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Is eye appeal causing grade inflation?

tradedollarnuttradedollarnut Posts: 20,146 ✭✭✭✭✭
A tale of two trade dollars:

The Amon Carter 1885 trade dollar sold in 1991 as an NGC PF61, again in the same holder in 2003, then was graded PCGS PR62CAM and now is NGC PF63CAM. It's a beautiful coin, but has light hairlines.

image

The Norweb 1885 trade dollar sold in 1996 as a PCGS PR62 and again in 2004 as an NGC PF62. It's a beautiful coin that was unfortunately wiped when it was owned by King Farouk.

image


These coins started out in the early 1990's as 61 and 62 respectively - indicative of the originality of their surfaces. Now they are 63CAM and 62 respectively - more indicative of the eye appeal of the coins. So I ask you .... is eye appeal causing grade inflation? image
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Comments



  • << <i>Is eye appeal causing grade inflation? >>

    Yes, it is a result of the TPG's move towards market grading.
  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭
    I think my old 1871 MS66 (nee 64) Seated Dollar indicates that.

    image
  • topstuftopstuf Posts: 14,803 ✭✭✭✭✭


    << <i>Yes, it is a result of the TPG's move towards market grading. >>




    ANYTHING to avoid admitting that ANACS has a better idea.


    image
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    Definitely. Your example supports that well. You didn't get color bumps in 1989 to the extent we do today. Good to great color on average seems to be worth 1/4 to 1/2 point. And then once maxed out in a holder, sellers often to try to get high-end money because of the "color." In essence a double bump and almost a full point. A newbie is a great candidate for such a ploy. This discussion only refers to type coins as the color bumps in the 20th century series, are very difficult to follow as the rules vary from series to series.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • orevilleoreville Posts: 11,772 ✭✭✭✭✭
    TDN:

    I did NOT see the Norweb's 1885 Trade dollar in their vault room. Perhaps they were not very proud of it. I do not remember asking about it but I certainly remember they did not bring up that subject matter or the fact that they even owned one.

    I need to look up again on how Dave Bowers described such coin in the B&M auction of such coin.image
    A Collectors Universe poster since 1997!
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    From the Norweb catalog: "a lovely specimen...ya da ya da...and would be a higher grade if not for some light hairlines on both surfaces."

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • Unfortunately Farouk didn't "wipe" them - he scrubbed" them - I would describe the Farouk coin as an impaired proof, and it looks it. THe Amon Carter coin looks original, unimaired with lite wispy hairlines, a BIG difference IMHO. Perhaps the Farouk coin is and always has been over-graded for what it is and the Amon Carter coin was drastically undergraded and is finally in the correct grade holder - I WOULD buy the Amon Carter coin for my collection - I would NOT buy the Farouk coin
    Collecting eye-appealing Proof and MS Indian Head Cents, 1858 Flying Eagle and IHC patterns and beautiful toned coins.

    “It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” Mark Twain
    Newmismatist
  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    is eye appeal causing grade inflation?

    TDN - I think I know who wrote that for you. image

    Seriously, I think the real answer is best explained by your two photos. In your photos, the Carter coin looks like a superb gem. I'm sure it's not, of course. But the trend I see, especially at NGC, is towards arm's length grading. Literally. In other words, coins that look better at arm's length are now graded higher. An earlier-graded PR 63 with an obvious but not-too-severe staple scratch is probably still a 63 because you can see the staple scratch at arm's length. A old PR 63 with many light hairlines could now easily grade a point or two higher because the hairlines vanish at arm's length. Is that the same thing as a shift towards eye-appeal? Not really. For example, rainbow toning will not take an staple scratched old 63 any higher now than it would have in 1988.
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • BigEBigE Posts: 6,949 ✭✭✭
    Yes , I think it is. Maybe grading keeps up with the price people are willing to pay---------BigE
    I'm glad I am a Tree
  • One arguement was that TPGs are practicing "market grading" does anyone have a counter arguement? Mine would be that NGC did not grade nearly as many Proof Trade Dollars then as they have by now therefore, there wasn't a dependable metric for grading. In other words, due to low populations at the time, PR61 was more of a guess than a lock. This is one of the reasons why many claim that PCGS rattlers cointain undergraded pieces.
  • BearBear Posts: 18,954 ✭✭
    I believe as the graders arms get longer and longer,

    we will max all unc coins out as PR or MS-65,66,67,68 , 69 or 70.

