Is our system of third party graders ideal? I think it just might be!
Baley
Posts: 22,663 ✭✭✭✭✭
In considering that our ranking of third party graders: (in order of "strictness" for lack of a better term)
PCGS
NGC
ANACS
then the second tier "close but generally optimistic" companies in no particular order:
ICG, PCI, SEGS, etc. etc, ... NTC, ACG.
It occurs to me (not for the first time, and I wasn't the first, but nevertheless..)
that it's a pretty good system that will eventually ensure that lots of coins get into the "right" holder,
FOR THE COIN...
think about it,
say a coin has VF details and a moderate cleaning with hairlines, it can't go in a P or N holder, so it's either ANACS VF details net VG cleaned, or a PCI Fine red, or an SEGS Very Fine with a cleaned notation, or an ACG EF.
similarly, a Gem Mint state Morgan with attractive, light toning might start out in an NGC holder, and if it can cross at the same grade, it goes to PCGS, eventually, because it (the market) "prefers" it to be there.
A coin that doesn't quite make it into a PCGS 65 holder might be in an NGC 65 holder.
A coin that can't quite make neither a 65 NGC or 65 PCGS holder might be an ICG or PCI 65
If ICG, PCI, and SEGS only give it a 64, it might work in an NTC 65 holder (and price)
see where I'm going with this?
works the other way too:
the exact same coin might look right and be valued the same whether it's in an PCI or NTC 67 holder, or an NGC 66, or PCGS 65 holder.
it works, as long as everyone knows the game, and newbies who don't dont get too ripped.
PCGS
NGC
ANACS
then the second tier "close but generally optimistic" companies in no particular order:
ICG, PCI, SEGS, etc. etc, ... NTC, ACG.
It occurs to me (not for the first time, and I wasn't the first, but nevertheless..)
that it's a pretty good system that will eventually ensure that lots of coins get into the "right" holder,
FOR THE COIN...
think about it,
say a coin has VF details and a moderate cleaning with hairlines, it can't go in a P or N holder, so it's either ANACS VF details net VG cleaned, or a PCI Fine red, or an SEGS Very Fine with a cleaned notation, or an ACG EF.
similarly, a Gem Mint state Morgan with attractive, light toning might start out in an NGC holder, and if it can cross at the same grade, it goes to PCGS, eventually, because it (the market) "prefers" it to be there.
A coin that doesn't quite make it into a PCGS 65 holder might be in an NGC 65 holder.
A coin that can't quite make neither a 65 NGC or 65 PCGS holder might be an ICG or PCI 65
If ICG, PCI, and SEGS only give it a 64, it might work in an NTC 65 holder (and price)
see where I'm going with this?
works the other way too:
the exact same coin might look right and be valued the same whether it's in an PCI or NTC 67 holder, or an NGC 66, or PCGS 65 holder.
it works, as long as everyone knows the game, and newbies who don't dont get too ripped.
Liberty: Parent of Science & Industry
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Comments
<< <i>it works, as long as everyone knows the game, and newbies who don't dont get too ripped. >>
BINGO!
Most people use those holders just because newbies won't know the difference... only when newbies won't get ripped will the steerage of the industry finally sink or abandon ship.
Jeremy
K S
It shouldn't be a game.
but suppose for a minute that third party grading is here to stay, and that perhaps the best way to learn how to Grade the Graders, as well as coins, is by having a range of companies like we do now, with their order of preference being one of the first things a new collector learns? it makes sense!
It also helps separate out the coins by quality, GENERALLY, yes I know there will always be specific exceptions and mistakes, but the system trends existing coins toward increased order, decreased entropy in the populations, if you will.
I also think it's valuable to know how the third party graders grade. I personally have a set of NGC MS 64 and 66 type coins in the early and mid 20th century silver series that I used to learn to grade coins with, by comparing my raw coins with them I could learn the nuances, the coins that were overall better than my slabbed 64 coins in terms of marks, strike, luster, surface preservation, and overall eye appeal, I knew were at least 65 NGC, and the ones that were just a little bit better than that would 65 at PCGS, and the ones that were just a little bit better than that would 66 at NGC, and the ones that were even better than my NGC 66 coins would probably 66 at PCGS!
our current system also has a place for, shall we say, less choice specimens, which newer collectors are more likely to afford, well, they have a cheaper third party alternative OPINION to rely on, and they eventually learn you get what you pay for and there ain't no santa claus in the coin business.
