An Interview with JOHN ALBANESE by Maurice Rosen 2 2

[physics-fan3.14]

Greg, I just want to say that I agree with your points. Very well said.

 

Very extremely interesting read. Finally, the purpose of the CAC, the reasoning behind it, and a glimpse at the modus operandi, all straight from the horse's mouth, as it were. I read the whole thing, and I recomend that serious collectors and those interested in the future of our hobby do the same - its long, but carve out an hour for yourself, get a coke, and read it.

 

(thumbs u

I suspect that a lot of CAC detractors won't bother to read it, because it's a lot more fun to circulate rumors and bash without having information/facts. But those who do take the time, should be able to understand the motivations and thought process of Mr. Albanese and see that it's not "all about the money".

 

Unfortunately Mark (and you know that I hold you in the highest respect and regard) I'm going to have to very much disagree with you on this point. Before reading this interview, I would say I was ambivalent at best towards the CAC. But after reading it, I am going to have to say that I am against it. The main thing that I took away from this interview was that is was all about the money - albeit, maybe not a profit play from submissions. Rather, it seemed like several times JA talked about the large premiums of high end coins, and how the CAC would help restore prices to where they should be. The prices should be where the market dictates they should be - not where JA thinks they should be. This goes back to the very real issue that James was bringing up in the previous thread, and that several people harangued him for: a run-up in prices is not good for the collector overall, but very good for the dealer.

 

[James_OldeTowne]

Much of the disdain that I just can't help feeling for the CAC concept is that still, after reading through all this long interview and looking through the website, I still cannot find a clear, concise explanation of exactly what CAC's grading standards are nor how they guarantee those (unknown) standards. Literally thousands of posts on CAC have flowed through threads here and ATS - and still no explanation of what it takes to be A, B, C, or D quality - just an assumption that I, as a consumer, can just trust in an unspoken "standard" and just take the sticker at face value.

 

And I'm also getting tired of the "it's just a second opinion" argument, and that I can take it or leave it. The fact is, unless there IS a sticker, I won't know whether I'm actually taking or leaving the second opinion! If I am offered a coin that has no sticker, then I have no idea whether it's ever gone through CAC, and you can be darned certain the dealer (unless it's Mark Feld) ain't going to tell me that it failed CAC approval. It may have been rejected - a second opinion that I would not be aware of, and a second opinion that I'm unaware of is no use whatsoever.

 

OK, I'm really trying to be done with this subject . I'm sure it won't be long before the consoling and cajoling posts come along, "proving" that I have nothing to worry about, and that I need to just trust that the CAC is a great thing .

[Tradedollarnut]

Much of the disdain that I just can't help feeling for the CAC concept is that still, after reading through all this long interview and looking through the website, I still cannot find a clear, concise explanation of exactly what CAC's grading standards are nor how they guarantee those (unknown) standards. Literally thousands of posts on CAC have flowed through threads here and ATS - and still no explanation of what it takes to be A, B, C, or D quality - just an assumption that I, as a consumer, can just trust in an unspoken "standard" and just take the sticker at face value.

 

Be sure to let us know when you find the clear and concise explanation of NGC's grading standards.

 

CAC is a trading network backed with $25M in capital. Stickered coins are eligible for subsequently sight unseen bids from CAC and its member dealers.

[James_OldeTowne]

Be sure to let us know when you find the clear and concise explanation of NGC's grading standards.

I don't know about NGC, but PCGS does describe their standards in a widely available book. At the very least, NGC has a considerable volume of work that seemingly implies a standard (loose though it may be).

 

It just seems that since "grading standards" evidently plays the pivotal role in CAC's existence, the least they would do is explain what standards are being used (but apparently not guaranteed). To put it another way, how is it advantageous to those who want to use the CAC to be kept uninformed of the actual standards being used to evaluate their coins? Wouldn't CAC want to give buyers of CAC coins every possible advantage in understanding the grading process?

[CHABSENTIA]

Be sure to let us know when you find the clear and concise explanation of NGC's grading standards.

I don't know about NGC, but PCGS does describe their standards in a widely available book. At the very least, NGC has a considerable volume of work that seemingly implies a standard (loose though it may be).

