TPGs, grading and the logical progression of slabbing

Doug, I'd be shocked if I said that. I can imagine having said 5 years ago, but not 15. I confess though, that my memory is far from perfect.

 

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I disagree about the timing of the market downturn - I believe it began approximately during the summer of 2007, at least for the areas that I deal in.

 

You betcha.

Yes, I do largely agree.

I agree with the OP to an certain extent. The key word throughout this thread is extent.

Yes, there is a "Peter Principle" tendency for some coins to wind up in overgraded slabs and get stuck there (a coin coffin). That is very reasonable; in fact, it's very difficult to refute. In that respect, the OP is right on.

But the OP said

<emphasis mine>

I personally, IMHO, do not believe that to be true. I do not believe the tectonic forces at work will push 51% - 100% of coins into overgraded holders. Maybe I'm wrong. Maybe we have 51% overgraded now*.

The existence of the phrase "if not all" suggests that the OP was possibly considering "majority" to be a great majority - perhaps 70% or more - since the upper range of possibility was 100%.

My only concern with the OP is one of extent. Qualitatively, he's right on. Quantitatively, I believe it's overstated. That's all I'm saying.



* That oughta throw some gasoline on the fire !

 

Again, my concern is one of extent. I agree qualitatively, but disagree quantitatively. i.e. "for every AU indian quarter eagle ... there's a MS 65 proof seated half dollar"

But that's just it... there isn't.

The number of AU indian quarter eagle running around is 1000x the number of MS 65 proof seated half dollars. AU $2.5 Indians are sold in bulk lots of 10, 25, 50... uncertified.




The term 1000x is a figure of speech. I don't know the actual number, but there's no reasonable doubt there is a giant difference 'twixt pops of AU indian quarter eagle and PR65 Seated 50c.

 

In my OP, I said "if not all" because I was talking about the "logical conclusion" of this scenario. An eventuality, not something I see on the immediate horizon.

I stated that if things continued in this direction, then eventually a majority if not all will be in over-graded slabs.

oh, an BTW 900, you can call me Mike (or Noodle) not that I am insulted by being referred to as the OP, but it is a little more familiar this way.

 

If this is the case...wouldn't the market evolve to the changing grading. For example, if a coins that are MS60 today ends up in MS63 holders in 10 years due to this phenomenon...won't it the MS63 grade be redefined and price accordingly? It seems like this has already happened with the old PCGS slabs selling for a premium because the grade on the slab was considered low my today's market. I agree that this is a problem for the hobby, but I think it's a problem that the market will keep in check.

 

I think that any scenario that provides for the virtually infinite submission of coins to TPGs is something that not only behooves the TPGs to espouse, but is something that they will lobby for within the hobby whether overtly or covertly.

Ergo a grading standard that for lack of a better term, ebbs and flows provides for the constant re-grading of coins is in the TPGs best interest.

 

Perhaps another point of clarification : should we distinguish "overgraded" from "low end for the grade" ?

Let's define "overgraded" as "off by a full point or more". We already have a majority "low end for the grade".

The reason I don't think a majority will eventually be overgraded is because the Peter Principle affects some issues less than others. Low end coins get less push from the Peter Principle because there is so little driving force to submit over and over and over, which is required for the eventuality of residing in a coin coffin (i.e. overgraded). The great majority of coins are in this category.

Which suggests that the greatest driving force is for valuable coins... unfortunately, the ones where 1 point of overgrade means bigger financial loss. All the more reason to grade for one's self (not surprising).

Which suggests there's a greater chance of valuable coins being eventually overgraded, and thus a higher percentage overgraded at any given time. Comments, anyone ? Hmmmm.....

Right-o ! I used OP to refer to the text, not the person. But yep "Mike" is good !

 

There's a lot of truth in there.

And since folks often make decisions not from facts, but what they think are facts, then rumors, fuzziness, and vagueness favor the TPGs / multiple submission syndrome.

 

Those who have commented that a marginal coin may not be worth resubmitting, and definitely wouldn't be worth resubmitting multiple times are missing one thing. Who ever said the multiple submissions would come from the same person?

Take that theoretical AU Indian. If he can get it bumped from AU to MS-61 there is a $70 upvalue potential. So he makes his $30 shot and fails. Takes has $30 lumps and sels it off to the next guy. This guy loks at that $70 possibility (and not knowing it has already been attempted) and takes his $30 shot and fails. Takes his lumps and sells it to the next guy. This keeps repeating, no one taking more than one shot at the upgrade until after say a dozen attempts it finally succeeds. Now it is overgraded in a holder so no one takes any further upgrade shots. But the service has been pais $360 so far in grading fees for this $230 coin. No one person in his right mind would have submitted that coins a dozen times, but a dozen people in THEIR right minds would and eventualy the coin winds up in a coffin. And this process keeps repeating for other coins as long as there is a fair to moderate, sometimes even just a slight chance, that the coin will upgrade.

The services tell you they have graded millions and millions of coins. How many of those millions are repeats? Going by their figures roughly one out of every 7 PCGS slabs should be a rattler. Almost one out of every two should either be a old green label (1990 - 95) or a new green label (95 - 1999) Yet in the market I see a sea of blue labels and most of those being with the barcode on the front and no coin or series numbers, a figure which should be one in five slabs. There aren't 20 to 25 million PCGS slabs out there, it is the same 5 to 10 million coins being recycled, regraded, reholdered, crossed, crossed back

And like Mark said, over time the overgrading becomes accepted, and the overgraded coins in the slabs DO become what the new "standard" is. We tell the newbies they need to learn to grade and the way to do it is to look at a lot of coins graded by the big boys. But if the standards have slipped what we are in effect telling them is to adopt these overgraded coins as the new standard. It then just sets things up for a new round of gradeflation.