Controllers of the Numismatic Hobby

What no one seemed to touch on is that every hobby, not just coins, has fallen to TPG's of some sort. Comics, stamps, lunch boxes, postcards, etc. If we all bought the books before the items we would all be as knowledgeable as any TPG. This last generation has only themselves to blame. Their faces are buried in cell phones, tablets, video games, etc. Laziness has led to making their own problems. How many of this current generation do you see in a library anymore? I go often and it is usually people 40+ that I see most times. I have an extensive library on hobbies of all sorts that I often sit down with on a regular basis and bone up on things I collect and do not collect. When the times comes to do tag sales, flea markets, etc., I am ready. You see it here when someone posts a coin that they think is valuable and refuses to take our advice and then says they are going to send it to a TPG anyways. I would blame no one but myself if I did not educate myself first.

 

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If more felt like you, my sort of militant attitude wouldn't be necessary.

 

The TPGs came into being in between my two stints as a collector. I sure find all the observations interesting. But being something of a devil's advocate here, is it possible that the hobby has forgotten the true seriousness of whatever problems spurred on the TPGs? (Just tossing it up for discussion).

 

The internet has made dealers less important than ever. I agree that dealers buying and holding coins for inventory supports the price level, but its importance has a lot more to do with the fact that most collectors buy and own coins that are common or not hard to buy.

 

TPGs would a lot less important financially if US based collectors (who are almost the only ones who prefer graded coins) didn't make such a big deal out of minimal if not imaginary differences in quality and pay substantial to exorbitant premiums for one or a few points on the grading scale.

As for counterfeits, if the price level reflected coins actual numismatic merits instead of (concurrently) being treated as "investments", a lot less of it would exist because it wouldn't be (as) profitable to do it. For the coins I buy, outside of one series (the more common South Africa Union), the coins are too scarce and the price level isn't high enough where it is worthwhile to fake most of them.

 

The last time I checked, the combined population reports recorded about 470,000 1881-S Morgan dollars in all grades. Even assuming every last one has been graded (which I do not believe) and if every one has been submitted twice which is almost certainly an exaggeration, this is at least one for every 10 US collectors if the active base is about two million (a guestimate of mine). As popular as Morgan dollars are, I don't believe 10% of the US collector base owns a graded 1881-S. This leads me to conclude that a substantial minority if not majority are owned by "investors", possibly by the hundreds or even thousands in some instances by one individual.

 

There are a lot of factors that go into their success that goes well beyond just blaming newer and younger collectors as being lazy.

The most obvious difference is that the younger collectors and the next generation of collectors have had TPGs during their entire collecting career thus they are more likely to use them. We see these same kind of usage biases many places in life such as computers, cell phones, social media ect. People that spent a large portion of their life without a certain service are less likely to use something than someone who has had it around their entire life.

The two other major things are liquidity, and doing what one can to protect their investment. In the internet age most things need to be slabbed to sell quick unless you are willing to take pennies on the dollar. With society in general now everything is appraised by third parties why should coins be any different considering the cost of a lot of them? People will disagree with TPG grades on various coins, but at least someone else took a look at it and gave an opinion that provides a bit of protection as opposed to depending entirely on the word of someone who the better they make the coin sound to you the more money they will make.

This doesn't mean there aren't people who blindly by anything, there are and they would still do that with a TPG or not. Are TPGs perfect, not nothing is that is run by humans but they are certainly a lot better than a free for all of dealers just saying whatever they want to jack up the prices. We see threads every day of dealers trying to get many grade levels up for slabs, they would be MUCH more successful with that if that coin was raw.

My point is basically that there are many reasons for why the TPGs have been so successful in this global increasingly internet based market we live in today. The TPGs and that internet market though are why I am not the least bit concerned that the hobby will continue to be enjoyed by future generations for quite some time.

 

TPGs are not even a factor for me and my collecting interests. I am a numismatist.

 

This, x1000. I collect coins, not plastic. (Well, mostly not plastic... I've considered buying a couple of coins in interesting slabs as exonumia pieces, but that's not really relevant to my point.)

