Let us clear up a number of misconceptions about coin collecting

Bear · December 5, 2009 6:27AM

Whether we like it or not, most collectors do not really know
the finer points of grading, especially for more expensive coins.
They have not seen the tens of thousands of coins necessary to
gain such experience. While a number of collectors may be able
to grade some coin series or some grades in a series, they are,
for the most part limited.

1. Gap pricing....New comments towards the end of the comments on page two

2. We need TPG also for the problem of the ever increasing effectiveness
of the minters of phony coins. The better producers are making coins thast
are most difficult to spot.

3. The loss of the guarantee on Red and R/B coppers has been a long overdue
change for PCGS. This is a matter which no third party grader has much, if any
control over. Heat, humidity are the villans in this case and PCGS , as a public
held company must make decisions that are based upon sound business practices.

4. PCGS, in particular, thru its Coin Forum, has allowed the enlightenment of more collectors
on more matters related to coins then almost any other facility available to collectors. There
are not many Forums that allow the participants to criticize the company thru the free service
of the Forum provided by the company. Only when such criticism is rude, untrue or non constructive
do the moderators intervene. Also, how often do we find ranking officers of a company directly
answer concerns of the Forum Members.

5.For those of you too young to remember what the bad old days were like, before the TPGs, let me
tell you it was open season on the collector, by unscrupulous sellers of coins. Thru a more consistent
method of professional grading, more collectors became more acquainted with proper grading then
ever before.The TPGs were a service whose time had come.

6.Sometime we all, myself included, tend to open our mouths before our brains are fully in gear. While it
is proper to politely discuss issues that we feel need the light of day and corrective action, let us never lose
sight of the good things that have come about in the hobby of collecting.

SilverEagles92 · December 5, 2009 6:30AM

One of the largest misconceptions about coins in general by non-collectors is that antiquity is associated with (high) value. More often than not, that's not the case.

ocon4008 · December 5, 2009 6:40AM

Hear hear Bear!

<<6.Sometime we all, myself included, tend to open our moths before our brains are fully in gear. While it
is proper to politely discuss issues that we feel need the light of day and corrective action, let us never lose
sight of the good things that have come about in the hobby of collecting.>>

Which PCGS has had a very large part of, I would like to add. Collectors should be thankful, IMHO.

Unknown · December 5, 2009 6:52AM

This content has been removed.

DoubleEagle59 · December 5, 2009 6:55AM

I totally agree with you Bear. Very well said.

No system is perfect, but it's the best we've ever had so far.

tahoe98 · December 5, 2009 6:57AM

<< 1. Whether we like it or not, most collectors do not really know
the finer points of grading, especially for more expensive coins.
They have not seen the tens of thousands of coins necessary to
gain such experience. While a number of collectors may be able
to grade some coin series or some grades in a series, they are,
for the most part limited.

2. We need TPG also for the problem of the ever increasing effectiveness
of the minters of phony coins. The better producers are making coins thast
are most difficult to spot.

3. The loss of the guarantee on Red and R/B coppers has been a long overdue
change for PCGS. This is a matter which no third party grader has much, if any
control over. Heat, humidity are the villans in this case and PCGS , as a public
held company must make decisions that are based upon sound business practices.

4. PCGS, in particular, thru its Coin Forum, has allowed the enlightenment of more collectors
on more matters related to coins then almost any other facility available to collectors. There
are not many Forums that allow the participants to criticise the company thru the free service
of the Forum provided by the company. Only when such criticism is rude, untrue or non constructive
do the moderators intervene. Also, how often do we find ranking officers of a company directly
answer concerns of the Forum Members.

5.For those of you too young to remember what the bad old days were like, before the TPGs, let me
tell you it was open season on the collector, by unscrupulous sellers of coins. Thru a more consistent
method of professional grading, more collectors became more acquented with proper grading then
ever before.The TPGs were a service whose time had come.

