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Resubmissions are out of control !!!
Sunnywood
Posts: 2,683 ✭
It less than one year ago that PCGS cert numbers changed from seven digits to eight digits. Yet a remarkably high number of coins offered for sale at auction and by dealers reside in these relatively new holders. At the same time, in the last year, pops in many areas have been exploding (speaking in terms of percent increases). Collectors would be amazed to know how many times coins get cracked out and resubmitted by dealers, professionals, insiders and auction houses. These coins are endlessly maxed out. Most players are not satisfied with a mere markup, they are only interested in the upgrade. That's where the money is.
For example, in the sixteen years prior to July 2002, PCGS certified (148) 1901-O dollars as MS66. On March 21, 2004, that number had increased 46% to (217). Of course, this is but one example. I have studied the pops of all Morgan dollars in higher grades from 2002 to the present. At the MS66 level in particular, populations have increased 20+ % for most issues. These are not new fresh coins from old-time collections as some would like you to believe. These are the same coins getting recycled over and over. The grades go up, and with them the prices. A pretty 1878 8TF dollar with obverse color sold in the Bowers Lindesmith Sale (March 2000, lot 2123) for $1552.50. Then it found its way into a PCGS MS66 holder. Recently the coin was offered for sale at over $16K. I wonder how many times it had to be cracked out to score the upgrade. I focused on Morgans because they are arguably still the most popular series in all of numismatics. But the story is the same elsewhere.
Then there is the NCS dipping mill. Now available widely to everyone, dipping has become de rigeur for everything from shield and Lib nickels to proof gold. These coins seem to find their way into higher graded holders. Dipping, stripping, and upgrading. What a party !!
When new fresh material is unavailable, the coin market insiders need to create supply to feed the fires. One way to do this is to repackage existing inventory into higher-numbered plastic, with or without a chemical dip to enhance the appearance. Thus supply increases, and the flames are fanned. Pops go up, bids go up, supply goes up. But watch out !!! When the demand begins to shrink someday as it inevitably will, that shrinking demand will suddenly be grossly outweighed by inflated supply and inflated prices ... and then POW .... 1989 crash all over again.
For 12-13 years, we used to hear "The 1989 high for this issue was ..." This did NOT make me think that coins were a good investment. It made me realize instead that this market can GO DOWN, AND STAY DOWN, FOR MANY YEARS. What goes up must come down. Except for the pops. They just keep going up and up. Real or artifically inflated by resubmissions, either way it is more and more supply being created to meet the demand. When the demand goes down, the supply won't be able to go down with it, as people will rush to sell before prices plunge.
Of course, a hot market brings out all the rarities, and the auctions of the last two years have been remarkable. What a time it is to be endlessly wealthy !!! Great collections are being built by the super-rich, while the rest of us spend more than we should on our little niches. When prices fall, some of the auction supply will disappear, as those who do not need the cash will simply refuse to sell anything. But that tightening of supply won't be enough to stem a plunge in prices.
I am not trying to be Cassandra wailing about the coming apocalypse. I am just saying, "Caveat emptor." This is a big, hairy, expensive game, driven by high dollar value and the accompanying greed that it breeds. Every time you look at a holder with an eight digit cert number, think a little bit harder about what that really means.
What do you think?
Best,
Sunnywood
For example, in the sixteen years prior to July 2002, PCGS certified (148) 1901-O dollars as MS66. On March 21, 2004, that number had increased 46% to (217). Of course, this is but one example. I have studied the pops of all Morgan dollars in higher grades from 2002 to the present. At the MS66 level in particular, populations have increased 20+ % for most issues. These are not new fresh coins from old-time collections as some would like you to believe. These are the same coins getting recycled over and over. The grades go up, and with them the prices. A pretty 1878 8TF dollar with obverse color sold in the Bowers Lindesmith Sale (March 2000, lot 2123) for $1552.50. Then it found its way into a PCGS MS66 holder. Recently the coin was offered for sale at over $16K. I wonder how many times it had to be cracked out to score the upgrade. I focused on Morgans because they are arguably still the most popular series in all of numismatics. But the story is the same elsewhere.
Then there is the NCS dipping mill. Now available widely to everyone, dipping has become de rigeur for everything from shield and Lib nickels to proof gold. These coins seem to find their way into higher graded holders. Dipping, stripping, and upgrading. What a party !!
