Cracking out coins

OK, this is my last question for a while:


First - is cracking out coins considered taboo in the industry or is it just a common sense stratgey that collecters and dealers use to try improve the grades of their coins?


Second - does it work???

 

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why wouldn't it work if you got the right coin that is...

 

I guess I'm asking does the number of upgrades outweigh the number of possible downgrades such that it is overall profitable much of the time - or are upgrades so rare that it's not worth the trouble.

 

depends on if you can spot an undergraded coin or not. I have heard the TPg's are getting stricter with the advent of the green and gold beans.

 

"green and gold beans"??

 

CAC Stickers (see example in photo below).



Sorry, I don't own a CAC gold sticker.

 

CAC now approves the third party graders grades with colored stickers shaped like beans. No bean if it is an overgraded coin, green bean if accurately graded and gold if undergraded by 1.5 poins or more. Thats the theroy anyway.

 

It depends. If you randomly crack out coins blindly hoping they will upgrade I would think your success rate would be extremely low.

But if you only crack out those coins that you think are undergraded your success rate will be directly related to your coin grading skills. The better you are at coin grading the higher your success rate will be.

If you plan to play the crackout game I recommend that you pick your coins so you maximize your upside and minimize your downside. What I mean is pick a coin that jumps up substantially in price at the next higher grade but does not decrease much in price at the next lower grade.

For example, suppose you want to play the crackout game with Morgan Dollars. Let's also assume that you can buy and sell at Grey Sheet Bid.

You decide to try your hand with an 1892-CC. You check the Grey Sheet and find the following values (Bid): MS-60 - $1250; MS-63 - $1530; MS-64 - $2200; MS-65 - $7850. There is no value given for MS-62 but you can straight-line interpolate $1425.

In this case your target grade is MS-63. If you guess wrong and your coin drops a grade to MS-62 you will lose $105. But if you guess right and your coin bumps up to MS-64 you stand make $670.

In reality you will probably have to pay a premium over "book" for a PQ coin and that will increase your downside and cut into your upside. But if your grading skills are good enough that you can consistently spot undergraded coins you should do well.

I know a dealer who cracks out thousands and thousands and thousands of coins a year. His grading bill is more than most people make in a year but he makes VERY good money doing this. Sometimes he has to resubmit a coin 10 times or more to get the bump but when the potential increase in price is $10,000 or so he does not complain about the resubmission fees.

 

Actually it is:

Overgraded - No bean

Accurately graded but low for the grade (C coin) - No bean

Accurately graded and solid for the grade (B coin) or PQ (Premium Quality - A coin) - Green Bean

Undergraded (and a candidate for upgrade) - Gold Bean

 

Sorry, I missed a step. Who/what is CAC? I would send them a coin just like I would send a TPG a coin? or they are a TPG or I would send to them first before a TPG . . . I'm cornfused (as usual). Tx

 

Previously CAC would only accept specific slabbed coins through a dealer network. They said this was because although many were submitted, few got a bean. Well this is/has changed(ing) so select ( don't know how decided) advanced collectors can also submit to CAC. Marketwise it works just as all of those useless, first day struck stuff, people pay more for a sticker or label. Expect the finalizer at PCGS or NCG to start giving their own bean or "swoop" to indicate A,B, or C level grade ( why should CAC get all that money. So we have VF30a, VF30b, VF30c. Of course also expect to pay extra for the bean just as you do for specific labels. IMO.

Jim

 

True, but since you can't tell the first two apart since neather one has the bean (unless you can accurately grade.), the assumption with no bean would likely be that it is overgraded.

 

the CAC makes you think it is a better graded coin. I do not think that way all CAC want is $$$

 

Just so I understand, CAC is a grader that grades the the graders? Is that right?

 

Yes
That make a 4th party scam in my mind. You pay them to tell you what you looking has eye appeal.
but that lust my 2cents

 

Cost to do this?

 

CAC not for Me

Maybe some here can tell I won't use them or buy a CAC coin

 

as does the TPG...you dont think they care about anything but getting you to give them money and then holding on to it at all costs? Its just about profit for them. They are just in it for the money and it works...there are people who are completely dependant on the TPG and wont buy any coin without a TPG slab and grade....this is just how they want it...more money from the collector who is already involved in an expensive hobby.

Now you have this COMPLETELY insane CAC who you pay to check the grade of the grader...So you pay for the coin, the grade and slab, the to check the grade...

It just goes to show that there are a lot of suckers with money to waste in this hobby. More importantly there are a lot people involved in flipping more than happy to be a part of this as they can bilk more money out of you. In the end...its about money but in making that money they NEED to get people to accept them as authorities and construct a system that people will use (expanded grading system...now with beans)....and the lemmings will follow and get bilked and those who sell and flip will buy into as it will allow them to charge more.

 

What's wrong with making a profit?? What's wrong with making money by offering a service? Jee wiz

 

Nothing wrong with it, if you can get people to shell out their hard earned money for it then good for you. The service they offer, IMO, is questionable for a variety of reasons I have stated many times before so I wont go into it. I will buy a coin, I will not pay more for it because it has been slabbed and graded or the grade has been graded...IMO...they have a negative effect on the hobby in general. I collect coins, I dont want to pay anything more than the price of the coin...the hobby is expensive enough not to have to be shelling out money to string of people and companies whose main motive is to make a living off of me while offering what I feel to be little if anything worth paying for. Just my opinion.