Grading inconsistency and the 7070 experience

RYK · July 10, 2012 12:30PM

I have had two recent experiences with 3rd party grading which highlight problems with grading inconsistency and make taking valuable coins out of holders problematic. Both were coins that I purchased in an extremely reputable TPG holder, cracked the coins out for the 7070 and allowed the coins to spend several years there. When I had the opportunity to fill these slots with other coins, which I deemed more appropriate, I sent the coins back to the same extremely reputable grading company. Here are the results:

1861 seated half dime was 61, now 53.
1843 seated dollar was 45, now Gen.

Both coins have been significantly devalued by sitting in my 7070 (with the caveat of the potential wear or damage from cracking out, turning, toning and/or damage in transit). At any rate, I am glad that I did not play with coins that were very expensive. The 61 to 53 change is more puzzling to me than the Gen. The latter coin is a tad hazy, and perhaps there is some foreign material on the surface. At any rate, both are returning to the 7070 for the rest of my natural life.

michiganboy · July 10, 2012 12:37PM

Things that make say

I feel you there buddy, you are not the only one from the things local dealers and collectors have been telling me.

MidLifeCrisis · July 10, 2012 12:47PM

"It's all a gamble when it's just a game" - Guns N' Roses

Mowgli · July 10, 2012 1:58PM

I dread the day I try to sell all the coins I cracked out for my Dansco albums - and there are way too many of them.
My guess is that standards have changed more than the 7070 changed your coins.

Sell them for someone else's 7070.

krueger · July 10, 2012 2:20PM

I once saw a fella at a show with his 7070 album and he had the slab labels taped nicely to the inside of the covers of the album,
presumably when it comes time to sell a buyer would be more easily found.

Krueger

Bochiman · July 10, 2012 2:34PM

Sorry to hear that.
As a solution, I do have a 7070 that is used for GENs and coins that grade lower than they should.....so your coins are welcome over here as those slots are currently not filled

coinbuf · July 10, 2012 3:20PM

<< I once saw a fella at a show with his 7070 album and he had the slab labels taped nicely to the inside of the covers of the album,
presumably when it comes time to sell a buyer would be more easily found.

Krueger >>

Wont mean squat, its a nice way to keep track of where the coins came from but once you crack a coin the lable is useless as a selling tool.

mkman123 · July 10, 2012 3:36PM

were they in PCGS holders and then you sent them back in to PCGS?

MilkmanDan · July 10, 2012 3:38PM

Wait guys, I thought grading standards have eased up over the years. Are you saying there's a such thing as grade de-flation? *smirk*

Coinbot · July 10, 2012 3:47PM

Buy the coin and not the slab... right?

PerryHall · July 10, 2012 4:32PM

<< My guess is that standards have changed more than the 7070 changed your coins. >>

Agree. I can't imagine your coin album changed your coins any significant amount.

PerryHall · July 10, 2012 4:35PM

<< Sell them for someone else's 7070. >>

Easier said than done. Even album collectors usually want to buy their better coins in slabs so they know what they are getting.

PerryHall · July 10, 2012 4:38PM

<< were they in PCGS holders and then you sent them back in to PCGS? >>

He said he sent them back to the same grading company which originally slabbed them. Obviously he doesn't want to out this grading company so perhaps you should ask him in a PM.

bosco5041 · July 10, 2012 9:58PM

I have only cracked out 2 coins in my life and they went in a 7070 book to. I probably won't ever crack out any more for that reason.

Barry · July 10, 2012 10:16PM

You've been doing this long enough that you should not be surprised at all.

MrEureka · July 10, 2012 10:17PM

Just keep resubmitting like the rest of us. Sooner or later, you'll get good grades.

DHeath · July 10, 2012 10:22PM

Did these coins come from a reputable dealer with some sort of buy-back policy? Did the buy-back policy only apply if the coin was not cracked from the holder? Did someone mentor you regarding these purchases, or did you buy the coins solely based on the TPG opinion? Were they wrong in their original assessment of the coins? Many on this board lament the amount of dreck in TPG holders and advocate for tighter grading standards, while not recognizing the impact that tightening will have on collectors who hold most of the dreck in their current collections. If the standard is wrong, who is culpable and who is the victim. Were these coins dreck?

