PCGS setting it self up for another Jadecoin fiasco?

[truthteller]

I was perusing the PCGS forums and someone came up with this coin in Heritage's inventory. Definitely not Full Head, with some questionable color. Now, after hearing and reading how PCGS does not back up it's designations via the Mark Feld story, nor it's authenticity to the pedigree via the Jadecoin story, how in the world will anyone buy this coin?

 

http://apps.heritagecoin.com/common/view_item.php?source=&Inventory_No=85494001&sid=6F4631983310847283E49AA8DFC7C18A

 

So is it really worth $5,000? or less?

 

 

TRUTH

[Tradedollarnut]

Wow - it must be contagious. According to mrearlygold, NGC is doing the same on this coin:

 

1918/17 SLQ

 

 

Perhaps, just perhaps, we should not try to grade or attribute coins off scans. Perhaps we should buy what we want to buy and not worry about whether something is or isn't some arbitrary designation.

 

And last but not least, why the heck spend any amount of money on some silly little strike issue when even experts can disagree as to the definition or attainment of the attribute?

[James_OldeTowne]

((Now, after hearing and reading how PCGS does not back up it's designations via the Mark Feld story))

Could you please mention where I can read that?

 

Thanks.

[truthteller]

James,

 

Link to Mark Feld and his story.

 

http://boards.collectors-society.com/showflat.php?Cat=&Number=173680&page=&view=&sb=5&o=&fpart=1&vc=1

 

 

TRUTH

[gmarguli]

((Now, after hearing and reading how PCGS does not back up it's designations via the Mark Feld story))

Could you please mention where I can read that?

 

Thanks.

 

Mark is probably too much of a good guy to repeat the story, but I'm a vindictive SOB, so here goes: Mark purchased a 1945 10¢ in PCGS MS65FB. The coin arrives and it is not FB. The seller says screw you. Mark contacts David Hall who says send it back and we'll take care of it. Now this part might sound familiar to you. The coin arrives back reslabbed without the FB designation. PCGS says "Oops, mechanical error". Marks says "What about my compensation? I'm out $5400!" David says "[!@#%^&^] you Mark."

[truthteller]

TDN,

 

The 1918/17 looks full head, even from the scan. The 1927s DOES NOT appear full head. Maybe, just maybe, PCGS screwed up again? Nawwww..

 

TRUTH

[Tradedollarnut]

The 1918/17 looks full head, even from the scan. The 1927s DOES NOT appear full head.

 

Don't know if either is or is not. Frankly I don't care about strike designations, especially FH. In my experience, I've seen quite many coins that didn't appear to my eyes to be FH in both company's holders. This made me wonder what actually defines FH. Can you tell me exactly what criteria PCGS uses to define FH? Or NGC?

 

Perhaps that definition would be useful if you insist on debating the merits of individual coins off scans........

[truthteller]

TDN,

 

From the PCGS website.

 

Full Bands

Term applied to Mercury (Winged Liberty Head) dimes when the central band is fully separated (FB). There can be no disturbance of the separation. Also applicable to Roosevelt dimes that display full separation in both the upper and lower pair of crossbands on the torch.

 

Full Bell Lines

Term applied to Franklin half dollars when the lower sets of bell lines are complete (FBL). Very slight disturbance of several lines is acceptable.

 

Full Head

Term applied to Standing Liberty quarters when the helmet of the head has full detail (FH). Both Type 1 and 2 coins are so designated but the criteria is different for both.

 

Full Steps

Term applied to a Jefferson five-cent example when at least 5 steps of Monticello are present.

 

Full strike

A numismatic item that displays the full detail intended by the designer. Weak striking pressure, worn dies or improper planchets can sometimes prevent all the details from appearing, even on uncirculated specimens.

 

 

Also:

 

 

ear

An area of certain coins that is important to the strike. (i.e. The hole in the ear of the Standing Liberty quarter is a necessary component of a Full Head designation.)

 

 

 

 

TRUTH

[Tradedollarnut]

Full Head

Term applied to Standing Liberty quarters when the helmet of the head has full detail (FH). Both Type 1 and 2 coins are so designated but the criteria is different for both.

