Grading World Series: why you don't want to win
roadrunner
Posts: 28,303 ✭✭✭✭✭
This is more directed at the collecting fraternity rather than dealers.
Why it is a great asset to be able to grade as closely as possible to teh precise standards of a PCGS or NGC, I submit that it is far better for a collector to be able to judge to a slightly tighter standard on a consistent basis. If the standard is say 75, they a collector ought to be consistently at say 50-65. The reason for this is that a collector needs to be tighter to protect oneself from the downside risk. Dealers have far better outlets near their cost for their mistakes from the services. Collectors rarely have such a support system and usually will end up eating a major loss when they make a mistake.
The downside risk for anyone not in the market on a day to day to basis is probably much greater than the upside gain from a score here or there.
The key is to buy great coins, PQ or solid for the grade, raw or slabbed, and to avoid the chaff at all costs. That's the true secret.
If you depend on grading to the levels of the grading services your downside is potentially large and variable.
Grade consistently tight, buy right, and be proud of it.
roadrunner
Why it is a great asset to be able to grade as closely as possible to teh precise standards of a PCGS or NGC, I submit that it is far better for a collector to be able to judge to a slightly tighter standard on a consistent basis. If the standard is say 75, they a collector ought to be consistently at say 50-65. The reason for this is that a collector needs to be tighter to protect oneself from the downside risk. Dealers have far better outlets near their cost for their mistakes from the services. Collectors rarely have such a support system and usually will end up eating a major loss when they make a mistake.
The downside risk for anyone not in the market on a day to day to basis is probably much greater than the upside gain from a score here or there.
The key is to buy great coins, PQ or solid for the grade, raw or slabbed, and to avoid the chaff at all costs. That's the true secret.
If you depend on grading to the levels of the grading services your downside is potentially large and variable.
Grade consistently tight, buy right, and be proud of it.
roadrunner
0
Comments
I agree with you in principal. Your arguement is that the most astute collector should hone skills and judgement to demand better than standard graded coins for their collection. In fact it matters little if you say you always want to select the top end of any grade range and pay standard grade price or are able to recognize that a coin has slipped over a line into another grade that is marginal at best and is overpriced and should be passed. Since you are a very experienced and astute collector you are able to avoid paying average price for average coin as the price has built into it profit margin for the dealer, auctioneer that may not be recoverable immediately. Thus you recommend a tighter personal grading standard that protects you. This approach can be defined either as discipline or a mind trick to maximize value.
Incidentally this is a little different than the breakout artists who judge-top end coins that are candidates for upgrade, since you will be satisied with a coin that is PQ in a given grade if you can pay a standard grade price.
It should also be noted that you take a very practical approach to collecting, that of a value collector. It is also possible to be a great collector, know and purchase quality without concern for price or assigned grade. It works for those with disposable wealth or indifference since asset value linked to $ value is not part of their formula. There are some members of this forum that take this position. "I bought a great coin from a dealer; he/she will tell me how much when they figure it out". This is an attitude or luxory that most of us can not afford.
Oh I forgot your title for the thread and are editing this to advise you to win at everything.. Being a competitve person I know you would be happy to win the grading series by adding the differential between your own standard to that of the grading services and win the prize.
I consider that too many of the dealers who try to play the crackout game for a living, or to those dealers who dabble in it from time to time, fail at this game. The hobby is littered with those who have not succeeded. In essence they are trying to grade to the PCGS/NGC "moving" standards and their hits are outweighed by the misses. The average collector just isn't going to succeed at this game or even the game of buying nice coins for the grade if their standards are exactly like PCGS/NGC. Tighten up until your misses are far and few and easily outweighed by the solidly graded coins you buy. Considering that the range of grades of coins in holders is TWO POINTS (i.e. 65: ranges from 64 to 66) and a group of 3 grades won't all agree on it, one should have reason for concern.
I cannot call this a trick but more a methodology. If you have multiple standards in your head vice one rock steady one, you'll make major mistakes too often. It's not about the winners, those will come, it's the LOSERS that kill you. Avoid the losers. Tighten it up now!
As far as those who pay whatever it takes, they have a well-defined system too even if it may not appear as such to me and you. They may know that they can price said "monster" coins to within 80% of their value while the seller may only be accurate to 50%. Over time, they win and win big. That's a system too. MS68 comes to mind as someone who has a knack to know what the "real phone number" price tag is while others are grasping at straws. Those that buy
great coins at ANY price and without hesitation, may be the ONLY ones doing it RIGHT...at least in an upwardly rising market. While that is not me or you, I'd bet the track records of those guys is better than ours! Think about it. We'll get them on the downside
roadrunner
My contest strategy was to arrive at a grade that would be no more than 1 point wrong. In other words if I thought a coin could be a 64 or 65, to break the tie, I didn't think about whether it was more likely a 64 or 65...instead I thought would it more likely be a 63 or 66. In other words I considered the grades at the extreme of the range I was considering. If I concluded that there was 'no way' the coin could 66, I would call the coin a 64 instead of a 65. Why did I do this? Because if I was wrong, I would be wrong by no more than 1 grade. I knew based on the contest rules that there was a heavy penalty for being wrong by more than one grade. My objective therefore, was to find a grade that would be no more than 1 grade wrong. How successful was I at that strategy? Not very, unfortunately. Of the 30 coins I missed, I missed 10 by more than 1 grading point. I am convinced, though, that my contest strategy was sound, its just my grading that sucks!