When new fresh material is unavailable, the coin market insiders need to create supply to feed the fires. One way to do this is to repackage existing inventory into higher-numbered plastic, with or without a chemical dip to enhance the appearance. Thus supply increases, and the flames are fanned. Pops go up, bids go up, supply goes up. But watch out !!! When the demand begins to shrink someday as it inevitably will, that shrinking demand will suddenly be grossly outweighed by inflated supply and inflated prices ... and then POW .... 1989 crash all over again.
For 12-13 years, we used to hear "The 1989 high for this issue was ..." This did NOT make me think that coins were a good investment. It made me realize instead that this market can GO DOWN, AND STAY DOWN, FOR MANY YEARS. What goes up must come down. Except for the pops. They just keep going up and up. Real or artifically inflated by resubmissions, either way it is more and more supply being created to meet the demand. When the demand goes down, the supply won't be able to go down with it, as people will rush to sell before prices plunge.
Of course, a hot market brings out all the rarities, and the auctions of the last two years have been remarkable. What a time it is to be endlessly wealthy !!! Great collections are being built by the super-rich, while the rest of us spend more than we should on our little niches. When prices fall, some of the auction supply will disappear, as those who do not need the cash will simply refuse to sell anything. But that tightening of supply won't be enough to stem a plunge in prices.
I am not trying to be Cassandra wailing about the coming apocalypse. I am just saying, "Caveat emptor." This is a big, hairy, expensive game, driven by high dollar value and the accompanying greed that it breeds. Every time you look at a holder with an eight digit cert number, think a little bit harder about what that really means.
What do you think?
Best,
Sunnywood
0
Comments
Sunnywood,
I don't have much to add except that I agree with your "caveat emptor" warning, and the following:
It's been a while since we chatted...
EVP
PS I cringe whenever I hear someone ask me about coins as an investment vehicle. It's hard to answer someone on this issue without sounding even a teeny bit patronizing.
How does one get a hater to stop hating?
I can be reached at evillageprowler@gmail.com
<< <i>What do you think? >>
I think I'll just keep trolling the bottom of the market that nobody cares about.
Russ, NCNE
I guess the good news is, that due to extensive resubmissions, many coins have much lower populations than indicated in the published reports. Perhaps there is a way to turn that information into more $?
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There are many none harmful chemicals that could be used on a coin to spray a graders certification number and a grade. These chemicals are clear and undetectable except under certain lights, ultraviolet, etc. If graded certified coins were treated in some way, and raw coins were scanned on submittal, then the coins would be graded consistently each time except in a case where a mistake was made, and an additional grading seal was added, but if the grading was consistent to begin with, and all the graders were on the same sheet of music to start with there would be very little chance of most coins having such wide swings in grades.
I believe at some point in time someone come up with a solution to fix this, but
it would have to revolve around the grading services being able to positively
identify individual coins. As I see it, there is only two ways to do this:
1) Use some sort of laser measurements that would record the exact dimensions
of a coin in thousands of spots. This would allow the identification of a coin based
on striking detail and the location and severity of hits/marks. A coin could change
color from dipping or toning, and could even have more hits from mishandling, but
could still be identified.
2) Someone here once brought up the idea of micro-laser etching of a serial number
onto the coin's surface. This would be invisible to the naked eye, but could be used
to identify individual coins.
Either of these methods would also help in the identification of stolen coins.
I have some more thoughts, but have to run for now.........
Ken
<< <i>There are many none harmful chemicals that could be used on a coin to spray a graders certification number and a grade. >>
I'm a bit dubious about such a "solution". Most chemicals that can be sprayed on can be washed off, or removed via a solvent or chemical means. I would suspect that a physical marker would be much more effective.
Sunnywood - very interesting post and informative post. However, if the pops are inflated, then that very inflation can act as a counter balance to a bursting of the bubble - artificial supply. Just my opinion.
The pop numbers go up for three reasons:
1. Fresh coins.
2. Successful resubmittals of crack-out coins from lower grades.
3. "Failed" resubmittals of crack-out coins from the same grade.
(this ignores crack-outs that go down a grade, crossovers, etc.)
As many have pointed out, this reduces the value of the pop numbers, especially in absolute terms. Pop numbers are overstated, but by how much? Nobody knows. The numbers probably have some value in terms of comparisons of one pop against another, but even that is muddied by the dynamics of the crack-out game. It all boils down to just another way to extract the maximum possible tuition from all of us students of the hobby. Learn to grad, learn what really appeals to you, and pay for the coin, not the plastic.
