Why should I worry about the CAC?

[DC Dawg]

After undergoing a procedure to fix my knee last week, I stayed home most of the weekend to watch sports[*] and play with my coins. While gathering several coins that I wanted placed into albums, I looked at my collection. My collection consists of a shelf-full of Whitman blue albums with enough holes to at least represent the 20th Century. There is also a Library of Coins album with Indian Head cents given to me by my late grandfather and a Large Cent album with very worn coins that I think shows a lot of character.

 

I have some slabs. Most of my keys are in slabs because my insurance requires that any coin worth more than $500 be certified. I have some fun items in slabs, like errors and autographed coins. I also have my registry sets. I don’t have a lot of high value items in my registry set. I am even considering selling off a considerable portion of the modern dollar sets.

 

In short, I am a hobbyist. I collect what I like. I am not interested in slabbing my Motorcycle coins. I like seeing that 1928 Peace Dollar completing the album. And even my wife, who is not a collector, thinks the boxes with the silver Britannias, Maple Leafs, and Pandas in AirTites are cool. We even had a good chuckle over my mini collection of New York City transportation tokens!

 

So why should I worry about the CAC? What is the CAC going to do for me? Does it really matter that my keys are “blessed” by this 4th party authentication Service? Will they tell me that having the autographed ICG and PCGS slabs are not worth the plastic they are encased in? Will it effect my search for high-grade 1976 business strikes for my registry set? Or will it change the way I collect what I like because I like it?

 

The answer to all of these questions is: No, the CAC will have no effect on me and very few of the collectors I know. I will continue to collect mostly raw coins from dealers I know (and some I do not know when I go to Baltimore next month) and not worry whether some fourth party agrees with the third party about coins I bought from the second party that were manufactured by the Mint, the party of the first part!

 

Scott

 

[*] My sports watching consisted of Georgia (my undergraduate alma mater) beating Florida, the Red Sox winning the World Series (my wife is a BoSox fan, so this keeps domestic peace and tranquility), and the Giants squishing the Fish in London. As a bonus, the Redskins were trounced in Foxboro (I am not a Patriots fan but living in the DC-area allows me to laugh at the 'Skins). For me, it was a very good sports weekend!!

[Tradedollarnut]

That's totally true - I wouldn't worry about it either way if I were you.

[James_OldeTowne]

Scott, I can think of only one argument relevant to your excellent post. If the actions of the CAC results in yet another run-up in the value (price) of coins, then that may cause you to be priced out of a segment of the market you might currently enjoy. That's really my only concern about this whole endeavor. Many of the coins I enjoy are in the $500 - $1000 range, and I can (occasionally) barely afford them at that level. If these suddenly become $900 - $1800 coins on account of a mere sticker, that will definitely cut into my enjoyment of the hobby.

[Tradedollarnut]

Methinks they more likely will become $900-1800 coins because of the tanking dollar.

[jackson64]

I am not really concerned in the slightest. My favorite registry set is a non-competition signature set ( coins with sailing ships) and the grades don't even really matter to me. I just like handsome coins and when I do get them slabbed it is to protect them and include them in my registry "collection". It's not about "investing" or value or points, although when my set reaches 1,000 coins I'm sure it will be valued at several hundred grand--regardless of the grades.

 

I also still love to put together quality albums. Easier sets {like Frankies and moderns} I will make BU but other sets--like my 3-cent nickels--a matching xf+ quality works very nice. I am getting a lot of enjoyment out of the hobby without the politics and stresses that seem to be concerning so many others.

 

If I ever get to the point where things within the hobby steal my enjoyment of it, I'll just give it up...CAC??? I could care less...

 

Great post Scott......PS: I'll be in Baltimore at the show on that Friday (living on the Chesapeake Western Shore) if you want to meet up in the food court and talk coins, send me a PM and we'll arrange the details...Jackson

[EZ_E]

... and not worry whether some fourth party agrees with the third party about coins I bought from the second party that were manufactured by the Mint, the party of the first part!

 

Very clever, Scott.

 

James, price run-ups is what is worrying me too. The market is already too bullish for me for many of the type coins I need for my set. I already pay PQ money for better coins at times, the CAC approval sticker will just open the door for another round of price increases.

 

I think the exception is my purchases from Mark Feld. I always get PQ coins from him at very reasonable prices. He is a God-send for the middle class collector like myself.

[kryptonitecomics]

I love the CAC......this is the first time in years that AT vs NT threads have been put on the back burner.........

[BillJones]

The problem with CAC is that they are proposing to become THE STANDARD for double certification. In other words if CAC gets its way a collector or dealer will have to send a coin first to NGC or PCGS and then to CAC to certify that that you chosen certification company got it right. This will add expenses to what is already an expensive, time consuming process.

 

In short run if you are not looking to sell your coins, a successful CAC poses no problem. But when the time comes to sell, the success of CAC could force you to have your coins re-certified to get a good price.

