Coin Grading Standards by TPG

If you were to do further research into our archives looking in particular for threads focusing on the distinctions between technical (condition) and market grading one of the things among others you're going to discover is that the ANA market grading scheme emerged at the same time the first TPG, PCGS, hung out its shingle. Now, whether you have a need to believe that's just coincidental, or whether you rather think it happened in a concerted effort to justify the resultant scheme, third-party grading, is immaterial, really. IMHO, at least, what's important to take from that is that grading finally reached the point at which condition and value had to somehow be better synthesized. Enter, market, as opposed to condition, grading; condition grading, now, being relegated to a simple subset of market grading.

I'd implore you to search for those threads and study them, as many, here, have participated in them, and, not without good reason. But, bottom line, IMHO, it's really quite impossible to give a short answer to your question, unrelated to that larger context. Nonetheless, if you have to have one, here, I'll try. We haven't "gravitated" toward anything. Rather, ANA cleared the way, a long time ago, for what these TPGs are doing (and, IMHO, doing much better, now)...and, that is, simply, appraising the market value of our coins.

 

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Count me into that group, but I am starting to get it, I think. You used an interesting term, earlier, "value grading." May I expand on that, and add, "as distinguished from [ANA] market grading?" See, I told you I'm paying attention.

IMHO, Doug, the TPGs are the best at what they do. What their standards are, that's still anybody's guess. But (and, I'm just throwing this thought out), perhaps that's the way it should be. If they're indeed "value grading" (which, of course, I believe they are), their only true standard is what their experiences and databases of comparables tell them the market will bear. As such, take a criteria as silly as "pedigree," in terms of it being a "grading factor." All that is is a status symbol. However, because a good portion of the market values that, it necessarily has to bear on the TPGs [value] grade.

Now, CAC? I'll spare you my thoughts on those guys for now, Doug...but, only out of respect, because I'm appreciative of the lessons I've learned from you over the three years I've been here. But, if it weren't for that...

 

All grading companies are wrong period,

All grading companies are wrong period, - what I really mean is if you do enough of anything you will be wrong fairly often depending on how many you do. It's only human nature to fail almost as often as you succeed. We learn equally as well, (if not better from failure) than success don't we? Success is easy, failure is much more complex and rewarding albeit costly at times.
Look folks, if you wanted perfection you should be in engineering or something where failure is kept to a minimum - but alas if you were an engineer you'd be as boring as the day is long and I mean that with some sympathy, not much but a little.
The world is not black and white it is always many shades of grey you can either embrace it or fight it - one of these way you win and one you fail.
The TPG companies would slab their mothers if they thought it would make them more money. You'all don't think they perform this service just for you do you? I sure hope not - personally I like not being able to make coin grading scientific and perfect. What a boring world of coins that would be if we could answer every question, get most all grades right, take the skill subtle differences at of it - well, if we could do that I would just lose complete interest in it altogether.
We all really need discrepancies that is what make things rich in life. Not the other way around - really, think about you'all seriously do you really want a perfect grading system that everybody in the world follows to a "T" - I sure don't.

 

I personally do not have a problem with a 100 point system, or other other system at that. What I have a problem with is when people think that such systems may be forced upon everyone. That simply will not stand. You still have dealers and collectors (YOUNG as well as old) who continue to use a non-numeric system in their grading. Not everyone follows a Sheldon-like numeric system (though they may be a vast minority).

I have no problem as long as either a seller or buyer, I and the one I am conducting business with come to an agreement upon the condition of the coin, as well as an agreeable price for the coin, as well. Price sheets are not bid/ask/sells written in stone which are not to be deviated from. Grades are not objective truths written in stone which are not to be deviated from. Our hobby has many sets of different rules and etiquettes involved in it that are not written in stone which are not to be deviated from.

Forcing some form of "universal system" on everyone is far from the answer, because if you really, truly believe that such a system will "fix" anything then you seem not to truly believe that grading is subjective. Only a purely objective system can "fix" any differences that occur with respects to grading. Anybody who knows even a minimal amount regarding coin grading understands that grading is, in fact, subjective!

It is this subjectiveness that is the core of the differences in grading in our hobby. Even with the vastness and plethora of opinions that may result in the grading of one coin using the current "standards", the system as we utilize it today is not enough to account for all of the possible differences of opinion.

Yet, subjectiveness is by no means an excuse. SGS is one of the prime examples. Just because grading is subjective does not mean that one can take commonly used and understood terms and designations when the object does not, in fact, support such use of said terms and designations. Yet, it is not only SGS, but even NGC and PCGS. "First Strike" anyone?

The point is, you cannot even begin to think that you can enforce a set of regulations that are objectively encompassing of every facet or consideration of grading and have it be consistently consistent. There are differences of opinion. There are differences, from coin to coin, in the extremity of certain facets involved in the grade.

