Certification has improved grading standards but do we have slab inflation?

BiddlesBank

Cases in point:

(1) PCGS, NGC, and ANACS have helped standardize and implement less ambiguous grading standards. The point is not whether you believe that an old AU58 is now graded MS63 but whether there is evolving a more universal standard of grading?

(2) Several years ago I purchased an exceptionally rare Draped Bust Half Dollar that in the early 1980's was touted as the world's finest known, as XF, by one of the most respected dealers in the United States. In 2002 it came back from ANACS net VG8.

(3) John J Ford predicted slab inflation in the early 1990's. But he added that the New Netherlands Coin Company purposely under-graded coins which produced a pyschological effect that made bidders bid more in the long run. It is not unusual to see coins today that will certify several grades above their listing grade of old. So it appears we have both sides of the coin in yesteryear grading.

(4) Today repeated cracking out a coin and resubmitting it for a higher grade dilutes the grade. But it is not considered bad to do so by most collectors so this I do not toss into the bad guy arena.

As for me I think eye appeal is a greater factor than grade and I definitely think the slab market is artificially driving up the market as an investor's market rather than a collector's market. But on the other hand a slab is a safer way to buy.

jmski52

There's a reason that I collect mostly bullion issues.

That reason is that back in 1966, I decided that I could grade for myself, and that I didn't need a 0 to 70 grading scale to know a good coin when I saw one. When they started hyping third party grading, it merely reinforced my conviction.

I only recently joined the party, but that doesn't mean that I believe in standardized grading. There isn't really any such thing. The market knows it, too.

coindeuce

Exactly as jmski52 wrote.

MrEureka

that doesn't mean that I believe in standardized grading. There isn't really any such thing. The market knows it, too.

If this is all true, then there is something else about plastic (besides "standardized grading") that the market values. What is it?

ColonialCoinUnion

<< <i>Several years ago I purchased an exceptionally rare Draped Bust Half Dollar that in the early 1980's was touted as the world's finest known, as XF, by one of the most respected dealers in the United States. In 2002 it came back from ANACS net VG8. >>



I'm sorry, I'm having trouble getting past point #2.

What issue is this, and what dealer was it from?

slumlord98

<< <i>If this is all true, then there is something else about plastic (besides "standardized grading") that the market values. What is it? >>



Authentication and the illusion that plastic offers standardized grading.

Edited to add-

<< <i> But on the other hand a slab is a safer way to buy. >>



I couldn't disagree more strongly.

OneCent

<< <i>that doesn't mean that I believe in standardized grading. There isn't really any such thing. The market knows it, too.

If this is all true, then there is something else about plastic (besides "standardized grading") that the market values. What is it? >>



I believe that having a coin encapsulated by a top-tier grading company gives the purchaser a sense of comfort when shelling out some greenbacks for a particular coin of interest. Similar to the Good Housekeeping seal of approval. It is the knowlegde that an expert in the field looked at/reviewed the coin and certified the piece as being of X grade.

Additionally, the market(buyers) put value in the encapsulation as the prices for similarly graded raw pieces almost always sell at a discount to the slabbed coin.

JMHO

BiddlesBank

<< <i>

<< <i>Several years ago I purchased an exceptionally rare Draped Bust Half Dollar that in the early 1980's was touted as the world's finest known, as XF, by one of the most respected dealers in the United States. In 2002 it came back from ANACS net VG8. >>

I'm sorry, I'm having trouble getting past point #2. What issue is this, and what dealer was it from? >>



Now Colonial Coin Union you know I can not disclose his name on this forum. But he has appeared on public education shows explaining numismatic aspects of early issues.

I did not buy directly from him but in the flip was his advertisement for the coin. I certainly did not buy it as an XF but someone did and I can't mention that name either.

In a personal private discussion I would be glad to explain point #2 in greater detail.

But it is safe to explain that the coin had been tooled in the right field and then a substance applied in the depression. After that it was art toned. Now days any good grading service would catch that. I certainly did and paid the price such a piece was worth. About $2,000 if I remember right.

Now I am not saying this dealer knowingly participated in a coverup, it was used as an example of how carefree grading could be in an earlier era. Many would give us the impression that early dealers were more conservative than today's grading services. This was an illustration to pop that baloon.

jmski52

When there are people who make a career out of tracking whether grading standards are tightening or becoming more lenient, and are actually able to play an arbitrage game from this phenomenon, it's the kind of situation, in most cases, that I walk away from. No, make that RUN away from.

".............that doesn't mean that I believe in standardized grading. There isn't really any such thing. The market knows it, too."

If this is all true, then there is something else about plastic (besides "standardized grading") that the market values. What is it?


What is it? It's the mystic of a name brand and a better than average long-term marketing campaign for a fairly consistant service. Certification is not without value - but it's not the holy grail, either. The market doesn't value all MS-67's for any given coin the same, or any other grade category either. The value for a coin comes from a "hands on" examination and experience in that coin, and not from the plastic.

roadrunner

There are already major players who track the swings in the TPG's grading on a monthly or even weekly basis. They keep an eye on who the individual graders are at any time. And they make money at this. Guess it's time to leave the slab market.

Don't look know, but the slab insert IS the major factor in determining the price of a coin the majority of the time. It doesn't mean that seasoned dealers and collectors don't usually buy the coin first, but the majority of coin buyers out there....buy the insert.

roadrunner