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Have the TPGs out-lived their usefulness to the hobby?
FatMan
Posts: 8,977 ✭
I see remarkable numbers regarding the quantity of coins being graded today. I suspect a great percentage of coins represented in these huge numbers are "Current Year Moderns". I look at the pops of SAE's and modern proofs and the numbers are substantial. But even with the huge amount of these, there is still a very large quantity of the earlier coins being submitted.
The root of my question is aimed at the more classic coins. The million dollar question here is what percentage (even better answer would be how many) of coins valued at over $100 have never been graded? I know that there are still collections that come to market raw, but since it has now been 20 years since the grading phenomenon got into gear, how many more raw coins are out there? The TPGs would be blind to not have recognized this as a problem. When I see numbers like 70,000 coins a month, I have to believe that many more of these "Classics" have been previously graded than are being graded for the first time. Why are coins that have already been graded being submitted in such large quantity? And is this useful to the hobby? I believe the answers can be found here: "Welcome to the TPG Games."
I believe the TPGs are playing every game in the book to survive under corporate pressures to annually increase profits while facing a shrinking supply of classic raw coins. Unlike the original intent of the TPGs to become a positive influence on the hobby by creating a certain standard, these games being played are no longer positive for the hobby, and are intended entirely to protect the bottom line.
The games being played:
Some of this is my personal opinion based upon viewing thousands of holdered coins over the years and personal TPG submission experiences. Some are from opinions of others obtained by listening to the experiences of dealers, and listening to the experiences of collectors. Please note this is only opinion and I could be wrong. And this is directed to the TPGs in general, not directed to anyone specifically. I don't want to get bammed for this.
1. Grade inflation: creates a need to resubmit coin so the label reflects the ever changing standard
2. Dipping, Stripping, and Messing Rewards: This creates the need to crack out, ruin original coins and resubmit for the reward. Originalty will never be rewarded as such a reward would limit coins being cracked and resubmitted.
3. Registry Sets: Wow, this one has really opened the flood gates on plastic. Hundreds of thousands of "moderns" being graded when they don't really need to be graded as they are all ultra super gems to begin with. All of which, where absent the plastic hold much reduced to very little value. Not bashing Moderns here, the same can be said about all coins in todays market but the registry sets have really increased the grading on common moderns.
4. Inconsistency: the TPGs have developed a "Market Acceptable Level of Inconsistency" which allows them to knowingly miss the mark on many coins (grades and bodybags), knowing that most "players" will simply resubmit because it is the way the game is played.
5. Market Grading: The TPGs have moved away from the more objective (yet, still subjective) "Technical Grading" and have incorporated the much more subjective "Market Grading". This only gives them more leeway in there execution for "inconsistency" noted above.
So what would happen if the TPGs simply ceased to exist today? Would the market become more stable. Would the chaos of pre-TPGs ensue? Are they doing more damage today than good?
I am a big fan of TPGs but I do have some concerns where all this is going. Tell me what is right on the mark here, and/or what is way off base.
BTW...why do you think they call them "SUBMISSIONS"
The root of my question is aimed at the more classic coins. The million dollar question here is what percentage (even better answer would be how many) of coins valued at over $100 have never been graded? I know that there are still collections that come to market raw, but since it has now been 20 years since the grading phenomenon got into gear, how many more raw coins are out there? The TPGs would be blind to not have recognized this as a problem. When I see numbers like 70,000 coins a month, I have to believe that many more of these "Classics" have been previously graded than are being graded for the first time. Why are coins that have already been graded being submitted in such large quantity? And is this useful to the hobby? I believe the answers can be found here: "Welcome to the TPG Games."
I believe the TPGs are playing every game in the book to survive under corporate pressures to annually increase profits while facing a shrinking supply of classic raw coins. Unlike the original intent of the TPGs to become a positive influence on the hobby by creating a certain standard, these games being played are no longer positive for the hobby, and are intended entirely to protect the bottom line.
The games being played:
Some of this is my personal opinion based upon viewing thousands of holdered coins over the years and personal TPG submission experiences. Some are from opinions of others obtained by listening to the experiences of dealers, and listening to the experiences of collectors. Please note this is only opinion and I could be wrong. And this is directed to the TPGs in general, not directed to anyone specifically. I don't want to get bammed for this.