There are just, simply put, too many differences in coins to try to dictate an objective standard. Our hobby is a lot like real estate, in a sense. You can get a professional opinion, if you want, of what a property is worth. You can sit down with the owner or buyer and discuss any problems that are apparent (and even not so apparent) with the property. You can haggle back and forth on an acceptable sale price. But, in the end, it is JUST you and the seller that come to the overall acceptance or rejection of the sale offer.

If you don't like the price for what you see, then walk away. Sure, you can complain to the State that an appraiser's assessment seemed to low-ball you property, but if you don't want to sell for less, find a different buyer. There are numerous remedies for a plethora of situations regarding real estate. But these remedies are either contractual and remedied in court, or they are regulated and regard, almost exclusively, disclosure.

If there is a problem with a TPG (or even a B&M dealer) grossly misrepresenting a coin, there are already remedies both through the court system, as well as regulatorily through the FTC and the State Attorney Generals' offices. If there's a problem, use the tools already in place. But do not think to remove the subjectivity from grading, nor the freedom I have as a consumer to make my own educated decisions in purchasing, either for investment, for business, or for personal enjoyment.

If people are too lazy to learn what they are doing, then they simply should not be involved in "the market" until they do have an understanding. It is no different from real estate, stocks, or precious metals investments. If you do not understand how it works, do not invest in it.

If you are not an investor (or trying to pass coins for the "quick buck") and are simply involved as a purist collector, then I see absolutely NO need for anybody to interfere with that collector's pursuits. As a collector, that individual and NOBODY else knows what the collector likes. The collector is the one that decides what they like. The collector is the one that decides how much they are willing to pay for a coin. The collector is the one that decides whether to pass up or to jump at an opportunity.

And if the person is truly a collector, then they will be most definitely learning about what they are collecting, so they will (even if slowly but surely) be in the know of the market.

Even in the English language, there are many dialects worldwide. We even use the same words for different meanings. Even as speakers of the English language, we may not necessarily fully understand another English speaker. We have to have an understanding of what is being communicated. It is no different with grading standards. There should be no problem, so long as the two involved in the communication and transaction undertand what eachother is talking about.

 

And many people in the UK were opposed to the switch to the decimal system... even though the pre-existing system was archaic and absurd.

It will have to do. I have no illusions my system will be implemented. In fact, the majority of my post indicated reasons it won't be.

Forgive me for not making my point more clear in my OP. My point is this : the existing system is irrational, confusing, and illogical - just like the Olde English monetary system and the English Imperial system of weights and measures. They weren't invented per se. They evolved out of an archaic and outdated way of living - just like today's coin grading "system".

In contrast, we have the Metric System, which was invented. It's coherent. My proposal was "Metric System" style thinking adapted to coin grading.

This is the best we can hope for. Small evolutionary changes are more likely than dramatic, convulsive revolutions.

I hope it happens, Doug. It's not that far away.

There would be big issues getting giants like NGC and PCGS to agree. There would be an element of "turf war", with each expecting the other to come to them. Corporate ego.

And, of course, the TPGs shouldn't be the ones setting the standards. But they are power players - market makers. I don't know any Power Structure which can challenge them. If they don't buy in, the proposed changes won't have street cred.

I'm not saying that's the way it should be. I'm saying that's the way it is.

 

I'd like to see a consistent grading system. For one thing, standardization would make it easier to learn and easier to understand why someone's opinion about a grade is wrong. It wouldn't make it EASY, but it would be EASIER. Right now, it's as if the industry was dominated by two major engineering firms that used slightly different definitions of what length constitutes an inch, foot, yard and mile -- but kept it a secret.

I don't think a 100 point system would make things any better than a 70. If the US switched from fahrenheit to celsius, the weather wouldn't get any better because the number changed.

 

Ok after reading all the responses in this thread, maybe someone can clear something up for me. When you are talking about a standard grading system or Universal grading system are you talking about all coins regardless of series being graded under the same standards?
I ask this because even though I consider myself really new in this hobby, something I myself have noticed about graded coins is that no TPG follows any real standard between the different series. In this I mean, I have seen some Morgan dollars which have graded MSXX that are totally scratched up and show no luster at all, yet at the same time, I have seen some moderen coins with great luster and very little scratches come back bodybagged (this from looking at posts here on coin talk).
Personally I would like to see the standard used accross the board for all coins. A MS XX should be the same no matter what the series.
If that is what you are already saying then I agree 100% with that.

Dave

 

Have not read the whole thread, but here goes.

Know what the market dictates, know what the market grades ( I'll get flamed for this) and live with it. THAT is the reality of coin grading.

Does it fluctuate? Sure it does, and I am on a steep learning curve here, trial by fire so to speak.

But, I DO know my market and what is acceptable. I will always be confidant that any coin I sell would grade at least what I put on it, and worth what I charge.

