U.S. grading vs. European...

coinpictures

This one got me thinking...

On a whim this morning I did an impulse BIN on this half crown.

It's advertised as a VF. Based on my experience, by U.S. standards this would easily be an XF and quite possibly an AU. Clean rims, minimal wear, especially on the reverse. Of course I'm going by the photograph; we'll see what the coin is like upon receipt.

I wonder how many people make money by buying coins at European standards and selling them at U.S. standards... I don't know that you could get away with it on "big ticket" items, as those in the market are likely "in the know", but for sub-$50 coins, it might work.

Thoughts?

theboz11

You can TRY to sell them and call them anything you want. The trick is to get buyers that will buy from you again, after you told them what you thought that coin was.



BTW She looks dipped.

coinpictures

Please don't misunderstand; I'm not advocating misleading a customer in any way.

I'm simply comparing what I see offered from U.K. sellers as opposed to material being offered by U.S. sellers, and what I saw at the coin show last weekend. There seems to be a clear difference.

And yes you're correct; the coin could easily be dipped.

theboz11

Yes there is a clear difference IF you equate US XF to euro XF, but most advanced collectors (Darkside) are going buy the LOOK of the coin anyhow,,regardless of what grade someone else states. Only on the lightside do they buy the plastic, so to speak.

Edit to add,,how are you going to look up a price for a AU+ coin when the catalog list xf and unc.

drjules

Hi

Interesting idea and a nice coin to pick up at that price.

Dr J

laurentyvan

If I bought that coin locally, I'm confident it would be sold as an XF.

Edit to add,,how are you going to look up a price for a AU+ coin when the catalog list xf and unc.

This morning I purchased an AU Cuban 1939 one peso which had a price tag of $100.

The UNC Krause price was close to $150 (if memory serves correctly) and the XF Krause price was $45. I asked the same question (XF vs UNC), and ended up getting the coin for $65. There is a large grey area here and I try to work from XF price up as opposed to UNC down.

Dealers can make a lot of money with this kind of coin but usually "bend the knee" so to speak, which leads me to believe they buy at XF or a little above, even if it is an AU (unless it is truly a remarkable AU).

coinpictures

I asked a similar question back in August.

Linky

coinkat

There is a difference between US and European grading... as long as the standards are appropriately applied, there should not be a problem. European grading can be more conservative but it is often more forgiving of problems that would raise questions on this side of the pond.

DaveG

I think that most American collectors of British coins understand that a "VF" in the UK is an "XF" here in the US. (I don't collect European coins so I don't know about continental European grading standards.)

I've also heard it said that Canadian dealers grade US coins very strictly (more like British standards), so one can sometimes pick up a bargain on a circulated US coin in Canada.

nicholasz219

One of the reasons that I have become really irritated in general with liteside collecting is the poor state of my eyes. I have a hard time seeing superfine details on coin after coin. My doctor says he thinks he can correct my vision with glasses again for regular use, but I will never be able to see or focus for long periods of time on minute details.

This is another factor of why world coin collecting is much more appropriate for someone like me. I would be getting tarred and feathered if I was buying only liteside and unable to differentiate between a 64 and a 66.

This will be the only time I say this, but Europeans have a better grading scale in terms of concentrating on the overall look and appeal of a coin. Large problems are still duly noted, but a pleasing coin still comes with a reasonable price and much eye appeal.

Nick

wybrit

The reverse does look good, but that is typical of British coinage. It is quite common to see obverse and reverse separated by one to one and a half grades.

crito

Really only applies in VF and XF, as they have no AU. But in the unc grades some of the claims I've seen by European dealers are preposterous. Like British BU = MS70. Yeah sure, only if you use ACG as the US standard. What most European dealers call BU would barely pass for MS63 here and finding a true MS65 gem example takes more luck than skill. I just have to keep buying BUs on ebay until I get lucky and actually get a gem or near gem instead of the typical MS62.

European Unc = AU58 - MS61
European BU = MS62 - MS63
and they stop counting right there!

secondrepublic

The European system of grading is superior in my opinion because they don't pretend they can impose a 0 to 70 Sheldon scale on every coin. I prefer the "categories" of grades, like VF, XF, etc. With an appropriate "plus" or "minus" in some cases, that's the most accurate way to grade most coins in my opinion.

In many (but not all) cases, grading on coins on a 70 point scale is pseudo-scientific at best. For one thing, each coin has an obverse and a reverse. Many, or probably most, coins are not the exact same Sheldon grade on both sides. So there is some "averaging" that goes on. Then you have problems like, how do you grade - using the 70 point scale - an otherwise beautiful coin that has an annoying scratch? Or has a rim ding? It's these kinds of problems that make the 70 point scale difficult to apply in an honest and accurate way.

