Is market grading common? Do you think it is a good thing?

dan1ecu

Are there many "technical" MS64's that are graded as MS65's because of especially nice luster or toning? If so, do you think that it would be better for the grading services to grade a coin strictly on its technical merits, and then leave it to the buyer and seller to negotiate a premium for unusually nice specimens?

Perhaps PCGS should start designating certain coins with a "*" or "PQ" designation?

What do you think?

Dan

lordmarcovan

Is it common? Yes.

Do I think it is a good thing? No, not really. But it's a reality. I guess it's not inherently a bad or a good thing.



<< <i>do you think that it would be better for the grading services to grade a coin strictly on its technical merits, and then leave it to the buyer and seller to negotiate a premium for unusually nice specimens? >>



I think that is a good idea in theory, but I'm not so sure how or if it would work in real life.



<< <i>Perhaps PCGS should start designating certain coins with a "*" or "PQ" designation? >>



I don't think they should, but if they do, I'll still judge for myself what PQ is. What someone thinks about a lot of the variables like color and toning and eye appeal can vary. Beauty (and ugliness) are definitely in the eye of the beholder.

Dog97

When I send a coin in to a grading service that's what I want done; I want it graded.
If I wanted a pricing service I'd subscribe to Coin Prices, CDN or buy a RedBook.
I imagine if I were a dealer depending on the numerical grade on the slab to seperate a collector from his hard earned money I'd like Market Grading.
Yes it's common and I don't like it.

stman

<< <i>If so, do you think that it would be better for the grading services to grade a coin strictly on its technical merits, and then leave it to the buyer and seller to negotiate a premium for unusually nice specimens? >>



Yes Yes Yes!!! Problem is these days, the grading service gives the bump higher in grade for toning or whatever, seller takes this bump in grade figures the price for that grade than gives another bump in price for toning or color. So us poor collectors have to end up paying the price for 2 bumps. If I'm getting my point across.

Than they look at you when you're at a coin show with that grin and say or think to themselves...." Well how bad do you want it." That's ok though things will be changing and I see it coming already. Probably more than you wanted to hear isn't it?

dan1ecu

Yes, STman -- We sometimes pay for two bumps! Maybe some coins are worth two bumps up in price, but if the grading service thinks that an MS64 coin is worth MS65 money, and then the seller charges MS66 money because of the toning, then someone's making out like a bandit!

I'm for technical grading.

prooflike

As far as PCGS, et.al. performing market grading, I think that is a very bad thing. I think the market (collectors/dealers) should do the market grading and let the paid-for grading services do authentication and technical grading.

Singapore

Is it common? Yes.
Is it a good thing? Of course not. Its about the worst dam thing thats happened to numismatics since 'whizzing' was invented (I mean as in whizzing a coin, not the other useage).

Market grading is responsible for things like this:



Which while apparently a VF-25, is slabbed as an MS-62.

fcloud

Technical grading has its bad points, too. A really ugly coins with a full strike would grade the same as a blazing toned or white coin because of strike. If we really want a technical system maybe we could go by the weight of the coin to determine exactly how much it has circulated.

BigD5

You know, NGC graded technically for a LONG time. They are still paying the price (in sheet values) for that mistake. It didn't work. I understand the point of submitting a coin and looking for a technical number to be assigned, and then letting the market make the price. It just didn't work.
For the coins with positive eye appeal, sure it will work out. They will command a premium. For the "butt ugly" gems...... How about those really darkly toned "gems" that NGC slabbed from years gone by? Slabbed with a technical ms/64 or 5, and not worth 3 money. For the grading service that is a no-no. Their overall sheet numbers will be lower than a market grading slabbing company, and the perception will be that those slabbed coins are worth LESS.
Overall, that's what is going on today with NGC. That's why some Bluesheet numbers are so off. They have some real dogs still lying in their holders. Anything recently graded is going to be right on. It's some of those older slabs that you have to sift through. Some of those can be undergraded (the standards were different then), but some others can be so unattractive, eye appeal wise, regardless of technical merit, that they are virtually unsalable in those old holders.
We can debate this stuff forever.

Coulport

Slabs are market grading.

Good thing? That's the way it is.

joejeweler

Everyboby so far has talked about the cases where market grading has "bumped" the coin UP in grade level for exceptional color or luster.......but that is not always the case!

A few months ago i purchased the 1795 AU58 NGC Flowing Hair half dime from Anaconda. Neither Adrian, myself, nor any of my local long time coin dealers can see any rub or breaks in the luster on this coin.

"Technically" it's at least MS63 to MS64, and would probably grade at least MS65 to MS66 if strike were not taken into account! Not a mark on this coin lest you look with a 10X triplet, but the feathers on the eagles are missing do to striking weakness......typical on most EVERY Flowing hair half dime, half, and dollar!

Anyway......i paid over AU58 money for this one......but the "market" factored more into the price rather than the printed grade! It's got attractive original toning, full cartwheel luster, clean as a whistle, and should be in a MS holder.......but that bane of collectors hit this coin.....MARKET GRADING!

Let the market determine the price of a coin.......don't grade it to fit into a pricing slot that might have changed when the coin gets to market! In the long term it makes no sense, and hurts the hobby AND market......

nwcs

Grading on technical merits is also flawed, unless you develop criteria to account for everything. For example, a coin on rusted and cracked dies but with no marks.. Would you call it MS70? Or how about a coin with a very very weak strike where not all the detail struck up correctly. But it was preserved right off the press. Would you give it MS70?

Market grading, at its core, is essentially an appraisal of the coin's value. The reason why the market went to market grading was that technical grading was lacking and insufficient. If it wasn't, the market would never have developed market grading.

