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What will happen when grading standards tighten?
TopographicOceans
Posts: 6,535 ✭✭✭✭
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?
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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
What might confuse you is the amount of coins on the market that were graded a while ago.
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.
In honor of the memory of Cpl. Michael E. Thompson
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.
In honor of the memory of Cpl. Michael E. Thompson
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.
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.
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.
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OINK
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.
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.
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.
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
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.
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.
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