1. Grade inflation: creates a need to resubmit coin so the label reflects the ever changing standard
2. Dipping, Stripping, and Messing Rewards: This creates the need to crack out, ruin original coins and resubmit for the reward. Originalty will never be rewarded as such a reward would limit coins being cracked and resubmitted.
3. Registry Sets: Wow, this one has really opened the flood gates on plastic. Hundreds of thousands of "moderns" being graded when they don't really need to be graded as they are all ultra super gems to begin with. All of which, where absent the plastic hold much reduced to very little value. Not bashing Moderns here, the same can be said about all coins in todays market but the registry sets have really increased the grading on common moderns.
4. Inconsistency: the TPGs have developed a "Market Acceptable Level of Inconsistency" which allows them to knowingly miss the mark on many coins (grades and bodybags), knowing that most "players" will simply resubmit because it is the way the game is played.
5. Market Grading: The TPGs have moved away from the more objective (yet, still subjective) "Technical Grading" and have incorporated the much more subjective "Market Grading". This only gives them more leeway in there execution for "inconsistency" noted above.
So what would happen if the TPGs simply ceased to exist today? Would the market become more stable. Would the chaos of pre-TPGs ensue? Are they doing more damage today than good?
I am a big fan of TPGs but I do have some concerns where all this is going. Tell me what is right on the mark here, and/or what is way off base.
BTW...why do you think they call them "SUBMISSIONS"
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Looking for alot of crap.
K S
Excellent post.
I view the TPGs as a double-edged sword. The positive edge provides authentication with a guarantee, a ballpark grade, and limited environmental protection for rare coins. The "other" edge offers the problems or side-effects that you describe. Net-net, all comers considered, I think the TPGs provide a positive influence in the marketplace, but probably less positive than it was 10-15 years ago. In other words, in any given circumstance, the chances that the TPGs are causing more harm than good has risen.
In my ideal TPG company, the company would provide the following:
1. Authentication with a guarantee
2. Coin protection
3. Grade optional
4. Originality designation
5. A clear, scratch-resistent plastic holder that makes it easy to photography the coin
6. An optional photography service
7. No favors no matter how small/large the submitter
Edited: Sorry for addressing only one aspect of your question and taking it on a tangent. Maybe more later.
Anything, when out of control, can be very harmful. I think the TPG's and the collector/dealer community as a whole needs to do something to reign in the rampant crackouts and re-submissions. To continue this track will do nothing but hurt the hobby down the road.
Neo...
I also wonder how many unopened bags of Morgan dollars are still out there. My gut feeling is that there are still quite a few; probably more than most would suspect.
Very well written and well said. I wonder, too, how the TPGs are going to continue to increase their revenues when the total population of certifiable coins seems to be shrinking (not counting high grade moderns which are made every year). Perhaps the TPGs are looking to diversify, such as starting NCS, or adding services, such as the TrueView photography service. I doubt that either of these two services will take the place of the main revenue producing activities of grading coins, but it is probably a start.
As for whether things are better or worse today, maybe things are a little bit better, but still grading seems to be consistently inconsistent.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
<< <i>BTW...why do you think they call them "SUBMISSIONS" >>
As in, being submissive? Is the idea you're getting at being the industry's reliance, or being subject to, the whim of the TPG's? I think you have a lot of relevant thoughts in your post.
I have observed dealers grading the coins in auction for themselves and bidding what they felt the actual grade to be. Perhaps this is done for a crackout or perhaps not, but as a consignor, perhaps it is best to leave your slabs intact, knowing your pq coins will sell for a strong premium regardless. The goal of buying nice coins with eye appeal seems to be ever present, regardless of TPG's. Perhaps we have come full circle.
in stabilizing ther market and placing a measure of
standardization to the grading. They also play an important role
in identifying conterfeit, whizzed, AT and doctored coins.
Certainly, the TPGs are not perfect, they are not 100% consistant
nor are they able to correctle identify all top notch doctored coins.
