It Pays To Know How To Grade......$36,000.00 Profit
elwood
Posts: 2,414 ✭
Here's an Early Dime that's been sold twice in less then 2 months.
It appeared first in ANR's Kennywood Sale at the FUN show in Jan. 05
Lot #339
1798/7 13 Star Dime PCGS AU-58
Realized: $46,000.00
It then was sold in Heritages Long Beach Signature Sale Feb 26 05
Lot #6174
1798/7 13 Star Dime PCGS MS-62
Realized: $83,375.00
Nice upgrade!!! I just don't understand this demand for plastic and a number on a holder.
ANR
Heritage
It appeared first in ANR's Kennywood Sale at the FUN show in Jan. 05
Lot #339
1798/7 13 Star Dime PCGS AU-58
Realized: $46,000.00
It then was sold in Heritages Long Beach Signature Sale Feb 26 05
Lot #6174
1798/7 13 Star Dime PCGS MS-62
Realized: $83,375.00
Nice upgrade!!! I just don't understand this demand for plastic and a number on a holder.
ANR
Heritage
Please visit my website prehistoricamerica.com www.visitiowa.org/pinecreekcabins
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Comments
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
BTW, Heritage imaging sux.
The ANR looks like different from the Heritage (Toning aside). Looks like a die crack behind the hair on the ANR which I don't see on the Heritage picture. Maybe a lossy picture from Heritage.....
Hair detail looks better on the ANR coin along with the reverse shield lines and feather details.
Cameron Kiefer
I've also had the coin at my house and photographed it prior to it's first auction appearance.
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.
<< <i>Still looks AU58 to me... >>
yep
I wonder if the the first owner has a cause of action against PCGS? I would guess 'yes.'
-c-
Tiger trout, Deerfield River, c. 2001.
<< <i> wonder if the the first owner has a cause of action against PCGS? I would guess 'yes.' >>
Why??? Because the first owner decided to sell it in it's old green holder and not bother to try to upgrade it?
My answer would be 'no'.
Without seeing the coin, I can't say if ALL the weakness in the cent is due to strike. If it is due to strike, the coin could be an MS-62. BUT if there is rub there, this coin is an AU-58 in MS-62 clothing.
REMEMBER - most MS-61 and 62 graded coins are "sliders," especially in this era.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Tyler
<< <i>Still looks AU58 to me... >>
Great transactions with oih82w8, JasonGaming, Moose1913.
First, there are two things to keep in mind.
1. Assuming it's the same coin, PCGS gave two different grades. Note that this is not a "slider" situation -- this coin went from AU58 to MS62.
2. The 'value' of the coin is what one uncoerced person is willing to give another at an arm's length transaction. Therefore, regardless of "timing" or "luck," the fair market value of the coin (in a 62 holder) is $83,375.00.
If the coin is truly MS62, then the original owner got screwed out of $37,375. He had an $83,375 coin for which he got only $46,000. Who's responsible? PCGS! Why PCGS? Because PCGS undergraded his coin, with severe economic consequences to the original owner.
If the coin is truly AU58, then the new owner got screwed out of $37,375. He paid $83,375 for a coin which was worth only $46,000. Who's responsible? PCGS! Why PCGS? Because PCGS overgraded his coin, with severe economic consequences to the second owner.
If the coin is somewhere in between, then both owners got screwed. Who's responsible? PCGS, for the same reason.
The logical extension is that anytime PCGS upgrades a coin, it has harmed someone. That's true for 'slider' coins and coins whose value increases only a dollar because of the upgrade.
Now I know that many of you are rolling your eyes because you believe that grading is subjective. I refer you to a previous post, reproduced below, which describes the significant legal risks that befall those who would advance the "grading is subjective" defense. Frattlaw, whom I know many of you justifiably hold great admiration for, characterized the previous post as "By far, absolutely the best explanation I have ever read in regards to the legal ramifications of grades and the standards that are used in our industry." He added that "The above post should be required reading by everyone on this Board --- dealers, collectors, graders, scammers alike."
Here it is:
"There is a huge difference in the law between making a vague assertion about an item’s quality or its value and making a specific assertion about its condition. This goes for any object which can be moved, including coins (Article 2 of the UCC, which all 50 states have adopted in some form or another, and which governs the sale of such items, calls these “moveable goods,” as distinguished from the sale of services). For example, a seller who says that a car is in “great shape” or that a coin has “monster toning” is said to be “puffing,” that is, merely hyping his goods. If the car runs less than great, or the coin has only a little toning, the buyer cannot seek damages from the seller because the assertions were vague and not provable. The reason is obvious: everyone has their own conception of what it means for a car to be in “great shape” or for a coin to have “monster toning,” and there is and can be no uniform understanding of what these concepts mean. It would be unfair to hold someone responsible if another person didn't agree that the car was great or the coin had monster toning.
