In general, who determines what’s “market acceptable”?
MFeld
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This subject just came up as part of another thread, so I decided to start a new one and ask here.
Do the grading services tend to conform to what’s market acceptable, or do hobbyists tend to conform to what the grading services deem to be market acceptable?
I included the words “in general” in the thread title, because I understand that ultimately, each collector decides for himself/herself, what’s “market acceptable”.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
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Grading Services > Hobbyists.
peacockcoins
Without a doubt the buyers are the ones following, in large part because so many collectors are unable to grade and have placed too much reliance on the TPG.
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The grading services. I think good examples of this are coins that were details graded by one service selling for say, 10k. They get sent to another service, get a straight grade, and then sell for 100k (I made up the numbers, but it’s not a small difference).
It doesn’t seem that in the second sale the collectors thought that the coin wasn’t market acceptable, but in the first sale they did. It comes down to what’s on the label I think.
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Hobbyists in my opinion. There was a time when pcgs would not slab coins with counterstamps, medals, Dan Carr items but the market was wanting these things to be slabbed so pcgs followed along. Also there are rarities that need to be authenticated that in other series would not be considered market acceptable if in the same type non-marketable condition.
I tend to think the grading services lead the way. They are considered the professionals and the hobbyist in most cases are the novice or amateurs.
EAC and CBH collectors accepted, respectively, a little porosity and a little dipping long before the TPGS's even existed. Since then it is far more symbiotic than people seen to think.
At this point I would say the big time dealers largely influence the TPGSs, especially as many dealers end up being the graders themselves at one time it another. Then they influence indirectly public perception based on what is holdered.
The buying public likely has little impact on such things because there are many, many different opinions and other than not buying over a period of years what ways can then influence a TPG?
The guys running the market.
Apparently CAC determines what is market acceptable for a large portion of the coin market.
That sounds to be largely about what the grading services are willing to grade (based upon demand), rather than who determines market acceptability.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I'm going to say the hobbyists. If they're buying the values are going up. I've seen a number of coins surpass the Greysheet, PCGS, and NGC price guide values on the auction sites. Then look at the current backlog with grading times (which include dealer submissions) at all of the TPGs currently. Also look at ANACS which is one that puts number grades on their "Details" coins and on sites like Great Collections regardless of the TPG the details coins are selling. I personally don't buy details but they're still being bought and sold.
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I suspect it is market trends played out over hundreds of thousands of transactions that have been observed by the dealers (of reputation) and accepted by knowledgeable collectors on average. Those Industry professionals cross that against their comprehension of practices and mechanics and apply it at the grading level.
It helps if you have handled thousands upon thousands of coins so it is easier to spot the outliers and judge accordingly divorced from the backstories that dealers and collectors alike propagate when trying to justify the outliers.
All that said it is a fluid art not a ridged Science
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I think this, but would love to be convinced otherwise.
Dealers (market makers) have a major influence on what is considered market acceptable because they mostly set the price for coins although collectors and TPGS also influence what is considered market acceptable.
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I determine whats market acceptable. For me that is. If I like it I buy it, if its a turd then I dont buy it.
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Grading Services and the hobbyists follow along. The more coins graded = more profit and I do not mean that as a negative but grading services are in buss to make money. If dipped coins got details grade many would not be sent in. Like if you know a coin has a cleaning you do not send it in.
JMO
Al
The grading services have the power. Power = price. They have the "wise men" who make the rules.
I can always buy what I like, charge any price I want when reselling, decide on my own rules re.. grading... but the numbers on the slab dictate (a range) what I should expect to receive in payment.
The sad truth is that almost no one understands that grading coins is my forte except for my wife. She tells me all the time to buy what I like and what I believe is undervalued. She has complete confidence in me. She also tells me not to buy anything that isn't slabbed.
The grading services hold the cards, in general.
Yet, individuals can still choose which graded coins to buy or not to buy.
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The hobbyist, they are who pay for the coins - the amount anyone is willing to pay for a coin sets the “market acceptability” ... but that’s such an easy answer it makes me think maybe I misunderstood the question...