The TPG will continue to evolve and continue to meet the increasing and
changing needs if the industry as well as the collector.
Camelot
'discover' the viability of slabbing modern coins..
change standards..
change standards again..
world trade center silver eagles..
slab gold nuggets..
multi coin holders..
presidential reviews..
guaranteed regrades..
flag holders for state quarters..
express grading..'er regrading and serving the crackout artists at shows..
grade cleaned.. 'er conserved shipwreck coins with gold foil tags..
to answer your question..the grading services have outlived their usefulness to the collector and hobby a long long time ago in my opinion..now they just keep the dealers in business with crackouts and upgrades..and the modern dealers who play the submission lottery
anyone disagree..
Probably more than half of mine. While I have a large number of slabbed coins that are over $100. I have many that are in albums and were purchased raw, and many of those are in excess of $100.
But this really doesn't answer the root question, have the TPGs outlived their usefulness to the hobby.
Since the hobby is only one of the TPG customers, I'm not sure it makes and difference (and I am a pure hobbist). There are also those that view coins as a business, they certainly don't seem to feel TPGs are on the way out. I don't actually think many hobbists do either.
There is no lack of coins to be slabbed, but to more directly comment on your statement...some will continue to innovate while those who fail will fall by the wayside over time. Some however, require no innovation and simply need to exist to fill a market niche. In the aggregate, that's how free markets work.
There is a whole new paradigm of value added services that will be common place within the next 5-10 years, which will bring inflows of additional capital in to numismatics, thus creating new opportunities for TPG's. We also have to be mindful that coins are just one thing that they do -- some also do comic books, cards, stamps, currency, signatures, records, etc., and will eventually continue to extend their product road maps in to other areas of collectibles. In fact, time is such a great equalizer I would venture to say that the really smart ones will further diversify their concentrations of risk in certain lines of businesses to the extent that their coin-related business will be hedged by other lines of businesses.
I think an interesting thread would be not to assess the problems that TPG's purportedly cause but rather to assess -- say the next coin show -- if every coin was raw (again). I can GUARANTEE you less people would attend and less people would buy. How can I guarantee this? Well, think to pre-1980 and the amount of $$ that traded hands versus the amount of $$ that trades hands today. That is not by accident -- that is partially because of TPG's. Arguing that point is simply ignoring reality. And oh, another favorite topic -- eBay -- those sales would almost disappear as people just love
Think of the headwind for our hobby NOT because they exist, but what would be the velocity of the headwind if they didn't exist...even the 3rd tier guys, who also happen to have their niche/place in the macro coin economy.
I would say the extreme minority of "coins worth grading" have been graded at all. Everything mentioned here is anecdotal in basis. Maybe it is true, maybe it is not. But these things have been said before and will be said again. So while people moan and groan about this, that, or the other thing I'll keep buying coins I enjoy at prices I can work with and be happy.
Think about it - is there anything else you would pay a 30% fee for an appraisal?
In theory, it sounds like a great idea. The problem is that the big submitters, who are the big sellers, will not use the service to downgrade their coins, as it would invariably result in their coins selling for less.
I do like the idea of a new, specialized high-end grading firm.
Joe
TPGs (the big ones) are not in the coin grading business. They are in the collectible authentication and certification business. A company needs to define itself broadly or it will run into the exact problems that FatMan discussed. Once you get to 60% market share (as Motorola did with pagers), you limit growth. These companies can live a very long time by offering professional collectible services across a wide range of items. Now think about the constant flow of $$$ if you have a 30% market share in the grading of all collectible markets with new annual offerings, upgrades, crack outs, etc. It would be a very long time before you tapped out that opportunity. Even then, they could extend into new areas like research. Would some people pay $100 for a 100 year provenance on their coin? Sure they would.
NOTE: No trees were killed in the sending of this message. However, a large number of electrons were terribly inconvenienced.
Type collector since 1981
Current focus 1855 date type set
Interesting and timely post. My views of this are on the other side of your issue.
