My thought about the constant talk of grade-flation.
Maywood
Posts: 2,090 ✭✭✭✭✭
I have always thought the constant insistence of this forum that the major TPG's, to wit PCGS and NGC, engage in changing the "grading standard" and over grading coins was a little over the top. I tend to keep that thought to myself but lately it's bugged me that it seems to be a constant theme and growing in volume. Now there are two major services attempting to fight for the market in grading graded coins, and I can't see it stopping there. What sticks in my mind is the fact that PCGS and NGC combined have graded about 75-100 million coins. That's quite a lot. If there are 1 million coins over-graded that represents only a miniscule number of around 1% and that seems quite low for a conspiracy, which is what many people seem to allege, that PCGS and NGC intentionally mis-grade coins. It seems more like paranoid talk than anything else.
Maywood.
Comments
Graders are human, so there will be variation and inconsistencies from time to time. Grading is also subjective. I have been relatively happy with both NGC and PCGS’s performance over the years and decades. JMHO.
Edit to add: knowing how to grade, yourself, and having a keen eye is just as important, today, as it was 38 years ago. Being able to do so enables you to cherry pick the occasional undergrades.
Sometimes, it’s better to be LUCKY than good. 🍀 🍺👍
My Full Walker Registry Set (1916-1947):
https://www.ngccoin.com/registry/competitive-sets/16292/
I've seen over graded coins but I have also seen plenty of under graded coins.
In fact I have submitted several that have jumped a grade. I have one that I crossed over from a gold lettered on the back slab that went up two grades as a PL.
That's why I always say "on any given day"
Student of numismatics and collector of Morgan dollars
Successful BST transactions with: Namvet Justindan Mattniss RWW olah_in_MA
Dantheman984 Toyz4geo SurfinxHI greencopper RWW bigjpst bretsan
I think it's quite reasonable for market participants (myself, included) to believe that there's been noticeable gradeflation over time. And people can believe so, without also accusing the grading companies of a "conspiracy" or being paranoid.
There appears to be considerable evidence of the gradeflation in the population/census reports of the companies doing the grading, as well as in viewing hundreds of thousands of graded coins over a nearly 40 year period.
Edited to add: I think your figure of approximately 1% for over-graded coins is way too low and I'd say the same about such a figure for under-graded coins. Edited to add: I think even the grading companies might agree with me on that.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
From my understanding, graders grade per corporate policy placed by leadership. Each grader may personally feel slightly different about grading yet will attempt to be as precise as to what is dictated to them.
Now, as leadership and the graders are not robots, human fragility comes into play here.
On a side note I also believe if each grader was allowed to slow down just a bit- perhaps descreas their workload by 20%- grades would be a bit more consistent.
peacockcoins
It might not be the grading companies lowering their standards. It might be that, if a coin looks like it has a chance of getting a higher grade then people resubmit it more frequently than a coin that doesn’t look like it has a chance of getting a higher grade.
Since the coin that looks like it has a chance of getting a higher grade gets resubmitted, it has a much greater chance of eventually getting a higher grade.
Mr_Spud
The turnover rate of graders and finalizers may have something to do with it.
Others may have more insight.
I also agree with the company's standars changing from time to time may come into play.
I personally am very pleased when I purchase an undergraded coin. Doesn't happen often but it has.
Student of numismatics and collector of Morgan dollars
Successful BST transactions with: Namvet Justindan Mattniss RWW olah_in_MA
Dantheman984 Toyz4geo SurfinxHI greencopper RWW bigjpst bretsan
Opinions. That's what they pay for and that's what they get.
This is exactly the point that I made in the other thread, which seems to have triggered this thread.
I wouldn't say that there has been a "constant insistence" of any wrongdoing on behalf of the TPGs nor is there any now. The fact that some people will feel that some coins were undergraded probably has some truth to it and those are the ones that will tend to get cracked out, leaving mostly properly graded and some overgraded coins in the marketplace. As the undergraded OGHs come back on the market, or are sold by dealers, like me who submitted once and didn't ever resubmit, the nicest coins are cracked out and/or green or gold beaned, again leaving the average or below average coins in their holders.