RYK · July 10, 2012 11:07PM

<< Did these coins come from a reputable dealer with some sort of buy-back policy? Did the buy-back policy only apply if the coin was not cracked from the holder? Did someone mentor you regarding these purchases, or did you buy the coins solely based on the TPG opinion? Were they wrong in their original assessment of the coins? Many on this board lament the amount of dreck in TPG holders and advocate for tighter grading standards, while not recognizing the impact that tightening will have on collectors who hold most of the dreck in their current collections. If the standard is wrong, who is culpable and who is the victim. Were these coins dreck? >>

The half dime was purchased from a reputable dealer. To be honest, I do not recall where I purchased the dollar, and I am not motivated enough to research it in my records. It was probably one of three places, all of which would be considered reputable. I thought the coins were decent for the grade, but not stellar. I do not see why the dollar was a BB, as I regularly see all kinds of crappy, cleaned seated dollars in TPG holders. Perhaps I will bring it to the next show and solicit opinions.

If this were the greatest calamity that ever befell me as a collector, I would be in the top 0.01%.

DIMEMAN · July 10, 2012 11:14PM

You will get no sympathy here. What have I ALWAYS said about cracking coins out!!

DON'T DO IT................ EVER!!!!!!!

ColonialCoinUnion · July 10, 2012 11:15PM

It's very easy to crack a coin out of a holder. Not always so easy to get it back in.

golden · July 10, 2012 11:25PM

<< It's very easy to crack a coin out of a holder. Not always so easy to get it back in. >>

TwoSides2aCoin · July 10, 2012 11:37PM

Humpty Dumpty sat in the book
Humpty Dumpty sent back for a look
All the king's horses and all the king's men
Had to crack that orb out again.

~A nursery rhyme for YNs~

lcoopie · July 10, 2012 11:45PM

good lesson

crypto79 · July 10, 2012 11:50PM

<< It's very easy to crack a coin out of a holder. Not always so easy to get it back in. >>

It is also easy to draw a conclusion based off of the extreme when most coins go back in the apx range of the original. The main difference I have seen in terms of standards is that impacted luster is more likely to drop the technical net grade from AU to XF and UNC to AU where strick highpoint wear was of a higher focus.

DHeath · July 11, 2012 1:33AM

Is it reasonable to advocate on this board for a fourth-party service to help police the "dreck" that goes into TPG holders, and then start a thread venting one's frustration that the TPG is inconsistent because they have become more conservative? It would seem the TPGs are damned if they do and damned if they don't in this case.

Personally, I believe it would be possible to develop a maturity model around the TPG, dealer and collector supply-chain as a demand network. In the early stages of TPG, the market would grow in response to the information visibility created by the holder. At the peak, speculator activity creates substantial churn, and coins are resubmitted until there are no ++ coins waiting to be resubmitted. Dealers lament the lack of PQ material on the bourse or at auction, saying there are no "fresh" coins (i.e. coins that are conservatively graded and easier to sell). Forth-party grading is introduced by the dealer community to create the separation necessary to perpetuate churn. TPG's react to forth-party scrutiny by gradually tightening--erring on the side of caution. The collectors who now hold some percentage of coins that won't regrade complain that the services are inconsistent. The TPGs continue tightening until third and forth party standards co-align around the most pessimistic grading standard the market will tolerate. Each seeks to minimize the relevance of the other. Collectors who hold the bulk of all previously holdered coins lose value. This helps dealers support the notion of coins as investments. Collectors hold the bulk of current inventory and suffer the largest loss relative to the changing standards, which in reality are simply a manifestation of a mature market. If you bought a 65++ for a premium, it is now a "real" 65. If you bought a marginal 65, it is now a 64. The dealer who sold you the PQ 65 for a premium will tell you how you have benefited from their good judgement. In truth, if the 65++ was still a 65++ you'd be a much bigger winner.

It would be fascinating to know how many previously unholdered coins have been submitted each year since the services' inception. At what point do the services perform maintenance for the extant population of collector coins. I always thought PCGS was smart for trying to grow the hobby through sponsorship of modern coins. However, many here disagree.

renomedphys · July 11, 2012 1:51AM

Just do what I do. Put them in a flip with the old label and drown them in a spare blue box. Then that in itself becomes yet another nice little collection. I even started buying coins that don't technically fit in my 7070, like a large dime and quarter, and keeping them in there with all the culls. Ya know, just to dress up the place. Add in a couple of raw $1000 cents that should have never been cracked, a nifty '75-cc 20-center, and that old blue box of loose stuff looks pretty neat in its own right.