 

In a perfect world we would all use one grading system , with the ANA system being the most logical , but it won't happen as for reasons Doug and others stated , the most we can hope for is to educate ourselves and learn the market so for any givin coin we could know the value and thus the price . Also maybe the TPGs could institute a new generation slab graded by ANA standards , with all the other slabs would be sold as is like raw coins are now .
rzage

 

Thanks GDJMSP
I think you answered most of my question, but not sure about the last part of it. Should not the TPG's not also gade all coins no matter the series under the same scale? I really am sorry if I sound ignorant on this, but the fact is I am.
Why should a Morgan Dollar be graded under different standards then a new Pres Dollar, or why should a IHC be graded under a different standard then a lincoln cent? Should not MS-XX be the same no matter what, for all series of coins?
Again I ask this because I have seen slabbed coins that are listed MS-XX from one series that if it were a modern lincoln or other modern coin would not even grade at all.

Thanks Dave

 

I'll try with an example,

I'll try with an example,
Lets say there was 20,000 1955 doublED dies Lincoln's (there actually was maybe more) that were released.
They all were circulated to some degree or another but there were many AU-50 and some AU-55 coins found and graded over the years.
All the grading companies certified thousands each of them eventually from poor to AU-55. All the AU-55 coins were not nice looking by a long shot.
Then along come a little old man that got his little ole hands an a little ole partial roll of them say 30 pc's.
They were the best that have ever been seen all fabulous strong strikes beautiful color, no carbon and so on.
They were so good that they called the top dogs of their company to come look at them. Yes, there was no doubt that they had the ever so slightest bit of rub or circulation and technically they were AU-55 coins. Yet they were so much better than all the others had ever seen. Plus this is before those stupid CAC stickers or whatever they call them.
So what were they to do? They could call them AU-58 I suppose but they were even so much better than that according to all the others seen of this type in AU. That plus the money that these coins were worth was many times more everyone agreed that even the best AU-55 ever seen before. Even though I have never seen a AU-59 that's what they gave them. In other words that was their only available tool to distinguish these coins from all the others when in reality they were AU-55 coins. Those coins went on to become the highest value 1955 doubled dies in extant.
Now this is fiction but in it many truths are found. We are talking about coins, pieces of US history made of copper, silver gold and so on. Coin that have been saved, spent, buried, lost, found, well you get the picture.
The coin series, varieties, types, contents must first stand alone to be graded then graded by someone using using this vast confusion array of technics we call modern coin grading. I hope you are beginning to see holes wide enough to drive trucks through by now. Weather are not the these subtle nuances are .5% or 25% is always going to be left open to interpretation and that's a human trait, one subject to different and often conflicting interpretation's.
And no, for these reasons and others not yet mentioned you cannot grade modern presidential dollars against Morgan dollars. They are 2 different coin series and the technology has advanced so much the comparison ends there. They are not even the same metals so how in the world would it be fair to apply one and only one form of strict grading criteria to the vastly different coin series?? You cannot.
There are so many flaws and difference's in coins that the only way you could ever grade all coins the exact same way would be to have a data base where you could see all the coins in all grades at once and then grade your series accordingly. But what about that little ole man that puts his stuff on the market you don't know about yet?? What you gonna do about that? What are you going to do about coins in mint state that have early die states? What are you going to do about that?
You see it goes on and on - with this many differences it will never be science.

 

Thank you GDJMSP. I have wondered about that for a while and your analogy really hit home with me.

 

Doug I can see the dropping of the larger coins causes more and bigger dings , so we give them a break on the dings , fine some alowwance should be made . But should we then start giving breaks because one coin was struck with a new die and has a great strike while another has a weak strike because it was struck with a worn die , no of course we don't , a gem is a gem because it somehow avoided all them dings and has a superior strike whether it's a Morgan or a mercury .
Rusty

 

All I can think about is this... If there was one final adopted method of grading, the rule book would be 15 volumes big with each volume 1500 pages long... It can't be done...

And another thing... 20 people can look at a coin and there can be 20 different responses as to how that coin will "grade"... Everybody sees something different, or see's something nobody else did. Or they believe this should lower a coin buy a point, or raise the coin by a point...

I just do not believe it can't be done.... Way too much human nature in all of us....

 

Ben,

Your incessant criticism of TPG's is sounding more and more like the griping of a dealer that wishes he could grade his coins and charge what he wants. In other words, you don't like the fact that they take money out of your pocket. This is precisely why TPG's are a good thing. They have no vested interest in the final grade of the coin making their determination unbiased. As far as their quality, the TPG's are more consistent than any dealer I have ever seen. I will not dispute that they would like to grade as many coins as possible and make as much money as possible, but they have proven they can do both without affecting the quality of the service they provide.

Do you really want to return to the days of unscrupulous dealers passing off MS60-62 crap as gem state coins. Maybe you are one of the fair and responsible dealers, but there are many out there that are not. There is nothing to stop you from charging a premium for what you consider a PQ coin for whatever reason (undergraded by TPG, superlative strike, early die state, etc.) But if the coin doesn't sell at your price, then the market is telling you the coin is not as PQ as you thought it was. And as a toned coin collector, I know all about paying premiums.

BTW, I have an engineering degree (metallurgy) and although I work in a casino, I don't think engineers are boring.

Paul

 

dont stop now. the only reason we dont reach salvation is you stop your sermons mid way. please continue to the finish line.