Precision grading

Discussion in 'US Coins Forum' started by halfcent1793, May 15, 2020.

  1. halfcent1793

    halfcent1793 Well-Known Member

    There have been some recent comments on this forum about "precision grading," i.e., numerical grading. I would say that precision grading is hype, pure and simple. There is no such thing in the real world. Grading is subjective and has never been otherwise.

    We have numerical grading because Sheldon was obsessed with quantitation. He also promoted the idea that your body proportions (quantitative) predicted your behavior. I refer to his Atlas of Men, 1954, Harper & Brothers, NY. and The Varieties of Temperament, 1942, Harper & Brothers, NY. HOWEVER, his scale was never intended as a grading scale. It was a pricing scale for 1794 large cents. It failed to have predictive value as a pricing scale, but copper collectors still use it as a shorthand; some think it easier to say 20 than VF or 40 than XF.

    Dealers, particularly those who dealt in Morgan dollars, saw it as a way to make more money by increasing the number of grades and giving the false impression that grading was somehow precise and quantitative.

    Discuss.
     
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  3. TypeCoin971793

    TypeCoin971793 Just a random guy on the internet

    My popcorn is cooking in the microwave.
     
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  4. physics-fan3.14

    physics-fan3.14 You got any more of them.... prooflikes?

    (I am going to completely ignore Sheldon's non-numismatic pursuits in this thread. I don't think they are relevant to the discussion).

    There are two aspects to grading - there is the technical aspect, and there is the valuation aspect (often called "market).

    There is absolutely value in saying "this coin has this level of wear." Or, "this coin has a number of contact marks in a prime focal area." Or, "this coin has full details from a strong strike." These are objective, quantifiable, measurable properties. This is technical grading.

    Then there are more subjective appraisals, such as "this coin has strong luster." The attractiveness of the luster is subjective. However, you can characterize the luster as being "creamy," "flashy," or "satiny." The strictest technical scales do not include luster in their grade, but some technical graders do.

    The most subjective aspect of grading is eye appeal. Eye appeal is not a technical item - it is solely the opinion of the grader. The quality of the luster feeds into this eye appeal aspect of the grade. A certain appearance of a coin which I find attractive, you might not like. Generally, experienced numismatists have a broad consensus of positive and negative eye appeal - but there is nothing technical about it.

    I think everyone can agree that there is a need for a grading scale. It is a convenient shorthand to describe the physical condition of a coin. I could satisfactorily describe a coin with a paragraph, but if I say that a coin is "VF," you instantly have a good idea what the level of preservation is going to be on that coin.

    I think the problem that some people have with "grading" is that they expect a 64 to have a narrow set of characteristics. People might struggle with the idea that eye appeal can bump a grade up or down. It is quite common to get a technical 63 with great eye appeal, fantastic toning, etc., and find it in a 64 holder. It is quite common to get a technical 65 with unattractive spottiness and find it in a 64 holder.

    The reason people struggle is because they forget that the TPGs are *not* grading a coin. They are assigning it a value. This coin is considered to be worth more than other 63s with comparable contact marks and strike, and so it will be assigned a 64 grade. This coin is worth less than an average 65 because those spots are ugly, and so it will be assigned a 64 grade.

    To understand modern grading you also have to remember two things: there were grading scales before Sheldon, he just expanded their use. And there have been 7 decades of evolution and refinement since Sheldon. We call it the "Sheldon" scale, but we just as easily could today call it the DeLorey scale.
     
  5. tmoneyeagles

    tmoneyeagles Indian Buffalo Gatherer

    I'm actually shocked to see as many people as there are who have issues with the Sheldon scale (as it exists now) and the idea of precisely/technically grading coins. I don't remember this ever being a popular opinion, at least not on these forums.

    I agree that grading is subjective, but my contention is that the degree to which it is can be mitigated by adherence to agreed upon standards. To me, the biggest issue in TPGs grading of coins is that the standards are simply not adhered to.

    If that very system is flawed, what then is the alternative?
     
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  6. physics-fan3.14

    physics-fan3.14 You got any more of them.... prooflikes?

    But what standards are we adhering to? Who's standard is *the* standard? The ANA guide? The PCGS guide? NGC hasn't published a guide. And even with the ANA guide, it has changed through the years. The ANA guide published in 1978 is nothing like the most recent revision!

    Each TPG has it's own standard, and each grader interprets that "standard" slightly differently. Many of the TPGs won't even tell you what "standard" they use.