I don't think that the TPGs could have stopped this from happening and it also happens to be an attractive aspect of their business model. They are not mutually exclusive.
I agree and posted this regarding gradeflation in another recent thread:
I believe that a far greater contributor to gradeflation is the regrade process. In the case of regrades, chances of an upgrade far exceed those of a downgrade. That’s in large part because if a coin downgrades, the grading company is on the hook for the reduced difference in value.
So over time, countless coins continue to be resubmitted over and over again, until they end up at their their final(?) maxed-out grade.”
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Agreed!
The grading company websites used to have multiple images of coins for inspection. Over time you could track coins that raised a grade, or two, by comparing the photos. Guess what? You can not see those images anymore......
Nothing nefarious going on just the markets maturing. After all, there are only so many "new" coins to grade. Crackouts and regrades (reconsider) would have to be a major part of the market for the services to remain profitable.
Changing of the guard at the services will also bring a new set of biases to the grading room. No matter how you "teach" the graders there will always be personal bias as part of the equation.
That's why there is so much arbitrage between grading services via the crackout artists.
Think about why there are so few PCGS "rattler" holders in the marketplace today.........It's not because we don't like the holders.....
Just my OPINION. Don't execute the messenger, just share yours.
A: The year they spend more on their library than their coin collection.
A numismatist is judged more on the content of their library than the content of their cabinet.
As far back as 2002-2003 there was an insistence at this site by many members that (particularly) PCGS would not assign certain grades to coins, that they were intentionally grading low. That changed over time and soon it flipped to a belief that they were over grading. That belief persists. Nothing was ever presented to support the claims by various members aside from scatterred, hand picked coins to illustrate the point. Certainly I haven't viewed hundreds of thousands of coins but I've seen enough to form an opinion. Also, there was a time when I obsessed over following how PCGS was grading, back when they mailed members the monthly/quarterly pop reports. I had almost every report from around 1996-2006 so I could track trends until the sheer volume of the catalogues got too large to store. Maybe some members can still recall when I used to buy the ones I needed via the BST.
I see this "phenomenon" as similar to the way we each learn how to grade and move forward, improving that skill over time based on how large our sample size of viewing coins might be. I know that I don't assess coin types, Morgans as an example, today the same way I did 20 years ago. I have seen enough coins to have an improved sense of what a specific grade might be.
Graders tend to examine a lot more coins than collectors do. And grading hundreds of coins a day for years should give them “an improved sense of what a specific grade might be” in a far shorter time than 20 years.
Edited to add: With both PCGS and NGC having started grading coins in the 80’s, I think professional graders had seen more than enough Morgans (as an example) before the turn of the century, to know how to grade them accurately.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I think it is fair to say that this portion of your comment is also over the top. I don't believe that anyone has accused any TPG of conspiracy, but it is an undeniable fact that grades have risen, substantially so in recent years, over the grades that were awarded when both P and N started.
As you say you have pop reports from the mid 90's please review a pop report from 2000 (or as close to that year as you have and report on the pops for a common date well struck Lincoln in MS68, say 1934 and the number of coins graded at that point. We can then compare that number to the pops and number of coins graded today. In 2000 the TPG's had been operating for over ten years and the graders had had ample time to hone their skills enough to tell a 68 from a 67 by that time.
My guess is that the pop number for MS68's will be very low in 2000, perhaps still even close to zero, and I already know what that number is today. If you are correct and everyone else is incorrect, then the number of MS68's in 2000 will generally be on the same trajectory path as it is today (relative to the number of coins graded) and will prove you correct. If not, well then it might be time for you to see what everyone else does.
I look forward to you posting those numbers so we can put this to rest, and you will not have to be "bugged" about this anymore.
My Collection of Old Holders
Never a slave to one plastic brand will I ever be.
The same population reports will also show a large number of other coins that had extremely low populations in top grades for many years, but whose populations later increased dramatically, especially considering the relatively small number of years in which the increases occurred.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
I think you may be misjudging many of us.
Fact: In the last 50+ years the prevailing grading standards have become looser.
Fact: Any coin graded in 1988 (Pr-64 CAM) was not under graded at the time just because it gradesPR-67 CAM today.