 

 

I can't grade off that definition.... can anybody? What are the exact criteria?

 

[truthteller]

TDN,

 

I think this is the 'exact' definition that PCGS uses. Kinda funny, kinda sad , but always shocking

 

 

TRUTH

[Tradedollarnut]

I'll say this for Heritage - they got the balls to list a coin at $240k and at the same time show a Value Index range of over $100k less!

[Tradedollarnut]

I think this is the 'exact' definition that PCGS uses

 

Truthteller, I highly doubt that it is. I enjoy your posts, but before you call a grading company to task for not living up to a strike attribution, please let's agree exactly what the grading company believes the criteria of that attribution are! I can see where you or I might believe the coin not to be completely full head. But our beliefs are irrelevant. What matters is if the coin meets the criteria set forth by the grading company.

 

Same thing as when people slam NGC for grading too loose. How are they grading too loose when there are no exact criteria for what mandates a grade of MS65? Oh...they are grading too loose compared to PCGS. Well....PCGS might be grading too tight! So perhaps what you or I consider to be a full head is too tight and doesn't match the criteria put forth by the grading companies.

 

Edited to add: certainly there is a reasonableness standard that would apply to the above arguement. PCGS's criteria for FH would need to be reasonable in order to be market acceptable. That's what got ACG in trouble - their standard for MS65 wasn't reasonable, nor market acceptable. But that scan is simply not good enough to reveal the full detail of the head in order to say that, if it meets PCGS's FH standards, whether or not those standards are or are not reasonable.

[truthteller]

TDN,

 

I agree with most of what you say. The major problem with PCGS right now is Public Relations and not standing behind their product. After the Mark Feld incident and then with the Jadecoin fiasco, my confidence in PCGS became very shakey. The company promotes itself as the standard, but when push came to shove, PCGS made a PR nightmare that made many of its designations highly suspect. As far as grading, that, in itself, is merely an opinion, and can be interpreted by the buyer and seller. However, a designation adds substantial value to the grade and, thus, must be guaranteed by the grading company. Yet, PCGS refuses to acknowlege this as a guarantee and classifies it as purely mechanical. For someone to pay $250,000 based on a mechanical designation, which PCGS may or may not accept in future conclusions, is simply asking for trouble. PCGS has made its own trouble.

 

TRUTH

[Tradedollarnut]

One last thought: A while back I purchased an MS67 1917 SLQ for the type set I was doing at the time. The coin was not FH designated, but was oh so close. It had somewhat less detail than what I believe I can see in that 1927-S scan. At the time, I considered resubmitting the 1917 in hopes of the FH designation because I believed it just might qualify. At the same time, I doubt I'd have wanted to pay the full price if I was buying my coin in a FH holder. This leads me to two conclusions:

 

First, that bias does indeed come into play on liner coins. Whether that bias be ownership or other inherent matters, it does indeed impact our internal interpretation of what we see. Second, that the criteria for FH SLQ's are somewhat of a mystery to me and that even if they weren't there would always be a bit of interpretation involved.

 

So, in summary, I have to say that I think it's not really possible to point to a scan of a liner coin and say definitely whether the coin is FH or not. Our viewpoint is internally biased, it's a two dimensional scan, and the criteria are unclear and subject to interpretation.

[Tradedollarnut]

The major problem with PCGS right now is Public Relations

 

I don't disagree at all, but part of it is perhaps just a correction of our erroneous original perceptions. Our erroneous original perception is that everything on the label is guaranteed. Oh, for sure it was in print that the submittor was responsible for mechanical errors, not the company, but that wasn't part of our perception so it didn't exist. It took a real live example to drive home exactly what was covered and what wasn't. [bTW - I suspect that it wouldn't be covered at NGC either, but that perhaps they would have paid and gone after the original submittor just for the public relations benefit]. Nowhere in print does it state that provenance is guaranteed, but again our erroneous perception pops up. It took a real life example to drive that point home as well.

