasons INCLUDING WHO OWNS/GRADES IT ), there are many variables. The amount of original surface missing due to friction wear, stacking compression, or strike weakness is just one of many characteristics that factor into the opinion of the moment. A famous TPGS professional is reported to have said something like "If a coin is worth grading once it is worth grading several times."

If you wish to identify a coin forever regardless of market conditions or desirability for as long as it stays in the same condition every time you see it (PRECISION) , YOU MUST REMOVE (SIMPLE) as many "market variables" as possible. That system no longer exists.

Thanks for taking the time to post explain your position! I'll be back.

 

No, that system has never existed. AU58 with "conservative" grading is an extremely imprecise grade. It does not describe the overall condition of the coin. It only describes the miniscule portion of the condition that is worn.

For a PO1, a wear-based grade is phenomenal. It describes all of the coin very precisely because all of the coin is heavily worn. The wear-based grade for circulated coins continues to precisely describe the condition as you move up the scale, because all surfaces are worn, and you are concerned with the amount of detail that hasn't worn off.

Once you hit VF35 you start to get miniscule traces of original surface on the coin. A wear-based grade is still great here, but as you move up the scale into XF and finally AU the overall percentage of the coin that is original increases. As this happens, the percentage of the coin that you are able to describe by only noting the level of wear decreases, and so a description of wear becomes progressively less precise (and less relevant) as there is less percentage of the coin that actually has wear.

In other words, on a VF20, describing only the level of wear gives you a precise description of 100% of the surfaces, but by the time you get up to AU58, a grade describing the existence of wear is describing less than 1% of the surfaces of the coin. As a grade it ignores the other 99.8% of the surfaces and describes nothing about them whatsoever. It's like describing the condition of a car by saying there is a scratch on the rear bumper. Ok, but what about the rest of the car?

Now I am a pragmatist, and I find a description of wear for circulated coins is precise for a very long time. For me, once you get up to A quality AU55 coins (AU55+) , a description of the amount of wear suddenly becomes almost irrelevant for precisely describing the condition of the coin because almost all of the surfaces are original.

The areas of wear at that point are comparable to a minor surface impairment, and if you want a precise description of the condition, you need to focus on the original surfaces, because they are the vast majority of the coin. In other words, not enough wear exists to really care about wear in terms of using it to produce a grade. Do I still care at that point that the coin is circulated? Absolutely. I'm just saying that in order to be descriptive, qualitative grading needs to start at AU55+ instead of at 60. Perhaps after AU55 we single step from Q57-Q67 (Q for quality, with a mandatory AU or MS designation in that range), followed by MS68-70.

 

After all these years, I suddenly had an "aha" moment that concerns when an AU58 coin receives an MS grade (MS62). The MS62 is given based on what the coin is worth on the market. I remember reading a long time ago that AU58 coins were likely to be superior to many coins that are mint state. Specifically, if the coin didn't have a touch of wear on it, it might have received an MS65 or higher grade.

I have just such a coin in my collection. It's a 1931-S cent I bought not long after I got married. I found it at a little hole-in-the-wall shop on Royal St. in the Quarter in New Orleans. The seller wanted $27.50 for it, and I bought it because that was less than another dealer down the street wanted for coins not nearly as nice. Anyway, the first time I got it certified, by "Good" PCI (not to be confused with the later PCI that was terrible), it came back with the grade of AU58. Many years later I sent it to PCGS along with some other PCI-graded coins, and it came back with the grade of MS62. In a way, that's a disservice to my coin, which without the wear would probably receive a grade of MS65 or higher.

 

So you are asking that the AU grades should be broke down into single increments?
The screw ups happen when you try and value a circulated coin in an MS grade.
Why do you want to screw up the value of the more popular grade of UNC.
Seems we need to stick to valuing the AU coins better.
Confusing a collector with circulation should be the last thing we do.
Circulation has and will always be a hard line. It is or it isn't.
What the market can't handle is the value, back in the old days we paid good money for AU58 and 58+, Your grading company's are trying to take advantage of the situation.
Skip can say it again.