Greg Hansen, Melbourne, FL Click here for any current EBAY auctions Multiple "Circle of Trust" transactions over 14 years on forum
If you read my comment on one of Davids previous threads about the contest I said that I was expecting the dealers to have better scores then the serious collectors. I can't remember exactly how I phrased it then so I'll state it again now.
Dealers have a vested interest in maximizing profit on a coin for sale and that includes buying raw and trying to talk down the grade of a given coin offered to them or playing the crackout game on upper end slabbed coins. They view the coin as a commodity to milk for all its worth, or maybe it would be more accurate to say to milk the grade for all its worth [as well as the end user the collector who buys the coin from them].
When I'm looking at a coin as a collector and a coin strikes me as over priced and/or overgraded in either case I'll pass. The raw 64 that was upper end for the grade thats still raw if its being offered as a 64 I'll buy it but if its either been slabbed as a 65 or being sold raw for closer to 65 money then 64 because the dealer put a pq sticker on the coin hoping that some gready collector will buy it and take the chance slabbing it for what would be a bargin {IF} it makes it, again I'll pass.
The eye of the collector is the best one to use when adding coins to your collection. Sometimes dealers don't like when you do this, do you get upset if a dealer calls you to pickey or a cherry picker ? When it happens to me all I do is
Les
If you miss once, and buy off your miss, it could cost you dearly
So you look at 100 coins - 70 you garde too low, 20 you grade the same, and 10 you grade too high
depending on prices, you may very well end up with the ones you grade too high
(at least they will be the 'type' of coins you like)
Buy coins that are quality for the grade. Don't get caught up in graysheet prices and trying to play "Mr. Wholesaler" by shaving off a buck here and there because you will loose out on quality. Quality speaks for itself and those that recognize it will pay for it.
Experience the World through Numismatics...it's more than you can imagine.
jim
Although I don't think that we know one another (other than through forum posts) I noticed that two of your author names (Trime & BarberLover) indicate that you focus and perhaps specilize in specific coin series. This helps one to become an "expert" in a particular facet of numismatics, and knowledge contributes towards making good purchasing decisions & collecting success.
I also take the value-oriented approach to coin collecting, and feel more comfortable purchasing certified (PCGS,NGC, ANACS or ICG) slabbed coins if I am spending more than $200 for a coin. It helps to minimize my downside risk of grade, authenticity, etc. If the price is right, and I feel that the coin's under-graded then I will pay above Greysheet ask for the specific coin.
I am not concerned about "missing" a purchase, because I've never seen a coin that I can't live without, but I do have a couple that I've purchased that I can't live with! The only exception was a 1795 ANACS Fowing Hair Dollar that I passed on 2-3 years ago that was an XF Net Graded down to VF for some light cleaning -- I should have snapped it up at $1100. But I was trying to avoid purchasing a "problem coin" so I think I passed for the right reason on that particular day, although my clear vision 20/20 hindsight would like to have a shot at doing over again!
It's good to see others who are "keeping their heads about them" and sticking to their value-oriented approach in this frothy coin market!!
Stuart
Collect 18th & 19th Century US Type Coins, Silver Dollars, $20 Gold Double Eagles and World Crowns & Talers with High Eye Appeal
"Luck is what happens when Preparation meets Opportunity"
who place meaningful money into their collections.
Since grading tightens up in a down market , or to put
it another way, buyers expect more coin for the money,
why not tighten up now in the up market. While it is getting more difficult to
find PQ coins in a grade, they are still available with diligent search. Of course, the monster
coins, though expensive, will always be monster coins. Each grade will have its just made it,
average and PQ examples for that particular grade. Even If you must pay a little more money now
for a PQ, it will be worth it later on. Quality is always respected and desired.
Camelot
<< <i>I believe that this thread is most valuable to collectors
who place meaningful money into their collections.
Since grading tightens up in a down marketor to put
it another way, buyers expect more coin for the money,
why not tighten up now in the up market. While it is getting more difficult to
find PQ coins in a grade, they are still available with diligent search. Of course, the monster
coins, though expensive, will always be monster coins. Each grade will have its just made it,
average and PQ examples for that particular grade. Even If you must pay a little more money now
for a PQ, it will be worth it later on. Quality is always respected and desired. >>
I'm with Bear on this one! BTW..... Don't pay know nevermind Bear to my sig line!
While I agree that there is another day and another example for most coins; the specialist may have something special on their watch and wish list that may show up only once in a decade if ever again. If so its either or. Also there is an occassional surprise when you see a coin that has some special eye appeal that you know you want. I bought such a coin recently at an auction. I bid by proxy because I suspected that it might hit lofty heights and I wanted to be disciplined. As it turned out I was fortunate that no one else wanted it more than me and I bought a unique coin it was a Pr 66 R6-7 Pattern. These are exceptions to the rules discussed earlier.
All my coins are PQ, aren't yours?
It's a different mindset - if you are collecting to get choice and attractive coins, you almost don't care what the grade is, except as a matter of value, and even only one factor of value at that.
OTOH, if you are a dealer, all you care about is whether the coin is under/over graded from the services point of view.
In other words, the collectors care about what is important to THEM. The dealers care about what is important to the all powerful graders.