Third Party Grading Company Article

Hi Eric. I've moved this topic to the Main Forum so that you will get more exposure.

There are a lot of different opinions on the TPG's here in the US. There are only 3-4 that are considered to be top-tier companies. They are PCGS, NGC, and ANACS (some include ICG). For the most part, grading between PCGS and NGC is pretty close with the PCGS slabs seeming to sell for more money than NGC. ANACS has slightly stricter grading standards (more conservative) and will also grade problem coins which PCGS and NGC will not. ICG has been known for overgrading modern coins but being pretty accurate with the older ones.

Personally, I feel that the TPG's are great for authentication. More and more, though, I am finding that I don't agree with the grading coming out of any of the companies. As I have said, ANACS has had stricter grading standards (in my opinion) than PCGS and NGC. Well, to combat that, PCGS and NGC are now (again, in my opinion) undergrading coins. This makes the grading from these companies worthless to me.

There are so many counterfeits of US coins though, that the authentication service is very valuable.

Hope this helps.

I agree with Susan concerning the authentification service.

Rick

Thanks everyone. I have heard that PCGS has tightened the belt on their MS coins to such an extent that MS-63 coins are really, really, really superb (and sometimes PL) pieces. Can anyone shed light on this?

I believe TPGs are using authentication as a hostage to foist their grading off on people. Authentication is very useful and they apparently can do that very well. Grading is another matter whether TPGs can do it well or not, IMO, is a mote point. Price=Grade in "market grading" so the grades will always change over time, so basically *they're always covered*. And they always have a steady stream of re-submissions "fees" (should be called rental income) With authentication you pay once and your done. With market grading you are just RENTING A GRADE. I'll use TPGs again if and when they ever start to issue authentication certificates--and I'm not holding my breath either waiting on that one. Otherwise--NOT A CENT IN TRIBUTE!

Longnine, what do you mean by price = grade and the term "market grading"?

There is some articles about some Australian companies that are to follow suit like the US system, but they didn't follow suit either because it wasn't too popular or other reasons that I don't know.

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Originally posted by Eric

Longnine, what do you mean by price = grade and the term "market grading"?

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When you go to fill up your car the next time will probably notice the price of gas went up. Did the grade of your gasoline also go up? When the price of mid-grade gas goes up does it become Premium--WOW! gas ?

In U.S "Market grading" The grades change as the prices goes up or down. If the prices of a certain coin in MS65 keeps going up it will be graded MS66. Of course you have to submit it and get it re-graded. Tell me, please, anybody, why does the grade have to change? Why can't coin "A" in MS65 that goes up in value from $500 to $1,000 just be called coin "A" MS65 value $1,000." Isn't that how it works with everything else? Does a three bedroom house become a 6 bedroom house because the price doubled? Even if they wanted to pretend that it does it too big to put in a slab anyway.

There is technical grading and market grading. Technical grading is just preservation. How much wear does the coin have or not have. Market grading are factors such as surface marks, luster, strike eye-appeal and anything else that is subjective. Although technical grading also is subjective. What exactly is "slight wear" on eagles breast? All of these things are combined to come up with a net grade. One number such as MS66. Which also means you have no idea how much weight was assigned to each factor. Sort of like getting your phone bill that just says $200 have a nice day. With no itemization of the charges. Pretty neat huh? Authentication is the central point in all this. If you want your coin authenticated you have to go along with this other junk to get it. Oh yes, of course you can break your coin out of the slab if you don't like slabs but what will do if you want to or have to sell it? Oh oh oh oh, I know, I know,---send it in to get it re-slabbed. Or you can learn to authenticate your own coins. That only helps you as a buyer. Again what if you want to sell something. Oh, oh, oh, I know, I know,---send it in to be re-slabbed.

The funniest part in all this is people will say "Buy the coin and not the slab?" Excuse me but isn't that the same as grading it yourself? So what are we paying for?

Authentication is the key. If they control authentication they control it all, and they do.

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Originally posted by Susanlynn9

Market grading takes into account the rarity and value of a coin prior to assigning a grade. This means that very rare or very valuable coins are graded on a different scale than common coins. I recently saw an 1894 Morgan that I would only have graded VF30 but it was graded AU50.

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True. Though I've found it also works in reverse, particularly for "condition rarity" Morgans. Because some of the TPGs have a grade guarantee of sorts -- that they will "make it right" if they screw it up upon review -- they are afraid to give many condition rarity coins the grades they deserve. I've seen plenty of MS-61 and even AU-58 1884-S Morgans which would be no-brainer 64s if they had an O mint mark.

Also, "market grading" also comes into play with "superslider" coins. Most collectors value a very high-end AU-58 coin more highly than an MS-60 coin; most would agree that the former has far greater eye appeal in most cases. As a result a lot of technically AU-58 coins with just a trace of wear wind up being graded as MS-62 or MS-63, the idea being that "the market" will usually value these at 62 or 63 money anyway.