Stop the gradeflation before there is no need for grading services.
RegistryCoin
Posts: 5,117 ✭✭✭✭
Grading Companies:
Please stop the grade-flation that has been taking place for the last couple of years.
Please think of the endgame.
Consider: All coins have reached their "Peter Principle", as high as they can possibly go, even at least one grade higher than they deserve. At this point, there will be no "need" for any "objective" grading service, only the need to put the coin in an appropriate holder.
I hope you can see that purposeful grade-flation, is but a short-term profit center, and, considering the long-run, an ineffective move to increase the bottom line. (jmho)
ps. can we establish a standard? no, a real standard, one which can be counted on, one which will last?
Please stop the grade-flation that has been taking place for the last couple of years.
Please think of the endgame.
Consider: All coins have reached their "Peter Principle", as high as they can possibly go, even at least one grade higher than they deserve. At this point, there will be no "need" for any "objective" grading service, only the need to put the coin in an appropriate holder.
I hope you can see that purposeful grade-flation, is but a short-term profit center, and, considering the long-run, an ineffective move to increase the bottom line. (jmho)
ps. can we establish a standard? no, a real standard, one which can be counted on, one which will last?
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Comments
By the way, I personally have suffered from this inflation - I bought at premium prices a nice pop 4 coin less than a year ago that is now pop 14 and valued at somewhat less than half of what I paid.
Additionally, it drives me craZy that there is no definitive publication that details the grades (plus or minus one). Obviously, the grading companies have some sort of reference material - how else would they be able to establish the grades given? This should be available - even at a cost to anyone who has the interest. At the very least a grading series photos at high magnification should be available online for each major series of coins. Additonally, it doesn't seem all that hard to set up a webpage of photos where I choose the grade based on those photos to test my abilities. Maybe I will try to set one up for modern proofs - seems worthwhile.
Others thoughts on this are appreciated.
CLif
Here's a warning parable for coin collectors...
Camelot
and... D. I have always poo-poo'd the professed ability from the grading services to add (perhaps, subtract) a point for "eye appeal".
IMHO, "eye appeal" should be left to the "market" not the grading services. "Eye appeal" is at best "personal", and should not be foisted upon a collector, or a market, due to the grading team's opinion of the day. (Remember Hot Pants. they were all the rage, until...)
The services should ONLY grade on a technical scale, then let the market decide the value of the coins. As long as the grading services have added "eye appeal" into their perceived "ability" to technically grade a coin, the "standard" is bogus.
Collect PO01 and there is very little 'downside' the coins will grade out .05 on a regrade...
The dinosaures,us, should just shut up and adjust to todays standards. I was told to do exactly that a couple of weeks ago by a young whipper snapper dealer over on the coin forum.
Now don't forget JUST ADJUST !!
Ken
Yes, I will completely shut up on this issue.
Thanks for the (kick in the pants) great advice.
Adjusting,
Steve
...day late, and a dollar short.
You played it absolutely correctly, and as I said in 2001, you still are the odds on favorite for numismatist of the millenium.
Thanks for the comments. You were correct to "call" me on it.
Steve
ps. It IS the weekend, and all was cool last weekend, and we haven't had a goodie this weekend, so I thought I'd throw out something to chew on.
There are plenty of green tagged PCGS coins that are entombed in their current holders. The only hope they have is if some newbie takes the bait, cracks it out, and ends up with a no grade/Alt surfaces/Env Damage/AT/or a lower grade. Not all green tags and first gens are created equal. They varied by +- 1/2 point back then too!
roadrunner
<< <i>Braddick - that coin is a sure thing upgrade! >>
The "upgrade game" is, overall, an immensely educational experience and I would recommend that anyone who thinks they can grade coins give it a shot for a year or two and see how they end up. Over the past couple years, while playing the "upgrade game" I was fortunate at various points in time to enjoy the tutelage of "MS68" - a consummate professional in all aspects of the coin business. Did I learn a huge amount from "MS68" - you better believe it! And, I hope he learned a few things from me as well.
Earlier this year, I decided to refocus nearly all of my energy on selling coins. And, yes, as MS68 points out, upgrades did get harder to make. But, there were other issues as well that changed my personal focus.
