CAC article- Nov.08 Coinage

Ruben, you asked to be given proof that shows that CAC stickers don't cause great premiums to coins claiming that it is CLEAR (your own capitalized word) that they do. All I wanted was to see actual evidence of coins being sold at these premiums...not a bunch of marketing claims off the CAC website. Not only were you unable (or unwilling...I'm not sure which) to provide those, you decided to throw in personal attacks claiming that I am easy to manipulate and implying that I will be taken advantage of in my professional career. That is both childish and inappropriate. If you want to continue to spread your conspiracy theories around and rather than provide proof dish out insults, I do not want to be a part of it. I am through with this conversation.

 

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Your right, it was a mistake because it doesn't matter ... the CAC scam will, as sure and the sun follows the night, result in escalating prices in CAC tagged coins. Either that or everything learned about Economics and business since Adam Smith is wrong and if so...I need to find a good Kibbutz to move to...

Ruben

 

That's your basic logic? Is that what you want to argue? Ok. No wonder you have your viewpoint. You have flawed logic. You're saying that every type coin in a MS-64 is equal? You're wrong. And I've seen plenty that had obvious eye appeal problems that would exclude them from receiving a CAC sticker. And I've seen some where the problems did not show up on internet pictures.

I still haven't seen you describe how this is a scam. With the object being clearly stated by the company. And I agree with what they're doing and that it is possible and appreciate the additional opinion. No, they're not putting their own grade on it. They shouldn't have to. All they're adding is whether they too, feel it's right, wrong (and do nothing), or under-graded. Wow, what a scam.

 

Then lucky you! With your expertise, you'll be able to cherry pick all those cheap, slabbed, A grade coins that haven't yet been sent to CAC! Then send them in yourself and sell them for the (supposed) windfall profit.

 

ROFL

Your not getting it. Your not following the business logic because your too stuck on the validity of the grading systems....

Lets try it this way...

Is their any way that the TPGs can grade their submissions which would make a CAC sticker useless?

Ruben

 

The reason Ruben thinks the CAC is a scam boils down to this. The CAC offers their opinion of the TPG's grade (opinion). By doing this, they create doubt in the consumer's eyes regarding the credibility of the original opinion. The creation of this doubt only serves to ensure that the CAC's opinion becomes more necessary thereby increasing their revenue. Before the creation of the CAC, the opinion of the TPG's did not suffer from an a severe credibility problem. Ruben is saying that the CAC is purposefully discrediting the TPG opinion in order to make their opinion essential.

To some extent, he has a point. The CAC does not do anything to a coin that does not qualify for a sticker. This only ensures that these coins will be submitted over and over again while the CAC collects the fee and denies the sticker over and over. If they want their opinion to be ethical, they need to assign a different sticker to the coins that don't meet their requirements for that grade and include those coins in their online database. Any coin that gets a bad sticker will of course have the sticker removed by the owner, but they can't get away from the online database.

I like CAC coins that have a sticker for buying sight unseen coins, but I do recognize the potential evils of this system.

 

Your not Getting it.

Regardless of the accuracy of the CAC standards, either resultant evaluation or through validation of method, which would actually require a resultant quality control formula anyway, will a CAC sticker cause the market to give their snickered coins preferences in the market? If it is YES its a scam. If it is NO then its STILL A SCAM because they're Advertising is implying that it does.

If they had ETHICS they would regrade the coin and reslab it.

Ruben

 

Finally an explanation I can understand , thanks , I like the idea of CAC , your right they should put stickers on every coin would be ideal , but I 'll still use the extra eyes .
rzage:smile

 

How bout if they do like Lehigh suggested and put 3 different stickers on every coin they grade .
rzage

 

If people are paying a fee for an additional check whether a graded coin is at least a B to A type coin, then why shouldn't they have preference in the market?
People on ebay can hide serious flaws through digital photography. If it's a highly desired coin, that would obviously classify as a C grade, but you can't tell from the doctored photo, then everybody's going to bid it up at A price ANYWAY! But you're going to get less for the money.

Why should they have to re-slab anything? They're only saying they agree that a coin was properly graded in the slab it's already in! They admit that there are C grade coins, within the same grade, that should still have the same slab, but don't warrant their sticker.