Liberty: Parent of Science & Industry
Brian.
Most people use those holders just because newbies won't know the difference... only when newbies won't get ripped will the steerage of the industry finally sink or abandon ship.
newbies always get ripped off if they don't learn what they're doing before jumping in.
some of them (us, heh, it happened to me) learned our lessons specifically BY getting taken once or twice.
you can't protect everyone, you can just advise 'em to wise up and learn before backing up truck.
what do you mean about the "steerage of the industry"? the big Houses? the Grading Co's ?
Liberty: Parent of Science & Industry
<< <i>It occurs to me … that it's a pretty good system that will eventually ensure that lots of coins get into the "right" holder >>
Does it, Baley?
Let me suggest an alternative scenario. First, unless it's a rare coin, there's little reason to trade up circulated coins and most of these services will get the grade right most of the time. If it's extremely rare, this VF coin could eventually get a MS rating. (Just being "theoretical" -- not that we know of any examples, right?
So, eventually, the market will come to realize that all rare US coins grade one point lower than marked on the label in the slab and discount accordingly. Contrariwise, all slabbed rare US coins will be "grade inflated" one point -- and the market will prevent revising them to their correct grades because of the concomittant reduction in value.
Come on over ... to The Dark Side!
as it is, what's interesting is that these decisions must be made on a case by case, coin by coin basis, and the decision of grade and value must be made every single time that coin is traded...
especially when there's a huuuuge premium for a single grade point, or magnificent color. you know the buyer is often thinking "maybe it'll upgrade" and the seller is thinking, "it's maxed out"
Liberty: Parent of Science & Industry
For example: Suppose I'm a newbie and I want an uncirculated standing liberty quarter. A dealer has one raw, but I sense he might be on to my newbieness, so I'll pass at the moment... but online, I can get one IN A HOLDER at the same price (wow!)! So I assume that since a professional said it is so, it must be so, and I still get ripped with the same coin.
Basically, people don't understand the guarantees and have more faith in the "pros," so they lose a lot more in the slab game than the normal "newbie was ripped $10 on his first coin from a dealer."
Jeremy
I think I am having some trouble following the logic of your post. While I tend to agree that PCGS is viewed by most dealers and collectors as the leader of the TPG companies (at least for US coins...), that does not necessarily mean that all coins graded MS 63 by PCGS are of a higher quality than ones graded MS 63 by NGC or ANACs. There are high end and low end MS coins that either barely make or miss a grade. I would much rather have a coin that I viewed that was high end for the grade instead of having an artifical concern that it was in the right TPG holder. What does that matter? Do we collect coins or the plastic that they are in? There are collectors that buy the coin and not the plastic and are not influenced by whether the coin was graded by PCGS or whoever. Why does the attractive Morgan graded MS 65 by NGC even need to be resubmitted to PCGS? Remember, grading has a subjective component.
If serious collectors are truly interested in helping "newbies", then perhaps we should use this forum to explain that grading is a skill that takes years to learn and master and not to rely soley on TPGs. Newbies need to go to coin shows, look at as many coins as possible and experience how the hobby functions. Knowledge, ambition and patience is required to really enjoy this hobby. There is no substitute... At some time or another, we have all bought coins that we shouldn't have and learned from our mistakes, that hopefully, were not too costly. Buying the coin and not the plastic is an important concept that somehow gets lost in all the hoopla.
BTW, I am not so sure that PCGS is the most conservative TPG with respect to all US coins (or World coins... but that can a subject of a different thread). Moreover, all of the TPG have graded coins that have obviously been enhanced. Unfortunately, this has been done by insisting that such coins still fall within the scope of being "market acceptable". This needs to change. While the TPGs provide a much needed service, what they do and how they do it needs to be re-evaluated to deal with the modern way coins are bought and sold.