 

It just seems that since "grading standards" evidently plays the pivotal role in CAC's existence, the least they would do is explain what standards are being used (but apparently not guaranteed). To put it another way, how is it advantageous to those who want to use the CAC to be kept uninformed of the actual standards being used to evaluate their coins? Wouldn't CAC want to give buyers of CAC coins every possible advantage in understanding the grading process?[/quote

 

Actually I subsrcibe to the Rosen letter and had read it before. Notice in the letter here where JA states that 'all graders are human and that they are not perfect and that they just want CAC to keep it to a minimum.". Since this is the case then it seems that JA is saying that his graders are better.

 

Another part is when JA is asked about "ever" starting his own grading service and JA states that he has no desire to start his own grading service.I find this a little misleading as it implies that CAC is a first attempt to keep mistakes at a minimum and that he has never been part of a Grading service . The fact is that he has been a Co Founder and a Founder of the two top TPGS. Even in the body of the letter he uses sentences such as "when I was grading coins" and Rosen states to him "During the time we were grading coins".

 

So do we need another Entity such as CAC to keep the mistakes at a better minimum?Why not mention his previous role at the two top TPGs and instead mention that he had no desire to start his own grading service?

[MarkFeld]

Be sure to let us know when you find the clear and concise explanation of NGC's grading standards.

I don't know about NGC, but PCGS does describe their standards in a widely available book. At the very least, NGC has a considerable volume of work that seemingly implies a standard (loose though it may be).

 

It just seems that since "grading standards" evidently plays the pivotal role in CAC's existence, the least they would do is explain what standards are being used (but apparently not guaranteed). To put it another way, how is it advantageous to those who want to use the CAC to be kept uninformed of the actual standards being used to evaluate their coins? Wouldn't CAC want to give buyers of CAC coins every possible advantage in understanding the grading process?

James, I believe that meaningful written grading standards are possible only for circulated coins and literally perfect, MS/PR 70 coins. Anything which is written to tell people how to distinguish between 2 different numerical grades between MS60 and MS69 is too vague/general/imprecise to allow one to know the difference.

 

Please select any two grades in the MS/PR 60-69 range, provide us with PCGS' or ANACS' published grading standards and tell us how in the heck to apply them in order to tell the difference between those two grades.

[James_OldeTowne]

James, I believe that meaningful written grading standards are possible only for circulated coins and literally perfect, MS/PR 70 coins. Anything which is written to tell people how to distinguish between 2 different numerical grades between MS60 and MS69 is too vague/general/imprecise to allow one to know the difference.

 

Please select any two grades in the MS/PR 60-69 range, provide us with PCGS' or ANACS' published grading standards and tell us how in the heck to apply them in order to tell the difference between those two grades.

Mark, your argument leads me back to a question I posed elsewhere, but which I believe you belittled : If there is no standard which can be conveyed to coin collectors (and let's just focus on the 60-69 range you mentioned), then why do we need stickers at all? What is their purpose? Does a sticker have any meaning or usefulness whatsoever if, in fact, it conveys no new information, since there is no standard by which to judge that information?

 

Below are five quotes (my bolds) from the CAC website. I would submit to you that these imply some body of set standards by which the CAC is abiding. If this is so, then why has it been deemed inappropriate to explain them? And if there are in fact no CAC stringent grading standards, then why imply that there are?

 

The green CAC label placed on this holder denotes that this coin has met CAC' stringent grading standards.

 

The CAC GREEN Label signifies that a coin has met Certified Acceptance Corporation's stringent grading standards.

 

CAC holds coins to a higher standard so you can be confident in the value of yours. We verify previously graded coins and award our sticker only to those coins that meet the standard for today’s sophisticated buyer

 

Your coin has been verified as meeting the standard for strict quality within its grade.

 

The CAC examines coins that have already been graded and encapsulated by one of the two leading grading services, the PCGS and the NGC. Each submitted coin that meets the standards of the CAC receives a green sticker.

[Tradedollarnut]

If the Supreme Court can't describe pornography, but knows it when it sees it... how can you expect a mere numismatist to describe the subtle differences between mint state grades?

[MarkFeld]

James, I believe that meaningful written grading standards are possible only for circulated coins and literally perfect, MS/PR 70 coins. Anything which is written to tell people how to distinguish between 2 different numerical grades between MS60 and MS69 is too vague/general/imprecise to allow one to know the difference.

 

Please select any two grades in the MS/PR 60-69 range, provide us with PCGS' or ANACS' published grading standards and tell us how in the heck to apply them in order to tell the difference between those two grades.

