@keets said:
this thread, and the line of thought it follows, is sort of interesting. it was prompted by an innocent question in response to a CW ad and morphed in to a debate centered on paranoia, delusion and denial.
I don't know about paranoia, but there's a lot of denial.
While I don't think JA is trying to scam anyone, there is an undeniable conflict of interest. It's the virtual definition. I mean: I sell stickers then I buy coins with stickers. Then I resell coins with stickers for a profit. It's like the grocery store issuing USDA Prime labels and then charging you a premium based on the fact that it is USDA Prime.
I think your missing alot. For instance, you are not considering that if the coins were not stickered properly there are many, many experts who would have no part of it and would point it out. The reason that CAC has built up a following is based upon the experience that many trust JAs opinion.
els and then charging you a premium based on the fact that it is USDA Prime.
I think your missing alot. For instance, you are not considering that if the coins were not stickered properly there are many, many experts who would have no part of it and would point it out. The reason that CAC has built up a following is based upon the experience that many trust JAs opinion.
You are focusing on but one of multiple possible ways one could manipulate the system. They don't have to be inappropriately stickering coins to profit. They just need to be stickering their own coins. They also could simply refrain from stickering a coin to keep their coin as a Pop 1. I'm rather tired of spinning possibilities, as they are endless.
JA, as far as I know, IS DOING NOTHING WRONG.
Conflict of interest is not about what you are currently doing wrong. It's about what you could do wrong and even giving the appearance that there is bias.
Auction houses should not buy coins. TPGS should not buy coins. CAC should not be in the coin business if they want to avoid the appearance of conflict.
Now, there is only one way that there is NO conflict of interest: CAC is a retail coin business and the beans are simply a method of display. Then, they are in the business of buying coins not offering opinions on coins.
I think we need to rethink how we view CAC. They are not in the opinion game, because their opinion lacks objectivity or at least has the appearance of lacking objectivity.
@Insider2 said: @jmlanzaf said: "...But the fact that every major auction house is submitting their entire catalog of premium material to CAC who is also a BUYER of coins seems at least POTENTIALLY problematic."
LOL, Perhaps only to a chemist.
No. Also to the lawyers.
It is considered a conflict of interest for me to have a relationship of any kind with textbook manufacturers because I have the ability to choose my course's textbook. As such, even lunch is reportable.
Years ago, GM cracked down on engineers taking swag (lunch, hockey tickets) from vendors because it could potentially influence buying decisions.
People have been ranting about the relationship between drug company reps and doctors in recent years.
There is a reason that companies have conflict of interest rules. They come from the lawyers, not the chemists.
Now, we are all free to not care. If my doctor gets a free trip to Bermuda from the XPQ drug rep and then prescribes me XPQ, I don't have to care. If my coin opinion comes from Apmex who also wants to buy my coin, I don't have to care. But let's not pretend there isn't at least the appearance of a conflict.
LOL, thank's for telling all of us how it works IN THE REAL WORLD! Fortunately, most of us know all this. If a grader is seen talking with a dealer or buying something for their personal collection tongues will wag. That never stopped me from accepting a donation of a counterfeit for my teaching set. Our actions are what's important and I'm asked to be "brutal" on everyone's coins so the "Market Graders" who examine it afterward can make an informed decision on its value/grade.
PS. Let's make this discussion real simple and take out all the If's, can's, do's and don'ts: YES, conflicts of interest are possible at every TPGS and at each "sticker" provider. Do they occur? If you know, provide an example. Otherwise, close your piehole as the paranoia and speculation in this fantasy thread can go on forever.
IMO, the "market" takes care of itself. It was pointed out already that one TPGS was slapped on the wrist for actually doing what IS POSSIBLE. Unfortunately, It will always be possible. Probably just harder with Internet forums such as this and the vigilance of the market. Why kill a "cash cow" by cheating?
IMO, based on what I read, you do not have a basic understanding of the coin market. Your comments read like a fairy tale wrapped in wishful thinking. I'm going to reply to your post as I see things and look forward to being corrected so I can learn which of my comments are incorrect.
Grading standards have evolved and it will continue! This is a provable fact and anyone who disputes this is uninformed. I prefer to use the word "ignorant" on the subject but those who are ignorant of the definition of that word will be offended.,
You have posted: "A large amount of the money that comes into this hobby is based on the understanding that professional grading services offer guarantees." Yes, this is another fact. However, what you may think is a GRADING error pf some kind that should be covered may fall into the category of the way the TPGS interprets market acceptable based on the standards they employ. So your "understanding" means squat!
This presupposes fixed, consistent standards. Oh my, do you ever read the discussions on CU? As I wrote above, this belief about a fixed standard is just plain ... I won't write the word again. What part of THERE ARE NO STANDARDS AND WHAT WE THINK THEY ARE CHANGES - often monthly - but in a constant march to looser over a long period of time don't you understand?
If the "standards" constantly change, then those guarantees are worthless and the entire market is predicated upon a huge fraud (a non-existent guarantee and resulting implied stability/legitimacy). AFAIK, all the TPGS's honor their Grading guarantee when they deem warranted. It is their choice. Furthermore, I see no dire collapse of the coin market or fraud committed by the TPGS's. If you think so, back up your contention now. I'll lay it out for you. The standards DO CHANGE. Where is the fraud you write about?
Your overgraded MS64 of yesteryear is now today's MS66 -YES no TPGS payout for you. Oh and the new MS66 equals old MS63-63+ value and quality! YES Old cleaning on your coins? No problem. You may have bought a turd in the 1990s, but it is now market acceptable based on current "standards." Guess what, it is also worth less now in the MS66 holder than in the MS64 holder when you bought it because grade inflation has driven people and their money out of this hobby! Yes, there is a light at the end of your post. My coins WERE GRADED 100% correctly when I bought them as examples for the grades. Now they grade higher. So what. Just as their grades have become more liberal, prices have dropped to reflect that, the present popularity of the series, and the condition of the market. It's all relative.