FACT: That same coin graded PR-67 CAM today is not over graded.
Over time grading has changed, In each case, when a coin is submitted to a major TPGS THE VAST MAJORITY are correctly graded. Anything under graded is cracked and correctly graded. IMO, an extremely tiny amount are considered to be over graded! In most cases of this, folks like me have grading standards that are stricter than the TPGS. So, if the market place accepts a grade and I don't, who do you think is the "out-of-step-wacko"?
Hint: It's not the TPGS or the commercial coin market!
Hard to imagine a new collector reading threads like this and thinking he's found a great new hobby. Just saying.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Perhaps the main sources of gradeflation are some combination of conscious loosening of standards and resubmissions but even if the services never intentionally changed their guidelines, the asymmetry of resubmissions will likely result in loosening standards anyway. Think about how people learn how to grade - by studying thousands and thousands of graded coins.
If the pool of coins in a given grade declines over time, then the concept of what a particular grade should look like declines as well. Sure there are some written guidelines for what merits a certain grade but they are vague enough that there’s some room to maneuver.
I remember going head to head with a well known coin dealer (still) back in the mid 2000s in a heritage auction for the ONLY MS-67 1941-S walker, a pop 1 then. Now there are 16 of them
And yes, I lost, if I remember correctly the coin sold in the $12k-$15k range.
Maybe someone can look it up.........
Mike
My Indians
Danco Set
https://coins.ha.com/itm/walking-liberty-half-dollars/1941-s-50c-ms67-pcgs-even-before-it-became-popular-to/a/296-8557.s
Chopmarked Trade Dollar Registry Set --- US & World Gold Showcase --- World Chopmark Showcase
Thanks lermish, that does look like it
I still remember the fustration of not winning it
Mike
My Indians
Danco Set
Mike
Does the cert number work for you? Possibly this one was upgraded?
After looking at it I don't think that is the coin after all. I remember the coin had toning and at the time it was the only one in MS-67
I could be wrong but I think it might have been before that date.
Edited to add:
If it helps it was a Heritage auction at Long Beach
Mike
My Indians
Danco Set
I will continue to express my doubts about gradeflation as I always have. Consistency is difficult and while the OP offers an arbitrary figure of 1% over graded, I would surmise that statistically, if you could have a company like PCGS and only misgrade (better or worse) 5% of coins you'd be doing really well and 10% might even be difficult. And with 1 in 20 being misgraded, you're going to encounter misgraded coins in the marketplace constantly. And, those misgraded coins will probably get more attention and be remembered more than the correctly graded ones contributing to an exaggerated impression of accuracy.
From a mathematical standpoint, if you had a constant flow of an even spectrum of coins through a grading company, undoubtedly the average or mean grade would drift over time that you could plot on a chart that should theoretically resemble a sinusoidal wave as human graders naturally drift tighter or looser based on any number of factors over time or even throughout the day. But there is a limit to how wide the spectrum is. I will venture to say that the 3 Sigma distribution is probably +/- 0.6 to 0.7 points where (for example) an average but solid MS64.5 gets assigned an MS65 or the same coin ends up in an MS63 or MS63+ holder at the extremes. That is the theoretical limit for gradeflation because any more extreme and the error becomes to obvious. Now I guess the question to show gradeflation is, does the variance spend more time on the positive side of the variance more than the negative side? Statistically this should not happen.
Of course I have to state that there are always exception and corner cases where extenuating circumstances may lead to occasional larger errors but these should be fairly rare so please don't derail the conversation by talking about that one coin that was MS63 and ended up in a 66 holder.
Another reason why gradeflation is difficult in practicality is that grading is a spectrum. A 1 will always be an awful coin and a 70 will always be as good as it gets. Everything else must fall in between. And as we all know, the UNC spectrum goes from 60 to 70. If gradeflation was real, eventually we'd stop seeing 60's and 1's and as it got worse we'd stop seeing 61's and 2's.
There are 2 NGC 67s before this but without pictures. I couldn't find any other PCGS coins or toners.