The other thing I don't like about the 70 point scale is that it introduces a sense of competitiveness into coin collecting which I personally am not a big fan of. Instead of focusing on the coin itself, people focus on the grade - they need to have all 65s or whatever, that becomes the main focus. You see this also in the pricing, where on the liteside a lot of slabbed 65 coins sell for literally several times the price of a 64. It's just crazy.

The other thing - this applies to Sheldon and to the European system - is that they assume that an UNC is always better than a nice AU. The old philosophy of coin collecting, from long ago, was to get the most beautiful and appealing coins. In the modern context, this means a willingness to put a really nice AU coin in your collection, rather than a less-nice MS that's technically a higher grade. We've become so focused on the Sheldon scale that it's kind of countercultural to do this, because according to the Sheldon logic, a MS 61 or 62 should always be better than an AU 58. But in reality, it's often not! I've put a few awesome choice AUs in my collection, where they'll stay for a long time, and have passed on UNCs that are technically higher grade, but nowhere near as nice.

SYRACUSIAN

Secondrepublic, I've heard this argument before, and I only have to say one thing:

US numerical grades refer to the value of the coin, not its state of preservation. So, the appealing MS62 is in fact a gEF, but it's worth MS62 money. Hence,I disagree with Anacs' recent decision to elliminate numerical netgrades. Also, it was Anacs that used to have a purely technical grade in the beginning, two grades in fact, one for the obverse ,one for the reverse. As very often the reverse was better than the obverse,but a 62/64 coin does not necessarily become a 63 now, most probably it will end up in a 62 holder. Obviously a PQ 62, but that's up to the buyer to see.

1jester

I strongly agree with SecondRep's assertion that nice AU coins can be much more appealing, and in my opinion, should command higher prices than ugly but technical uncirculated coins. I too seek out nice AUs over dog uncirculated coin.

I agree with Dimitri's views on the value of placing a net grade on coins by ANACS. However, I'm not sure I agree that in the US system, the higher numerical number represents a more valuable coin (see my above statement).

coinpictures

I agree completely with the sentiment that an attractive AU is preferable to a bland, yet technically accurate MS coin. That's one of the reasons I picked up the Wurttemberg 3 Mark piece I photographed in my toning thread. It's nowehere near MS, but the toning is absolutely gorgeous.

Then again, I actually lean towards XF and AU coins anyway, especially when it comes to raw coins. I'm not any good at grading UNC coins and attmpting to differentiate between an MS 62 vs. MS 63, etc. So rather than playing that point game, where dollars start coming into play on an MS63 vs. MS65, I'm happy with a nice XF or AU coin, which has the vast majority of the design detail anyway.

IMO, AU coins are great to collect. Practically all the visual allure of UNC coins, but usually at a fraction of the cost.

secondrepublic

<< <i>I strongly agree with SecondRep's assertion that nice AU coins can be much more appealing, and in my opinion, should command higher prices than ugly but technical uncirculated coins. I too seek out nice AUs over dog uncirculated coin.

I agree with Dimitri's views on the value of placing a net grade on coins by ANACS. However, I'm not sure I agree that in the US system, the higher numerical number represents a more valuable coin (see my above statement).

>>



Unfortunately a lot of other collectors seem to be of the mindset that a UNC coin is always better than a nice AU (a 61 or 62 always beats a 58, etc.) I guess I should say "unfortunately for them," because it makes it easier to find choice AU pieces for good money. In the Polish market, I've picked up some really nice choice AU pieces for a lot less money than the low-grade UNCs that people are often fighting over. A nice AU with original surfaces and just a hint of circulation is soooooooo much preferable to a beat-up specimen that's technically UNC but may have hairlines, lots of bagmarks, etc.

MacCrimmon

I wish I had my 1832 Bust Half back......

I bought it back in about 1983 (pre-plastique), and it was a "real" choice AU coin; blast white-monster lustre with just a faint touch of champagne tone, but with the coolest rainbow crescent sliver around about 60% of the periphery..........Ahhhhhhhh!

I'd wager the value of a cool AU Thaler, that my old 1832 is now in a PCGS MS63 or maybe MS64 slab today.....great look-slight rub.

SYRACUSIAN

I agree with Dimitri's views on the value of placing a net grade on coins by ANACS. However, I'm not sure I agree that in the US system, the higher numerical number represents a more valuable coin (see my above statement).






Jester,I don't think we disagree here. An attractive choice AU coin has good chances of ending in an MS slab,because of its superior eye appeal. Therefore, if slabbed, it's worth more than a three points lower slabbed AU average looking coin and maybe also more than a slabbed MS of the same number,technically better but dull looking. If it's a raw coin, I believe most of us still call them G,F,VF,EF, AU, UNC or BU, and decide for ourselves what we're willing to pay for them.


