Please help explain to me..Coin vs. grade?
denali12
Posts: 101 ✭
Hello everyone!.. As a newbie still learning a lot about coins and how to collect/invest in them. Went to a coin show over the weekend and heard from a few dealers and have heard other places " buy the coin.. not the grade".. It really got me thinking and maybe I have this all wrong. I thought the idea of "grading" was to standardize the industry and get an impartial look at coins, versus just one dealers opinion or collectors opinion on the grade/value of a coin.
I understand there is probably an artistic angle and value to "toned" coins- that will obviously vary on an individual opinion- but please help to explain let's say a pr68 dcam coin or pr69dcam. Shouldn't they all be the same? and if different, shouldn't they have different grades? if not what is the purpose of slabbing and grading?
I know these are basic questions, but trying to learn as I can. thank you for any input or discussion
Comments
There are multiple meanings to "buy the coin, not the grade." Firstly, you have to remember that the grades assigned to coins are ultimately assigned by humans. Humans are opinionated and just because they assign a certain grade to a coin doesn't mean it is really that grade. Secondly, every coin is slightly different from every other, so even within one grade (except 70) there are an infinite number of possibilities. There are horrible-looking MS64s and great-looking MS64s. Wait for the great-looking one to turn up, don't just splurge on the first coin with the grade you're looking for. While grades are helpful in determining the price, they are only an aid; a professional knows how much a coin is worth based on other things like eye appeal, which can increase or decrease the price of a coin in a certain grade by huge numbers. Don't get tricked into buying a coin for what the grade is supposedly "worth" just because it's in that certain grade. Thirdly, buy a coin if you like the way it looks, not because of a number that some random person assigned to it.
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This is what i'm struggling with and do not understand. How can that be? I thought that is precisely why have grades, to standardize what each grade looks like- so do not have such variance. Or if a coin is "horrible looking" it would have a lower grade. Understand a slight "human element".. but seems if have a big difference, you are defeating the sole purpose of slabbing and grading if a big difference.
Not to muddy up the waters, but I think if you watch coin dealer Rick Snow, who specializes in Indian cents, explain his proposed new "grading" system; the reason why a coin with the same grade can be very different is explained.
WS
https://www.youtube.com/watch?v=LY7KMZRmkIw&t=1939s
There are horrible looking and great looking MS64's because there are multiple factors that are considered in the grade: strike, toning, marks, etc. There are coins that would normally be an MS63 but have nice toning so are considered MS64 and coins that would have been MS66 but have some scratches and are considered MS64. Every coin is different; there are an infinite number of possible combinations of strike, toning, luster, and other factors. It would be physically impossible for every coin in one grade to look exactly the same.
Gobrecht's Engraved Mature Head Large Cent Model
https://www.instagram.com/rexrarities/?hl=en
There's a really nice set of videos on the considerations taken into account when grading coins at this link: https://www.pcgs.com/education
You have to log into your PCGS account to access it, and you can make an account if you don't already have one (it's free).
Gobrecht's Engraved Mature Head Large Cent Model
https://www.instagram.com/rexrarities/?hl=en
First if you are putting a set together of a particular coin i.e. Buffalo Nichols I suggest you get the key dates (rarest coins ) in the set in the highest grades you can. Make sure they are well struck and have eye appeal. The more common dates are where I will drop down in grade as they don't appreciate and are not the focal point of a set. Take time to learn how to grade what you collect. I don't understand what the dealer was trying to say but I have never regretted stretching for a key date. For every coin look at the pop reports and you will see where a particular coin starts to be come rare. An example suppose you are looking for a 1919 D Buffalo and there are 525 in VF 35 200 in VF 40 170 IN AU 50 and 55 in AU 53 and 19 in AU 55 or a very strong AU 53. I would wait until a nice example showed up as you are getting to what I call the sweet spot for a given coin. Keep in mind high population coin reports are understated while lower pop numbers get overstated due to resubmissions. I no longer collect Buffalos but when I was collecting a coin collector clued me in when I was looking for the 18/17 D. I stretched for a strong EF and paid $525 decades ago It gas since been sold and I don't want to know what it might bring in a good auction. I was throwing a paper route then and it tool some time to get together the money. picking up Coke bottles helped as did mowing yards. This all took place before grading services and the internet were years away but the approach has not changed. PCGS has population reports and price guides and as Rexford pointed out you can join PCGS for free.
Don't invest in coins. You will lose money.
Instead invest in books and learn. Start with the Redbook.