    There will be no grades of MS or PR 60, 61, 62, 63, or 64.
    There once was a place called
    Camelotimage
  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    Maybe another way to say that arm's length grading is in vogue is that in the 1980's, it seemed like everyone used a glass at all times.
    I would suspect this was the case with the TPG's. They were extremely critical of hairlines back then. A single light line across the face of a Barber quarter doomed that coin to MS/PF 64 status, regardless of color. Today, that same coin could be a 66, especially if pretty. There's much more talk today about grading sans glass.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • BigEBigE Posts: 6,949 ✭✭✭
    Chuck, that still sounds like market grading to me, basically saying "we haven't seen enough of these to know how to grade them", when the standards of grading should be set anyway. Interesting----------------------BigE image
    I'm glad I am a Tree
  • ziggy29ziggy29 Posts: 18,668 ✭✭✭
    It's certainly causing a lot of AU-58s to be cracked out and placed into in 61, 62 and 63 holders...
  • BearBear Posts: 18,954 ✭✭
    This must be why I am having so much trouble buying the coins I like.

    I am still grading coins with a glass like the old days and todays graders must

    be using a "glass eye". I do not normally buy MS or PR-65 coins any more because

    more times then not they are really not gems.As it has been thru the ages, the buyer

    must exercise due diligence and care before spending the cabbage.
    There once was a place called
    Camelotimage


  • << <i>Chuck, that still sounds like market grading to me, basically saying "we haven't seen enough of these to know how to grade them", when the standards of grading should be set anyway. Interesting----------------------BigE image >>



    Ah, so that's the definition of market grading; I wasn't sure of its meaning.
  • Yes, up to the grade of MS/PR 65, in the absence of an arms length major distraction, "eye appeal" is definately causing SOME grade inflation. At the grade of 65 or higher, the coin still has to meet the qualifications of a gem, although again the appearance can cause a 1/2 point bump. Eye appeal however is absolutely not the whole story in the common collected series. Here, the simple fact is that most coins are dipped or otherwise less than appealing to the sophisticated collector. There is simply a 1 point jump IMHO for these lower valued series bases on my submissions at least. AT THE TOP SOMETHING ELSE HAPPENS: namely look at the 1804 Proof Dollars!! All that's happened is that as these 15 coins have been graded (except 3 in Smithsonian), they have been ranked from best down to the lowest condition. The numbers are as meaningless as the grades on a sophomore organic chemistry exam-- where the top grade of 45 is normalized to a grade of 100 and the rest follow an imaginary bell curve. PRICE inflation is caused of course by other factors such as Market supply vs. demand for series, and eye appeal is only one factor to cause market prices to go nuts on certain unusal coins. Interesting question, not easily answered.image
    morgannut2
  • BAJJERFANBAJJERFAN Posts: 30,977 ✭✭✭✭✭
    Maybe the graders play guess the grade just like they do here on the forums.
    Do the TPG's grade these coins then hope that no one ever sees them and wonders how in the HELL did THAT THING get a 65.
  • RonyahskiRonyahski Posts: 3,116 ✭✭✭✭✭
    I agree that eye appeal is the prime culprit for grade inflation. Don't agree with your example, though, as proving the case. Why did the Amon-Carter start out at 61 with light hairlines, while an obviously wiped coin start out at 62? For an 1885 Trade Dollar, maybe it is more of a case in which the TPGs desire to have such a rare coin resident in their holder, rather than the enemy's.

    [q A old PR 63 with many light hairlines could now easily grade a point or two higher because the hairlines vanish at arm's length. For example, rainbow toning will not take an staple scratched old 63 any higher now than it would have in 1988. >>



    I think market grading is still to blame. The many light hairlines vanish as long as the graders have something else to look at, like rainbow toning, or other eye appeal.
    Some refer to overgraded slabs as Coffins. I like to think of them as Happy Coins.


  • << <i>Is eye appeal causing grade inflation? >>

    No, grade-flation is. For every eye-appealing coin that up-grades, there is probably a not-so-eye-appealing one that up-grades too. Personally, I don't think the former is any more ok than the latter.
  • BearBear Posts: 18,954 ✭✭
    If my coins upgrade, then thats cool. If the

    other guys coin upgrades then thats bad.

    I think I understand the system now.
    There once was a place called
    Camelotimage
  • OuthaulOuthaul Posts: 7,440 ✭✭✭✭✭
    Perfect argument for "technical grading" and let eye appeal be determined by the buying public.

    Cheers,

    Bob
  • MrEurekaMrEureka Posts: 23,892 ✭✭✭✭✭
    Ah, so that's the definition of market grading; I wasn't sure of its meaning.

    Actually, that definition is wrong.

    I'd define "market grading" as a TPG grading to the loosest standard to which it can grade without being inundated with complaints of overgrading. Because the market will accept looser standards in a hot market, "market grading" implies looser grading in a hot market.