Regarding netgrading, let's not forget that all TPGs tolerate minor/medium defects anyway,it's just not noted on the holder, only the grade is affected.As for personal preferences, I'm very attracted by gVF as well as gem BU coins for different reasons each.I'm not a big fan of AUs.

nicholasz219

Frankly, I collect anything that has a decent look to it, and buying coins off the computer makes for hazardous guesses at best anyway before you hold the coin in your hand.

So I look for truly attractive pieces and determine the grade when I get the piece in hand. Technically, a higher slab grade will almost always command more regardless of look because of its certified grade, but most of us know a dog when we see one and leave it on the curb.

I think all of us here are pretty smart for evaluating mostly by eye appeal with exceptions for truly rare coins where even a dog is nice to have.

Going back to the original line of thought, I think that at least amongst this group of collectors, you would be hard pressed to pass a dog of a coin back to one of us, regardless in the apparent discrepancy in grades between the European and US grade systems. I think too many of us in this forum are saavy to let a label dictate our thoughts on the coin.

It is possible I think if you were dealing with people outside of their specialty that yes you could easily sell overgraded material to unwitting buyers. I think quite a bit of that goes on on the liteside where I really can't say with certainty how many people actually can grade coins by single point differences. And if they can't grade coins by single point differences, then they are very likely getting ripped off.

The Third Party Graders have a vested interest in keeping dealers submitting and resubmitting coins. The more respected services are not going to completely overgrade a coin by a full grade, but "grade creep" starts with a 61 sliding to 63 then later sliding to a 65 which totally shellacs the customer.

MacCrimmon

<< <i>but "grade creep" starts with a 61 sliding to 63 then later sliding to a 65 which totally shellacs the customer. >>



Well, I would have to disagree with this statement. With strictly uncirculated coins, a slightly baggy "61" in 1988 might 'evolve' into a 'just barely' MS63 by 2004, but going to a 65 is beyond the pale for one of the leading TPGs. Inconsistencies aside, the leading graders are not going to let the rudder spin that far of course.

Now, a 100-pt scale?? Well, that's a whole nuther kettle of fish.

secondrepublic

Nick has a point about the "grade creep" which has occurred in the last 10 to 15 years in slabbed coins, though I don't think it's more than a point or two on average. It's not a problem you see as much with darkside "category" grading used in Europe (VF, XF, etc.), but you see it all the time with 70-point Sheldon scale grading.

If numismatists are going to employ something as precise as a 70-point grading system, there needs to be a high degree of consistency within individual TPGs, over time, and across TPGs. (As if....) If not, it's better to use a system that's at least fairly accurate and fairly indisputable. E.g., there's much less legitimate argument over whether something is XF or VF, than if it's VF 35 or VF 30, or MS 61 or MS 62.

cladking

European grading is more honest in the sense that it doesn't try to categorize things
that can't be categorized. There's no AU simply because there's not really such a thing
as high point luster being "almost broken". It's either broken or it isn't. Some of the
darkside grading systems have no problem with downgrading an ugly unc coin to XF.
If the strike or luster are impaired they are simply described as XF. But it's collectors
who have created the grading that has resulted in the 70 point system. If collectors
ever begin demanding quality over other attributes in darkside coins the same sort of
situation will develop.

One should understand that world coins are graded to a far stricter standard but this
isn't necessarily better, it's just different and more honest. Coins should be graded
based on what they looked like when they were struck (to the degree one can tell) and
what has happened to them since. Such systems can be highly accurate and repeatable
for the vast majority of coins. The most obvious benefit is it tells someone without the
coin in hand a great deal about it's actual condition. Since collectors have their own
individual tastes it seems to only make sense to "describe" the coin.

nicholasz219

I think that over the course of many years, not only will coin prices be driven up by inflation which is out of our control, but by grade inflation as well. If coins get cracked out enough times or only once a generation for example, what starts off as a slow slide might become a radically different grade.

The grade divisions in any system are arbitrary in the first place, but if the lines get moved constantly the system will eventually become useless. I dunno, but it seems that by demanding more and more precise grades, the chasm between average collector and investment grade material grows ever wider.


I agree with Cladking in that the best possible hedge against all of this claptrap is just to keep a keen eye on the quality of the coins you are buying. Don't buy a bland coin with an overall boring or unappealing look. It may even be graded accurately, but the problem is not so much the grade as the person buying the coin depending on the grade as the sole determinant as whether or not to buy said coin. It seems that there is a lot of uneducated money in the US market right now buying a lot of so-so quality and driving prices up.

It would be nice to have the education and the money here for once!

Nick