What Does The New CAC Grading Service Mean For Other TPG Values

I do not think CAC grading service will have a significant impact on the other TPG's or on the coin market as a whole except at the very top end.

Rationale:

1. CAC membership is required to submit coins to CAC's new grading service. However, CAC membership is limited and very difficult to obtain, even for coin dealers, due to long wait lists and stringent application requirements. Per the latest data, CAC currently consists of approximately 3,000 members, and those 3,000 are the only people who will be able to submit coins to CAC's new grading service. But extensive delays at CAC have been a frequent occurrence -- certification has been repeatedly suspended, even for CAC members, and even when they ARE accepting coins for certification, members have been consistently reporting 60-90 day or longer turnaround times.

2. CAC does not yet have an equivalent to NGC or PCGS's Registry Sets, but it's in the future plans. The popularity of Registry Set collecting has been a strong driver of demand for PCGS and NGC graded coins over the last several years. According to CAC, they have a "World Class registry program" in the works, but it's not completed yet. Supposedly, it will allow inclusion of PCGS and NGC coins, but will also maintain a separate Registry for CAC coins only. It's worth noting that PCGS's Registry Set -- arguably the most popular, and certainly the most dominant Registry Set program -- only allows PCGS coins, which means PCGS Registry Set participants are not likely to crack out their PCGS coins (which would render them ineligible for PCGS Registry Sets) in exchange for a CAC holder. PCGS does have a separate CAC registry for CAC-certified (beaned) coins, but they have not yet stated if it will include CAC-graded coins -- although that seems unlikely since the new CAC grading service will be a direct competitor.

Note: CAC has not currently stated whether or not they will accept coins for the new grading service that have been submitted by CAC members if those coins are already in other TPG holders ("crossover grading") although this seems likely since they only issue CAC green beans to already-slabbed coins. CAC has stated that the new grading service will allow submission of raw coins not already graded.

3. Given CAC's allegedly stringent approach to grading, and the large number of coins which CAC deems unworthy of a green bean, I doubt many collectors or dealers are going to be lining up to have their PCGS and NGC coins cracked out and graded by CAC, especially if they already have CAC green beans on them. CAC has already announced their intention to "gradually discontinue" CAC stickers, meaning that the only way to have a coin approved by CAC will be to submit it for grading by CAC.

4. There is a surprising amount of ambiguity on CAC's part as to why they are a better choice than NGC or PCGS for grading coins. Other than very vague language about "respected experts in the field" not much has been disclosed; and CAC has not yet publicly disclosed the standards which they will use to grade coins to anyone at all (whether they are members or non-member collectors/dealers.) CAC states that they will be building "master sets" of CAC-graded coins that they plan to exhibit at shows, but this has not yet been done either, of course, since they don't have enough CAC-graded coins yet to build sets with. CAC states that they will be using "the best team of graders possible" but has not indicated what qualifications are in place to justify their employees being considered the "best graders."

5. CAC's new grading service is being financed by a consortium of "over 125 dealers, numismatic professionals and influential collectors" (CAC's language, not mine.) CAC has already disclosed that these "partners" will have a direct financial interest in CAC's business affairs up to and including ownership. This is a serious area of concern. Neither PCGS nor NGC are owned by dealers or collectors. This means that CAC itself will have a direct professional and financial conflict of interest when grading any coins submitted by those 125+ stakeholders, and yet CAC has failed to address this concern or provide any indication that there will be a system of checks or safeguards to prevent members of that consortium from receiving preferential or favorable treatment when they submit coins for certification. (They're basically submitting coins to themselves, what can possibly go wrong?)

6. CACG is deliberately planning to limit its services to what can be performed by a single pod of three graders viewing EVERY coin, with JA as the arbitrator if the three can't agree. They've stated no interest in common coins, in modern coins. My personal believe is the costs will be eye-watering.

If it costs $30-50 to grade a coin, that limits the appear to coins that are maybe worth $100-200 at a minimum. If you need to add another $35 for a CAC bean, that pushes the value proposition higher.

In order to limit submissions, they're going to have to charge say $100? At which point coins worth less than maybe $1,000 aren't economical.

Earle42 & others




There is a difference between a price that makes a profit and the market clearing price that maximizes profits.

As long as your investors are fine with lesser returns, you are free to make less money.

That brings us back to an interesting point - who are those "over 125" who are investing in CACG? Who owns the biggest share and thus can put together a power block to drive the bus? There have certainly been cases where founders with one set of ideals have been eased or thrown out...

I'm specifically thinking of Krause Publications, where the 100% Employee owned company was sold without a vote by the employee-owners, it was done by the hired managers who believed they have a fiduciary duty to maximize the value of the company for the owners.

https://www.chicagotribune.com/news...1-story.html

Kbbpil
Who defines what A, B and C coins are and the parameters for each category? I think A,B and C are as vague as "solid."
You misunderstand me. I don't mean to assume every coin has been to CAC. Clearly they haven't. Coins that have never been submitted haven't met the criterion of submittal for evaluation. Anyhow, without getting into semantics, I did not intend your reading.
At this point, there is no factual foundation for concluding CACG would give an MS63 grade to both an "A" and a "C" coin, however CAC has chosen to draw the lines between its two categories. I see that as the principal question: whether CACG starts treating "C" level MS63s as "A" level MS62s to appear to be consistent with its stringent requirements for beaning.
We'll all see.

Do I recall correctly that CAC is/was considering using the number range 0 to 10 for their grades?
And using tenths values to refine their opinions?
So a coin could be graded by CAC as 5.6?

That would greatly confuse grades and grading.

@Kanga Perhaps you are thinking of NGCX, which is now grading on a 10 point scale if you wanted that.

If CACG is going to grade everything they consider MS63-C as MS62-A, then what happens to all the existing MS62 coins from the other TPGs? Prior MS62-A coins become MS62-B, MS62-B becomes MS62-C? Now you've got two buckets of MS62-C coins, and the premise is that those all become MS61-A under CAC. And on down the line. The alternative is that now there are twice as many MS62-A coins.

The bottom line for me is that it's just somebody else's subjective grading standards, and we'll still have the same online theories that "NGC rewards this with a higher grade but doesn't like this other thing, PCGS likes this but doesn't like that, CACG does this or that...". The battles of the marketing departments will rage. Then somebody famous will come along and start stickering the CAC slabs.

Well, that did not take long!

I agree. I am sure their potential customers have been looking at what people are paying for these things at resale