Mark, your argument leads me back to a question I posed elsewhere, but which I believe you belittled : If there is no standard which can be conveyed to coin collectors (and let's just focus on the 60-69 range you mentioned), then why do we need stickers at all? What is their purpose? Does a sticker have any meaning or usefulness whatsoever if, in fact, it conveys no new information, since there is no standard by which to judge that information?

 

Below are five quotes (my bolds) from the CAC website. I would submit to you that these imply some body of set standards by which the CAC is abiding. If this is so, then why has it been deemed inappropriate to explain them? And if there are in fact no CAC stringent grading standards, then why imply that there are?

 

The green CAC label placed on this holder denotes that this coin has met CAC' stringent grading standards.

 

The CAC GREEN Label signifies that a coin has met Certified Acceptance Corporation's stringent grading standards.

 

CAC holds coins to a higher standard so you can be confident in the value of yours. We verify previously graded coins and award our sticker only to those coins that meet the standard for today’s sophisticated buyer

 

Your coin has been verified as meeting the standard for strict quality within its grade.

 

The CAC examines coins that have already been graded and encapsulated by one of the two leading grading services, the PCGS and the NGC. Each submitted coin that meets the standards of the CAC receives a green sticker.

However imprecise and/or inconsistent one wants to argue that grading "standards" are, I believe that they are at least conveyed through the actual grading of coins by experts. And that is so, even if those standards don't lend themselves to published explanations which which can't account for anywhere near all of the differences in various coins. So, it's not that there aren't standards, only that they can't be explained on paper in a meaningful way with respect to distinguishing one precise grade from another.

[jesbroken]

 

CAC is a trading network backed with $25M in capital. Stickered coins are eligible for subsequently sight unseen bids from CAC and its member dealers

 

Thanks, TDN. I now understand the purpose of CAC and I agree wholeheartedly with its premise. Its for private members only, as in a private club which can do as it pleases among its members. See, I was under the misunderstanding that it was established for the whole collector society. It's kind of like PCGS's forum, they are backing it with their money and should be able to run it as they see fit and darn anyone who says different. I truly have no problem with private clubs. I think they are an American way of life. Some are good and some are bad. Don't join if you don't believe in their concepts. (thumbs u

Jim

[Tradedollarnut]

CAC is a trading network backed with $25M in capital. Stickered coins are eligible for subsequently sight unseen bids from CAC and its member dealers

 

Thanks, TDN. I now understand the purpose of CAC and I agree wholeheartedly with its premise. Its for private members only, as in a private club which can do as it pleases among its members. See, I was under the misunderstanding that it was established for the whole collector society. It's kind of like PCGS's forum, they are backing it with their money and should be able to run it as they see fit and darn anyone who says different. I truly have no problem with private clubs. I think they are an American way of life. Some are good and some are bad. Don't join if you don't believe in their concepts. (thumbs u

Jim

 

yuh, huh. Enjoy your collecting endeavors. When you get to the point where it matters to you if your holdered coin's been doctored, be sure to try to figure out some way of telling.

[MarkFeld]

Since this is the case then it seems that JA is saying that his graders are better

Bologna. PCGS and NGC could screen their coins too in the same manner if they cared to.

[MarkFeld]

CAC is a trading network backed with $25M in capital. Stickered coins are eligible for subsequently sight unseen bids from CAC and its member dealers

 

Thanks, TDN. I now understand the purpose of CAC and I agree wholeheartedly with its premise. Its for private members only, as in a private club which can do as it pleases among its members. See, I was under the misunderstanding that it was established for the whole collector society. It's kind of like PCGS's forum, they are backing it with their money and should be able to run it as they see fit and darn anyone who says different. I truly have no problem with private clubs. I think they are an American way of life. Some are good and some are bad. Don't join if you don't believe in their concepts. (thumbs u

Jim

Jim, perhaps you misread TDN's comment - your post sure reads that way. Those sight unseen bids will apply to anyone who has such coins to sell and are merely being POSTED by CAC and its member dealers. There's nothing exclusive in that, and personally, I think you owe Bruce an apology.

[jesbroken]

My goodness, Mark, if you think I owe someone an apology I will immediately apologize and will keep my opinions to my self from now on. Bruce sorry.

Jim

[MarkFeld]

My goodness, Mark, if you think I owe someone an apology I will immediately apologize and will keep my opinions to my self from now on. Bruce sorry.

Jim

Jim, opinions are great, but I don't understand your opinion/comment as it pertained to the post you responded to in such a facetious manner.

 

If you feel up to it, please read Bruce's post and then yours, and let us know how you arrived at the opinion you stated?