    BTW, for all it's worth, I think the practice of "market grading" is largely a myth. It's more just an excuse people use to try to explain the erratic nature of subjective grading.
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • CoinosaurusCoinosaurus Posts: 9,614 ✭✭✭✭✭
    Outhaul-

    Wouldn't work. Too many collectors want to buy the number on the holder.

    Ya have to wonder though.......ten years from now, after everything is in a "70" holder, some enterprising grading service, with the right people behind it, may have a crack at "technical" grading.

    The big two understand this - that is why they "tighten up" from time to time - but the trend over the last five years is definitely grade-flation. It has to stop somewhere.
  • BigEBigE Posts: 6,949 ✭✭✭
    actually, there is no such thing as grade inflation, the graders have been there so long they are getting blind and according to David Hall there are no replacementsimage-------------------BigE
    I'm glad I am a Tree
  • krankykranky Posts: 8,709 ✭✭✭
    Rare that I would disagree with MrEureka, but I believe that "market grading" absolutely is being done with gold (AU coins graded as low MS) and it's not because of subjective grading.

    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.

  • IrishMikeIrishMike Posts: 7,738 ✭✭✭
    When the demand for high grade coins is strong there is always more pressure on the TPG's to upgrade to meet this demand.
  • RonyahskiRonyahski Posts: 3,116 ✭✭✭✭✭


    << <i>

    << <i>Is eye appeal causing grade inflation? >>

    No, grade-flation is. For every eye-appealing coin that up-grades, there is probably a not-so-eye-appealing one that up-grades too. Personally, I don't think the former is any more ok than the latter. >>



    Does the first upgrade CAUSE the second? You must not think so, else you would agree. So, what is causing the second upgrade, generally looser standards? I think we'd all agree with you that neither is o.k.
    Some refer to overgraded slabs as Coffins. I like to think of them as Happy Coins.
  • BigEBigE Posts: 6,949 ✭✭✭
    Actually Mr Eureka you are wrong, you can't define anything by labeling it as a myth, that's an oxymoron-------------------BigE
    I'm glad I am a Tree
  • keetskeets Posts: 25,351 ✭✭✭✭✭
    i would ask why a wiped coin is holdered and hope that the answer wouldn't be "because it's an important coin" or something like that.

    so, why is a wiped coin holdered by PCGS??

    al h.image
  • Wiped coins which are graded are generally proofs, and most proofs are wiped. If you grade old proofs, you have to grade wiped ones. Simple.
    morgannut2
  • BigEBigE Posts: 6,949 ✭✭✭
    imagegood question, maybe lots of ultra-rarities would only be in ANACS holders?---------BigE
    I'm glad I am a Tree
  • orevilleoreville Posts: 11,772 ✭✭✭✭✭
    Ronyahski: You said:

    <<<<< I agree that market toning is the prime culprit for grade inflation. >>>>>>>>

    What the heck is market toning?image
    A Collectors Universe poster since 1997!
  • originalisbestoriginalisbest Posts: 5,911 ✭✭✭✭
    Given the importance of that coin (the coin-abused Farouk proof) I have no problem with it being in a PCGS holder, that's just the way that goes. Make it a 1885-P Morgan treated as such and that one will likely not make it in.

    Sort of reminds me of a "tweener" I saw about 4 years ago, of a PCGS 21-S half in XF-40 (detail was all there for it) but that thing had been polished to a brilliant sheen at some point in its life, then started to slightly mellow at the edges. I suppose they let it in because of the much better than average detail, but I have never since seen such an unappealing key date in a holder. Not even if it had been priced at a severe discount due to the polishing by the dealer that had it on display (which, of course, it was not. image)

    As Russ has shown elsewhere tonight, it certainly pays to at least be semi-cognizant of your stuff, regardless of what the plastic says. Not unlike when I (happily) had a choice between two common slabbed MS-62 2-1/2 Indians for my type set - one was clearly more appealing and all around better than the other; a teensy, unoffensive lamination hidden in the headdress explained why the better one didn't make 63. It was a no-brainer better choice as far as a 62 purchase...

    I suppose the buyer must still beware!
  • orevilleoreville Posts: 11,772 ✭✭✭✭✭
    BigE: You are making an awful lot of sense to me. Real scary!
    Does that mean I have to yell TIMBERRRRRR!
    A Collectors Universe poster since 1997!
  • RonyahskiRonyahski Posts: 3,116 ✭✭✭✭✭


    << <i>Ronyahski: You said:

    <<<<< I agree that market toning is the prime culprit for grade inflation. >>>>>>>>

    What the heck is market toning?image >>



    Ooops, market "grading". Thanks
    Some refer to overgraded slabs as Coffins. I like to think of them as Happy Coins.
  • cohodkcohodk Posts: 18,553 ✭✭✭✭✭
    TDN,

    I have never seen the coins you presented here but I have some comments and questions.

