A question regarding CAC
pursuitofliberty
Posts: 6,597 ✭✭✭✭✭
I have a question about CAC, and I do not see answers on their website. If someone has information on this point, please let me know. I am writing this as a serious inquiry, not an attempt to bash or play troll games.
I’ll get straight to the point. My question is regarding succession.
In my business, we try to have succession plans for top managers. It gives us an idea of who may be up next, and it gives everyone in the process an idea of where they are, or where they can be going. Additionally, in our business, certain people have almost unreplaceable qualities and insights. One of my challenges, fortunately or unfortunately, is that I am one of those people.
My take is that John is one of those people for his profession, which is why the bean has gained reverence. However is John looking at every coin? Is he the only “finalizer”, if he has built a team of eyes to preview? If that team exists, do we know who those eyes belong to? Does he have a repeatable guideline as a standard?
For the record, I have never submitted to CAC. I have looked at a fair number of CAC coins however, both when they first started (a lot) and more recently (some). I also own several. I have yet to see a coin with a bean where I did not agree that the grade was reasonable, if not solid. Of the coins I have seen that are toned with a bean, I have yet to see one that I do not THINK could have occurred naturally. I have never seen one that was obviously, or not so obviously, “worked”. Therefore, even if the coin is unattractive to me, I have not seen one where I think they failed in their primary mission.
Recently, I have considered having some of my coins reviewed, but unless I plan to sell them in the next couple years, it really does not make sense to me. Yes, I would get feedback from an expert regarding what he thought. Yes, because I would use a trusted board member to submit, I would probably be able to get another honest and unbiased opinion. But again, unless I plan on the sale in the near future, why?
Let us consider this. I am a big fan of PCGS. I say that not just because I am here, but because I believe, at the end of the day, they have produced the most consistent body of work over the last (?) 35 years. But to the Kool-Aide drinkers, and those that weren’t there and maybe those who don’t listen, there was a day when that could not be said. There was a day that many old timers will remember when the TPG wars where dead-locked, and maybe even favored NGC. There were other players trying hard for the new market. In fact, some of those TPG’s where considered pretty reliable for a time, but ultimately lost credibility, and with that kiss of death, they faded from existence.
So again, I have to wonder … what happens when John is gone? Who takes over? Do they have the same reverence, and the same apparent integrity, to assure the legacy? If not, does that fallout erase the perceived current benefit?
In the case of PCGS and NGC, to a lesser extent (at least in the past 15 years) ANACS, and all the other also rans that actually put forth the effort in the beginning … the competition for services created a type of checks and balances. It forced the standard to evolve, but at the same time attempt for a consistency and stability that would exude reliability. It has worked out pretty well, all things considered. Not perfect, by any means, but more reliable than the wild west.
I hope for those that “have to have a bean”, the same holds true. I’m still trying to decide. I’m not planning on selling much over the next five years.
“We are only their care-takers,” he posed, “if we take good care of them, then centuries from now they may still be here … ”
Todd - BHNC #242
Comments
It has been said that JA has a plan but will it work and will the company thrive under different leadership only time will tell.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
CAC gets away with vagueness and lack of clarity. He has not announced his succession plan. I sure hope it isn't his biggest groupie as I don't think it will do much for the brand.
In before the dumpster fire begins...
Rehash away!
Smitten with DBLCs.
OK, here we go again. Regardless, some comments:
1. Why submit coins to CAC if you are unlikely to sell them in the next five years or so? Because for a cost of only $15 each, for those coins that merit the CAC, the market will likely pay you (or your heirs) a LOT more than that cost for whenever the time comes that your coins are sold.
2. In an interview about 1-1/2 years ago or so, John said that he estimates that his firm has seen about 90% of the coins they are going to see, implying two things: a) Much of what is submitted today, in his opinion, are coins that are in new holders, but have been cracked out or submitted for regrade, and b) There are collectors that for their own reasons will not submit their coins to CAC (but yes, when the heirs sell them either to the LCS or place them in auction, they very likely will be sent to CAC, but see #3 just below).
