My final assessment of the week's events

[Tradedollarnut]

I'm about as burned out on the whole thing as can be, but figured I'd put down on "paper" my final assessment of the whole shebang:

 

1) Very few people understand the industry as a whole. One faction thinks that only PCGS can annoint a particular grade and that NGC coins are overgraded unless they cross. The other faction thinks that NGC annoints the grade and PCGS coins are undergraded. Neither are correct. The market is the ultimate judge of whether a coin is correctly graded, adjusted for the "power of the holder". Just because a coin sits in a particular holder does not mean it will exactly bring the listed value for that holder. It will bring a price commensurate to its quality adjusted for the value of the holder it sits in. If the holder grade is too high for the quality of the coin, the coin will bring its true price plus a bit of value for the holder. If the holder grade is too low for the quality of the coin, the coin will bring its true price minus a bit of negative value for the holder. Upgrading/crossing does NOT add value to a coin, it merely adjusts the value associated with the holder!

 

2) People are too caught up in the arguement over who is the "better" grading service. PCGS and NGC have completely different goals and are both successful at their goals. NGC's goal is to grade to a standard as consistently and accurately as possible. I don't believe that they care if this standard is too high or too low for the market, but the fact is that for the majority of coins, NGC's price realized is closer to the published market value than PCGS's and therefore the arguement could easily be made that the market has adopted NGC's grades as the industry standard. BUT WHO REALLY CARES?! PCGS's goal is to maintain the tightest standard in the industry. For the most part they grade a coin much tighter than any other service, demanding a particular eye appeal for a coin to make the grade. PCGS's coins (on average) usually DO command a premium over market, because of their marketing prowess AND their specific goal of tight standards. BUT - I REMIND YOU - THIS IS STATISTICS. Who collects statistics? Not you and not me. We collect coins. On a coin by coin basis, the statistical average is completely and totally irrelevant. Each individual coin MUST be evaluated on its own and all the averages in the world don't mean squat.

 

3) Rick's leaving PCGS for NGC is going to be a winner for all involved. How can that be? Well, the fact is that over the past few years NGC has grown immensely and PCGS has become complacent. NGC needs a person of Rick's talents in order to manage their larger organization. He solidifies their grading team and brings needed management skills to their organization. PCGS loses a valuable employee but gains the realization that things were not perfect - that their position was in danger. It's not enough any more to sit back and cherrypick the best coins. Customers are demanding superb service, communication and consistency. In a perfect marketplace, the grade on the coin is becoming less and less of a factor (see item number one) and the quality of the coin determines the lion's share of the value. So the customer's choice of company begins to be associated with those items other than grading ability (within reason). I don't think PCGS understood this until now. They seem to have finally listened to the growing wail of complaints and, if they follow thru and address them, will be the better company for it. And finally, the consumer - us collectors - are better off because both companies will be able to service us better.

 

Now I need a break from all this! Go away!

[keithdagen]

Nice summation.

[braddick]

Agreed. You said it all right there.

[IrishMike]

TDN, not that is scary, I was thinking virtually the same thing on all your points. But this entire diatribe back and forth, mostly I think bewteen those that have a vested interest in the value of their registry sets and those that don't has been way to nasty and burned me out. Sometimes it reminds me of the college days when the Sigma Chi's argued nonsensically with the Lamda Chi's over who had the best Frat and us GDI's just looked on in amusement. BTW this was back in the late 60's. Times don't change much.

[MarkFeld]

TDN, as I posted on the other board :

 

You're making too much sense! You should be booted from the message board.

 

I do feel that most of us get way too carried away with statistics and generalizations, while losing focus of the particular coin or coins being discussed.

 

People want to know, sight unseen, what the chances are of a coin in an old NGC or PCGS holder being upgraded - why not look at the coin itself to try to make a determination?!!

 

People want to know what the chances are of a given coin being crossed from PCGS to NGC or from NGC to PCGS - the overall crossover statistics aren't nearly as relevant as is the quality of the coin being sent for crossover. Well, hopefully, at least.

.

The fact that one grading company might be stricter than others from time to time doesn't make it better or even more consistent or accurate.