Coinlearner, Ahrensdad, Nolawyer, RG, coinlieutenant, Yorkshireman, lordmarcovan, Soldi, masscrew, JimTyler, Relaxn, jclovescoins, justindan, doubleeagle07
Now listen boy, I'm tryin' to teach you sumthin' . . . . that ain't no optical illusion, it only looks like an optical illusion.
My mind reader refuses to charge me. . . . . . .
Yes, resubmissions of coins over and over will max them out in the current time period while grading standards are the same but who knows what will happen in 10 years when grading changes again. We will then have the currently graded coins being brought onto the market and cracked out in hopes for the next higher grade (this is true provided grading changes the same it has been since 1986).
If we all participated in the registry, then it seems the coins could be better accounted for. Of course if someone cracks a coin out and doesn't report it, then I suppose the same coin could appear in two sets. So much for my great theory.
<< <i>This is actually a very simple problem that could be solved if there were an independent association that ruled over the graders rather than the companies that empoly them. Again licensed, bonded schooled graders with a set of rules and ethics. >>
Bad idea that will never happen. Just get over your NGC bodybags already.
Russ, NCNE
Missed it yesterday---TTT.
Clankeye
<< <i> Just get over your NGC bodybags already.
>>
no kidding, it's really getting tiresome.
on another note, always good to read a sunnywood post, even when it's a preachin' fire an brimstone....
The grade on the holder is only a part of the price of the coin. Try to buy the coins where the grade on the holder actually holds back the value of the coin.... they are out there!
<< <i>
<< <i>This is actually a very simple problem that could be solved if there were an independent association that ruled over the graders rather than the companies that empoly them. Again licensed, bonded schooled graders with a set of rules and ethics. >>
Bad idea that will never happen. Just get over your NGC bodybags already.
Russ, NCNE >>
Thank you!!! But you know, that will never happen, i.e., he 'll never get over it.
Oh, BTW, great post Sunnywood. Thanks.
I am very familiar with the beautifully toned PCGS MS66 1878 8TF to which you refer in this thread -- in fact, I recently had that very same coin on memo from the dealer who currently owns the coin (for which he paid $15,000+). I also know the "collector" who purchased the coin for $1,500+ and who subsequently got it upgraded...the first time he tried. By the way, the collector who upgraded this coin sold it to the dealer who now owns it. This particular coin is a "real" MS66 with compelling visual appeal -- PCGS (as it does on occasion) just blew it on this coin when it was originally graded. Had the asking price been around $12,000 I would have written a check on the spot! You're certainly correct that there are numerous dollars that have been certified MS66 after numerous attempts that don't merit that grade designation, but this coin does not fall into that category -- and I don't even own it (although I wish I did).
Mike
Visit Our Website @ www.numisvision.com
Specializing in DMPL Dollars, MONSTER toners and other Premium Quality U.S. Coins
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“<< Just get over your NGC bodybags already. no kidding, it's really getting tiresome.”
“Thank you!!! But you know, that will never happen, i.e., he 'll never get over it.”
You guys are right, and I am done. No more post or threads for me on anything but coins !
At the end of the day everyone’s ideas and opinions are fixed in stone anyway. Some will always be for an idea and some will be against but I have never really read any threads here where one person, or a group of people, had their preconceived ideas changed, so any ideas I might have or anyone else may have for that matter are really a waste of time and print. In addition it seems obvious that none of the guys controlling any of the bigger companies that we deal with day to day pay any attention to what is said here, or at least they never comment.
I think Russ is very safe down there with the poop
Go BIG or GO HOME. ©Bill
I use pop reports as guides, only. This is because 3 or 4 years ago, I overheard a guy at a Long Beach Show comment re a friend of his who got a particular Seated $ to upgrade to MS 65 on its 11th resubmission.
If a particular coin is in a 5 holder and upgrades and is now in a 7 holder, it's still the same coin. I can think of at least 10 Seated $s & Trade $s in 5 holders (slabbed by the majors) that were really ugly coins. I don't care if they're in MS 70 holders, they're still ugly.
Some people who either like to collect expensive pieces of plastic -- or sell coins to these people -- are bidding these coins up to their current levels.
As TDN said, know what you're buying, know what you're willing to spend, and be patient. Ie., I've been looking for a nice Braided Hair Half Cent in RB 5 for the last 3 years. I found ONE that I liked, and it went for more $ than I was willing to spend. I'm still looking.
Another option is to collect material that hasn't gotten caught up in the market hype of the last year or so. High grade mint state type Barber coinage, mint state Liberty Nickels, SLQs, and denominations like 2 & Cent coinage and 1/2 Dimes come to mind.
