Featured Market Grading vs. Technical Grading

Different strokes for different folks. I feel the complete opposite about that. I feel there should be more grade numbers. Maybe not VF20, VF21, etc but at least double of what he have, at least between VF and XF.

And not that our ways of seeing it is right and wrong.

 

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Isn't the only point of a grade to determine value? If that's the case, shouldn't the grade represent value. I mean these grades slapped on by PCGS and NGC are for the benefit of the less educated or experienced collector aren't they? Someone very knowledgeable about grading a series doesn't care what NGC or PCGS says the grade is whether that be technical or market grading.

 

Those grades slapped on by PCGS or NGC are for the benefit of the "sight unseen" dealer market. They have nothing to do with benefiting collectors--inexperienced or advanced--and never have. That's why market grading has always been used by them.

Do the TPGs provide a benefit to collectors as a result? Most would say yes, however, that's not why they are in business.

 

Value is based on the individual purchasing the coin. I've seen some MS coins so ugly, that they would never been a consideration, while I've paid over market value on some AU coins. Even though the amount paid could have bought me an uncirculated example. And sometimes I get lucky and pay under fair market price (rarely) because the person selling it (usually from another collector) felt the piece was not worthy for top dollar. So ultimately, value is in the eye of the beholder.

 

I was basing my statement from the PCGS website explaining who they were.

The advent of the third-party appraisal of a coin's physical condition, backed by a guarantee, and a national network of reputable coin dealers could provide an extremely reliable form of protection for rare coin collectors. PCGS would create a climate in which consumers could participate in the coin market with greater confidence.

...

 

Other than the fact that they substitute "collectors" rather than the word "investor" this is almost word for word what they wanted to do.

The original idea was to create an easily tradable commodity market for the high roller investor who had little to no interest in coins as coins.

Collector benefit--if any--is an added bonus to the TPG age.

 

I know Dr.Sheldon Came up with the 60 thru 70 scale but wasnt it James L. Halperin who added the Letters and Numbers for lower grades and AU coins. When i started collecting with my grandpa it was condition eye appeal and rarity he was always disagreeing with shops and friends. Going thru rolls of Franklin, Kennedys and old Morgans and Walkers he had those were good times. I do like okbustchasers daughters method!

 

Just a short comment on the top graders. I know ICG does not get the respect it deserve and their coins don't pull the value of NGC or PCGS but the graders at ICG especially Randy Campbell are as good as they get, bar none.

 

It's also my agreed opinion that you're correct, and believe that some public "less positive" comparative statements are unwarranted.

I've been acquiring classic Gold certified coins by the top four TPG, from Fine to MS67, where 1 grade disparity, could by TPG published values, result in a minimum 3 and maximum 5 figure dollar amount in value.

Until the advent of the "bean", an objective party other than myself (who had only evaluated for >half-century these coins, and since copyright 1977 publishing, the illustrated ANA standards) couldn't substantiate the perceived grading disparities.

I searched for a like type/grade/date coin that had a "bean" which I felt a lay jurist with the published standards and 4 coins from the different TPG in hand could readily see a grade (preferably 2) disparity from the technical "standard".

I recently believe the aforementioned goal was achieved. One coin met the technical standard, and the rest had at least 1 grade negative or more from the standard. The coin meeting the standard was ICG graded.

I don't believe this to be an anomaly.

JMHO

 

That is funny--I remember the days of "word grading," and every coin that was bought was "uncirculated," and every one that one wanted to sell was "about uncirculated." I guess that is more exact than the TPGs and the Sheldon Scale? In which parallel universe? The "good old days" were incredibly subjective in grading accuracy, and beauty was definitely in the eyes of the beholder. As I have said before, TPGs do get things wrong, but they are still one of the best things that has ever happened to the hobby--an objective third party making the call.

 

But they cannot be completely objective since they have a financial incentive to be somewhat lenient. If they are too tight with grades compared to other TPGs they will lose market share. Of course going too loose with grades will lose them credibility so they have to walk a fine line. Having said that, people will send a coin to whichever reputable TPG is likely to give the highest grade, so they are in competition with each other and as a result grades will slide over time.