 

Perhaps it is our perception that needs correction? Perhaps if we realize that the grading company is going to guarantee the consistency of its opinion and nothing else then we won't be jumping up and down as much? A situation with flat bands labeled as full bands is a mechanical error because opinion did not enter into the equation. A situation where you have a liner FH is not subject to the mechanical error arguement because opinion does enter into the equation.

 

Now of course the attorneys can get involved and force the company back toward our erroneous perceptions utilizing California law and all that stuff, but I for one am willing to accept both the major grading companies for what they are providing - an opinion as to the quality of the coin. If I disagree with their opinion, I just don't buy it.

[gmarguli]

I agree with most of what you say. The major problem with PCGS right now is Public Relations and not standing behind their product. After the Mark Feld incident and then with the Jadecoin fiasco, my confidence in PCGS became very shakey. The company promotes itself as the standard, but when push came to shove, PCGS made a PR nightmare that made many of its designations highly suspect.

 

I think it goes a little deeper that PR. I think it is the entire corporate culture that is ruled by DH. DH is running the place and from what I have been told by people who work for him, you don't question him and his decisions if you want to work there. It's that simple. It's his company and you do what he says.

 

He has PERSONALLY decided to not pay off on the guarantee because I presume he thinks he is saving money. I believe he looks at situations like: "I don't pay Mark Feld and I save $5400" rather than looking at it like: "I don't pay Mark Feld and I save $5400 in the short term and lose $1,000,000 in the long run as all my marketing goes to waste and people start to question my product and people throughout the industry start to talk that PCGS welches on their guarantee." Only time will tell if the current approach is right for them, but logic and history tells me that it is the wrong choice.

 

[gmarguli]

Our erroneous original perception is that everything on the label is guaranteed. Oh, for sure it was in print that the submittor was responsible for mechanical errors, not the company, but that wasn't part of our perception so it didn't exist. It took a real live example to drive home exactly what was covered and what wasn't.

 

ISTRONGLY disagree. They are the experts and have made a claim which caused a person financial harm. They can put any disclaimer on the back of the form they want and can make the submitter liable for everything including the rain, but the courts aren't necessarily going to back them up on that.

 

Mechanical error means calling a quarter a half or calling a 1913-S a 1913-D. It does not mean calling an MS64 an MS64FH. PCGS can say otherwise, as can all the grading services, but I have a hard time believeing the courts would agree.

[Tradedollarnut]

They are the experts and have made a claim which caused a person financial harm.

 

No - they made an error which benefitted the submittor and then the submittor fraudulently utilized the error to reap the gains.

 

It's precisely because they are experts that it's an obvious mechanical error. To have FB on the label for a flat band coin is exactly the same as having D for the mintmark when the coin is an S. Even a cursory examination will catch the problem. It's simply not the same as if the coin had partially split bands, or nearly a full head, and an opinion was rendered as to whether or not it met the criteria.

 

 

[Dry]

"Mark is probably too much of a good guy to repeat the story, but I'm a vindictive SOB, so here goes: Mark purchased a 1945 10¢ in PCGS MS65FB. The coin arrives and it is not FB. The seller says screw you. Mark contacts David Hall who says send it back and we'll take care of it. Now this part might sound familiar to you. The coin arrives back reslabbed without the FB designation. PCGS says "Oops, mechanical error". Marks says "What about my compensation? I'm out $5400!" David says "[!@#%^&^] you Mark."

 

So the guarantee now means that they will change the holder for free if they screwed up and you point it out. Thats a heck of a guarantee! I had a FBL designated Frankie in a PCGS holder a couple of years ago. I bought it blind on eBay. NO WAY in hell it was FBL. I thought about sending it back to PCGS, but opted to stick it back on eBay with a very brief description (no hype). I broke even, the buyer was THRILLED to get it after it arrived. The buyer happened to be a plastic...I mean... Registry collector.

[gmarguli]

I still disagree. I've had coins come back with different designations after I cracked them out. I guess I should have complained about the mechanical errors. Of course which were the mechanical errors? Were they the ones with the designation or without?

 

I had a Merc come back with FB after it didn't have it first. When did the mechanical error occur?