1. Grade inflation: Who knows, some times we all complain of how tight the graders are and sometimes how loose. All in all I would much prefer an outside grader to a dealer that cannot grade, or just has the bottom line in mind. Think about this for one minute. Most coin dealers will carry and sell every U.S. coin ever minted. In the PCGS regular type set there are 134 coins. Every single coin has a potential of 20 grades. So to be an honest dealer, and to price all of their material correctly, a dealer needs to know how to grade 2,680 coins in different grades, and this does not consider damaged, cleaned etc.
2. Dipping, Stripping, and Messing Rewards: It is we the collector that has given the TPG’S approval on these coins. If dipping coins were as unacceptable to us as coins cleaned with Ajax the TPG’S would reject all these coins as damaged. If collectors as a group would buy only original coins and were only willing to pay 50% of the “original price” for dipped coins no one would ever crack a coin out to be dipped.
3. Registry Sets: As with many of the free services provided by the TPG’S I believe this is one of the best. Where else can you see what other collectors of coins in your area are building? Where else can you compare grades, even see pictures of other collections like yours. As collectors it is not our duty to be judgmental of what others in the hobby are collecting, or for that matter what they are spending. Most registry sets have the contact email of the owner and some of my closest collecting friends have come form the communications thru the registry. Obviously the registries are not for everyone. Many collectors want to build raw sets, many are not interested in sharing their collections or their information, but who else has taken on this job for those that do want to share their collections and be a little more competitive? No doubt there is some benefit to the TPG’S for doing this but who else is doing it. Do you know of any coin club or other entity that provides a site where their members can list their sets, raw or certified? Even long term sophisticated groups like the BHNC do not have their own registries.
4. Inconsistency: Talk is cheap in this area, and my feeling on this is that if you can PROVE it with a particular coin then make the TPG buy it. The fact remains that the TPG’S do not have an axe to grind or any more money to make by grading one way or another.
5. Market Grading: This is another area where proof is needed. Yes there are wide price swings in small movements in grades these days, but you have to be able to prove your case. I have never seen a case here where a coin was purchased at one particular grade and the grade was so far off, and there was so much evidence of faulty grading, that the TPG did not buy it back.
“So what would happen if the TPGs simply ceased to exist today?”
Back to the dark ages.!
Not all the things that have ensued since the TPG’S have become prominent are good.
For one thing, having certified coins available as nearly liquid investments has driven lots of investors and speculators into the market.
In addition the TPG’S have provided for the site-unseen market not only liquidity of market, but upward price mobility in movement as coins change hands through several dealers until they find a homes with a collectors.
For one thing, having certified coins available as nearly liquid investments has driven lots of investors and speculators into the market.
Is it your position this is a bad thing or that you do not favor this, or am I misreading your comment? I wanted to better understand this last statement.....thanks.
<< <i>For one thing, having certified coins available as nearly liquid investments has driven lots of investors and speculators into the market. >>
<< <i>Is it your position this is a bad thing or that you do not favor this, or am I misreading your comment? I wanted to better understand this last statement.....thanks. >>
I would like to know the answer to this too....thanks.
and it sets us apart from practitioners and consultants. Gregor
only to those who aren't real collectors..or are just koolaid drinking registry dolts..or the blind lazy and naive
I think this issue is a double-edged sword!
First having both speculators and investors in the market provides collectors with liquidity in the hobby. Sure the Internet as a show and tell vehicle is a great help, but without this ready liquidity of investors many coins would just sit, and new material would not be constantly coming to market.
On the other hand there is a price to pay for this liquidity, and that is rising prices. What I think has really changed in this bull market as compared to the 1989 market is that investors see high quality coins as a real alternative to other investments. I base that assumption on the fact that interest rates are now up to reasonable levels, the stock market is back into safe ground, and the real-estate market is hot yet investors have not moved on and dumped their coin investments. I also believe that this trend will continue and become worldwide phenomena, not just in U.S. coinage, but World coins as well.
I think many collectors of better material in this market would be very surprised of how often a rarer coin changes hands in a short span of time as several profits are added before reaching the collector.
Here is my personal example form just 10 days ago. I was looking for a higher-grade 1795 bust half.
