I probably should have just bumped the old topic, since I know there are already a few - OldDan will just have to sue me. OK, so I was reading Travers' book, and he mentions that the Sheldon scale is base on the following formula: Book Value = Basal Value x Numeric Grade in his example, $80 (book value) = $2 (base value) x 40 (numerical grade) So, heres where I run into a logic issue with market value's pushing up the grading standards (or pushing them into the ground, depending how you look at it). The market ALREADY has its say in the basal value of a particular coin - if demand for a coin pushs the market value up, it is reflective in the equation within that value. In this respect, it only stands to reason that numeric grade needs to be static - or at least should be, sans subjectivity without dishonesty. The book value of the coin can still slide based on the variable set up to allow for market adjustment. So perhaps the standard was poorly explained, or more likely poorly understood on my part, because I am not seeing the grade as dependent upon the market value - I see the book value (of course) being a computation set up determined upon the state of the coin and the base multiplier of value, which appears as a round-about rule of thumb for the age old determination that price is determined between supply and demand. Granted, I think it has flaws, because as the number approaches the ever mythical value of 70, I think the formula is more geometric than algebraic (which I probably would have sounded smarter if I took the time to look that up and make sure I spelled it correctly) - but whatever works to how you determine what you feel is a fair price for a certain coin in a certain grade is fine with me... I am still, after ALL this time, failing to see reason, except in terms that the market will adjust on whatever terms the market will accept. I guess that's the only valid argument I can see - because it is market proven. In other words, it's up to those who comprise the market to reject this foolish notion of shifting grades to accomidate market price. Has anyone seen any impact in the market trends that resulted from this recent 'adjustment'?
Not real sure what ya mean by that. Two things really - impact in trends and recent adjustment. By impact in trends I assume you mean increases in prices - and by recent adjustment - that can be two things all by itself. Do you mean changes in grading standards, or are you just referring to the recent increases in prices ?
the former. I was wondering if anyone had any run-ins with the changes in the grading standards. I have not, personally, but I don't buy and sell nearly as much as a lot of people in the hobby. I guess the whole business that people were talking about a few weeks ago just *still* sits poorly with me - and not just because I don't like the idea of grade adjustments. Where I don't like that, I find that if the hobby decides grading needs to be tweeked every now and again, that will happen... I don't agree with it, but I can at least understand 'hey, people think that what we used to call above average F is now considered an average VF. People thought about it, and that's what people decided.' To me, that's much like saying 'ok 2+2 used to = 4, but now people have decided to call 4 '5' - we aren't saying that 2 is now = to 2.5, or that 4 has really changed in real value... we're just calling 4 '5'.' So fine... I think it's ridiculous, but I can process the idea. Nothing really changes except the terms used. But what seemed to be explained was that the 1-70 grading standard was a value based grading system, which I thought was sort of odd - and I have never personally directly read Dr. Sheldon's works. But unless Travers has it all wrong, it doesn't appear that the 1-70 designation is value based in the formula. At least, if it is, it doesn't need to be. It just defies reason. Set aside, for a moment, that the only real thing that defines value is market economics - I can't call a Dodge a BMW and expect I can price it according to the name I gave it. It's still a Dodge. This hobby, in my opinion, is filled with smart and reasonable people. This leaves me with the thought that something happens that I don't understand. Like anyone else, I can see what happened and accept the facts in the aftermath - but the logical process entirely evades me.
First of all let me say that I agree with you - grading standards should be static and values should fluctuate. But Travers wasn't wrong either - it is a value based system. It always was and always will be. How can it be otherwise ? A coin of a given grade will always be worth a given value. Although the value may change with time, I do not personally think the grade needs to change with it. But that was the original premise.
The problem with overgraded slabs will be solved when they go to a 100 point grading system. Then the former over graded MS67 will "actually" be undergraded because it should be an MS85
At the time the 70 point system was devised it just coincidentally worked for large cents. It was never intended for other series and it no longer works for even large cents. Collectors and grading companies do not so much grade coins as price them. Prices are based on the aggregate real demand as expressed in terms of those who actually buy that specific grade coin and the total available supply of coins actually enterring the market. Unrealized sales have a strong psychological im- pact on the parties involved and tend to make thwarted buyers raise their bids and frustrated sellers lower their asks. Changing the grades has no direct impact on those who buy coins and are know- ledgeable about the market and grading. It will impact buyers and sellers who are not as knowledgable until market prices readjust. Grading and pricing has always been a moving target. We could nail down grading if we wanted to but most collectors simply want to know what their coin is worth, not what condition it's in.
