What You Need To Know About: Grading Or: Tying it all Together – The Science and Art of Grading By Jason Poe The single most important thing a coin collector needs to be able to do is to grade a coin. A seller and a buyer must agree on a price – and that price is determined by the grade. Once the basics of grading are mastered, only the subtleties of a series or issue must be learned. I think most would recognize that learning to grade coins quickly, accurately, and consistently can be somewhat challenging. And so, after a journey spanning almost two years, the sixth and final article in this ongoing series will conclude our discussion on grading. I highly recommend you go back and review the entire series, which I’ve linked below. To properly grade, you must understand each aspect, and be able to judge how to weight each in a holistic view of the coin. An experienced grader is able to quickly judge each aspect without counting the number of marks or using a photometer to measure luster. What You Need To Know About: Wear What You Need To Know About: Contact Marks What You Need To Know About: Luster What You Need To Know About: Strike What You Need To Know About: Eye Appeal It was not until the 19th century that numismatists began categorizing coins in the broad groups of poor, good, fine, and uncirculated. The publication of William Sheldon’s Penny Whimsy brought about the 1-70 point scale that we use today. The ANA used the Sheldon scale as a basis, but adapted it to other series besides the large cent. When the Third Party Graders came on the scene, the grading scale was still not quite in its present form. In the first edition of the ANA guide, only MS-60, 65, and 70 were recognized. In 1986, PCGS was founded; NGC started grading coins in 1987. The Sheldon scale is divided into two separate overarching categories. Uncirculated coins comprise numbers 60 continuously through 70. These are coins which show no signs of wear. Their details are as struck, showing no trace of metal being removed from their high points. Basic descriptions below of several grades are taken from the ANA Grading guide, 5th edition: MS-60: below average to average luster and color, numerous noticeable marks, obvious mishandling, below average eye appeal MS-63: below average to above average luster and color, some noticeable marks, minor mishandling, below average to average eye appeal MS-65: average to above average luster and color, light marks, no signs of mishandling, good eye appeal MS-67: exceptional luster and color, virtually no detracting marks, no signs of mishandling, exceptional eye appeal The problem with grading is that almost every descriptor for a grade is subjective. What I think is exceptional eye appeal might be to you quite unattractive; what I determine is above average luster you might think is just average. Learning all these subtleties is what makes the grader’s job so difficult. With practice, and examining hundreds or thousands of coins, anyone can come to learn the qualities of a coin, and what makes certain coins grade higher than others. Looking at coins already graded by experts (such as the TPGs) will certainly promote good grading skills. Coins in the Circulated category range from Poor-1 through About Uncirculated-58, and are broken down as shown in this chart adapted from the ANA Grading guide, 5th edition. As you can see, only certain numbers are used – the scale is by no means a continuous gradation from 1- 59: Poor (PR-1) – Identifiable as a coin. Fair (FR-2) – Extremely heavily worn, outline of major devices visible. About Good (AG-3) – Very heavily worn with portions of lettering or date worn smooth, date barely readable. Good (G-4, 6) – Heavily worn, Major designs visible, but with faintness in areas. To qualify for G-6, coin must have full rims. Very Good (VG-8, 10) – Well worn, major designs visible but with faintness in areas. Head of Liberty, wreath, and other major features visible but without center detail. Fine (F-12, much less common 15, 18) – Moderate to considerable even wear. Entire design is bold. All lettering, including LIBERTY (on coins with this feature on shield or headband) visible, but with some weakness. Very Fine (VF-20, 25) – Moderate wear on the high parts Choice Very Fine (VF-30, 35) Light even wear on the surface, design details on the highest points lightly worn, but with all lettering and major features sharp. Extremely Fine (EF-40, 45, also called Extra Fine, also abbreviated XF) With only slight wear, but more extensive than AU, still with excellent overall sharpness. Traces of mint luster may still show. About Uncirculated (AU-50, 53, 55, 58) – With traces of wear on nearly all of the highest areas. Half to all original mint luster remaining. These brief descriptions are merely a guide to the scale – far more detailed, series specific criteria can be found in a guide such as the ANA Grading Standards or Photograde. Another resource I highly recommend is the PCGS Photograde website. Once you have determined the numerical grade of a coin, you can then apply any descriptors