OTOH, I am very glad that TPG companies exist, and that there are good dealers supporting the hobby. As far as I'm concerned, a slab is a strong indication of authenticity, and the grade provides a starting point for a conversation about price. That is it.

I personally grade every coin I'm considering purchasing. If it's a slabbed coin, sometimes that matches up with the label on the holder; sometimes not. Dealers I purchase from have the same attitude.

I've said this before, but what I look for in a dealer is a broad inventory of certified, raw, mint state, circulated, key dates, and type coins within their specialty. I also like if they have some oddball or interesting items in addition to your everyday/average coins. For instance, maybe they have a pattern coin or two, or some interesting exonumia items.

This tells me that they love coins and have the knowledge to purchase a variety of things. Those are the type of people I want to support and have supporting my hobby. Some of those people submit coins to TPGs, and some do not. And, it makes not a whit of difference to me. All I'm after as a hobbyist and numismatist is a great coin at a fair price (rather than a fair coin at a great price). Give me that, and I will be happy.

 

I'm vey anti-slab and the attitude or focus that comes with slabbing where profit potential is the greatest concern with purchases. I collect and study coins - the grade of the coin is of very minor importance to me. I rarely grade my tokens and my ancients are described not graded. I don't collect coins because of their grade but because they're important to me in some way.

 

There will always be a place for TPG's, for the reasons many have stated. However, over the years they have become a substitution for skill on the part of the collector, which leaves that collector all the more liable to being taken by things like fake slabs containing counterfeit coins.

And the majority of that kind of slabbing took place early on in the TPG process, when they were the New Hotness and seen as the "future of collecting." It may be that it wasn't until then that people actually realized how common 1881-S was in MS66, after spending bazillions to slab 63's and 64's. Oops.

 

I would disagree here, as with anything in life things are what we make of them. The type who only buys a label on anything would be even more susceptible without the TPG. They can be a very good learning experience for grading for those that have the interest, if the interest isn't actually there TPG or not they are setting themselves up to be taken advantage of.

 

We can't help the types who only buy the label, and they are the ones which cause me to reluctantly accept the need for TPG's, but we can help the ones using crutches who would walk normally if we took those crutches away.

It's the people who take Jwt708's studious attitude towards numismatics - and for many that's the draw of the hobby, the basic interest in studying history - who can be weaned from the "need" for a slab.

 

I think a lot of the OPs "gripe" is due to the area where he collects. A huge amount of the TPGs business is in the slabbing of uber-common bullion. In that arena, it's all smoke and mirrors, and arbitrary and unwarranted mark ups for the "magical" 70. If your goal is to hoard silver and gold bullion, then TPGs should never be a part of that equation IMO.

I do personally think TPGs serve a purpose, but I am also of the philosophy that people take them too seriously and that micro-grading differences have really consumed the hyper-competitive registry players. There is often no defensible difference between an MS66 and MS67 graded classic silver coin, but the price tags could be multiples in difference.

The crossover, regrading, maxing out, and registry games have filled the pockets of dealers who sell the "best of the best" -- think Legend Numismatics here where they sell PCGS graded coins only, and rave about how they are for the most discerning collectors. In reality, they provide investments for billionaires and millionaires who don't give one toot about numismatics, history, or the hobby. That model seems to have subsumed much of the hobby, and if you visit the PCGS coin forums, you will quickly see how many have drank the kool-aid.

I have been slowly getting out of collecting USA coins. The prices are simply silly for inconsequential differences in assigned numerical grade. The vast majority of collectors have been hoodwinked into thinking the grade on the label is somehow magical and infallible. The TPGs have also been enablers of the madness that ensues after the US Mint releases a new "limited edition" trinket. For example, the new 2016 Gold Mercury Dime was followed by immediate flipping and hype, only worsened by the TPGs. The double-whammy US Mint / TPG machine really brings out the sleaziest of the hobby, and I just don't care to be a part of that.

OK, rant over.