In any event, I just wanted to respond to MS68's comment and may comment generally on Registrycoin's thread when I get back later tonight.
Wondercoin
Really? Hmmmmmm
As Mitch intimated, MS68's tuteladge is priceless.
Sometimes I think that the Pogues' have it right!
Oh, well ... we resign ourselves to our plight... onward!
<< <i>Sometimes I think that the Pogues' have it right! >>
Of course they would. What in paticular though? I'm curious.
Then came the grading services, and some "standards" were in place to help collectors get a fair brake.
Unfortunately, not all grading services are equal, and now we are learning that even within grading services standards can vary.
What a mess.
And if the mess worsens then the hobby/business runs the risk of losing its credibility.
Back in the late 1980s the coin industry had an explosion in prices that in part was helped by "standards" in grading that took some of the risk out of coin ownership and Wall Street became interested in numismatics.
If there is a lack of trust in standards today then coins as an investment option will vanish -- just when Wall Street is getting interested again.
I, like many of you, have been a victim of grade inflation. I can't tell you how many times Ive bought a coin at one grade but when I had to sell it the buyer dropped the grade by one or more notches.
Standardization is critical.
cheers, alan mendelson
www.AlanBestBuys.com
www.VegasBestBuys.com
Trust me I know this to be fact, take a look at the 1998 platinum $10's
I personally own and have made 262 of that pop, now you tell me how it got that high in a matter of a very short period of time when the total pop a year ago was less than 100.
The stock of raw coins is almost non existant, now you tell me how does this happen?
I wouldnt believe 1/2 of what the pop says only due to the fact that no one really knows what's going on at all times.
Also, I recently bought a 4 coin MS-70 PCGS Platinum 2004 MS set, I tried to re-do my platinum sets to recapture my #1 in the MS $100's which I could do rather easy without those coins.
I was told that set would not count towards my sets, now you tell me the pop of the $100 is 3 right?
Why is there 6 known 4 coin sets in 70 if the pop still shows 3 in MS-70 on the 100's.
This is why I'm not spending 10's of thousands of dollars as I did 2 years ago, it was fun but at what cost?
Wondercoin
Thanks,
Leo
You have made me feel badly, in that I started this thread, and it has been said that it is "worthy", but now, I feel that it isn't.
I have no doubt you will beat me on any race to feedback on ebay. My goal is to sell MORE coins off ebay!!
Wondercoin
<< <i>Grading Companies:
Please think of the endgame.
>>
Maybe the "grade inflation" is driven by fear of the endgame and actually is a concerted scam to get repeat business for the grading services.
Otherwise, when all the slabbable coins are graded, they are out of business!!
Consider another issue. Spreads between top pops and one grade under coins has widened considerably over the past few years. For sake of argument, let's say an MS67 Silver Commem is worth $1,500, but, an MS68 is now worth $25,000. There is now $23,500 "to be made" off an upgrade. So, why not submit a "liner" coin you believe in 25 times at $40-$100/turn? In fact, send it back and forth to PCGS and NGC 10 more times for good measure to try some crossing action as well to "make the grade".
In the end, let's say you expended 35 grading fees even at $100 a pop - that's $3,500. If you are successful 1/5 times using this formula, you have made $23,500 and spent $17,500 doing so. Land 2/5 upgrades and you make $47,000 on your $17,500 in grading fees. Now, consider that making 2/5 involves getting 2 coins to work out of 70 tries!! Not a bad return for those LINER coins you really believe in?
So, is this really "gradeflation", or is this something else? In many cases, it appears to me it is merely WORKING those LINER coins to death, which might not have been the case 10 years ago when a spread from grade to grade might have been $1,500 to $5,000 or $6,000.
Now, does this then become a "chicken and egg" thing - "gradeflation" being the natural consequence of LINER coins being worked to death over an extended period of time? That appears to be an interesting question.
Wondercoin
I'm going to retired from eBay at 1500 and let my kid take over, frankly I hate eBay, on Aug 6th watch how high the paypal fees are going to get unless you clear 100k a month in paypal income... Between eBay and paypal fees they are going to take about 8.5% of each sale, good luck sellers!
Is it all the upgraders' "fault" as I theorized?
