The "Peter Principle" for Slabbing Coins

better not go there

 

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Yeah, good night everyone.

 

The CAC "blessing" is restricted to Mamma and Pappa Bear only. At least for the time being.

 

I know there is a lot of discussion going on here.... but I would like to add that any TPG that lowers or changes their standards to generate more revenue will ultimately fail....

People will catch onto to a scheme like this, and IMO respect is what allows certain TPG's to thrive. Although none can be perfect in all situations, the top teir services rely on trust to thrive. If there is a large percieved weakness there are other services that could take over, or a new one would emerge to fill the gap.

In fact, with the introduction of DGS into the marketplace, I think you will see the the percieved top three scrambling to make changes.

I also think the easiest way for any older TPG to drum up new business would be through a reholder campaign. Basically just offering a new service "like a visual population report", based on a nominal reholder fee.

Somebody is going to have to have an answer for DGS if they(DGS) gains any trust/ respect.

Another question then arises. What happens if a new player proves to have more strict, tighter, and more consistant standards? What will this do to the market? That IMO could have a huge effect on the entire market. Pricing standards currently established.... population reports et cetera could all come into question.

I believe that TPG's real goal is to carve out or define the lines for "rare coins". Coins that are not really rare become rare based on high grades. In effect TPG's have widened the definable lines in the rare coin market. Basically giving all the kids a bigger play ground with more pals to play with. All someone really has to do is "trick" the sheeple, and the lines can be redefined again.... It's all about money, and there will always be a new way to get more.

 

I think something that hasn't even been brought up....but should have been is Market Grading.
Both NGC and PCGS grade coins by the market--Market grading is made, changed, and updated by the market....by YOU and I. If the market says that a Buffalo Nickel can grade VF without a full horn then the grading companies say ok....if the market says that to grade VF the horn must be full then they would do that.
Demand is how all of this works--when YOU and I change our grading standers is when NGC and PCGS seem to go along.

This is how any business works. In the business I co-own we look at what the market is wanting. I do nitch marketing....I go to people who work in that market and ask questions on how they want something to work....how they want stuff to work, etc. Then I go to someone else and ask the same thing. What comes out is something that is MARKET GRADED. The people who use my product like it better than any other on the market....because it was/is made FOR them BY them.

It's not NGC and PCGS that has changed...it is the MARKET...in other words: You and I.

Speedy

 

I think the people peddling "CAC" ought to make one big sticker and put it over their mouths before this game really gets out of hand...

 

Speedy,

I think you have the carriage before the horse concerning market grading. The market doesn't demand that grading get sloppy just so they can have a coin that someone says is a certain grade. It's the market manipulators who start grading sloppy in order to satify the demand for a certain grade. What is supposed to happen when demand for a certain grade exceeds supply is a price adjustment for that grade.

Whether one wants to call it changes in standards or changes in the application of standards makes little difference. It's just a play on simantics that doesn't deserve more that a one sentance explanation. In that sense, Bonedigger is right on target when he states that standards have changed.

Actually either standards have changed (or the application thereof) or the alleged pros can't grade for squat because I personally know someone who made a living over a period of years cracking out Morgan Dollars and resubmitting for higher grades. He started doing that before eBay when he had to buy from dealers and than sell back to dealers, at times even the same dealer.

The term market grading is nothing more than putting lipstick on a pig. If today's collector would stop looking at the label and start studying about their hobby, market grading would die of it's own stupidity.

 

I disagree. Someone wants to have a set of Buffalo Nickels all graded VF....but they find that in todays market they are too $$$...so they start "over grading", "market grading" the coins to fit their terms.

People want a set of Franklins with FBL but they can't find ones with both top and bottom lines full....as more and more people collect them with just the bottom lines full the market is calling that FBL. PCGS therefore goes along with Market Grading and grades those coins FBL...FOLLOWING the MARKET.

And every collect is a "market manipulators". When I buy a coin I've just made a "market" for that coin.

I for one disagree. Do a search here on CT for Market Grading. From your posts it sounds like you really don't understand Market Grading.

Speedy

NOTE: I know that this isn't exactly what the term Market Grading Stands for....but I feel that this is something that ties into the grading game and could also be called Market Grading.

 

its cac not GAG lol

 

refreshing you know you should really speak more often

 

What the market is willing to accept is quite different from what the market demands. I've yet to meet a collector who goes into a coin shop looking for a VF, and since they are not readily available, asks the dealer to regrade a F up to a VF, and of course price it accordingly, so they can have a VF in their set. I haven't heard any collector ask that the FBL requirements be lowered so they can claim to have one in their set.

