"Confessions of a Coin Dealer" - Slab Submissions
Hi folks!
I have been lurking on the boards for about a month or so and really enjoy the opinions of everyone and exchanges. I had hoped to get in on the toning discussions but for some reason I could not get a user name assigned until I contacted CU. Took almost 2 weeks. I hope to add some insight in the toning conversy at a later time.
I used to work for a major coin dealer before I soured on the practices and industry in general but I still love coins although collect modestly now. I do collect a lot of other things where the competition and greed level is not high or as high as it is in coins.
I feel I can add to the forum some insites on how to be better consumers when buying coins, selling coins and how to avoid some of the pitfalls of collecting. Also pass on some investment guidance for those so inclined.
I have no hidden agenda as I am a former dealer. I am not selling anything but I am writing a book which covers alot of issues which many collectors would be interested in; however, the book will not be ready, if ever, until mid 2004 at the earliest. By the way, write for your ego not your wallet, writers make no money unless they are named Krantz or Crichton or Clinton!! LOL!
The first topic I would like to address are the grading services. I am neither pro NGC or PCGS, I believe both need to survive and prosper for the industry to remain stable and attract more collectors.
Most of you know the grading game, buy a PCGS slab, send to NGC to upgrade then sell it/auction it retail. Or send borderline coins to PCGS and keep sending until you get the grade you want. Granted, grades are not just given out as gifts but sometimes I wonder. I have seen more and more overgraded PCGS and NGC, to a lesser extent, slabs in the last year than ever before.
I suspect dealers are putting so much pressure on the services they are caving in on some submissions. Dealer submissions are the life blood of grading services. The grading game stops and the cash flow stops. Where is your grading company now?
The average collector is clueless to how dangerous this can be to the hobby. Imagine if PCGS suddenly loosened up and there was a flood of sub par slabs put on the market. What does that do to PCGS reputation? What does that do to the value of your PCGS slabs? I can understand how collectors want a high grade for their submissions but does it really matter what PCGS or NGC says the grade on your coin is? Do you really feel different if they grade it a 68DCAM versus a 69DCAM? Same coin. I guess you would feel different if you were going to sell it or were a dealer.
Dealers on the other hand have only one motive in mind when submitting coins, get a higher grade to make more money. End results are higher grades have more and more marginal coins. I noticed at FUN, ANA and Baltimore the abundance of low end MS65 material in NGC and PCGS slabs. Many were dealer resubmissions. Can't give too many details on how I know but I recognized at least 9 coins which were in 64s and one in a 63 holder within the last 24 months and now were in 65s. And no they did not belong there.
Ever hear the expression, Buy the coin not the holder? If this is ever true it is today. Go to any major internet dealer site and you can see the grade-flation. Sorry to say but the buyers of these coins will be in for a shock when everyone gets wiser. Suddenly a 65 will only bring 64 money.
Final word of wisdom, get educated, buy the book and look at plenty of coins of both above and below what you are thinking of buying. You will be better prepared to make a wise purchase.
Upcoming post -- Dos & Donts at a coin show {especially important now that a major show has ended in Ca.}
Happy Collecting!
I have been lurking on the boards for about a month or so and really enjoy the opinions of everyone and exchanges. I had hoped to get in on the toning discussions but for some reason I could not get a user name assigned until I contacted CU. Took almost 2 weeks. I hope to add some insight in the toning conversy at a later time.
I used to work for a major coin dealer before I soured on the practices and industry in general but I still love coins although collect modestly now. I do collect a lot of other things where the competition and greed level is not high or as high as it is in coins.
I feel I can add to the forum some insites on how to be better consumers when buying coins, selling coins and how to avoid some of the pitfalls of collecting. Also pass on some investment guidance for those so inclined.
I have no hidden agenda as I am a former dealer. I am not selling anything but I am writing a book which covers alot of issues which many collectors would be interested in; however, the book will not be ready, if ever, until mid 2004 at the earliest. By the way, write for your ego not your wallet, writers make no money unless they are named Krantz or Crichton or Clinton!! LOL!
The first topic I would like to address are the grading services. I am neither pro NGC or PCGS, I believe both need to survive and prosper for the industry to remain stable and attract more collectors.