 

I know how to grade and am just as comfortable buying raw as I am buying slabbed (I buy the coins for the coins). Having said that, I prefer slabbed coins. They protect the coins and make them easy to examine and to show. They make the coins much easier for loved ones to identify (matching serial numbers against your price list). They also provide assurance of authenticity.

More importantly, they make internet sales much easier. Even great photos can only convey so much compared to viewing a coin in hand. If you're shelling out 4 figures for a coin in an internet auction, especially for something like an upgrade where minor grade differences can matter more, you're going to feel a lot safer knowing a third party you trust has graded and authenticated the coin. In the age of online transactions, slabbing is very important to getting top dollar for your sales and making high value sales viable.

I've spoken to some dealers who talk of customers seeing a coin they like at a price they like but refusing to buy it because it is slabbed, especially in the world coin market. This is just nonsense.

Are there coins out there that have been slabbed for no good reason? Absolutely. Are there collectors/investors out there who buy slabbed coins without knowledge? Absolutely. But slabs provide enough clear benefits that no-one should turn down a coin simply because it is slabbed. Buy the coin, not the holder.

 

Slabs are definitely a mixed blessing. As someone already mentioned, they provide a decent hedge against now rampant counterfeiting (as long as one uses reasonable caution when buying slabs, since counterfeited slabs also exist). Though I have no direct experience with selling slabs, it seems like they bolster the sale-ability of a coin, at least in general.

On the negative side, slabs do entrap the coins in a not always attractive plastic cocoon. Even the word "slab" sounds yucky. This gives coins a solemn, museum-esque aura that may sway some from actually touching them for fear of downgrading it from a 70 to a 69. In some cases that's a good thing. In others not so much. Grade-flation and ridiculous price differences between contiguous grading levels, also already mentioned, make the hobby sometimes feel frustrating and silly.

And the hobby is definitely driven by money, money, money, but what isn't in our society right now? This is probably less, or at least equally, the fault of dealers and TPGs than a reflection on where we've gone as a culture. We seem hedged into a kind of economic fundamentalism, which makes sense in some areas but may actually do damage in others. The hobby market overall, not only coins, has flowed with this inexorable tide.

The most one can probably do is find trusted business partners, always a challenge, and educate oneself as much as possible. If you're into coins for a profit this goes doubly, triply or quadruply so. Expecting to make money off of coins without an education abandons one to the rages of fortune and luck. Be careful out there.

 

One thing nobody's mentioned yet is that slabbed coins are a great teaching tool. Looking at a lot of properly graded coins is the best way to learn to grade, and PCGS and NGC definitely have a vast majority of correctly graded coins in their holders. They don't whiff very often. The same goes for learning to recognize market acceptable toning.

I'll buy slabbed bullion, but I won't pay for plastic. I agree this is ridiculous, especially the premiums for 70s.

You do have a point, but those "inconsequential differences" really only happen in the upper ends of MS, past 65.

Yes, absolutely! This is what slabs are for, IMO. I would add that they should make liquidating your collection easier when the time comes. It's one case in which the very human tendency to look things up in a price guide actually works reasonably well.

That said, of course, the idea of price guides for a collectible, for which the quality can vary extremely from piece to piece, is nearly laughable.

That is literally ridiculous. So ridiculous, in fact, I don't want to waste a lot of words on it. Needless to say, there's a difference between buying and paying a premium for the plastic and buying the coin without paying a huge premium for the plastic.

I think the holder is worth a small premium. Call it $5 for the excellent protection, and possibly a few bucks for the authenticity opinion, but that's about it.

 

I strongly disagree with this. I see very little consistency across the TPGs, and because they assign "market" grades, their standards change over time.

 

Like any teaching tool, they work better in the hands of an experienced teacher.

I would say there's vastly more consistency between coins in a given NGC or PCGS holder than there is between different dealers, even if those dealers are all experienced numismatists. Spotting "market graded" coins is a more advanced learning exercise.

 

"Trust the TPG's because they get it right. Except when they don't."