Etsy begs to differ. Dealers can ask whatever they want but they can't make anyone buy at the listed price.
The solution is simple: Learn to grade for yourself and always, ALWAYS buy the coin, not the holder.
It's a very wide question and there are many smaller markets within the larger markets.
Maybe if your question was more specific such as what's acceptable to be graded problem free by the grading services.
For example, should coins with excessive hairlines be graded as problem free.
We've all seen folks here preach about how they would not own or buy a coin that does not meet cac standards. Well is that coin still market acceptable even though the grading services say yes? To some yes and others a definite no.
Are you saying there's no need for a Third Party Grader? Personally I would trust the 3 to 4 professionals at PCGS before I'd trust my opinion. People who believe they are class coin graders often wind up disappointed.
I'm quite sure that is not what he is saying. If you have been a collector for many years and you only rely on what others say and you don't learn anything then why bother collecting?
If you take the time, learn and understand how grading works and know what will pass then you can possibly have your collection for far less money than letting others do the work. It's good to know what's a $500 coin and what's a $50 coin
I think TPG's have the upper hand in determining what is "market acceptable". Most collectors somewhat rely on the TPG grade when evaluating coins, even when evaluating them "in-hand" and not through an online auction site. The value I see in a TPG slab is an experts opinion on what that coin represents. Over the years, thousands of images, and slabs/raw coins in-hand later... a collector develops at least some of the knowledge and skills required to accurately grade a coin and have a good feel for whether or not that coin will "straight-grade"... ie, be market acceptable. That knowledge was informed by looking at straight-graded and ungraded Slabbed coins... at least for me.
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The TPGs set the line to minimize complaints from major submitters and market makers. But the submitters all have their own ideas on what’s acceptable, so ultimately everyone has to conform to the TPG standard.
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I have learned plenty over the long years in this 'hobby'. Mainly from places like this. But it is only a hobby to me; it's not a profession. I have learned a lot about mechanics over the years yet I don't do the heavy mechanics on my vehicles. On the day I no longer trust the judgement of our Host I'll give it up.
Well, it's a philosophical question really. After all, there actually is a market for almost any coin. Around here we tend to look down our nose at people who collect problem stuff, but lots of folks are mashing inexpensive coins into albums and having a ball.
When my grandma died, we found that she had acquired some coins from the usual late-night TV types. I felt kind of bad about it at first, but then realized that it probably brought her as much joy as my purchases bring me. She was able to do it at a much lower price point too.
As for what I collect, I probably consider several hundred coins for every one I actually purchase. For the rest, there was something that made them not market acceptable to me (price, look, grade, hits, plastic, stickers, toning, situation, current goals, grade, etc.)
There are fads that swing around over time, but I think the hobbyists determine that more than any grading company.
Dealers promoting certain items can have an affect too.
Or the owner gets out and walks, because without the horse he realizes he doesn't need all that crap in the cart.
So I am under the impression that we as the collectors ultimately determine what is market acceptable by what we find acceptable according to our personal measures.
I assume "Market Acceptable" means the coin receives a straight grade, whereas "Market Unacceptable" means the coin receives a Details grade. In that case, I would have to say the TPGs make the rules, since I don't believe I (or any other collector) can call up PCGS and say, "You know, I would be willing to pay retail for that coin, so please straight grade it."
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History would suggest that the grading services conform to the trends in the marketplace. thus gradeflation.
Too many collectors chasing too few coins. Grade tightening is attempted, but again, too few coins chased by too many collectors especially in a bull market. Market acceptability is simply a function of supply and demand, without getting too deep in the specifics.
Bottom line the market will self correct when demand falls off and prices flatline or fall. Not really something that needs to be overly concerning IMO.
Market acceptance in coins is like the invisible hand in economics - a mysterious force that describes the unintended greater collector benefits brought about by individuals acting in their own self-interests through a system of interdependence.
I think that there is a simple answer to this question. Three hairlines from a light cleaning on a 1975 $5 should merit a straight grade. And if it's in a details slab that's ok. or not. At the end of the day it's subjective to what the person that is lying out the Sheckels thinks.... Just my 2 Cents,,,,
While agreeing with the great opinions made in here, also want to chip in about the phenomenon that emerged during the lockdown period because many got into the hobby and speculated quite a bit.
