I believe it is because collectors, new and old, all struggle with grading and valuation. Said more bluntly, people don't like to get ripped off.
First off, I've given you not one but two reasons why the CAC doesn't publish this information, yet you've now twice ignored it. Secondly, the CAC does in fact provide this information to the people who submit the coins on request. Lastly, I've given you an example of how the CAC is useful (identifying problem coins, in my case putty), and this usefulness has been confirmed by every single collector I've spoken with who has used the service. Given the above, how can you continue to state that the CAC's usefulness is limited to speculators. I don't get it.
When submitting hundreds of coins to a grading company at a time, we both know that the profits from returned averages will greatly outweigh the submission fees. However, when the slab has received a sticker and then begins to circulate through the secondary market, it will more likely than not eventually end up in the hands of an opportunist. Whether using fast talking, sleight of hand, hype and tall-telling, or whatever, this individual will eventually make the sale for the inflated price. The inflated price will eventually trickle into the analysis of market experts and, with enough instances in a short period of time, skew the market, thus artificially raising the published price levels for such coins. The reasoning for the inflated ask price would be submission fees. I just fenced this weekend with our closest dealer (four hour round trip) over a raw Close AM proof cent and he tried to use grading fees as an excuse to give a low bid for the coin, but eventually we both came to the agreement that we both knew better and compromised a fair price for the both of us. But, the point is, submission prices for both grading and CAC alike will most likely eventually make its way into the price of the slabbed coin multiple times over the years, but now I've even forgotten if I'm still on topic with what we were discussing, so I'll zip it for a few.
Thank you for the response. You've given some insight into some of the workings of the CAC non-sticker.
I will repeat: You are incorrect. For example, in the cases where I buy and list for sale non-CAC coins which are subsequently stickered, I leave the price unchanged. Odds are quite good that I'm not the only seller who does so. A $10 or $20 CAC fee need not result in raised prices. And, because you made an erroneous assumption or accusation - in another post you wrote: You are incorrect. No one with or without a stake in CAC evaluates or stickers their own coins. There are no "self stickerers".
That is good information to know, I'll have to inquire on this policy. Just a difference of opinion. We're allowed that. In 1989, two decades ago, I am sure that would have also been the response had you been told that PCGS, a third party coin grader in business for five years, would be at the wrong end of an FTC investigation. The investigation was not simply the claims of objective grading, but also of claims of marketability and ease of sale, as well as premiums in pricing. History often repeats itself, but remembrance and knowledge help to avoid that.
I've never known any of your dealings to be opportunistic, but there are dealers and individuals out there who are. Not every dealer is going to do as you do. And further into the secondary market, there will be those who take advantage of the sticker to convince someone not necessarily knowledgeable that paying an obscene premium is a deal...and even use the submission price as the reason, "it costs $100 to take this coin to a show and have it graded..."
A fair perspective, to be sure. However, I will leave you with this thought -- how many FTC investigations have there been into the TPGs over the past two decades? Respectfully...Mike p.s. To be completely candid, I think the coin game reeks of price fixing, market manipulation, collusion, and other unsavory practices. However, I see the TPGs and CAC as tools collectors like us can use to help limit our risk AND educate ourselves -- which I, for one, see value in.
Thank you. I take it that you agree with me that to have said "most definitely" in your comment below, was an exaggeration.
I enjoyed this back and forth, and I applaud the participants for not letting a disagreement degenerate into becoming personal. I do not see how if it costs money to grade and slab, and then sticker a coin that those costs are not included in the price asked for that coin. I would not expect a dealer to turn his business into a charity for my sake, and I would tend to look a bit warily at a claim that those services have nothing to do with prices. I think that the subjective nature of grading is pretty well established, otherwise why would any tpg use three or however many experts to come to an average (mean or statistical?), if it was as cut and dried as a laboratory measurement a computor program could be used instead of flesh and blood. I also liked the tripartite dichotomy of collector investor and speculator that was mentioned, plus the overlap that each probably has, I would tend to think that the overlap occurs more with collectors, less so with investors, and even less so with speculators. Thanks again to those who expressed themselves on these postings.