    On the first is it possible the coin was undergraded to start with. Almost every 63 is graded as such because of hairlines. If they are severe then the coin should be a 60-62.

    On the second coin the hairlines look terrible and probably should have been no higher than a 60 to start with.

    You have seen them both. Is the Amon Carter nicer than the Farouk? And if so, how much nicer? And if it is nicer then it should have been graded higher to begin with.
    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • BigEBigE Posts: 6,949 ✭✭✭
    Oreville, luckily lumber has gone thru the same sort of grade inflation that coins have so us old holders are still around-----------------------BigE
    I'm glad I am a Tree
  • keetskeets Posts: 25,351 ✭✭✭✭✭
    Wiped coins which are graded are generally proofs, and most proofs are wiped. If you grade old proofs, you have to grade wiped ones. Simple.

    that fits into the "something like that" category. i would of course say "Does PCGS grade wiped coins" and the answer should be no. it's a pity that the coin has been wiped and thus harmed but in my mind it detracts from the many older proofs which were cared for properly and holdered. with all the wringing of hands and gnashing of teeth by so many who want consistency out of a grading company, why is this kind of stuff so easily, casually explained away?? the coin is damaged, to my first glance looks like crap and shouldn't be holdered.

    ANACS appears to have a clue here and a leg up on legitimacy with their net grading which is scorned by some, probably some of the same who tolerate grading wiped coins, just because. what's next, thumbing is OK because...................??

    al h.image
  • I have no problem with grade-flation for PQ original coins. If it helps to keep them original. Good for the TPG's. It is very common to see a slider in a 61 or 62 holder today because of eye appeal. If it helps keep original coins stay original and out of the dip (to hide the rub) then I am willing to accept that. Something needs to be done to save and protect these coins. Something to help eliminate the financial gain in cleaning the coin.
    I do have a problem bumping a coin from a 65 to a 66 or a 66 to a 67 for eye appeal alone, because of the price levels for the extra point or two. If a coin is going to grade a Gem or better, it had better be a Gem or better and mark free.
    Please visit my website prehistoricamerica.com www.visitiowa.org/pinecreekcabins
  • originalisbestoriginalisbest Posts: 5,911 ✭✭✭✭
    I would've agreed with you in ca. 1986 Keets, but it's pretty clear to me that, for a good while now, PCGS and all the grading co's let stuff that's been fudged with into their holders. Take Bust dollars for example; not let in any that have EVER been cleaned at some point, and practically none would be in there, or certainly not enough to meet the demand. ANACS goes the extra step of net grading, but then they decide where that line is drawn as does PCGS, and I don't always agree with them; there have been "universal" (to borrow from the CGC comic grading term) ANACS coins I've seen that really ought to have been net graded, IMO.
  • CalGoldCalGold Posts: 2,609 ✭✭


    << <i> Because the market will accept looser standards in a hot market, "market grading" implies looser grading in a hot market >>



    But as prices increase aren't the TPGs incurring greater financial risk if they overgrade since a grade guaranty claim will cost them more to settle?




    << <i>When the demand for high grade coins is strong there is always more pressure on the TPG's to upgrade to meet this demand >>



    How does the market exert this pressure on the TPGs? Sure the volume of submissions goes up as raw coins come out of the woodwork and crackouts increase, but how does that pressure them to give higher grades?

    I can see how a higher volume would allow graders in less time to grade each coin but that is just saying that the risk of them making an error increases, and that error could result in an undergrade or an overgrade.

    If anything, if one is to believe what some posters have said in other threads over the past year or two the game is to continue to grade low on high end coins knowing that they will be resubmitted for a shot at a higher grade.

    CG
  • Well Keets has a good point, namely that wiped coins are impared and so shouldn't be graded. The point I'm making isn't about grade inflation or standards. The fact is, like it or not, the pre-1936 proof coins have very, very delicate proof mirror surfaces and even the slightest handling tends to impart some degree of hairlines. Once a service agrees to grade these delicate coins, they will be forced to give some grade PR-30---whatever--- to proof coins because the vast majority have picked up hairlines. The pathetic NGC proof shown by TDN certainly deserves an grade less than 60, reflecting mishandling rather than very slight wiping. By wiping I mean perhaps as the coin moved on a velvet surface as happened to a number of Eliasberg proofs, that could never be called mishandled. The services are recognising the fact that very old proofs will almost always have some hairlines by the nature of the coin's delicacy. Giving a grade higher than impared 58 is another problem though.
    morgannut2
  • OuthaulOuthaul Posts: 7,440 ✭✭✭✭✭
    Well, you know, I'm with Keets on this one. I don't give a rats azz who owned a coin or how historically significant it is, it's still damaged and for other than the aforementioned reasons would never be holdered. If you took a modern proof and wiped it, it would be considered an "Impaired Proof" and not holder. I think "No Grade" holdering is a proper way to go (i.e. NCS) and add the pedigree to the label.