    Everyone keeps talking about "standards," but I haven't heard anyone explain what that means. There is no industry-wide standard, and so there is nothing for them to adhere to!

    Geez, I'm starting to sound like Doug!
     
  7. GDJMSP

    GDJMSP Numismatist Moderator

    No there weren't. Sheldon was the very first one to ever actually write a standard of any kind. But his was for 1 coin and 1 coin only - large cents. Now granted, before Sheldon people had names for grades. They'd say this coin was this grade or that grade, but it was purely adjectival and totally open to each individual's personal choice of words. But there were no standards of any kind.

    That said, it must be noted that since the late 1890s collectors had been trying to come up with a set of grading standards. But they were never able to do so. And it was not until 1958 that the very first set of grading standards for all coins was written by Brown and Dunn.

    Precisely the problem. Especially since every TPG claims there is a standard and that they follow standards. But nobody actually knows what those standards are. And if nobody knows, then by definition there is no standard.

    Yes, you're correct, but only because the one published in 1977 was based purely on technical grading. BUT - the one published in 1987 is exactly like the one published in 2013, and all other editions in between those years. With 2 very minor exceptions, for only 2 specific coins, and only in 1 grade each. Other than that, the ANA standards for every coin, the actual grading criteria for every coin in every grade is the same - since 1987.

    And the grading system published by the ANA in 1987 and every edition since then is market grading. The ANA invented market grading. But back then and at no time since then has ANA market grading ever had anything to do with establishing the value of a coin. It is and always has been about establishing the condition of the coin - nothing more.

    You are also correct in that what the TPGs do is to grade coins based on value - and specifically NOT on the condition of the coin. And that, THAT is the entire problem with TPG grading ! It is also why people "call" what the TPGs do market grading. But it is a huge misnomer ! The ANA grading standards are market grading - not what the TPGs do.

    Not exactly. Yes, each TPG uses what they call their own unique set of grading standards, but nobody knows what those standards are. And the graders who work them have to grade the coins the way their company tells to them grade the coins, regardless of what the grader's personal opinion of the grade is. And if they do not do that, then they don't have a job anymore !

    Again, precisely the point - and the problem ;)

    Ya see, it is precisely because of that that we come full circle, right back to what we had BEFORE the TPGs came into existence, where everybody assigns whatever grade they want to coins. Which, by definition, means there are no grading standards.
     
  8. Lehigh96

    Lehigh96 Toning Enthusiast

    I have given my input on this topic many times in the past. I think technical grading ignores so many attributes of a coin that it can never again be used effectively as a grading system. To do so would trade the complaints we currently have with complaints that hideously ugly coins with clean surfaces grade higher than coins with lesser surfaces, but are clearly superior in overall quality.

    That brings us to the "standards" of the market grading system being employed. The reason why people "claim" that standards aren't being adhered to is because all they see is the final result of the grading process. If the TPGs used more transparency, and provided the foundations for their grades, they would go along way to explaining some of the more egregious market graded examples. This can be done easily by providing a breakdown of the elements of grading an assigning values and weights for each element.

    Elements of Grading (weights):

    Surface Preservation--40%
    Luster------------------20%
    Strike------------------20%
    Eye Appeal------------20%

    Then consider a market graded Morgan Dollar with phenomenal vibrant lustrous bag toning, above average strike, and near unimprovable eye appeal with MS63 surfaces. The result would look like this.

    SP: 63 x 0.4 = 25.2
    L: 67 x 0.2 = 13.4
    S: 65 x 0.2 = 13
    EA: 69 x 0.2 = 13.8

    Resultant Grade: 65.4

    So you have a coin with MS63 surfaces that grades a solid MS65. And why shouldn't it? I have seen many bag toned Morgan Dollars with premium gem luster and ultra gem eye appeal. They are far superior to the blast white widgets that make up the rest of the Morgan Dollar population. And it would be easy enough for the TPG to provide this info on the reverse label (SP63-L67-S65-EA69).

    Furthermore, the weights don't have to remain static; the TPGs could change the way they weight each element of grading based on the series of coin that they are grading. For example, I submit that classic commemoratives which rarely if ever have very many surface marks should not have surface preservation taking up 40% of the grading process. Strike, luster, and eye appeal are much more important in grading commemorative coins.

    The end result would be a set of standards that were still subjective, but were applied in a logical and consistent way and accompanied by transparency that would reassure the TPG customer base.
     