RYK · July 11, 2012 2:23AM

Is it reasonable to advocate on this board for a fourth-party service to help police the "dreck" that goes into TPG holders, and then start a thread venting one's frustration that the TPG is inconsistent because they have become more conservative? It would seem the TPGs are damned if they do and damned if they don't in this case.

Actually, these are both lower value coins that I would never consider to be candidates to be sent to the fourth party grading services. From my perspective, I can see a tightening in the upper grade/price ranges, as the TPG takes on more exposure and liability. For an XF seated dollar, perhaps worth $500, that was previously in a slab, which looks to 99% of people like a decent coin, is that really where we need to be tightening? If I were a TPG, I would be more concerned about drawing the 64/65 line in High Reliefs or the AU/MS line in early dollars and keeping lasered proof gold, puttied 1929-1932 Saints, and tooled/re-engraved bust coins out of holders, where the stakes are higher and the mistakes look ridiculous.

I will pass the 1843 dollar around the next show, and perhaps one of the experts will show me the market unacceptable problem.

FWIW, I have not been an "advocate on this board for a fourth-party service to help police the "dreck" that goes into TPG holders", but I have been a supporter of a fourth party service for other collector-oriented reasons.

stealer · July 11, 2012 2:29AM

What, you didn't know that TPG's were inconsistent?

A lot of holders out there are "maxed out". People send them in over and over and over depending on how big the price jump is to the next grade and when they get that grade, they cash out and make some serious bank.

nankraut · July 11, 2012 2:45AM

<< You will get no sympathy here. What have I ALWAYS said about cracking coins out!!

DON'T DO IT................ EVER!!!!!!!

>>

BINGO! I agree 100%

jayPem · July 11, 2012 2:49AM

<< Is it reasonable to advocate on this board for a fourth-party service to help police the "dreck" that goes into TPG holders, and then start a thread venting one's frustration that the TPG is inconsistent because they have become more conservative? It would seem the TPGs are damned if they do and damned if they don't in this case.

Personally, I believe it would be possible to develop a maturity model around the TPG, dealer and collector supply-chain as a demand network. In the early stages of TPG, the market would grow in response to the information visibility created by the holder. At the peak, speculator activity creates substantial churn, and coins are resubmitted until there are no ++ coins waiting to be resubmitted. Dealers lament the lack of PQ material on the bourse or at auction, saying there are no "fresh" coins (i.e. coins that are conservatively graded and easier to sell). Forth-party grading is introduced by the dealer community to create the separation necessary to perpetuate churn. TPG's react to forth-party scrutiny by gradually tightening--erring on the side of caution. The collectors who now hold some percentage of coins that won't regrade complain that the services are inconsistent. The TPGs continue tightening until third and forth party standards co-align around the most pessimistic grading standard the market will tolerate. Each seeks to minimize the relevance of the other. Collectors who hold the bulk of all previously holdered coins lose value. This helps dealers support the notion of coins as investments. Collectors hold the bulk of current inventory and suffer the largest loss relative to the changing standards, which in reality are simply a manifestation of a mature market. If you bought a 65++ for a premium, it is now a "real" 65. If you bought a marginal 65, it is now a 64. The dealer who sold you the PQ 65 for a premium will tell you how you have benefited from their good judgement. In truth, if the 65++ was still a 65++ you'd be a much bigger winner.

It would be fascinating to know how many previously unholdered coins have been submitted each year since the services' inception. At what point do the services perform maintenance for the extant population of collector coins. I always thought PCGS was smart for trying to grow the hobby through sponsorship of modern coins. However, many here disagree. >>

I was afraid that this was the way things were heading....I'm thinking it's time to put more energy into the world class malt liquor collection I'm building...

RYK · July 11, 2012 3:08AM

<< What, you didn't know that TPG's were inconsistent?

A lot of holders out there are "maxed out". People send them in over and over and over depending on how big the price jump is to the next grade and when they get that grade, they cash out and make some serious bank. >>

Dude, it's a cautionary tale. Take it for what it's worth. Lots of folks are buying slabbed coins for their 7070s.

I really doubt that people are trying to "max out" XF seated dollars and $150 seated half dimes. Perhaps you can provide some examples of such.

As for not cracking out coins, once I own the coin, I will do whatever I want with it. Maybe I'll make a YouTube video of me flattening the half dime with a hammer.

TwoSides2aCoin · July 11, 2012 3:17AM

They're just coins. I like the people who share them here, and the thought process of the collectors.