And if you want to mess with the market, don't pay MS money for a coin that you find with wear. Educate yourself.
The market will correct itself. And I believe give greater money for true MS examples than the garbage they are selling us.

 

Not what I'm saying. I'm saying the AU grades would stop at 55. After that, 57-67 would be a quality scale for both AU and MS coins where wear would be a designation. 68-70 would be reserved for MS only.

Oh sure, except when it's an MS62, or when it's a Saint, or when it's a coin with "cabinet rub", or any of the other many exceptions to this "hard line" rule. The market doesn't care about a touch of wear. The graders have been struggling to advance this agenda while wrestling with the antiquated concept of the AU58/MS60 boundary. It's about time we modernize the grading scale so we can do away with these workaround exceptions and the inappropriate labelling of AU coins as MS.

 

So you think that we only need 4 grades for UNC. It is the biggest profit margin in the TPG establishments. Intead of arguing for change how about we confirm the line that is and forget about the value scale, we have that hard line already Maybe we add a 59 and just let all the bidders go crazy. It seems much simpler.

That was the thought of a couple of TPG's, they all do it.
And only because of the indecision made by the top two and CAC.
Graders only do to the best they can with the rules of the house.

I don't grade that way, and never will. I have a coin cabinet. I know the circulation it gives to a nicely toned or original coin. Everything you stated above is by definition circulation.

 

I said 57-70 would be MS, single step. That would be 14 grades for UNC. AU would be 50-67, also 14 grades.

I don't grade that way either. That's my point; those things are nonsense. They aren't my exceptions, they are the TPGs' exceptions. I think you're agreeing with me here.

 

This is the confusion. Unless you are confirming that circulated coins make Gem grade on a regular basis. I want to remind you that there are still many coins below the grade of gem that are still considered UNC. this is tooo big of a change how about modify the AU grading scale to fit Market grading.

 

That depends on the series. Virtually all Saints suffer high point wear on the breast/leg due to roll/stacking friction, including those in the gem/premium gem grades. What he is saying is that those coins that show that friction would max out at an MS67 grade. For example:

 

Not exactly. It's a different quality scale altogether than what we have now.

So right now we have 1-58 circulated coins based on wear, 60-70 quality scale only for MS coins.

Ok, so the circulated coins at the top of the circulated scale have too broad a distribution in quality to be accurately graded if they are all given AU58, so the TPGs grade circulated coins on the 60-70 quality scale through various exceptions where wear is completely ignored or market grading where it isn't ignored but the coin is graded higher commensurate with value. The problem here is that MS prefix before 60-70. You can have the numeric quality grade 60-70 be accurate for an AU coin, but the MS prefix is the problem because it is completely inaccurate.

The obvious solution is to decouple the MS prefix from 60-70 coins so that AU coins that warrant grading on the quality scale instead of the wear scale aren't labelled as MS. If we include AU or MS as a designation, the information is still there, but it is provided accurately.

Let me give you an example from my own collection:

US 25C 1876
NGC MS61


Here's a beautiful seated quarter from my collection. It is a "conservative" AU58 because it has just the slightest touch of rub. The fields are beautiful, the luster is beautiful especially on the reverse, and the toning is very pleasing.

Now if this was graded AU58 it would be problematic because that grade doesn't convey much useful information about this coin, especially for a sight unseen or internet transaction. AU58 would just tell you that the coin has a touch of wear, but it would also tell you nothing about 99.8% of the surfaces.

So they attempted to market grade the coin on the 60-70 quality scale so that for sight unseen/internet transactions it could be priced more in line with the actual quality of the coin. Ok sure, but calling it MS61 implies that it is uncirculated, when it is not. It also implies that the fields should be very baggy, which they are not. So really we've gone from one terribly uninformative grade (AU58) to a terribly misleading grade (MS61). It's not really an improvement, especially because quality wise this coin is really a 64, as in if those tiny areas of rub were instead hits or some other similarly sized detractor, that's what the grade would be. But they typically don't want to market grade coins with a touch of wear that high because with the MS prefix they are calling the coin uncirculated and they have a grade guarantee to stand behind. So essentially these market graded coins are usually capped at MS62. This doesn't let them grade high enough when it is warranted though, such as on this coin.

