What is the future of coin grading ?

STEWARTBLAYNUMIS · September 9, 2011 11:01PM

It is common knowledge that most of the classic coins have already been graded. I feel safe to say almost 90% of the classic coins have already been graded at least once.

Most of the income from coin grading is presently derived from grading " modern crap". Excuse my French but I never believed collectors/investors would be sending coins directly from the mint to the grading service.Heck, for the first ten years of third party coin grading
The grading services would not grade a coin minted after 1964

The 100 point system will not fly. Plus grading is not very popular nor rewarding.

What do you think ?

Stewart Blay

jayPem · September 9, 2011 11:44PM

let me see, I know my ten foot pole is around here somewhere...

ambro51 · September 9, 2011 11:48PM

I think the future of coin grading will go on much as it is now.

However the 'buy the coin not the holder' practice will become even more important.

Baley · September 9, 2011 11:59PM

Third party opinion of the grade on the holder and various PQ qualifiers, 4th party grade verification opinion on the sticker, 5th party opinion maybe from a future outfit that maybe offers written critique of first 2 opinions and description of coin history, strike, planchet, and surface quality, opinion of color, etc.

of course, the most relevant aspect of "grade" , which is "price", will always be determined by the first and second party opinions, the seller and buyer.

I think informed expert opinions can help the transacting parties arrive at a price, but buyers and sellers who rely on them exclusively or obsess about them may miss the forest for the trees

astrorat · September 10, 2011 12:20AM

<< The 100 point system will not fly. >>

I wouldn't be so quick with that statement. The way to sustain a product or line of products is to evergreen them (the pharmaceutical industry does this quite well) or to discontinue a favored product to force sales of an "improved" version (the running shoe companies are masters at this). With TPGs, when PCGS sneezes everybody else catches a cold. If PCGS moved to a 100 point system, collectors would whine, complain, threaten, and everything else people afraid of change do, but soon after, the hobby would follow. Once people started resubmitting, PCGS will have more revenue than a pie vendor at a fat farm.

It's not like PCGS can't convince collectors to do odd stuff ... think about the uberbrilliant idea of Registry Sets. Geez! Get people with huge wallets and large egos to compete to buy YOUR product. And ... make it fun for the small fish (like me). Genius! It's just pure, freakin' genius.

anablep · September 10, 2011 12:28AM

As long as there are counterfeiters, there will be coin grading companies.

astrorat · September 10, 2011 12:31AM

<< As long as there are counterfeiters, there will be coin grading companies. >>

Good point ... but I bet a miniscule fraction of the coins are submitted for authentication purposes.

roadrunner · September 10, 2011 12:35AM

<< I think the future of coin grading will go on much as it is now.

However the 'buy the coin not the holder' practice will become even more important. >>

I sure hope things don't continue on the current path. Right now it's buy the holder with a sticker .

If yours doesn't measure up the coin is considered a 2nd class citizen and brings considerably less money. This almost reminds me of the first couple of years of widespread certified grading in the later 1980's. The supply of coins was so small that it was a self fulfilling prophecy of price rises. Our next step in this process might be buy the holder, sticker, and shield. . It's alread clear that the great weeding out is occurring and the majority of graded coins aren't stacking as well as most though. While this process doesn't really affect raw coins or collectors who really don't care what they pay or what other think about their selections, but it does affect the vast majority of non-bullion coins in the >$200-$500 category. As new money enters the higher end of our hobby, they are concentrating on safety and a proven track record of performance. Wrong holder - no shield - no sticker coins are at a distinct disadvantage. And it's only getting worse. The great weeding out is needed because there are just too many darn coins to absorb the limited investment dollars. In the 1990's this was solved by starting to hand out higher grades like 66-69 much more often than TPG's had before. Then came "star" and striking acronyms. But there are still too many coins so additional reduction is needed to keep the number of "all there" coins at the right level. Even if as Stewart suggests that 90% of all classic coins have been graded, it's still not adequate. Those 90% have to be broken down further to separate the winners and losers even though they sit in the same holders with the same grade.

