Spooked Now!

apprais1, welcome to the forum! We've got lots of friendly folk here, all willing to share their experiences and expertise.

You've asked a good question, but it doesn't have a simple answer. Somehow, the buying market has decided that PCGS slabs are worth more than NGC slabs even through both TPGs have top-notch professional graders. While there is some variation in the accuracy of grading within certain series, it is minimal. It's just a market thing dealing more with peoples' perceptions than reality. The same may be applied to ANACS and ICG, also among the top four TPGs.

The online and printed price guides are generally overly optimistic, especially the PCGS Price Guide http://www.pcgs.com/prices/ . These guides represent the top price ever paid for a coin as slabbed by a top TPG at a top auction house (e.g., Heritage, Superior, Stacks, etc). For the average top TPG slabbed coin, one would be nuts to pay what most of the price guides state is current market value.

That said, it's also in the best interests of the professionals within the coin sales industry, including the TPGs to see such coins priced as high as possible. They all rely on the continued value appreciation of coins to stay in business, even if they do not sell directly themselves (e.g., the TPGs, the price guides and magazines). If persons with coins think their coins will increase in value, it keeps their interest alive. As long as there is interest, price guide and numismatic magazines will sell, people will want to get their coins slabbed to preserve not only the coin but the coin's value, and dealers will continue to sell at top dollar. I guess it could be labeled "consumer confidence" but others might label it simply "avarice".

Thus, although the top TPGs are in fact generally disinterested parties, their future relies on a continued flow of coin submissions from people who are hoping for the highest grade possible to enhance their coins' value. The TPGs generally have a rule against their employees dealing coins, but there's quite a few qualifications to this rule in that third parties may deal on behalf of a TPG employee and the rule doesn't really apply to personal collections.

Where it becomes even more complicated is when the top TPGs respond to market pressure by changing their grading standards. Invariably, these changes will raise the value of some coins while lowering for others. These changes seem to be most beneficial to the dealers who are associated with one TPG or another. Further, the standards are not necessarily applied equally: a large dealer with a large submission might see his grades a little bit higher than a collector who has submitted just a few coins. While this subjectivity is relatively minor in terms of an assigned grade being up or down by one grade from another apparently equal coin, the difference in value between one grade and the next can be thousands. Perhaps this is the major complaint againt the big TPGs is that their standards appear not to have been applied equally across the board.

It's always a good idea to get oneself thoroughly educated about a particular coin before buying, selling, or submitting a coin for grading, especially ability to grade a particular coin series and ability to differentiate between a possible problem coin and a solid no-problems coin. Also as importantly, knowledge of the market comes from more than the price guides: previous sales on ebay and the large auction houses are a better indicator of current market trends and values.

It's not a perfect system, but it's the only one we have right now.

Fred

quote:

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Originally posted by Morgan Fred

apprais1, welcome to the forum! We've got lots of friendly folk here, all willing to share their experiences and expertise.

You've asked a good question, but it doesn't have a simple answer. Somehow, the buying market has decided that PCGS slabs are worth more than NGC slabs even through both TPGs have top-notch professional graders. While there is some variation in the accuracy of grading within certain series, it is minimal. It's just a market thing dealing more with peoples' perceptions than reality. The same may be applied to ANACS and ICG, also among the top four TPGs.

The online and printed price guides are generally overly optimistic, especially the PCGS Price Guide http://www.pcgs.com/prices/ . These guides represent the top price ever paid for a coin as slabbed by a top TPG at a top auction house (e.g., Heritage, Superior, Stacks, etc). For the average top TPG slabbed coin, one would be nuts to pay what most of the price guides state is current market value.

That said, it's also in the best interests of the professionals within the coin sales industry, including the TPGs to see such coins priced as high as possible. They all rely on the continued value appreciation of coins to stay in business, even if they do not sell directly themselves (e.g., the TPGs, the price guides and magazines). If persons with coins think their coins will increase in value, it keeps their interest alive. As long as there is interest, price guide and numismatic magazines will sell, people will want to get their coins slabbed to preserve not only the coin but the coin's value, and dealers will continue to sell at top dollar. I guess it could be labeled "consumer confidence" but others might label it simply "avarice".

Thus, although the top TPGs are in fact generally disinterested parties, their future relies on a continued flow of coin submissions from people who are hoping for the highest grade possible to enhance their coins' value. The TPGs generally have a rule against their employees dealing coins, but there's quite a few qualifications to this rule in that third parties may deal on behalf of a TPG employee and the rule doesn't really apply to personal collections.

Where it becomes even more complicated is when the top TPGs respond to market pressure by changing their grading standards. Invariably, these changes will raise the value of some coins while lowering for others. These changes seem to be most beneficial to the dealers who are associated with one TPG or another. Further, the standards are not necessarily applied equally: a large dealer with a large submission might see his grades a little bit higher than a collector who has submitted just a few coins. While this subjectivity is relatively minor in terms of an assigned grade being up or down by one grade from another apparently equal coin, the difference in value between one grade and the next can be thousands. Perhaps this is the major complaint againt the big TPGs is that their standards appear not to have been applied equally across the board.

It's always a good idea to get oneself thoroughly educated about a particular coin before buying, selling, or submitting a coin for grading, especially ability to grade a particular coin series and ability to differentiate between a possible problem coin and a solid no-problems coin. Also as importantly, knowledge of the market comes from more than the price guides: previous sales on ebay and the large auction houses are a better indicator of current market trends and values.

It's not a perfect system, but it's the only one we have right now.

Fred

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That post needs to be an in FAQ somewhere. It couldn't be said better.

[quote]Thus, although the top TPGs are in fact generally disinterested parties, their future relies on a continued flow of coin submissions from people who are hoping for the highest grade possible to enhance their coins' value. The TPGs generally have a rule against their employees dealing coins, but there's quite a few qualifications to this rule in that third parties may deal on behalf of a TPG employee and the rule doesn't really apply to personal collections.[/quote
One thing that I would add to this paragraph. The rule applies to the employees/graders. The OWNERS of the TPG tend to be larger coin dealers and the rule does NOT apply to them.

Very interesting, kinda' like the real estate market, my profession, there are Realtors, and there are Appraisers, and then there are both and it's the both that creates issues.

Thanks for the words of wisdom and I feel so much more secure now!