PS You are one of my top five "foils."
The above summarizes what every reader of this thread should know.
1) Grading standards change over time, and as long as people are grading coins, mistakes will be made.
Many years ago, I looked at a type MS 64 and type MS 65 Seated Half, both With Motto. The 4 was the nicer coin. I compared my Small Dentil Capped Bust Dime in 4 with three of them in 5 holders. My 4 was nicer than one 5, as nice as the second, and not as nice as the third one. If you want to make money buying and selling coins, you should be painfully aware of this.
2) CAC is in the business of buying coins they like, based on the holders in which they are housed. They sticker the coins they like. As grades change, so do the standards used by CAC in determining which coins they like.
3) Insider said that all of his coins when he bought them were correctly graded. That's because he knows how to grade.
4) Given 3), you should also be aware that any coin you have held for an extended period of time might grade differently if it was sent in today.
5) If items 1) - 4) really bother you, you should either only buy inexpensive (for you) coins or not be in the hobby.
"Vou invadir o Nordeste, "Seu cabra da peste, "Sou Mangueira......."
@astrorat said:
I see little, if no conflict of interest. CAC offers an opinion, nothing more. CAC's opinion is optional, not compulsory ... despite what some may infer. We (the royal we) want to assign a value to that opinion. We allow this opinion to affect the marketplace. We are sentient beings with free will.
Here is an alternative business model for CAC. Send certified coins to CAC for an opinion. CAC records the opinion in a database. CAC returns the coin without any exterior indication (i.e., no fancy sticker to cause skirts to get into a bunch). CAC then charges a subscription to search the database. Same result, just more cumbersome.
I know of dealers and collectors who have incredible memories and/or keep a record of 'choice coins.' CAC does the same thing, but on a massive scale and relies on technology to assist. These dealers and collectors are willing to buy those 'choice coins' whenever the coins become available. CAC does the same.
A conflict of interest may be if, PCGS, for example, started offering opinions on coins graded by it's competition and placed 'we agree or disagree with the grade' stickers on the other TPG slabs.
Yes indeed Lane. Yes indeed
m
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
@astrorat said: "A conflict of interest may be if, PCGS, for example, started offering opinions on coins graded by it's competition and placed 'we agree or disagree with the grade' stickers on the other TPG slabs."
I see NO CONFLICT with this at all. What an excellent idea! More money for the TPGS and more comfort for the non-graders in the business. PCGS could use green: "agree." Red: "disagree." Gold: "Get that puppy to us for an upgrade immediately!"
The sooner some TPGS does this, the better! I should think a coin in a TPGS slab with two "Gold" stickers would be the "bomb!"
If I still worked at NGC I would "pitch" this idea Monday morning!
PS they could charge less for this too if the submitter wanted the coin kept in its original slab. Separate division offering two-day review and turnaround for just a few bucks.
@thefinn said:
They would have to do a lot of work to watch for serial numbers of coins that they thought would upgrade. Definitely more time that it would be worth.
Think about it.
Computers - all they need to do is have someone write the code.
That is only one of a dozen ways they could manipulate things. The easiest thing is just to buy slabbed coins and sticker them.
And while they may not be doing any of these things, they could...which is why it is a conflict of interest to be both certifying coins and buying and selling coins.
If PCGS submitted purchase offers in all of your packages, would you not be concerned that the coins would upgrade?
You are forgetting the importance of a company maintaining a good reputation. It keeps you in business. See ACG and a host of other TPGers that are merely a ghost or memory.
There is a big difference between a company that assesses already certified coins for acceptance at premium prices they are willing to pay, and dealers I know who have bought collections at low ball prices and get the lion's share of the profits. And I know several of them, former hourly workers who have profited enough to buy new cars, go on posh vacations and buy houses. It should be plenty to make 10-20% like cac makes at most. Also one coin club I am a member of has appraisal weekends where they also make offers on what they appraise. So that's a conflict of interest.
People throw around the phrase "conflict of interest" without really stopping to think what it means. Does David Hall have a conflict of interest because he owns DHRC with Van? In the OP's world, I guess so but it sure has never bothered me that DHRC sells PCGS coins. Would you prefer that David Hall sell only NGC coins? That seems silly. In the same way, it seems silly to suggest that one of the most successful wholesalers in the business should stop buying and selling coins because he started a company that sought to address issues that were affecting values in the coin industry.
"Look up, old boy, and see what you get." -William Bonney.
@breakdown said:
People throw around the phrase "conflict of interest" without really stopping to think what it means. Does David Hall have a conflict of interest because he owns DHRC with Van? In the OP's world, I guess so but it sure has never bothered me that DHRC sells PCGS coins. Would you prefer that David Hall sell only NGC coins? That seems silly. In the same way, it seems silly to suggest that one of the most successful wholesalers in the business should stop buying and selling coins because he started a company that sought to address issues that were affecting values in the coin industry.
If David Hall controls PCGS and a retail coin operation, he also has a conflict of interest.
I don't know about a conflict of interest per se, but the CAC business plan does take a lot of faith. In their normal course of business they are taking submissions for stickers from a dealer network and a few collectors. These coins are being submitted because a coin with a sticker will sell for more money than the same coin without the sticker. I don't believe anyone will argue that point.
So here is where the faith in the CAC system is required. As an example, say a submitter finds an above average 1924 St. Gaudens Double Eagle. Grey Sheet says this coin wholesales for $2,080 in MS66. So, let's assume that someone buys a coin in PCGS 66 for $1,950 and sends it in. It is acceptable and receives a green sticker. This same coin now has a GS wholesale value of $3,525. An increase of $1,445 or 69% - for the same coin.
