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 Replies: 38 / Views: 3,912 |
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Pillar of the Community
United States
1247 Posts |
From Longnine:
quote:
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Graded and thus priced not by the aggregate market of coin collectors but by what TPGs say we are suppose to like and how much we are suppose to like it.
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* "Then explain to me why, when you look up slabbed a NGC AU-58 3-Legged Buffalo you will find (recent) prices ranging from $1300-$2100 on Heritage. And coincidentally the higher priced examples have nicer eye appeal."
** Explain to me how it can be graded at all when an error is the inverse of a "normal" coin? AU58 is *or was * suppose to describe rubs on the high parts of a coin. Not a missing leg from an abraded die.
* "The TPGs did not develop the 70 point system. They simply provide their professional opinion about where a coin lies among that scale. Whether or not you respect their opinion, they DO have a lot more knowledge than me, the buyer."
**No they just instituted their 11 point Frankengrades that no one can understand except, supposedly, them. Then they speak of how much grading changes, how fluid it is and in the same breath speak of their 150 years of combined experience that their graders have. Seems to me much of that experience must be pretty obsolete if grading is so fluid. So how do you know they have more knowledge than you? In fact how do we know that they are really good at authenticating coins? The consensus seems to be that they do a good a job at it. How is it that we make that conclusion? If we don't have the knowledge to authenticate our own coins where do we suddenly get the knowledge to evaluate someone else? If we don't have the knowledge to decipher Frankengrading, how then do we know they can? Faith in authority figures...?
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They might wake up one day and not agree that coins with a bit of extra strike are worth an extra $10,000 because LOOK! they have full rivets on the shield.
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*And if they do that would have little or nothing to do with the TPGs. The TPGs didn't come up with the concept of things like Full Bands, DMPL, etc. The consumer did, and the consumer is who added monetary value to such features.
** That would depend. Do TPGs grade coins by what collectors want. Or does the investment mantra induce collectors to demand the latest fashion being hawked by dealers and graded by TPGs. I choose not to believe TPGs have some kind of Vulcan mind meld with the collecting community. I do choose to believe they will do all they can to appease their biggest customers. Whether it's one or the other, either way collectors get what they want for moment. And so a moment later they can easily subtract that monetary value when the investment mantra fails or they just grow tired of collecting something. It's happened before and IMO it will happen again.
* "OK, now... let me simplify this. It is a fact that, as a novice, I can be easily taken advantage of. I can fail to spot cleaning, I can pay waaaay too much for an over-graded coin, and heck, I can flat out buy a fake.
When I buy a coin certified from a reputable company, it dramatically reduces the risk. So please explain why greatly reducing risk in an otherwise risky market is NOT of value to me.
**If you believe it is of value to you that's all that matters. It does not have value to me because I do not believe in Frankengrades. I'd rather buy tokens that are graded simply as plus/minus or = Above average, below average, or average.
**I like Warren Buffett's mantra. Don't invest in stuff you don't understand. If you can't understand something it just might be because someone doesn't want you to understand it. I don't understand Frankengrading either and I don't want to. And in fact I would have to if I'm to carry out the biggest contradiction of all of: "buy the coin and not the slab."
**And I don't believe for a second that they are dis-interested third parties. I think they're very interested in keeping their big fish happy. How do you keep the big fish happy?
Edited by longnine009
07/05/2007 02:52 am
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Pillar of the Community
United States
2254 Posts |
This was a great read this morning. Thanks to the folks that posted. If I may make one suggestion to USArmy and everyone else for that matter. I honestly don't think it will be long before someone gets a hold of a pile of the top tier TPG's slabs. That is if it hasn't already happened. So my advice to everyone, including myself for that matter, is to look at every coin, in a slab or not, as a fake, and then convince yourself via research, knowledge, and at times questions/pictures on here that it is not. I think this will go a long way in educating all of the newer collectors and the collectors that are new to a certain series. As a side note, a lot of folks including myself will only go high if it's in a slab and very good quality pictures are available. On ebay, it's only with good feedback and a good return policy. My honest opinion is a good return policy is the best thing to protect yourself from any incorrect grade, bad pictures, or problem coins. |
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Valued Member
United States
206 Posts |
i think the problem with the third party graders is the "invention" of between grades. looking at an MS66 coin and comparing it to a MS65 sometimes leaves a buyer confused - I have seen plenty of MS65 coins that appear equal or better than a like coin graded as an MS66. if I can't tell the difference after spending an hour comparing the 2 coins, then how will another collector be able to make the distinction?
