Market Grading vs. Technical Grading - Round 35!!! Ding!

EDIT - I was completely wrong when I answered Question 1 below last night so I have revised my answer.

No. Strike does not affect a coin's grade under Technical Grading standards.

Hmmm. That's a good question. I know what you meant to ask but I think what you meant to ask is, "Does a technically-graded coin ever get better money than a market-graded coin of the same grade (same denomination, date, MM, etc.)?"

I think the answer to that question is going to be "rarely" because buyers will tend to market grade the coins themselves (and many of them may not be aware they are doing so). Buyers take into account things like eye appearl that affect the desirability of the coin and that affect its price.

Would you pay more for a Walker Half that grades MS-65 by Technical Grading standards [but has diminished luster, two marks that happen to be on Liberty's leg and on the Sun, and generally poor eye appeal] than a Walker Half (same date and MM) that grades MS-65 [but has great luster, superior eye appeal and the one tiny mark hidden in Liberty's gown, a mark hidden in the eagle's feathers and a mark-free Sun]? Maybe that technical MS-65 has very, very unattractive toning? Would that affect what you would pay for it?

The point is - if a coin technically grades a certain grade but is unattractive it will most likely sell for less that attractive coins of the same grade.

Hope this helps.

 

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the "current" ana course curriculum including "grading coins today" by don bonser, as well as the "grading mint state coins", which includes a dvd by j.p. martin, gives a good comparison/contrast of technical vs market standard grading.these are circa 1992. the first grading course which i took from the ana in 1982 was only technical grading..not sure when it was written.
i still have a habit of technical grading in regards to coins whether circ or mint state and also grade by series.
best wishes all and nice discussion,
steve

 

No it wouldn't.

That's the whole point. The coin would be MS-65 graded technically. A weakly struck can grade MS-65 and above based on technical merit alone. It is when you consider what the market is willing to accept, or market grading, when a coin weakly struck may not grade MS-65 or above.

And you seemed to contradict yourself in your statement that it is agreeable that the coin grades MS-65 by technical standards, yet a weakly-struck coin cannot grade MS-65 under Technical Grading standards. You attempted to illustrate technical grading using a market example. That's not technical grading.

I will add this also. Market grading does not always overall lower a grade. In fact, market grading will quite often raise the technical grade of a coin due to factors such as luster, strike, eye appeal, etc.

I'm sorry, but your post actually confuses me, because you are using the terms technical and market utilizing the same example. Here you state that the MS-64 is a market grade, while above you state it is a technical grade.

And the adjustments to the technical grade for such a coin is what we call market grading.

 

When I was first introduced to the term "market grading" many many years ago, it was defined in terms of market strength. When the market was hot and the demand for certain coins in certain grades exceeded supply, those coins that were just short of the next grade would get bumped up in order to satisfy demand. Conversly, in a slow market, where supply exceeded demand, those same coins would get downgraded because collectors had plenty of options to choose from and overgraded coins would sit in the dealers stock for eternity. It was based soley on what the market would accept based on supply and demand. There was no defined set of "standards" for market graded coins.

It wasn't until the ANA, that very organization that established the new 70 point grading standards in 1977 abdicated their responsibility to maintain those standards that we now have alleged ANA standards that in fact are nothing more than a reporting of what the market manipulators have been able to accomplish.

Just like PCGS "created" a market for slabbed coins and CAC is "creating" a market for their services, those in a position to "create" market grading standards will do so in the name of profit.

This whole discussion would be moot if collectors stopped looking at the label and simply evaluated the coin in terms of what they desire for their collection and what they feel is a fair price. Think about it. Do you really want your coins graded based on what someone else is willing to accept?

 

greetings all, once again!

my extremely humble opinion, (and there are many far more knowledgeable than me on this board...both much younger and just a hair older than i am) is in complete agreement w/ vavet's last statement...it boils down to:
beauty is in the eye of the beholder and any given coin is worth exactly what a given collector is willing to pay for it.
i try to establish a grade and value balance. i have "overpaid" (according to "established markey values") for a coin i personally thought was gorgeous, as well as paid less for a coin i liked, yet did not meet certain grading criteria. it all depended on what i personally felt a coin was worth. some people would feel i did well, others , perhaps would not.

i just think collectors should study and think for themselves before trading money for coin...whatever the given holder states.

also...NEVER ,EVER hesitate to ask for advice if you are unsure about a given coin. there are true experts out there willling to help you, especially on this forum.
to give an example... whenever i purchase my first bust half..i am going to be asking Ben (bonedigger) for his opinion. there are also a few others i would trust greatly in this matter. i believe all the moderators, both young and not so young, have seen more coins in their hands than i will ever. when i need advice..i will be running to them if i am in doubt. there are some brilliant true numismatists on this forum and i will never hesitate to ask them.

once again..only my very humble 2 cents (or less).

best wishes and may GOD Bless you all!!!
steve

 

You are correct. I completely blew that one. I need to quit posting late at night. I get myself confused. And this is one topic that is easily confused.

