The REAL lesson of the 1963 PR 70 Cent...

MrEureka · January 2, 2004 10:17AM

We all think we're so smart in knowing that the coin isn't worth the price. But maybe it is. Who's to say???

jbsteven · January 2, 2004 10:20AM

<< Who's to say >>

The person willing to write the check

nwcs · January 2, 2004 10:20AM

Who's to say? The last bidder, of course. This coin is another example of why price guides are the blind leading the blind. Everyone values differently.

tjkillian · January 2, 2004 10:23AM

To me, many of the coins in the 20th century are priced far, far, far higher than I'd be willing to pay. Look at that 1916 Standing Liberty Quarter pattern that is over a half a million already! Beauty is clearly in the eye of the beholder. For the price of that one quarter, I could bid on Stuart's indian cent collection. To me, that would be worth far more to me.

Tom

jeffnpcb · January 2, 2004 10:23AM

The registry , plastic and a subjective grade!

Lakesammman · January 2, 2004 10:24AM

Well, you might get Stewarts 1877 "princess" but not the whole collection!

BillJones · January 2, 2004 10:29AM

<< We all think we're so smart in knowing that the coin isn't worth the price. But maybe it is. Who's to say??? >>

I wonder why the FTC didn't buy that argument when they shut down a number of coin "investment houses" that were bilking the public big time back in the late 1970s? It sounds like the kind of logic that the wolves and scape goats use to lead the lambs the slaughter.

Russ · January 2, 2004 10:42AM

<< I wonder why the FTC didn't buy that argument when they shut down a number of coin "investment houses" that were bilking the public big time back in the late 1970s? >>

Because they weren't selling in a competitive bid auction.

Russ, NCNE

MrEureka · January 2, 2004 11:02AM

Because they weren't selling in a competitive bid auction.

Russ - So a public auction is a license to steal?

BillJones · January 2, 2004 11:04AM

<< 

<< I wonder why the FTC didn't buy that argument when they shut down a number of coin "investment houses" that were bilking the public big time back in the late 1970s? >>

Because they weren't selling in a competitive bid auction.

Russ, NCNE >>

That's not the argument that I was trying to make, Russ. That wishy-washy type of response is that sort of argument that crooked dealers have used for years. "NO BODY knows what antiques are REALLY worth so my record high prices are PERFECTLY legit.

I'll admit that the auction angle holds some water, but when the item is not described properly, the auctioneer can still be subject to a civil law suit. That sort of thing happened a few years ago between an New England are auctioneer and a couple of people who belonged to a Boston area coin club. The result was rather interesting. The court found that the auctioneer had indeed not described the item properly (overgraded), but declined to award damages because the collectors in question should have know better. The logic was that people don't sell $45,000 coins for $3,500.

Russ · January 2, 2004 11:06AM

<< Russ - So a public auction is a license to steal? >>

Apparently it is.

Of course, one more bid increment, and this guy is at breakeven. He may yet make a profit on the coin. So, what was stolen and who was the thief?

Russ, NCNE

Russ · January 2, 2004 11:08AM

Bill,

You're just ranting because this guy is about to make a profit on an ultra grade modern that you've been bashing since he bought it.

Russ, NCNE

MrEureka · January 2, 2004 11:11AM

So, what was stolen and who was the thief?

Russ - So many questions! You're beginning to sound like SethChandler!

BillJones · January 2, 2004 11:13AM

<< Bill,

You're just ranting because this guy is about to make a profit on an ultra grade modern that you've been bashing since he bought it.

Russ, NCNE >>

If the original buyer makes a profit, more power to him! It just goes to show that the bigger fool theory is not limited to the stock market.

MrEureka · January 2, 2004 11:18AM

We all think we're so smart in knowing that the coin isn't worth the price. But maybe it is. Who's to say???

Anyone that cares to.

STEWARTBLAYNUMIS · January 2, 2004 11:29AM

Andy - I say that John Troy thinks this coin is worth the $39,100 that he paid for it.Heck,He hasn't tried to return the coin to PCGS under guaranteed resubmission.If he had or if Heritage had instructed him to do so the coin would have sold more easily.
Unfortunately for Mr. Troy the coin which is reserved for $38,000 will not sell.