3. Regarding succession, in that interview John made it pretty clear that due to #2 above, that there’s a real chance that in a few years his firm will STOP evaluating coins for CAC stickers, and only do what really brings the main money to his firm, which is making a market in buying and selling coins with CAC’s! These $15 fees are not making JA financially comfortable - making a market in buying and selling is.
4. With #3 in mind, if indeed that happens, JA really doesn’t need a succession plan for the CAC evaluation part of the business, but only for the making the market part of the business, and that latter part is easy.
5. My question to you — if indeed #3 turns out to be true, where do you see this current two tier market going? For me, my guess is that the pricing differential will increase, not decrease.
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
i would send them to CAC,
The principal has established a great reputation, there is greater perceived value with the bean currently. When and if he leaves in the near future they will most certainly change the bean to mark his departure.
No guarantee the reputation will follow....
Steve, I appreciate the response. Really. Our brief PM exchanges have shown me that you are a passionate collector with a fair amount of knowledge in the current market.
Also, I am not trying to stir the pot. I guess this has been went over before, but I couldn't find the answers I was looking for. I'm still trying to see through for an answer that works for me.
Finally since you are somewhat pointedly asking me, I will take the time to answer before I call it a day.
*
So I'll ask my question again ... but much more pointed and direct.
If John leaves, and the tide turns with time (as it always seems to do), will the King still have clothes?
“We are only their care-takers,” he posed, “if we take good care of them, then centuries from now they may still be here … ”
Todd - BHNC #242
What about new discovery pieces, new variety attributions, and reholders? Are those pieces going to be condemned to dreckdom? If CAC does this, it will lose influence more and more as time goes on. The coin market might implode.
On another note, the rare coin market may very well see its demise long before JA if it continues its multi-year decline.
I don’t know the answer to your actual question, but I think it’s a good one.
Some thoughts on what others have said (and I guess I haven’t been around long enough to recognize this as a rehash)...now that stickering has become a thing, I don’t think it’ll ever go away. Maybe CAC will stop, but then another trusted name will step in and we might see several fight for market dominance for awhile before things settle out. With that said, maybe CAC just raises rates to keep going and stop that from happening.
On the threat of a stoppage: classic sales tactic to induce a sense of urgency. Maybe he means it, and he wants everything to come across his table before he goes out. Maybe he doesn’t and he’s just trying to remind everyone of the scarcity of a bean. Either way, genius, and to be expected. If I really thought they’d stop in a year, maybe I’d send mine in for that additional assurance for myself or my heirs. Otherwise, I have no reason. All very interesting to think through (at least for those of us who haven’t, yet).
Finally, if the standards aren’t unknown within the company, a succession plan can be successful. If it’s really just a couple of guys going on gut feel, I’ll be excited for the threads about “bean generation” collectors and and OGHs with OGBs.
OH NO!
CAC will never hurt the value/price/saleability of a coin.
Why spend the money? I would not. I don’t worry how long he wb around. If they folded likely so would their bids in the sheet which is what their pricing system Is based on. You need to know what the CAC bids are in the sheet for your material to evaluate options. Someday when their no longer around you will see threads here debating how remove their stickers from the slabs lol if that hasn’t been replaced by something else.
Idk how many you would send but the cost doing that could buy a nice bullion coin or coins. Coins are a non interest / dividend investment so keeping overhead costs low is a must. Millions jobs lost due to covid which may never recover. I am out to cut overhead expense, not increase it as I question how USA market can advance considering decreasing number of collectors.
If you're relying on some else's opinion that much to buy a coin, maybe you should buy a book instead.
In 20 years we'll be using the 100 point scale so they will all have to be re-graded anyway.
Stickers are a dealer/money grift.