Most of you know the grading game, buy a PCGS slab, send to NGC to upgrade then sell it/auction it retail. Or send borderline coins to PCGS and keep sending until you get the grade you want. Granted, grades are not just given out as gifts but sometimes I wonder. I have seen more and more overgraded PCGS and NGC, to a lesser extent, slabs in the last year than ever before.
I suspect dealers are putting so much pressure on the services they are caving in on some submissions. Dealer submissions are the life blood of grading services. The grading game stops and the cash flow stops. Where is your grading company now?
The average collector is clueless to how dangerous this can be to the hobby. Imagine if PCGS suddenly loosened up and there was a flood of sub par slabs put on the market. What does that do to PCGS reputation? What does that do to the value of your PCGS slabs? I can understand how collectors want a high grade for their submissions but does it really matter what PCGS or NGC says the grade on your coin is? Do you really feel different if they grade it a 68DCAM versus a 69DCAM? Same coin. I guess you would feel different if you were going to sell it or were a dealer.
Dealers on the other hand have only one motive in mind when submitting coins, get a higher grade to make more money. End results are higher grades have more and more marginal coins. I noticed at FUN, ANA and Baltimore the abundance of low end MS65 material in NGC and PCGS slabs. Many were dealer resubmissions. Can't give too many details on how I know but I recognized at least 9 coins which were in 64s and one in a 63 holder within the last 24 months and now were in 65s. And no they did not belong there.
Ever hear the expression, Buy the coin not the holder? If this is ever true it is today. Go to any major internet dealer site and you can see the grade-flation. Sorry to say but the buyers of these coins will be in for a shock when everyone gets wiser. Suddenly a 65 will only bring 64 money.
Final word of wisdom, get educated, buy the book and look at plenty of coins of both above and below what you are thinking of buying. You will be better prepared to make a wise purchase.
Upcoming post -- Dos & Donts at a coin show {especially important now that a major show has ended in Ca.}
Happy Collecting!
0
Comments
William S. Burroughs, Cities of the Red Night
PS: Nicely written, and well thought out.
Russ, NCNE
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
I buy/colllect/hoard coins for the sheer enjoyment of the hunt and accomplishment.
and it sets us apart from practitioners and consultants. Gregor
Your one comment hit home
<< <i>By the way, write for your ego not your wallet, writers make no money >>
I have four published books and I'm glad I didn't give up the day job.
Carl
P.S. Nice icon!
Here's a warning parable for coin collectors...
Registry 1909-1958 Proof Lincolns
President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay
"The silver is mine and the gold is mine,' declares the LORD GOD Almighty."
Ray
Instead of all the tightening up we've been hearing about it sounds like you're telling us many coins are being maxed out and placed in holders- graded- and are overgraded.
peacockcoins
your past would seem to give a unique perspective to many topics currently in vogue. well thought out #3 post, keep 'em coming. i wait with baited breath for the do's at a coin show. i seem to figure out all the dont's in short order!!
al h.
It will be interesting to know how much there is to confess. The "submission until successful or lost" is a well known strategy. The threads clearly indicate that many collectors as well as dealers think the process of finding cracking , submitting and resubmitting is great ( when failed, the grading service is stupid; when successful, off to E-Bay); the purchasers of sliders or overgraded coins are stuck and if smart enough to know are angry! I would be shocked if there was not some way to influence the system ( submitter bias) as it is true in every other walk in life.
I hope you can provide us a Table of Contents so we can anticipate the wonders to come! To sell well "the book in process" must deal with new topics (yet to come?) and/or have specifics of special and unexploiited examples of egregious practice as the rest has been so hashed over that only the naive and hopeful ( Me?) believe otherwise.
Should be fun to hear the tale.
Moichido, I look forward to your insight and participation. Enjoy your time here.
Frank
Finally some meat!!! I am hungry.
Read people.
Truthteller where are you?
Tbig
<< <i>Welcome to the forum Moichido. Moichido, ... moichido? I've heard that before. What does it mean? My apologies if it's your actual name, but I'm sure I've encountered the term at some time during a tour in Japan. Is it something like, the Best, or the First? >>
I'm sure the OP will correct me if I'm wrong, but I think it means "One more time".