"Contrast that situation with one in which the seller says that his car “has a rebuilt engine and a new muffler.” That’s a specific representation capable of empiric proof. If, in fact, the car does not have a rebuilt engine or a new muffler, the seller can be liable for the damages caused by his misrepresentation. That also is a fair result, provided that the buyer actually relied on what the seller said when deciding to buy. (The legal term for this is called "detrimental reliance".)
"Now, there are certain fungible items in everday life that are bought and sold according to their condition or grade. Take beef, for example. Beef wholesalers sell their cuts to retailers according to a grading system set out by the USDA and known to all who are in the business. One type of beef has certain known characteristics and is priced accordingly. Another type of beef may be of a lesser quality, and therefore be of a lesser grade on the scale, and command a lesser price. Eggs are another example. grade A eggs have certain predetermined characteristics that distinguish them from other grades of eggs. If a seller of eggs says to a potentional buyer, “These twelve dozen eggs are all grade A,” and the eggs are a lesser grade, the seller is liable to the buyer. There is a whole body of law which addresses the sale and purchase of items that are valued according to a grading system, like beef and eggs.
"And coins. Like beef and eggs, coins are commonly bought and sold according to their grade. Yes, clearly there is a subjective element to grading coins, but that is true with grading eggs or beef or any number of other items, and there is a definitive standard against which any particular coin can be measured to determine its grade. Indeed, the graysheet prices coins sight unseen by saying that, in a given case, a particular year and mint of mercury dime is worth so-and-so. It simply cannot be denied that the coin industry relies on coin grading to determine value, just as cattle and poultry producers rely on their own grading system.
"Thus, a seller who says that a particular coin is in a particular grade has made a representation about that coin. The law calls what he said an “express warranty” that the coin is, in fact, the grade that the seller said it was. (UCC Article 2, § 2-313(1)(a) provides that “[a]ny affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis for the bargain creates an express warranty that the goods shall conform to the affirmation of promise.”) If the buyer buys the coin and finds that, in fact, it’s a lesser grade, and as long as the buyer relied on the seller’s representation regarding the grade in deciding to buy the coin, then the buyer has a legitimate claim for damages. (If the buyer did not rely on the seller’s misrepresentation, then the buyer has no claim, and rightly so.)
"The UCC provides a variety of remedies for a frustrated buyer (and also for sellers when the buyers refuse to buy). The underlying principle is that when a contract is breached, the non-breaching party is entitled to the “benefit of the bargain” he struck. In the case of a seller being the breaching party, the buyer can demand the money back (plus any “reasonably foreseeable” consequential damages), the buyer can “cover” (that is, go out into the market, buy the product, and then charge the purchase price to the original seller), or, perhaps most commonly, recover the difference between the item as warranted and as actually received (Article 2, § 2-714(2) of the UCC says, “[t]he measure of damages for breach of warranty is the difference . . . between the value of the goods accepted and the value they would have had if they had been as warranted . . . .”)
"Thus, if a seller tells a buyer that a coin is, say, MS 65, and in fact the coin grades at MS 62, and the difference between MS 65 and MS 62 is $100, the buyer would be entitled to the lower-valued MS 62 and--note that I said "and"!--the additional $100 in order to permit the buyer to receive everything he bargained for. (Or the buyer could buy a “real” MS 65 and send the bill to the original seller, or the buyer could just demand his money back. Buyer chooses the remedy he desires.)
"As sellers, you might say that grading standards are too subjective and that PCGS or some other reputable grading service might grade a coin MS 65 one day and the same coin MS 64 or MS 66 the next. this is a fair argument, but against a properly-prepared plaintiff it won't carry the day. Yes, there is an element of subjectivity in grading, and yes, PCGS's and others' results might vary, even for the same coin, but how are you going to prove it? PCGS won’t submit an affidavit on your behalf that they sometimes grade the same coin differently. The best you’ll be able to do is to take the stand in your own defense (or hire another coin dealer to act as an expert) and try to explain why a definitive coin grading system can’t really be adhered to or followed accurately, all this after the court has heard from the disappointed buyer who has presented compelling evidence of his own about how the entire coin industry relies on the grading system. I contend that that's not a situation most sellers would like to be in.
"When (if) you represent that a particular coin is a particular numerical grade, you have made an express warranty that the coin is, in fact, the grade you represented it to be, and if it isn’t, you can be held liable for damages. Beware, especially if you live within New York, Connecticut, or Vermont (the three states comprising the United States Court of Appeals for the Second Circuit).
"(Note well, too, that may be just the beginning. If the plaintiff proves that it was more likely than not that you had a “bad” motive in making your representation, you can be found liable for multiple damages *and* costs and the plaintiffs’ attorneys fees! Not to mention criminal liability!)
