Another way to look at rational grading vs. consensus grading:

ANACONDA

Imagine if ice skating competitions were "judged" by four people, three who rendered an opinion that doesn't have to count and one whose opinion over rules all the others.

All four talk amongst themselves, in secret and you don't know who they are in relationship to the performers.

How do you think the audience would generally percieve the scores?

adrian

MrEureka

Let's pretend that there are no slabs and only four coin dealers. You have a raw coin. You offer it to each of the four dealers and get four offers. They all grade the coins differently, so the offers are $100, $200, $300 and $400. Is the coin only worth the average of the four offers ($250)? Is it worth $300 (or a bit more) because that's what it would bring at auction? Is it worth $400 because that's what you can get? Or (my choice) is it worth an indeterminate amount between $300 to $400. The point? I'm very suspicious of allowing a consensus to set a value, be it in dollars or points on a grading scale. IMHO, the grade on the slab should indicate the highest grade that the coin could be expected to TRADE at between knowledgable parties.

Bear

Andy, I am in agreement. The grade of a coin

should have nothing to do with the perceived value of the coin.

There are choice MS-64 coins that you would pay close to MS-65 money

then for a really marginal MS-65 coins that are ugly. These are really

subjective values, much more so then the subjectivity in grading.

MrEureka

But to be fair to Adrian, let's answer his question. I would take the score with a grain of salt.

Julian

The audience only needs the score if there is a physical award given. Absent that, the audience can appreciate the beauty without a score.

nwcs

As an audience, I would consider the final score arbitrary. I like your other idea of an average. Have 4 people look at it, grade it on the 11 point scale, and average the results. So if you have 3 who grade it 66 and one who grades it 65, it's 65.75. If three grade 62 and 1 64, it's 62.5. That way an individual doesn't grade in a decimal but the final grade more accurate reveals the sum of the grader's experience and the coin's attributes.

au58

Don't tell me what the grade is. Just tell me the price. If I like the coin at your price, I'll buy it. If not, I'll keep looking for another one that represents better value.

Lakesammman

Whenever I watch the skating in the Olympics, I ignore the scores and can usually pick the winner. I guess it comes from living in the "iron curtain" era when I learned you couldn't trust the scores anyway, so why worry about them.

Same thing with coins - if you follow auction prices realized vs the slab score/grade, the market knows who the winners are.

tradedollarnut

In case you missed it in the other thread, here's a true example of why it's better:



A few years ago, I bought a fairly low end PCGS MS64 73CC trade dollar for $54,000. The only MS64 at the time. I grade it 63.8 - I would not want to crack it out of the holder and resubmit it! [Note that all 73-CC's come ugly so the 64 IS a full grade higher than the 63's I've seen]. Then, about a year later, the Vermeule coin came up for auction and Legend bought it raw for about $75,000. It is a full point finer than the PCGS coin - I grade it 64.8 - but the first time thru PCGS it was graded the same as the other at 64. It was then submitted to NGC where it received the 65 grade. The market values a PCGS 64 at about $50k and a PCGS 65 at about $90k. A PQ PCGS 64 would be about $60k, an NGC 65 at about $70k, and a real nice NGC 65 at about $80k. The market is using the grading differences between PCGS and NGC to approximate a smooth pricing curve.

So, at LB the coin was submitted for crossover along with the 63.8 for comparison. David informed me that two graders assigned the 65 grade and three assigned the 64 grade - therefore it didn't cross. PCGS still grades the coin 64.0 because they grade to the minimum full integer. Yet the coin is significantly finer than a coin in the same PCGS grade. IF the graders had been allowed to assign a half grade and the grades averaged, I think the coin would have gotten 3 64.5's and 2 65.0's which averages out to 64.7 - almost exactly correct for what I grade the coin. [BTW - at FUN, David himself acknowledged that the Vermeule coin is "nicer" than the other one]. The other low end 64 would probably receive 2 64.0's and a 63.5 for an average of 63.8 - exactly correct for what I grade the coin.

The advantages are obvious. Under the current system, two coins valued $30,000 apart in the marketplace are lumped together in the same grade by PCGS. That is because they assign a MINIMUM integer grade! Under the decimal system, the coins approximate their true quality and the marketplace would respond accordingly.

DeepCoin

Finally we have an analogy that is really good. Thanks Adrian. The whole skating issue is exactly the situation that PCGS is in. These are supposed to be world class judges, yet they differ significantly on the same performance. The same is most likely true for coin graders, as they all have unconscious biases.

That is why "consistency" is a bit of a myth. Everyone wants PCGS to grade everything exactly "right" the first time when their is NO right grade that will please everyone and there never will be.