 

James has argued that CAC will pull more “stupid money” (people who know little about coins and don’t know how to grade) given the assurances that CAC will provide. I tend to doubt that will be the case because it is my perception that many of those people are more bullion coin oriented.

 

Still if the day does come when such people dominate the coin market, a major correction will not be far in the offing. The long term value of coins depends upon collector demand. Speculator demand is dependent upon fools finding bigger fools, and eventually markets like that run their course. It happened in 1980 and 1989, and it will happen again.

 

[PerryHall]

I wonder if the grading services will offer a service where they will slab a coin and then, for a fee, automatically foreward the slab to CAC to get it stickered.

[BillJones]

I wonder if the grading services will offer a service where they will slab a coin and then, for a fee, automatically foreward the slab to CAC to get it stickered.

 

Well at least that would save us a second mailing fee for sending the coins to CAC. It would be 21st century version of "the triangular trade."

 

AND we could start calling the coins that got sacked by CAC “the little body bag.”

 

Of course body bagged coins should go to CAC as well. For those of us who have had coins body bagged by one service only to be graded by the other (I've had this one go both ways), perhaps we could find out if there is hope for such pieces from the true experts.

 

[carson city]

Dream On !!!

[Conder101]

Well at least that would save us a second mailing fee for sending the coins to CAC. It would be 21st century version of "the triangular trade."

Wanna bet. You don't think the TPG will eat that mailing fee do you? No, they will offer that "triangular trade" deal, but it will cost you more than the standard fee and they will bulk ship many TT deals to CAC at the same time to save on shipping. Yes you will save some off of two shipping fees, but you will pay more than the single grading fee and shipping that you used to. And you will still be paying the CAC fee.

 

On the other hand if the TPG can save enough on the shipping and pass it along it might still be a good deal if you are going to go into that kind of thing.

[BillJones]

I was joking.

 

I think that PCGS and NGC are going to treat CAC like a stepsister who has come down with a social disease. These guys don’t like it when their customers question their opinions. They will think even less of an “in your face” outfit like this that is collecting money for their opinions.

[CHABSENTIA]

What makes you think that an increased price won't be built into the charges even if the grading company sent them directly to CAC/

[BillJones]

Please get this through you heads.

 

CAC is an insult to PCGS's and NGC's image and protégé. They CAN’T be happy about this. If they start sending coins to CAC, they may as well go out of business because they will be irrelevant. All CAC will need to do if CAC becomes the ultimate grading source is start slabbing coins. Then PCGS and NGC will join the rest as “third world grading services,” or close up shop.

 

[PerryHall]

I wonder if the grading services will offer a service where they will slab a coin and then, for a fee, automatically foreward the slab to CAC to get it stickered.

 

For the record, when I made this post, I was not serious. I was trying to interject some humor into a subject that too many people are taking far too seriously. It's obvious that it's not in NGC or PCGS's best interest to encourage people to use the services of CAC.

[Houston Investor]

CAC is an insult to anyone who knows how to grade coins, let alone market participants that can select nice ones. NGC does a fine job - there is no need for CAC or its pie in the sky high fees. I have never seen anything concrete that the CAC participants know as much as the NGC graders or can match the competency a major TPG like NGC offers its customers - and yet they are asking for a higher fee to give a second opinion? They have shown in here they are out to insult anyone who does not accept their idea. Is this the bigger fool theory in action?

 

The fact there are people in here who support the CAC idea is mind boggling - I guess every fool has his day. Let them have fun with their stickers - afterall its only a hobby, just about coins, and their money.

[MarkFeld]

.... It's obvious that it's not in NGC or PCGS's best interest to encourage people to use the services of CAC.

Actually, I'm not so sure that you're correct in the case of NGC. Many people talk and act as if NGC is almost always more liberal in its grading than PCGS is. And, while I do think that PCGS is stricter on average for many coins/types, I don't believe that the difference is nearly as widespread as is generally perceived.

 

For example, in numerous "how will this coin grade" threads I have seen on the PCGS and NGC forums, those who guess a potential grade by both PCGS and NGC almost always guess a higher NGC grade. But in reality, frequently, NGC grades the same as PCGS does, and sometimes they grade coins lower than PCGS does. I kid you not!

 

Bottom line - I believe that CAC potentially offers many NGC coins equal footing (and prices) with PCGS coins, which they might not otherwise have.

[carson city]

THE Spin Doctor has spoken----put a sticker on it (front and back) !

[MAULEMALL]

THE Spin Doctor has spoken----put a sticker on it (front and back) !

I am no spin doctor,,I posted this the other day.

I have been thinking about this for a while now..

The only one I see getting upset about this is pcgs..

And I can now fully appreciate the fact that they are going to lose a ton of money on crossovers and more importantly the glass house that they have built for themselves is about to shatter...

The kool aid drinkers will have no ability to say that an NGC coin just doesn't stack up to a pcgs..