DIMEMAN · July 11, 2012 3:27AM

>>>As for not cracking out coins, once I own the coin, I will do whatever I want with it. Maybe I'll make a YouTube video of me flattening the half dime with a hammer. <<<

Go ahead........that will show us!!

Sonorandesertrat · July 11, 2012 3:36AM

In my opinion, 61-63 grades on slabbed Liberty Seated and Capped Bust coinage call for special care on the part of prospective buyers. Most of these that were graded 61-63 during the last bull market strike me as somewhat to very overgraded by current standards. I don't think that the root of the problem is removal of a coin from its slab. An overgraded coin, raw or slabbed, will only sell at the stated grade today if the owner knows what he is doing, finds a less knowledgeable buyer, and has a bit of luck. Of course, there were many such coins that sold at inflated grades during the last bull market; buyers tended to be less cautious when they felt that a greater fool could be easily found in the event that the coin needed to be dumped. During markets like the current one, buyers tend to be more grade-conscious.

Collectors need to remember that the grade on a slabbed coin should be the second point in evaluating a coin for purchase (overall eye appeal being the first), not the final word.

FWIW, I also am slowly completing a 7070 album (plus the gold page), using mostly coins that I have removed from their slabs, and I tape the inserts to the inside of the album cover. But...I have been doing this with the full knowledge that all bets are off when a coin is removed from its TPG holder.

sparky64 · July 11, 2012 5:04AM

<< Dude, it's a cautionary tale. Take it for what it's worth. Lots of folks are buying slabbed coins for their 7070s. >>

I here what your saying RYK. I sometimes think messing around putting my better coins in the 7070 introduces slide hairlines, fingerprints, funky toning, etc..
Never cracked one out for it so cautionary tale is understood.

<< As for not cracking out coins, once I own the coin, I will do whatever I want with it. Maybe I'll make a YouTube video of me flattening the half dime with a hammer. >>

That's just plain funny.

Baley · July 11, 2012 6:17AM

Did the coins go from maxed-out (or <gasp> overgraded) in the old holders,
to Super PQ for the grade (and gold bean-worthy) in the new?

If so, isn't that a good thing?

RYK · July 11, 2012 6:26AM

<< Did the coins go from maxed-out (or <gasp> overgraded) in the old holders,
to Super PQ for the grade (and gold bean-worthy) in the new?

If so, isn't that a good thing? >>

Gee, I don't know. They are just some average Joe coins in average Joe holders that were average Joe for the grade and are now average Joe coins that are raw again in an average Joe 7070. I am off tomorrow, so I will make the video of me (an average Joe), smashing the average Joe 1861 with my average Joe Sears hammer.

Buzzybest · July 11, 2012 6:30AM

Don't you dare! I have an 1861 $20 Liberty gold that I play with often as an average Joe!

DHeath · July 11, 2012 7:14AM

I don't think a hammer is necessary. Based on the post, I figure you're on the receiving end of a screwdriver you helped twist.

If I were a TPG, I would be more concerned about drawing the 64/65 line in High Reliefs or the AU/MS line in early dollars and keeping lasered proof gold, puttied 1929-1932 Saints, and tooled/re-engraved bust coins out of holders, where the stakes are higher and the mistakes look ridiculous.

BTW - You are aware I assume that one 4th party service is accepting Ikes now, right? As an aside, I had no idea you were interested in MS65 High Reliefs, MS early dollars, proof gold, or 1929-1932 Saints.

CoinJunkie · July 11, 2012 7:22AM

<< Gee, I don't know. They are just some average Joe coins in average Joe holders that were average Joe for the grade and are now average Joe coins that are raw again in an average Joe 7070. I am off tomorrow, so I will make the video of me (an average Joe), smashing the average Joe 1861 with my average Joe Sears hammer. >>

That's way too much "average Joe" for this coffee snob...

coinkat · July 11, 2012 7:32AM

I would like to see pictures if at all possible-

I am very concerned about the swing from 61 to 53 and even more interested in the Seated Dollar

The sad part of this is that the Seated Series is tough enough in terms of finding the right coins

MikeInFL · July 12, 2012 4:10AM

I agree. Buying from "extremely reputable" dealers and TPGs is not insurance against buying bad coins. Your only insurance against that is knowledge, and even that only goes so far with respect to the variability in grades from TPGs.

coinbuf · July 12, 2012 4:40AM

I love this thread

Grading inconsistency and the 7070 experience

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