This is an art form, not an exact science.

MrEureka

Hypothetical example:

The coin is a gem proof Morgan dollar with dark, original toning and a few very small rim nicks from being mounted on a wall.

What should be the final average grade of the following opinions?

Grader #1 65 (Yes, he saw the nicks, but he would have graded it 67 otherwise. He liked the toning.)

Grader #2 64 (Yes, he saw the nicks, but he would have graded it 65 otherwise. He wasn't crazy about the toning.)

Grader #3 62 (Yes, he saw the nicks. They bothered him, and he also hated the toning.)

Grader #4 No grade (he thought the coin was too damaged to grade, especially given that the nicks would be hidden by the holder.)

redhott

"How do you think the audience would generally percieve the scores?"

The same way the UNknowledgeable public feels about coins - WE WAS ROBBED!

zep

Eureka,
If gem proof means full luster and mark-free surfaces, I'd grade it PF65. Toning shouldn't alter the grade unless it's artificial.

dorkkarl

then should a-t always bump a grade down?

K S

dorkkarl

friends, the problem w/ all these arguments is that you continue to make the error by thinking that "value follows the grade". that is NOT the way it's supposed to work. the grade of a coin is supposed to reflect it's market value.

an "ice skating" competition is an invalid analogy because the "performance" is a singular event, therefore after the initial judging, subsequent "grades" aren't possible. there is no time-sensitive subjectivity about a single performance. such is not the case w/ grading of coins. many collectors will follow us, & barring a sudden change in a particular coin's appearance, how future generations value a coin is not predictable, but is critical because it is what will determine the coin's instantaneous value, & therefore it's grade.

K S

Julian

Value follows appreciation of the purchaser and the seller. If they can agree, then that is the value.

Grade is just an attempt to convey the coin's appearance to someone who cannot physically examine it.

lincolnSence

TDN - good example. I'am sure with the fine specimens you have the actual grade matters little if at all. Not many people drop 90K or so on a whim, so experts are used to define a fair price.

Thinking back on Hall's comment re dealers inability to grade consistently, putting a loaded gun in their hands with a point scale that goes to the tenth is not only foolish, its stupid. Collectors would be jerked around like ............ I can't even imagine. The constant arguements over where the price jump alone occurs would destroy coin collecting.

I have to laugh at all the garbage stirred up by the few trouble makers here on these points. Anaconda, sorry old boy, give it a rest!

The posting of the MS69 lincoln and the posts coinguy1 provided a while back is what its all about.

Remember coins?????? Time to get back to them.

jom

According to real estate appraisal full market value is defined as: The most PROBABLE selling priced with these restrictions:

1) Knowledgable buyer and seller acting prudently
2) Open and exposed market
3) Not effected by undo stimulus or duress.

This, I'm sure, can apply to the full market value of a coin.

Grading, on the other hand, is supposed to be a DESCRIPTION of a coin for someone who is unable to actually see it.

Now, does the present coin grading situation in the coin market reflect any of this? Hardly. IMO, "grading" as it is viewing in today's coin market is exceedingly OVERRATED as a tool to determine full market value.

jom

MrEureka

friends, the problem w/ all these arguments is that you continue to make the error by thinking that "value follows the grade". that is NOT the way it's supposed to work. the grade of a coin is supposed to reflect it's market value.

I like this on the philosophical level, but it doesn't work for slab collectors. The slab lasts beyond the moment.

kieferscoins

If the slab grade reflects the market value, then the slab grade should hypothetically change from week to week. Right?

Cameron Kiefer

dorkkarl

<< <i>If the slab grade reflects the market value, then the slab grade should hypothetically change from week to week. Right? >>

kiefers coins: THANK YOU. that is exactly right. a "Grade" IS NOT an instantaneously "consistent" or "accurate", or even "measurable" aspect of any coin.

K S

Gilbert

Value follows appreciation of the purchaser and the seller. If they can agree, then that is the value.

Grade is just an attempt to convey the coin's appearance to someone who cannot physically examine it.

Thank you Julian. I was beginning to think I was the only one who believes this way, even though this is the "independent services" claim to fame.



friends, the problem w/ all these arguments is that you continue to make the error by thinking that "value follows the grade". that is NOT the way it's supposed to work. the grade of a coin is supposed to reflect it's market value.

This philosophy and the attempts to actually employ grading for that purpose, is the major reason why there is so much dissatisfaction with grading.

The purpose is being convaluted by many on all sides. The Sheldon SCALE was borrowed, not his philosophy.