Grading is an art and not a science. With major price increases between a single grade point the grade is important.
Only buy PCGS or NGC coins. They back their grades with a money guarantee. So if the coin is in a MS67 holder, but experts agree it is really a MS66, they will buy the coin back.
Since coin grading is an opinion sometimes the opinions are wrong. And grading standards change over time. People search for undergraded coins, so if you can find a coin that should be a MS68 but it is currently in a MS67 holder, you can resubmit it and perhaps get an extra grade point - which can increase the value of the coin dramatically.
You are not going to see much difference in these grades. The vast majority of items in this category are non-circulating legal tender (NCLT) or private issues -- products made by mints for collectors. If this is what you collect, "buy the coin not the grade" has a different meaning, and I would say it means don't bother to get these slabbed because you are wasting your money.
For coins in lower MS grades there are several issues to consider but here are two that might help illustrate the point, bag-marks and strike quality. Each grade is allowed a certain number of dings from other coins that got dumped into the same bag at the mint. However, if a ding appears on a prominent feature, like Liberty's nose, it may warrant the same technical grade but it is certainly less appealing and that means the collectible value is different. Dies wear down over time and fine details can become blurred or disappear. For some issues, qualifiers like "full split bands" and "full steps" are used to distinguish the presence of full strike details within the same technical grade. Again, a very different collectible value is associated with full strike details. The point, as others mentioned, is to know how to evaluate the coin beyond its technical grade.
-Dies wear down over time and fine details can become blurred or disappear.-
Such coins have and continue to find their way into high grade holders. And in turn, end up in the # 1, 2, 3, 4 top Registry sets creating a false image of great sets and coins, mainly Jefferson nickels.
-For some issues, qualifiers like "full split bands" and "full steps" are used to distinguish the presence of full strike details within the same technical grade.-
I wish that were true!
Coins with mushy, worn out details are the pits, the dog do-do of coins and shouldn't have anyplace in anyone's coin collection.
The more qualities observed in a coin, the more desirable that coin becomes!
My Jefferson Nickel Collection
I've been confused on that as well. Some of the stuff below helped me somewhat grasp it.
The videos that @watersports and @Rexford linked to are probably two of the best on the entire Internet to help you get a grip on it.
That PDS grading system is neat and seems like some higher level coin dealers and collectors would demand it or something like it.
I recently learned the same grade on a coin can mean about anything in a real life situation. Just a common Morgan but, mind blown.
I was winning bidder on an 1881 S Morgan NGC graded in MS64. So I went to the PCGS website to see the estimated value of the coin. PCGS calls the value of an 1881 S MS64 Morgan at $75. Or do they?
Click to show more info on the coin and http://www.pcgscoinfacts.com/Coin/Detail/7130 scroll down for auction results. They even have NGC auction results (cause PCGS has got ya covered) and of 5 auctions listed in just over a year the 1881 S in MS 64 has sold for between a low of $84 to a high of What??? $940 (Click on the prices and you can see the coin on PCGS's site) MS67's in NGC holders haven't even brought $940. Toning is hot right now, very hot.
In my opinion the $940 one is a strong strike with great eye appeal but more bag marks than a MS65 grade could bear.
Mine is a weak strike with no big detracting bag marks but plenty of little ones.
Same year and mint, same grade, but for different reasons which on a large scale averages out,
I also found this video very interesting, especially around the 18 min mark when they discuss why he chose the grades he did.
Buy the book before the coin-best advice there is. Learn about what you want to collect before you collect it. Getting back to your question: There are different factors that determine if a coin is worthy of buying. Two coins could be graded MS64, but one has dark toning and the other does not-it is known that you do not buy darkly toned coins, so that is not a MS64. There are other factors like strike and eye appeal that are important. This is the difference between technical toning (which determines the amount of wear) and market grading (which incorporates other things like planchet quality and luster). If you would like to talk more, DM me.
YN Member of the ANA, ANS, NBS, EAC, C4, MCA, PNNA, CSNS, ILNA, TEC, and more!
Always buying numismatic literature and sample slabs.
"The best graders get it right about 80% of the time"
I really enjoyed this video, thanks for posting.
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Made me curious what the proper formula would be to estimate the number that are incorrectly graded with say 3 graders grading 300 or 900 coins or any number large enough to predict an error possibility. I'm sure someone knows.
On most coins it's so scientific and no argument then some odd duck coins get thrown in and its totally subjective +- 2 or 3 grades or more.