I found two examples that would fit the type and the price with one dealer. I called the dealer and request more information. I was told that the coins were out to another dealer, and I would get a call back as soon as the other dealer could be contacted and the coins returned. I never got a call back. I was later told that the dealer that had the coins had taken them to the Baltimore show, where they were sold to yet another dealer. In looking at the new listings of an upcoming auction at the end of Sept. I now find the coins going to auction. These are the same two 1795 Bust halves, as I down loaded the pictures when I first found them. I guess I will find out next month where the reserve is now on these coins.
Experience the World through Numismatics...it's more than you can imagine.
Also, I know the TPGs are not going away. They will continue to do what they do and play the games necessary to stay in business. The fact they remain in business is no way an indication of their usefulness to the "hobby"-read collectors.
The point is that I used to see the TPGs as a great contributor to the "hobby" - read collectors. But now I'm thinking collectors have reached the point of dimishing returns for the value of TPGs. It seems to me that most coins worth grading have already been graded and the games the TPGs are playing are all big wins for the coin business, more often than not at the expense of the collectors.
I am still interested in your thoughts on how many no problem coins valued at over $100 have not already been graded.
<< <i>I would say the extreme minority of "coins worth grading" have been graded at all. >>
So far this is the only response to that question, and I disagree. If this is accurate it blows my whole premise of the the post.
<< <i>Fatman, good post, but one bone I'd pick is that moderns represent 1 of every 11 coins graded at PCGS. According to the pop reporst, PCGS has graded 11 million coins, and 1 million were minted post-1963, inculding bullion. >>
Don, thanks for the good information. But I believe a great majority of the post-1963 has been holdered in recent years. What would you guess is the current ratio of post-1963 vs pre 1963?
<<So far this is the only response to that question, and I disagree. If this is accurate it blows my whole premise of the the post.>>
I disagree also, and strongly at that, though admittedly I am only speculating. Additionally, there are sure to be different opinions regarding what constitutes "coins worth grading".
Great discussion, folks.
But you see, who is to say what coins are worthy of grading and when enough is enough? I would say it may depend upon the niche but I certainly can't make a statement that grand for the coin hobby as a whole.
<< <i>tpg from a plastic co. has always been useless to me, but i like their authentication capability.
K S >>
<< <i>The root of my question is aimed at the more classic coins. The million dollar question here is what percentage (even better answer would be how many) of coins valued at over $100 have never been graded? I know that there are still collections that come to market raw, but since it has now been 20 years since the grading phenomenon got into gear, how many more raw coins are out there? The TPGs would be blind to not have recognized this as a problem. When I see numbers like 70,000 coins a month, I have to believe that many more of these "Classics" have been previously graded than are being graded for the first time. >>
Thousands of classic US coins are coming out of Europe on a daily basis that have never seen a grading service- all the big US coin places have people over there buying. Just on a local level I see estate auctions with all kinds of gradable classic US coins.
<< <i> Thousands of classic US coins are coming out of Europe on a daily basis that have never seen a grading service- all the big US coin places have people over there buying. Just on a local level I see estate auctions with all kinds of gradable classic US coins. >>
Are you talking gold? I was aware of a large quantity of US gold being held in Europe but I am uninformed to the fact of silver coins being held over there. Thousands on a daily basis? Is that for real or are using artistic license to make a point.
Oh the games being played.
FatMan
I am with you, this number just blows my mind, and I do not see how this can continue?
O.K. so I can see that lots of New World material is now being slabbed, and of course modern. I can even see where many of the second and third tier TPG coins are being submitted to both PCGS and NGC.
Even if you assume that the word used by Mr. Salzberg, “grading” does not mean slabbing, 160,000 per month is still a huge number, which does not include the PCGS coins.
Certainly there are many coins out there that could be slabbed. According to many members here, most Bust coin collectors collect raw, so for that 45 year period, there is still lots of raw material out there, but in following the pop reports the last two years on Bust Half dollars the numbers have not changed much. In fact one would think that this would be the reverse in such a HOT market since almost all coins valued at over $300 must now be certified to sell for close to market price.
In fact the bodybagging of many older coins points to the fact that the top TPG’S are doing their job.