"But don’t despair. As sellers there are things you can do to limit your exposure. You can disclaim warranties in your sales receipt, for example (although this is a bit tricky to do legally–the UCC has several sections on exactly how it must be done to be valid), or you can assert that the grade is merely your opinion of the coin’s grade and that the seller should not rely on anything you say about the grade. You also could say that a coin was “probably” or “likely” a particular grade. Or you could just say that it’s “premium” or “gem” or “high quality” or use other “puffing” language. Just be careful, that’s all.
"Again, take it or leave it, but ignore it at your peril."
Link to thread in which this previous post appeared
Indeed, it is even possible to be criminally liable for overgrading! See here!
Finally, please note that the legal views advanced are entirely my own and in no way necessarily represent those of my employer.
Continued regards to all,
--chris
Tiger trout, Deerfield River, c. 2001.
Heck, no! Grading is an art, not a science. PCGS [or NGC for that matter] puts a number on the holder that reflects their willingness to stand behind at the time of grading. Coins are graded with any number of defects and attributes in mind and a net grade is arrived at mentally. No court of law would expect a mental summation to be 100% consistent... especially one arrived at by different graders at different times!
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Look. PCGS charges you a lot of money to give your coin a grade. That's its business. Here it appears to have graded the very same coin quite differently at two different times, with enormous financial consequences. Now, if there was some indication that the condition of the coin had deteriorated while out of PCGS's control, that's one thing. But that's NOT what happened here -- here, the coin IMPROVED in PCGS's view.
I've already posted a link where a company was found to be criminally liable for grade swings that weren't that much worse than the one here.
How would YOU like to be the original owner of the coin in question here? PCGS represented to you that it was 58, so you sold it for 58 money. Then you learn that PCGS REALLY thinks its 62, and your ex-coin sold for $37,000 more than you sold it for. You're telling me you wouldn't be aggrieved?
"My grader had a bad day" or "My grader didn't get it 100% right" or "It had two different graders" is NOT going to impress a judge faced with a claim that a company that charges people to assign grades to coins screwed up and harmed the claimant.
I mean, this one isn't really even close, in my opinion.
-c-
Tiger trout, Deerfield River, c. 2001.
<< <i>It is more amazing that more money was spent on a horrible image. I would have thought the Heritage image would drive a 40K bid and the ANR was the 80K bid. >>
The quality of the images really doesn't matter since it was a floor auction.
Russ, NCNE
Oh... three or four court decisions upheld on appeal that state just that.
They did not know the original grade on the coin was 58 now did they, so they regraded it as a 62 honestly and fairly.
Isn't this why people always try and get the premium coins in a 63 holder and bump them to a 64 if possible.
The original owner or his advisor(s) it appears made a expensive mistake by not getting the coin regraded before they sold it. That owner might also think it was a 58 and who say they are nuts to give it a 62.
<< <i>How would YOU like to be the original owner of the coin in question here? PCGS represented to you that it was 58, so you sold it for 58 money. >>
The original owner is at least as culpable as PCGS. If I had a coin of this value I'd make DAMNED sure of the grade before I ever decided to sell it. If I thought it had even the smallest chance of an upgrade like this, you can bet your ass I'd try it first.
Russ, NCNE
<< <i>Here's why I think *someone* has a cause of action.
Heck, no! Grading is an art, not a science. PCGS [or NGC for that matter] puts a number on the holder that reflects their willingness to stand behind at the time of grading. Coins are graded with any number of defects and attributes in mind and a net grade is arrived at mentally. No court of law would expect a mental summation to be 100% consistent... especially one arrived at by different graders at different times! >>
Nonsense in this case. We are not talking MS63 vs. MS64, but the same coin one time graded as circulated and the other time as uncirculated. Any experienced grader should be able to tell the difference between a circulated coin and an uncirculated coin.
<< <i>I don't know what it's going to take to get you people to start accepting the idea that courts won't necessarily buy into your idea that grading is an art, not a science, and that's it's subjective.
Oh... three or four court decisions upheld on appeal that state just that.
US vs. Kayne
It looks worse in Heritage, but it has a higher grade.
Go figure.
Unfortunately, I can't see a winning case in the courts, until PCGS is declared the final word.
As long as I am living, there will never be unanimous consent that grading can be consistant, with the technology that is in current use.
I firmly believe in numismatics as the world's greatest hobby, but recognize that this is a luxury and without collectors, we can all spend/melt our collections/inventories.
eBaystore
Pick a nice shiny quarter out of your pocket change and send it in. Let me know the results....
<< <i>
<< <i>How would YOU like to be the original owner of the coin in question here? PCGS represented to you that it was 58, so you sold it for 58 money. >>
The original owner is at least as culpable as PCGS. If I had a coin of this value I'd make DAMNED sure of the grade before I ever decided to sell it. If I thought it had even the smallest chance of an upgrade like this, you can bet your ass I'd try it first.