As a buyer of coins I had no problems with the older systems. But it's pretty clear that if I want my coins to have the full advantage of price appreciation that is potentially available, I'd better pick the coins with the right combination of scarcity/demand vs. price.....but that additionally meet new buyer's requirements (ie right holder - right sticker - right shield - right ETC...).

roadrunner

RedTiger · September 10, 2011 12:52AM

The future, as is the future in many industries is more computer assistance, more computer decision making. The sniffer is one step towards that. Full computerized grading is unlikely for the current companies, because they have too much invested in the current model. Computer assisted grading is another thing, and is already here with the sniffer. A start up may come in with market acceptable computer grading and force the existing companies to move more in that direction. Without that push, it will be a slow migration.

Evolution, not a revolution has always been the way with the grading companies. The basic business model is unchanged since the 1980s. What has added revenue are more high MS grades on classics, grading of moderns, FS and early release, registry, and now plus grading. Plus grading almost gets to the same place as a 100 point system without having to renumber all the coins. Each of those moves was unpopular with the curmudgeon crowd, but brought in more revenue. For businesses, that is the main goal, more revenue, more profit. The next obvious frontier are moves towards foreign markets. A sign of that is PCGS recently putting out a help wanted ad for a foreign coin pricing specialist.

The 90% figure is a point of debate. For high value classic coins, it may be a high percentage, but 90% still seems way high to me. In any case, of the coins that are likely to ever be submitted by current owners, it may be accurate, but there are still plenty of old time collections, old time hoards squirreled away that may only get graded when the owners pass and the estate sold. Certainly for most foreign coins, the figure would likely be reversed, less than 10% of high value coins have been submitted, so there is room there.

renman95 · September 10, 2011 12:56AM

The billions of ungraded post modern coins should keep the TPG's and marketers happy for a long time. If there's money to be made, smoeone will figure out the next "big one."

lordmarcovan · September 10, 2011 1:02AM

<< It is common knowledge that most of the classic coins have already been graded. I feel safe to say almost 90% of the classic coins have already been graded at least once. >>

Really? I just can't bring myself to agree with this statistic at all.

<< Most of the income from coin grading is presently derived from grading " modern crap". Excuse my French but I never believed collectors/investors would be sending coins directly from the mint to the grading service.Heck, for the first ten years of third party coin grading
The grading services would not grade a coin minted after 1964 >>

Hey, whatever floats their boats. Funny, I didn't know that about the early years of TPGs. Interesting.

<< The 100 point system will not fly. Plus grading is not very popular nor rewarding. >>

I agree with the former, and am not so sure about the latter. In some circles grading IS quite popular, and SOME people must be getting rewarded at least some of the time, or it wouldn't have caught on as it has.

GRANDAM · September 10, 2011 1:04AM

<< Heck, for the first ten years of third party coin grading
The grading services would not grade a coin minted after 1964

Stewart Blay >>

--------------------------------------------------------------------

This is not a true statement. I started sending IKE Dollars to PCGS via SilverTowne in 1986 / 1987.

GrandAm

golfer72 · September 10, 2011 1:24AM

PCGS will start split "grading" eventually. Both sides get graded. Its coming. What a moneymaker that will be ! Probably not until the bullion coin grading nonsense slows down though. Looking further out it will be computers grading coins. This will eliminate the market grading nonsense that the TPG's now use. If PCGS doesnt start computer grading someone else will.

ricko · September 10, 2011 1:57AM

The future is computer grading. It will take over eventually. It is creeping in already at PCGS. The technology exists, it is in fact, in use, in many industries today, from silicon chips to circuit boards. The only thing lacking is the significant (very significant) investment in software. That is the only roadblock currently holding it back. It will be 100% repeatable, identify coins without possibility of duplication, detect alterations, evaluate strike and even luster. It is the future - beyond any shadow of a doubt. Brace yourself. Cheers, RickO

