Thoughts on the Evolution of Coin Grading -- What Do You Think ??

Stuart

Here are some thoughts that I recently posted on the U.S. Coin Forum thread that I felt might be worthy of their own discussion thread...

I've seen many Bust Halves in MS-62 holders (Top 2 TPGS's in both old & new holders), that in my personal grading opinion were nice high-eye appealing AU-58 sliders,which I like to call AU-59.5's, (or even AU-62's).

I have also seen numerous Morgan Dollars (Top 2 TPGS's in both old & new holders) graded MS-62 that I felt were AU coins. One person's interpretation of light wispy appearing bagmarks may be another's interpretation of light circulation marks.

When I first started collecting coins back in the early 1970's, over a decade before plastic slabs and Third Party Grading, there was not a big commercial difference between an AU and MS Morgan Dollar (same for many Type Coins -- except for the key coins).

Today there is an increased emphasis on grade (not necessarily quality and eye appeal), a large commercial difference between an AU and MS coin, and even huge commercial price differences between Unc, BU, Choice BU and Gem BU grades (notice that I intentionally did not use numerics).

Based on the above it is important for the intelligent collector to carefully evaluate all aspects of the coin during the purchase decision process. I totally agree with the sage old advice of buy the coin, not the holder.

We also must take into consideration that the above-mentioned grade-sensitive pricing, provides the opportunity and commercial incentive for people to resubmit coins which they feel are undergraded (or borderline coins) to try for the next higher grade. This has created a grade-infation situation, where there is an unnatural distribution of coins which may grade in either the lower quartile or even lower decile of a specific grade. (i.e. having an uneven skewed population distribution of an issue within a specific grade, reather than what would be a naturally occuring standard bell curve distribution).

In my opinion this is why I commonly find original undipped and unprocessed MS-63 & 64 Morgan Dollars, which have much greater eye appeal than MS-65 & 66 coins which have been dipped & processed to catch the higher grade. I tend to focus more on original mint luster, and strong strike than to overly focus on contact marks, expecially when contact marks are located in non-prime focal point areas, and when they are less harsh. Other than for key coins, there is less commercial incentive to upgrade an MS-63 Morgan Dollar to MS-64, and even MS-64 to MS-65, while upgrading MS-65 to MS-66, and MS-66 to MS-67, is commercially attractive.

I liked it better when we used the terms: AU, Unc, BU, Choice BU and Gem BU.

I'd appreciate others' thoughts on the above. Thanks for reading!!

tradedollarnut

Thoughts on the Evolution of Coin Grading -- What Do You Think ??

I think three separate things have occurred:

1) a slow degradation of standards due to constant resubmissions. Not only have liner coins gone up and up and up, but so many mistakes have gotten through that standards have fallen significantly.

2) expansion of the upper grades. A better realization of what exists has allowed the TPG's to more accurately assess and allocate the superb gem grades for classic material

3) change in philosophy for AU58. It became apparent that choice AU58 coins were valued as low uncs. The TPG's began to look at high point rub with a less jaundiced eye leading to coins exhibiting such being graded anywhere from MS62 to MS65.

PrivateCoinCollector

I think that although there are always exceptions, that the overall grading quality of PCGS, NGC and ICG would stand up to statistical analysis. An interesting side thought would be to see how CAC populations go over time. I seems kind of paradoxical that for them to remain viable they MUST find a significant (read to mean statistically) number of coins that are graded incorrectly.

MrEureka

I liked it better when we used the terms: AU, Unc, BU, Choice BU and Gem BU.

I prefer the precision offered by the Sheldon scale. It helps when you need to describe a coin, or have it described to you.

On the other hand, I don't even bother grading the coins in my collection, before or after acquisition. To me, there's no need to quantify quality unless it has to be communicated.

RWB

I see no "precision" whatever in the Sheldon scale as used for coins – simply arbitrary application of a non-linear nonsense scale to subjective opinion on relative condition.

PS: When a coin shows wear or "rub" it is not MS - AU or lower is the only meaningful designation. Pricing is irrelevant - as in poker the coin grades itself.

MrEureka

I see no "precision" whatever in the Sheldon scale as used for coins – simply arbitrary application of a non-linear nonsense scale to subjective opinion on relative condition.

Roger - The trick is to use the scale in a non-arbitrary manner.

firstmint

The Sheldon grading scale, which first appeared in 1949, was meant as a mathematical formula to create a hypothetical value based on the lowest common denominator. It was suggested for use only for Large Cents.

It really doesn't work for all US issues, and hasn't performed as planned since the since the early 1950's.

There are too many variables, such as strike, bagmarks, toning, etc. that are not taken into consideration in the currently used Sheldon 1-70 scale.

jmski52

There are too many variables, such as strike, bagmarks, toning, etc. that are not taken into consideration in the currently used Sheldon 1-70 scale.

Bagmarks aren't taken into account?

firstmint

Oops! That one slipped through.

I was thinking about the original Sheldon scale which only mentions injuries, scratches, bruises, or mutilations (p.42).

Bear

I have found that what ever system

is used, the collector will be in trouble.

That is, unless the collector learns to

grade quality for themselves. Blast white

with subdued luster, is not the same as original.

A coin can be the technical grade, but lacks that certain

look, is not a coin the serious collector should want. Even

in the circulated grades, one must learn to seek quality for

the grade.

dizzlecc

The scale does not matter as much as consistency.

My other thought on the weakness of current grading standards is the reputation that the services have for grading coins with lighting timing.

From what I have heard, it takes less than 10 seconds to grade a coin and closer to 5 if it is a common coin.

I wish they would at least take a few more moments and try to get it right the first time.

ricko

Grading is subjective at best. There are many, many variables - and as long as humans are doing it, subject to error. I have a career in Quality... and professionals know that 100% inspection (human) is the most unreliable form of defect detection. It works to some extent.. approximately 90% - and here is where complexity of the subject being inspected enters. The more complex, the higher percentage of errors. I know this will sound blasphemous to some, however, take the word of professionals, buy Dr. Joseph Juran's Handbook of Quality, read it, read Dr. Demings works, read Phil Crosby's books... all the experts will tell you - human 100% inspection is unreliable and will produce errors - many errors. Coins, for the most part, are fairly complex to grade - it takes time and close scrutiny. Lacking that, errors increase. There will NEVER be consistancy over a large segment of product given these conditions. Cheers, RickO

RWB

An arbitrary scale cannot be used in a rational manner.

This was the basic logic Virgil Hancoque (the system won't let me write his correct name!) could not grasp decades ago when he was pushing for adoption of Dr. Sheldon’s nonsense scale.