My Solution (NGC, PCGS, ANACS, CAG, etc.)

pmh1nic

This isn't another thread to bash any grading service but my way around the controversy surrounding the value of a coin based on the grading service that slabbed it or sticker attached to it. It's pretty simple and works for me.

I don't buy any really expensive coins (all less than $3K). The more expensive coins I buy I don't buy in grades where a 1 point difference means a 1.5x plus spread in price.

An example is a 1900 Liberty Double Eagle. The PCGS price guide (used to make a general point, not to validate their pricing) has the 62 at $2650, 63 at $2800 with the 64 jumping to $3750. In this situation I'm not buying the 64 coin no matter who graded it or what sticker is on it. I don't have that much confidence in any grading company to pay a 35% premium over the coin in the grade just below it. I do have enough confidence that they will a get me into the ballpark for a particular grade where there are small premiums between the grades (in the case for the 62 and 63 above around 6%).

So in the above case I would buy the 63 if I agreed with the 63 grade (most of the time they get it right). If they get it wrong then I'm behind 6%. No name on the label or stick would prompt me to buy the 64 coin, in this case with a 35% premium over the 63. This is not exorbitant premium compared to the premium on the 1901-S from 63 to 64 (x2.5) but in my opinion that is putting a LOT more faith in the grading company and/or company applying the stick than I'm willing to extend.

braddick

Not a bad way to go.
Nice analysis.

oldabeintx

I opt for the 64 grade in many cases, where the big increase is from 64 to 65. I look for CAC as well, if the premium is modest. In moderns I look for 69 vs. 70 if the price difference is material. I agree with the essential argument that in many cases a 1 point difference doesn’t justify the jump in price, considering the subjective nature of grading. But then I’m not a registry guy.

PerryHall

I've always advocated buying a coin at the highest grade before the big jump in price at the next higher grade. It's usually the best value for most coin collectors and makes the most sense.

NewEnglandRarities

Well done!! This post described a numismatist to how I understand it (with many years in!). The points you made are great, and exactly how a coin collector should think in the market of federal coins. Really enjoyed that post!

DeplorableDan

I like value grades, but its highly dependent on eye appeal. Many times, I cant rationalize paying 62-63 money when I get a 55-58 with the same or better appeal. Once you get closer to gem grades, its a different story.

RobertScotLover

I prefer to collect coins not grades. And to me that means a high enough grade to see all the detail and a high enough eye appeal to attract me to admire it. If I had to put that in grading terms and knowing how subjective grading my anyone is , anywhere from AU55 to MS67 fits the bill. As to the price to acquire such an animal, I don't get lost in the weeds and become overly fixated or concerned about prices other than always trying to avoid being the last man standing/holding when the music stops. If I can get my money back or somewhat close then I am good. Again its about acquiring a special coin and not about shopping in a Mall for discounts

Elcontador

@PerryHall said:
I've always advocated buying a coin at the highest grade before the big jump in price at the next higher grade. It's usually the best value for most coin collectors and makes the most sense.

Good example of this is a nice MS 64 Seated Dollar rather than springing for an MS 65 of the series.

stockdude_

Totally agree. The sweet spot for Morgans is MS-63 and 64. Many are just as nice as "65" for close to 100 less. You of course have to cherry pick. I buy off Great Coll and dont even look at 65's. I never pay more than $70 for a 63 or $85 for a 64

Catbert

Price guides are trailing indicators. Price guides focus on the average coin/condition for the grade and not superior examples. Previous sales (comps) of the the coin or one like it are better guideposts.

As such, while price guides are an important reference point when deciding on a purchase, I value eye appeal, whether the coin quickens my pulse, and how the coin fits my collection. These factors are the primary consideration. Next, can I afford the coin. If I determine the superior coin is wildly overpriced per my instinct, then I'll pass. Of course, these are generalities and one must evaluate each coin on its own merits.