LanLord · September 10, 2011 2:39AM

<< 

<< It is common knowledge that most of the classic coins have already been graded. I feel safe to say almost 90% of the classic coins have already been graded at least once. >>

Really? I just can't bring myself to agree with this statistic at all.
>>

I was sorta wondering how that "90%" was arrived at as well.

bidask · September 10, 2011 2:41AM

The tpg's growth area is foreign coins.

ziggy29 · September 10, 2011 2:46AM

I think the emphasis will be increasingly on authentication, both of the coin AND the holder. The industry will still grade, to be sure, but increasing business volume will come from selling services that keep "one step ahead" of the counterfeiters, as that is the only way I think trust in the certified coin market can be maintained.

STEWARTBLAYNUMIS · September 10, 2011 3:13AM

Computer grading will not work because it does not take into account " eye appeal"

Split grading was a thing of the past and will not come back

Third Party Grading companies must down size .Grading coins sent directly from the mint is a scam and must stop!

Stewart

MICHAELDIXON · September 10, 2011 3:17AM

All the grading services will close by the year 2525; if man is still alive!

topstuf · September 10, 2011 3:21AM

How could only 100 points provide enough information?

Steve27 · September 10, 2011 3:23AM

Actually, most classic coins have NOT been graded, and based my the members of my coin club, most people do not collect slabbed coins.

I agree with bidask, the major growth area for the TPG companies is in the area of world coins.

EagleEye · September 10, 2011 3:25AM

I agree with bidask, ancient and foreign coins are the future of coin grading, especially with the Chinese counterfeits.

dbcoin · September 10, 2011 5:49AM

I think you didn't get the grade you wanted on a recent submission and came here to cry like a baby...again

khayse · September 10, 2011 5:59AM

>How could only 100 points provide enough information?

Exactly. I say we use a 1000 point scale.

-Keith

ricko · September 10, 2011 6:40AM

<< Computer grading will not work because it does not take into account " eye appeal" >>

It will work since a computer can be programmed to evaluate any parameter specified. It is already starting at PCGS. It will continue to be developed. Good news in some respects, bad news for graders.
Cheers, RickO

RedTiger · September 10, 2011 7:03AM

<< 

<< Computer grading will not work because it does not take into account " eye appeal" >>

It will work since a computer can be programmed to evaluate any parameter specified. It is already starting at PCGS. It will continue to be developed. Good news in some respects, bad news for graders.
Cheers, RickO >>

Of course computers can learn eye appeal. The computer can learn it the same way human graders learn it, by looking at thousands of coins. Now that there are so many graded coin images available, the computer can compare the new image to existing images. If the new coin looks like many other coins that are rated high eye appeal, the computer will learn to do the same.

The old time algorithms made by non-coin programmers getting technical specs from coin experts is long gone. With the old way, eye appeal was a very difficult task. This is not true for the new ways computers learn, and build their knowledge networks. Much more difficult tasks than coin grading are now open to computers. The main reason computer coin grading isn't here today is economics, tradition, market acceptance. It would take a lot of money to develop the algorithms, and much more than accurate computerized grading for coin collectors and dealers to accept computer grades. Coin grading is a small industry, with modest and stagnant revenues. A student project combine with open source help, is the most likely way computer grading is going to come to the masses. The existing companies have little incentive to move in that direction.

lcoopie · September 10, 2011 7:31AM

perhaps the computer can do all the grading,
asides from eye appeal.
eye appeal seems to be the easiest of the attributes to judge,
so I will volunteer.

magikbilly · September 10, 2011 7:44AM

"Plus grading is not very popular nor rewarding."

Depends who you ask I guess. I submit that it is uh...rich with potential. It has no horizon unless you are willing not to look.

Eric

TwoSides2aCoin · September 10, 2011 8:02AM

Those who have eyes should use their brains in conjunction with their orbs. That's how I see the future of grading.