Stewart

Russ · January 2, 2004 11:30AM

<< Unfortunately for Mr. Troy the coin which is reserved for $38,000 will not sell. >>

It's reserved for $35K and will sell.

Russ, NCNE

jacktheknife · January 2, 2004 11:34AM

I guess the line has been drawn in the sand so to speak.

tradedollarnut · January 2, 2004 11:49AM

A very wise and learned coin person once tried to teach someone a lesson while I was watching. It seems appropriate here.

An NGC PF69 Morgan was offered at a fairly high price. The wise person was consulted as to the value of the coin. His response was something I'll never forget:

"Is the coin a real PF69? No? So what's a 68 worth? Ok, so - what's the holder worth? Now, you have to add them together to figure what that's worth."

What that interaction taught me is that the holder and the coin can and must be valued separately. Just because a coin is not the grade on the holder does not mean it's only worth what the coin's true grade is. It's worth the sum of the coin value and the holder value. In this instance, the holder value is a rather high percentage of the combined value!

Russ · January 2, 2004 11:53AM

<< In this instance, the holder value is a rather high percentage of the combined value! >>

And, TDN wins the first understatement award of 2004.

Russ, NCNE

Typetone · January 2, 2004 12:02PM

As long as the grade guarantee is good, the holder is worth a fortune on this coin. Suppose I wanted the #1 registry set, and believed the coin was only say a 67. I could buy it for 45K, or whatever I need to bid to buy it. Once I own it, I can have the #1 set presumably. Then when I want to dispose of the coin, or the set, I can get it downgraded at PCGS, and collect from them. To establish value, I would have two auction results. Plus, there is little question that a true 70DCAM would be worth that kind of money. And, the PCGS guarantee is supposed to consider the market price of a correctly graded coin. Just remember, when you buy the plastic you are not just getting an opinion. From PCGS you get a grade guarantee.

Greg

Russ · January 2, 2004 12:10PM

Greg,

I think hell would freeze over before PCGS would pay anywhere near the realized price of this coin in a grade guarantee scenario. Their guarantee has an insanity clause.

Russ, NCNE

Typetone · January 2, 2004 12:13PM

Russ:

Not true at all. PCGS is supposed to base the guarantee on what a correctly graded coin would sell for and pay the difference. Would a real 70 sell for 40K to 45K. That is debatable, but I don't see why not, given the popularity of the proof Lincoln series, and the big pockets competing for the pop one items.

Greg

goose3 · January 2, 2004 12:13PM

I agree with Russ.
You might even get it back in a PF69 holder or BB with NO explanation much less a check.

originalisbest · January 2, 2004 12:16PM

The REAL lesson of this coin:

- don't bid whilst drunk.

Typetone · January 2, 2004 12:20PM

Goose3

Not true either. As long as it is submitted in the holder, you are guaranteed a check with the downgrade or BB. And the check is based on the value of a true 70. What do you think that would be?

Greg

barberlover · January 2, 2004 12:27PM

Andy, Russ, Bill

Everybody responding to this thread so far has skirted the main issue with this coin without taking it head on so I will.

This has NOTHING to do with the modern-vs- classic values debate. It's the grade on the slab of a coin that is nationally known about to have turned in the holder, yet pcgs and David Hall have said nothing about the coin, why ???

It would be interesting to see if David would say either that the fair market value of a 1963 Dcam penny in proof 70 is worth on either side of 39 K because of 2 auction results or if he would say a fair market value has not yet been established because the coin is an obvious grading mistake do to turning in the holder and it was and is the owner of the coin's responsibility for having the right to turn it in for grade review and chosing not to loses that right ? I am not saying I know what he would say but how can any of you be certain ? This turkey should be submitted for regrade to what it is now, not because it's a modern but because the value it's fetching is based soley on the grade on the slab and not the current grade of the coin. Wether you grade the coin proof 64 or proof 67 or somewher inbetween, surly we should all be able to agree who've seen the coin that it is currently not even close to a proof 70 anymore and thus the true grade of the coin would change it's real value even to modern collectors who would pay 39 K for a pcgs proof 70 dcam but would only pay 10 bucks for a proof 67.