This is the closest I could find but not really matching your description.
https://coins.ha.com/itm/walking-liberty-half-dollars/1941-s-50c-ms67-ngc-whispers-of-red-golden-brown-and-cobalt-blue-toning-cling-to-the-rim-areas-of-this-radiantly-lustrou/a/432-1107.s
Chopmarked Trade Dollar Registry Set --- US & World Gold Showcase --- World Chopmark Showcase
I agree. It's hard to imagine how he/she would feel if their questions were not answered in a thread like this.
Nope, it was before that
It could have been in the 1990s, I don't know
I know that it was the 1st one to be graded MS-67 and I know it was Long Beach because I was there bidding
No, the cert won't work. I went back to my retired set of Walkers and all the cert numbers are invalid now
Mike
My Indians
Danco Set
>Another reason why gradeflation is difficult in practicality is that grading is a spectrum. A 1 will always be an awful coin and a 70 will always be as good as it gets. Everything else must fall in between. And as we all know, the UNC spectrum goes from 60 to 70. If gradeflation was real, eventually we'd stop seeing 60's and 1's and as it got worse we'd stop seeing 61's and 2's.
_
Since coin grading is not mathematical, all the statistics above overwhelmed my pea brain so I'll just post two things to consider. I believe coins graded MS-60 hardly exist anymore. I have not seen one in ages. I could be wrong.
If I were to insert another grade into the grading scale, say between XF and MS, would that be considered Gradeflation? What if I bumped the grade of an MS-64 coin to MS-65 or MS-66 due to the most beautiful original colors one could imagine. What if I were to ignore the loss of surface detail and luster on specific Type coins so they would sell as MS because only a small percentage exist in full, original MS. Is that Gradflation?
I don't know what year HA's records started being digitized but here are all of the records they have online for a 41-S in PCGS 67...only 6 of them. First one seems kind of close but was in NY, not LB. If you continue to be curious you might have to go look up old catalogs in the NNP.
https://coins.ha.com/c/search/results.zx?term=&si=2&dept=1909&archive_state=5327&sold_status=1526&coin_category=2514&coin_category_child=4881&coin_grade_group=3055&us_coin_year=1941&mint_mark=3680&service=3352&mode=archive&page=10~1&ic4=Refine-GradingService-102615
Chopmarked Trade Dollar Registry Set --- US & World Gold Showcase --- World Chopmark Showcase
This was LB in 1999 and is a colorful 67...but NGC.
https://coins.ha.com/itm/walking-liberty-half-dollars/1941-s-ms-67-ngc-an-outstanding-gem-specimen-that-combines-the-purity-of-mark-free-fields-with-vibrant-golden-color-about-the-r/a/202-341.s?ic4=ListView-ShortDescription-071515#auction-info
Chopmarked Trade Dollar Registry Set --- US & World Gold Showcase --- World Chopmark Showcase
It's all good,
I used to save all my auction catologs but lost them all when I moved
Thanks for searching, I know one day it will come to me when it was.
Don't know if there is a way to search when the 1st 1941-S MS-67 coin appeared for sale/auction or graded
Mike
My Indians
Danco Set
These are the earliest major auction house records of all 41-S in 67. Anything earlier is probably around somewhere but I don't know if that is indexed and searchable and, if so, where to find it.
Chopmarked Trade Dollar Registry Set --- US & World Gold Showcase --- World Chopmark Showcase
There was a day when this would be a proof 65 at best.
Now look at it.
Nutty nut bar, nuts.
peacockcoins
Find pleasure beneath the opinion and plastic.
That JA interview in late-2022 with CoinWeek was an eyeopener. JA is very honest and admits that some dealers like Warren Mills might even be stricter than him.
Here he says that "market grading" wasn't nefarious or evil...it was a result of rising prices and you either adapted or went out of business:
"...I remember going back to 1985 when the hottest part of the market, the white-hot part of the market was the gold type sets. Marketing companies were selling them as MS63. And there are certain coins in gold type sets, certain coins that were really the toughest ones, like Type-2 $1 gold pieces, and five Indians, for example. All of a sudden, literally, what is today’s $800 to $1,000 super slider Type-2 $1 gold piece was an MS63. It was $15,000 and people are paying $12,000 or $13,000, selling them for $15,000. To me, it was a head scratcher.