My Saint Set
So are all of your coins “raw”, since you bought the book instead of using the opinion of a TPG for your Saints? Sounds clearly like a double standard!
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
Does JA have a guarantee of any kind if he makes a mistake?
Will he refund the CAC tax you paid?
My Saint Set
Oh, so reading the book instead of paying for a professional opinion is no longer the issue? I get it!
My collecting “Pride & Joy” is my PCGS Registry Dansco 7070 Set:
https://www.pcgs.com/setregistry/type-sets/design-type-sets/complete-dansco-7070-modified-type-set-1796-date/publishedset/213996
You get one professional opinion per book.
Assuming each book costs $1000, you get 3 professional opinions for the cost of a MS65 common saint.
You only get 2 opinions if you buy an actual PCGS/CAC coin.
3 is better than 2
My Saint Set
If JA buys back a mistake, he will just send it back to PCGS or NGC.
Worry is the interest you pay on a debt you may not owe.
It's great to know that PCGS will refund their price + the CAC premium.
Disregard everything I just posted
My Saint Set
What happens when the stickered coins go bad in the holders lol (reaction to atmosphere).
My temperature is 98.6
My car gets 47 mpg
I have great faith in American stubbornness
Successful BST transactions with: Cameonut, Rob41281
I have looked at the issue of succession closely at CAC. I have also talked to a couple of top dealers about the issue.
I have come to the conclusion that in almost any scenario the price differential between non cac and cac coins will continue to grow. I am not really addressing coins that are plentiful but rare dates, condition census coins and especially gold coins.
There is almost no debate on JA's expertise. A coin with a CAC sticker has proven to almost always carry a premium. That will not change for the coins currently stickered. I agree with Winesteven that it is likely stickering may stop since JA has said he has seen almost all the coins that are worthwhile to sticker. If this happens i think the prices on cac coins could explode. The idea that someone would take over and put the exact same sticker on thousands of undeserving coins is far fetched and makes absolutly no business sense if one understands the CAC model. In fact CAC has been the best at consistently adhering to its model with no "inflation." Even if that worst case scenario happens i think identifying when a coin stickered generally will be possible with a little detective work.
For the past decade people have been critical of CAC and quite frankly they have been proven wrong by the market. The type of coins i identified earlier have seen the gap widen between non cac and cac prices. Most important players recognize this now with multiple price guides for cac only and pcgs has a registry for cac coins.
My prediction is that the those buying pcgs coins now that are are low population cac approved will be doing very well 10 years down the road if not sooner. My humble opinion.
Very interesting thread. I just have an issue with one point. JA states he's seen 90% of the coins they are going to see ?
I have a hard time agreeing with that. As we have seen, CAC adds a premium to coins. As more and more collectors / dealers realize this, more and more coins are going to be submitted to CAC. Myself, I collect moderns which are not eligible for CAC review, so I don't have a dog in this fight. I just believe there's a vast amount of coins out there that are either raw, or slabbed but have not been submitted to CAC.
Curious to know the number of total number coins JA has looked at.
Amazing...must be a slow Sunday night/Monday morning..... Always fun to discuss 'what ifs' or the 'unknowables'.... gives one the feeling of omnipotence - or utter hopelessness....
I just don't care....going to work on a mechanical device....Lots more fun and actually has an achievable objective. Cheers, RickO
Just a clarification. There are different pricing tiers based on value.
Went to work today, like a normal Monday. I'm a pro at what I do, and there is a demand for my services. Didn't get to play with the mechanics today though like @ricko did. Anything good? I need to build and program another trick Chilled Water skid soon.
Anyway, I see this generated a lot of interesting points (mostly last night after I turned in).
I said in the beginning I did not come here to bash or question the model, only curious about the succession. Until earlier this year, I was out of the hobby for 7 years. I still had (and have) a collection, but I walked away for a long hiatus. And when I say walked away, I didn't even read articles. I have a pile of PCGS magazines and calendars never opened.