So, the question is this. Is everyone treated equally? Is a collector going to get a sticker for a coin that is equal to one sent in by one of the dealer network members?
I would assume that CAC is honest, honorable and fair in their dealings. I have never heard anything to the contrary and I don't have any doubts myself. But since there is no accountability or paper trail and we are all blind as to the inner workings of CAC, it does take some faith in their propriety.
@coinhack said:
So, the question is this. Is everyone treated equally? Is a collector going to get a sticker for a coin that is equal to one sent in by one of the dealer network members?
Yes. CAC isn't going to pay a 69% premium (your number) for a coin that JA believes is low end or garbage just to please a dealer. Moreover, the damage is even greater than $1500 as the damage to his reputation would be huge.
For the collector buying coins that cost a few thousand dollars or more-----when it comes time to sell their coins, will they feel there is more of a conspiracy/conflict when they sell their non cac coins or their cac coins? I'll keep buying CAC and others are free to ignore CAC.
So ; and I mean this with respect, the real question is : should it bother me that JA, or anyone , for that matter , should make a two-way market with their expertise ?
No, it should not and does not bother me. The use of "us" in the title implies that "we" are all on the same wave length.
As the thread has progressed let me add, I'm NOT in the circle of trust, or market, as it were. (Only for a fair trade and grade in coin matters ).
So it's no skin off my nose if the principals (CAC & Co. ) make a market in some of the best ____ available in this hobby.
Conflict of interest ? While I can reason with those assertions, nobody is stopping "us ( that's we common folk) from creating a syndicate and likewise competing for same ( coins in the market)
Not only is this the best hobby in the world , I personally think "WE" love to create, imagine, and concoct stories in our own circles along that path , OUR own way .... with respect to all this, don't we ?
@coinhack said:
So, the question is this. Is everyone treated equally? Is a collector going to get a sticker for a coin that is equal to one sent in by one of the dealer network members?
Yes. CAC isn't going to pay a 69% premium (your number) for a coin that JA believes is low end or garbage just to please a dealer. Moreover, the damage is even greater than $1500 as the damage to his reputation would be huge.
I guess I wasn't very clear with my example. There is nothing in my post about putting a sticker on low end garbage. What I asked and the line you quoted says, "is a collector going to get a sticker for a coin that is equal to one sent in by one of the dealer network members?" That was my question. If everyone's coins are treated equally, fine, then their system is fair and honest and working as it should.
Since no one audits their numbers or knows who's coins are receiving stickers and who's are not, it does leave the opportunity for abuse. Since we are all in general agreement that they are probably not doing anything nefarious, then my premise was simply that we all take this on faith.
I would assume that CAC is honest, honorable and fair in their dealings. I have never heard anything to the contrary and I don't have any doubts myself. But since there is no accountability or paper trail and we are all blind as to the inner workings of CAC, it does take some faith in their propriety.
As one who has sat through seemingly countless corporate training courses on Conflict of Interest (as it seems @jmlanzaf has) to me there is no question that CAC has a POTENTIAL conflict of interest as jmlantzaf has proposed.
I agree completely with those that attribute nothing but the highest motive to CAC. However one of the reasons to avoid conflicts of interest is that humans are susceptible to unconscious bias, especially in subjective judgement calls, which it seems to me coin grading is a textbook example of.
You can spend (my opinion waste) a lot of time on this. Potential conflicts exist throughout our hobby.
How about being the president of our host, and have registry sets? Any conflict when the person you are asking to grade your coins is your employee?
The US mint can create an instant rarity as they arbitrarily decide what the mintage of an offering will be. What could a mint employee do with this information?
I choose to believe CAC and our host are honorable people whose reputation is very important to them. Nobody has provided data proving otherwise. So my advice: work on something that needs fixing and you can actually fix
Just because CAC is a " 3 letter acronym", doesn't mean they should automatically be distrusted. After all, they are a private company and not another "agency".
@coinhack said:
So, the question is this. Is everyone treated equally? Is a collector going to get a sticker for a coin that is equal to one sent in by one of the dealer network members?
Yes. CAC isn't going to pay a 69% premium (your number) for a coin that JA believes is low end or garbage just to please a dealer. Moreover, the damage is even greater than $1500 as the damage to his reputation would be huge.
I guess I wasn't very clear with my example. There is nothing in my post about putting a sticker on low end garbage. What I asked and the line you quoted says, "is a collector going to get a sticker for a coin that is equal to one sent in by one of the dealer network members?" That was my question. If everyone's coins are treated equally, fine, then their system is fair and honest and working as it should.
Since no one audits their numbers or knows who's coins are receiving stickers and who's are not, it does leave the opportunity for abuse. Since we are all in general agreement that they are probably not doing anything nefarious, then my premise was simply that we all take this on faith.
My point was that CAC will buyback the coin regardless of who submitted it and who owns it/offers it to CAC. The CAC bids are also published. John would be cutting his own throat by using different standards for dealers as those coins will be bought for the same price as other coins. The market maker aspect has its own logical check and balance.
Pardon me if I am wrong....
I thought the opposite is true contrary to this observation; CAC % would actually flattened if not decreasing with each improvement to TPG grading standards because IMHO CAC would find it less likely to marginalizes themselves on.
@Coinstartled said:
I bought a coin this evening that JA deemed to be improperly graded by PCGS. In hand I wonder if I will be able to see if and where PCGS erred.
Quit your **** stirring - you know darn well JA doesn’t deem any such thing
@Coinstartled said:
I bought a coin this evening that JA deemed to be improperly graded by PCGS. In hand I wonder if I will be able to see if and where PCGS erred.
Quit your **** stirring - you know darn well JA doesn’t deem any such thing
Then what is all of the CAC only mantra all over Legend's website about? If there are wholesome, accurately graded coins without a sticker, then why the hysteria and why are non-CAC coins presumed to be dreck?
