Am I the only one who thinks grading is a ripoff?

When I was at the santa clara coin show on saturday, I found that the least expensive

graded slabbed coin was $10. The coin itself was a modern presidential dollar that you

could get about the same contition if you went to the bank. Apperently, this was a good

price because it was in a "bargain bin". I have seen the price hike up especially on good

condition (ms) coins. At the coin show, I saw wheat cents from the 1950's that had full

mint luster and were in great condition in sets for 10 dollars at the most. graded slabbed

coins in about the same condition seemed to be $20 minimum. can someone tell me why

it is worth so much to get a coin that is $20 raw for sometimes $50? I understand that

people want their coins authenticated, but can't you just go to a dealer for that?

 

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Dealers don't back their opinions with a guarantee of authenticity. TPGs do.

That said, slabbing coins of a value below about $200 doesn't seem to make a lot of sense -- to me at least.

I don't think grading is a rip off.

 

Today, it seems, most collevtors are looking at their coins as an investment. So they want a standardized authentication that will get them the maximum return for their items when they resell. I collect raw coins, because i don't intend to sell them. But many only buy with an endgame in mind. So they get slabbed coins authenticated and graded by well known TPGs. Also,with 30,000+ ANA dealers, all have varying degrees of knowledge and ability. Who is to say any dealer cannot be mistaken ?

 

I can see the "ripoff" sentiment with modern coinage. When you get to the older series, it's a matter of authentication, preservation, and sometimes insurance. That is why the majority of my older coinage is slabbed.

Edit: Also, sometimes collector's are not versed enough in the subjective art of grading so the slabbed coins help the conscience. I am some what in this category because I am still a bit off determining original surfaces in the series I collect.

 

asch,

You should buy the coin, not the slab. A common, modern coin in a slab will almost always be priced higher than a similar raw coin. And why shouldn't the slabbed coin be priced higher? It costs money to have a coin slabbed and you have to pay for the slab. Like Leadfoot said above, it usually doesn't make economic sense to slab inexpensive coins.

 

The only modern coins I consider slabbing are the MS-69/70 coins for a type set or for someone who wants to get their proof sets graded.

The only modern coin I want to get in a slab is a 1998 Washington Quarter in MS-69/70. Not SP. Not PF. In MS.



Aside from coins for a type set, it's not, at this time, economical for someone to send a whole mess of modern coins to one of the TPGs to get graded.

 

All of my presidential dollars are raw and in a Dansco. IMO, there is no need to get them slabbed or buy them graded unless you are trying to complete a registry set. TC

 

You can call me crazy, but when the Mint released the CA SQ in 2005, I really liked the design. So, I ordered the $250 Mint bags to search. I submitted about 50 P&D for grading. Seven of them came back MS68 (6 - P & 1 - D). To this day, the NGC Census still lists a mere 13 - MS68 for the 2005-P with 3 higher and 14 - MS68 for the 2005-D with none higher (no 70's for either mm). So, I own better than 25% of the total MS68 population of these two coins, but the Numismedia Price Guide values them at $35 & $20, respectively. Does this make sense?

Chris

 

You are CRAZY my friend.....LOL
Hey, keep holding on to them. Never know what the future might bring.

 

I'll go you one further and say it doesn't make sense to submit any coin with a value under $75 if one is expecting a quick flip for profit.

 

I believe most of the time its a waste of money especially on moderns, but there are lots of cases where a coin should be authenticated. Personally I would rather send a coin to a specialist for $3-$5 and get their professional opinion...

 

Generally speaking, low grade, slabbed modern coins are the end result of either a bulk submission looking for high-grade coins or a newbie "thinking" he/she had a high grade modern OR someone looking to fill a registry slot.

The only purpose in grading modern coins, especially Presidential Dollars, is in seeking high grades for resale or registry. Multiple coin submissions can generate high grade results but the lessor grades on the submission then need to be disposed of which is probably what ythe OP was viewing.

Again, generally speaking, $5.00 is about the maximum price folks should expect to pay for ANY common Presidential in a Common MS65 Grade.

 

Chris it makes pretty good sense to me why these caoins aren't valued higher. You submitted lets say 50 coins and 7 came back MS68. That is 14%. Even though 50 coins probably isn't enough to be a good gauge of the average grading of the series it does allow you to make some assumptions. One might assume that roughly 14% of all of those coins minted in 2005 were MS68. How many millions of these coins were minted? How many other collectors have bags and rolls of these tucked away and haven't submitted them to the TGP's? This is kind of the same logic people use who see graded bullion as a poor investment. These coins are made by the MILLIONS and only a small fraction of these are sent off the the TGPS. If only 1 MS70 is known and there are millions of ungraded coins out there the MS70 may not be particulary rare or valuable.

 

I have asked this question in another thread and haven't gotten a reply. Are there some dealers who have bulk submission with PCGS who will take raw coins and send them off on your behalf for a smaller fee then it would cost to send to PCGS as a non member?

 

I agree with what you state, and add that most people submitting moderns are taking the gamble of the MS/PR 70 grade for the quick flip for higher profits.

 

I dunno, I see the value of $20 for just about any coin in a PCGS holder. regardless if the coin is worth it. I think the holder is.

I buy as many as I can find for $10 when I have the time.

 

Read what they have to go through here: http://www.pcgs.com/bulksubmissionagreement.html

I am sure timing is everything. however with the amount of paperwork, shipping costs back and forth, membership fees that allow you to submit bulk and the fact that dealers need to make money during the time they spend on coins - I don't see how there would be much savings.

Why not just do it yourself? You can get 100 coins encapsulated for around $1000. there can only be 5 varieties though.

 

Your assumption is not valid because he (Chris) did not submit 50 coins at random; he searched through 1,000 coins and submitted 50, of which 7 came back MS-68.

So 14% of his submission came back MS-68 (7 coins out of 50) and his submission represented 5% of the total coins searched (50 coins out of 1,000). You could then make the assumption that 14% of 5% of the coins that were searched are MS-68 - that would equate to 0.7% of the total coins searched. But I don't believe that assumption to be true (based on the NGC Pop Report).

edit . . .

What percentage of the total mintage do you think were searched before the coins were placed into circulation? 10%? Not likely. 5%? I doubt it. I will venture to say that less than 2% of the total mintage was searched before the coins were placed into circulation.

Let's assume on the high side that 2% of the coins were searched and let's use the above assumption that 0.7% of the coins searched will grade MS-68. That equates to 0.014% of the total mintage grading MS-68 (1/1000th of your original assumption).

 

"Am I the only one who thinks grading is a ripoff?"

No, you are not.