6.Sometime we all, myself included, tend to open our moths before our brains are fully in gear. While it
is proper to politely discuss issues that we feel need the light of day and corrective action, let us never lose
sight of the good things that have come about in the hobby of collecting. >>

......great points, bear! and one more thing, i NEVER obey the "do not feed the bears" signs.

ricko · December 5, 2009 6:59AM

Congratulations and thank you Bear... well stated. Cheers, RickO

coinguy1 · December 5, 2009 7:08AM

I'm not exactly sure what the misconceptions were or that whatever they were, they have necessarily been cleared up.

<< Well growled Bear, i have to agree with you 100%. I could never understand why PCGS guaranteed copper's color, they wouldn't with silver so why with copper. >>

Alan, it is apples to oranges to talk about guaranteeing copper vs. silver. Regardless, though, silver was and is, in essence, covered under the PCGS grading guarantee.

I would guess that PCGS guaranteed copper because they felt that the downside to doing so was outweighed by the increased submissions of and demand for PCGS copper coins which resulted. But whether they should have done it in the past or not, isn't really the issue. What matters, at least to many owners of PCGS copper coins, is once the guarantee did go into effect, whether it should subsequently be changed.

Dismeguy · December 5, 2009 7:40AM

Well said Bear! There is always room for improvements with TPG services, but today the playing field is much more level for the collector and coins as an investment.

AUandAG · December 5, 2009 10:46AM

Yep, I'm in agreement.

One thing I'll add is that those on this forum are PASSIONATE for collecting coins.

By that I mean the discussions can really take weird turns, good and bad, but in the
end we all learn from it and are better for it.

I've been humbled so many times on this forum. I thought I was a collector until I
joined this board. I've so much to learn and at 63 so little time to learn it, but I'll try.

Thanks to all of you and keep the humbling coming, I enjoy it for sure.

bob

Konahead · December 5, 2009 10:55AM

Very well said and you get extra honey tonight!

ecichlid · December 5, 2009 11:26AM

Everything you said is correct except this one needs a little more detail, I think...

<< 3. The loss of the guarantee on Red and R/B coppers has been a long overdue change for PCGS. This is a matter which no third party grader has much, if any control over. Heat, humidity are the villans in this case and PCGS , as a public held company must make decisions that are based upon sound business practices. >>

They are having a tough time figuring out which copper coins have been doctored to look RD or RB and then quickly turn in their slab. No? If that wasn't the case, wouldn't they offer a one year guarantee, just like Rick Snow requested.?

JCMhouston · December 5, 2009 11:27AM

I agree with you on these Bear.

roadrunner · December 5, 2009 1:00PM

I too concur Bear.

But I will add one thing. The grading problem was basically solved back in 1986-1990. It was unfortunate that we backtracked in the years that followed. That was a mistake for whatever the various reasons behind it. If someone disagrees I can only say that if I am incorrect there would be a million or more rattlers and millions of ogh's still running around. In fact old holders would probably make up 30-50% of the market today if all were left as is.

roadrunner

mikeyg · December 5, 2009 1:09PM

well put bear ty

PLE · December 5, 2009 1:30PM

While a number of collectors may be able to grade some coin series or some grades in a series, they are, for the most part limited.

Well, I guess I am just one of those limited collectors that you refer to. And, yes, I am old enough to remember what coin collecting was like before TPGs.

But, here is my problem. I collect Red Indian Head cents, and I've invested over 15 years in my collection. I did my best to learn how to grade that series, and, yes, as a limited collector, I did, indeed, rely on PCGS.

I received this very long email from Don that told me that PCGS's guarantee is truly wonderful, and then told me that PCGS is going to rescind its guarantee on the coins that I collect. That email message was terrible. Sorry, but I don't buy his argument that humidity in Florida is the problem.

I now realize that I made a huge mistake in trusting PCGS.

I am extremely disappointed.

