What percentage of coins are over-graded?

Discussion in 'Coin Chat' started by Dougmeister, Jan 25, 2020.

  1. Kevin Mader

    Kevin Mader Fellow Coin Enthusiast Supporter

    @Publius2 I agree with your assessment on the '69, but still a very nice coin! I would think that the greater range in difference might be at the lower grades through AU coins. But MS coins, being uncirculated, should be more consistent coin-to-coin and design-to-design. There should be better continuity and reproducibility between different parties, IMHO. Qualitative assessments inherently have a number of biases. That said, spending time at sites like Heritage Auctions will illustrate the range of assessments across slabs of different vintages. It can be a headscratcher at times how certain coins got graded so high or low. And this is at the root of why folks will crack a slabbed coin in hopes of a better grade the next time around. Buying on appearance and what you like take on a new meaning, perhaps the more important set of criteria, to sustain ongoing satisfaction with a purchase, as you did with your '69.
     
    Last edited: Jan 26, 2020
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  3. micbraun

    micbraun coindiccted

    Coins I buy are vastly overgraded, coins I sell are always undergraded :-D
     
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  4. GDJMSP

    GDJMSP Numismatist Moderator

    The thing is nobody outside the TPG offices even knows what those standards are. NGC for example has never, ever, published written grading standards. PCGS has published theirs twice, the last time in 2004. But that versions was different than their first version which was published in 1997. And no other TPG has ever published written grading standards.

    In contrast to this, the ANA has published their grading standards several times, the most recent edition in 2013. And if you look in the actual books and compare them, the grading standards listed are the same they were in the 1987 edition. Standards which were written and adopted in 1986. And no, it's not a coincidence that PCGS and NGC first came into existence in 1986 and 1987 respectively.

    That said, the TPGs most definitely do not follow these ANA standards. For that matter, PCGS doesn't even follow their own published standards from 2004 ! Coins are much more leniently graded than what their own book says they should be !

    Publicly, the TPGs deny ever having changed their grading standards. However, the 2 books both published by PCGS only 7 years apart - prove otherwise. Their current grading of coins being grossly different from their own standards last published in 2004 - prove otherwise. Comparison of coins graded prior to 2004 to those graded 2004 and later - prove otherwise.

    As for someone talking, they have, many times. But they are conveniently ignored by most. One of our own forum members actually wrote the first technical grading standards used by the 1st TPG, ANACS, back in its earliest days. Granted that was long before 1986 when everything changed and even the ANA adopted the new market grading standards, (the ANA invented market grading, not the TPGs) and PCGS and NGC came into existence. But since that time he has worked for ANACS, NGC, and ICG, and written countless articles similar to this one from 2009 where he readily acknowledges changes in TPG grading standards -

    https://www.numismaticnews.net/article/market_demands_change_grade_standards

    Now that is merely one article, but there have been countless others. Many also written by Mike, but more than one can count written by other great names in our hobby. All one has to do is read them. And they began to be written in 2004. None of this is anything new - but it is conveniently ignored by way too many !

    And for those who actually know coins, they don't need anyone to "talk", all they have to do is look at the coins ! The coins themselves and the grades on the labels are all the evidence that anyone would ever need ! But that too is conveniently ignored.
     
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  5. GoldFinger1969

    GoldFinger1969 Well-Known Member

    These folks speak to coin collectors all the time, individually and before groups. What do they say when asked about this ?

    Don't doubt it -- my Franklin Half-Dollar CU Posts -- but again, what do they say about this ?

    They can't be maintaining a Wall of Silence ?


    Thanks for posting this, fantastic article (gonna read it RIGHT NOW)....but let me play Devil's Advocate:

    If market grading is now the norm.....and if everything is HIGHER than it should be....isn't it like "grading on a curve" in school ? Nobody is really being cheated, because the MS65 coin you have from 1985 is -- if you crack it out or submit it to CAC or just have a buyer with a similar super-sharp eye -- will grade out as MS66 or maybe even MS67 ?

    So what's the harm if the refs have loosened the standards, but it applies to ALL coins and gradings ?

    Again...I'm playing Devil's Advocate, please don't attack me for downplaying it. :D

    On a serious note, I much more fear counterfeit coins than market grading. 7 ways to Sunday !!
     