Under the scale I am proposing this coin would be graded Q64 AU. The Q64 grade tells you that it is a 64 on the quality scale, and the AU designation also tells you that it has a touch of circulation wear. It doesn't have the problem of an uninformative grade like AU58 has. It doesn't have the problem of calling it an uncirculated coin with an MS grade when it is not, and it doesn't have the problem of giving it a grade of 61 that suggests it is an uncirculated dog when it is a gorgeous coin, and it doesn't have the problem of capping the grade at 62 when it should be higher.

Look, conservative grading works but has significant shortcomings when it is adapted to sight unseen or internet sales. Market grading is a solution to these problems, but it produces fictitious grades that attempt to correct pricing but provide bad information about the coin's preservation state. I would say that is even worse in some ways than conservative grading. The problem with market grading is that the idea behind it is great, but they didn't fix the problems with the grading scale when they implemented it. All problems with market grading stem from the use of what is necessarily a conservative grading scale. So let's fix it.

 

Yes exactly, and great example. I mean you could just call it Q57-70 for simplicity. It's just that no AU coins would in practice grade above Q67 because by definition any observable wear would be too large of a detractor to grade 68 and above. Does that make more sense?

 

It makes perfect sense, and while I understand your use of the QXX (AU/MS) grading system, I think people would be able to infer what you are saying by just using AU63 vs MS63 rather than introduce the QXX. Afterall, the AU63 grade has been something collectors have been discussing as a theoretical grade for decades.

 

Yeah I considered that, but how would you tell a new MS62 from an old market graded MS62, etc.? The QXX AU/MS format serves two purposes. First it makes it clear that the coin is graded on the new system, and second it diminishes the importance of slight circulation wear on the grade, by relegating it to a designation. AU63 says that it's a circulated coin that is the quality of a 63. Q63 AU says it's a 63 quality coin that happens to have a touch of wear.

 

An ideal grading system must be SIMPLE and PRECISE. Anyone can learn it and it is unchanging over time. Unfortunately, WE DO NOT HAVE such a system but decades ago we came very close.

If you wish to place a value on a MS coin (very complicated and fluctuates for too many reasons INCLUDING WHO OWNS/GRADES IT ), there are many variables. The amount of original surface missing due to friction wear, stacking compression, or strike weakness is just one of many characteristics that factor into the opinion of the moment. A famous TPGS professional is reported to have said something like "If a coin is worth grading once it is worth grading several times."

If you wish to identify a coin forever regardless of market conditions or desirability for as long as it stays in the same condition every time you see it (PRECISION) , YOU MUST REMOVE (SIMPLE) as many "market variables" as possible. That system no longer exists.



Jaelus, posted: "No, that system has never existed."

Oh but it did. In addition to using the word "technical" incorrectly (as it was FIRST applied to grading coins in the 1970's), you are uninformed. What I just described above was the "TRUE" technical grading system that was used for internal records at the ANA's Authentication Service in Washington, DC and then at the first TPGS - INSAB. It was simple and precise leaving much less room to disagree with a grade.

How do I know and why am I making a big deal of the misuse/corruption of that word and that grading system? It's because I take FULL CREDIT for being allowed to devise and name that system we used to grade and ID coins based on Sheldon's description for each grade. Notice, that there is no mention of value connected with Technical Grading BECAUSE we did not place a value on coins. We were not professional coin dealers! We just described their condition of preservation. The value of a coin SHOULD NOT change it's obvious condition of preservation as has been done for decades leading to gradeflation, variability, and changing grades for the same coin over a period of months or sooner.

PS If you do a little reading, you'll learn that coins were originally graded to describe them to other folks who could not see them. Sheldon came along and used their condition (grade) as a guide to price them.