Does anybody know what the submission fee is?

 

As Lehigh stated, they won't do this because sellers would just remove them.

 

There is something more insidious that this though. It doesn't matter if they are accurate with their evaluations or not. Market economics dictate that the standard can not be maintained over time because the response of the market to the fear their stickers will generate will erode the economic need for tight evaluation because it supersedes the normal interpretation and flow of information in the market.

The purpose of their service is to distort the market by establishing themselves as a gatekeeper in the evaluation of market necessary information. Where the TPG is saying this coin IS a MS62 an we slab it as such in such a way as to evaluate the coin and protect it from tampering. The service is grading coins which are otherwise ungraded.

The purpose of CAC is to fix the market. By establishing their sticker as proof that a grade, no matter how it was acquired, is either above or below market expectations within the grade level of the TPG they are intervening in the market value of a product by causing irrational fear.

An MS68 Morgan which can be expertly evaluated as a above average coin without a sticker will soon be discounted for lack of validation. The market would demand this behavior assuming that CAC has a successful operation. And CAC is SAYING they expect this result to its clients through its advertising and press and saying it in plain English.

Ruben

 

BTW, according to the article in Coinage, the guy that has founded CAC, is the same guy that originally founded PCGS and then founded NGC. Which were both founded to try and improve market conditions.

I'm normally very skeptical, and of course this is going to bring in more profits for him, but I have no reason to believe this won't serve to help the market in the long run. Despite having supposedly inflated prices for them right now, because the concept is new.

If people are willing to pay a premium for slabs with the sticker, who cares? It's not your money. Anybody who thinks it's such a scam should report it to the FBI and stick to only buying raw coins using their own expertise and judgment. Just avoid it altogether.

In the mean time, others will be happy with their CAC slab.

 

Yeah and don't slam your door on the way out.


What will happen with the CAC stickers is they scam collectors and people will leave the hobby. That is what will result.

Ruben

 

Why do you use the term irrational fear? You've never seen a bad MS coin?

Can you at least agree that there may two 1884 Morgan MS-64's side by side in the same slab both graded properly? And that one may have a bad stain on the reverse or a black streak from something, while the other is very clean. They're both MS-64s! So CAC aside, if the dealer was charging 60 bucks a piece for them, then it's ok for me to pay 60 for the clean one and a less knowledgeable, or less discerning collector to pay the same price for the bad one?

You don't think it would make more sense that the one with the mark on it, despite being the proper grade, should be priced at 50 and the better quality one should be 70? That's the theory behind this from what I understand and I agree with it. This being just one example of a scenario.

 

Like I said Ruben, I don't like some of the potential evils the CAC creates, but I do like the security the service provides with respect to sight unseen coins.

I am surprised that one of the TPG's has not publicly criticized the CAC. Without consumer support, the CAC will have problems surviving. Dealers will attempt to charge more for the CAC coins which will probably eliminate them from the dissent. However, if PCGS were to publicly denounce the CAC, the koolaid drinkers would jump right on the bandwagon in a second.

It leads me to believe that there is a measure of cooperation between JA at CAC and the TPG's. I don't even know what to make of that.

 

Wow, the premiums must be much higher than I had imagined. If anything, the coin mills in China will be the downfall of the hobby. CAC's the least of our concern.

 

As stated above, the guy that founded CAC is the same guy who founded PCGS and NGC. It's not likely the companies will complain, although both are under different ownership now. It's possible. We'll have to see what comes of it.

I think prices will be artificially inflated in the short term because it's new. Eventually they should become more common.

 

Because that is the textbook term....it is the technical term.

That would be expected market behavior but really those two coins, if the TPGs were doing their jobs, would be different grades. I didn't mean to say that because it obstructs from the original CAC issue, but I thought it was worth saying.

If CAC was stand up they would re slab the coin with different grades, with published standards and a validate process instead of being gatekeepers of other peoples graded coins.

 

Look Ruben, you don't even understand how grading works. No, the lesser one should not be re-slabbed. If the coin meets the requirements for a MS-64, it doesn't get dropped to a MS-63 only over eye appeal. There are a lot of ugly MS coins out there that are graded properly.