or qualifiers to the grade. Many of the strike designations are discussed in my article on Strike. Other qualifiers you will see on a coin are *, +, CAM, UCAM, DCAM, PL, DPL, and any number of other descriptors as the grader sees fit. The Star (*) is a designation only used by NGC, and it designates the coin has exceptional eye appeal. Plus (+) is a new designation for the TPG’s, but has been in use in general grading by many sellers for a while. It designates a coin which is in the high range of certain grade (for example, a 64+ is a coin which just barely misses being a 65). Prooflike (PL) and Deep Mirror Prooflike (DMPL or DPL) coins are incredibly beautiful, mirrored coins which were made as Business Strike coins, but have the appearance of proofs. If the coin you are grading looks to be a very nice EF-40 coin, except for a large scratch across the obverse, there is no way the coin will sell for an EF-40 price. Someone who just saw the coin described as EF-40 would be expecting a problem free, original coin. In this case, you must add a qualifier to the grade to describe the problem. The coin would properly be graded as “EF Details, Scratched.” Both NGC and ANACS will describe problem coins on the slab this way; PCGS does not offer a details grade but labels the coin Genuine, with a “Designation Code” attached to the serial number. You have to then go look up the code to see what the problem is. (NGC MS-64 FBL PL Franklin) The mint also makes Proof coins (throughout its history, it has made proof coins in a number of different surface finishes, but the ones made today are Brilliant Proofs). Proof is not a grade – it is a method of manufacture. Proof coins are made from specially prepared dies, using specially prepared planchets, and struck at least twice using higher pressure. Proofs are graded using the same 1-70 point scale, but designated as PF by NGC or PR by PCGS (in contrast to the MS grades listed above). Proof coins have the designations Cameo (CAM) and Ultra Cameo (UCAM) at NGC, or Deep Cameo (DCAM) at PCGS. Different levels of contrast are required to achieve each designation, with Cameo coins being slightly contrasted and UCAM coins heavily contrasted. (1962 Proof Franklin, NGC PF-67UCAM) Before you start grading a coin, the right tools are essential. Your study area at home will have a very different environment than your local dealer or a coin show. I personally use 15W helical fluorescent lights in my desk lamps; this same lighting is used for all pictures I take. Other lighting sources to be aware of: incandescent bulbs, which are quickly going out of style. These produce a large amount of heat, and their light is generally more yellowish than other light bulbs. Halogen lights are very harsh, and can make the coin look much worse than it really is. In some cases, such as at a flea market, sunlight is the only available option. Sunlight is highly variable based on the season, time of day, weather, etc., and is generally a softer light. experiment performed by the legendary Mark Goodman. The other tool you will need is some sort of magnification. While your initial grade should be based on a “naked eye” appraisal, it is often important to examine the coin closer. Evidence of cleaning, hairlines, die polish lines, puttying, or any number of other problems may only reveal themselves under magnification. Further, a close-up will give you a better idea of certain details of strike, such as the head on the Standing Liberty Quarter. For grading, you probably shouldn’t use anything much stronger than 5x magnification. Many suggest a simple 2x or 3x magnifier for grading. Professional graders, such as dealers or graders at the TPGs, will usually not use any magnification at all when grading, only taking a closer look when something catches their eye. Alright, are you ready to grade a coin with me? When you are first starting out, having a method is good. Take the time to be slow and follow the same steps each time. Most of all, take your time. For this discussion, we are going to be grading this 1960D Franklin. (The 1960D Franklin we will be using for this discussion) The first thing you notice is the luster. Turn the coin under the light, and the luster will present itself to you. What do I mean by that? Hold the coin firmly between your thumb and forefinger, and rotate the coin so that you see the cartwheel of luster move around the coin. Carefully watch what I do in the video below. The movement takes some practice, and is awkward with a slab, but just move the coin under the light and you will see the luster move. Moving the coin, you can see the luster travel around the coin, and how it behaves on the high points. These high points are where you must look for luster breaks, a key indication of wear which would mean the coin was AU. The luster of this coin would be strong enough for a 65. [video=youtube;FgfHpM36u6s]http://www.youtube.com/watch?v=FgfHpM36u6s[/video] (Video demonstrating cart wheeling luster) Next, I usually look in the fields and prominent focal areas for large marks. Large marks