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Poll: Grading and Dealer Test: Could we pull it off?

RYKRYK Posts: 35,801 ✭✭✭✭✭
In the wake of the much publicized, but poorly conceived, Coin World grading survey done earlier this year, and in light of the continued questions and concerns over dealers like Coast-to-Coast and other CW advertisers, could this community perform a test of both issues?

Hypotheses: NGC and PCGS are top graders and virtually equivalent in consistency
and CTC and other dealers that advertise in Coin World sell mostly garbabe, problem, overgraded coins.

Design:
1. Collect $50 from each board member sponsor.
2. Collect/purchase four groups of raw coins and one group of slabbed coins. These coins need not be expensive, though it would be useful to include a few gold coins (generic $2.50's and $5's would do nicely). The coins from the advertisers should have verification of purchase from that advertiser (a receipt) and never having been previously sent to a grading service. There would be six coins in each group. Example: one Indian cent, one buffalo nickel, one Barber quarter, one Franklin half, one Morgan, and one Liberty $2.50 or $5.
3. The coins would then be submitted to PCI, SEGS, ICG, ANACS, NGC, and PCGS via the least expensive/economy route. The mint state coins that get graded would then be resent to ANACS, NGC, and PCGS to test the consistency of the established majors.
4. Coins will all be in the AU to "Gem BU" range, where much of the contraversy exists.
5. At the end of the study, the coins that were purchased for the study could be sold on ebay

My estimate is that grading/mailing costs for the study would be around $2500. If we have to purchase coins from the dealers that would add to the cost of the study, but some of this money will be returned on the ebay sale. I would guess that it would require 60 board members to pony up $50. I am not an experienced submitter, and I may have over/underestimated the cost.

This study could be tailored to ask more specifically about a certain denomination or grade, but my design above, though far from ideal, asseses copper, nickel, silver, and gold. A clad quarter could be added, for example to be more thorough. Gold could be left out to reduce the expense of acquiring coins and insuring the submissions.

More important than money or coins, the study would require one or a few volunteers who have experience in cracking out coins and submitting coins to do the legwork. Ideally, someone who is retired, single, a YN (this could be an awesome YN essay) or anyone else for whom the legwork is not a hardship. The volunteers could be overseen by a smaller board to help design the study, deal with unforeseen problems that arise during the study, etc.

Any questions/comments?
Any interest?

Comments

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    darktonedarktone Posts: 8,437 ✭✭✭
    Robert, I like the idea. I think MS coins at the grade point where the price takes a huge jump would be the best target area- afterall this is the area where we pay the biggest premium for PCGS/NGC coins. I would donate some cash and let you use some coins for the study. mike image
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    braddickbraddick Posts: 25,238 ✭✭✭✭✭
    RYK: Excellent. I would only add it would be terrific if one or two coins in your survey included coins in the VF20 to VF35 range. Some early Series coins show a hugh price jump between the VF and EF grade. One Service's VF could be another's XF40. That would also be interesting information to have on hand.
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    darktonedarktone Posts: 8,437 ✭✭✭
    Maybe a less expensive study would be to submit the same group of coins to the same grading service seveal times to see the range of grades the same coin will get. mike image
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    newsmannewsman Posts: 2,658 ✭✭✭
    Excellent idea! I would be happy to participate in the preparation and execution of the study, as I have some experience with those matters. I also would be willing to offer some coins I bought from C to C and the results from their submission to PCGS to the effort. imageimage

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    The point eludes me. We already know PCGS is the best service followed by NGC. We also know that buying
    coins out of coin world is often asking for trouble. We also already know there are "mistakes" in slabs
    from all the services. We should also know that our local dealer probably has no clue. Bottom line, it involves
    work..........you have to learn what you are doing the hard way or look for that elusive dealer who will
    try and treat you right. That is tough because not all honest dealers have any idea what they are doing.
    At least you are trying to get things right and I really like that. Best of luck.
    Rusty
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    We know that only three services are dependable for grading (PCGS, NGC and ANACS--which will net grade problem coins) and that dealers frequently over grade sliders as MS. I'm not sure that the time, effort and cost of the study would justify its results--which I would predict to be inconclusive. We know that the service results will differ and that some dealer coins will be graded correctly and that some will be sliders. There is also the problem of copper vs. silver vs. gold. As long as CW dealers offer return policies and collectors have some responsibility for knowing how to grade I'm not sure why we would want to single CW dealers out--as opposed to dealers who do the same thing but don't advertise in CW.

