What will happen when grading standards tighten?

TopographicOceans

It seems like standards fluctuate over time.

If TPG's enter a period where they tighten their standards and it becomes more difficult to get a coin into Gem grades.

But there are coins already encapsulated in 66+ and above holders that may not make it in the same grade if resubmitted.
It seems like there would be a massive cost to buy back these coins. I'm really just talking about NGC and PCGS since they are the only ones that guarantee their grades.
It seems like the possible expense of buy backs would prevent grade tightening.

What are your thoughts?

jdimmick

I think it already has to some degree over the past 6 months to a year or so, and honestly it needed too.



I had a large group of type coins across all series that were cracked by a customer several years ago, when they were all sent back in, many fell a point. a couple upgraded, but these were ones that were bought 5-10 years ago.



I had all the labels from before and have all the data recorded, when I get time, Ill post the results.



But in truthfulness, several that went down a grade probably were correct this time around, and for whatever reason the prior owner/dealers who sold them to my customer got the upgrades.



jim

TwoSides2aCoin

Prognosticating isn't my forte'. The costs are tuition, and the consumer always pays.

mercurydimeguy

They have been tight for a while now.



What might confuse you is the amount of coins on the market that were graded a while ago.

TomB

I don't understand your premise.



If the TPGs shift their criteria for grading coins there is little incentive to announce such shift and even less incentive to go out and buy back otherwise problem-free, accurately graded coinage. Additionally, if there is a shift in grading criteria that the public notices then there is essentially no incentive at all for the public to send in coins to be graded downward as those coins would immediately lose value.

TomB

I don't understand your premise.



If the TPGs shift their criteria for grading coins there is little incentive to announce such shift and even less incentive to go out and buy back otherwise problem-free, accurately graded coinage. Additionally, if there is a shift in grading criteria that the public notices then there is essentially no incentive at all for the public to send in coins to be graded downward as those coins would immediately lose value.

ricko

I totally agree with TomB..... Cheers, RickO

BillJones

I don't see any evidence of where the third party grade companies have a "massive buy-back" of coins when the standards are tightened.

I have been collecting coins for over 50 years, and I've been in this hobby for a as long as there have been slabs. I've seen several cycles where grades were loosened and tightened. The net result was really nothing from this. The over graded coins stayed in their slabs and were traded in many cases as if the grades were okay. Those of us who can grade passed over those coins, and those who can't bought them.

My perception has been that grading is tightened when the markets are slow. They are tend to be less tight when the markets are doing well. This has gone on for years, and I don't see anything, other than perhaps CAC, that will change that. The trouble is my perception of CAC is that it has inconsistencies just like the grading companies. Many coins deserve the CAC sticker, but there are enough coins on the market with the sticker that don't deserve it to make it less than a foolproof solution.

TwoSides2aCoin

My last submission is currently "in-house", brother. You know the standards are tightening, now.

jdimmick

Bill Jones comments are dead on!

And I might further add: the grading services wouldn't publicize this info anyhow, it just shifts.

those in the know, especially folks and dealers that submit often across various series will begin to pick up on this trend whether its loosening or tightening.

ElmerFusterpuck

The way I look at it is this:



If you submit coins for grading and you don't get the grades you wanted, the services are grading too tight.

Now you want to sell these coins and all you will hear is how loose the grading services have gotten lately.

Sonorandesertrat

I also fully agree with all of Bill's comments.

BryceM

I think there are some great comments here, but there's something else to consider too. When them market is hot, really great coins hit the market, and the graders are delighted to see such nice coins. They grade accordingly and it might seem like standards have loosened. When things are slow, people will often hold on to their best pieces. When the same old "meh" stuff keeps showing up in the grading room, the grades given out will reflect that.

LindeDad

I find as things age they usually don't get tighter.

panexpoguy

It has been my experience that grading has tightened over the last 12 months or so. I have had my best success rate at CAC with more recently (9 months) graded coins which could indicate PCGS and CAC have gravitated closer in evaluating. Of course, it could be due to other factors. I have enjoyed learning from successes and failures that I have submitted to CAC and PCGS. As has been stated, tuition is paid by the collector, but I feel pretty confident on one series that if I like it raw or in NGC/ANACs plastic that it will cross at grade in the present and have a high chance of getting a green bean.

19Lyds

I had to double check the date on this thread since this very subject has been approached many times over the past 10 years.

OldIndianNutKase

I have the feeling that grading standards will continue to eveolve from an absolute to a relativeistic scale. Comparing the perfection of a modern PR70 DCAM with a coin from the 19th century is like comparing apples and oranges. I think it probably good for the hobby if 19th century coins are graded on their own scale relative to each other.



OINK

Cougar1978

That is why one needs to know how to grade.

Who do you think is going to buy them back? The TPG's? No incentive for them to. Sellers? Not me - Once the return period (14 day on sight unseen - online) has expired any coin offered back is subject to my wholesale offer based on current market conditions and inventory needs. My thoughts? Not worried about it, my goal is profitable, quick inventory turnover. However, one needs to look at the coin and evaluate it by their own grading standards in determining where it falls in the grade range. With the fantastic PCGS Coin Facts Tool, one can not only study auction history but look at the coins in many instances to possibly get an idea of why some realized more than others.

TopographicOceans

Originally posted by: TomB
I don't understand your premise.

If the TPGs shift their criteria for grading coins there is little incentive to announce such shift and even less incentive to go out and buy back otherwise problem-free, accurately graded coinage. Additionally, if there is a shift in grading criteria that the public notices then there is essentially no incentive at all for the public to send in coins to be graded downward as those coins would immediately lose value.

Let's say you buy 100 MS67 Morgans. Then 1 year from now you start seeing freshly graded MS66 Morgans that look nicer than your MS67's.

So you buy them and resubmit and they keep coming back MS66.

Then you'd wind up with 100 MS67's that would be MS66 in the "new" standard. That's a lot of money.

But I think Bill's answer is spot on.

mercurydimeguy

Originally posted by: OldIndianNutKase

I have the feeling that grading standards will continue to eveolve from an absolute to a relativeistic scale. Comparing the perfection of a modern PR70 DCAM with a coin from the 19th century is like comparing apples and oranges. I think it probably good for the hobby if 19th century coins are graded on their own scale relative to each other.



OINK

I would even go a step further to say they were never absolute to begin with

roadrunner

Since the first PCGS graded coin in 1986, there has been a slowly meandering expanding wave of volatility in coin grading. The market loosened a bit from 1987-1990 as the growing pains of slabdom occurred. It then tightened or held reasonably steady from 1990-1996.



From 1996-2008 the grading loosened up considerably even if within that window there may have been short periods of tighter grading lasting months at a time. Now we've had a general tightening since November 2008, or about when CAC came into existence. This also fit well within the market downturn of Sept 2008 - Sept 2011. Things just get tighter during pull backs. Bottom line is that we never go back to the tighter standards of years earlier. It's sort of like sovereign debt...it just expands. Grading just expands.

FredF

Then you'd wind up with 100 MS67's that would be MS66 in the "new" standard.

I don't think this is a big deal. The price will match the quality. So hypothetically you have a coin that is $1000 in 65, $5000 in 66, and $15,000 in 67. You buy a bunch of coins in 67. Grading standards tighten, and those 67s are now 66's in the new system. Do you lose money? I would say no, because the prices of 66's will go up. People in the know will also understand that a coin slabbed in the past at 67 is equivalent to a present 66, so won't pay the same for an "old" 67 as they would for a "new" 67. Same as how people look at ANACS slabs from different eras, or OGH vs. current slabs, etc.