Should grading services stop putting grades on their slabs?

clw54

A tremendous amount of time, money, and energy is spent resubmitting coins to get a higher grade, or comparing what grade a given coin will get from various grading services. Another thread mentioned a Seated Dollar slabbed as AU55 that in reality was MS61 or 62. The dealer wanted MS money for it, but of course a buyer would likely want it for AU money. Regardless, it's the same coin. I understand there are two main reasons for this: 1) Buy at one grade, resubmit for a higher grade, and sell it for a profit because the number is higher. 2) Get a higher ranking in a registry set. Again, it's the same coin.

Theoretically, we're supposed to buy the coin, not the slab, but it really doesn't work that way. It's the coin, the grading service of the slab, and the number on the slab. So would it be better if the grading services just provided preservation, verified authenticity, and that there are no problems? Sometimes it seems so.

crito

Theoretically, we're supposed to buy the coin, not the slab, but it really doesn't work that way. It's the coin, the grading service of the slab, and the number on the slab.

What's theoretical about it? I buy coins, not plastic. The majority of buyers, who comprise the “market”, want plastic with big numbers. So, I sell them plastic, not coins. Being a member of the "market" yourself, all you have to do is vote properly with your dollars. The reality is, some of us REALLY don't care what plastic a coin is in... until it comes time to sell anyway

BTW, I've had an AU55 go MS61 upon resubmission, and have another that probably will also, if I ever decide to sell it (doubtful). Coin has original "skin", no hairlines, few bag marks, is fully struck, and leg is surprisingly clean (equivalent to cheek on a Morgan $); it's just not a "brilliant" looking coin. Each individual grader has their own biases too, I suppose.

mdwoods

The reality is, some of us REALLY don't care what plastic a coin is in... until it comes time to sell anyway

How true. Then most prefer PCGS. Still the best, and most consistent company. However I haven't, as yet, received my last submission. I could very well be singing the blues next week.

RYK

CLW,

That is a terrific point. Maybe there could be discounted level of service in which all you get is a slab guarantee of authenticity and to be problem-free. And then we can go back to the old system in which the buyer and seller can haggle over grade, price, etc.

CLASSICS

and just what would everyone do if the grading companies deceided to close up shop? dont ever say never., what would the coins be worth then.

CYBERKEN

In the long run, the grade opinion will NOT affect price. The market goes up and down, so the "hot" 65 coin that sold for $900 in a good market can STILL only be marketable for $200 or less five years later-in a bad market, and despite the slab.

Similarly the market can still pay top dollar for 63 and 64 when there's lots of money flowing in, but only pay top $$ for 66-or-better under the opposite market environment.

The only real difference is the way it's PHRASED. In 1983, a dealer simply looked at a 65 you bought, and said, "Sorry, it's 63. Grading standards have tightened up the last few years.".

The dealer in 1983 was, of course, technically correct. But the profession got a very bad public image, because only the most experienced collectors could give them the benefit of the doubt. (There was, as there always is, considerable fraud. But that's a different subject).

So slabbing simply moves the natural ebb and flow back to pure monetary terms (as well as lowering the initiation dues for new collectors-a good thing for both the market and the hobby). And that is why it was COIN DEALERS who created services like PCGS. They were, and continue to be, acting in their own self-interest. That, IMO, should be reassuring for most of us...

CYBERKEN

Just my take, but I can't help but think of people who say "I don't care at all about the plastic." as similar to the small group who were so good at cranking up the ignition on their Model T's that they laughed at the "new fangled" cars with automatic ignition systems. You grant them their personal feelings-but with a large grain of salt.

I buy the COMBINATION of a coin I like, and the plastic that reinforces my personal opinion of the grade. I bet the people who think like me are the vast majority-and growing...

CYBERKEN

Presumably someday every coin of any real interest will be in a slab, and the grading companies WILL fold, or the service will become a small subsidiary of a larger pursuit. I doubt PCGS or anyone else could make a living on re-submissions.

While that day may be a couple decades down the road, the slabs being created today will still be there. And if a compelling reason to shed slabs takes hold, some new service will, eventually, come along.

One caveat: The services will need to create new reasons to get new slabs on old slabbed coins. Thus, as you can see, trends like the currently hot DMCAM rating for proofs. It remains to be seen whether the services can create enough new qualifiers to keep previously-slabbed coins coming back around.

The "Fully-Struck-Ear" MS-66-or-better Reagan 2 1/2 dollar coin of 2009 and later, anyone?...