Wondercoin
A very good example within the Washington Quarter series is the 40-D. I researched the Heritage archives and just a couple years ago the pop at PCGS was 10 in PCGS 67. Now I believe it to be 18. All the folks that had a PCGS 67 1940-D suffered a substantial loss when the pop basically doubled.
So far as regrades/ upgrades go, I submitted 4 coins, two PCGS 63 1932-Ds, a PCGS 65 1935-D that is eye candy...the most thickly coated, icy, frosty, sugary lustered coin I have seen to this day-even better looking than my 66 and a 36-D. Much to my liking, BOTH of the 32-Ds did in fact upgrade to 64....a substantial jump in "premium".
Now if I submit them again back to PCGS, IN THEIR SLABS, population will be kept correctly, BUT should I crack them out and submit them, obviously population will be wrong....if I send them to NGC (raw or slabbed) obtain a grade- NGC's pop goes up, PCGS' stays the same instead of being minus two and should I now take the NGC coins and submit them back to PCGS, now NGC has no idea THEY are minus two and PCGS will show another two when in fact they are not. They are as they were before I sent them to NGC but now NGC is minus two. I know you well enough to respect your wisdom and the fact that you do get my point. With all the cracking out etc, jumping from service to service, there is absolutely NO WAY for population to be correct at either service.
I suppose one day the services will come up with a system.... a "show me the coin in the slab" method to verify population. Until something along these lines is put in place, I'm afraid BOTH major services' population counts are just downright bogus.
and then, MP3's cleaned their clock.
Wait till the advent of computer grading. I know, I know, it's an art and there's lots of considerations and colors and toning and distinguishing wear from poor strike . . .
If they can send rockets to Mars and unload little tinker toys that drive around up there and send us back cool pictures -- which, if you ask somebody who is an aerospace engineer or physicist, is a HUGE project, or, if they can design the 747 by using thousands of engineers worldwide for years and years of work . . .
believe me, they can program computers to grade coins.
Face it, we live in the disposable age. Everything new is headed for the garbage can in a few years to be replaced by something bigger and better.
(boy, i really went on and on, didn't i?)
Funny, but about 100 years ago they also said man would never fly. In the 70's people screamed when they suggested computers build cars. They were wrong again! Look at how dependable cars are now and how long they last compared to
when humans made them. Not only can man fly, he's actually been on another Moon and satellites are still going out into space further than anyone could have ever imagined and just look at the images they provide us that before we could only imagine.
If computers do the grading we'll always be caught up instead of running behind and worrying if the grader kicked the dog or had a spat with the Mrs. Therein may be a problem however, as this would spell the end of revenue for resubmission after resubmission until a grade is "bought".
<< <i>I thought "liners" on "the other side of the line, were just that, wannabes. The "expectation" that any 66.9, 67.9, 68.9, will become a 67, 68, 69, after many, many submissions, is ludicrous. but IT IS HAPPINING!!! I don't think that those "in power" are seeing the future of this behavior. It, seems to me to be such "short term" thinking, that I fear "They may be poised, on purpose, for a buyout/takeover", as I don't understand this behavior to be "long-term" thinking. >>
All I can add is that when I took the ANA Grading class, many of the coins were graded by the instructors using words similar to: "I like it as a 65, but 2 out of 5 times it would 66." Very, very often they would qualify the grade with "...X out of Y times it would grade (one point higher)". Maybe that's just the nature of single-point grading Unc coins.
Was it wondercoin who did that great analysis (with charts) of the impact of grading liner coins a couple years ago?
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
Wondercoin
Edited to add - To the collectors out there that are used to seeing that specific quality 26(s) Buffalo in a PCGS-MS64 holder , they might (incorrectly) conclude "gradeflation" has occured rather than the natural evolution of a coin achieving it proper grade? Interesting difference if you think about it.
Wondercoin
only to find that my extensive training and experience is bogus due to a variable grading standard. Example: I have been studying the BTWs for years, and "all of a sudden" the highest grade given for these, mostly poorly minted was 65, then 66, then 67, and I hear that there is a 68???????
Impossible, without gradeflation. What is our agreed upon definition of gradeflation? Don't know, but, it does exist, and it is important to consider, and I'm not even going into the ethics of all this mess!