 

I've had so many coins come back with either no CAM, or CAM, or DCAM designation that I lost count. Which of those were mechanical errors? Was the coin that lost the designation a mechanical error the first time or the second time when it got the designation?

 

Don't get me wrong, in the case of Mark Feld, if the bands were as flat as he says then I agree it was a mechanical error. However, someone purchased the coin based on that error. PCGS made the error. PCGS had the opportunity to correct that error. Their finalizer/verfier didn't catch the error. PCGS is liable for this since they made the error. Regardless of what it says on the back of that submission form, PCGS is the expert and they will be held liable. Now if they want to go after the submitter, that is their choice. The submitter might also be liable, but that doesn't absolve PCGS of its liability.

 

Can you imagine your lawyer telling you that he isn't liable because it was a mechanical error that occurred and the price listed on the contract wasn't correct. How about, sorry your car caught fire because I put the wrong part in it, but it was a mechanical error. I meant to use part 1032A, but I put in part 1023A. It's not my fault that this mechanical error occurred. Damn packaging is to blame.

 

In the case of the coin Truth posted, I'm not sure if it is a FH or not. I'll freely admit that this designation I have a hard time with because I don't do much with them and I also think it is a worthless designation. However, even if it is a blatant mistake I want the grading service to make me whole again. That's because I take their word on what is on the insert.

 

[Dry]

"It's precisely because they are experts that it's an obvious mechanical error."

Sounds like an ad for ACG

[Tradedollarnut]

Greg: we agree more than we disagree. To whit:

 

1) Neither of us can tell if that damnable 27-S quarter is or isn't FH off that scan

 

2) Neither of us would pay a premium even if it is

 

3) We both agree that if the 45 dime had flat as pancake bands that it was a mechanical error

 

I guess we just disagree how much responsibility lies with the purchaser, submittor and grading company in the event of a problem. But I do agree that in a perfect world your scenario would be the best....

 

[bTW: does the verifyer inspect the coin in the holder?]

 

 

[gmarguli]

[bTW: does the verifyer inspect the coin in the holder?]

 

Yes. Both PCGS & NGC have a final grader (verifyer/finalizer/etc) look after it is slabbed and make sure that everything on the insert is correct and that they agree with the grade assigned.

 

Having said that, I do question how much time they actually spend looking at the coins and I have a gut feeling that they only look at a select few, i.e. the expensive ones or the ones with an unusual grade.

[TonerGuy]

Greg - don't bother trying to argue with TDN, he will just discard logic, reasoning as well as the facts to simply defend PCGS and David Hall.

 

Now of course the attorneys can get involved and force the company back toward our erroneous perceptions utilizing California law and all that stuff, but I for one am willing to accept both the major grading companies for what they are providing - an opinion as to the quality of the coin. If I disagree with their opinion, I just don't buy it.

 

I like where he refers to the laws the govern business in California as "all that stuff." Obviously he really doesn't care what anyone else thinks, it's all based on this perception and acceptance of what a TPG should and shouldn't do. Fortunately, he is just dead wrong and unfortunately, you will never convince him otherwise.

 

You can't argue with someone's opinion.

 

Michael

[Tradedollarnut]

Greg - don't bother trying to argue with TDN, he will just discard logic, reasoning as well as the facts to simply defend PCGS and David Hall.

 

Huh? Not even close - I try to see both sides of the story and believe that both leading services do things right and things wrong. And I'm not afraid to state my opinion either way. I'd just prefer not to see this forum devolve into a constant [!@#%^&^] and moaning venue for all of PCGS's purported wrongs.

 

Look at the premise of this thread - that the coin shown is an obvious non full head coin. Has one person yet come on and stated with any certaintly that the coin is not a FH? I think I presented my reasoning on my opinion that it is not an obvious mistake quite logically and factually.

 

If I have a bias, it's a pro business bias. I'm sick and tired of businesses being wrong until proven right. Sick and tired of the mentality in this country regarding entitlement. Spill your hot coffee on your lap - sue! Blechhh!

 

Sorry that you believe I've drunk the PCGS coolaid, but since I think the same thing about you in just the opposite manner, I guess we're even.

