Logical Fallacy

jtryka

In watching so many posts on grades, I started thinking of third party grading like a fiat currency. Yes, we all think it would be great if the government started printing more money, and we were walking around with $100 bills falling out of our pockets, but most of us fail to realize that all of these actions have consequences. We wouldn't be the only ones with all that cash, everyone would have it! And then it would cost us $1,000 for lunch, and suddenly all that money wouldn't seem so great. I think many of us look at grading the same way, and we are ticked when we don't get the high grade we feel we deserve. But how often do we think about the repurcussions of looser grading standards such that every modern was MS-70? Would this not have the same effect as a currency devaluation? Wouldn't all of our coins suddenly be worth less? Look at the many examples of third tier grading companies and the values they bring, would we want the same for NGC or PCGS? Now don't get me wrong, I want consistency and accuracy from any grading company, and they do make mistakes that legitimize our gripes, but next time you get a coin graded and it comes back MS-65 and you thought it should be an MS-66, ask yourself, is it really a 66, or is the fact that it's your coin adding a +1 point bias to your assessment. Just some food for thought after reading countless griping threads and so very few threads where the submitter say, wow, they got this group right on! Now, let the flames begin!

coppercoins

No flame from me, I think you're right on - but I would have to see the coins in question before I could say you've made a fair assessment of the situation at hand. I really think a lot of the people's gripes around here center on inconsistency, which should not be tolerated, especially out of some company that charges as much as PCGS for their service and supposedly has the best reputation for grading out of any of them. My personal thought is that most of the coins I have seen in the slabs are overgraded anyway, so it's a moot point in my case....but does somewhat strengthen yours.

Placid

You didn't submit any coins to pcgs this month did you jtryka?
I think most of my coins got the grade they deserved probaby 97%.
It's the other 3% that keep me awake at night

Ronyahski

No flames from here either. Although I do agree with you that all of my coins should be 1 point higher, ha ha, it has been over two years since I could say they got a group right on.

I want consistency from coins submitted last week, to last month to last year. It's frustrating that just when you think you've learned enough to know how to grade a certain series consistently, the grading services continuously disagree.

I think another phenomenon happening, at least in the "less-modern" series, is increased activity in crossovers, crackouts, and upgrades. Why, because much of the available supply has already been slabbed. Therefore, by having a benchmark to compare to, it's more justified to gripe when expectations aren't met.

clevegreg

Actually a very good post J.

I, however, am long past the stage in collecting where I add +1 point to my coins when sending them in. Actually, I am quite cheap, and unless I really believe that a coin will make a grade that will make economic sense, I don't submit it.

I am also one heck of a good coin grader

Greg

edited for spelling

jtryka

you're right placid, I stopped sending coins to PCGS after my bout of fingerprints and hazing last summer on some modern proofs. I have some coins at ANACS right now though.

sinin1

I think my problem has been buying off of ebay/yahoo auctions where many of the low end slabs end up. I've got a MS65 Peace dollar that I need to send back to ICG because now I noticed a 1/4 inch staple scratch that is in a perfect location to be one of her spikes on her head - and I'm thinking - bummer - if I cracked this out it would bodybag or maybe a 62. But when I figure out how much it will cost to register mail it in/pay for regrading/pay for shipping back, I think bummer - a great guarantee but it will cost me $50 for it.

pmh1nic

When we start looking at grading as what it is, an educated (sometimes ) subjective opinion arrived at using more than one set of standards, and stop paying huge premiums for one point differences in opinion, then I think we'll have found the real benefit of having the grading services. That benefit in my mind is accurate authentication and attribution in addition to a "general" assessment of surface preservation.

Outhaul

jtryka makes a very good point. However, it always seems that no matter how good the coin looks the grade stops just at the price break. My feeling is that if it's a 66 and the price break is at 65 it still does not make the coin any less than a 66, they just don't give up the extra point (depending who you are, but that's a whole thread unto itself). How many on this board have seen the same with their submissions? I have MANY times.

Cheers,

Bob

coinguy1

jtryka,

Interesting post!

I have discussed some of these thoughts with various dealer friends over a period of several years. This is my personal take on it, though simplified, quite a bit, for discussion purposes :

There is a certain amount of money out there (in the known universe) with which to buy rare coins and, at any one time, there is a population of coins which is the object of that money.

If, for example, all certified coins magically increased in grade by one point over night, their value would certainly be reduced significantly. Why? Because the same amount of money would be available for the same group/number of coins.

In the scenario above, unless the gradeflation was met with an increase in the amount of available funds with which to purchase those coins, their value would be reduced accordingly. Contrary to what some people might think, an increase in grades assigned to coins, doesn't have the same effect as printing money out of thin air. For every coin that goes up in grade, there is a proportional decrease in the overall value of each certified coin, all other factors being equal.

I see you posted on the other board so I will post this reply there, too.

pmh1nic

Coinguy1

I think your reasoning is valid. But when you get a relatively sudden flood of new money coming into the market (could be the result of speculators/investors rather than "traditional" collectors), that can throw things out of kilter in the market, sometimes on a long term basis. When you get someone with deep pockets willing to pay $20,000 for an MS-68 Washington Quarter it affects the whole market for Washington Quarters increasing the perceived significants of one point grade differences causing an undue focus (IMHO) on small differences in appearance.