If collectors choose not to take the initative to do this, who will and when?
Experience the World through Numismatics...it's more than you can imagine.
On top of that there are several layers of price guides so that it is nearly impossible for a collector to know precisely what his coin is worth unless he is in the market daily and has access to the plethora of price guides. Now we toss in other qualifiers such as cameo, DCAM, fsb, full torch, full hand, white, white*, toned, toned*, PQ, PQ+, old holder, first generation holder, etc. WOW!!!! The permutations on this must run into the tens of thousands. Even if you luck into knowing where your coins stands quality-wise with respect to others of the same grade, the odds are stacked against you zeroing in on the price as well.
Any serious potential newbie investor looking at this from the outside would have to think that we are all nuts. Can't argue with that.
roadrunner
This system is much more replicable, i.e. the grades given in this manner will more consistently be given again should the coin be re-submitted.
Another problem with our system is that it is too complicated. Too many graders, too many standards.
People who are new to coins if they are not careful, will initially get stabbed badly in the checkbook unless they are extremely savy and
bright. In order for them to stay in coins, they have to have a real tough chin. Many people leave the arena with very bitter feelings.
(Incidentally, if our leaders in the hobby wanted to help minimize this, they could.)
but since you prefaced it with "If they're careful spending their money" i guess i really can't technically disagree.
The problem is that that newbies don't realize what an enormous amount of time is required to be able to spend their money carefully.
Carefully spending their money requires them to study coins for well over a year before they are qualified in my mind to spend a good portion of their income on coins.
Just my opinion.
(And to express myself more clearly, .....in your opinioin, how many ACG coins are out there that were at one time or another purchased
at grey sheet bid by people who thought they were getting their money's worth to only end up getting a small fraction of a dollar's worth
of coins for their dollar? And...if newbies bought carefully, would ACG still be in business?)
adrian
coinkat, I know there are exceptions, in fact stated that every coin must be evaluated individually, but I will ask you this:
If i were to offer you a given coin, say, oh, I dunno, how about a 1927-D peace dollar, just for an example, and its going to be in a MS65 holder, everything else being equal , would you rather it be in a PCGS 65 holder, an NGC 65 holder, an ICG 65, a PCI 65, an NTC 65, or an ACG 65? and why?
I don't mean it's the same coin in the various holders, I mean you're getting the holder and you have to take the coin that comes inside it. I would take them in the order given, because of the implied quality.
my main premise was that the forces of the market, and our system of various grading companies, and the profit motive, will tend to drive coins into the "proper" holder to maximize their "value", such that the "crack out targets" will decrease over time, as each coin in turn get's 'maxed out'. There will always be anomolies, but it seems that the daily activities of experienced collectors and dealers will tend to sort all this out, on a continual basis, and unfortunately, much of the cost is borne by those new to the 'game'.
Liberty: Parent of Science & Industry
You did miss on several points, what about coins that are ATed, puttied, lasered, thumbed and doctored in ways that I don't even know that are in PCGS and NGC holders. Who gets hurt by these coins?
And you have to think about "what if" a grading company purposefully changed their grading standards on a rotational basis in order to garner more submissions. That creates a system of resubmissions on numerous coins. Realize, there are only so many coins to grade, moderns excluded, once that group has been slabbed by the TPGs, how are they ever going to get to regrade that coin. Changing their standards.
Just some more thought provoking commentary.
Michael
I am not sure where you came up with "our" ranking of companies, but thanks for speaking for the 9001 members.
I see problems with your question that make next to impossible to answer but I'll give it a shot. A 1927-d Peace Dollar graded MS65... which TPG company holder would I want the coin in? Again, I would need to see the coins to make that determination. Not all coins are equal, and even MS 65 Peace Dollars can vary based on the strike, lustre as well as the original appearance of the coin. I am well aware of the fact that a 1927-d Peace graded MS65 by PCGS will, the majority of the times, sell easier and faster than one slabbed by NGC or ANACs but still that doesn't make it a more attractive coin. I want the coin that I find to be the most attractive regardless of the holder.