CAC survived while I was gone, which is a testament to the model, the desire, and the now somewhat reliance (by some) and relevance (by many).
Also, the answer to the succession question potentially affects me (at a young, soon to be 56) more than a collector who might be pushing 15 or 20 years my senior, as our time lines might be different.
Actually, it might be @topstuf who has the most succinct answer, but that doesn't make me want to go out and have all my worthy coins stickered (mostly because of points I will make shortly). I don't think absolutes are a fair assessment, but he very well may be right, it might never hurt the value. Of course buying coins that have been stickered makes since if I agree, because then we have a consortium (the TPG, myself and JA).
@Cougar1978 makes a good point in that it is nice to keep the costs at a minimum. Between vault fees and other costs of the hobby, coins do not reap a return or a cash flow until they are sold. In fact, my collection, no matter how glorious, will probably never reap the profits nearly as high as my skills and reputation, or how I invest. With collecting money, I look more at ROI as a Return OF Investment, not a Return On Investment. Of course, at the time of sale, maybe the sticker makes sense. But even if only coins worth over, say $300. on today's market are worth the additional and added costs of sending in, and I pick the most worthy from those (let's say I am lucky enough to bat 75%), that's still a noticeable outlay for money that will be more market driven (in my opinion) than sticker driven 10 to 15 years from now.
@Gazes also makes a compelling point for the sticker, without sounding like he is full-on drunk on green bean Kool-Aide. And I agree, if the sticker is there, it makes you look twice and possibly have more confidence as a buyer. I don't question John's ability, at all, and I am not critical of CAC. Again, just trying to find a footing that makes sense to me.
Last one, for @Tom147 . Nail, meet hammer.
Exactly! And since John cannot, by any stretch of the imagination, view every coin that will want to be sent to CAC as this model moves forward, my questions still stand, and unfortunately, are not fully answered.
“We are only their care-takers,” he posed, “if we take good care of them, then centuries from now they may still be here … ”
Todd - BHNC #242
Yes the king will still have clothes and apparently you have some interest in CAC so I suggest you get the the coins you want beaned and send them to CAC while John himself is still around ....
I give away money. I collect money.
I don’t love money . I do love the Lord God.
There are most probably NOT a vast amount of coins out there that are rare dates , condition census or both when it comes to gold much less other series that
John has not seen.
Perhaps that is what John meant referring to the 90% he has seen of those kind of specimens .
I give away money. I collect money.
I don’t love money . I do love the Lord God.
The market has already decided that the sticker services are here to stay. Unless there is something inherently made different with the current TPG services, there will always be demand for determining the premium coins for the grade.
I suspect if JA calls it "a day" with CAC then another service will take its place. Like I said, the market has already spoken and wants this service. CAC is incredibly reasonable with its pricing model. If they weren't so cheap, while also being considered the "gold standard," then I'm sure there would be others out there.
Everyone in a physical body dies and Mr. Albanese is no exception to this currently fundamental truth. What happens when his day arrives? What happened when Prince, Tom Petty, George Jones, etc., died? I recall their recording works went to the top of the charts and in some cases they sold more songs than when they were alive. I see this same post death effect happening with CAC coins, with the CAC sticker becoming even more valuable, especially if it was announced that the CAC coin submission window was closed.
It's a moot point. The only thing that really exists is now, where CAC approval has become a strong positive in many numismatic areas. Make your decision based on this moment in time because all of the future is unknown and uncertain. If you want some reassurance on CAC secession plans perhaps you should contact JA. He probably knows exactly how he wishes it to go.
My take on this all is simply anyone that can assume or state that the green bean is meaningless or inconsequential is truly putting his head in the sand. Facts on the ground prove otherwise. When your heirs will need/want to sell, it would be most advantageous at that time.
If the sales of beaned v/s no bean price history does not make you woke about this, I don't know what does.
