Has Tight Grading Created A Supply Shortage?

CalGold · March 29, 2004 12:11PM

We keep hearing about how hard it is to find "nice" coins. Read "nice" to mean high grade gems and super gems.

An interesting point made or at least implied by Laura Sperber in her market reports is that tight grading by PCGS and NGC is keeping coins off the market. Apparently dealers and the crack-out folks, and perhaps some collectors who are thinking of selling, have been disappointed with the grades they received and are holding inventory off the market. I read that to mean dealers and crack out guys paid too much for some coins at the grade they received and are either hoping to get upgrades through resubmission or are waiting for prices to climb to the point where they can recover their investment.

Query: is the market thin enough that a relatively small decline or even just a plateau will cause dealers to sell this inventory to cover their declining revenues?

Query: is there enough of this inventory to depress the market if it hits all at once?

CG

Coinosaurus · March 29, 2004 1:57PM

OK, be careful when reading the Legend reports. They are extremely well connected, but understand that they are dealing in a specific niche (super cool high end type coins) & that everything they are saying doesn't apply to all tiers of the market. The market I collect in (better date seated coinage in "collector" grades) isn't generally concerned about whether the services are calling something "F15" or "VF20". Yes, there are always slaves to the sheets out there who will certainly try to max out a coin, especially if it is close, and the upgrade is worth a lot. But by and large we are just looking for rare collector coins that are choice for the grade. And they are a lot tougher to find than they were 2-3 years back. To me, this is a sign of broad based collector interest, coins in "tight" hands, and has very little to do with whether PCGS is calling something VF instead of XF. If the coin is all there, the price and demand will generally follow regardless of what number the services put on it.

Gotta go, Janet Jackson is on David Letterman now

Rittenhouse · March 29, 2004 10:43PM

I don't buy the premise that today's grading is "tight". It's certainly tighter than, say, 2 years ago. But it isn't what it used to be in 90 - 94 when I consider the grading to be just about right. I am aware of several sharp collectors who are selling coins purchased during this time and receiving grades well above what they bought at -- i.e. XF45s coming back as 62 - 63, 60 - 62s coming back as 64 - 66, etc. In one particularly nice turn for the owner, a tougher date choice AU58 came back as a 64. Nice profit.

mrearlygold · March 29, 2004 11:07PM

Revenues are definitely not decreasing, they are increasing. But you have to pay a little more for good quality. And I don't see "tightened" standards at all which is the real reason for the lack of supplies.

There's a lack of real nice coins. There's plenty of just made it ( or worse) "stuff" .

Rgrds
TP

Has Tight Grading Created A Supply Shortage?

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