Gradeflation or so I have been told.

Some interesting reading from the latest edition of Coin World (p.8)

ANA revised 6th edition of their grading book. These are some of the changes to the system:

Just think, that set of old coins laying there and collecting dust, has just doubled in value and each coin has gone up one grade. That is only nine years, so just think what could happen in twice that much time. Yes sir, better than the stock market and as good as Reno or Vegas.

This is what some people call gradeflation.

 

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You are right, and that in itself leads into another corner of the world.
Why isn't it the accepted practice to raise the price of an item and then be in line to receiver the exact same thing as it would originally have cost.example;
a nickel graded 20 for $5 in 1996, but becaue of inflation etc. the same nickel graded 20 will bring $10. It costs you more but you still have the original coin graded 20.
The way it seem to be, is in 1996 a coin graded 20 is the next grade up and you are buying a F12 for the money you are spending on a VF20.
I probably got this all mixed up, but it sure seem to be gettin the cart in front of the horse.

 

Is this primarily because of what folks call 'sliders'? It's almost X grade... then there's a whole bunch of almost X grades... then Joe Dealer or John Collector says, well my almost X grade coin is better than his... therefore mine MUST be average X grade.

 

They can only push market grading so far. That is why an MS65 in an NNC, or NNT, and the myriad of other 2nd and 3rd tier TPGs holder will only sell for MS62 or 63 prices. With certain series of coins that I am very familiar with (I never call myself an expert!), I don`t care what the holder says, or what dealer X has written on his 2X2. I know what I consider a coins grade to be, and that is what counts. I do see where gradeflation can be problematic when talking about how many letters of Liberty are visable in series such as Standing Liberty, Barber, IHC etc. If everyone else is now calling a coin with 3 letters an F12, and you still insist on adhereing to your standards of VG8, then you may just be tilting at windmills.

 

While I understand the term "gradeflation" and its implementation in the marketplace, I wholely disagree with the ANA issuing Grading Standards that match the market place vs. technical grading standards that reflect the true condition not the market value of the coin. I would have no problem with the ANA adding to their Grading Standards book the necessary information about market grading or net grading.

I just cannot accept that those old Indian Head Cents have now become better than they were. They haven't.

 

Exactly why I WILL NEVER buy a slabbed coin, nor will I have a raw coin slabbed, every again. They stick a number on it, and the fact that its in an NGC or PCGS hunk of plastic makes them the expert authority on a coin's grade. Bull! My 30+ years of experience makes me FAR better at grading the coins I specialize in collecting than those production-line drones who slap numbers on 1000 or more coins per day so they can be hawked on the television shopping show that they are partnered with.

 

I'm not sure why the ANA doesn't think they are in a strong enough position to SET standards rather than report what they are. If not the ANA, then someone should set the standard. This is almost as bad as the dark ages when a foot was the length of the foot of whoever was currently the King, and when the King died the length of a foot was changed to match the foot of the new King.

Numismatics needs to come out of the dark ages and into the modern world where "standards" are just that -- unchangeable measures that nobody has the power to alter over time.

This situation is particularly damaging to someone like me, more of a casual collector without the deep knowledge or skill level that many of you possess to accurately grade and price coins. It makes me more afraid to buy things, which is lost income to somebody. In the meantime, it might be best to only buy coins in older holders.

 

This last paragraph was sort of what I meant, and probably didn't word very well.

The first paragraph, above, is what I don't really understand. I know that it has been talked about here in at least one other thread that I remember, but I assumed I didn't understand it correctly, then, either. It doesn't make sense to me. If a price of, say, Fine goes up - then the value of that coin in F is more expense - that much I understand. But what you are saying, if I get it correctly, is that if the value goes up, then it can also be bumped up to a VF grade? Does that serve some sort of market purpose? It seems almost... misleading - for lack of a better term. as in 'if people won't spend 200 for this coin in F, but the market says it's worth 200 dollars, in F - then we will just call it VF, and more people will be apt to buy it.'

Or am I still not getting it? I don't claim to be the sharpest knife in the crayon box.

