Technical grading vs Market grading

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Sorry Doug, but I have no idea what either term means. Could you PLEASE, help out a dummy? LOL Thanks!

swick

 

In a nutshell I would say that my take on Technical Grading is based upon the individual condition of every grade-able aspect of the coin. That means the Edge, Mint Mark, Date, Fields, Devices, etc., and then combining all of those and coming up with an overall General Field Grade, that could be Good, Fine, Very Fine, AU, etc. Then I'll take the General Field Grade and following (usually the RedBook standards for the series) begin breaking it down further on a scale of 1-70. That could be determining the difference between a G-4 and a G-8 or a VF25 and VF-30, etc. That's Technical Grading to me.

(Using Capped Bust Halves as an example.) Market Grading in my mind is when you have a coin that's Technically Graded (say VF-35) but because of who owned it (a Jules Reiver pedigree) or the rarity of the piece (1815/2 CBH) and then bump up the grade to say XF-45. Obviously somewhat higher than what the Technical Grade would normally be for a coin of less desirability, but grade is a pretty good barometer of value when it comes to coins...

Take Care
Ben

 

Poorly struck coins can market grade less than actual wear grade, due to details for the technical grade being " unstruck" rather than worn.Look at 1922-D Lincoln cents for an example.

Also in the other direction, nice AU coins can bring more than BU coins in the market. Some real good looking well struck AU's have brought above MS-60 based on appearance outstanding eye appeal.

Am I close?

 

That's certainly true, and might be the key to understanding Market Grading.

I think the point of Market Grading is this : For a given issue, all coins of a given Market Grade have similar Market Price. So a really great slider AU might be bumped up to MS60 or 61. MG is more subjective.

Technical Grading is more objective and mathematical. It takes into account multiple factors - surface preservation, strike, luster, wear, hairlines, and overall eye appeal. Each factor has a grade, and a weighted average determines total aggregate grade. Some factors are more important than others.

I don't think TG explicitly takes into account toning or color* as a formal factor, but rather rolls that into the "eye appeal" factor.

Anyway, I'm just rambling. This is a great topic, and I'm interested to hear what other folks say.

* i.e. Red and Brown for coppers

 

As you see, I am blending market VALUE with market GRADE, may be a bad practice, but I think of what "this coin is worth" rather than "what number is it".

I agree...great topic, should be fun and educational to watch

 

Great topic! I agree with 900fine. Just today at the coin shop I saw two coins grade about the same, but the coin with the darker toning made it worth a couple of bucks more.

 

and if I may... this is exactly what I was talking about, Doug. I think grading is exactly that, grading. What I think is that people sometimes equate grade to value, and that's just not true. As I said in the other thread, the grade of a coin is what it is. Either the horn is there, or it isn't. And just because it's a rare date, the horn isn't suddenly not as important to the coin's grade as it would be on a common date.

Value is a different story entirely. Value of a coin is based not only on the technical grade, but the eye appeal, the rarity and even the desirability of pedigree or other factors, but none of those factors should affect it's technical grade.

 

OOPS, I forgot to add. When I grade the tone/color of the coin has no bearing what-so-ever. It's not mentioned in any grade coin guide that I'm aware of either.

 

I am a lot more cynical about market vs technical grading. There are standards for technical grading, e.g. the ANA Grading Standards book, or Photograde. However the usual dealer will grade a coin somewhat higher - to make more money off the sale. The typical grade assigned by a dealer is the Market Grade.

 

I have a bunch of Morgans, Battle Creek pedigree, 64* just because the wild toning it gets a star, but the grade did not change. Value sure goes up, grade stays the same. Good point !!

 

A great subject full of so many variables and opinions.

I use the ANA book myself. I like the fact that they do mention weak strikes etc.
I am by no means a professional grader, however, being a 2 Cent Junkie I have noticed a lot of things about them over the years.
For example 1867 coins are often weakly struck - no mention of this in ANA but believe me it's true.

Actually most of the "technically" graded 2 Cent pieces I see slabbed by reputable TPGs are correct in my opinion.

Now as for "market" grading I've seen some of the worst overgrading ever on these coins especially the key small motto and 1872 dates (go figure).
At a show I had a dealer (with three severely overgraded 1872 tell me I'd NEVER find one with with a strong WE if I could find one with WE at all. Well, I have three now - NOT razor sharp but most defninetely strong.

On another occasion I purchased a VF20 1872 from a dealer off a web site. NOW, this dealer is actually a contributor to Redbook. When I received the coin it had numerous rim dings (quite noticeable) and less than F12 detail. I showed this coin to my local dealers as well as sending pics to my friends on the internet.
When I inquired (and I had read the policies believe me) about returning the coin he was very rude. His main argument? I'm a contributor to Redbook. Big deal - I got my money back on a coin that I told him "was grossly over graded".

Now taking this further into TPGs I do feel that some coins do get over graded due to rarity even if they are not extremely rare. What one uses as a grading guide really comes into play here I believe.
Mikenoodle mentioned the 1927-S Standing Liberty Quarter - boy did that hit home!

This is a coin that I always thought was under rated even in lower grades so I used to buy them in VG (my local dealer using ANA standards) for $10-15. Many of his VGs were just a hair short of F12. Then as I got into ebay and shows I would see PCGS coins at F12 or even 15 that had nothing on my raw VGs. Difference? PCGS really seems to concentrate on the knee and not the shield.

So should I send my VGs in to be slabbed by PCGS hoping for the F12 or higher and turn my $10 coin into a $90 coin (less slabbing fees of course). Then I could sell the slab and not the coin.

Through all of my rambling my point is this. There is a big difference between technical and market grading. There are also a ton of variables in the overall equation.

 

I am a total novice when it comes to grading still, so I really don't think I am qualified enough to really give an opinion on these subjects, still a lot to learn. But, I want you guys to know this is teaching me a lot, and I am sure a lot others, and is a very interesting subject about different terms and aspects of grading. Can't really get out what I am trying to say, other than this seems to be a darn good thread to learn from.

Phoenix

 

I think you are just trying to confuse me even more than I am now on how to grade large cents by throwing in the EAC grading on large cents. Choice, average and scudzy are widely open to interpretation. I have seen those used for a variety of coins that I would disagree with. At they same time I do take into consideration the details of a coin and then the condition to determine what I might pay for a coin. I also find it hard to imagine that out of 175 million large cents only 1.5 million still exist. Not arguing, but wow - no wonder problem free coins are hard to come by in some of the earlier dates. This is a really good thread.

 

Had to laugh at that one as I saw what you were posting while I was posting and yours was finished first.

Still a ton of variables involved and methinks one of them might be that raw market grading can be a heck of a lot worse than TPG market grading. They want to make that sale.

 

So all the major players in the grading game use Market Grading. The way I understand this is when the coin market fluctuates then the grades should also? As we are all so painfully aware the value of our collections changes as the market does, but the beauty of Technical Grading is that the grade stays the same.

Turn around what I posted before about the grade of a coin being a good barometer for value to... as the value of a coin goes down then so does the grade I guess, LOL...

Let's here it for old fashioned Technical Grading Hip, Hip, Hooray...

Take Care
Ben