I know it's hard for some of us to acknowledge this. We deride having this added nuisance to contend with.
I was one of them years ago, but have since reversed my thinking.
Hence I predict there are those anti-beaners that own coins that are not up to par, and voice bitter disdain for this great service.
Beaned pieces get the best results. While we can differ on certain examples, and yes we admittedly can, overall and by and large when it has a bean it is solid for the grade.
A coin with a CAC sticker has proven to almost always carry a premium. That will not change for the coins currently stickered.
wow.
I have an avid 10 year old collector in the family.
My set may not be sold for 90 years, if then.
What am I going to teach him about coins now?
"Coin collecting is all about what you can get out of it and never trust your own judgement?"
My Saint Set
If CAC is successful in its goal, then it is a self defeating model. If all of the good coins or even 90% have stickered and go to long term holders, only the widgets will be available to flip with tight margins. There will be fewer decent coins for CAC to buy and sell.
People have lots of good arguments. History is also filled with brands that destroy themselves or attempt to cash out. Maybe they continue and lower standards. Perhaps the whole operation eventually gets acquired by someone who is an idiot or a megalomaniac. How about a special partnership with APMEX to give nice green sticker seal of approval for modern coins. Will they one day introduce a new sticker to take advantage of technological advances in imaging and comparative analysis. Could many years from now there be unethical acts that undermine brand faith.
No one knows the future. What a lovely thing! We get to bet on it.
You're making the assumption (unjustified in my view) that once a coin gets stickered, it will likely be off the market for a long time.
Regarding succession, in that interview John made it pretty clear that due to #2 above, that there’s a real chance that in a few years his firm will STOP evaluating coins for CAC stickers
if CAC were to stop "stickering" coins altogether, would that mean we have re-defined "coffin" to mean any encapsulated coin with a CAC sticker??
I’m confident that they have thought of that and aren’t concerned about it.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I have a dozen or so CACers in my collection, all mid-grade and without doubt original. Eye appeal depends on the collector. I like them, but have many times more coins that I like equally or better. I basically don't worry about stickers. Hopefully I will enjoy my coins many years, if they are sold I will put on all the latest bells and whistles, and it may not be CAC stickers.
Maybe a CAC sticker becomes the equivalent of an OGH. But I am sure there will be another service to take their place.
I wouldn’t count on another such service. People with the combination of John’s abilities, motives, willingness, well earned and deserved reputation, influence and likability are virtually, if not, none existent.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
MFeld, agree with part of your statement. Obviously JA is obviously in a very limited group. However, if CAC ceases to exist and if there's money to be made, someone ( possibly more than one ) will start another service. How successful ? Depends on who it is, and alot of other factors. Success if at all won;t happen overnight.
There are already others who have started or operate sticker services now. None come close to the impact cac has had on the market and collectors. I think it is less likely any service in the future will have the stature, influence and following of CAC. Possible---yes, likely---no.
RE: So again, I have to wonder … what happens when John is gone?
What happens to PCGS when David Hall is gone?
Ask BIGDAVE ...
You should teach him to collect exactly the same way you have. Right after you teach him how to dial a rotary phone.
Successful BST transactions with: Cameonut, Rob41281
Perhaps an enterprising numismatist from a well-respected auction house will strike out on his own to provide such a service?
Successful BST transactions with: Cameonut, Rob41281
Great endorsement! I have to agree.
Absolutely! Hudson and Nash quit. But American Motors .....stepped....right... in.
Sure!
He just learned how to use a functional sextant from his sailing obsessed grandfather (on land)
Same person who instructed him on the use of a clutch (Ford Ferguson tractor)
He's received some basic orienteering instruction from me but I intend to go much further. (map & compass)
I almost always use a pointed flexible fountain pen and am trying to get him more interested in penmanship.
My Saint Set
Sounds like you're putting him through his paces. Next up, CAC lessons?