I found this very interesting in terms of how graders (and TPGs) might think
mercurydimeguy
Posts: 4,625 ✭✭✭✭
Thought I'd share the link...
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mercurydimeguy
Posts: 4,625 ✭✭✭✭
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Interesting from the fact that the time of that RNA/JA interview was July 2008, essentially the last major coin market peak. Things often look very good from the mountain top. They talked about gradeflation possibly ending at that time. How'd that turn out? Today we're still down in the valley looking back up at the mountain.
"MR: What potential do you see for these coins?
JA: Well, we talked about the MS-65 Barber Quarter which was $2,500 for a long time and now is $1,100 bid. I believe if the price doubled to $2,200, it would be no big deal, the price would hardly be deemed out of whack. You could almost throw a dart at the sheet of Type Coins and do well with whatever you buy – assuming, of course, that you bought nice coins at fair prices."
And MS65 Barber quarters 9 years later aren't even $1,000 anymore.....buyable at $500-$700, even CAC'd. CAC wasn't the solution for the market, and apparently not even for A and B MS65 Barber quarters.
This is the interview where the often quoted "80% of all coins CAC" comes from. It's been debated to death (DTD).
I totally dig the honesty that grading has evolved into market pricing...it's not about grading anymore, it's about the TPG saying this coin should sell for XX dollars and putting a grade on the label that corresponds to what the TPG thinks the coin should sell for. That is in so many words what JA said. And in instances where there are these corrections going on, an MS65 $17k value coin will get slabbed as an MS64 $7k value coin, but then the owner/seller is screwed! That was JAs point on CAC, they equalized vacillations in grading over time. Very interesting, never thought of it this way...
I agree with you...I think the TPGs have been essentially pricing the coins all along.....
MR: Given all this John, why did you start CAC?
JA: I felt we were basically in a death spiral. I saw the “C” coins dragging down the prices of “A” and “B” coins. Throughout my career I’ve always tried to buy the “A” and “B” coins. I felt that someone just had to push back. I felt strongly that the “A” and “B” coins needed to trade on their own, to be decoupled from the “C” coins. I felt the best way to accomplish that was to start CAC. Earlier in the interview I was critical of The Greysheet for contributing to gradeflation. The Greysheet changed ownership in 1984. Since then I’m glad to say there’s been a decided improvement. They’ve been much more responsive, reporting the prices as they see them.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
MR: What do you hope to achieve with CAC?
JA: We will ignore the less than “B” coins. We know it’s going to be hard but we’re barely in the first inning and have achieved some impressive success. Greysheet bids are strong since we started, but Bluesheet prices (sigh-unseen bids as opposed to the Greysheet’s sight-seen bids) have not been as strong. We’re already seeing a start to the decoupling we hoped to achieve. We expect volatility in prices; what we shouldn’t expect is volatility in grading. That’s our mission.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
MR: Have you encountered any obstacles in developing and carrying out your mission?
JA: Clearly, there have been obstacles from the dealers selling the “C” coins. They are starting to encounter problems selling their coins because we’re making markets in “A” and “B” coins, not “C” coins. However, the bigger problem is people not fully understanding our program. That’s probably my fault for taking a low-key approach to this point, not aggressively advertising and marketing CAC. That will be addressed soon enough, and your advisory, Maurice, will be a big help to us. Our efforts have been to get the product out there, encourage submissions, allowing the product to speak for itself. The market will eventually determine how successful we’ll be.
I have dealers calling me telling me they don’t need me to tell them their coin is PQ. I tell them they’re right, but the problem is the guy a few tables down from them has coins for sale at much lower prices then they do. Their nicer coins need to distinguished from the pack. I’m not disparaging the other coins; after all, a “C” is a passing grade. I just don’t believe that a minority of less-than-solid-grade coins coming out of the services should dictate the entire marketplace.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Wow. Is JA the first true market-maker that numismatics has seen?
Gradeflation, grade controversy, A, B, C, D coins.... all this will continue (much to the TPG's success) as long as we have subjective grading. I have been saying this for years. Sure, it is all we have right now... and no doubt there are forces that would like it to continue.... However, just as JA was the innovator and market maker with fourth party grading, so will the first successful computer grading service. Oh yes, I know it has been tried, but that was then. Now, with more sophisticated technology (i.e. AI etc.) it is within reach... at a price. Just like any major breakthrough, it will be a blockbuster and fortune maker when it finally happens. Yes, there will be much whining and crying....just as there was when JA introduced CAC. Then, gradually, it will be accepted, then lauded and then it will become the standard. Fame and fortune awaits.... Cheers, RickO