this has opened the door for the seemingly endless alphabet of slabbers on the internet. there is a cult surrounding the grade on a slab - it's almost unquestioned when a collector is interested in a coin - maybe they don't care because it's filling a hole in the set and it's good enough. whatever the driving force, the problem is assigning an authority to an unknown - what makes the person who graded this coin an authority?
and that is problem - there is a willingness to accept what the slab says but I'm not sure why. the grader plays god with wealth and it is obvious that limited numbers of high grade coins keep the value of certain coins inflated. the value exists in a rare one in high grade simply because it is a high grade coin that is rare...
-steve
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Pillar of the Community
United States
1283 Posts |
quote:
I honestly don't think it will be long before someone gets a hold of a pile of the top tier TPG's slabs.
The serial numbers on those slabs wouldn't match the registry on their website. quote:
the grader plays god with wealth and it is obvious that limited numbers of high grade coins keep the value of certain coins inflated.
I would agree to some degree, but stop short of saying the slab itself determines all. As I said before, go to Heritage and do a search on recent auction closes (with the same coin/grade/grader) and you will see a fairly wide range of closing prices. You will also notice that the higher priced like-coins also have nicer eye appeal and/or are conservatively graded. Also, I am certainly not saying TPGs are the end all - be all. Nor am I saying there aren't problems or draw backs. All I'm saying is, IMO they are a GOOD thing overall. That is, when you weigh the pluses and minuses. |
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Valued Member
United States
206 Posts |
what are the pluses? if there is no consistency to the grades and they use "secret" criteria to establish a coin grade (what is an MS66?) how is that adding anything to the industry - seems they have much to gain in the creation of wealth in creating demand for pushing a coin to the next higher grade. seems very self-servicing by the TPG's. if my higher end MS65 could be regraded and viewed as a lower end MS66, I could increase the value of my coin significantly. that's the game and everyone knows it - who profits the most from the game? it's not dealers or collectors.... -steve |
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Pillar of the Community
United States
1173 Posts |
Since Halperin and Ivy collectively own 25% of PCG and also seem to be business partners with PCGS, it seems very likely that graders in those two TPG's are under great pressure to bump up submissions from Heritage. The caveat that graders are not "supposed to know" who has submitted any particular coin for grading is reassuring only to the naive. (This would be analogous to the small-time stock investor who thinks that insider trading isn't the norm on Wall Street, and that the big hedge fund guys don't manipulate the market on any given stock on any given day.) The clever part of the game is being sure that enough coins that are cracked out and resubmitted by Heritage are NOT bumped to give the illusion, during an audit, that the game is fairly played. If grading is consistently and fairly applied, using set standards that are available to the general buying public, then it seems likely that on occasion a coin could move up a notch when being regraded, but it should actually be MORE LIKELY that a coin be bumped DOWNWARD. Why do I say that? Two reasons. First, in areas of extreme subjectivity, such as the differences between MS66, MS67 and MS68, it should be more likely that any given MS67 be marginal between the current and lower grade than between the current and higher grade, because the higher grade should generally be scarcer. Second, as pointed out in the Forbes article, coins are susceptible to environmental changes that will lower their grade, but should never raise the grade. Carbon spots, verdigris, finger prints new dents, digs and dings from improper storage and/or handling, will lower the grade, but all the proper care in the world can never raise the grade. (With the possible exception that natural toning, over time, could hide the hairline scratches from cleaning a coin.) I doubt that most collectors could ever have access to enough high grade coins in many series to ever develop the discerning eye of a conniseur to distinguish between MS grades. In common coins...say memorial cents, and unc Morgans there are enough coins around that any of us could become expert in the series...but try to find fifteen or twenty or thirty high grade uncirculated Flying Eagle cents to compare and learn from! If I were looking at a 1916-D Merc or a 1909-S VDB, I'd want an expert by my side to help authenticate the coin. I can likely figure out its true grade...but will I ever see enough of either coin to be able to readily distinguish a cleverly done forgery from the real thing? A top-tier TPG is the "most readily available expert" that I can hire (in the form of a higher price I'm willing to pay for a PCGS or NGC coin.) Edited by hunter20ga
07/06/2007 10:10 am
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Pillar of the Community
United States
1283 Posts |
quote:
what are the pluses? if there is no consistency to the grades and they use "secret" criteria to establish a coin grade (what is an MS66?) how is that adding anything to the industry - seems they have much to gain in the creation of wealth in creating demand for pushing a coin to the next higher grade. seems very self-servicing by the TPG's.