 

Oh, and word grading is objective? I have this cleaned AU coin that I tell you is uncirculated, and you are not experienced enough to know the difference, but you think it is nice and shiny, so you buy it? That has been decreased by TPGs, and more uniformity has definitely emerged. You might not agree, but I doubt you bought and sold coins before the TPG days.

 

He may not have but I certainly did. Yes. there were dealers who operated in the manner you describe. There were also dealers, however, who graded based on the coin not the circumstances. You learned over time who was who.

Today, there are dealers who look even at slabbed coins and grade/price them based on whether they are buying and selling. There are also dealers who buy/sell based on the coin not the circumstances. You learn over time who is who.

The problem is, back in the day if you got screwed by a dealer selling an AU coin as an UNC it cost you maybe a 100 dollars at most. Today, in the world of slabs a dealer who sells you an AU coin that got into an MS slab it can cost you (tens of)thousands.

 

I think that in a market economy they, and everyone else, gets exactly the respect they deserve. I recommend not holding their stock. There are too many buyers like me who flat out refuse to buy a non pcgs/ngc coin.

Also every single coin show I go to only has ngc and pcgs coins. Maybe you will see a handful of Anacs slip in but I haven't seen any igc at a show.

 

You are correct in that I did not collect before TPGs, however, most of the coins I buy are raw. Clearly a seller word grading is not an objective party either because they have a financial stake in the transaction. I don't always agree with the dealer's grade when I'm buying a raw coin. I judge the coin for myself and make an offer (or not) accordingly. I only consider CAC to be an objective third party and one of the main reasons is that they don't have any serious competition.

I agree that TPGs have led to more uniformity in grading, but TPGs have also led to looser grading standards. As TPGs enable sight unseen transactions for slabbed coins, there is pressure for looser grades over time due to market competition. For example, if I have a borderline coin that's worth considerably more in AU than in XF, and I know that NGC is more likely to grade it an AU than PCGS is, I'm going to give my business to NGC. Other TPGs see this and re-evaluate their grading slightly to adjust (per series). Over time the market readily accepts these borderline coins as AU and the grading loosens a little across the board. Dealers who are still textbook grading at that point end up undergrading (and underpricing) their coins and lamenting how the market grading is wrong. Technically they are correct but it doesn't matter; the market dictates what is acceptable.

 

If you buy mostly raw coins, I GUARANTEE that some of your coins are problem (no grade) coins. They have been skillfully cleaned, overdipped, or are damaged. One protection against problem coins is TPG grading--they rarely blow damaged coins and cleaned coins. However, the same cannot be said for most collectors, and from the way you speak contemptuously of TPGs, I am sure you have been fooled at least a few times.

 

On the other hand, if you strictly depend on the TPGs to protect you, I GUARANTEE that some of your coins are problem coins. They have been skillfully cleaned, overdipped, or are damaged. Especially, cleaned or overdipped.

The only protection a collector has is to learn for himself what HE likes as far as particular coins--then buy those regardless of raw or slabbed.

 

But I don't have any contempt for TPGs. Evolving grading standards are a perfectly natural thing. My point is only that very few grading parties can be truly objective. I think TPGs are fairly consistent in their grading. I also know they give clean grades to some "problem" coins where they deem the problems to be market acceptable. I don't have a problem with that.

I also don't have a problem with problem coins. Most of it is hype. A coin is either an attractive coin or it's an unattractive coin. Some of my favorite coins are "problem" coins that I find very attractive, and there are likewise plenty of "problem free" coins that are unattractive. Almost all coins have problems, to include natural wear. It's just that natural wear is easy to describe with the Sheldon scale and that makes it easy to price, whereas all other problems are unique and must be priced subjectively. Just because a TPG can't issue a price guarantee on a coin with non natural wear problems due to the inherent subjectivity doesn't mean the coin is not valuable or collectible.

 

That is bull hockey, as I can look at a coin, and know if it is a problem coin or a cleaned one. Also, I have a guarantee with a slabbed coin if they make a mistake. With a raw coin---nada.