in these areas will kill the grade. You don’t see any large marks, but there are a number of fine tickmarks. Look next at the secondary focal areas – places like the hair, bustline, in the mottoes, or on the bell hanger. Marks in these areas are less important, but a sizeable mark here will again rule out a high grade. Again, you notice no large distracting marks, but a number of smaller tick marks. The marks on the obverse would warrant a 64 grade, the marks on the reverse would be at least a strong 64. Now we want to look at the strike of the coin. From the luster and marks, we are trying to decide if this is a 64 or 65 coin, so we definitely need to pay close attention to the strike. Look at the fine details of the coin, such as Franklin’s hair. Look at the eagle’s feathers and the wood grain on the bell hanger. Finally and most importantly, look at the bell lines. The strike is pretty good on this coin, and the bell lines are clear and full. However, there are a number of small marks across the lines. The strike on this coin is worthy of a 65 grade. (Closeup of the bell lines on the coin in question) Finally, you evaluate the eye appeal. In reality, you’ve been evaluating the eye appeal all along. The first thing you noticed was how the coin looks; it’s what first caught your attention. When I look at a coin, I generally formulate an opinion of the coin within seconds. The rest of the analysis is to determine whether my first impression was correct or not. By turning the coin in your hand, looking at it from different angles, seeing how the light plays off the surfaces, you are looking for things you might have missed in your first impression. Back to the Franklin in question – there is no toning, so that part of the evaluation is not important. There is minimal spotting on the reverse which is going to hold the grade back some, and the die polish lines on the obverse slightly impede the eye appeal. So, the eye appeal of this coin is consistent with a 64. After evaluating all these characteristics, what is the final grade? Well, everything seems to be pointing to either a 64 or 65 grade. Contact marks and luster are more important than strike, and eye appeal I use as an adjuster in borderline cases. I would give this coin’s obverse a 64, and the reverse is a 65. The obverse is considered to be the more important side for a grade, and the grade of the obverse will usually be the grade of the coin. I would grade the coin a strong 64 overall, with Full Bell Lines (FBL). NGC agrees with me. If I submitted this coin several times, it’s entirely possible it would come back as a 65 at one point, but it would be a low end 65. However, if I do get a 65 out of it, why would I ever submit it again and run the chance of getting a lower grade? There are two major schools of thought when it comes to grading: Technical and Market grading. There has been discussion in the past about what each means, and I will attempt to clear up any confusion. Jim Halperin, founder of Heritage Auction Galleries, defines technical grading as “A system of grading which only takes into account that which has happened to a coin after the minting process (i.e. the state of preservation). Technical graders often ignore strike and eye-appeal.” The technical grade only takes into account the marks, rub, and hits that the coin has suffered – it nearly completely disregards the other factors we have been discussing. This is in stark contrast to market grading, which noted author Q. David Bowers describes thusly: “Under this philosophy, a coin is assigned a single grade number which reflects its market price, not necessarily its technical grade. This is a departure from the grading systems outlined in the 1970s and 1980s in Photograde and the Official ANA Grading Standards for United States Coins books.” The Third (and now also Fourth) Party Graders practice market grading to its fullest extent. It is important for the collector to notice – The TPGs VALUE coins, they don’t GRADE them. This is quite a shocking concept to many when they first hear it. The TPG will attempt to place a grade on a coin corresponding to the value a coin should have in the marketplace. Thus, a strong 64 with great eye appeal will get a bump up to a 65 or even 66, because that is the price level it would be expected to trade at. A coin with flawless surfaces and a strong strike, but with spotty, splotchy toning will be downgraded to a 65 because it should trade at a discount to a normal 66. For two excellent and exemplary discussions of market vs. technical grading, see two very old posts here and here. So what does the future hold? Grading is definitely still an evolving art form, as evidenced by the advent of decimal grading even as recently as last year. Some proponents argue for the adoption of a 100 point grading scale, instead of the current 70 point scale. The key is to be able to accurately be able to evaluate a coin, assess its qualities, recognize its flaws, and be able to determine if it is worthy of being in your collection or not. Once you can quickly and skillfully grade a coin, the world of numismatics is opened to you in a way that it never was before. As the well-worn adage goes, “Buy the coin, not the holder.” You must be able to grade the coin in order to do this. So, time to start grading! Jason Poe