    I have always believed that technical grading is the only way to go. Bumping up or subtracting a point or two based upon eye-appeal is only the opinion of the person looking at the coin. I mean, if you have an MS-63 Morgan that is simply that but has spectacular toning and they bump it up a point or two based upon the toning, you STILL have an MS-63 Morgan. At the same time, if it had detracting toning you'd be pretty pissed if it was knocked down a grade just because the guy grading it doesn't particularly care for that type of toning.

    Technical grade and let the market decide how much more they want to pay for eye-appeal.


    Cheers,

    Bob
  • I agree that eye appeal is the prime culprit for grade inflation>>>>

    i have been doing this since 1973 and have recognized grade-flation in the late 80s ( since slabing began in 1986 ) and dubbed it as such in the early 90s ....it is imho that the services are merely ranking coins and in theory will eventually ( after they make 100 million ) anoint the best of the best...aka the monster ( of the date ) and a few of ( or more depending on the " look ").... what i call the under-monsters....and those coins will always be sought after....ALWAYS

    as far as the rest of the population ..i break them down into 2 catagories.....good or higher eye apeal....or just coins...in which those 2 catagories will be subject to the laws of supply and demand...with both being a fixed supply obviuosly the most eye apealing coins will be sought after first right on down to the ugliest....and will be priced acordingly....but as i said it is all demand driven as the supply is fixed thus all coins will be ranked ( acording to the "look" )....and if you own the look you will ring the bell..if you dont you may have to wait a while

    monsterman

    ps...the hardest thing for all newbies to understand is grade-flation...they look at...for example diamonds and say it a f-vvs-2....period...and will always be just that...and cant possibly be a e-vs-1 someday....and they are right...but diamonds do not have a fixed supply...there are tons of them and tons more to be found and there is no upgrading diamonds as the grade is the grade...but coins on the other hand have a fixed supply....and thus my "ranking them " theory......

    their mistake is they are trying to equate apples and oranges and do not understand the " landscape " of ( aka the nature of the beast ) the territory
    my goal is to find the monsters and i go where they are but i sometimes miss some.... so if you have any and want to sell IM THE BUYER FOR THEM!!!

    out of rockets ...out of bullets...switching to harsh language
  • tradedollarnuttradedollarnut Posts: 20,146 ✭✭✭✭✭
  • fcloudfcloud Posts: 12,133 ✭✭✭✭
    TDN

    Did you find the way back machine? Its a nice read.

    Eye appeal only causes gradeflation if the coin deserves it. Today some would get that fourth party sticker.

    President, Racine Numismatic Society 2013-2014; Variety Resource Dimes; See 6/8/12 CDN for my article on Winged Liberty Dimes; Ebay

  • ZoinsZoins Posts: 33,811 ✭✭✭✭✭


    << <i>TDN

    Did you find the way back machine? Its a nice read.

    Eye appeal only causes gradeflation if the coin deserves it. >>

    Some would argue a coin never deserves it.

    << <i>Today some would get that fourth party sticker. >>

    Yes, fast forward to today and it appears that the coin can get both a higher grade and a sticker.
  • DoogyDoogy Posts: 4,508
    I would wager less on "eye appeal", and put more emphasis on a "race to the top" mentality. The two services are fighting over having coins like this in their holders/pop reports, and are willing to play one-ups to get and keep them. The most obvious example of this mess, is the 1804 dollars.

    I think your examples are another sad instance of this.
  • LakesammmanLakesammman Posts: 17,282 ✭✭✭✭✭
    My VERY limited experience suggests an upgrade candidate is easier to detect from arms length than with a 7X.
    "My friends who see my collection sometimes ask what something costs. I tell them and they are in awe at my stupidity." (Baccaruda, 12/03).I find it hard to believe that he (Trump) rushed to some hotel to meet girls of loose morals, although ours are undoubtedly the best in the world. (Putin 1/17) Gone but not forgotten. IGWT, Speedy, Bear, BigE, HokieFore, John Burns, Russ, TahoeDale, Dahlonega, Astrorat, Stewart Blay, Oldhoopster, Broadstruck, Ricko.

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