@Coinstartled said:
I bought a coin this evening that JA deemed to be improperly graded by PCGS. In hand I wonder if I will be able to see if and where PCGS erred.
Quit your **** stirring - you know darn well JA doesn’t deem any such thing
Then what is all of the CAC only mantra all over Legend's website about? If there are wholesome, accurately graded coins without a sticker, then why the hysteria and why are non-CAC coins presumed to be dreck?
JA stickers A and B coins for the grade. Not stickering a coin means it could be an accurately graded C coin OR have some other problem. No sticker doesn’t automatically mean PCGS made a mistake and he knows that fact very well. Enough already
@Coinstartled said:
I bought a coin this evening that JA deemed to be improperly graded by PCGS. In hand I wonder if I will be able to see if and where PCGS erred.
Quit your **** stirring - you know darn well JA doesn’t deem any such thing
Will you contribute $1000 to the GOP if I can prove that I am correct?
@Coinstartled said:
I bought a coin this evening that JA deemed to be improperly graded by PCGS. In hand I wonder if I will be able to see if and where PCGS erred.
Quit your **** stirring - you know darn well JA doesn’t deem any such thing
Then what is all of the CAC only mantra all over Legend's website about? If there are wholesome, accurately graded coins without a sticker, then why the hysteria and why are non-CAC coins presumed to be dreck?
JA stickers A and B coins for the grade. Not stickering a coin means it could be an accurately graded C coin OR have some other problem. No sticker doesn’t automatically mean PCGS made a mistake and he knows that fact very well. Enough already
That's my understanding as well, but not what I have read in other places. I'm glad that we are all on the same page.
Apparently TDN has retired for the evening. Perhaps a good nights sleep and he will realize the simple error that he made...maybe not. I'll post a link to my new coin tomorrow.
@Coinstartled said:
I bought a coin this evening that JA deemed to be improperly graded by PCGS. In hand I wonder if I will be able to see if and where PCGS erred.
Quit your **** stirring - you know darn well JA doesn’t deem any such thing
Then what is all of the CAC only mantra all over Legend's website about? If there are wholesome, accurately graded coins without a sticker, then why the hysteria and why are non-CAC coins presumed to be dreck?
JA stickers A and B coins for the grade. Not stickering a coin means it could be an accurately graded C coin OR have some other problem. No sticker doesn’t automatically mean PCGS made a mistake and he knows that fact very well. Enough already
That's my understanding as well, but not what I have read in other places. I'm glad that we are all on the same page.
From the CAC site:
If a coin doesn’t receive a CAC sticker, does this mean CAC believes the coin is over-graded?
JA: Absolutely not. There are many coins that are certified accurately for their grade. Unfortunately, it is an inescapable reality that many are at the lower end of the quality range for the assigned grade. CAC’s rejection of a coin does not necessarily mean that CAC believes the coin has been over-graded. It simply means that there are other coins with CAC stickers that are of higher quality for the grade. CAC will eventually reject tens of thousands of accurately graded coins. Many of these rejected coins will be acceptable to numerous dealers and collectors and will continue to be available in the marketplace. For quality-conscious collectors and dealers, a coin with a CAC sticker will have significant meaning.
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
@specialist said:
If the market really though there was "conflict of interest", CAC would never have grown to be such a force-period. The market is the final voice.
Really? Whether a market accepts a behavior or not says nothing about whether there are conflicts of interest or potential conflicts of interest. In fact, this hobby is full of them and these are routine and usually seen as acceptable. Let's explore:
A dealer ("A") has a customer ("B") that he regularly discounts coins for in order to keep recurring business. The dealer also accepts consignments and owes duties of impartiality and loyalty to his consignors. The dealer has a consignor ("C") that he does business with only occasionally. "B" has expressed an interest in a coin consigned by "C" and made an offer. Does the dealer talk "B" into accepting a lower amount for a quick sale to his favorite, long steady customer "C" or does he hold out knowing that he could obtain more money for "C" with only a small amount of work? Put another way, does the dealer put his wallet and business relationships with "B" before "C's" pecuniary interest in spite of the consignment contract? Which "master" is dealer "A" serving: (1) his wallet, (2) B, (3) C?
An auction house ("Random Auctions") accepts consignments from collectors and dealers. Random has a die-hard, dedicated customer base of bidders and has established trust with its bidders. Random also owes fiduciary duties of loyalty and impartiality to its consignors. Consigner "A" is consigning a small lot for the first time and may never consign ever again. A loyal bidder (who has done hundreds of thousands of dollars with Random as a buyer) has trusted Random to help him to assemble a set of coins and has asked for an opinion. Random does not believe the coin is a good fit for "A's" set. How does Random weigh the interests of its trusted customer "A" with its consignor who may receive less as a result? How does Random weigh the interests of "A" with its own bottom line in the form of reduced commissions on the item? Which "master" is Random serving: (1) itself, (2) the consignor, (3) the bidder?
Third party grading company ("Mythical") is a publicly traded company and owes legal duties to its shareholders. A second third party grading company ("Farcical") is privately held but its owners are also graders and finalizers. Each company guarantees its grades and offers a buy back guarantee. Submitter "J" has a very expensive coin that he believes is over-graded. The resubmission comes before a corporate disbursement or public earnings disclosure, and Farcical and Mythical haven't been doing so well. They will take a blow if they make a payout to "J." The coin is marginal and would normally be bought back under the guarantee, but it is a close call. How do Mythical and Farcical weigh the interest of submitter "J" against their own pecuniary interest or that of their shareholders?