On the other hand, every FINE 24S Buffalo that I have seen in the last 10 years has been graded VF. Just because collectors, many of whom don't know any better because thats all that is available, are willing to accept them as VF, doesn't translate into collector demand. More accurately it's collector acceptance. Totally different IMO.

The very first lesson in Economics 101 is that price in a free market is determined by supply and demand. When demand exceeds supply, either the supply or the price increases until equalibrium is reached. Getting sloppy with the grades is not increasing supply, it's market manipulation because the "new supply" is not the same as the original supply.

And I understand market grading as well as anyone else on this board. What it all boils down to is "what the market will accept". Not demand I might add.

Show me something, anything, that doesn't come from the good ole boys club where collectors are asking for grading to be relaxed in order to get the grade of their choice.

 

what you are saying here doesnt make any sense at all. Whatever the reason the new supply is greater than the original supply. getting sloppy with the grades will increase the supply if f coins start to get vf grades then the supply of vf coins has gone up. i cant believe you would choose to argue that. you might argue that they are not graded accurately but thats a different argument

 

You don't increase the supply of apples by throwing in some oranges and that is what this is all about. Increasing the supply of VF coins by throwing in a bunch of Fine coins does not increase the supply of VF coins.

I'll let those who read this decide if it makes sense to them.

 

if a coin is in VF slab then its a VF coin if as you say the buyers are ignorant and if the buyers are smart then they cannot really be manipulated by TPG's or anyone else.

but as you said let the readers decide.

 

OH contraire Herr Spock... Grades are subjective and always up in the air, however they serve a very basic purpose and that is protection and authentication, especially when one buys the coin and not the SLAB...

 

Of course not--they don't go say.....rip me off. In most cases the coins I see when going to shows or dealers are NOT graded. They are in flips with the date/mint and a price listed on the flip. It is up to the BUYER to put a grade. Most collectors don't know how to grade correctly. In fact....most don't even bother with reading and studying coins.
Then we have dealers that DO mark the flip with a grade and OVER grade the coin. They mark what you would call a F a VF....the normal collector who can't grade comes in and sees it marked VF and buys it.

CORRECT!!!!!
The grading hasn't changed....it's just different from what you learned. Market Grading changes along with the market. For at least 10 years the grading stander has been that what you call a F, should be in fact a VF.
As I have said over and over again---it isn't PCGS or NGC's problem---the COLLECTORs have accepted this change.

Brown & Dunn's guide is one that I think you listed in a post in this thread...I have a copy of their guide and I must say that it is VERY outdated. Photograde has strong points, but every guide has its good and bad points.
What I suggest to any collector is to read anything on grading they can....the PCGS guide, Photograde, ANA Guide, Brown and Dunn, etc. Then STUDY, STUDY, and do more study on grading, and look at as many coins as you can in person. Only then will anyone really be able to grade.

I'm still very green when it comes to grading. I've been reading and studying coins so long I can't remember when I started (I think about 8 years ago)...I only know one thing...and that is there is SO much more to learn.

I along with MANY, MANY others here on this forum would WELCOME a set of Grading Standers that all grading Co's. and collectors would follow. If we all worked from the same book it would make things much easier. The truth is, this isn't going to happen until alot more get behind it, and push for it.

Speedy

 

The Wine Industry has one; an accepted standard for each vintage that is, why not coin collectors???

BTW, all one has to do to verify the changed standards is to look as old slabs grades (and the coins within). I'm talking about ALL the accepted (Top Three, ANACS, NGC, PCGS) companies slabs which can be found for sale. My coin (1813 CBH) posted was graded by me based upon other 1813, O-102s which have been reported on various sites over the past few years. It's an accurate grade according to experienced BHD collectors.

Oh, (he double toothpicks ll) they (Grading Standards) have changed.

Ben

 

If this were true, then we really would not be having this discussion. The "collectors" have not accepted these changes, yet the TPGs continue to try to force the changes that they perceive back down the chain to the collector. As more and more collector/investors and pure investors continue their flood into numismatics, the market changes will "become" accepted...but not by collectors.

Everywhere you go online to varied forums, you see CaC and the TPGs praised and saluted because of the ten$ of thou$and$ there are to be made through varied games, such as the "Crackout Game", and everything is about profit, profit, profit. And if you look close enough, you will realize that many, if not most, of these are collector/investoers, investors, and speculators.