I wish I knew why David doesn't comment on this seeing as how its in one of his holders and is making worlds record prices knowing it turned in the holder [which certainly isn't his fault] I just don't understand why at this point he choses not to say anything.

Les

numispro · January 2, 2004 12:31PM

The REAL lesson of the 1963 PR 70 Cent...

Is that the greater fool theory is alive and well.

Russ · January 2, 2004 12:39PM

Did anybody else notice that one of the spots on the coin looks vaguely like the outline of a tulip bulb?

Russ, NCNE

doop · January 2, 2004 12:43PM

The subject coin, broken out and submitted from scratch woud grade pr68dcam. It is a base dcam ultra
but only a base ultra. 63's are availible in monster snow-white pr68dcam the "moose" caliber for $100 to $150 or so,and that is for the sure enough killers. It does not qualify for red status as the etched-in unremoveable browning growing from the micro-speck stuck onto the coin
that is growing by the day is worth about $35 to $40.

This is the biggest nutcase scenario that PCGS or the 3 buyers so far of this coin over the last few years
have ever allowed to become such a public spectacle that I can think of in terms of "If it were cracked today and resubbed" value then as a fraction of a fraction of a fraction as of now residing in that holder.

Total insanity I tell ya, total.......

I do 50-70 cameos,cameos is what I do. A lot of them too. I am 100% non-uninformed

MrEureka · January 2, 2004 12:45PM

So if the coin is an obvious mistake, and if it's still "worth" 40K plus, then a "real" 70 should be worth much more than 40K. So if the coin is determined by PCGS to be overgraded, how much should they pay? 50K? 60K? 100K?

MrEureka · January 2, 2004 12:48PM

The subject coin, broken out and submitted from scratch woud grade pr68dcam.

I do 50-70 cameos,cameos is what I do. A lot of them too. I am 100% non-uninformed

Doop - Based on the first comment, your second appears to me to be untrue. I grade the coin 64.

tradedollarnut · January 2, 2004 12:50PM

Hmmm. I wonder if there's a really nice PF69DCAM locked away in the vault at PCGS [total investment $200] just waiting for the day.......

doop · January 2, 2004 1:34PM

<< The subject coin, broken out and submitted from scratch woud grade pr68dcam.

I do 50-70 cameos,cameos is what I do. A lot of them too. I am 100% non-uninformed

Doop - Based on the first comment, your second appears to me to be untrue. I grade the coin 64. >>

No, with that kind of growing fleck in a #2 focal area,plus it actually having not a single hairline
will go 8dcam like that every day. I send em em by the bookoods. Believe me, a no hairline or haze pr69dcam with a bad field fleck will go 68dcam. A few bad flecks or negative haze will go 67dcam

Besides all that the fleck was probably a micro dandruff speck or airborne common air particle that between hands to others hands to encapsulation ended up on the coin un-noticed in QC.

That dont mean the coin was at one time an actual pr70dcam,perfect surfaced,full bore first struck
mega cam. It's only half a true monster ultra just making dcam status. That alone being way,way down the line of striking at the mint right there disqalifies it from being a truly deserved proof70.

What it means to me and most who specialize in this field is ICG coming along supposedly to clean up the liberal crap and their product be the best,etc,etc,blah,blah and more blah....then they started handing out some fat grades. And then at about the same timeframe...........On the cameo stuff 50's,60's primarily they shucked some 70cams and dcams out there about the same time PCGS starts handing out a few until it became fact after finding that those ICG 70's were like 67's or 8's at best and cams not dcams at all.

Enters in the marketing strategy when it's a competitor/semi potential threat to the above aforementioned. Heard no word ? Wont either...

The new owner needs to obtain a good numismatistically inclined lawyer and a cameo pro who can safely remove the coin with no change and prepare it for submission and then a good filmer/photo to
educate not only the grading comapanies on what to do when these instances occur so blatantly as this one down to the more leanward way of all of us to get on or much closer to the same page about all the vairiables about coin grading,"pq" assessment and the many other attributes that go into the mix of how to better understand why something is what it is and why it's worth what it's worth,etc...

Now that would be a cool covert op.....

