Define Market Grading

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Simple, market grading is overgrading based on how much more the PCGS customer can get when a Large Cent that should be graded EAC AU-55BN is made into an MS-64 RB and slabbed.

 

WOW, usually there are multipage discussions on a coin or coins or who said what. Now we have a multipage discussion on what a grading system really is or isn't. I've read all the posts so far and really, really glad that I still have no idea or interest in what a Market Grading System is all about. Think I'll just go out and wax a car. :goofer:

 

Sorry Doug, busy week at work. I just started the next phase of my training, which will involve 12 hour days for the next 6 months - so until that is done, I'll probably only be able to get on here on the weekends.

Very interesting discussion, and I appreciate you doing this.

My question, and I guess the source of my confusion - I thought technical grading included things like luster, and strike. If not, then what is technical grading? Just marks?

I very much agree that the TPG's value grade - and I believe this was my point in the other thread which prompted this discussion. This is what I have always understood market grading to be. They assign a grade based on the estimated value of a coin, weighing eye appeal and rarity into their appraisal.

 

I guess what I use to grade my coins is a hybrid of market and technical grading then: I absolutely evaluate marks, but I consider the luster and strike to be technical aspects of a coin. They were influenced by how well the coin was made, and how well it was preserved and treated. I absolutely incorporate them into my grade, along with eye appeal. An eye appealing coin should grade higher - there is no doubt in my mind about it.

Where I differ, however, is I apply the same standards to all coins, no matter the rarity. It irks me to see a VG 1916D in an F holder, just because its rare. It doesn't matter!

How do you feel about having different standards for different issues in a series which were made differently? For example, I will grade a 52D Franklin completely differently than a 53S Franklin - because I know that they were made to very different standards. I suppose this is your point about market grading, although I really do think it is valid. You just won't ever find a 53S with a solid strike, so if you are grading based on strike, you will never have a 65 coin. In this case, I agree with market grading.

 

I agree with that 100%. There is also the other side to that, which is the better *struck* dates are usually graded stricter (which I also agree with).

A good example is the '79-'82 S Morgan dollars (which are know for their sharp strike and strong luster). These coins are usually held to stricter standards than the average Morgan dollar. Then there are coins like the 1896-O which are so notorious for their weak strike and poor luster, that standards are weakened when grading them.

 

I think we had this conversation before.

Peace Dollars (Is strike an element of grade?)

 

Yes Paul, that is an exemplary thread. But it was before many of us were members. While we had a little bit of that discussion in my recent thread about strike ( http://www.cointalk.com/t102246/ ), the focus of this conversation is a bit different.

 

I have really enjoyed this thread. I now see why people say buy the coin not the holder and why the TPG's can sometimes vary so much on a coins grade. Ice

 

market grading = inflating the grade of a coin due to its rarity, scarcity in the market place or steep incline in price (i.e. $100 for MS64 vs. $1000 for MS65) in order to wring a higher price out of it for the sake of making the seller many times the amount of money they would be entitled to if they sold it based on actual grading standards.

 

You're right Doug, I meant to say the better struck dates. I'm gonna' edit that in now.

 

If you actually believe that then Doug is right. Market grading has transformed into value grading and the average collector does not recognize the difference.

 

Good point!

 

A coin should always be technically graded first based on unwavering standards, then a value based on other factors like eye appeal should come into play, that is why I like CAC as they have neutralized some of the "shifting sands" in the market grading game. A coin either is or isn't an MS-63 or 65 or whatever, then it becomes a either a typical, choice or superior coin for the grade and the market place will determine that. It should not be the TPGS' job to "influence" the market by tightening or loosening standards that should always be a constant just because a coin can be marketed in a more advantagous way to retail customers.

 

Also, if we compare our system to our British cousin's standards, strike and luster do matter even when considering if a coin with NO WEAR AT ALL qualifies as unc. To the British, a duller unc coin that is weakly struck should only grade GEF (Good Extra Fine) or Practically or Almost Unc. I personally think this is an extreme, but I have personally purchased GEF UK coins and had some of them slab out as MS-64 in extreme cases, but typically they come in around MS-62 to MS-63. When the UK coins are sold as Unc, they come back as MS-64 and highier in most cases.

 

My cynicism aside, market grading is the same thing as value grading IMO. You can't really separate the two because they are so closely linked. Which coins are the ones that see the most "grading slip" from one grade to the next...the keys. This eventually causes a shift in the other coins of that series because the key can't get three or four points away from the standard before the other coins have to move to "keep up". What they are really keeping up is appearances. This seems to be the exact reason that PCGS came out with the plus, so now they can market grade in smaller increments leaving room for the coin to "appreciate" in grade over the years as the way coins are graded becomes more understood. It all comes down to money in the end, it is never about a collector wanting the nicest coin for his collection so they reinvent the grading system and call his technically graded AU-58 and market graded MS-65, no it becomes about cash and what cash people will be willing to part with to accept the fact that what was once an AU-58 at $150 is now an MS-65 at $2000. If they want it bad enough and there is enough demand than they can trick themselves into believing whatever they want. And the sad thing is that it is not just true for our hobby, but carries over into other hobbies as well.