All of these are meant as hypotheticals and not meant to emulate any specific entity; however, these situations arise frequently in numismatics. A conflict or potential conflict of interest isn't necessarily bad; it can be positive or even neutral in some respects depending on the context. A number have pointed to law. Lawyers can represent clients when there is a conflict of interest so as long as it is done openly and transparently with the client's consent (with the right to recuse if necessary). By analogy, some conflicts of interest in numismatics are acceptable as long as they are done (1) openly/transparently, (2) fairly, and (3) with the informed consent of all involved.
And because this thread has become convoluted, it becomes necessary to define "conflict of interest." The concept comes from the law of agency. Individuals known as principals hire others known as agents to perform some service for them. In the process, the principals delegate power and decision making authority to agents. In return, the agent owes duties of loyalty and impartiality (among others) to its principal. Put another way, each agent should only represent one master, or at least, each agent should not represent principals with adverse interests without full disclosure and consent.
Applying this framework to CAC is very easy. CAC offers to sticker coins that it has an interest in buying back later at published bid levels so that it can flip them for a profit. It is not a grading service. It is not an authenticator. CAC serves only one master: CAC's wallet. Any claims made to the contrary are nothing more than rhetorical fluff and marketing. Accordingly, CAC has no conflict of interest.
@specialist said:
If the market really though there was "conflict of interest", CAC would never have grown to be such a force-period. The market is the final voice.
Really? Whether a market accepts a behavior or not says nothing about whether there are conflicts of interest or potential conflicts of interest. In fact, this hobby is full of them and these are routine and usually seen as acceptable. Let's explore:
A dealer ("A") has a customer ("B") that he regularly discounts coins for in order to keep recurring business. The dealer also accepts consignments and owes duties of impartiality and loyalty to his consignors. The dealer has a consignor ("C") that he does business with only occasionally. "B" has expressed an interest in a coin consigned by "C" and made an offer. Does the dealer talk "B" into accepting a lower amount for a quick sale to his favorite, long steady customer "C" or does he hold out knowing that he could obtain more money for "C" with only a small amount of work? Put another way, does the dealer put his wallet and business relationships with "B" before "C's" pecuniary interest in spite of the consignment contract? Which "master" is dealer "A" serving: (1) his wallet, (2) B, (3) C?
An auction house ("Random Auctions") accepts consignments from collectors and dealers. Random has a die-hard, dedicated customer base of bidders and has established trust with its bidders. Random also owes fiduciary duties of loyalty and impartiality to its consignors. Consigner "A" is consigning a small lot for the first time and may never consign ever again. A loyal bidder (who has done hundreds of thousands of dollars with Random as a buyer) has trusted Random to help him to assemble a set of coins and has asked for an opinion. Random does not believe the coin is a good fit for "A's" set. How does Random weigh the interests of its trusted customer "A" with its consignor who may receive less as a result? How does Random weigh the interests of "A" with its own bottom line in the form of reduced commissions on the item? Which "master" is Random serving: (1) itself, (2) the consignor, (3) the bidder?
Third party grading company ("Mythical") is a publicly traded company and owes legal duties to its shareholders. A second third party grading company ("Farcical") is privately held but its owners are also graders and finalizers. Each company guarantees its grades and offers a buy back guarantee. Submitter "J" has a very expensive coin that he believes is over-graded. The resubmission comes before a corporate disbursement or public earnings disclosure, and Farcical and Mythical haven't been doing so well. They will take a blow if they make a payout to "J." The coin is marginal and would normally be bought back under the guarantee, but it is a close call. How do Mythical and Farcical weigh the interest of submitter "J" against their own pecuniary interest or that of their shareholders?
All of these are meant as hypotheticals and not meant to emulate any specific entity; however, these situations arise frequently in numismatics. A conflict or potential conflict of interest isn't necessarily bad; it can be positive or even neutral in some respects depending on the context. A number have pointed to law. Lawyers can represent clients when there is a conflict of interest so as long as it is done openly and transparently with the client's consent (with the right to recuse if necessary). By analogy, some conflicts of interest in numismatics are acceptable as long as they are done (1) openly/transparently, (2) fairly, and (3) with the informed consent of all involved.
And because this thread has become convoluted, it becomes necessary to define "conflict of interest." The concept comes from the law of agency. Individuals known as principals hire others known as agents to perform some service for them. In the process, the principals delegate power and decision making authority to agents. In return, the agent owes duties of loyalty and impartiality (among others) to its principal. Put another way, each agent should only represent one master, or at least, each agent should not represent principals with adverse interests without full disclosure and consent.
Applying this framework to CAC is very easy. CAC offers to sticker coins that it has an interest in buying back later at published bid levels so that it can flip them for a profit. It is not a grading service. It is not an authenticator. CAC serves only one master: CAC's wallet. Any claims made to the contrary are nothing more than rhetorical fluff and marketing. Accordingly, CAC has no conflict of interest.
I agree with everything said here. But I do think it is an important thing to note: CAC is a coin retailer, not an independent opinion. As such, as you say, they have no conflict of interest.
I hope we can agree that CAC buys and sells coins, this has been public information since the inception of CAC.
I'm not sure why you think their opinions are not independent "CAC is a coin retailer, not an independent opinion." I'm convinced CAC opinions are independent from the grading services. If as you assert JA's options are not independent then please explain who or what his decision to approve or disapprove coins is dependent on.
We all understand that JA approves coins that meet his standards and that he is comfortable selling. Independent is defined as "free from outside control; not depending on another's authority" or "not depending on another for livelihood or subsistence."
@Coinstartled said:
I bought a coin this evening that JA deemed to be improperly graded by PCGS. In hand I wonder if I will be able to see if and where PCGS erred.
@tradedollarnut said:
Quit your **** stirring - you know darn well JA doesn’t deem any such thing
>
You seem to only focus on the overgraded.....my new coin
I doubt they erred at the time. Hard to make that assertion what with constantly changing standards.
