This is where undergrading gets you...

jtryka

Just saw this auction 1874-S $20, and knew I would see this type of description somewhere:



<< <i>Being Graded by a professional Company such as PCGS! They are the most strict when it comes to grading. For non-proof coins they call them Mint State or MS. Then they assign a number and a grade to it. A perfect coin which would get the grading of MS-70 I have never seen PCGS grade a coin with the perfect grade of MS-70. I have seen it in MS-70 by NGC and PCI. So since PCGS is so picky you know that you could be getting a coin graded by another company instead of Almost Uncircirculated -53. It could be a 54 or a 55 if it had been sent to another grading company. >>



Is this really what we want to see promoted in the hobby?

stman

I guess the only good thing is he says you might get a grade of au 54-55 from another company. Instead of trying to say ms 65.

stman

jtryka

You're right stman, and I don't think this guy is really trying to rip anyone off. It's just that as many of the PCGS fans automatically assume that most other services overgrade by a point or two, there is a growing segment on the other side of the fence that assume PCGS always undergrades by a point or two. Fortunately for this coin, the difference between a 53 and 55 is about $20 or $30, but what happens for a Type 3 Lib $20 in MS-63? Big difference between a 63 and a 65 (even between a 62 and 63 in Type 3 Libs).

stman

Agreed, I can understand someone promoting a sale, but why can't people just say maybe it's great for the grade or something. I have a local dealer that every coin he has he says it's the next higher grade. It gets on my nerves. Problem is this dealer I mentioned wants to get the next grades price and the coins are not PQ.

He also uses the same statement this seller does.

stman

jtryka

I agree stman, on some really nice coins, or coins that are harder to find (like late 1890s quarter eagles) I might be willing to pay a lot more, even up to the next grade, but just as often, I see coins that I wouldn't pay more than the next grade lower! Unfortunately it's a lot harder to get the seller to go lower with the grade listed on the slab. It creates a "slab bias" in that a coin is never lower than the stated grade, but can always be higher! Crazy stuff.

stman

It's only lower than the slab grade when you come back to sell it.

stman

dorkkarl

i've said it time and again, that pcgs does NOT stand behind their grades 100%!!! they stand behind their grades 50%. they guarantee the coin will not be overgraded , but undergrading is comlpletely ignored. thus, the concept that they are assuring you (not you personally, but the plastic-buying public) , of consistency is the biggest bag of b.s. around. same is true of every single plast company that does not guarantee grading BOTH ways.

bottom line: why the he11 would anyone pay good money for something that has a 50% guarantee???

K S

clevegreg

Hi DK,

While in some cases that may be true, if you take the time and effort, and are convinced that you have a coin that is undergraded, PCGS WILL in fact upgrade it if it is deemed correct. I have had this experience twice in the past year.

Greg

DHeath

Jtryka,

Do you think the seller really believes his statement? I've actually had a few PCGS to NGC crack-outs that downgraded. I think eventually everyone will figure out that it really is about the coin, not the holder. Dealers won't pay a premium for a coin blind or from a scan, and they do it for a living. ANA has a grading seminar this March in Charlotte for $350. I would think anyone investing serious money in the hobby would invest the time and money there to become holder-independent, especially if they are buying expensive coins. IMO

nwcs

To me, the seller's comments sound like a tactic to raise the perceived value of his coin.

Neil

keets

hype, it's all about hype.

i don't sell very often on eBay but whenever i do i keep it short and sweet in the description, try to provide the best pics i can and encourage any bidders to e-mail me with questions. more than that is BS
and just a sophisticated attempt to decieve. i wouldn't make a good salesman!!! my inclination is to let an item "speak" to the buyer with as little interference from me as possible.

al h.

Pushkin

Come on people - give the guy a break. He stated the coin was only an AU-5 in his banner. That grade needs some embellishment.

dorkkarl

<< <i>To me, the seller's comments sound like a tactic to raise the perceived value of his coin. >>

absolutely nothing wrong w/ that , since an opinion is being expressed and must be respected as much as any other opinoin.

K S

jtryka

Don,

I really think that this seller believes that statement, and I think a lot of other people do too. I am not trying to bash this particular seller, as I don't think he's really done anything wrong, just stated his opinion on the coin and PCGS. I absolutely believe that this seller is either less experienced, or trying to give an impression of less experience, otherwise why would he try to push a coin up from an AU-53 to and AU-54 or AU-55 (tell me what reputable grading service currently uses AU-54?). The point is, when we consistently see identical coins (or in some cases the exact same coin) receive one grade from PCGS and a different (and often but not always) higher grade from another service, there are two possible ways to look at it:

1. PCGS is correct and everyone else overgrades by a point or more.
2. PCGS undergrades and most of the other services are more realistic.