What are the rules for nominating a post for Thread of the Week again? Seriously though Jason, that was outstanding. Your commitment to the numismatic education of others is something that is commendable and very much appreciated by this collector. Furthermore, I would like to thank you not only for the content of this fantastic thread, but also for the superb presentation which is a testament to your dedication and relentless pursuit of excellence. I really think you deserve some serious kudos for this thread as well as the other WYNTK component threads contained within. I don't know how many of your fellow Cointalk members know that your NGC registry collection of Franklin Half Dollars won an award for BEST PRESENTED set in 2008. Although, after reading this thread, I doubt they would be surprised. The Poe Collection It is impossible to view that registry collection and not feel your passion that you have for this great hobby of ours. In fact, it was your collection that inspired me to improve the presentation of my Jefferson Nickel collection. In my opinion, you are a role model for coin collectors: knowledgeable, passionate, selective, humble, and caring. Take a bow Jason, you've earned it! BRAVO! :bow:
Very educational! In the past half hour while reading your threads, I learned more than I have all year regarding the finer aspects of coin collecting. Thank you for posting this! It'll be something I will be referring to over and over.:bow:
I couldn't agree more. Clinker Award, you have to PM Doug with a link to the post you want to nominate, if that post gets 5 nominations, Doug will post a link to it in the Clinker Award Winners thread, in the Announcement section. I'll be nominating this thread too.
Another excellent post Jason :thumb: I would make 2 minor additions to your comments, only for the sake of understanding. One is to this paragraph - "When the Third Party Graders came on the scene, the grading scale was still not quite in its present form. In the first edition of the ANA guide, only MS-60, 65, and 70 were recognized. In 1986, PCGS was founded; NGC started grading coins in 1987. " It is important to note that the First Edition ANA Guide was published in 1977 so that people have a better understanding of how and when the grading process came about. It is also important to note that everything contained within the Third Edition ANA Guide was decided upon in 1986 and that David Hall and John Albanese, two of the founders of PCGS and NGC, were also two of the key players in making the decisions as to what the ANA Grading Guide would say and what its grading standards would be. For it is only by knowing this information that one can truly understand what happened to grading after that time. The other addition I would make is to this paragrapgh, and again for the sake of understanding. 'This is in stark contrast to market grading, which noted author Q. David Bowers describes thusly: “Under this philosophy, a coin is assigned a single grade number which reflects its market price, not necessarily its technical grade. This is a departure from the grading systems outlined in the 1970s and 1980s in Photograde and the Official ANA Grading Standards for United States Coins books.” ' It is important to understand David Bowers's comments only applied to the First and Second Editions of the ANA Grading Guide. For with the publication of the Third Edition ANA Grading Guide in 1987 market grading was born. That's right, the Third Edition (and all subsequent editions) of the ANA Guide established the practice of market grading. It is important to remember that the switch from technical grading to market grading in the ANA Grading Guide, and the birth of the TPGs took place at exactly the same time - 1986. It was the ANA agreeing to make that switch to market grading that allowed the TPGs to become successful. Otherwise, it never would have happened.
Wonderful post. It highlights the fact that while grading might be subjective, we can objectively One additional measure that has helped me, is evaluating a coin multiple times under different lighting.
That's the highest compliment you can give me, Paul, thanks. And Doug, thanks for the additions. Those points were in my original full version of this article, which was 13 single spaced Word pages. I figured that would be a little overwhelming for this format, so I edited it down to the current 6 pages. Obviously, much of the discussion and subtlety was lost. I'm glad everyone is learning something from this series, that makes all the time spent on this totally worth it.
I believe a discussion of surfaces is required for a thorough understanding of grading. I've begun a discussion here (I would have updated the OP with the link, but I can't) : https://www.cointalk.com/threads/a-discussion-about-surfaces-part-1-of-2.256003/