The more valluable the coin, the less significant the grading fee is. So, while a $20 grading fee will often impact a seller's asking price on a $100 coin, it wont have the same effect on a $2000 coin. And if a grading fee amounts to only a small % of a coin's value and results in greater liquidity/a faster sale of the coin, it can be well worth it. Likewise, if I buy a $300+ non-CAC coin, list it for sale, subsequently spend $10 to have CAC review it and it receives a sticker, I see no reason to raise my asking price. I likely have a more liquid coin and will still hope to make an acceptable profit on it.
So your point is that the CAC could eliminate the allegations of fraud by simply publishing publicly every opinion of every coin they examine. I think if you read Ruben's (MrBrooklyn) opinion of the CAC, you might think otherwise. I don't have the time to search for his opinion in a previous thread, but there are going to be critics and supporters of the CAC no matter which side of the fence we stand on. Personally, I think the CAC is a very valuable tool for collectors that don't have the opportunity to attend major shows and purchase coins sight seen. Creating a stable sight unseen market is well worth the nominal grading fee that the CAC charges. In addition, I have always been of the opinion that slabbing a coin valued under $200 is generally a waste of money unless the coin is toned, frequently counterfeited, or is of registry quality. To that end, sending a certified coin to the CAC would also be a waste if the coin was not valued at $500+ IMO. I personally own 5 coins that I know were reviewed by the CAC. Everyone is valued well over $1,000. The most expensive one came back with a CAC red sticker. Here is a photo. I have to assume that the CAC keeps track of every coin they see simply to ensure consistency. After all, they don't want the same coin to be submitted multiple times with different results. That actually could be considered fraud, even though the TPG's do it routinely.
Mark gave you his answer and I will add this. Most dealers don't even consider it because they simply don't have the time to break down all of the associated costs that go into what they pay for a coin. They only care about 1 thing - the total. To that total most dealers just add their given precentage and that's it - end of story. For example, if they pay $100 for a coin and their personal markup is 20% then they ask $120 for the coin. And don't forget, the majority of coins that a dealer buys are already slabbed when he buys them - he has no cost to add in. And the argument that at some point along the line the cost for slabbing is added in by somebody doesn't fly either. Do you think that if a person, any person dealer or collector, buys a raw coin for $80, submits it and it comes back as MS64 and worth $150 that he is going to then ask $170 for the coin ? He can try I suppose, but if the list price is $150 he is going to be waiting a long time. The listed value of coins is the listed value - not the listed value plus grading fees. People submit coins to the TPG's, and to CAC for one primary reason - it makes it easier to sell them. It doesn't necessarily get them more money - but it does help them to get their money back out of a coin faster. And that's what it's all about to a dealer. Most would rather lose $20 on a coin than they would have it sit in the cases for a year. They could care less about grading fees and consider them to be inconsequential. Merely part of the cost of doing business, just like the elctric bill. It's all covered by their standard percentage markup.
It shouldn't suprise anyone that CAC makes money and most business models based on fraud do make money until the bubble bursts. Mind you, to repeat old threads, I don't use the word "fraud" here lightly. It is a technical business term that refers to specific business practices and models, which has been covered in detail in previous threads. Ruben
IMO CAC may be a sales gimmick financed by some big money people in the business. This enables them to get big markups (just compare their asking prices from their ads to the CDN) on their big ticket material (over $1000) from their wealthy customers. At a recent show over coffee a dealer from NJ set up near me told me he got a few of his nicer US Gold Type coins CAC'ed and was able to move them quicker then normal even after adding 25% to the price bc of the green bean. He said "I would not dare put all my coins in the mail to get them CACed but some of the big ticket stuff I can markup into the stratosphere ya bet." We both agreed CAC was not for coins under $1000. It can be an ego thing for collectors as its like a validation to them they can pick out nice coins. An Indiana dealer told me "Walkup stuff brought to my table, I offer them just a tad over sheet to take it if I think it will CAC then if it comes back with the bean I mark it up at least 50% over bid. Its sorta like the MS / PF 70 craze on mods (laughing)" I found his opinion the most impressive. Example (Same Denom / Date / mint/ both PCGS 65): Would you pay 28,000 for a CAC coin when the non CAC coin was $25,000 wanting peace of mind it had not been doctored? Can't say I would blame you if you did but $3000 is not a bad return on a $10 investment for that seller is it? I really have no use for CAC myself (but great business concept) and would not pay a premium for a coin just bc it had a green bean. However, with the opinions expressed in the first paragraph, perhaps I may reconsider this. If CAC coins are your thing then enjoy your coins.
