Buy the coin not the holder
SteveBell
Posts: 58 ✭✭✭
Still being fairly new I have a serious question(s).
I've heard the term numerous time to "buy the coin not the holder".Is there a reason most people choose PCGS and NGC over ANACS and IGC or other third party grader?What's the difference?
When I started collecting,mostly album type,it seemed much more simple.But now getting into buying graded stuff it seems as if there is a premium for the plastic. I understand that these folks are part of authenticating it,encapsulating and putting shiny stickers on it,but why the high price?Wouldn't something be of the same value in a 2x2?
Sorry for overloading on questions here.Just been curious!
All the best!Steve
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Steve, good questions. I have the same ones myself and I've been a collector for over 50 years.
Each of the grading services you mention are considered reputable and according to some each has their niche in the market.
Over time the market opinion of grading "accuracy" has gone back and forth between them. Registry sets also have a big impact on what some people will buy. People say buy the coin not the holder because the coin is what it is, nothing more, nothing less. Learn to grade, decide on "the look" you are interested in and buy what you like.
The only time "buy the coin not the holder" should not apply is if you are collecting sample slabs.
Hope this helps a little.
it's crackers to slip a rozzer the dropsy in snide
The answers to your questions to fill a book. I will try to do the Readers’ Digest version.
The general perception among collectors and dealers is that PCGS and NGC grading is more accurate and gets more respect in the market than the other "second tier" services. When comes to specific coins there can exceptions to that, and expert graders can spot conservatively graded coins in the lower tier holders, crack them out of those holders and submit them for grading to the leading services. The goal, of course, is to make money.
In the current market the PCGS-CAC combination of services is #1 in the eyes of many people, PCGS alone is #2 and NGC is third with or without CAC. Once more there are those that will tell you that the market opinion is one thing; the grade of the coin in the holder is another. That's what is met by "buy the coin, not the holder."
A very large portion of coin buyers have come to the conclusion that certification with respect to authenticity and grade has a significant market value. Therefore, the coin in the holder is worth more than the raw piece in a 2x2. When I was dealer I bought raw coins, even pieces that were frequently counterfeited, like a 1909-S-VDB Cent, but I would never sell them raw. They had to be certified to get the most money for them.
Of course, when I was buying those raw coins, I had to figure in the price of certification and shipping along with a cushion for the grade in case the coin did not come back from the grader in a holder that I anticipated. Experts can differ on grades, but once the coin is a holder, the grading argument is much closer to a resolution.
In recent years, the emergence of large numbers of Chinese made counterfeits has made authentication much more important. Counterfeits have always been a problem in the coin hobby, but it’s worse now than anytime that I have been a collector which spans over 55 years.
A slab allows the people who are not experts at grading (myself included) to sleep better at night. It also acts as a referee over a coin's grade when the coin changes hands. (It also confirms basic authenticity).
It can become an obsession, though, and it gets more and more ridiculous from there. On another thread on this forum there is a discussion of Palladium coins graded MS70 that have visible dings and nicks on the edges/rims. MS70 is supposed to be "perfect", but now we apparently need a higher designation to distinguish between "perfect coins" and more perfect "perfect coins".
Third Party Graders definitely have an important role, but collectors need to be conscious of what their preferences and demands are leading to.
Markets dislike uncertainty. Adding a layer (or two) of professional authentication and valuation (which is what a grade really is) reassures people who might not stretch quite as far without that assurance.
It has greatly reduced the huge buy/sell spread for joe average collectors. It was pretty common to be sold a coin as an AU and then be told it was a low-end VF when soldback to the same dealer.
For people with enough experience and knowledge, slabs and stickers probably aren't all that helpful but coins in holders with flashy stickers are always more liquid at sale time.
To summarize, yes, a raw coin should be worth the same amount as a coin in a holder, but people fall into a habit of appealing to authority instead of trusting their own opinions.
@You I fail to understand how a raw coin should be worth the same as a slabbed coin. A slabbed coin is deemed authentic by a professional. A raw coin is not. That certificate of authenticity which is given by a major grading company is worth some dollar amount. They are putting their reputation on the line.
Are you saying that if given the option to buy the same coin in a slab or raw that you would actually choose raw? Afterall, they should be worth the same amount, so might as well take the raw version.
In my opinion, a slabbed coin should be worth more than the identical raw coin for the reason above. The question is just, 'how much'?
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Uh, gotta disagree with that one. With all of the sophisticated counterfeits out there, some stability is needed from reputable firms with skin in the game to back up your hobby/investment. The exception being if your coins are worth less than or equal to the cost of grading then by all means carry on and enjoy!
I agree with you,but were coins worth less before third party company's came about?
Nothing wrong with collecting raw coins if you know what you are doing. When the day comes to sell, slabs become important. Buyers feel better and will pay more. A PCGS with a CAC make folks feel really good.
Don't get me wrong y'all:Henceforth I'll only buy graded stuff.Im just trying to see both sides of the hobby/business.
@SteveBell It's all about market liquidity and that is the value differential. Many collectors, including me, decide to sell their coins during their ownership when the urge occurs. You may find yourself in a similar way and will then appreciate this market reality.
"Got a flaming heart, can't get my fill"
At the end of the day, if the plastic and label do not exist, the only thing relevant is the coin. It is what the collector ought to see.
Because most collectors are not expert in authentication or grading, TPG's were formed. They offered 'professional' opinions and then 'locked' the coin in plastic with included, written, opinion. This service was seen as added value by collectors and is a major force in today's coin market. The coin itself does not change, however, much like education enhances a person's perceived value, so the coin becomes more desirable - thus, more expensive. Cheers, RickO
Lots of points/issues here. Point is, Having some industry accepted grading services has really opened up the top end of the market and kept many, many collectors from buying problem coins for non-problem prices.
Grading is tough, authentication tricky in today's climate, and people make mistakes, especially if rushed. One saving grace of the major TPG's (in my opinion) is their guarantee.
Case in point is my 1872-s "half dollar". Two different TPG's and "grades", same fake...
It depends on price levels, and newbies need to be careful, buy both coin and holder plus cac sticker if you can afford it.
A case in point because people used to say ogh lock upgrade. I was speaking to a major show dealer on the weekend who talked about all the problem coins still left in old green holders. The good ones get cracked out. I took a chance on an ogh $20 with a scuffed holder that fortunately cac'd; but was burned by another one last year.