Coinosaurus · January 2, 2004 2:33PM

It is insanity. And if I were David Hall I would not want to touch this one with a ten foot pole because it exposes some really nasty problems with the modern market. PCGS should seriously think about buying this POS and quietly taking it off the market. It would well be worth the money. This is one of those deals where having an unregulated market is not good. Mind you, the last thing I want is the feds coming in and telling all us dealers and collectors how to behave. But this poptop/modern/registry business is gonna raise a lot of eyebrows if it ever falls apart. Giving out less 70s and buying back your occassional mistakes (very occassional - I really do have great respect for PCGS and what they do) might be a smart thing to do.

MrEureka · January 2, 2004 11:02PM

IMHO, the REAL lesson is that there is a need for TPG's to remove contaminants from the surface of a coin before slabbing it. Further, they need to ensure that no contaminants are accidentally encapsulated with the coin. If they do not do so, more coins will deteriorate in their slabs.

I consider modern proofs the numismatic equivalent of a canary in a coal mine. The modern proofs are the most fragile coins and will deteriorate fastest. Perhaps its not too late to save our "real" coins.

DHeath · January 2, 2004 11:38PM

I always thought it made sense to use an airtight holder full of inert gas. No oxygen, no oxidation. They do it routinely with dual pane windows. It isn't rocket science.

eagle7 · January 3, 2004 12:34AM

This coin highlights the stark contrast between those folks who collect plastic and those who collect coins. As Jeff Funderburke pointed out, one can find a monster frosted two sided beautiful 63 Lincoln in a 68 DCAM holder which will look light years nicer than this 70DCAM coin in question for about 150.00 or less. Yet, because of the pop 1 category handed to someone by PCGS, this coin is selling for something north of 40 K. All I can do is shake my head and resolve to buy coins that look nice, not coins that are ho hum yet in some expensive plastic. If others want to do otherwise, I have no problem with that. That is their problem. And it will at some point become a problem for the person who is last in line when the plastic bubble bursts. But there is always someone last in line for plastic or stock or gold or silver or real estate or whatever. Im just glad in this case it is not me!

roadrunner · January 3, 2004 12:43AM

Imagine the damage that could be done to PCGS' reputation if some "well-intentioned" individual with an axe to grind purchased this piece and then promoted it around the country. And then in a strictly controlled manner, resubmitted it to PCGS. When the coin came back a PF67 he would then take it around the country with before and after photos. I would imagine the PCGS proof modern market would take a major hit. PCGS should do everything possible to take this stinker off the market as quietly as possible. And I would not be surprised one bit if PCGS was in fact, bidding on the coin via a 3rd party. $50K is a drop in the bucket compared to the PR headaches this coin is gonna cause them down the road.

roadrunner

MrEureka · January 3, 2004 1:04AM

When the coin came back a PF67 he would then take it around the country with before and after photos.

Brian - I grade the coin 64. Doop grades it 68. I find it disconcerting that you put more credibility in his opinion than in mine.

Russ · January 3, 2004 1:24AM

<< Unfortunately for Mr. Troy the coin which is reserved for $38,000 will not sell. >>

Hey Stewie,

It's now at $43K before buyer's premium. Is $43K the reserve?

Russ, NCNE

tradedollarnut · January 3, 2004 1:27AM

My personal opinion is that the PCGS warranty is not an obligation in this case. Here's my post from another thread:

But that's for a coin that is the grade assigned when you bought it and then it turns. Not for a coin that turned already and then you buy it. I suspect that there is a legal difference there when a knowledgable buyer is involved. Just like the case quoted on the other forum - the auction house 'lost' but there were no damages awarded because the buyer should have known that $40k coins don't sell for $3500. In this instance, the coin is assigned a grade of PF70 but a person with any coin knowledge whatsoever can immediately see at first glance that the coin is not a PF70. And yet the person decides to buy it anyway....because of the insert.....then how is the person harmed in any way if the coin remains as is? If I were a judge I'd rule that he wasn't harmed in any way and thus due no money. The only person that could have collected on the PCGS insurance was the original collector - yet he wasn't harmed because he sold it at a huge profit to Troy.