And the supposed added value of the plastic dissapears.

 

The playing field is level.

 

And the coin will be what you purchase.

 

What will happen if more coins in NGC holders get stickers than pcgs..

_________________________

The only TPG who is upset about this that I see is pcgs.

 

[IrishMike]

If as you say CAC is an insult to anyone who knows how to grade coins, then that is a very small world indeed. I overheard a President of a TPG say that 80% of dealers can't grade. I personally think he was being too kind. 50 years in this business and I have run across a handful of folks who can grade accurately across the board. I am not a very good grader, but better than some I have seen that claim to be.

 

Let's all dismiss this myth commonly found on message boards that most of the members are good graders. It just ain't true.

[BillJones]

As a dealer, if you can't grade coins, you won't survive in the business.

 

Some dealers specialize in certain areas. Quite often they are experts in all aspects of their numismatic specialty, but they are out of their realm if they venture beyond their expertise. That was obvious when some guys decided to try to get into the Civil War token business before they knew what they were doing. AND that goes for the first slabbed Civil War tokens that the TPG put out as well.

 

I've known a couple guys who bought slabs and tried to be dealers without having any idea how to grade coins. They were history in less than a year.

 

Do some dealers place optimistic grades on their coins? With a doubt they do. But that has more to do with marketing and self benefit than with ignorance.

 

 

[DC Dawg]

As a dealer, if you can't grade coins, you won't survive in the business.

 

Some dealers specialize in certain areas. Quite often they are experts in all aspects of their numismatic specialty, but they are out of their realm if they venture beyond their expertise. That was obvious when some guys decided to try to get into the Civil War token business before they knew what they were doing. AND that goes for the first slabbed Civil War tokens that the TPG put out as well.

Bill... I think you are mixing things together. While I agree that dealers must know how to grade coins to survive, they also need to understand the coin business and their market. If the dealer does not know the coins, market dynamics, or how to protect themselves in this market, they will go out of business. Grading is only one part of the issue.

 

Or to put in terms of my business, just because you can turn on a computer, it does not make you a computer expert.

 

Scott

[Conder101]

CAC is an insult to anyone who knows how to grade coins, let alone market participants that can select nice ones.

By the same logic, are PCGS and NGC also an insult to anyone who knows how to grade as well?

[Arizonadesertrat]

If as you say CAC is an insult to anyone who knows how to grade coins, then that is a very small world indeed. I overheard a President of a TPG say that 80% of dealers can't grade. I personally think he was being too kind. 50 years in this business and I have run across a handful of folks who can grade accurately across the board. I am not a very good grader, but better than some I have seen that claim to be.

 

Let's all dismiss this myth commonly found on message boards that most of the members are good graders. It just ain't true.

 

Spot on. Just look through the 'grade this....' posts on this forum and the other one----you will see grades all over the place for a given coin. Lots of collectors don't have a clue about grading, particularly subtle aspects like AT/NT and tricky surface alterations. The way I began to make progress in spotting surface alterations was to sit down with a trusted dealer one day when business was slow and go through his box of spot-tooled/whizzzed/polished/AT coins, accumulated over several decades (none of which were for sale). This was an eye-opener. Ditto for learning grade variations. For example, I spent another hour or so looking through a stack of two dozen, NGC/PCGS-graded Liberty double eagles, 2 in MS64, 17 in MS63 and 1 in MS62. That was enlightening too.

 

The only way to learn how to grade coins is to physically inspect LOTS of coins---reading books and internet posts aren't enough.

[Zoins]

CAC is an insult to anyone who knows how to grade coins, let alone market participants that can select nice ones.

By the same logic, are PCGS and NGC also an insult to anyone who knows how to grade as well?

[James_OldeTowne]

By the same logic, are PCGS and NGC also an insult to anyone who knows how to grade as well?

But, PCGS and NGC also authenticate coins and attribute coins (more or less). CAC offers no such added value that I'm aware of.

[Houston Investor]

By the same logic, are PCGS and NGC also an insult to anyone who knows how to grade as well?

But, PCGS and NGC also authenticate coins and attribute coins (more or less). CAC offers no such added value that I'm aware of.

 

No - The major TPG's are not an insult - they auctually add value. Good point James!

 

[MarkFeld]

By the same logic, are PCGS and NGC also an insult to anyone who knows how to grade as well?

But, PCGS and NGC also authenticate coins and attribute coins (more or less). CAC offers no such added value that I'm aware of.

James, I will ask the original question differently, then: By the same logic, are PCGS and NGC also an insult to anyone who knows how to grade (and authenticate) as well?

 

[James_OldeTowne]

James, I will ask the original question differently, then: By the same logic, are PCGS and NGC also an insult to anyone who knows how to grade (and authenticate) as well?

Mark, if such a person exists, he must be working for PCGS or NGC .

 

Or the CAC !!!!!