But CAC is supposed to be the standard bearer of consistent grading. If PCGS got the 65 right in 1991 or so, should a green bean have not of been appropriate. Maybe you are correct in this case....PCGS got it right and CAC blew it.
Comments
I think your missing alot. For instance, you are not considering that if the coins were not stickered properly there are many, many experts who would have no part of it and would point it out. The reason that CAC has built up a following is based upon the experience that many trust JAs opinion.
"CAC - should it bother us that CAC is a buyer?"
I think the reason it works is BECAUSE they are a buyer
els and then charging you a premium based on the fact that it is USDA Prime.
You are focusing on but one of multiple possible ways one could manipulate the system. They don't have to be inappropriately stickering coins to profit. They just need to be stickering their own coins. They also could simply refrain from stickering a coin to keep their coin as a Pop 1. I'm rather tired of spinning possibilities, as they are endless.
JA, as far as I know, IS DOING NOTHING WRONG.
Conflict of interest is not about what you are currently doing wrong. It's about what you could do wrong and even giving the appearance that there is bias.
Auction houses should not buy coins. TPGS should not buy coins. CAC should not be in the coin business if they want to avoid the appearance of conflict.
Now, there is only one way that there is NO conflict of interest: CAC is a retail coin business and the beans are simply a method of display. Then, they are in the business of buying coins not offering opinions on coins.
I think we need to rethink how we view CAC. They are not in the opinion game, because their opinion lacks objectivity or at least has the appearance of lacking objectivity.
LOL, thank's for telling all of us how it works IN THE REAL WORLD! Fortunately, most of us know all this. If a grader is seen talking with a dealer or buying something for their personal collection tongues will wag. That never stopped me from accepting a donation of a counterfeit for my teaching set. Our actions are what's important and I'm asked to be "brutal" on everyone's coins so the "Market Graders" who examine it afterward can make an informed decision on its value/grade.
PS. Let's make this discussion real simple and take out all the If's, can's, do's and don'ts: YES, conflicts of interest are possible at every TPGS and at each "sticker" provider. Do they occur? If you know, provide an example. Otherwise, close your piehole as the paranoia and speculation in this fantasy thread can go on forever.
IMO, the "market" takes care of itself. It was pointed out already that one TPGS was slapped on the wrist for actually doing what IS POSSIBLE. Unfortunately, It will always be possible. Probably just harder with Internet forums such as this and the vigilance of the market. Why kill a "cash cow" by cheating?
I think it would be nice if JA came on here and said something.
Later, Paul.
Paranoia, delusion, and denial. What a wonderful hobby. What we need is an ANA Summer Seminar on self-flagellation.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
The above summarizes what every reader of this thread should know.
1) Grading standards change over time, and as long as people are grading coins, mistakes will be made.
Many years ago, I looked at a type MS 64 and type MS 65 Seated Half, both With Motto. The 4 was the nicer coin. I compared my Small Dentil Capped Bust Dime in 4 with three of them in 5 holders. My 4 was nicer than one 5, as nice as the second, and not as nice as the third one. If you want to make money buying and selling coins, you should be painfully aware of this.
2) CAC is in the business of buying coins they like, based on the holders in which they are housed. They sticker the coins they like. As grades change, so do the standards used by CAC in determining which coins they like.
3) Insider said that all of his coins when he bought them were correctly graded. That's because he knows how to grade.
4) Given 3), you should also be aware that any coin you have held for an extended period of time might grade differently if it was sent in today.
5) If items 1) - 4) really bother you, you should either only buy inexpensive (for you) coins or not be in the hobby.
"Seu cabra da peste,
"Sou Mangueira......."
Yes indeed Lane. Yes indeed
m
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
@astrorat said: "A conflict of interest may be if, PCGS, for example, started offering opinions on coins graded by it's competition and placed 'we agree or disagree with the grade' stickers on the other TPG slabs."
I see NO CONFLICT with this at all. What an excellent idea! More money for the TPGS and more comfort for the non-graders in the business. PCGS could use green: "agree." Red: "disagree." Gold: "Get that puppy to us for an upgrade immediately!"
The sooner some TPGS does this, the better! I should think a coin in a TPGS slab with two "Gold" stickers would be the "bomb!"
If I still worked at NGC I would "pitch" this idea Monday morning!
PS they could charge less for this too if the submitter wanted the coin kept in its original slab. Separate division offering two-day review and turnaround for just a few bucks.
Insder2, step away from the nuclear detonation switch.
RMR: 'Wer, wenn ich schriee, hörte mich denn aus der Engel Ordnungen?'
CJ: 'No one!' [Ain't no angels in the coin biz]
You are forgetting the importance of a company maintaining a good reputation. It keeps you in business. See ACG and a host of other TPGers that are merely a ghost or memory.
There is a big difference between a company that assesses already certified coins for acceptance at premium prices they are willing to pay, and dealers I know who have bought collections at low ball prices and get the lion's share of the profits. And I know several of them, former hourly workers who have profited enough to buy new cars, go on posh vacations and buy houses. It should be plenty to make 10-20% like cac makes at most. Also one coin club I am a member of has appraisal weekends where they also make offers on what they appraise. So that's a conflict of interest.
My wife says neither aspect of this statement applies to me.
Smitten with DBLCs.
People throw around the phrase "conflict of interest" without really stopping to think what it means. Does David Hall have a conflict of interest because he owns DHRC with Van? In the OP's world, I guess so but it sure has never bothered me that DHRC sells PCGS coins. Would you prefer that David Hall sell only NGC coins? That seems silly. In the same way, it seems silly to suggest that one of the most successful wholesalers in the business should stop buying and selling coins because he started a company that sought to address issues that were affecting values in the coin industry.
"Look up, old boy, and see what you get." -William Bonney.
Maybe it should, but it doesn't.
If David Hall controls PCGS and a retail coin operation, he also has a conflict of interest.