Russ, NCNE >>
That's a good point, Russ, but the problem is that the original owner could have tried it 100 times for all we know.
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.
Nice try, Eric.
<< <i>That's a good point, Russ, but the problem is that the original owner could have tried it 100 times for all we know. >>
Possible, but since it was in an OGH, unlikely. However, if he did try multiple times for an upgrade in holder and was unsuccessful, then I think a legitimate case could be made against PCGS. Particularly so if the buyer is a dealer and it upgraded in one shot.
Russ, NCNE
I would, too, but there's no way that NOT resubmitting the coin would relieve PCGS of liability it would otherwise face.
Otherwise, any owner of a slabbed coin would be under a duty to resubmit the coin prior to selling it. That's absurd.
I think it's perfectly reasonable for someone who purchases a coin graded by PCGS to expect that PCGS has accurately graded the coin.
Here, PCGS didn't do that and should be held accountable. (Whether to the original seller or the later buyer, I don't know.)
-c-
Tiger trout, Deerfield River, c. 2001.
<< <i>Otherwise, any owner of a slabbed coin would be under a duty to resubmit the coin prior to selling it. That's absurd. >>
There's nothing absurd about it. Every user of potentially hazardous equipment is under a duty to exercise due caution when using that equipment. As a lawyer, I'm sure you're familiar with the concept of contributory negligence.
Russ, NCNE
<< <i>I don't know what it's going to take to get you people to start accepting the idea that courts won't necessarily buy into your idea that grading is an art, not a science, and that's it's subjective.
How would YOU like to be the original owner of the coin in question here? PCGS represented to you that it was 58, so you sold it for 58 money. Then you learn that PCGS REALLY thinks its 62, and your ex-coin sold for $37,000 more than you sold it for. You're telling me you wouldn't be aggrieved?
I mean, this one isn't really even close, in my opinion.
-c- >>
Actually this one is close - ultra high end circ. or bottom of the barrel unc. is one of the tougher "lines."
Especially for coins that were pehaps not fully struck up, or may have suffered from a touch of the old "cabinet friction...."
You ask how I'd like to be the original owner of the coin in question? I wouldn't mind having just sold a coin for $46K, I know that!
... and who knows, maybe the original owner bought the coin as an even lower grade for $20k!
Maybe they were thrilled at one point in time when their au 55 coin got upgraded to 58!
How far back are we supposed to take this, anyway?
Finally, with regards to courts acccepting "ideas" about the subjectivity of grading - I challenge you to find even ONE top numismatist who would be willing to walk into a courtroom and testify that there is one grade and one grade only that properly corresponds to every coin on the face of the earth, (which i believe would be necessary to prove that grading is in fact a science and not a subjective art).
All those cases that Eric cites are basically fraud cases, where representations are made knowingly and some intent is proven.
When ACG grades a vf coin ms63, we're talking FRAUD.
When i send a coin to pcgs and it comes back - au58, bodybag, au58, ms63 - that's the crackout game, baby.
ps. i have very, very little sympathy for people who deal in coins that cost as much as houses and then cry when somebody else makes the money that they should have made themselves.
but hey, that's just me..........
CG
al h.
<< <i>There is no excuse for this. For a coin of this value, PCGS should have been very careful when grading. For an experienced grader, there is no fine line between AU58 and MS62, either a coin has wear or it doesn't. Either the previous owner or the current owner got the shaft, and without looking at the coin in person there is no way to tell which. >>
The policy at PCGS is to pay the difference in price if there is a difference in grading. The previous owner should contact Pcgs .
In addition, anything being bought or sold is worth what someone else will pay- only. Price guides are ok, but if anyone wants exceptional coins, they usually have to pay exceptional prices !!
<< <i>The policy at PCGS is to pay the difference in price if there is a difference in grading. The previous owner should contact Pcgs. >>
That policy applies only to downgrades.
Russ, NCNE
<< <i>There is a big difference between assigning two different grades [within market tolerances] at two different times with two different grading teams for a $100 grading fee vs knowingly asserting a coin is not the grade you are selling it for in return for a big profit.
Nice try, Eric. >>
You asserted that the courts viewed grading as "subjective" and that there were no court cases where action was taken for incorrect grading. There are two examples, and there are more.
<< <i>There is no excuse for this. For a coin of this value, PCGS should have been very careful when grading. For an experienced grader, there is no fine line between AU58 and MS62, either a coin has wear or it doesn't. Either the previous owner or the current owner got the shaft, and without looking at the coin in person there is no way to tell which. >>
There can be rub (ie minimal wear) on grades up to MS67, according to PCGS. I would disagree there is no fine line between AU58 and MS62. PCGS utilizes market, not technical, grading. The market value is equal to the slab grade. Many technical AU58's are worth more than MS62s.