RedTiger · December 5, 2009 2:12PM

For collectors such as PLE, the facts as Bear states them may stand. However, the immediate hit in value and demand for the coins he/she has spent over a decade collecting is also a fact. To think that such collectors are going to take the news well, is asking a lot. The value of modest collections (not the big names) of red copper certified by PCGS has just gone down. By how much remains to be seen, but the drop in value is likely both immediate and permanent, and likely by more than a few percentage points. Bear and others forumites may not have much money tied up in red certified copper, but those that do, like PLE are probably like him/her--not so happy campers at the moment and I don't blame them.

The PCGS guarantee vs. the NGC guarantee on copper was a big reason many such collectors chose PCGS certified coins, or chose to submit their raw coins to PCGS.

Bear · December 5, 2009 3:07PM

Red tiger, you raise a cogent point indeed. It is a major blow to

collectors who specialize in full red cents. About all one can do, is

to seek out red cents in older holders that appear to have been stable

for a fairly long period of time. It would seem that in the world we live in

today, nothing is forever, not even a promise or a guarantee. It also means

that copper collectors must become extremely cautious and demanding if they

continue to seek out True red cents.

Quarternut · December 5, 2009 3:13PM

Koolaid drinker!

mike92694 · December 5, 2009 3:38PM

Here is my personal take on it.

I have never had a PCGS/NGC MS RB/RD cent change color on me. However, I have seen (or at least I have seen) two PCGS red lincoln proof cents change color on me fairly rapidly. I live in Southern California with mild to moderate humidity.

WinPitcher · December 5, 2009 4:22PM

I would have hoped if they were to stop guaranteeing red copper it would be

for only those coins certified from that point forward, NOT for coins that were certified

before the change.

edited to add: They are only not guaranteeing coins they grade after...."we will not be guaranteeing the color of cooper coins graded or sold after January 1, 2010"

So why does a person with these coins already have to worry? His/her coins are still guaranteed.

What am I missing?

Steve

mike92694 · December 5, 2009 4:40PM

<< I would have hoped if they were to stop guaranteeing red copper it would be

for only those coins certified from that point forward, NOT for coins that were certified

before the change.

edited to add: They are only not guaranteeing coins they grade after...."we will not be guaranteeing the color of cooper coins graded or sold after January 1, 2010"

So why does a person with these coins already have to worry? His/her coins are still guaranteed.

What am I missing?

Steve >>

the point where it said "sold after January 1, 2010". My interpretation is that the guarantee is void if the ownership changes hands, thus losing its perceived value (along with the guarantee)

WinPitcher · December 5, 2009 4:44PM

Mike

yeah I just read that in the other thread. The 'sold' part is disturbing.

Thanks for the clarification.

Steve

TwoSides2aCoin · December 5, 2009 6:46PM

And now would you join me in singing :

Bringin' in the sheep

SeaEagleCoins · December 5, 2009 7:35PM

<< I too concur Bear.

But I will add one thing. The grading problem was basically solved back in 1986-1990. It was unfortunate that we backtracked in the years that followed. That was a mistake for whatever the various reasons behind it. If someone disagrees I can only say that if I am incorrect there would be a million or more rattlers and millions of ogh's still running around. In fact old holders would probably make up 30-50% of the market today if all were left as is.

roadrunner >>

I concur with Bear and Roadrunner...

In the busy quenching of thirst for koolaid... far too many folks seem to willingly overlook RR's point... the floating or moving target of grading standards is, for me, very hard to swallow. While I can accept a grade swing of one point in either direction... there seems to be far too much of a variance for my liking.

However, the truly befuddling aspect for me is... that while many, if not most, folks would agree that grading is not an exact science... and it is subject to variance... how is it that we WILL ACCEPT very large price gaps between grades? This does not... will not... and has never made sense to me...

Simply put... if a coin can be graded 64 on one submission, yet can find a home in a 65 holder on a subsequent submission... how can we accept a price jump that can sometimes be in the thousands of dollars???... same coin... different label...

Sorry...but no one will ever convince me of the validity of this type of pricing...

Bear · December 5, 2009 8:13PM

Pricing does have its own logic. When the original 1 -70 grading standard

was begun, it was actually borrows from an older grading system for Colonial

coins. It assumed that there was a straight line of increased value with a perfect

70 coin worth 70 times a basal 1 coin.