    Added: I didn't vote as you didn't have a response that fit--mine would be "I do care but I don't think such a study would be of value"
    Curmudgeon in waiting!
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    RYKRYK Posts: 35,801 ✭✭✭✭✭
    Billiard,

    There are subtle points that might be made. A study this small is unlikely to have the statistical power to prove anything, but it might make some interesting points.

    What if, for example, SEGS has gotten its act together and is a more rigorous and consistent grading service in this trial. How else we would learn this? None of us would send our coins to SEGS, would we? What if the same coin was sent to PCGS and NGC 5 times each, and was graded 63-bodybag-64-65-62 at PCGS but 63-63-63-64-63 at NGC. It would make me want to do more research before sending a coin to PCGS. We all only know from our own anecdotal observations and hearsay, but no good study has ever put the grading services to the test.

    Billboat,

    How do we know that only the Big 3 (PCGS, NGC, and ANACS) are worthy of grading our coins. Again, if SEGS suddenly became more consistent and more accurate, would you know? (Would you care?) We all believe SEGS/PCI and others to be inferior because we routinely see problem coins in their holders. And once there, these problem coins are at the end of the line. All of the better coins get cracked out of SEGS holders and end up in PCGS/NGC holders. So we really do not know if SEGS is currently a good or bad grader.

    As far as the bad dealers are concerned, if a neutral party could demonstrate in an unbiased controlled study that some of the CW advertisers were "bad dealers", perhaps we could either force them out or force them to improve, for the betterment of the hobby. Seems like it would be worth my $50 to that end.
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    clw54clw54 Posts: 3,815 ✭✭✭
    Why not submit to ANACS? They'll identify the problems such as whizzing on their slabs. If you go with PCGS or NGC, there will be a lot of bodybags.
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    flaminioflaminio Posts: 5,664 ✭✭✭
    I already did mine. Click here to see the results. Note that the final step was an NCS wash, then into the NGC holder.
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    flaminioflaminio Posts: 5,664 ✭✭✭


    << <i>The point eludes me. We already know PCGS is the best service followed by NGC. >>



    Put down the Kool-Aid, sir. You've had your limit.
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    newsmannewsman Posts: 2,658 ✭✭✭


    << <i>As far as the bad dealers are concerned, if a neutral party could demonstrate in an unbiased controlled study that some of the CW advertisers were "bad dealers", perhaps we could either force them out or force them to improve, for the betterment of the hobby. Seems like it would be worth my $50 to that end. >>



    One reason why an unbiased controlled study would be valuable is to set a standard that would eliminate the "grading is a matter of opinion" excuse and give collectors some ammunition against bad dealers that would hold up in court. If we can show that there is such a thing as consistently reliable expert grading, then dealers who consistently overgrade or knowingly sell problem coins as "Gem BU" would be vulnerable to action under consumer protection laws -- they would either have to clean up their act or get out of the business. image
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    RYK--your point is well taken--I should have said that currently PCGS, NGC and ANACS are considered dependable by a lot of collectors. My favorite is ANACS--but if PCI, SEGS, NTC, etc improved then certainly I would care. My point is that currently there is a lack of consistency across all services and also within the top three--so what would the proposed study add to this? Then we come to the issue of dealers who overgrade (and some who undergrade--case in point, a 1903S Barber Half that I bought from a local dealer for EF money and NGC graded at MS63--but I don't see anyone complaining about the undergrading)--why just focus on large CW dealers/advertisers (with whom I have NO connection)? I just don't see any surprises in the proposed study--services grade inconsistently and some dealers overgrade. The individual collector still makes his or her own decisions.
    Curmudgeon in waiting!
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    RYKRYK Posts: 35,801 ✭✭✭✭✭
    My point is that currently there is a lack of consistency across all services and also within the top three--so what would the proposed study add to this?

