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New to coin grading and can't wait to find something worth getting graded.
Unfortunately, a lot of newbies lose a lot of money jumping right in and wanting to get a coin graded. Nothing wrong at all with the desire and doing it, but unless you understand how the companies work, like so very many people, you will be left frustrated and wondering what happened b/c it is almost a guarantee you will not get back what you were expecting (plus be out around 200.00!).
The following info is difficult to find online yet accurately represents the experience/knowledge of people/dealers who have used grading companies and know how they actually work.
The Insider's Guide to Using Grading
-or-
Thinking of Slabbing? Make sure you understand the Facts...or You Could Lose Money.
Popular mistaken mindset:1. The grading companies are not a method/way that the majority of people, even those with a great deal of experience who know what they are doing, are going to be able to use in order to make huge personal profits. Many people start using grading companies thinking they will find a way to finance their hobby, but they learn a hard lesson quickly.
In general, a coin you have found in circulation is NOT going to make huge profits if slabbed. Way too many people pad the pockets of the companies and get nothing in return b/c they THINK (YouTube videos!) they have something rare.
Professional predicting not possible: 2. Watch some of Daniel's videos where he gets slabbed coins back from the grading companies. Not even people who live, eat, breathe, and deal coins for a living can accurately predict what grade the companies will give. And...the "fault" (not really a
fault) is in a widespread
mistaken perception people get from being exposed to all the slabs being sold nowadays:
a. Coin grading companies are a business out to make a profit - this is why they exist. They use a system where allegedly three, but in reality, it's normally two, graders look at each coin and give an opinion. The company videos showing the process make you believe this is a relaxed and paced process of studying each coin. In fact, one PCGS video shows several guys sitting around a table discussing what they think a specific coin should be graded as (on YouTube somewhere - sorry no link). Uh uh.
b. If you take a PCGS graded coin slabbed as MS64, break it out, and resubmit it to PCGS,
you are never guaranteed the same grade again. The slabbed coin might come back MS62 (extreme and a bad day for graders), 63, 64, 65, 66 (extreme and a great day for you!). This is b/c the process is all subjective:
No scientific/verifiable standards or methods are used. This subjectivity makes for greater company profits since people resubmit the same coin trying to get a higher (better price when selling) grade. In the 90s the companies, at great expense, created better (their own words) scientific methods not relying upon human opinion. No doubt the large profit from the re-slabbing game fell. The companies abandoned the science and went back to their less accurate systems. Presently some AI base phone apps seem to be consistent in grading a coin the same every time. These becoming widespread would be a good thing for consistency.
c. It needs to be mentioned that the fewer the "money grade" slabs a company assigns, the more the prices of said slabs climb. Thus more business is generated b/c more people pay to slab coins hoping to get that "money grade" slab. The companies DO keep records (accessible online) of how many of the higher graded slabs exist for each coin. While the idea of keeping money grade slabs minimized is speculative, there has been some convincing evidence of this being a reality.
d. The companies invented online registry sets which builds competition to see who can show they have the best set of graded slabs. While this may seem to be something the companies did to create fun for hobbyists, the result has been to drive the money slabs up in price. Again, this entices more people to pay the companies to slab coins.
But..saying they use no verifiable standards for grading is all hearsay without proof. So...
http://goccf.com/t/346174Here is another good read from former CFF member BiggFredd who was someone there at the start of the grading companies:
http://goccf.com/t/130186Error on errors:3. People also seem to think grading companies will examine a coin to see if they can find an error and then slab it as such. But again, they ONLY GRADE coins. The companies will NOT try to find and ID an error for you. You must FIRST ID the error yourself, CHECK to see if the company you want to use recognizes that specific error, PAY them to verify the error on the label, and then you may or may not get what you pay for! The companies have a bad reputation for attributing errors incorrectly.
Link to and read (download if you want it) the pdf link in my signature as an eye opening example. Sadly, the verifiable data presented from the PCGS website shows trusting people have spent thousands of dollars on many slabbed coins that are not what the companies claims/slabbed the coins to be.
Cost concerns:4. Because people do not understand the businesses, many people spend far more money to slab a coin than the coin is worth. The companies profit greatly from membership fees, submission fees, insurance fees, priority shipping fees, and extra (chosen) fees. When you do the math for all of these fees you are approaching $150-200.00 for a slabbed coin the very first time you submit. ANACs does not have all these fees though.
You don't have to throw in the towel over these companies...but education about the reality of them will put you on the right pathway to dealing with them in a legitimate way without losing money in the process.
Posted 04/15/2024 08:58 am
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