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 Replies: 24 / Views: 5,463 |
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Valued Member
United States
344 Posts |
This article in Coin World below stands to make anyone with knowledge know that in its statement it would tell a layman that it isn't a trustworthy market slabs and coins in general to get into. What it seems to me is somewhat of a used car salesman approach by some that overhaul (slab cracking) their own cars (coins) and resell them. It is an open market for just about anything. Full article on this link. http://www.coinworld.com/news/040802/editorial.aspANACS is owned by Coin World's parent company, Amos Press Inc., and pays no endorsement fees. So how does a newcomer identify a reputable grading service?
First, let's state some things up front that are rarely disclosed to newcomers:
1. The grading of coins is an unregulated practice.
2. The grading of coins is a subjective art, not a science.
3. There is no single or universal grading standard for U.S. coins.
4. Anyone can claim to be an expert grader. No licensing or educational requirements exist for graders of U.S. coins.
5. Grades are direct determinants of value of U.S. coins.
6. Grades assigned by third-party grading services are professional opinions, which can and do vary. |
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Rest in Peace
United States
2684 Posts |
All true, MC, but a lot of qualifications need to be inserted. First, the top three (four if ICG is included) TPGs have built up a certain level of trust among numismatists over the years. This trust is absolutely essential in an unregulated industry and the TPGs could not survive without it. Such trust needs to be established at the individual level and can only be established by individual experiences. If a TPG messes up even once, an individual may never trust that TPG again (present company included with PCGS). Second, while grading is certainly subjective, a reputable TPG works within fairly well-defined grading parameters, even if such standards do not necessarily agree with other top TPGs' standards. And the top TPGs strive for, although not necessarily reach some level of consistency. To a measurable degree, the top TPGs seldom vary from each other by more than one grade (plenty of exceptions) which in itself is a small miracle. It's all in the human factor, but until machine grading replaces human grading, numismatists will have to endure the vagaries of semi-subjective grading. Last, before I start writing my own book on the subject, where the whole grading concept is being degraded (npi) is with the wannabe and boiler room one-person alphabet grading companies who are undermining grading and slabbing in general. Far too many newbie coin collectors and investors are failing to educate themselves before pouring hundreds and thousands of bucks into these fraudulent coin slabbers such as SGS, CCGS, NNC, and 100 others just like them. Until and unless legal regulations are established or machine grading is made possible and acceptable, the whole grading process will continue to be regarded with suspicion and mistrust. I don't see any such legal standard becoming established in the future, but it very well may be that such standards become reality through the courts such as is being done with the ACG and "first strike" lawsuits; this would be back-door legislation, but it might be the TPGs' only salvation. Fred |
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Pillar of the Community
United States
830 Posts |
Fred, that's the best analysis of the situation I've seen  Trust is the key issue in any business, but especially an endeavor that is subjective such as grading. I know - I was an appraiser of real estate for a couple of decades. There are standards to follow in each business, and they change from time to time, but not so much that (using grading as an example) a VF-30 becomes an AU-58. Sadly, this is becoming a relatively regular occurrence with a lot of the "alphabet soup" outfits. |
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Valued Member
 United States
344 Posts |
Fred, I agree that in all instances of slabbed coins it does boil down to honesty and trust that the grade is true.There is the top grading companies that have had a longer running in authenticating coins which has built some trust. Seems though even with that said there has had to of been a degree in change of grading scale from back when James L. Halperin of Heritage Rare Coin Galleries began making millions from cracking slabs. If not how could he of done it.? And from what I have read talking about regulations and the like it also seems to me that the coin market has a very huge influence by COINS BULLION AND SILVER Tele-marketers. The more I read about like the ICTA, where some of the board members have had their hands slapped by the FTC in their own business practices and the fact the FTC has mentioned or have warned the ICTA that they had better start taking steps to help clean up that part of telemarketing Coin World that ICTA is trying to help protect from the government. Seems tele-marketers are big sellers of slabbed coins. I am curious as to the perfered choice of slabbing companies among tele-marekters ? Wonder what the average monthly expence slab compainies receive for slabs bought by tele-marketers. Tele-marketers,Coin Vault, HSN and the like. All ride the same bus maybe. MC |
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Rest in Peace
United States
2684 Posts |