 

[Newmismatist]

I was perusing the PCGS forums and someone came up with this coin in Heritage's inventory. Definitely not Full Head, with some questionable color. Now, after hearing and reading how PCGS does not back up it's designations via the Mark Feld story, nor it's authenticity to the pedigree via the Jadecoin story, how in the world will anyone buy this coin?

 

I absolutely fail to see how this equates with the title of this thread. Has someone bought this coin and submitted it to PCGS under it's "grading" guarantee? The Jadecoin "fiasco" was NOT a mechanical error scenerio. It was a flat out mis-attribution of the provenance. You can't accidently type in "Norweb" on the holder. A mechanical error is when you type 1879 and it should have been 1897. Or Ty1 when it's really Type 2.

 

Now, this is apparently PCGS's opinion of what constitutes a FH SLQ. Now to me It doesn't look like a FH SLQ, but I've repeatedly said that it very difficult to grade from scans and I really can't tell if the lack of detail in the head is due to light relection or the fact that is simply may not be there at all. Until someone submits that coin to PCGS and asks them to do something, we are discussing how many angles can dance on the head of a pin.

 

As I read the posts, what TDN is saying is pretty simple. It's his opinion (apparantly based on what PCGS did with Mark Feld's 1945"FB" Merc) that IF this coin is sent in to PCGS, and IF they decided that it was not a FH, they would change the designation so that FH was not on the holder because they don't guarantee attributions. THat folks, is a good observation, so don't pay stupid money for that coin expecting PCGS to pony up $250K if no one else will buy it as a FH. Pretty practical advice if you ask me.

 

TDN also says he wouldn't pay the crazy premium for the FH designation - again sounds pretty good to me - I checked an old blue sheet: MS65 was $6400, MS65FH was $100K. It is my firm belief that anyone who pays 95% of the value of a coin for a designation that covers about 2% of the area of the coin is simply setting themself up for a massive loss. The same is true for paying 99% of the value of coin for a top pop modern coin of which 3 million exist (PCGS 1963PR70DCam 1CN).

 

TDN is NOT arguing whether a lawyer could or could not compel PCGS to pay someone over 6 figures if they bought this coin & then decided to send it in for a refund of the difference between their cost and the bluesheet MS65 value. As I read what he is saying it's "don't buy that coin for stupid money and think PCGS his going to bail you out for your stupidity."

 

When TDN says:

I for one am willing to accept both the major grading companies for what they are providing - an opinion as to the quality of the coin. If I disagree with their opinion, I just don't buy it.

I think he means just that. He's not going to buy a coin that he doesn't agree with the assigned grade. He's not going to buy it, try and sell it for a profit & then when he can't, try and make the grading company give him his money back.

 

Fratlaw: TDN is not debating the merits of buying a coin so he would have the pleasure of litigating what the guarantee is (or is not). I'm not sure that he's "dead wrong", either. Would you advise a client to spend $250K to buy that coin so you could send it to PCGS to see whether their grade guarantee covers that FH designation? What if you're "right" and then the judge/jury says, yep the guarantee applies and that's a FH as defined by PCGS. An interesting Pyrhic victory.

 

You've answered your own question when you then state:

You can't argue with someone's opinion.

 

Isn't that exactly what PCGS's FH designation is - their opinion? And they get to define what their opinion is too.

 

Just MHO on this thread.

 

[bTW - I wouldn't buy that coin for anything more than non-FH 65 money, I can think of better ways to spend that other $244K ]

 

 

 

 

 

 

[Oldtrader3]

Speaking of HRH, someone is going to flatten his bands in a California court one of these days. He runs a public corporation with fudiciary responsibility to it's shareholders, not a private fiefdom dedicated to his own warped sense of fairplay and ethics.

 

I noticed that CU was adding additional Board Members. Are they more of his toadies or are they independent?

[nwcs]

To throw another wrinkle in, perhaps...

 

When you consider that PCGS has published their guidelines and what they consider to be designation-worthy, does that fact have any bearing when they do not assign the correct designation?