Artist · September 10, 2011 8:33AM

I think the trend of ultra-rarities and ultra-condition-rarities exponentially increasing in value will continue, but this will not pull values of more common material along with them - I see this as the maturing of the coin market into something on par with art.

Coin collecting on a broader level, will be hurt (and perhaps has already been hurt) by too many extraneous issues being released (First Spouse Gold anyone? Now there is an answer to a question nobody asked...) Coin Collecting will continue to be negatively impacted by coinage's increasing obsolescence as viable currency. And lastly, Coin Collecting cannot really compete with other forms of entertainment available to youngsters today. That being said, coin collecting will never suffer the same fate as stamp collecting, because coins offer more than stamps: they have existed for thousands of years vs. a couple hundred, they are more durable, they have a precious metal component, etc. and therefore I believe coins will always enjoy a following, though perhaps more modest than in the past.

mozin · September 10, 2011 8:43AM

I doubt more than 15% of classic US coins are encapsulated. Most of the large collection that I know of lie raw, until it is time to sell. For Capped Bust Series coins, my guess is that at least 85% of those in existence today would slab as "Genuine".

I am all for computer coin grading, the computer alone should be able to do the complete grading, including eye appeal. PCGS could start by working up enough in the software to act as a single grader, keeping the second grader, and the finalizer if needed. Eventually, the computer could do all the grading, and very quickly. No more waiting a month for grades. No more need to resubmit.

291fifth · September 10, 2011 9:35AM

Grading will still be important but authentication of all collector coins will become more important. Many new collectors are now internet only and, unless they are involved in a forum such as this, are probably not learning much about grading, cleaning, surface alteration or counterfeits.

I hate to think of how many counterfeits are now sitting in the collections of these internet only collectors.

golfer72 · September 10, 2011 9:39AM

<< "Plus grading is not very popular nor rewarding."

Depends who you ask I guess. I submit that it is uh...rich with potential. It has no horizon unless you are willing not to look.

Eric >>

Oh really? You send a coin in six times and it comes back with 4 different grades. Yet you think narrowing grades down to plus grades is valid. I am confused. Please tell me where I am wrong.

golfer72 · September 10, 2011 9:43AM

I dont understand why everyone still talks about eye appeal like it should be part of the grade. It should not. It is subjective. One person likes a coin, another doesnt. The grading services should only "grade" on technicals. Computers can only grade on technicals. I look forward to computer grading so this market grading crap will be eliminated.

LanceNewmanOCC · September 10, 2011 10:32AM

.
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really enjoying seeing all sides of the debate
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.

magikbilly · September 10, 2011 1:32PM

Golfer, you misunderstand me about this business. No problem. Reed between lines (lol).

Eric

AMRC · September 10, 2011 2:28PM

<< It is common knowledge that most of the classic coins have already been graded. I feel safe to say almost 90% of the classic coins have already been graded at least once.

Most of the income from coin grading is presently derived from grading " modern crap". Excuse my French but I never believed collectors/investors would be sending coins directly from the mint to the grading service.Heck, for the first ten years of third party coin grading
The grading services would not grade a coin minted after 1964

The 100 point system will not fly. Plus grading is not very popular nor rewarding.

What do you think ?

Stewart Blay >>

I am thinking you are not having a great day.

Comment 1: Yes, and so?

Comment 2: The average grade of ALL COINS graded by PCGS and NGC is MS69. That means much is modern, So how does that impact you again?

Comment 3: That is not french. Mr. Crapper was born in Yorkshire, that would make him English.

Comment 4: Would you rather have had that recent post 1964 No S dime that sold at Stacks ungraded?

Comment 5: Plus grading has had a substantial impact on the coin market. I am having a hard time imagining someone not thinking so. Coins today are graded on a 700 point scale (don't let the decimal fool you) and last time I checked PCGS or NGC are not in any hurry to try a 100 point scale.

What is the future of coin grading ?

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