Sorry if I muddied the water.

You missed my point. My point was that people apply market grading even when they use think they are only using technical grading. They do so by adjusting a coin's value based on things like eye appeal.

 

You'd be amazed at how many late nights I close a browser tab after writing six or seven paragraphs just because I realize suddenly that I muffed something up. Heh, it even happens in the afternoons (which are like late nights to me sometimes).

 

Plus I am over 50. Need I say more?

 

Does anyone else see the conflict in "MS70, lightly struck"???

 

Speaking of Bowers, he makes an intuitive remark about grading in his book "The Expert's Guide...":

"Buy the coin, not the plastic" comes to mind immediately. This statement brings into question quite a few things regarding grading, and specifically third-party grading. Irregardless of the final "market grade", even if it is coupled with the technical grade (say a "market grade" of MS-63 with a technical grade of MS-65: "MS-65.63") would show us more information than simply the market grade alone would. Such a combination would reveal that technically the coin grades higher and thus contains attributes of a much higher quality piece, yet there is some form of detraction, be it somewhat to do with strike, or luster, or some other issue with eye appeal, that makes it unacceptable to "the market" to be viewed as an MS-65.

Yet, even still, this is not enough information to make a proper determination of a coin's worth. Without actually seeing the coin, preferably in hand, one still cannot determine by the grade what the actual detraction is. As such, one cannot make a proper determination if a coin is "worth" the asking price or not. Nor can a potential buyer determine truly if this particular piece is one that is truly desirable for one's own collection.

I'll put this forth with grading overall: every system of grading that is currently in practice is insufficient to make a proper determination of the coin's actual level of true condition and eye appeal, to determine the totality of detractions, the nature and extent of blemishes, nor the worth of any specimen.

Every coin needs to be seen and determinations made and agreed upon by both the seller and buyer of any coin.

The way Q. David Bowers puts it:

Grading and grade assignments are only the beginning of the issue, not the end of it.

 

- So is there a compromise between what I now understand as the Black&White Technical Grade and a Market Grade that also considers Market Conditions/Pedigree?

 

Yes and no.

It depends on the standard you use as well as whether you are talking technical grade or market grade.

Take for instance, the Barber Half from the fifth edition ANA standards:

Now, let's add the general grade description for MS-70:

Now, let's separate the technical grade from the market grade:

1. A flawless coin exactly as it was minted TECHNICAL
2. no trace of wear or injury TECHNICAL
3. Must have full mint luster and brilliance or light toning. MARKET
4. Any unusual die or striking traits must be described. TECHNICAL
5. The perfect coin. YEAH RIGHT! :goof:
6. Has very attractive sharp strike and original luster of the highest quality for the date and mint. MARKET
7. No contact marks are visible under magnification. TECHNICAL
8. There are absolutely no hairlines, scuff marks or defects. TECHNICAL/MARKET
9. Attractive and outstanding eye appeal. MARKET

Now, consider a coin that is perfect in every way with regards to #1, 2, 7, and 8 above, excepting the fact that the coin is weakly struck. The technical grade assignment must be MS-70, with the notations "weakly struck" in accordance with #4 above. That is pure technical grading.

Once you take into consideration #3, 6, and 9, and reconsider #8, you may now derive the market grade. The market grade cannot be MS-70 because it would fail #6 for strike. Yet, this is market acceptability, not minting technicality. The coin is still "as minted" and that is what technical grading cares about. In fact, #4 and #6 starkly contrast and contradict each other.

How can you have a notation of the coin being "weakly struck" when the coin does not fit the (market) grade to begin with? This is what happens as you mix market grading standards with technical grading standards. You end up with apparent contradictions.

That is until you realize that you have the choice here: You may designate the same coin as (technical) "MS-70, weakly struck", or as simply (market) "MS-64" (or even possibly MS-63). Now that is a huge difference. YET, if you truly look at this as a whole picture, (technical) "MS-70, weakly struck" gives a lot more information about the true condition of the coin than (market) "MS-64" does. Even (market) "MS-69" will not suffice in communicating the true condition of the coin, as (market) "MS-69" would presuppose an exceptional strike, which this would not be.

 

But isn't that what the market calls it?

 

my own personal opinion..i cannot give a grade opinion past ms65.
i simply cannot grade above that numerical system....i think it would take a true numismatist..for example (GDSMP, Bonedigger, Zaneman,Treashunt, Speedy...as well as a few others...) to go to ms 66 and beyond. i simply cannot fathom an ms 70 grade.. no matter market, or especially tech.. can i see to grade that type of coin..no matter the series..it is beyond me... to me an ms65 coin is an overwhelmingly beautiful coin,..especially in an older series... this is only my own opinion..it would take a lot of beauty and a substantially contact mark free as well as an incredible strike coin to give this kind of a grade to..... pedigree or series date not withstanding.
only my own very humble opinion.........
best wishes all,
steve