If we assume that PCGS and NGC are grading 300,000 coins per month, and even if we assume that 30% are being bagged, and that number might be high, they are slabbing 2,520,000 coins per year.
In the case of Bust half dollars there appears to be perhaps a hundred plus coins per year added in the entire 45 year period in all the Overton numbers, not many for this large series.
Perhaps some of the other collectors here can report in on the populations they follow?
and it sets us apart from practitioners and consultants. Gregor
A nice raw 34-S Peace dollar in XF-40
Same coin in a holder.
and it sets us apart from practitioners and consultants. Gregor
<< <i>that makes the reholdering industry (60,000 x 12 x $10) a $7.2 million dollar per year enterprise. Most good business people don't invest that kind of money in anything that is not profitable. I guess that leaves the community with two scenarios, either grade inflation is sucking 8 million+ from the collector community each year, or there are millions more classic coins waiting to be holdered than was previously assumed. >>
The 8 million paid to the grading services is just the tip of the iceberg. How many hundreds of millions are being sucked from the collector community from the inflated numbers on the slabs? That is exactly my point about these games. We collectors are getting hosed for hundreds of millions of dollars as an end result of these games, and many of us simply don't see it.
The very same thing that is being said about the facilitators and enablers of the coin industry can be said of others, like the financial services sector, automotive sector, healthcare sector, etc. It is true that capitalism will promulgate corruption in certain pockets of certain business sectors, but when we get to the point where we check out in a line at a grocery store and think about how Hershey is hosing you 'cause you need your chocolate fix every day, man, and how Captain Crunch is a S.O.B. because your kids can't stop eating the stuff, and why Marie's Blue Cheese dressing is 2.5x the price of everything else -- how unfair because you really enjoy blue cheese dressing and Marie's is soooooo good, this rhetoric is funny but not healthy. This is the "victim" mentality, and I'm sad to say that we Americans are the best at it. Everybody wants to be the victim...it's just not healthy.
millions are being sucked from the collector community from the inflated numbers on the slabs? That is exactly my point about these games. We collectors are getting hosed for hundreds of millions of dollars as an end result of these games
I've said somewhere here before...most of the issues people have with TPG's are somewhat ideological in nature. I hope, and I say that with all sincerity, that you truly don't believe that the very same graders who grade 100k++ coins per month, are sitting there in their little cubicals and are conspiring about how they're going to screw the collector. It might make for a vary funny cartoon in the New Yorker, but that's about that.
Great post Dheath,
Here is something else to think about, one of our biggest problems with not only pops, but also with price increases is that series collectors have no real idea what is out there. In addition the TPG’S do not count anything but their own slabbed coins to determine point systems in their registries.
If the BHNC or JRCS would charge the same $50 per year fee from their members that the certification companies charge perhaps they could have a REAL website with REAL populations and their own registries. I believe that one of the BHNC members used the number of 1,000 members that would be $50,000 per year in fees.
Look at how many coins could be sold to other members of a sophisticated club with a great web presents that had their own sales site on their own website. Talk about cutting out the middleman.
Lets face it most collectors that buy more expensive coins, or do not feel comfortable in their grading judgment, buy slabbed coins., but when they go to NGC or PCGS to look up pops are they getting a false sense of what’s out there as Dheath suggests??
Are we all paying too much for what we believe are very rare coins just because we do not have ALL of the information?
“How many hundreds of millions are being sucked from the collector community from the inflated numbers on the slabs?”
Fats,
It may not be that the screwing is as bad on the grading as it is on the false information that you are buying a very rare coin based on low false population reports.
I am not saying that the TPG’S should be responsible for doing their own pop reports any different than they are doing, but somebody should?
<< <i>I've said somewhere here before...most of the issues people have with TPG's are somewhat ideological in nature. I hope, and I say that with all sincerity, that you truly don't believe that the very same graders who grade 100k++ coins per month, are sitting there in their little cubicals and are conspiring about how they're going to screw the collector. It might make for a vary funny cartoon in the New Yorker, but that's about that. >>
Of course I don't think the graders are sitting there conspiring about how to screw the collector. I do believe the TPGs are in a very competitive business, one where there is a finite supply of the product they were designed to service, and the supply is drying up. As such the corporate policies have been tinkered with to create incentives to re-submit previously graded coins to meet current and future corporate profit goals. The incentive is a good shot at the almighty dollar. Conspiracy? No. But who is paying for this in the end? The graders are doing there jobs, and I admire them for their incredible knowledge and ability to assign accurate grades to a company dictated standard.