Perhaps one of our fine attorney members could jump in and give their opinion.....

roadrunner · January 3, 2004 2:39AM

TDN, I agree with you 100%. This is more a moral and business issue. The business issue is with PCGS. If they wish to leave this coin on the market that is their decision. Maybe Troy was holding out for a profit and PCGS could not get the coin? The FTC may eventually swoop in on the whole modern grading issue (and classics too) who knows? We have many of the abuses of the 1983-1986 market only in this case the slabbed holder helps to give creedance to the dilemma. Wonder how the FTC looks upon the whole issue of gradeflation? Then again, you don't see them going after the FED chairman for inflating our dollar (buckflation).

Andy, sorry for the snub. It was unintentional. I merely picked the first grade down where the coin essentially becomes generic and grade is relatively meaningless. PF64 is worth about the same as PF67 really. Both are under $40 coins where the plastic holds at least 99.9% of the value. I'd agree that the coin looks rather blotchy and therefore around PF65 seems reasonable. Here is a case where "plastic makes perfect."

roadrunner

DCAMFranklin · January 3, 2004 5:19PM

Soon the coin will have sold for more than $39,000, on two separate occasions in just a bit over a year. A number of buyers have bid in excess of $39,000 in the same time frame. If the coin were submitted for PCGS grade guarantee, then I think PCGS would have a very
difficult time declaring the market value to be anything less than $39,000.

Barry · January 4, 2004 12:33AM

PCGS could solve this value issue very easily. All they need to do is take a few PR69s submitted for regrade and give them PR70s. End of absurd value, correctly graded or not.

MrEureka · January 4, 2004 2:44AM

PCGS could solve this value issue very easily. All they need to do is take a few PR69s submitted for regrade and give them PR70s.

PCGS can wait for this to happen - and it will - but they can't very well instruct their graders to loosen up on the coins to fill the need.

tradedollarnut · January 4, 2004 3:37AM

Might be a really good time to try and cross all those NGC PF70DCAM Memorial cents........

FrattLaw · January 4, 2004 3:55AM

To try to answer TDN's questions -- in a very simplistic manner, here's some relevant information from PCGS themselves --

Customer Bill of Rights

Each customer of a PCGS-authorized dealer is entitled to the following rights:

WRITTEN RECEIPT.
When the customer submits coins to the authorized dealer for grading by PCGS, the authorized dealer will provide the customer with a receipt identifying the submitted coins.
PROMPT SUBMISSION FOR GRADING.
The coins will then be promptly delivered to PCGS (in no event later than ten (10) days after the customer delivers the coins to the authorized dealer).

PROOF OF SUBMISSION.
The customer is entitled to receive, within fifteen (15) days after the customer delivers the coins to the authorized dealer, a copy of the PCGS invoice form prepared by the authorized dealer for submission to PCGS.

PROMPT RETURN AFTER GRADING.
The authorized dealer will promptly return the customer's graded and holdered coins to the customer within five (5) days after the authorized dealer receives them from PCGS, unless directed otherwise by the customer.

CAREFUL HANDLING.
The customer's coins will be returned to the customer in the same condition they were in when the customer delivered them to the authorized dealer.

GUARANTEED GRADE AND AUTHENTICITY.
As an owner of a PCGS-graded coin, the customer will have the benefit of PCGS's Guarantee of Grade and Authenticity and each PCGS authorized dealer will accept the grades assigned to the coins by PCGS.

FAIR MARKET PRICES.
The customer can call PCGS at 1-800-447-8848 to report any instance in which an authorized dealer, in offering to buy a PCGS coin from the customer, attempts to justify a lower than market purchase or bid price for the PCGS coin on the basis of allegedly improper grading by PCGS, or provides the customer with an unreasonably low purchase or bid price for the PCGS coin (with or without any allegation relating to PCGS's grading of the coin).

PRODUCT RELIABILITY.
In the event that PCGS develops and uses different coin holders, each authorized dealer will treat and deal with all PCGS coins without any distinction based on the type of holder.

COURTEOUS, HONEST SERVICE.
Each authorized dealer will at all times give the customer prompt, courteous and efficient service, and, in all of the authorized dealer's transactions with the customer, will observe the highest standards of honesty, integrity, fair dealing and ethical conduct.

Note: Certification by PCGS does not guarantee protection against the normal risks associated with potentially volatile markets. The degree of liquidity for PCGS certified coins will vary according to general market conditions and the particular coin involved. For some coins there may be no active market at all at certain points in time.