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
Tom
In response to this post, I agree with your observations. I think there may come a time when most slabbed coins will be "overgraded" but will not be considered overgraded because times will change and the "market graded" system will (if it already hasn't) replace the mostly technical system.
Joe.
Karen
-Thomas Jefferson
Welcome! Judging by your comment above, I look forward to your future contributions.
Kranky, you got the name right. Atari!
Obscurum per obscurius
Thanks for sharing you insights on the grading game. As you said the motivation is make money on the part of the grading services and dealers (nothing particularly wrong with making money). But it's the willing and in many cases unwitting participates (collectors) who pay outrageous (IMHO) one point grade premiums that fuels the practice you described. Take the profit motive out and the game ends. When collectors wake up and stop putting undue focus (traslated paying huge premiums) on what in many cases are small (in the case of 64's vs. 65's vs. 66's) or minute (67's vs. 68's vs. 69's) or microscopic (69's vs. 70's) differences in these grades a lot of what promotes this game will disappear.
Proof Dime Registry Set
so you been around for a month or so, glad you finely got a uses name. I think the grading company are the less of two evils the worst is the shady ebay seller that call a VF a choice BU. Would I buy a slabbed coin from a coin shop or a show? Only if I had plan to resell on the net. the grading service is the only insurance we have buying sight unseen. I think Mark Twain said the same thing about his books.
I hate it when you see my post before I can edit the spelling.
Always looking for nice type coins
my local dealer
Tyler
I have heard two schools of thought on this issue. One, the coin is more valuable in the lower holder if it is a strong upgrade candidate, and the second is that any upgrade candidate should be submitted to the grading service. Any comments on this?
I hate it when you see my post before I can edit the spelling.
Always looking for nice type coins
my local dealer
<< <i>Take the profit motive out and the game ends. When collectors wake up and stop putting undue focus (traslated paying huge premiums) on what in many cases are small (in the case of 64's vs. 65's vs. 66's) or minute (67's vs. 68's vs. 69's) or microscopic (69's vs. 70's) differences in these grades a lot of what promotes this game will disappear. >>
This all goes along with the fact that what is a hobby to some is an investment to others and a business to the rest (the dealers and the peripheral and related professions such as grading services). Of course there are subcategories, the most prevalent being the collector/investor.
I don't believe the pure "collector" cares about the "microscopic" or perhaps even the "minute" differences between the grades. I don't even know if there are a whole lot of pure collectors out there. I am not a dealer, so I don't know the degree to which this type of collector, especially with large amounts of expendable capital, exists. I would guess that there are never enough of them.
The investor, in a traditional sense, buys coins hoping they will appreciate in value. With the advent of grading services, registries, ebay and all things new and wonderful, there have become avenues of appreciation that are no longer dependent purely on a factor of time. In an effort to maximize profits, the cunning investor must be aware of such new opportunities, and to the degree possible take advantage of them.
This quick realization of profits for the investor brings them firmly into the provenance of what had once been the dealer's turf. In essence, everyone's a dealer, to some extent. Of course, with more competition, the dealer can't simply go about business as usual, so they have to find new ways to create income and turnover product.
Which brings us to the crackout game.
As a lowly collector/investor i am not a big submitter to the services. I perhaps make one or two submissions to each of the services i patronize (pcgs,ngc,icg,anacs,segs; yes, believe it or not, i submit to all, and for different reasons) per year. It is difficult to imagine getting a whole lot of "gift" gradings due to the raw numbers. But i do get good and bad grades from each and every. Some too high, some too low (yes, even in my small annual sample i seem to get over and undergraded coins from each and every service).
I can only imagine the number of such gifts a large submitter must get over the course of thousands of attempts, simply due to the fact that these are opinions on coins rendered quickly and perhaps not as carefully as in a perfect world.
And more importantly since they are merely opinions.
Of course, some gifts may be given to recipients for reasons other than chance, and that, i presume, is where the "confessions" part comes in.
In the past two weeks i've sent back 3 ebay coin purchases, two pcgs(one old holder, one new) and one ngc. They were borderline coins being presented as solid or better for the grade. I didn't believe they were. I was not cherrypicking, merely looking for my opinion to jive with the "pros." I gather from the thread's original author's opinions i can expect only more this in the future.
thanks for the provocative post, look forward to more.
z