When the system was included for all coins and TPGs, we entered a new consideration.

Not only was price based on demand ,overall rarity and condition but know we had the

number of coins that were graded in each condition. Thus you now have condition rarity

in addition to overall rarity of a particular series.

While in the old days one had only a few adjectives to describe a coin such as good, fine

XF, BU and Gem, now we have MS-60-61-62-63-64-65-66-67-68-69-70. Thus there are

theoretically 11 categories of BU, each number with its own rarity value. Then start to add

in Full Head LSQ, Full torch dimes, red/RB/BR BU Cents, Full bell Franklins FS Nickels, split tail

buffaloes as well as other strike characteristics and you can see major deviations in the straight

line value concept for the increasing grades in coins. Further, with large price gaps between

grades, I can visualize that the grading guarantee would cause a more conservative evaluation of

a coins grade,where a large gap occurs, if only subconsciously.

It can be argued that the price gaping has caused an entire profession of crack out artists attempting

for the big score on an expensive upgrade, or that the gaping has caused more business for TPGs. I

believe however, that the gaping has been caused primarily by the condition rarity, especially in the

more modern coinage. To even out the pricing would probably require a 100 point grading system which

in addition to being more complicated from what currently exists , I am sure, would

create its own anomalies under the principle of unintended consequences.

I do not like the price gaping as it truly places a price ceiling on upgrading ones collection, as prices leap tremendously

from grade to grade in a number of classic coin series as well as moderns. In the case of Moderns, many condition rarities

are valid and many will in the future be less rare. I can't tell which, but specialists in the modern series, who follow such series

probably have a much better handle on which modern rarity numbers are stable.

golfer72 · December 5, 2009 8:24PM

Well said Sea Eagle as far as the large price gaps between grades. This also becomes a self fulfilliling prophecy in that the TPG's are reluctant to grade a coin up to the next grade when there is this large gap so it just perpetuates itself. On another point brought up by someone else the difference between silver and copper as far as grading guarantees is copper goes down in value as it tarnishes whereas silver frequently goes up in vaue so there really is no need for a grading guarantee.

crypto79 · December 5, 2009 11:03PM

<< Here is my personal take on it.

I have never had a PCGS/NGC MS RB/RD cent change color on me. However, I have seen (or at least I have seen) two PCGS red lincoln proof cents change color on me fairly rapidly. I live in Southern California with mild to moderate humidity. >>

For the record you do not have mild to moderate humidity in SoCal, Please visit the east coast below the Mason Dixon line and reevaluate. lol

yellowkid · December 6, 2009 1:43AM

I don't know where else I could have picked up all the info I did here in the past year.

Bear · December 6, 2009 6:31AM

Additional section added on Gap pricing............. a few remarks above this one.

shorecoll · December 6, 2009 7:58AM

You think it's bad not guaranteeing RD vs RB copper...what do you think would happen if they ever stop "market grading" early copper and bust halves? How'd you like to see half of your MS63 busties come back with AU labels?

Bear · December 6, 2009 8:13AM

I only buy coins that meet my own rigid standards.

I buy only one out of 100 Bust Halves that I look at.

I do seek PCGS coins but they must still meet all of my

requirements. As such, I do not really care what the

grading standards may go to.

icsoccer · December 6, 2009 9:20AM

MikeInFL · December 6, 2009 9:28AM

<< 3. The loss of the guarantee on Red and R/B coppers has been a long overdue
change for PCGS. This is a matter which no third party grader has much, if any
control over. Heat, humidity are the villans in this case and PCGS , as a public
held company must make decisions that are based upon sound business practices. >>

Your assertion of the change being one dictated by "sound business practices" is a "misconception", in my opinion.

PCGS gross profits were 60% last quarter. Payouts last year were approximately 1% of revenues and 2% of gross profits, with copper being some fraction of this.