I hardly prescribe to a victim mentality. Your reference to the other corporations and products do not correlate here. Corporations in the marketplace do not suggest to you that once you by a hershey bar, you need to buy it again because last time it was made incorrectly and it will be better this time. In fact if that were the case they would more than likely give it away to get you to repurchase. These companies increase market share through branding which if done well provides the consumer with a level of confidence in the quality and consistency of their product. If they reach market saturation with their product, they create new, or improved products.
This is not what is happening here.
mercurydimeguy, I would like to ask you a couple of questions so I can understand your position better. 1. Do you believe grade inflation does not exist? 2. Are you a collector, investor, or a dealer?
<< <i> Either the community has grossly underestimated the number of raw coins when pricing the coins that have been introduced to the community, or there is a huge reholdering industry >>
What the pop reports of slabbed coins shows is coins that have come "through" the market--in other words coins that have come to market through dealer inventories or auction or are part of the collections of active collectors who submitted them for grading. Pop reports are merely an indicator of relative scarcity of most issues (excluding rarities of which all examples are present and accounted for) and show the liklihood of finding one on the market at any given point in time. If there are 1,000 at a grade you know you can easily find examples in the market, if there are only 10 you may well have to wait a while for a shot at one.
Agreed, there is simply no telling what is "out there" squirreled away in people's homes and safety deposit boxes. So the "overhang" of raw coins is overlooked in most cases in pricing coins since it is not on the market. We have all seen the debates here about the sagacity of the pricing of top pop moderns where there is a large overhang of mint state coins that could include top grade gems. The people who are buying the top pop coins know that over time the pops will grow, but at the time they are in the marking buying the pops are what they are--you cannot buy something that no body knows about and isn't being offered for sale. Nor can you tell a seller who is offering the only one on the market "those are a dime a dozen" because the seller will just tell you "fine--go buy one from someone else."
CG
1. Do you believe grade inflation does not exist?
Did you ever hear the parable about how a number of blind people are asked to put their hand on an elephant (not knowing what an elephant is) and then asking to describe it? One touches the tail, one touches the trunk, one touches the ear, and so on. They are all touching the same thing -- an elephant -- but they all think its something drastically different. My point is I do believe that grading standards evolve, as they rightfully have to because if they didn't we would be remiss not to effect all the new numismatic discoveries and learning that take place year over year. I do not prescribe to #1 in a (what I believe to be a) negative connotation of that statement (BTW--so we're clear/cool--I'm not predisposing that you are saying it in negative way). In fact #1 is often used here in these boards in the same manner that Lou Dobbs refered to "Outsourcing" during the election, where he drilled it in to people's heads that Outsourcing is the same as "Off-shoring", which it is not. Grade inflation has a negative connotation to it because it implies that (somehow) something bad is happening. I understand the sensationalism around throwing this term around, I just (personally) am choosing not to....are we cool on this point
2. Are you a collector, investor, or a dealer?
Well, anyone who is a serious numismatist will inescapably wear all 3 of those hats at some point
All kidding aside, though, I'm primarily a collector. That said, have I bought "widgets" to throw in to the safe as an investment -- sure. Who hasn't? Are there coins that I admire so much -- not widgets -- that I look at them at least once per week, and will probably never sell -- sure. Have I sold coins -- absolutely! Just sold 7 1999 Proof Sets, for that matter, because it was time for those "widgets" to go because I wanted to put the $$ in to a coin I "need/want" for my collection.
Contextually speaking, FatMan, I enjoy the spirited rhetoric on these message boards. I have no problem with people's opinions and their positions, even if I don't share them. Free speach is what makes this country great!
....there, that's a mouthful
No matter how much we complain about the TPG services and grading variations, it is still better than the even greater debate on grades of raw coins.
<< <i>Are you kidding me? >>
No.