    Anecdotally, this is what we know. Flaminio, as noted above, has sent a single coin to 5 services for grading. I would bet that if he sent the coin around again, the results would be different. It would be useful to know who really is the most consistent grader for a variety of series. This test could be done independently of the dealer assessment.

    Frankly, I do not purchase coins from CTC or its peers, nor do I ever plan to do so. From what I read here, they are a blight on our hobby and deserve to be exposed and stopped
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    newsmannewsman Posts: 2,658 ✭✭✭


    << <i>why just focus on large CW dealers/advertisers (with whom I have NO connection)? I just don't see any surprises in the proposed study--services grade inconsistently and some dealers overgrade. The individual collector still makes his or her own decisions. >>



    Why? Because what they are doing is consumer fraud. It's no different from a used car dealer who turns back an odometer or conceals wreck repairs.
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    FatManFatMan Posts: 8,977 ✭
    RYK

    An excellent first step in de-mystifying the grading game and bringing some consistency to the hobby. I have always believed that the only way to "fix" the hobby would be through a collector based organization that performed unbiased studies evaluating dealer, auction house, and third party grading company performance. This could easily be performed by creating timely, accurate, measurements on specific performance standards. This organization would need to be similar in structure to Consumer Union (Consumer Reports) where no dealer or TPG could be a member. The problem with our current Hobby organizations is that the Dealers have too much influence. If this type of organization was created and it published a monthly member newsletter of performance results, this hobby would change overnight.
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    Fair enough question. The easy way to be sure is very simple. Let the market tell you. When dealers starting sending
    their coins to SEGS for cross, then you will know the market wants that service. Right now, PCGS coins bring the
    most money for a reason. The reason is really not important, it is the math. For me it is all a numbers game. I don't
    care if a coin is the best or worst for the grade, it still brings the same as all others that are average for the grade.
    This grading thing can be simple if you let the numbers guide you. Go with the service that the real experts not
    only use, but pay the most money for. A proof 70 cent for $31 or $31,000 is a big difference. Might be a reason?
    Rusty
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    I have reservations about your sample size, & the degree of confidence. By choosing to including many different types of coins your degree of confidence goes way down. To be more effective you might want to choose just on or two types of coins (say Morgans & IHCs).

    Whatever you choose though I would be interested, if I could host the pictures on my site.
    Mike Bottos
    coinpage.com
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    OK RYK--I'm convinced--let me know where to send my $50 for the survey--test, whatever. I will agree that many of the big advertisers in CW could rip folks off--I'm the last one to say that they should do this without oversight--however I have bought from CTC and not been unhappy--I've had coins grade at least as high as they have advertised and also less than advertised, but then again, no less than I paid for--if you think you're getting a Morgan MS 1888-S for $40 you need to rethink your buying strategy. I'm happy with a high grade AU for that price--I still think that each of us needs to be responsible for our purchases and I have serious reservations about the results of the survey--but I'll certainly participate!! I'll certainly be part of outing the cheaters!!
    Curmudgeon in waiting!
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    RYKRYK Posts: 35,801 ✭✭✭✭✭
    Whoa! Billboat, I am not sure that I am ready for money. I will post back with ideas on how we can get started, but I am not sure that enough people have yet expressed interest.

    Robert
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    RYK--Let's go Dude!!--Just tell me when and where to send the $$--Also I can crack a slab with no problems--I use tin snips and the coin just falls out--plus I'm retired and have plenty of time!! Lets do it!!
    Curmudgeon in waiting!
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    BarryBarry Posts: 10,100 ✭✭✭


    << <i>Frankly, I do not purchase coins from CTC or its peers, nor do I ever plan to do so. From what I read here, they are a blight on our hobby and deserve to be exposed and stopped >>



    The key word here is exposed. Let's assume you do your study and the results of CTC, Sims et al are as expected. Those of us who read these boards already know what the results will be, and already avoid these dealers. How are you going to get the word out to the other 99 44/100% of collectors? Do you really think Coin World will publish such a study, when it bashes their main source of income?

    Before spending the time and money to undertake such a study, you might want to contact Coin World (or other publication) and get something in writing about them publishing the results.

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