  6. baseball21

    baseball21 Well-Known Member

    In all honesty yes. If for the sake of argument 90 percent of all coins were overgraded, then they are no longer overgraded you are just judging by an old and/or outdated standard. Realistically anything over 50% means the times have changed and it's time to update how you grade and look at things.

    Without question they need to be separated and realistically you should probably separate out PCGS/NGC from everyone else as well. Either way though TPGs represent an unbiased third party, 2x2 grading generally represents a seller trying to hype something up to maximize their profit

    Overgraded by todays standard for PCGS/NGC its probably 5-10% max. They've graded over 80 million coins combined and even if you cut the number in half you would have to find 2 million coins just to get to 5%.

    Forums are a lot like food review sites, you're most likely to find things posted people aren't happy with or feel they have an extraordinary experience with such as got a great deal. You generally won't get a whole lot of look at my unremarkable properly graded coins stuff in those types of discussions as they can often be started by someone trying to shape other peoples opinions (no I don't think that is what you are doing)

    Another thing to consider is the default by many when they don't agree with and/or understand a grade the default is to assume it's overgraded and express their opinion as such.
     
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  7. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Comments on the Numismatic News article:

    (1) The dichotomy between AU58/55's and MS60's has been well-documented. It's a "glitch" focused on appearance between great-looking CIRCULATED coins and mediocre-looking UNCIRCULATED ones. It may or may NOT be because of improper grading, IMO.

    I'm a bit confused by the article though: is the author saying that we the buyers should NOT be pricing AU's higher than low-60's MSs....or is he saying that the AUs should be MS's and the MS's should be AU's ?

    If a coin is TECHNICALLY Mint State and another is TECHNICALLY About Uncirculated, don't blame the buying public if they want to pay a bit more for the AU over the MS. Same thing with bills: lots of AU's look better (margins !) than low-MS 60's because the paper imperfections in the AU might not be visible under normal circumstances.

    (2) Is the author complaining that the low-60's MS should be low-AU's, priced below true AU58's ? I don't think he's saying that the AU's should be MS based on price paid by the public, right ?

    (3) I don't see decimal or 0-100 grading coming anytime soon. JMHO.
     
  8. GDJMSP

    GDJMSP Numismatist Moderator

    The answer is always the same - they deny it. They flat out deny that standards have changed.
     
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  9. desertgem

    desertgem Senior Errer Collecktor

    "Peridolia on aisle 3", Break out the denial papers!
     
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  10. Treashunt

    Treashunt The Other Frank

    Over graded?

    All the ones in dealers' cases.
    Also over priced
     
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  11. GoldFinger1969

    GoldFinger1969 Well-Known Member

    It would be interesting to hear from JA (CAC), and the 2 major TPGs to find out what percentage of coins submitted to them for a CAC bean or a higher grade make it.

    I bet they have the numbers.
     
  12. John Burgess

    John Burgess Well-Known Member

    now that this has been brought back from the dead I want to chime in.

    Grading is a subjective opinion, it's not gospel or fact, it's a 3rd parties opinion of a coin. And it's worth exactly that, their opinion.

    You might think it's undergraded, you might think it's overgraded, that's your opinion also, same goes for the coin dealer, owner, or seller of a coin, it's their opinion.
    Even CAC is an opinion of an opinion, and a coin submitted to CAC that doesn't get a sticker, doesn't mean it's overgraded, it just means it's not in the higher end of the grade and not top quality for the grade,,,, again, in their opinion. The green sticker is above average for the grade on the slab, the gold sticker awarded is described as "a coin that would easily green sticker if it was slabbed as grade higher",,, a stunner for the grade that it is.

    Now overgraded, undergraded, in slabs or 2x2s, it's all an opinion, no different than before there was third party grading, there is a bit more "sense of security" with their opinion I suppose, but you still need to know what you are looking at and your own opinion of the coin and their asking price for it. It didn't make things easier really except to add a lot more confidence that tpg graded coins are genuine. the rest after that, is opinion.

    the saying "buy the coin, not the slab" just means you still need to know grading and look it over and decide if it's worth the asking price to you, or you want to offer lower and disagree with their grade and maybe they refuse. maybe you don't disagree with the grade and it looks top quality to you, but, you want it cheaper STILL.
    This hasn't changed with the entry of 3rd party grading or the internet. a frugal buyer is going to study up, and they are still going to haggle over the price, just like buying anything else really. I mean, you wouldn't pay the sticker price on the window for a car, you'd haggle it down. Heck, I haggle discounts for TV, Fridge, repair work, pretty much anything that costs over $100, "come on, we can do better than this price, it can be gone or done today if you can discount it 20%". Maybe he comes back at 5%, or 10% we go back and forth, maybe he can't discount anything and I walk away and go somewhere else.