No grader can be completely consistent, whether they're a TPG, a dealer, a collector, or anyone else for that matter. But there's a big difference between not being perfectly consistent and having "no consistency". I do not count on a TPG to be perfectly consistent or to not make mistakes. I count on them to be much better than I am at grading and spotting problems and fakes. quote:
if my higher end MS65 could be regraded and viewed as a lower end MS66, I could increase the value of my coin significantly. that's the game and everyone knows it - who profits the most from the game? it's not dealers or collectors....
Well, that's one problem I have with the grading system we have right now. I think it's ridiculous to have 61,62,63,64,65,66,67,68,69,70. I'm thinking just like AU, we should have 60, 63, 65, 68 or something of the like. It doesn't create problem with TPG grading, it creates problems with ANYONE grading who's selling a coin. If a dealer has a low 64 coin but labels it 65, how long until someone actually bites? Who makes out on that deal? |
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Valued Member
United States
206 Posts |
the TPG's pushed to have the between grades and now you can see why - more rarities are created to bump up the price for limited populations. if there was only 60, 63, 65, 67, and 70 that means the gulf between 67 and 70 allows for less profit from auctions and more coins to exist in those grades. none of this exists for collectors. -steve |
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Pillar of the Community
United States
1173 Posts |
I don't know if it is fair to say that "none" of this exists for collectors, but I cannot fault your main thrust, which is that this exists for the benefit of the TPG's and certain dealers/auction houses. If there were only three or four MS grades, then there would be far less ambiguity in the grading, and much less chance that a coin could be resubmitted for a higher grade. |
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Valued Member
United States
206 Posts |
what is the point of an MS69 coin? I believe it exists to keep the population numbers of MS70 coins down thus lining the pockets of auction houses and dealers, and does nothing for the collector until they wish to sell. can you tell me the difference in an MS69 and MS70 coin? there has to be something that is quantifiable, right?
-steve
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Valued Member
United States
206 Posts |
let me put it another way - what is the point to population reports? the numbers can't be correct given the number of coins that are cracked and resubmitted - so why are they published?
-steve
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Pillar of the Community
United States
1173 Posts |
Well...if an MS70 is a perfect coin without blemish, then I can see the reason for MS69, because almost-but-not-quite perfect needs a designation. I, for one, probably can't see the blemish that keeps the MS69 from being MS70...but then I have almost no uncirculated coins in my collection, and have NEVER spent 10 minutes total trying to determine the differences between one mint state and another. (Obviously I don't collect Morgans or modern coinage!)
You are dead on as far as publishing populations of slabbed coins, since those numbers MUST be incorrect...though they would be high, thus tending to push market value down on that population of coins, wouldn't they?