[Tradedollarnut]

As I read the posts, what TDN is saying is pretty simple. It's his opinion (apparantly based on what PCGS did with Mark Feld's 1945"FB" Merc) that IF this coin is sent in to PCGS, and IF they decided that it was not a FH, they would change the designation so that FH was not on the holder because they don't guarantee attributions.

 

No, no, no! Absolutely not! Completely different situation! The only way that would apply is if the head was as flat as a pancake where even a novice could tell it was a mechanical error. PCGS does guaranty the FH attribution in this instance.... absolutely!

 

What I'm saying is:

 

1) we can't tell off that scan what is or isn't there. Saying yeah or nay off that picture is impossible.

 

2) we don't know what PCGS's definition of FH is, so how do we know it doesn't meet their definition quite handily? Just like PCGS has a 5 step requirement for Jefferson Full Steps and NGC has 6 required, the services have their own definitions of what it takes to be FH. I'd like to see PCGS's definition of what constitutes FH before I blast them for failing to grade to that definition.

 

I think it's stupid to pull a coin up off of Heritage's website and rail against the grading services. I defended NGC on the CU chatroom when mrearlygold did the same with the 18/17 and now I'm defending PCGS. The light on scans plays tricks and Heritage is reknowned for poor images. Most of us have absolutely no clue what the exact definition of the attribute is and yet we feel free to wail away about how the services are failing right and left.

 

Absolutely agree with your comments regarding 95% of the value being tied up into the strike on 2% of the coin. It's foolish to spend that premium - especially when standards of what define FH change right and left. Who's to say that in a decade full shield rivets won't be a requirement to realize that FH premium and you aren't stuck with a $200k loss?

[Android]

From David Halls Q and A session, today - 10/14/03:

 

David,

 

Thank you for taking the time every week to answer our questions. Your time here is greatly appreciated and a welcome service.

On the US Coin Forum there has been several discussions in the past year regarding "Mechanical Errors". These errors have been described as holders with incorrect dates, mint marks, varieties, etc. What is your definition of a "Mechanical Error" and how am I protected by PCGS if I purchase a PCGS holdered coin in a sight un-seen transaction (or a no return privilege transaction) in which a "Mechanical Error" has been made.

 

Tuesday October 14, 2003 8:10 PM   (NEW!)

 

 

Fats...

 

A mechanical error is an obvious error. Examples: a clearly mint state frosty surface coin in a proof holder, a 1936 dated coin in a holder that said 1935, a Boone commem in a Texas commem holder, a flat as a pancake band dime in a FB holder, etc. The obvious mechanical error can sometimes be a grade. For example, in 1986 we had a dispute with a dealer because he purchased a MS65 1893-O dollar. The problem was the coin was a bag marked to death MS60 that no one in his right mind would ever consider even MS63 let alone MS65. The guiding concept with mechanical errors is common sense.

 

David

_______________________________________________________________________________

 

Hello Mr. Hall,

 

Recently, there was a big stink regarding whether or not a particular Norweb coin had been correctly identified. As a result, I began to wonder how PCGS could guarantee a coins provenance.

When questioning a coins authenticity or grade, the coin can be resubmitted to PCGS and reevaluated. This is not a problem since authenticity and grade always travel with the coin.

However, if one questions the provenance, how does PCGS confirm this? Does PCGS keep a file on all coins that have a provenance attached to them? It seems to me that there must be a paper trail of some kind or else the guarantee is meaningless.

Thank you for your time.

 

Tuesday October 14, 2003 8:16 PM   (NEW!)

 

 

There are only four instances when we can pedigree a coin as far as I'm concerned.

1. The coin is from a famous, "name" auction and it is pictured in the catalog and the coin clearly matches the photo.

2. The coin is from a famous, "name" auction and it is in a sealed auction company flip (holder.) This doesn't happen much anymore as most auctions have certified coins.

3. The coin is from a collection or set that is in the PCGS Set Registry and the owner of the set sends the entire set in for pedigree to his collection.

4. The coin is from a famous "find" or hoard and we have specific information that the coins being pedigreed are the actual discovery coins. An example would be the gold coins from the SS Central America ship wreck.

 

David

_______________________________________________________________________________

Maybe this can shed a little light on the subject!

 

Andy