Well said, MC. Yes, I've seen and experienced some subtle shifts in the top TPG's grading standards. Over the past two years, for example, they've become more conservative when grading Morgans. Or they've just decided to adhere to their own standards a little more closely. Still, few accuse the top TPGs of deliberate over-grading viz a vis SGS, NTC, NNC, ANI, and the like. You have a very good point about the influence of telemarketers (media marketers, TV in particular) on grading of bullion and modern coins. I think the TPGs hopped onto the band wagon when they saw an opportunity to make a lot of money grading hundreds of thousands (millions?) of such coins en masse at little risk to their reputations since most of the coins so graded will grade out at MS-68 and above. Little gimmicks like "first strike" just add to the allure. While most bullion and moderns are worth no more than their melt or face values, the notion that the same coin in a slab will be worth more is popular among many recently new collectors. The TPGs make millions by slabbing newly minted coins which otherwise have no significant value while the media marketers hawk their wares on TV and make their own millions. Now, since the TPGs have slabbed so many and added their gimmicks, the concept has come back around to bite them in the butt since they appear to have over-done it. And down the road when buyers try to cash in their "investments", they will find their slabbed moderns and bullion coins might as well be cracked out and spent at the local convenience store. The market bubble around these slabbed coins (which otherwise have no significant value except for melt and face value) established and hawked by the media market may or may not burst some day. As long as there are uneducated, naive, and vulnerable people who believe everything they hear on TV, they will continue to buy such junk. It's a false bubble surrounding a non-entity, not a genuine numismatic market (a fad sort of like the hula hoop) and of no real interest to serious collectors and numismatists, but it's a fad which won't go away anytime soon and tends to give real numismatists a bad name. Best we can do is educate potential buyers one at a time about the ridiculous notion that such slabs are worth buying. I've got a neighbor who was sucked into the Coin Vault world some years ago, but is now a lot more savvy and is looking at older coins for collecting and investment purposes. Fred |
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Valued Member
United States
129 Posts |
Speaking of trust, some friends of mine who are not coin collectors asked me a simple question about TPG's, I hope I gave a pretty good answer- it was how do you know that when you submit a coin to a TPG that they don't "switch" it with a "lower" grade coin? my answer was that if a TPG was doing this they would be basically run out of business as the word would spread in our community about them and we wouldn't have our coins graded by them. Was this the correct answer I gave them? |
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Pillar of the Community
United States
7123 Posts |
Hi F4F Its probly as good as any answer that could be given,, Without very good evidence that the coin was switched most people would stand little chance of presenting enough evidence to convince many other people to stop using them especially if they were respected and carried the majority of the market. A couple of questions to ask yourself. How can document the coins I'm sending for grading ? How can these documents be made of legal stature so as to have respect if presented as evidence. I think the concerns expressed by the non collectors are very legitimate concerns and more folks need to be less trusting of the TPG's as a rule. Rick |
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Rest in Peace
United States
2684 Posts |
quote:
Originally posted by Five4fighting
Speaking of trust, some friends of mine who are not coin collectors asked me a simple question about TPG's, I hope I gave a pretty good answer- it was how do you know that when you submit a coin to a TPG that they don't "switch" it with a "lower" grade coin? my answer was that if a TPG was doing this they would be basically run out of business as the word would spread in our community about them and we wouldn't have our coins graded by them.
Was this the correct answer I gave them?
Yes, but I trust only the three or four top TPGs (ANACS, PCGS, NGS, and ICG) not to switch submitted coins. Exactly like you stated, if they were to do it only once and were to be caught, they would quickly be out of business. Certain of the remaining hundred plus wannabe alphabet TPGs certainly have been known to switch coins on occasion, but anyone who submits to them takes a much higher risk. It's all based on trust which the top TPGs have established over many years. With the boiler room grading companies (I refuse to label them "services"), most haven't been in business long enough to establish trust and most won't be in business long enough for anyone to learn to trust them. Most are fly-by-nights anyway and trust is not their objective. |
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Valued Member
United States
129 Posts |
In regards to regulating TPG's Since it would be a Federal thing what would it fall under? A new Goverment agency in the Federal Trade Commission? As far as I understand right now just the ANA endorses a TPG and I think NGC is the only one endorse by ANA. (If I'm wrong here please correct me) I really feel bad for new collectors or uninformed ones and see a coin graded by a TPG and take's it by what that company graded it. Edited by Five4fighting
12/23/2006 6:53 pm
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Rest in Peace
United States
2684 Posts |
I would guess that if it ever got as far as TPGs being regulated, it would fall under the FTC, an independent commission which reports only to Congress and has enforcement authority. However, I don't think we'll see TPGs become regulated at any time in the near future. Exception: as long as there is still an element of trust of the three or four top TPGs, as long as there is competition amongst them with no evidence of a monopoly, and as long as massive fraud is not found amongst them in a conspiracy, they will remain unregulated. If it ever comes to regulation, I imagine it would be in the form of some sort of licensing vis a vis the FCC's issuance of licenses to qualified applicants who have passed exams, have the requisite amount of education and experience, and otherwise meet specified criteria. No doubt, such licensing would eliminate most of the hundred(s) of wannabe alphabet grading companies.
