Message:

<p>[QUOTE=&quot;Lehigh96, post: 768998, member: 15309&quot;]It appears that most who have shared their opinion in this poll are going by the percentage method.&nbsp; The consensus seems to be if the grading cost is more than 10% of the value of the coin, then it is not worth having the coin graded.</p><p><br /></p><p>I would like to present an alternative method for certification value.&nbsp; Lets forget about the basic things that certification provides a collector while he owns the coin (authenticity &amp; protection) and focus merely on the financial aspect.&nbsp; We can further assume that what ever the assigned grade, it should be relatively easy to sell the coin at wholesale value.&nbsp; I know this is not always true, but let us assume for simplicity&#039;s sake.&nbsp; Instead of using a % of total value as the determining factor, I submit the cost of grading should be weighed against the potential loss of value if sold raw in combination with the grading skill of submitter.</p><p><br /></p><p>For example, lets look at a raw 1881-S Morgan Dollar that you grade MS65.&nbsp; Numismedia wholesale values can be rounded off to $50 for MS64 &amp; $125 for MS65.&nbsp; Undoubtedly if you sell this coin raw, you will not get MS65 money for it.&nbsp; Instead, you will normally get MS64 plus a small premium.&nbsp; Unless it is a no brainer MS65, the potential buyer will not risk paying MS65 money for an coin that might slab MS64.&nbsp; Normally I see what I consider raw common date MS65 Morgans sell for $75.</p><p><br /></p><p>Here is the system I would like to propose.&nbsp; The potential loss is $75 if we sell the coin raw.&nbsp; However, sometimes we are going to be wrong and the coin will come back in an MS64 leaving us no way to recoup the grading costs. Therefore if the coin is graded MS65 you generate $95 at sale but only $20 if the coin grades MS64.&nbsp; Then you have to be able to accurately predict your grading accuracy.&nbsp; Then multiply your grading accuracy % by the $95 and your failure % by the $20 and add those two amounts together.&nbsp; If the result is higher than $75, then certification has a positive EV (Expected Value) over time. </p><p><br /></p><p>For example, lets say your grading accuracy is 80%.</p><p><br /></p><p>(0.8 x $95) + (0.2 x $20) = $80</p><p><br /></p><p>Therefore you would have a positive EV to certify what you consider raw MS65 1881-S Morgan Dollars.</p><p><br /></p><p>However, lets say your grading accuracy is only 60%</p><p><br /></p><p>(0.6 x $95) + (0.4 X $20) = $63</p><p><br /></p><p>Now you would be losing money by having the coins certified and would be better off selling the coins raw.</p><p><br /></p><p>You will notice that nowhere do I mention the purchase price of the coin.&nbsp; That is irrelevant since it is a fixed cost.&nbsp; The only thing that matters is the difference in sale price between certified and raw.</p><p><br /></p><p>Also keep in mind that I have never employed this strategy because I have never submitted raw coins to a TPG with the intention of selling the coin.[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in