ANA standards vs TPG grading

I think it is difficult/impossible to understand grading trends by viewing coins that are on the bourse. Without first hand experience sending in a large number of coins yourself, I would think that the self-selecting nature of the bourse would lead to the lowest quality coins to proliferate and the good coins to disappear thus skewing your perspective.

 

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You say the coin is "obviously circulated" because you know its history. A coin which has been in circulation very briefly, can easily appear to be mint state, with no wear. The important consideration is whether expert graders, would/should grade a coin with the appearance of that one, mint state. And not having seen it, I'm not prepared to say that NGC got it wrong.

 

Hmmmm... let's see now... was it an alien's black mucus ? Or mucus from a black alien ?

In either case, I think I would pass on that one.

 

The answer to your question lies in the difference between Technical Grading and Market Grading.

Technical grading grades a coin based on wear. Technical grading does not account for eye appeal. Under technical grading standards your coin with slight wear would grade AU.

Market grading assigns a grade based on the market value of the coin. Let us assume your coin with slight wear has great luster and superior eye appeal. It should be worth more than a strictly uncirculated example that has terrible eye appeal (e.g., countless bag marks, little to no luster, very unattractive dark toning, etc.).

If you said the coin cannot grade MS because it has slight circulation wear the highest grade you could give it is AU-58. On a 70-point grading scale 58 is less than 60, hence the super attractive AU-58 coin should be priced less than the butt ugly MS-60. But the market knows the super attractive (but slightly circulated) coin is worth more than the beat up (but uncirculated) coin. The market may value the slightly circulated coin on par with an MS-62 or MS-63 coin, so the person market grading the coin would grade it MS-62 or MS-63 based on its value, not its technical grade.

I know. I know. It doesn't make sense at first. Being an engineer, I had a lot of trouble with that concept at first. I mean 2 + 2 = 4 and only 4. And if a coin is circulated it most certainly cannot be uncirculated, can it? But after taking several grading courses at ANA Summer Seminar I have come to understand and accept the concept of Market Grading.

The truth is that the TPGs and most collectors use Market Grading. If you want to stick to strict Technical Grading you will be out of step with most of the collecting community and you will grade coins very differently from them.

 

Rusty,

Take a look at this Heritage auction.

http://coins.ha.com/common/view_item.php?Sale_No=1102&Lot_No=758#photo

It should pretty much sum up what Hobo is saying with a perfect example. This coin is technically an AU58, but the eye appeal of the coin is such that it is more desirable than an MS62. The coin sold for MS63 price even though it is an AU58 coin with a price guide price of $4,225. The market tells us this coin is worth $10,950 which is MS63 money. Therefore, if the coin is market graded, it is an MS63. I would have no problem seeing this coin in an MS63 holder. However your point is well taken. Why not just grade it what it is and let the market decide the price. This auction shows that the collecting public does not need the help of the TPG in that regard. Toned coins show the same thing. Personally, I am easy. I will go along with whichever way the TPG's want to do it as long as they are consistent.