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Pillar of the Community
United States
1247 Posts |
quote: "what are the pluses? if there is no consistency to the grades and they use "secret" criteria to establish a coin grade (what is an MS66?) how is that adding anything to the industry - seems they have much to gain in the creation of wealth in creating demand for pushing a coin to the next higher grade. seems very self-servicing by the TPG's." I wish they would tell us what the secret method is by which we are to learn grading at all by looking at a lot of slabs. Even if you could look at slabs in which the grade is covered up and even if you got the same grade that doesn't mean you graded it the same way they did. Maybe the weight you gave to strike was more or less than the grader and the weight you gave to luster was more or less than the grader and they both washed to get the same grade. How would know looking at a net grade? If no one can know how they arrived at the grade on the slab then there can be no feedback. If there is no feedback there can be no learning process. So how do collectors learn to "buy the coin and not the slab?" |
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Moderator
 United States
23522 Posts |
This is a great discussion. quote:
I don't think it's possible for me to work any harder trying to learn about my hobby.
You are not the exception to the rule (it's not *that* uncommon), Trooper, but you are someone who sees the big picture more easily than most. You are different. Your attitude, your participation here, proves that. You are obviously going to be one of the ones who passes this wonderful hobby down to the next generation. But, in my opinion, you are not even in the majority. What percentage of coin collectors are even aware that Internet coin-related forums exist? The math was done in some CU thread a long time ago; I don't remember the actual percentage conclusion but is was below 20%. The day will come when you are perfectly willing to spend over $100 on a raw coin, and that day will be soon in your case. Of course, you will have the common sense to do it in a circumstance where you can see the coin in person, but your ebay skills will follow shortly. My contention is, unfortunately, that too large a percentage of our fellow collectors lack your resolve. Like the stereotypical American, they want it served to them on a platter, and are unwilling to do the legwork before reaping the benefits. And the accessibility, the implied infallibility (yes, that's twice for this phrase) of the TPG's facilitate this quintessential American "feed me" laziness which pervades a substantial percentage of our fellows in the hobby. I'm preaching to the choir here. I know that. By being here, you all prove yourselves to be willing enough to learn that my comments cannot apply to you. But there are, literally, thousands of folks out there, spending millions of dollars on coins, who are going to learn the hard way that there is no easy way. The TPG system is here to stay. I know that. I wholeheartedly endorse their role in authenticating coins. However, by their unregulated existence, they justify and encourage the proliferation of the alphabet slabbers whose presence is the absolute bane to our hobby. It is as much for this reason, as to encourage collectors to develop their own skills, that I speak against TPG's. I can only envision as a usable solution that government regulation and standards become a part of the TPG qualification. |
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Valued Member
United States
206 Posts |
i see the TPG industry as a well heeled snake oil sales racket. they have figured out how to extract a profit from the numismatic community without carrying an inventory. coin owners pay to have coins evaluated, graded, and certified. if you doubt this is big business, PCGS is a publicly traded stock. look at the costs involved to have a coin graded. the brillant part of the business model is the published population numbers - a completely unprovable and most likely absurdly incorrect census of graded coins. this is little more than a license to print money for the business - it encourages the resubmitting of coins to "game" the grading system by seeking to grade a coin at a higher grade. the TPG's have to do nothing more than throttle the numbers to encourage resubmitting since the limited numbers of high grade coins remains low thus adding perceived value to the coin. the ramifications for the collector are simple - high grade coins no longer are within grasp of many budgets. the perceived value (PCGS price guide) of an 1929S Walking Liberty half in MS66 is $5000.00, but the same coin in MS67 is 10x that value at $50,000.00. without looking at the slab, I really wonder how many collectors could perceive the difference in the grade - and if so, is that one grade step worth $45,000.00? going down a step from MS66 to MS65 only results in a decreased value of $1,850.00. I'm sure there are many more 1929S Walkers graded as MS65 compared to MS66 and even fewer graded as MS67. heaven knows what an MS68 would be "worth." granted the PCGS values are optimistic at best, but they make the case. throttling the numbers of high grade coins has a direct effect on perceived value. one of the many clients of the TPG's are auction houses who make rather nice profits from highly valued coins. it seems obvious that the TPG's exist only to inflate the sales figures of the high end sellers and to inflate the overall prices to keep investors buying. I have strange sense of dejavu - it reminds me of the dot com bubble - I wonder when the "investment" coin bubble will burst - I hope it doesn't devalue my minimal collection - what am I talking about, I own no coins of real "value" - I'm safe. -steve |
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Posted 07/05/2007 06:41 am