PCGS Guarantee of Grade & Authenticity

Customer Bill of Rights
The Guarantee of Grade & Authenticity is fundamental to PCGS's concept of third-party grading. The cash-back policy ensures the accuracy of the grade assigned to any PCGS coin as long as it remains in its tamper-evident holder. If a coin is believed to be improperly graded, and a discrepancy is found when resubmitted through PCGS's Guarantee Resubmission service, the guarantee entitles the coin's owner to options designed for his protection.

Trading Networks

Working in tandem with the PCGS Guarantee is the important link provided by computerized numismatic exchanges and their member firms. Such computerized trading networks have made it possible for many PCGS certified coins to be bought and sold sight-unseen -- and coast-to-coast through electronic trading networks, via telephone and internet auctions.

In turn, electronic trading of coins sight-unseen has been made possible only because of the high level of confidence consumers have in the integrity of PCGS encapsulated coins.

Today, this modern financial market links buyers and sellers in a manner somewhat like the way in which brokers may trade shares on the stock market. The daily quotation of bid and ask prices, and the negotiation of transactions between market makers has created improved liquidity for a number of PCGS coins.

And here's a clause from the Submission Form

Grading involves individual judgments that are subjective and require the exercise of professional opinion, which can change from time to time. Therefore, PCGS disclaims any warranties, express or implied with respect to the grade assigned by PCGS to any coin, except pursuant to PCGS's guarantee resubmission, re-verification or regrade service as in effect from time to time.

MrEureka · January 4, 2004 4:06AM

If a coin is believed to be improperly graded, and a discrepancy is found when resubmitted through PCGS's Guarantee Resubmission service, the guarantee entitles the coin's owner to options designed for his protection.

OK. So what are the options?

FrattLaw · January 4, 2004 4:11AM

Now after reading all of these and trying to make sense, since the statements appear to be contradictory, I would say that PCGS does in fact have financial responsibility for this coin, if in fact it is overgraded. Again, while anyone here can say it's overgraded, it would be a matter of proof. And as you all know grading is subjective.

I am sure PCGS would agree that it is overgraded, however, damages are the real question. To a certain extent I think TDN is correct when he points to the fact that there is a knowledgable buyer involved and thus, should have know better.

However, I think the real teeth in PCGS's argument why they won't be buying this coin back for $43k or even $35k is this paragraph --

<< Note: Certification by PCGS does not guarantee protection against the normal risks associated with potentially volatile markets. The degree of liquidity for PCGS certified coins will vary according to general market conditions and the particular coin involved. For some coins there may be no active market at all at certain points in time >>

I would argue as PCGS's attorney, that while a grading guaranty does apply, it doesn't apply to this level since (1) there's really no established market for this coin (2) it was the heat of the bidding that drove this coin to this point and therefore they can only guaranty the coin to an established cost basis that would involve comparisons to the price of other PR70DCAM Lincoln Mem. Cents.

As the attorney for submitter under the grade guaranty, I could make a host of arguments as well.

More or less, the question is will PCGS do the right thing and buy this coin back. We don't even know if it will be submitted. There are a bunch of PR70DCAM Ikes that aren't PR70DCAM Ikes that people have just in order to stay atop the Registry. PCGS knows this, and realizes that to a certain extent, not all the chickens will come home to roost. I doubt highly if the guaranty will ever be called into play on this coin, and if it was, I doubt highly that the buyer would be able to recover his/her initial price, unless they were willing to file a formal complaint.

It would be a difficult road to hoe for the buyer. For PCGS it would just be another PR nightmare, but they seem to survive them all the time. This is just 1 coin of 7 million graded. I doubt it would have any appreciable effect on their bottom line.

Michael

Barry · January 4, 2004 5:07AM

<< I am sure PCGS would agree that it is overgraded, however, damages are the real question. To a certain extent I think TDN is correct when he points to the fact that there is a knowledgable buyer involved and thus, should have know better. >>

I would argue that the buyer is not knowledgeable. A knowledgeable buyer:
1. would know this coin is not accurately graded
2. would not spend such stupid money for this coin

This buyer is in a competition, playing a nuymbers game, collecting inserts. The coin inside the holder is secondary.

The REAL lesson of the 1963 PR 70 Cent...

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