Well, the majority of folks on this board would probably subscribe to theory #1 (this is the PCGS forum after all), but outside this forum, there are a large and growing number of collectors that subscribe to theory #2. Well, neither one is particularly beneficial to collectors who desire some consistent independent opinion of a coin. I personally fall in between the two, as I look at the coins primarily to determine what I am willing to spend on them. But no one here can deny that when looking at coins in PCGS holders, it is far more common to say to yourself "that one is really undergraded" than "what were they thinking, no way that piece of crap is MS-XX." If that's the case, it's not hard to see how people would believe that #2 is true. This I believe is the real reason for the PCGS premium in the sight unseen market. If you construct a probability distribution (i.e. X% are undergraded by 1 point, Y% are undergraded by 2 points and Z% are correctly graded) the net expected undergrade should approximate the premium paid for the slabs sight unseen. Bottom line to all the Kool-aid drinkers, the PCGS premium is not the result of PCGS being great, it's the result of an efficient market compensating for PCGS' inadequacy in accurately grading coins (i.e. consistently undergrading).

tradedollarnut

I happen to agree pretty much with your analysis. IMO, the market place puts the correct grade at a tweener coin. What I mean by that is it's a nice NGC coin that should cross (when viewed objectively) but doesn't for whatever reason.

The upper half of PCGS coins and upper quartile of NGC coins bring premiums to the market. The lower half of NGC coins and lowest quartile of PCGS coins bring discounts to the market.

What does this mean? That each coin, no matter what the holder it resides in, must be evaluated for quality and priced accordingly.

dbldie55

<< <i>Hi DK,

While in some cases that may be true, if you take the time and effort, and are convinced that you have a coin that is undergraded, PCGS WILL in fact upgrade it if it is deemed correct. I have had this experience twice in the past year.

Greg >>



Greg, what DK is implying is that PCGS will not pay the person who sold the coin for the value of the incorrect undergrade the difference between the two grades. When you got the upgrade, did you pay the person you got the coin from for the "real" grade after the fact? I got a PCGS coin that I bought from Heritage upgraded. Did I pay heritage for the mistake PCGS made? Did PCGS? This is the other 50% being talked of.

EVillageProwler

I will not chime in; I will not chime in; I will not chime in. Ok, I will chime in.



Whether it's #1 or #2 from Jeff's analysis is not relevent in the case where you have a nice coin that people will want to buy. If it's a nice NGC AU55, but perhaps really PCGS AU53, you can get AU55 money for it.

If the coin's a PCGS AU53, but really NGC AU55, you'll only get AU53 money for it.

Keep in mind that I'm really talking about the earlier series, like Early Dollars or Seated Dollars, and that the coins generally have nice eye appeal. And, I'm assuming that you're trying to sell to dealers.

This has been my experience. After all, what dealer would happily pay you AU55 money for a coin in an AU53 holder? And, why would you want AU53 money for a coin in an AU55 holder?

EVP

dorkkarl

<< <i>But no one here can deny that when looking at coins in PCGS holders, it is far more common to say to yourself "that one is really undergraded" than "what were they thinking, no way that piece of crap is MS-XX." >>

i'd have to disupte that just a little, but it might be because i play in a little different market than most. i specialize in open-collar coinage, and you'd be surprised at how OFTEN i find myself saying just that: "how'd this piece of crap get graded so high". HOWEVER , i wouldn't generalize that about one plastic holder over another. note also that i am referring to NON-MS coins.

K S

jtryka

KS,

Point taken, and my comments were really geared towards the upper end grades (for double eagles AU and up), and as someone pointed out, the lower end of the grading scale can be quite a different environment. But, I would also remind you that on many series, the lower end of the scale is often not a source of big price changes. A common date Type 1 double eagle really doesn't jump a lot in price from VF-30 to VF-35, but it can jump a lot between AU-55 and AU-58, or MS-60 and MS-61. Either way, the market will correct for the differences, whether in the sight unseen market, or in person where folks can plainly see quality that may belie the grade assigned.

dorkkarl

point taken, & i gotta admit that high-end moderns are unfamiliar ground for this old ground-hog.

K S