Edited July 11, 2008 by MarkFeld

[Tradedollarnut]

My goodness, Mark, if you think I owe someone an apology I will immediately apologize and will keep my opinions to my self from now on. Bruce sorry.

Jim

 

No worries.

 

If you guys understood how much value has been transferred FROM collectors TO coin doctors and crackout artists over the past decade, you might be a bit more receptive to CAC. I would guesstimate it's in the 8 figure range [hundreds of millions of dollars].

[James_OldeTowne]

If the Supreme Court can't describe pornography, but knows it when it sees it... how can you expect a mere numismatist to describe the subtle differences between mint state grades?

I am not aware that the Supreme Court claims to ascertain what is pornography by "a set of standards". They also do not stamp magazines and other media with stickers indicating so.

 

However imprecise and/or inconsistent one wants to argue that grading "standards" are, I believe that they are at least conveyed through the actual grading of coins by experts. And that is so, even if those standards don't lend themselves to published explanations which which can't account for anywhere near all of the differences in various coins. So, it's not that there aren't standards, only that they can't be explained on paper in a meaningful way with respect to distinguishing one precise grade from another.

If the standards cannot be expressed, then I must question whether it is useful to state that there actually is a set of standards. The problem is that since a consumer has no written set of standards by which to measure his servicer's activity (the CAC), then he cannot verify that a useful service is being provided. This is why I've questioned several times whether a sticker actually has any purpose.

 

At any rate, Thank You tradedollarnut and MarkFeld for kindly having the patience to attempt to address all these questions. I do not feel my questions have been answered to any degree of (my) satisfaction, but I genuinely appreciate your efforts (thumbs u .

[gmarguli]

If you guys understood how much value has been transferred FROM collectors TO coin doctors and crackout artists over the past decade, you might be a bit more receptive to CAC. I would guesstimate it's in the 8 figure range [hundreds of millions of dollars].

 

Crackout artists are demons. They have the nerve to use their knowledge and risk their capital to try and make a profit. Sickens me. These people are worse than child rapists!

[Tradedollarnut]

If you guys understood how much value has been transferred FROM collectors TO coin doctors and crackout artists over the past decade, you might be a bit more receptive to CAC. I would guesstimate it's in the 8 figure range [hundreds of millions of dollars].

 

Crackout artists are demons. They have the nerve to use their knowledge and risk their capital to try and make a profit. Sickens me. These people are worse than child rapists!

 

What's bad, Greg, is the interaction between crackout artists and slow gradeflation and stagnant pricing. How many collectors or their heirs didn't realize that grades had changed by 1-2 points from the late 1980's to early 2000's? How much money was left on the table by these sellers to be raked up by the sharks? And how much extra was paid for essentially the same coin that had been worked over and maxxed out by the docs? Unless you're an insider, you just can't be aware of what's going on.

 

A hundred million dollars - sucked out of the hobby and into mansions in Orange County.

[MikeInFL]

If you guys understood how much value has been transferred FROM collectors TO coin doctors and crackout artists over the past decade, you might be a bit more receptive to CAC. I would guesstimate it's in the 8 figure range [hundreds of millions of dollars].

 

Crackout artists are demons. They have the nerve to use their knowledge and risk their capital to try and make a profit. Sickens me. These people are worse than child rapists!

 

I wouldn't go quite so far and call them "demons" or "rapists", but the term "parasite" seems to fit pretty well.

 

I don't see what value the crackout artists are providing to collectors and the market in general. Self-interest and greed are not value-adds, and it seems to me that all they are doing is skimming money out of the market IMO...Mike

 

p.s. TDN, it's 9 figures.

[Catbert]

After reviewing the article, what bothers me about the CAC approach is that as this standard is more and more adopted, this will result in more "A & B" coins being priced out of my price range. As a small time collector who desires to own a few coins with great eye appeal, I will be relegated by economics to the "C & D" coins. The hobby will then truly be the "hobby of kings" and will drive out those of limited means.

Edited July 11, 2008 by Catbert

[MikeInFL]

Catbert,

 

What I don't think you realize (and plese correct me if I'm wrong) is that you're probably already paying higher prices for A and B coins....and I wouldn't expect that to change much if the CAC is successful. However, the main reasons I see the CAC as a benefit for collectors like you and I is NOT on the buy side, but rather the sell side...