I remember sitting down with a large group of– it was probably the 32 original guys that made markets– and the guys at PCGS. We talked about grading status. I remember saying, “Hey, these are 58.” And some said, “You can’t call those 58. They’re worth $15,000. They’re selling at 63.” I said, “Yeah, but that’s now. There could be a day when they’re going to be AU again.”
Fortunately, I think that the more technical rules prevail because PCGS never got into that trap in 1986 upgrading AU Type-2 ones 63. Fortunately by then, that market had collapsed. For those dealers, sales came way down and then all of sudden, grading got conservative.
But it is a fact. I remember laughing about it as a teenager, whether it was MTB (Manfra, Tordella & Brookes) or A-Mark or the large houses, would always have a disclaimer on their invoices saying that “Grading standards can change with market conditions.”
That’s crazy. That’s BS. That’s impossible. How can that be?
I could never figure it out. But they were right."
https://coinweek.com/a-cac-grading-service-coinweek-interview-with-john-albanese/
What are MS-67's selling for today ? Has that coin CAC'd ?
My simple take.
The uneven playing field distinction.
Graders take approx 5 seconds + or - and a 5x glass to view a coin under particular lighting in a darkened room.
Collectors take approx 15 minutes and a 6x-9x glass to view a coin with varied lighting in a lite room.
Different results will occur every time.
Add to that difference ownership adding a point ie a different bias and there will be major differences in outcomes. Butt are the word major with a grain of salt because 1 or 2 points may or may not be major depending on where it falls in line on the grading scale
I don't believe they put that information out anymore, right ? And digitally, it would be alot easier.
No clue, can't find the coin
Mike
My Indians
Danco Set
Your analysis ignores the substantial effects of crackouts and resubmissions in the existing pool of TPG coins and only considers coins when first graded. It starts as a bell curve but rapidly becomes skewed by crackouts and resubmissions.
Five seconds is longer than it sounds. Age has its benefits; I'm not under that kind of pressure.
Good point. Yes, this will result in an accumulation of overgraded coins because we can assume the under graded are cracked out and resubmitted over time. Still, the rate of production of overgraded should remain relatively steady. I'm sure after a few decades there will be a decent prevalence of overgraded CACG coins due to this effect.
For a professional grader, five seconds might be longer than it sounds. And in addition to that, I believe that number understates the amount of time graders typically spend examining coins.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Anyonee who's collected coins for a number of years can grade circulated coins accurately. When it comes to high grade coins is when it gets tricky. PCGS & NGC have done a tremendous job of ensuring collectors purchase genuine coins at a grade that is usually consistent. Buy the coin not the holder is correct but there are some really good counterfeit coins out there and stabbed coins have made the hobby far safer
The problem with your 100 million number is that most of them are moderns> @ProofCollection said:
Not if 58’s move up into the UNC ranks
While grading is subjective, that would be an express non-subjective violation of the standard that Unc coins must not have any wear. In my world, that would fall under policy change rather than gradeflation.
For what's it worth, I agree with some exceptions. Naturally, the time it takes to get the coin ready to examine and the time it takes to return it to the box and make computer entries does not count. Additionally, the coin Type must slow things down closer to the 5-6 seconds commonly stated. I take longer to grade circulated coins. Large BU coins are much faster.
"If I were to insert another grade into the grading scale, say between XF and MS, would that be considered Gradeflation? What if I bumped the grade of an MS-64 coin to MS-65 or MS-66 due to the most beautiful original colors one could imagine. What if I were to ignore the loss of surface detail and luster on specific Type coins so they would sell as MS because only a small percentage exist in full, original MS. Is that Gradflation?"
These are good questions, I'll take a stab at them.
Inserting another grade into the grading scale, say between XF and MS, not really gradeflation.
Bumped the grade of an MS-64 coin to MS-65 or MS-66 due to the most beautiful original colors one could imagine. Tough one because toning can be very subjective, really no toning standards. Each coin must be evaluated, in some cases yes and in others no.
Ignoring the loss of surface detail and luster on specific Type coins so they would sell as MS because only a small percentage exist in full, original MS. In most cases yes gradeflation.
Policy changes, even if not written, spoken, official or acknowledged, can easily lead to gradeflation.
.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.