I believe that was also a factor leading to a price hike since it was a sort of race amongst the newbies who were flush with bailout cash.
https://www.pcgs.com/setregistry/u-s-coins/quarters/PCGS-2020-quarter-quest/album/247091
Beginning collectors are delighted to fill a hole. Over time they see variances in condition. Grading services provide condition reports based on generally accepted condition standards of experienced collectors. Market acceptance of condition is based on what hobbyists can afford.
Unfortunately the bar which is market acceptable has dropped considerably in the past 5 or so years if the TPG's are controlling that bar.
In general, I believe the TPG's set the standard. That being said, I judge each coin to my personal standards.... That does not mean my standards are better or worse than the TPG, just that I have my own idea of what I like and what I will accept. Not everyone likes Picasso.... Cheers, RickO
TPGs don't dictate what's market acceptable per se, but they do have significant influence in that regard because as we all know, far too many buyers look at the label before they look at the actual item. Or, in some cases, in lieu of seriously looking at the item. This is how gradeflation has happened over time and how the individual ability to learn, or even the desire to learn, things like grading, counterfeit detection, diagnostics of originality, etc. has gradually eroded over time. Our hobby is gradually being infected with an epidemic of laziness. And it saddens me.
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The answer really is a slippery slope whereby subjectivity plays a role that is just impossible to define. Unfortunately there are factors that play a role such as how original coins are perceived and the way in which luster is judged. Reflectivity seems to be a significant priority... if not the gold standard... in terms of obtaining an optimal grade outcome. And that creates larger problems in terms original coins that have been enhanced in an effort to obtain the optimal grade. Some enhanced clearly look enhanced... and I am intentionally being polite here... and it seems that there is a market for coins based upon the plastic the currently reside in over the natural appearance of what others would prefer. In my view, the behavior of dipping/enhancing has been rewarded more by TPG than coins that have die flow lines that are present but muted by the natural aging of a coin whether it be from very light circulation or from storage in a coin cabinet or Kraft envelope. And the range of what is market acceptable has expanded over time mainly because of how collecting and expectations have evolved. Not everyone has or shares the same expectations. So to answer the question, there is enough blame or credit that can be shared depending upon your expectations in terms of what is or is not market acceptable.
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It began long before that. There was a slight loosening in the late 1990s, but by the early 2000s standards really start to slip. The standards have become even more watered down as time goes on, and it looks like changes to TPG guarantees followed suit IMHO.
TPG's.
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The collector.
I’m sorry I disagree. Consider the following hypothetical: There are three Capped Bust Half Dollars in the same grade. Eye appeal and Overton variety are the same. All are PCGS CAC in the same generation of TPG plastic. All are “fresh” to the market and are sold in the same venue close in time. Two of the coins have very visible staple scratches. These two sell at auction for a discount price notwithstanding being blessed by PCGS and CAC who apparently opine the scratch has toned over sufficiently to be given a free pass. You sell your flawless coin without the distracting scratch where it fetched the same or for only a nominal amount more. The coin gods spoke and ordained the other two coins market acceptable and lowered the value of your coin in the process. Did you really have a choice? No. The services and CAC decided that arbitrarily, and it affected you. Like it or not, most collectors will treat your coin as qualitatively identical to the other two. They decide whether those coins are equivalent label and sticker wise, not you.
You may retort that collectors will look at the coin and recognize your coin is superior, but this occurs rather infrequently. Indeed, most people looking for “comps” look little past the prices realized. “But yeah those scratched ones were CACed too…” This is precisely the mechanism proposed for grade inflation destroying the hobby and the price guides.
Everyone always has a choice in numismatics.
Collector dollars make choices every day.
You assume quite logically but I think incorrectly that collectors are using meaningfully independent judgments from the stickers and label in most cases. I believe a small portion of the market does that in practice. I truly wonder what percentage look beyond the label and sticker. For them they are PCGS and “CAC only.”