It's a little off topic, but while mint state Shield Nickels also haven't seen a dramatic rise in price, I can not in good conscience recommend buying them, as IMO they are the Susie Bs of the 19th Century.
A History Lesson:
Shield Nickels remind me of the famous conversation between Winston Churchill and Lady Astor.
"Winston, you are drunk!"
" Yes Lady Astor, you are quite right, I am drunk. But while I am drunk tonight, tomorrow I shall be sober.
"However, tonight, you (insert, Shield Nickels) are ugly, and tomorrow, you (Shield Nickels) shall also be be ugly."
"Seu cabra da peste,
"Sou Mangueira......."
<< <i>There are many none harmful chemicals that could be used on a coin to spray a graders certification number and a grade. These chemicals are clear and undetectable except under certain lights, ultraviolet, etc. >>
You spray any chemical on my coins and you better prepare to die
<< <i>A simple [partial] solution is education. Research the series you specialize in. Look at the old auction catalogs and the books of the recent past to understand which specific coins have always been great. Look at as many coins as you can in your series so you learn to recognize what's right for the grade and what's wrong....so you learn to recognize coins you've seen before in lower holders. Know when to overpay and when to sit on your wallet.
The grade on the holder is only a part of the price of the coin. Try to buy the coins where the grade on the holder actually holds back the value of the coin.... they are out there! >>
Great advice TDN.
Knowledge is the enemy of fear
ws
can often be had for a (sometimes small) fraction of the top-pop coin, and for many issues you can
count on the listed pops as being (sometimes very) overblown due to crackouts.
Use your knowledge of a particular series or three, and you may do well down the road.
Ken
The music will stop sooner than later. Then there will be lots of finger pointing.
I tend to agree with what you have said. Perhaps that is why I have lost interest in Morgans... please don't get me wrong, the Morgan Dollar series is a great series, especially if one considers the VAMS... But grading is part of the hobby and TPG in many instances is necessary... how many raw 89-cc or 93-s Morgans would you consider?
The question that bothers me perhaps alittle more than most collectors is that certain Morgan dates are common in fairly high grades and always will be. Do most collectors really appreciate the difference between MS65 and 67? An attractive 1881-s goes from around $100 in 65 to probably $600-750, or more, in 67. $600-750 can still buy rarity with respect to certain coins... not all may be US coins, but expanding one's horizons really is not such a bad thing.
Experience the World through Numismatics...it's more than you can imagine.
all that really matters is exactly what a coin is, and it's condition (grade). As far as price
is concerned all that really matters is the supply and the demand. Yes, it's true that per-
ception is the driving force for the individual but it's far less important from a market per-
spective because whatever the reality is there will be individuals who percieve a range
about it.
If we really want pop reports to have meaning there is a simple solution. Start grading the
coins instead of pricing them. When you look at the pop report it will be pretty obvious
which ones are resubmissions.
accurate population count. Example, NGC certifies X amount of 32-D Quarters. Someone...Like....
ME..sends them to PCGS and they DO cross. #1- NGC doesn't know they've now lost this amount.
PCGS now adds to their pop report, a little later, say I submit for regrade and do so sucessfully. The
pop count in this one scenario, assuming the coins started off as NGC to begin with, is all screwed up. NGC is less one. PCGS gains one in the same grade...now when it upgrades, ALL the numbers are out of whack.
OK....then there are those that crack out! For SURE-now the count is REALLY off as the service has no idea that they have lost one and continue to grade the very same coins...VERY MISLEADING! A raw coin comes in , is assigned a grade and pop goes up.
To make matters even more complex, let's take the guy that submits/ re-submits and re-submits until either 1)he is convinced the coin is graded correctly 2) He gets tired of spending all kind of money on the same coin to no avail or 3) he FINALLY gets the grade he's after. In all these cases it is obvious
that population is not gospel....NO HOW-NO WAY!
<< <i>.
To make matters even more complex, let's take the guy that submits/ re-submits and re-submits until either 1)he is convinced the coin is graded correctly 2) He gets tired of spending all kind of money on the same coin to no avail or 3) he FINALLY gets the grade he's after. In all these cases it is obvious
that population is not gospel....NO HOW-NO WAY! >>
We do not grade coins, we price them. Two $250 1956 quarters are often going to
look very very different. If they were actually graded then it would be pretty obvious
when the same coin came back many times. Of course the pop reports would be as
difficult to read as the price guides.