Thoughts on cabinet friction from a professional grader.

It doesn't make a difference. The TPGs aren't arbitrarily changing trying to get resubmissions, they're just keeping up with the times while others aren't. The market is what causes grading to evolve not the other way around. Grading had been evolving and changing long before the TPGs existed which is something a lot of people forget. Every generation thinks they grade the best and future generations preferences and standards are lose or not as good etc. This is nothing new and been going on long before the TPGs and will probably go on as long as people collect coins.

If anything the TPGs evolve as a reflection of the market and what people want, not the other way around.

 

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No, in no other profession do you have the folks practicing/implementing the standard as the one setting the standard and that standard is unpublished and not peer reviewed. Ever heard of ANSI as an example?

 

Let's be real here. The ANA hasn't been keeping up with updating the grading standards, and they're not going to. That's on them. The TPGs are working with grading standards every day where the rubber meets the road.

There are many examples of professions where standards are somewhat ignored and independently updated because the organization setting them does not respond to changes fast enough (or at all) and people cannot afford to wait for them to do so.

 

"Planned obsolescence" of grading standards doesn't really work if there's competition. I've not been back in this game long enough to know, but people talk about ANACS loosening up a few years ago, and it didn't work out, so they tightened up again. NGC and PCGS are so closely matched on a lot of dimensions; I doubt either one wants to be the first to risk their reputation by loosening dramatically while the other does not. I don't deny that standards may have changed, but I'd need a lot of evidence to be convinced that it was a conspiracy to drive new business via re-slabbing.

 

Which "people" do you speak of? The management and shareholders of the Corporations along with a small minority of high end dealers who stand to profit the most? Or perhaps all the people?

 

Fact is the coin grading "business" is in a "mature" market and has been for some time...
Here are six signs that your market might be maturing:

1. Customer needs/desires do not appear to be evolving rapidly.
2. Consolidation by leading competitors is reducing competitive intensity.
3. Disruptive innovations and new entrants are gaining share only gradually and top out at relatively low levels.
4. Market shares of leading competitors have solidified and are changing gradually, if at all.
5. Price, brand and/or channel strategy has supplanted product innovation as key value drivers.
6. Cash flows are increasingly turning positive and being returned to investors rather than invested into the market.

So the Corporations know this and must add product innovations (think CAC stickers) as key value drivers, in absence of that they "innovate" new "grading standards"...this is pretty basic business 101 stuff people...

Corporations can be a good thing, but once you get to a point it starts to be harder and harder to keep on the profits without expanding somehow...IMO

Edit: yes I cut and pasted the 6 signs of market maturity from an internet source; for informational purposes only and easily googled.

 

Why can't evolving standards be a mix of TPG innovation and market desires?

I grew up in a family with a collection going back three generations, but started collecting very seriously in my early 30s. Now as a 40 year old advanced collector, I look at many AU58 coins with booming luster and eye appeal to spare, and likewise coins with pristine fields and light high point rub (especially gold) that clearly have not seen circulation, and I think to myself that it's only a disservice for these coins to be in AU58 holders. I don't see much aesthetic difference between wear and bag marks, and would rather see a touch of high point rub on an AU64 than have an MS61 hairlined dog. As a consumer, I would rather see TPG grades that make sense based on quality. I frequently deliberately cross PCGS world coins to NGC to get a lower grade. I'm not looking for gradeflation, just common sense.

 

Yes! I agree, but not let's not forget who is the dog and who is the tail.

 

This is just conspiracy stuff. The TPG growth has been in moderns, world coins, and internationally. They don't NEED classic coins which as you said is pretty basic 101 stuff about how they make their money. That doesn't even get into all the people that still crack out coins they buy which eventually will make their way back to the TPGs, crossovers, restoration services.

This idea that the TPGs have to change their standards to get classic coins resubmitted to survive is a fallacy

 

Not to survive but to fulfill the corporate mandate to maximize profits.

 

In the authentication/grading industry profits are maximized through market confidence. There's no inherent need for anyone to engage in collecting nor are corporations inherently evil. PCGS certainly wouldn't be located in Newport Beach if all that mattered was maximized profits and they would all be out sourcing their grading to somewhere like Hondrus where they can pay graders a few bucks a day if that.

Industries aren't all the same and thinking that they are is a huge mistake.

 

But you just proved my point if they outsourced to Honduras they would lose trust and fall short on the mandate. They have to have the trust of the customers to maximize profits so they have offices in upscale locations to prop up the image.

 

This is getting way to tinfoil hat conspiracy for me. I know some people want them to be evil and want them to be manipulating things for their own profit, that's simply not what is happening. They are keeping up with the times and the changes that are driven by collectors themselves just as what has always happened with grading.

 

See # 5 above PCGS has built a great brand and I like them too. It is just I can see them in an objective way.

 

No tinfoil, no conspiracy, corporations are not inherently evil and I did not say that. They exist for 1 thing only, to maximize profits for the shareholders.

 

Hoo boy! You just attached a can of worms to a bottle rocket!!

 

There are tons of raw classic coins. There were many more raw classic coins 10 years ago. There were even more raw classic coins 25 years ago. I find it very hard to believe that the supply dried up so much that they had to resort to resubmissions to stay profitable. There were enough Morgans, capped bust halves, classic gold, BU rolls of Mercury dimes, Walking Liberty halves, etc, as well as moderns to keep the money flowing in for years to come.

 

What are you talking about? This is the same long winded diatribe that he has been spouting for over a decade. A decade in which not only has he not submitted any coins for grading, but a decade in which he has not bought or sold a single coin. There is absolutely nothing new or interesting in Doug's book that he just posted.

The TPGs do not intentionally change their grading standards to spur resubmissions. Gradeflation is the result of two things. First, the inherent subjectivity in grading will cause people to resubmit PQ coins until the coin upgrades as long as the financial incentive outweighs the cost of the grading fees. Second, the expansion of market grading principles, like the topic of this thread, has led people like Doug to conclude that the TPGs have changed their larger standards when in fact, things like this are merely exceptions to the larger standards.

 

By admitting that the supply of raw classic coins is substantial, you completely undermine the entire argument for why the TPGs would deliberately change their grading standards.

 

I could tell without going to the next page that a firestorm with Baseball was kicked up. Not much else