Should we start a new thread?
Please don’t.
Oh come on. All of the drama was finally settling down.
I don't know about a conflict of interest per se, but the CAC business plan does take a lot of faith. In their normal course of business they are taking submissions for stickers from a dealer network and a few collectors. These coins are being submitted because a coin with a sticker will sell for more money than the same coin without the sticker. I don't believe anyone will argue that point.
So here is where the faith in the CAC system is required. As an example, say a submitter finds an above average 1924 St. Gaudens Double Eagle. Grey Sheet says this coin wholesales for $2,080 in MS66. So, let's assume that someone buys a coin in PCGS 66 for $1,950 and sends it in. It is acceptable and receives a green sticker. This same coin now has a GS wholesale value of $3,525. An increase of $1,445 or 69% - for the same coin.
So, the question is this. Is everyone treated equally? Is a collector going to get a sticker for a coin that is equal to one sent in by one of the dealer network members?
I would assume that CAC is honest, honorable and fair in their dealings. I have never heard anything to the contrary and I don't have any doubts myself. But since there is no accountability or paper trail and we are all blind as to the inner workings of CAC, it does take some faith in their propriety.
Yes. CAC isn't going to pay a 69% premium (your number) for a coin that JA believes is low end or garbage just to please a dealer. Moreover, the damage is even greater than $1500 as the damage to his reputation would be huge.
For the collector buying coins that cost a few thousand dollars or more-----when it comes time to sell their coins, will they feel there is more of a conspiracy/conflict when they sell their non cac coins or their cac coins? I'll keep buying CAC and others are free to ignore CAC.
So ; and I mean this with respect, the real question is : should it bother me that JA, or anyone , for that matter , should make a two-way market with their expertise ?
No, it should not and does not bother me. The use of "us" in the title implies that "we" are all on the same wave length.
As the thread has progressed let me add, I'm NOT in the circle of trust, or market, as it were. (Only for a fair trade and grade in coin matters ).
So it's no skin off my nose if the principals (CAC & Co. ) make a market in some of the best ____ available in this hobby.
Conflict of interest ? While I can reason with those assertions, nobody is stopping "us ( that's we common folk) from creating a syndicate and likewise competing for same ( coins in the market)
Not only is this the best hobby in the world , I personally think "WE" love to create, imagine, and concoct stories in our own circles along that path , OUR own way .... with respect to all this, don't we ?
I guess I wasn't very clear with my example. There is nothing in my post about putting a sticker on low end garbage. What I asked and the line you quoted says, "is a collector going to get a sticker for a coin that is equal to one sent in by one of the dealer network members?" That was my question. If everyone's coins are treated equally, fine, then their system is fair and honest and working as it should.
Since no one audits their numbers or knows who's coins are receiving stickers and who's are not, it does leave the opportunity for abuse. Since we are all in general agreement that they are probably not doing anything nefarious, then my premise was simply that we all take this on faith.
As one who has sat through seemingly countless corporate training courses on Conflict of Interest (as it seems @jmlanzaf has) to me there is no question that CAC has a POTENTIAL conflict of interest as jmlantzaf has proposed.
I agree completely with those that attribute nothing but the highest motive to CAC. However one of the reasons to avoid conflicts of interest is that humans are susceptible to unconscious bias, especially in subjective judgement calls, which it seems to me coin grading is a textbook example of.
You can spend (my opinion waste) a lot of time on this. Potential conflicts exist throughout our hobby.
How about being the president of our host, and have registry sets? Any conflict when the person you are asking to grade your coins is your employee?
The US mint can create an instant rarity as they arbitrarily decide what the mintage of an offering will be. What could a mint employee do with this information?
I choose to believe CAC and our host are honorable people whose reputation is very important to them. Nobody has provided data proving otherwise. So my advice: work on something that needs fixing and you can actually fix
Just because CAC is a " 3 letter acronym", doesn't mean they should automatically be distrusted. After all, they are a private company and not another "agency".
For only $5 I will unsticker any slab that meets my standards.
Rampant currency debasement will be the most important investment trend of this decade, and it will devastate most people.
- Nick Giambruno Buy dollar insurance now, because the policy will cost more as the dollar becomes worth less.
My point was that CAC will buyback the coin regardless of who submitted it and who owns it/offers it to CAC. The CAC bids are also published. John would be cutting his own throat by using different standards for dealers as those coins will be bought for the same price as other coins. The market maker aspect has its own logical check and balance.
Pardon me if I am wrong....
I thought the opposite is true contrary to this observation; CAC % would actually flattened if not decreasing with each improvement to TPG grading standards because IMHO CAC would find it less likely to marginalizes themselves on.
............. It would seem that the CAC % would go up with each improvement to TPG grading standards.
If the market really though there was "conflict of interest", CAC would never have grown to be such a force-period. The market is the final voice.
I bought a coin this evening that JA deemed to be improperly graded by PCGS. In hand I wonder if I will be able to see if and where PCGS erred.
Quit your **** stirring - you know darn well JA doesn’t deem any such thing
Then what is all of the CAC only mantra all over Legend's website about? If there are wholesome, accurately graded coins without a sticker, then why the hysteria and why are non-CAC coins presumed to be dreck?
This is getting good now...
Hoard the keys.
JA stickers A and B coins for the grade. Not stickering a coin means it could be an accurately graded C coin OR have some other problem. No sticker doesn’t automatically mean PCGS made a mistake and he knows that fact very well. Enough already
Will you contribute $1000 to the GOP if I can prove that I am correct?
That's my understanding as well, but not what I have read in other places. I'm glad that we are all on the same page.
Apparently TDN has retired for the evening. Perhaps a good nights sleep and he will realize the simple error that he made...maybe not. I'll post a link to my new coin tomorrow.