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Moderator
 United States
23522 Posts |
quote:
Originally posted by Morgan Fred
I would guess that if it ever got as far as TPGs being regulated, it would fall under the FTC, an independent commission which reports only to Congress and has enforcement authority. However, I don't think we'll see TPGs become regulated at any time in the near future. Exception: as long as there is still an element of trust of the three or four top TPGs, as long as there is competition amongst them with no evidence of a monopoly, and as long as massive fraud is not found amongst them in a conspiracy, they will remain unregulated. If it ever comes to regulation, I imagine it would be in the form of some sort of licensing vis a vis the FCC's issuance of licenses to qualified applicants who have passed exams, have the requisite amount of education and experience, and otherwise meet specified criteria. No doubt, such licensing would eliminate most of the hundred(s) of wannabe alphabet grading companies.
I think the case for regulation would be much stronger if someone put together a realistic estimate of the sheer dollar amount of business the alphabet slabbers are doing. As of this writing, a Search on ebay in US coins returns 1722 results for SGS, and 1748 results for NNC. That's 4% of all coins listed. Think about that. |
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Rest in Peace
United States
2684 Posts |
Hmmmmmmmmm. Maybe the notion of Federal regulation on TPGs isn't so far-fetched after all. I'd have no problem with that, but I'm certain the free-enterprisers, caveat emptors, laissez-faires, and less-government-is-best-government would object.  |
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Moderator
United States
23522 Posts |
quote:
Originally posted by Morgan Fred
Hmmmmmmmmm. Maybe the notion of Federal regulation on TPGs isn't so far-fetched after all. I'd have no problem with that, but I'm certain the free-enterprisers, caveat emptors, laissez-faires, and less-government-is-best-government would object.
I stand squarely in the center of that group, and the need has been proven to me beyond a reasonable objection. |
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Pillar of the Community
Canada
1152 Posts |
quote:
Originally posted by Five4fighting
Speaking of trust, some friends of mine who are not coin collectors asked me a simple question about TPG's, I hope I gave a pretty good answer- it was how do you know that when you submit a coin to a TPG that they don't "switch" it with a "lower" grade coin? my answer was that if a TPG was doing this they would be basically run out of business as the word would spread in our community about them and we wouldn't have our coins graded by them.
Was this the correct answer I gave them?
Same question my dad asked me, and the same amswer I gave as well. Great minds think alike  Andrew |
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New Member
United States
21 Posts |
There are old timers who think the biggest sin the Coveted Two TPG's commit is undergrading. Everyone has an opinion. I noticed a post recently on Collectors Universe that said PCGS will not grade ASE's MS70 because they fear milk spots in the future and would be stuck with the guarantee. PCGS shows MS70 ASE's in their on line price guide so is this something recent or just fiction? |
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Moderator
United States
23522 Posts |
quote:
Originally posted by airedale
There are old timers who think the biggest sin the Coveted Two TPG's commit is undergrading. Everyone has an opinion. I noticed a post recently on Collectors Universe that said PCGS will not grade ASE's MS70 because they fear milk spots in the future and would be stuck with the guarantee. PCGS shows MS70 ASE's in their on line price guide so is this something recent or just fiction?
I can't say it's corporate policy, but an MS70 ASE in a PCGS slab is all but impossible to find. NGC hands them out like Halloween candy. |
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Replies: 24 / Views: 5,463 |
Posted 12/18/2006 3:07 pm