  9. GDJMSP

    GDJMSP Numismatist Moderator

    We're in complete agreement on that, and the ANA has been in agreement too ever since 1986 when they invented market grading.

    A good bit of the rest of your comments - no, we're not in agreement at all. Grading standards mean there are limitations imposed by the specific grading criteria. And if all aspects of the coin don't measure up to all the specific grading criteria, then the coin is not worthy of that specific grade. In other words, one criteria, or even more than one, cannot simply ignore nor overrule all the rest of the grading criteria.

    Simply put it's either all there or it isn't. And if it isn't, it just isn't.
     
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  10. Murphy45p

    Murphy45p Active Member

    We now have the technology to make precision grading possible. Strike depth can be measured, luster as reflectivity, wear, etc. Program the parameters and an objective consistent grade is achieved.

    I also like L96's idea of disclosing the details of each aspect measured, perhaps separate grade components in addition to the overall grade, so that if someone values luster over wear, they can shop that way.

    Valuation will always be a point of contention. And even with machine grading, some coins, although equal grade, may be more desirable to a particular collector. Mechanical grading wouldn't solve all the problems for sure, but at least it would be objective and consistent.
     
  11. Lehigh96

    Lehigh96 Toning Enthusiast

    Yes Doug, we know that you are a "weakest link" grader. In your view, the overall grade of a coin can only be as good as its weakest attribute.

    I don't subscribe to that grading philosophy, and thankfully, neither do the TPGs.
     
  12. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Have the TPGs said where they are going with AI grading systems ?

    With lasers, MRI, PET scanning, and other scans...ability to image a coin in a fraction of a millisecond and look for scrateches, gouges, etc....if we can program a car to look for hundreds of items a second, it should be easy to get computer tomography to do that for coins.
     
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  13. GoldFinger1969

    GoldFinger1969 Well-Known Member

    This is going to take 1-2 minutes to do at least....will a TPG be willing to spend that amount of time per coin ?
     
  14. bradgator2

    bradgator2 Supporter! Supporter

    So... just to bust your chops and little and nitpick a small point... a PET scan injects radioactive fluorodeoxyglucose into something and it decays by Positron Emission (the PE in PET scan). That would be tough for a coin. :)

    But... I too have often wondered about the AI/technology point your were making. It cant be harder than quality control techniques used on circuit boards. At least for the surface preservation and strike.
     
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  15. -jeffB

    -jeffB Greshams LEO Supporter

    Not tomography (imaging a volume), that would be absolute overkill for the task at hand.

    We're good enough at inferring 3D structure from image sequences now that it's baked into Tesla automobiles. It would be easy enough to build up a good 3D model of a coin by spinning it in front of a high-res camera, ideally a few times with different lighting directions. From there, you could precisely measure wear, hits, damage, color, and probably even luster.

    But TPGs have established to their satisfaction that an objective measurement is not what the market wants. Or, to put it another way, it doesn't lead to a sustainable business model for them. I don't see a path for it to happen.
     
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  16. messydesk

    messydesk Well-Known Member

    I've posted volumes on this subject here before. There are other fish to fry with AI before grading gets tackled. While it's technically possible to grade using AI, there are other huge hurdles to building a system that would do it well.
     
  17. baseball21

    baseball21 Well-Known Member

    PCGS uses an AI system to help with counterfeits for the Gold Shield, not sure if NGC does and not aware of any that are using it to actually grade
     
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  18. GDJMSP

    GDJMSP Numismatist Moderator

    Yeah, it would be easy to do that part, but there's more to grading than that, lots more. Machines would have no problem with the objective aspects of grading. But they simply cannot, stress cannot, handle the subjective aspects of grading.
     
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  19. GDJMSP

    GDJMSP Numismatist Moderator

    Yeah, we know. And they don't subscribe to that philosophy because they wouldn't be able to grossly overgrade the coins if they did.
     
  20. GoldFinger1969

    GoldFinger1969 Well-Known Member

    Agreed...but it wouldn't hurt to maybe have the 2nd grade listed....and best of all, a computerized photo record of the coin to prevent counterfeits and be able to trace lineage.
     
  21. GoldFinger1969

    GoldFinger1969 Well-Known Member

    That's interesting....I get where you are coming from, but you mean to tell me that if you have 2 identical coins...and one has spectacular luster, strike, finish, detail, etc....and the other is just "OK" on all those...but they each have lots of bagmarks....you're gonna give them both an MS64 or MS63 based on the bagmarks ?
     
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