It appears that the whole story with respect to the grading services provided by the TPG companies never really makes it into these threads. Lets just spend a moment about what they do: Which grading service was the first to attribute VAMs for Morgans, Overton #s for Bust Halfs and Breen numbers for just about all US coin series? It was not NGC or PCGS...
There was a post recently about a collector that cherry picked a 1946 WLH DDR in a PCGS holder. Now if that same coin were submitted to ANACs, it would have been noted on the label that it was if fact the DDR. In this instance, which service provided the better service? Obviously the one that takes the time to recognize die varieties and label such coins to prevent this problem. I am fortunate enough to own two of these coins that were graded and properly designated by ANACs over 7 years ago.
Even a better example exists with Morgan Dollar VAMs and how the TPG companies handled the grading and attribution. There are at least 6 varieties of the 1882-o/s if eds varieties are included. There are different VAMs for the 1900 o/cc with one being significantly scarcer than the others. This is big issue for VAM collectors and PCGS and even NGC were alittle late in their efforts to seek submissions from VAM collectors. I could use other examples to illustrate my point, but lets move on and wrap this up...
My point is this... I like PCGS, NGC and ANACs and they are fine companies with skilled graders. Some of these companies provide better or different services than the other. The conventional wisdom of dismissing a coin because it is not in a PCGS holder just doesn't make sense. LOOK AT THE COIN and consider BUYING IT if it is ATTRACTIVE FOR THE GRADE.
Experience the World through Numismatics...it's more than you can imagine.
Liberty: Parent of Science & Industry
I got back into collecting because of TPG. While the present system is far from perfect, I can more or less manage. For me, the slab is the starting point. I went to Long Beach on Thursday, ready to spend a substantial sum, and after looking at coins for five hours, I bought Breen's latest edition on early Large Cents. That's it.
While there is less latitude in grading errors now that TPG is with us, substantial sums remain at risk when dealing with rare coins in various states of Unc. People who buy slabs and not know how to grade the coins therein will get screwed, I don't care who they are or how much money is spent.
As some earlier posters mentioned, periodic changes to grading standards guarantees additional submissions. Look at the section of Scott Travers' book (which came out in 1996) that discusses the various grades between MS 58 and MS 70. No one reading this can take it seriously in 2003. Ditto re the PCGS Grading Book which I think was printed in 1999 as it relates to the BN, RB and RD color designations pertaining to Large and Half Cents. If you look, you'll see plenty of these coins in Unc. in BN holders that have more original RD in them than older slabbed RB copper.
While the spread between BN and RB copper is not much re Braided Hair Large Cents, this is not the case re earlier copper. Furthermore, a large portion of Large Cents I've seen in RD holders are NOT 95% RD.
A personal illustration was when I sent a raw Walker to be graded in 1998, it came back from PCGS in a 5 holder. A year later, after seeing a number of high grade Walkers, I noticed that mine looked better than most 5s I saw. So I sent it back for in holder for a regrade and it came back in a 6 holder. While I appreciate the fact that it upgraded, the coin really should have been slabbed as a 6 the first time I submitted it.
This inconsistency is the biggest problem, and I don't see anything being done to correct it.
Adrian's idea re averaging the 3 grades assigned by graders I think will help. Now, more than ever, if you are buying Unc. coins whose values can change well over 100% if the coin is a 3 or a 4, etc., you must be able to distinguish what is a "just made it" coin from a "typical for the grade" coin, from a PQ coin.
Many dealers on the bourse floor routinely try to charge PQ prices for average or "just made it" material. Just because a coin is slabbed does not mean that the potential buyer is relieved from doing due diligence when considering a purchase.
The other thing an intelligent buyer must do is avoid the hype. No one out there who knows Barber or late Seated Date Proof coinage (1879 - 1891) will pay a premium for Cameo designated type coins from these dates, because they are so common. Now a Cameo designation on a No Motto Seated Half, that's another story.
One thing I strongly recommend is that if you are making a purchase which to you is material, have someone whose opinion you respect look at the coin.
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"Sou Mangueira......."