The only sound business practice broken was the keeping PCGS' word to their customers (IMO), because if you can't believe a company whose opinion is its only product, what are you left with?

Respectfully...Mike

Bear · December 6, 2009 9:31AM

Mike, If the company were as

profitable as you state, the stock

would be at a much higher level.

MikeInFL · December 6, 2009 9:35AM

Are you suggesting I'm lying?

The P:E is 71.23 as of Friday's close.

The numbers and PCGS' own filings don't lie (or if they do, they are in much bigger trouble with the SEC):

Link to CLCT P:E

Article on PCGS quarterly report

At least do your homework before you imply I'm lying....Mike

Bear · December 6, 2009 9:37AM

No I am not saying that. The company is composed of more then just
the coin grading service. Thus they may have found it necessary to tightrn
up things all up and down the line.

MikeInFL · December 6, 2009 9:39AM

But that's the point, Bear, they don't need to tighten anything up at a 60% GP (IMO).

JRocco · December 6, 2009 10:00AM

I take a position against this point Bear:

" 5.For those of you too young to remember what the bad old days were like, before the TPGs, let me
tell you it was open season on the collector, by unscrupulous sellers of coins. Thru a more consistent
method of professional grading, more collectors became more acquainted with proper grading then
ever before.The TPGs were a service whose time had come. "

I do not look back at this period as the bad old days.
There were a lot of collectors back then who collected with their checkbooks as
there are a lot today. The difference was back then some people never learned about their hobby
and paid a price for that. Today some people are still not learning about their hobby and are putting their
blind trust in a plastic insert. Hence - plastic collectors.
Now I am not saying that all people who collect their coins ONLY in plastic are not real collectors who spend the time
to learn the hobby, but many are.
The old days were AWESOME in my memory.
In fact I have often referred to them as the GOOD old days.

Were there crooked dealers...sure were.
Are there today...sure are.

There is a need for good TPG's, but that need is greatly diminished
for collectors who collect as a hobby, enjoy their hobby and learn their hobby.

As the value of the coins increases, so does the need for TPG's.
I will agree that 6 figure Saints should only be purchased in slabs.
Assembling a set of Commems in XYZ brand plastic ??????
Airtights would work fine for those IMO.

edited for spelling

Bear · December 6, 2009 10:13AM

True, there were many good things about the old days. I, however

was referring to the chicanery that was perpetrated against novice

collectors. They really had no reference point to determine what an

appropriate grade or price was for a coin. Without the web, information

was a tightly held secrete by the fraternity of dealers. To be sure, serious

collectors were avid students of of the coins they collected and they had

reputable dealers and experts to assist them in building high quality collections.

Unfortunately, we little sardines, without Forums like this, had trouble finding those

reputable and honorable dealers. Mostly, we bought coins from the dealers that had

the biggest ads in the coin journals.

astrorat · December 6, 2009 11:30PM

<< 5.For those of you too young to remember what the bad old days were like, before the TPGs, let me
tell you it was open season on the collector, by unscrupulous sellers of coins. Thru a more consistent
method of professional grading, more collectors became more acquainted with proper grading then
ever before.The TPGs were a service whose time had come. >>

While I appreciate the sentiment, let me provide a somewhat different perspective. In the "dark ages" before PCGS/NGC*, collectors actually needed to learn how to grade and authenticate coins. Dealers who wanted to cultivate clients and stay in business had to be knowledgeable, skillful, and educate their collectors. TPGs have afforded the hobby and industry the opportunity to become numismatically lazy and just rely on TPGs for grading and authentication. How much numismatic skill does it take to read a label and then claim "it's high-end for the grade?" Enter the era where numismatic skill is of less importance and dealers and collectors can go their merry way without needing to know how to grade or authenticate coins; just rely on the TPG label.

TPGs just provide a paid opinion and are not the divine word on grading. For the most part the hobby has forgotten that.

Lane

*Note: At the time, ANACS was not relied on for grading but served well for authentication.

Let us clear up a number of misconceptions about coin collecting

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