 

It's not really fair to the MS70 crowd either. Maybe in the 7th edition Whitman, who now owns the copyright to the 6th edition, can come out with MS71-75.

 

Thanks GD - that was very eye opening.

 

Boy, wouldn't that be a money maker! Just think of all the 69 and70 folks that would want their coins reslabbed, in order to stay up on top of the list.

Given the present conditions of the hobby, I would not be surprised to see this happen sometime in the not too distant future.

 

Ah, the old can of worms is open again! No, BZ, that is not the reason why NNC or NNT or whatever do not sell for the money of the grade on the holder. It is all a matter of so-called "market acceptance." I am not defending either side of this. The fact is that four firms are just just "well-known" but that they are "best known."

That familiarity might not be objectively based. It might be faddish or trendy or bought and paid for, but it is reflected in the way coins are bought and sold. And that is real, even if it is not "rational" or "empirical."

Modern foreign coins are slabbed in the USA. American tokens are slabbed. Paper money has recently come into this circle, as well. Even so, there are many areas of numismatics where slabbing is not part of the common culture.

 

A Von Mises Commemorative in a PCGS Holder ...

Well, yes, finally, it does all come down to you. I mean, there is not a single grading company with no mistakes in plastic. It happens. And the standards have changed over the years. The style of holder or the serial number can indicate whether the standards were stricter or looser at that moment. So, really, that is why "Buy the coin, not the holder." is a maxim in numismatics.

Also, it sounds to me as if you think of yourself as a conservative grader. As a buyer, you will be. As a seller, well, a conservative grader might not make all the money they can at this moment, but can build a solid reputation among buyers for that conservative grading.

GD's words (from WINS): "So I would not say that the average collector cannot accurately grade coins - I would say that the vast majority of coin collectors cannot accurately grade coins."

I have a certificate in grading U.S. coins from the ANA, for a class that I passed with High Honors. Believe me, I know what I think a coin grades. I would not want to bet on what a grading service would say -- and I nod to them. Their graders see hundreds of coins a day, 300 days a year, year after year -- and not just your over cleaned Barber Halves. Only the best coins go to grading companies in the first place. When they see a Fine or a Poor, it is a low mintage coin. These must often be graded against extremely low populations. So, all in all, I agree with you: based on my education and experience, I know what I grade a coin when I buy it and I do not care what someone else says. Even so, as we say in Austrian economics: the market is always right.

 

As I remember it TPG began with the outrage with overgrading. And the idea was that TPGs could be more objective with their grading as they were a disinterested independent third party. And that buyers and sellers had a hard time being objective when each had a financial stake in the grade. It's a wonderful *theory* and IMO half of it will always be true. The other half has failed. It has failed because TPGs have not only failed to remove subjective distorted perceptions of the market place(as if anyone could do that in the first place) they have facilitated it by accepting those very distortions as: Oh well that the marketplace.

 

SJNEBAY: you say you will never buy a slabed coin? I admit Im a little confused by the discussion of grade "DEflation." I admit PCGS and NGC slabs might occasionaly be overgrades. BUT as a whole, the hobby trusts the PCGS slabs and NGC slabs. Those guys have seen a lot of coins over the past 20 years of being in business. I dont attack your pessmism. But I hold trust in those two slab companies. On ebay you can trust only the slabbed coins. THe coins on ebay you cant trust raw coins. I have bought som raw Morgans on ebay. The dealers at the shows graded those raw morgans much lower than what I bought them at. Theres too may grades of mint. Where the scratches are. how big they are. is it circulation? is it a weak strike? The rules for grading are too general. COIN GRADING IS TOO AMBIGUOUS. Dealers buy low, and jack up the grade to sell the coin at a hihg price. Lot of bullcrap in the hobby. You buy a loose coin from one dealer, and another dealer contradicts the grade. When a coin has been cleaned is very ambiguous. I am saying things I posted on ths website two months ago. I will buy PCGS slabs. I will buy NGC slabs. BUT I wont buy anybody else's slabs. I will not buy a raw coin, if I can buy an PCGS or NGC slab. Thats where MY comfort level is.