From the CAC site:
JA: Absolutely not. There are many coins that are certified accurately for their grade. Unfortunately, it is an inescapable reality that many are at the lower end of the quality range for the assigned grade. CAC’s rejection of a coin does not necessarily mean that CAC believes the coin has been over-graded. It simply means that there are other coins with CAC stickers that are of higher quality for the grade. CAC will eventually reject tens of thousands of accurately graded coins. Many of these rejected coins will be acceptable to numerous dealers and collectors and will continue to be available in the marketplace. For quality-conscious collectors and dealers, a coin with a CAC sticker will have significant meaning.
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Really? Whether a market accepts a behavior or not says nothing about whether there are conflicts of interest or potential conflicts of interest. In fact, this hobby is full of them and these are routine and usually seen as acceptable. Let's explore:
A dealer ("A") has a customer ("B") that he regularly discounts coins for in order to keep recurring business. The dealer also accepts consignments and owes duties of impartiality and loyalty to his consignors. The dealer has a consignor ("C") that he does business with only occasionally. "B" has expressed an interest in a coin consigned by "C" and made an offer. Does the dealer talk "B" into accepting a lower amount for a quick sale to his favorite, long steady customer "C" or does he hold out knowing that he could obtain more money for "C" with only a small amount of work? Put another way, does the dealer put his wallet and business relationships with "B" before "C's" pecuniary interest in spite of the consignment contract? Which "master" is dealer "A" serving: (1) his wallet, (2) B, (3) C?
An auction house ("Random Auctions") accepts consignments from collectors and dealers. Random has a die-hard, dedicated customer base of bidders and has established trust with its bidders. Random also owes fiduciary duties of loyalty and impartiality to its consignors. Consigner "A" is consigning a small lot for the first time and may never consign ever again. A loyal bidder (who has done hundreds of thousands of dollars with Random as a buyer) has trusted Random to help him to assemble a set of coins and has asked for an opinion. Random does not believe the coin is a good fit for "A's" set. How does Random weigh the interests of its trusted customer "A" with its consignor who may receive less as a result? How does Random weigh the interests of "A" with its own bottom line in the form of reduced commissions on the item? Which "master" is Random serving: (1) itself, (2) the consignor, (3) the bidder?
Third party grading company ("Mythical") is a publicly traded company and owes legal duties to its shareholders. A second third party grading company ("Farcical") is privately held but its owners are also graders and finalizers. Each company guarantees its grades and offers a buy back guarantee. Submitter "J" has a very expensive coin that he believes is over-graded. The resubmission comes before a corporate disbursement or public earnings disclosure, and Farcical and Mythical haven't been doing so well. They will take a blow if they make a payout to "J." The coin is marginal and would normally be bought back under the guarantee, but it is a close call. How do Mythical and Farcical weigh the interest of submitter "J" against their own pecuniary interest or that of their shareholders?
All of these are meant as hypotheticals and not meant to emulate any specific entity; however, these situations arise frequently in numismatics. A conflict or potential conflict of interest isn't necessarily bad; it can be positive or even neutral in some respects depending on the context. A number have pointed to law. Lawyers can represent clients when there is a conflict of interest so as long as it is done openly and transparently with the client's consent (with the right to recuse if necessary). By analogy, some conflicts of interest in numismatics are acceptable as long as they are done (1) openly/transparently, (2) fairly, and (3) with the informed consent of all involved.
And because this thread has become convoluted, it becomes necessary to define "conflict of interest." The concept comes from the law of agency. Individuals known as principals hire others known as agents to perform some service for them. In the process, the principals delegate power and decision making authority to agents. In return, the agent owes duties of loyalty and impartiality (among others) to its principal. Put another way, each agent should only represent one master, or at least, each agent should not represent principals with adverse interests without full disclosure and consent.
Applying this framework to CAC is very easy. CAC offers to sticker coins that it has an interest in buying back later at published bid levels so that it can flip them for a profit. It is not a grading service. It is not an authenticator. CAC serves only one master: CAC's wallet. Any claims made to the contrary are nothing more than rhetorical fluff and marketing. Accordingly, CAC has no conflict of interest.
I agree with everything said here. But I do think it is an important thing to note: CAC is a coin retailer, not an independent opinion. As such, as you say, they have no conflict of interest.
I hope we can agree that CAC buys and sells coins, this has been public information since the inception of CAC.
I'm not sure why you think their opinions are not independent "CAC is a coin retailer, not an independent opinion." I'm convinced CAC opinions are independent from the grading services. If as you assert JA's options are not independent then please explain who or what his decision to approve or disapprove coins is dependent on.
We all understand that JA approves coins that meet his standards and that he is comfortable selling. Independent is defined as "free from outside control; not depending on another's authority" or "not depending on another for livelihood or subsistence."
@Coinstartled said:
I bought a coin this evening that JA deemed to be improperly graded by PCGS. In hand I wonder if I will be able to see if and where PCGS erred.
>
You seem to only focus on the overgraded.....my new coin
https://www.greatcollections.com/Coin/573585/1946-Booker-T-Washington-Memorial-Half-Dollar-PCGS-MS-65-CAC-Gold-Label-OGH
I doubt they erred at the time. Hard to make that assertion what with constantly changing standards.
Is it the standards that are changing or is it the opinion of those applying the standards that is changing?
Rampant currency debasement will be the most important investment trend of this decade, and it will devastate most people.
- Nick Giambruno Buy dollar insurance now, because the policy will cost more as the dollar becomes worth less.
Does PCGS EVER regrade their grading set coins?
I wonder if every coin in the PCGS Morgan grading set would get the bean.
Interesting
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
@tradedollarnut said:
But CAC is supposed to be the standard bearer of consistent grading. If PCGS got the 65 right in 1991 or so, should a green bean have not of been appropriate. Maybe you are correct in this case....PCGS got it right and CAC blew it.