PCGS made a big mistake?

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I wouldn't let it bother you...it's what they want to collect. I say let them if it makes them happy. These fancy labels don't interest me...but some people really go crazy for them.

Every hobby is different. Heck, I have a stack of 5 baseball cards on my desk right here...the stack probably cost $1000. $1000 for 5 small pieces of cardboard with someone's photo on it. You probably think it's crazy. A lot of people do, but it makes me happy. Heck, right now I'm saving for a baseball card that will cost between $5000-$8000. As far as I am concerned, TPG label collectors is a different hobby...just like me cards. It has it's own following and those who don't do it think it's a waste of money.

 

Agreed, 100%. And what they do does peripherally affect the general public's opinion of mainstream numismatics, too, so it's not a completely benign thing. Maybe the best outcome we can expect is to try to attempt to educate the non-collecting public that our hobby is bifurcating - some of us think the rest of us are nuts.

 

So tell us, IS confession good for the soul?

 

According to what I learned in Catholic school...Yes.

From practical experience...No.

 

I had a private lunch with Cliff Mishler at winter FUN in 2012. We talked about all kinds of stuff. His thoughts on the biggest peril our hobby faces is closely related to several threads that are hot on CoinTalk right now - the insane premiums being paid for 1-point grade spreads. He said at that time it threatens to ruin the hobby's collective reputation. We may be witnessing exactly that.

 

CamaroDMD

Heck, right now I'm saving for a baseball card that will cost between $5000-$8000.

You freak!

 

We're geeks. Suck it up.

 

That sounds like me. My wife thinks I'm crazy.

 

I think non-coin collectors always have and always will think there's something wrong with us. It's okay, I think there's something wrong with them when they live on facebook and warcraft.

 

Wait, you mean there's a chance we're not clinically insane?!? Huh.

 

First. I'm not going to stop buying pcgs coins because of the Ana labels. The pcgs label says nothing about the coin being purchased at the show just graded at the show. Second of all I could care less if it did.

I buy pcgs and ngc coins for three reasons. Their grading standards, their market acceptance and buy back guarantee. I only care about these three issues. Black cases, awesome labels and other issues not related to any of the above three reasons means nothing to me. I will continue to buy these tpg products until they violate one or more of my listed three reasons..

Second. I'm not here to tell anyone what or how to collect coins. But I am allowed to offer both my opinion and predictions. My opinion is there is a very small population of "label" collectors. I personally think that the majority of the market is not collectors but speculators who have no intention of being the net consumer. This means supply will far exceed demand, once the speculators sell their coins and move on to the next tickle me Elmo or beenie baby. If you track eBay sold auctions you would see this already confirm my theory. The reason I am so negative about graded moderns is simply supply and demand. While personally I have no need to have a graded modern I don't judge a person who does. But I do think the problem with modern graded coins is below.

(Please give me a little leeway if I misquote a number the concept still holds)

Mintage 1998s silver proof set. 240,658.
Current grey sheet value of the set $21.00
Current value of pcgs 70 dcam 25c =$28.00
Total population of pcgs graded 1998 silver 25c=3646
Pcgs silver 25c pcgs 70 403/3646=11% of all graded coins

Thus total population of pcgs 70's 25c silver = 11% x 240658 = 26,600 coins out there just waiting to be graded. Now some argue coins are preselected prior to grading. Ok so factor accordingly. Personally I discount this idea but there is a wide margin for error here.

So how much premium do you think there will be for a coin priced at when current value is over the value of the set. According to my math there is 66x the number of 70's currently available just waiting to be graded. So if you want to tell me the sets were preselected use your math and adjust the 66x current population to what ever you want but with a starting number of 66 you can see that no matter how preselected the sets you think were there are just too many coins floating out there.

I chose this coin at random but the concept holds. Personally I don't think there is anything wrong with collecting modern coins. But with graded coins I personally there is a false sense of rareness. Were I to collect modern it would be ogp, as I could submit anytime I wanted to but still have the ogp value as well. Just my own personal opinion.

 

I agree with all of that with two caveats:

1) I think you may be underestimating the number of new collectors coming that will continue to like moderns throughout their collecting lives.
2) I think you may also be underestimating the amount of selectivity that goes on prior to submitting for slabs.

Of course, both of those ONLY call into question the final numbers, not the broad concept, in which I agree you are spot on.

No quarrel with the basic concept, just the direness of the magnitude.

 

Here's the (oh boy) other side of the coin. (Sorry.)

Traditionally, lack of supply has created its own extra demand. I once wrote an article for NN in which I called this phenomenon the "key coin effect".

I am working on another economic theory in which that effect, when taken to its reductio ad absurdum extreme, may flip backwards onto itself and reduce demand for classic coins due to what I'm calling the "discouraged walk away effect". As this new upcoming generation keeps underperforming in disposable income, as has been their average, while the true rarities keep exploding in price due to the income distribution and obscene wealth of the 1%, more of tomorrow's collectors may throw up their hands in disgust at classic coins and eschew them completely in favor of the coins they have familiarity with. Just a theory at this point...

Economists do have a deserved reputation for being pains in the far lower back. No, lower. It is known as the dismal science.

 

Who decided that the people that decide who's insane are sane to do so?

 

They're not, and most of them will tell you so. Doesn't change their ability to decide you're nuts, too. It's called "credentialism".

 

1. I never said anything about the popularity of collecting moderns. My math was not about total modern coins available. Strictly the so called rarity of "high" grade moderns.

2. I specifically allowed for selectively. My assumption is none with moderns. I really don't see people looking over modern proof set after proof set but I mathematically allowed for this. With no selectivity the current ratio between is 66 times the current or for every currently 70 graded there are 66 ungraded coins waiting to be graded.

So I specifically told people they could allow for selection. For example, if a person looks at and selects 1 coin to submit out of every five it would be a 20% rate. So 20% of 66x is 13. So with only selecting one of every five coins my math shows that there are only 13 ungraded 70's for every one graded. Or 5239 70's ungraded waiting to dilute the value of the current 403 graded now. Still seems pretty dire to me.

I quoted my prior post to specifically show that in fact I did use both my math and allowed for using selectivity to be factored in. I just didn't think I needed to spell it out for the rest of the board. I assumed the others could do math but it appears some either can't or were too lazy to read and interpret. Please stop correcting my posts with information either I already included or never said.

Please stop insulting me. I am a member of the 1%. please refer to my prior post where I detail exactly what it takes in America to become a member of this "obscene wealth" category without stealing, inheriting or getting lucky to get rich. Take note of the likes. And in the future please keep the discussion on coins. I dislike the other topics and can go elsewhere if I did want to go off topic. And it doesn't take as much income as people think to be a 1%er.

 

Credentialism:

Have you ever met someone who
didn't say their pets are crazy?
Their pets aren't crazy, they're
just being themselves. If Albert
Einstein were to be himself today,
in school, they'd be treating him
for ADD.

 

Most people never have the option to accumulate that much education debt. I had all I could expect to handle after a B.A. at a "hoity toity" east coast school founded in the 1700's. Then I had to work, every bit as long and hard as you did, Vic. You are entitled to believe your economic status is based on merit. I'm entitled to believe you're full of it, and yourself.

Sorry, but I believe utterly it is impossible to "earn" a spot in the 1%, but only to "acquire" one.

 

Of all the people choosing fields of study it was my experience the ones choosing psychiatry were the least sane I knew. Just my personal experience.