Loose, Tight or Accurate to the Market?

tradedollarnut

Question: which is worse? Why?

1) a collector buys a coin that is graded too high because he hasn't the experience to recognize the coin is overgraded. When it comes time to sell, he only realizes 50 cents on the dollar because the marketplace values the coin at a lesser value.

2) a collector's relative inherits his raw, high quality coin collection and sends it thru to a certification service. Each coin is graded, but extremely conservatively. The owner then sells them for greysheet, realizing 50 cents on the dollar for what the coins will actually bring in the marketplace.

crito

#2 because he paid for expert grading and got a ticket to the "crackout games" instead. He didn't get what he paid for in scenario #1 either, but it's partially the (expert) dealer's fault and partially the (expert) slabbing co's. In #2 it's ENTIRELY the slabbing company's fault that he got shafted.

nwcs

I think #1 is better. Because it is apparent the collector held the coin longer. And even with an inflated grade, is likely to receive a bit more money in the sale (with the discount for grade inflation) than in #2. In #2, the person takes a hit from both the greysheet (instead of retail) and potential undergrading. So #2 is worse.

Neil

dorkkarl

<< <i>2) a collector's relative inherits his raw, high quality coin collection and sends it thru to a certification service. Each coin is graded, but extremely conservatively. The owner then sells them for greysheet, realizing 50 cents on the dollar for what the coins will actually bring in the marketplace. >>

you realize, don't you, that this is exactly why i complain (to no avail) about the fact that pcgs does NOT guarantee against undergraded coins?

K S

BigD5

I say #1 is worse, as the collector controls his or her own fate, and didn't do the necessary research or apply themselves properly when it came to making an educated purchase. #2 leaves the collectors benefactors with something they didn't have before, and unless they do some research they just won't know any better, but may not care to know any better.

Hoot

What Darin said, but I think that makes #2 worse. #2 has an insideous wrong inherent in it that goes beyond taking advantage of naivety.

Great question TDN. Hoot

roadrunner

Both are the same. He loses 50%.

roadrunner

DHeath

TDN,

It's a great post, and a difficult question. I was rambling today to myself about the value of third-party grading, and wondered how a collector could buy a $10,000 coin with no certainty it would be worth $1,000 if resubmitted, or perhaps $50,000. Then I wondered whose grading opinion mattered anyway. What I kept running into in my stream of thought was the effect of a grade guarantee. Obviously, it alone has value in the equation. The only certainty is that a coin graded X is not worth less than Y. It doesn't imply it couldn't be worth more, but it does establish a floor for the value. I guess that is the worth of the slab.