Neither system perfectly describes a coin. Neither works perfectly. But market grading accounts for more than technical grading. And it represents what the market is looking for in a coin, not necessarily an individual collector or coin scientist.

Dog97

BigD5 I know your a dealer and I respect you for that but you know sheet prices are an outdated system from the 80s that allowed dealers to trade average common coins amongst themselves, not for collectors to use when pricing nice collector coins.
And I'll admit there are plenty of coins Slabbed with a technical ms/64 or 5, and not worth 3 money. But what they are worth does not change they grade (condition) they are in.

PCGS originally started out as strong tech graders and look at the prices their old holders bring. They went opposite of NGC. Early slabs are generally strongly priced even for the butt ugly & overgraded coins.
NGC is generally known for market grading and look what it has got them recently; all the nice toners go to PCGS and when somebody gets a questionable AT looking coin that NGs @ PCGS what does everybody say? Send it to NGC!

Everybody needs to remember that luster & tone are already part of the technical grade under the eye appeal factor which goes along with the strike and distracting marks to determine the overall grade.

michael

it all depends show me a specific coin and then i can tell you either way

again it all depends for some yes for some no depending on the overall look of the coin


sincerely michael

BigD5

I agree with what you are saying Dog, and I even like the idea of grading on a technical basis, strictly.
The problem with that is if a legitimate grading service does that, their sheet numbers will suffer, as some really "butt ugly" coins will slab/grade too high. That's why I referenced the Bluesheet. Some numbers between NGC and PCGS are very close. Others are miles apart. NGC slabbed loads of higher mint state coins at one time, that were plain ugly, and not with the expected eye appeal for the given grades. Sure, technically they may have made the bill, but if 65's of a certain series were trading at say $1k, this technically sound, butt ugly coin would trade at say $700.
That may sound ok to you and I, but when that price realized starts to bring down the overall sheet numbers (I agree with your sheet comments by the way, but it's all we have!) for that particular company's slabbed/graded coins, then there is a problem. The PERCEPTION in the market is that coins graded by this specific grading company are WORTH less money than another grading company. If the perceived value of one grading company's slabbed coins is less than another, changes have to be made, to keep them on equal ground (perception/value wise). It's a vicious circle, or tug of war, with each side screaming at each other and that's why we've seen so many fluctuations in perceived grading standards. It's never going to end either!
Someone used to say that it's all madness........I believe they were correct

Askari

Yes. No.

Dog97

BigD5 I understand what you are saying.
My mind is sketchy on this because it's been a while but the gist is there; Several years ago Bob Merril for Heritage recounted in a coin rag article about how he had offered a client some kind of Commem; the client passed but called Bob later excited because he had bought the same series & grade somewhere else for "Bid" and thought he had gotten a really good deal at several thousand dollars cheaper. Bob said it was one of the darkest, lacklusterous, ugliest examples he had ever seen and that the collector had got ripped off even @ bid price for that grade.

I remember back in the goodle days when market grading meant calling a hand struck Bust Half UNC when it looked AU. Collectors paid UNC money because they knew it was weakly struck thus lacking luster and incomplete details that made it look AU. NGC was guilty of UNDERGRADING many of these coins which crackout artist later cracked & made a killing from. It's wasn't because NGC was too technical; it was because they didn't know the true characteristics of a MS Bust Half hand struck with an open collar. It also meant not being as tough on large gold coins because gold is soft and easily scuffed from contact. I'm all for that. And lastly key dates & mints that were historically badly struck as compared with well struck common dates.

Mostly the double bumping dealers like stman mentioned makes me against market grading bumping for color because like the buyers of the butt ugly coins BigD5 described, these buyers are getting shanked at the other end of the spectrum.
I mean you never see a dealer send a 63 Buff to PCGS who bumps it to 64 because it's an S mint then the dealer tells the buyer hey that's an S mint so you gotta pay me 65 money if you want to own it.

The only thing I can add is that a collector should read the introduction to the ANA Grading Standard and pay special attention to the paragraphs titled Note concerning market values, False Assumptions, and especially the one The solution to this is to learn to grade coins and think for yourself

barberlover

Someone asked me this question in a pm and i responded in a thread that he may not have seen.

If a coin is in about good to au 58, it should be a.n.a. grading standards only.

As i said in this other thread, i don't buy circ. barbers but if i did, i would only buy them raw and only if the seller and i agreed on the grade. If it's a better date worth good money and the grading company is to liberal, that could be a big hit!!!

The last coin i came close to buying was a raw 16 d dime i would grade vf 20, i asked the seller if he would sell it to me and gaurentee the authenticity and he said no, so i passed. Les

Iwog

Just a clarification, luster has little to do with a grade assigned by PCGS or NGC. The majority of top graded coins in any series are darkly toned with most of the luster destroyed. (not applicable to moderns or well preserved issues like Morgans) Incredible luster will AT MOST gain half a grade or bump a borderline coin into the next grade. Surface damaged and lusterless coins like this quarter continue to be graded with premium grades although ANA standards would prohibit any more than an MS63.

Toning on the other hand is not only very good at hiding flaws, it also seems to inspire random hits at higher grades. Most of the campfire stories you hear about a resubmitted coin getting MS63-MS67 grades on various attempts are heavily toned coins which are difficult to inspect in the few minutes allowed each grader.

Market grading doesn't exist anyway since "The Market" is utterly dependent upon slabs in the first place. Five raw 1921 Peace dollars marked MS65, and one PCGS MS65 1921 Peace dollar sit in a dealers case. Which one of these coins will "The Market" pay the most money for? The one in the PCGS slab of course because "The Market" likes the plastic better than the luster, toning, strike, or personality.