    I've haggled a 10% discount at McDonalds just to see if I could, the cashier froze up and didn't know what to do, but the manager was like, suuuure with a smile.... hahahha.
    Anyways, Grading is still an opinion, and you as the buyer, your opinion still matters the most or you aren't buying, simple as that. Maybe overgrading is rampant, maybe undergrading is rampant, it's all opinion and I completely trust the opinion of someone I never met or barely know as being accurate....
    ...not at all.
     
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  13. robp

    robp Well-Known Member

    I couldn't agree more with the above post. Whatever the grade it is only an opinion, whoever's that may be. Ultimately it comes down to the buyer, who to a man have a two point system - acceptable or not.
     
  14. GDJMSP

    GDJMSP Numismatist Moderator

    I readily agree that a grade is only an opinion. But when push comes to shove there's two things that matter. 1 whose opinion is it ? - as some opinions count more than others. And 2 - what is that opinion based on ? - in other words, what grading standards are being used by the one offering the opinion ?

    When judging opinions, unless you know those things, opinions are pretty much worthless.
     
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  15. Jaelus

    Jaelus The Hungarian Antiquarian Supporter

    Something hardly touched on here is that an across the board percentage of over graded TPG coins does not reflect the reality. For example, old ANACS slabs are more than likely correctly graded or undergraded. New ANACS coins are frequently over graded across the board. PCGS world coins are probably 75% overgraded. NGC world coins perhaps 10% overgraded. Etc.
     
  16. halfcent1793

    halfcent1793 Well-Known Member

    This is a purely metaphysical question. A coin's "grade" is only the stated opinion of a particular person at a particular point in time. Others' opinions will differ.

    Therefore, I can say with absolute certainty that all coins are overgraded. I can also, with equal certainty, say that no coins are overgraded.

    Even the "pros" at TPGs give the same coin different grades at different times, as we ALL should know from past posts here.
     
    Burton Strauss III likes this.
  17. Burton Strauss III

    Burton Strauss III Brother can you spare a trime? Supporter

  18. Lehigh96

    Lehigh96 Toning Enthusiast

    They should deny it for two reasons. First, because it is true, and second, offering a grade guaranty and then changing grading standards would make them guilty of fraud.
     
  19. 1865King

    1865King Well-Known Member

    I've attached a page from a 1967 Red Book. (My First Coin Book) Check out the grading standard from 1967 for Indian Cents & Morgan Dollars. You will notice they highest circulated grade is extra fine. Although, I know AU was being used at this time the extra fine grade requirement sound like a high AU graded coin. Without repeating everything others have posted I have noticed a considerable about of grade inflation in the last 10 plus years. Thirty years ago you almost never saw a certified coin grading higher than MS 66. If you did it was a major event. Today I've seen coins being graded MS 68 and MS 69. These aren't modern coins I'm talking about coins from before 1900. I can understand a few could exist and only been recently graded but, not the amount I've seen. However, most of these Wonder coins would only or barely make MS 67 thirty years ago. The ones that really drive me crazy are high grade MS 66 and up coins with either poor strike, nasty toning or finger prints (sometimes big finger prints). CAC has helped to some extent but I've seen below average coins with a CAC sticker on them. Buy the coin not the plastic.
     

    Attached Files:

  20. Jaelus

    Jaelus The Hungarian Antiquarian Supporter

    Ah, but the problem with that view is that you're saying the opinion of the grade is always correct. I can assure you it is not. If you give someone an MS coin and they tell you it is XF, that's simply not correct.

    If you had a coin graded 100 times, you'd see a distribution that indicated an absolute correct grade coinciding with the mean (even if it is a + grade), with some variance representing under or over grading (the times when the opinion was not correct). This is the reason why CAC has been so successful.
     
  21. Burton Strauss III

    Burton Strauss III Brother can you spare a trime? Supporter

    Unfortunately the wisdom of the crowd is a myth and the crowd is not always correct.
     
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