Yet, even amongst the few that rant and rave and raise their voices in praise of TPGs, the flip side is always apparent. There are many who will call into question the intent and motives of these third parties. They will point out blatant, and not so blatant, inconsistencies in their business practices. They will bring up the question the apparent conflict of interests, bringing us back full circle to questioning intent and motives once again. Many of these kind are not necessarily looking to roll over a profit, or even considering selling their collections in neither the near or far future. Many of these people consider themselves pure collectors.

And these are the same that will normally not accept the changes touted by the TPGs in the name of "following the market". I have responded to so many different threads like this on a number of forums over the past few weeks, but I have said before, the TPGs are very dangerous to numismatics because they do have the sway to be able to manipulate the market, where the market is not truly willing to accept the changes.

Collectors buying and selling is far from market manipulation. This is market indication. Analysts will use market indication to forecast the market's intent. But, true and actual "manipulation" of the market occurs much higher on the chain. I had referenced a book by Dennis Steinmetz previously in some thread (maybe this one), where he indicates, as an insider, that the market is truly manipulated by the cartel of large coin dealers through their strategic and high profiled buying and selling on the market.

It is these self-same large coin dealers who have found and operate the TPGs of today. Conflict of interests aside, the TPGs are now in the position to manipulate the market in much the same way the large national coin dealers of the 1970'2-1980's were able to do.

Now look what you did. I only intended to respond to you in one paragraph. :goof: I'll shut up for now. But, truly think about it all, conspiracy theories aside, and contemplate the hold that TPGs have, how many deem their slabs as sacramental, and how easy it is/would be for any TPG to simply change procedure and policy, but not necessarily standard, to effectively manipulate the market...all the while making you think that the market manipulated itself.

 

Not necessarily. They may have changed. This is why I have said before that subjectivity is the key. Grading is subjective. Because grading is subjective, you cannot say that any particular grade attribute is "right" or "wrong". Deceptive, yes. Right or wrong, no. SGS grades are certainly deceptive. That does not make them "right" or "wrong", however. If this were the case, then the mere existence of an ANA Standard grade MS60 being labeled as MS70 in an SGS slab would be grounds for some form of legal recourse. But it is not.

Does SGS publish their grading standard? No, they do not. So we cannot truly say that SGS has graded their slabs, as horribly deceptive as they are, as wrongly graded. The are most truly wrongly graded in accordance with historical and current ANA Standards, as well as standards published by NGC and PCGS. But this is comparative to standards that most collectors are already familiar with.

And I say that to make this point: Grading is subjective and depends upon three main pillars that support the grade...the technical standard, the individual bias, and the current, historic, and forecast market conditions.

Let's simply take the technical standards outlined in the Fifth edition ANA Standards, assume market conditions are stable, have been and will continue to be. Now, let's take a nice 1941 Walker Half. Let's say that there is only a trace of wear on the highest points of the devices, and that a trace of wear is noted on the reverse high points, namely the upper portion of the foremost leg. Now take two individuals that may take a look at the coin. Let us assume here that approximately 60% of the luster still shows. The first grader, who is a bit lenient on the eye appeal, especially when the coin is nice and fully struck, with details just standing out at you, decides that the coin should be an AU55. The second grader, on the other hand, demands that the grade be accompanied by the relevant luster, strike, and detail. This Walker, however, is lacking in the 3/4 luster recommendation in the ANA Standards. He therefore grades the coin AU50.

So who is right then? The first grader or the second? Because grading is subjective, and individual bias is clear in this example, you cannot possibly say that either is "right" or "wrong". That being the case, how then can a TPG be said to have changed their standards because coins upgrade (or downgrade) from what the previous slab label indicated? This is making an assumption, though a very valid one when coupled with other indicators and information, that the TPG has changed their standards.

And this is just looking at what personal bias...the root of subjectivity...can do to the grade of a coin. This does not even mention the market indicators and influence to the grade. For the standard to truly have "changed", the technical standard...the TRUE "standard"...has to change. The Buff horn is a prime example of this.

And I use SGS simply as the example that subjectivity is exactly that! And why it is important to know what language (standard) you are talking about when talking about grades and grading. But I will always stand on the fact that grading is subjective and there is no "wrong" nor "right" grade, but there are most definitely deceptive grades, especially when one standard is assumed, yet another is actually used.

 

we arent talking about grading here bone we are talking about demand and supply of coins that happen to be in a particular slab