 

With a stickered coin you'll KNOW how much your coins are worth (at a minimum) and they will be MORE liquid than before. How many times have you tried to sell a coin to a dealer only to see him whip out his greysheet or bluesheet and quote you a (crappy) price. While I think many collectors are astute enough to figure out who to sell to and who not to, not all of us can. So, if I'm understanding things, with the CAC you will have an alternative to selling for greysheet/bluesheet.

 

I see the value in this, but understand completely if you (or others) don't.

 

Respectfully...Mike

[BillJones]

Another thought is something I have expressed in these pages over the years: institutional participation in our market. For sure, the exciting prospects of how the market is responding now makes that prospect brighter, but John revealed to us that institutions are “circling around” as we speak. His, and my, point that opportunity knocks when the majority doesn’t see what you correctly see, can be an appealing attraction to one or more forward-thinking, large investment firms. Should such a firm make a $100 million commitment to rare coins patiently over some time, that amount might well represent a pittance to their overall managed funds. Yet, when their completed efforts are made known, it would have the effect of throwing a boulder into a bathtub! The barreling in that John mentioned will come the end of the bull market, affording us the green light and easy means to exit our position with plentiful gains.

 

This is easily the most negative paragraph in this entire posting. "Institutional participation" should be called what it is: SPECULATION. These people buy coins not for the reasons that collectors buy them, which includes an enjoyment of history and a hobby. They buy for ONE thing to MAKE A PROFIT.

 

I’m not against profits, but when these people become divorced from the collector market, they are doing nothing playing with each other. The motivation for “institutional participation” is very negative for collectors and hobby. It’s basically a scam that is aimed toward benefiting a comparatively small number of people to the detriment many people in this hobby. And in the end it will bad for the institutions as well.

 

As a retiree, I don’t mind having some of my money in my coin collection, but I would not want a dime invested in a mutual fund that is based upon coins. We have seen what happens when “investors” leave the collectors behind. They drive up prices through roof until they stop buying from each other (a.k.a. “bigger fools”) and then the market collapses.

 

As for myself I find this hero worship of Mr. Albanese disturbing. No one on this earth is that good. I have a numismatic library of 300+ books. In reviewing it, I can’t find one work by Mr. Albanese. He’s really great at making money, but I don’t see where he contributed much to hobby except for the start-upt of a couple of grading companies that he subsequently abandoned.

 

When he leaves CAC will it end up like PCGS and NGC? Will their standards slip to the point where CAC stickers end up on "C" coins? It has in one case. I got a "C" coin with a CAC sticker on it that would have cost me $12 grand. I returned it.

 

[mommam17]

I think you will find out is there are some really nice C coins. Not all coins not stickered are dogs, some have nice eye appeal but fall short of CAC standards.

Edited July 12, 2008 by mommam17

[mommam17]

Bill, You said John Albanese abandoned 2 grading companies. Some day you will find out why he left both, then you`ll understand John a lot better.

[Catbert]

I think you will find out is there are some really nice C coins. All coins not stickered are dogs, some have nice eye appeal but fall short of CAC standards.

 

I assume you meant "All coins not stickered are NOT dogs". Time will tell how loose their stickered standards become and thus what remains of quality to buy for the small time collector.

Edited July 11, 2008 by Catbert

[Catbert]

Catbert,

 

What I don't think you realize (and plese correct me if I'm wrong) is that you're probably already paying higher prices for A and B coins....and I wouldn't expect that to change much if the CAC is successful. However, the main reasons I see the CAC as a benefit for collectors like you and I is NOT on the buy side, but rather the sell side...

 

With a stickered coin you'll KNOW how much your coins are worth (at a minimum) and they will be MORE liquid than before. How many times have you tried to sell a coin to a dealer only to see him whip out his greysheet or bluesheet and quote you a (crappy) price. While I think many collectors are astute enough to figure out who to sell to and who not to, not all of us can. So, if I'm understanding things, with the CAC you will have an alternative to selling for greysheet/bluesheet.

 

I see the value in this, but understand completely if you (or others) don't.

 

Respectfully...Mike

 

Mike - while resale value is always relevant, it is less so for me because I prefer to keep most of my acquisitions.

[mommam17]

Right, my mistake. Not all coins not stickered are dogs!

Edited July 12, 2008 by mommam17

[MikeInFL]

Thanks for the explanation, Catbert -- that makes perfect sense as each one of us values things differently. I hope you have a nice weekend.

[Tradedollarnut]

In almost any case I can think of, you'll still pay less for an A or B of MS6x than a C or D of MS6x+1.

 

Think about it.