 

As you mentioned, while people are worried about which holder their coins are in, the coins themselves, when sold on the marketplace, bring prices commensurate with their individual qualities and attributes. The grade on the label and the holder the coins are in, often become secondary. Look at all of the examples of coins of the same date, grade and grading company, which bring significantly different (sometimes mutiples) prices in auctions and on bourse floors of major coin shows. Many coins trade like commodities but many do not and should not.

 

Let's worry and talk more about the coins, not their holders.

 

[EVillageProwler]

My comment from across the street:

--

Nice comments, TDN. There was an article in the latest John Reich Journal by Dave Perkins. In it, Perkins examined the Heritage offering of the Michael Hering collection of Early Dollars.

 

The Hering coins was not an attempt at a complete variety set; rather, it was simply a massive accumulation of coins of the same series. Perkins used the 1795 FH 3Lv ``Bar'' variety (Bol.5, BB-27) as an example because that variety was well represented and because the variety is considered a type coin.

 

Perkins chose many examples in the EF and AU grade range, all slabbed by various services (PCGS, NGC, ANACS, and maybe more). In looking at the prices realized for these specimens, he concluded that the slabbing service and the slabbed grade meant very little. The prices realized were all over the place, but generally reflecting the quality of each individual specimen.

 

In other words, Perkins found that the buyers bought the coin instead of the holder. The nice, original specimens brought excellent money, while the crappy ones did poorly.

 

EVP

 

[pmh1nic]

"Let's worry and talk more about the coins, not their holders." Quote from Coinguy1

 

Being strictly a collector I really do think too much emphasis is place on the holder and the minute differences that distinquish 66's from 67's and 67's from 68's, etc. Off course the reasons for this undue emphasis are the monumental grade rarity premiums (10x, 20x, 30x or more) being paid based on these minute cosmetic differences.

 

When will it all stop? I don't participate in it so I don't know. I guess when collectors wake up and realize that the focus shouldn't be a contact mark here or a spot of toning there but the coin as a whole, it's history, artistry and overall eye appeal.

 

[Architecht]

So maybe we move all this stuff to the water cooler at this point? Just a thought.

 

Arch

[EVillageProwler]

why? this stuff is about the u.s. coin market...

 

evp

 

[Architecht]

I've just heard a rumble or two about too much political talk and not enough coin talk. Personally, I kinda think it's hard to separate the two. But I thought I'd just air the point of view and see what people think.

 

I've been considering doing what I did with the comics boards when I set them up, which is to have a "general coin" board for stuff in general - separate from the individual collecitng specialties, like US and Foreign (or in comics, silver, gold, etc.). BUT, I feel it's a mistake to diversify the boards too much, and spread the posting out too thinly.

 

Arch

[MarkFeld]

Arch - the posting here is thin enough, already!

[EVillageProwler]

arch,

 

i suggest that you take a wait-n-see approach. the extreme politicking last week could easily just be a one-time flareup. let's see how things go once the great one gets too busy to post much more. he already posted one today, and it only got 3 or 4 responses. and, this is the first mention of it here...

 

evp

 

[IrishMike]

Arch, just take a couple of sedatives

[Architecht]

 

S'cool with me. I basically feel the same way about it. But, since it had been mention, I was just giving the idea a forum to see what everyone else wanted to do.

 

Arch

[Hoot]

TDN - Thanks for the summary and thanks to others for the comments. Unfortunately, I must take issue with a couple of statements.

 

1) The market is the ultimate judge of whether a coin is correctly graded, adjusted for the "power of the holder". Just because a coin sits in a particular holder does not mean it will exactly bring the listed value for that holder.

 

Reiterated bu Mark Feld as the coins themselves, when sold on the marketplace, bring prices commensurate with their individual qualities and attributes.

 

And also stated by EVP: The prices realized were all over the place, but generally reflecting the quality of each individual specimen.

 

These statement, all similar, reflect only a fraction of the coin market. They also reflect the mode of sale for particular coins (sight seen, sight unseen, in person, internet, B&M v. Heritage v. Superior v. eBay v. etcetera), the value of the coin ( a bit of a class issue), the desires of the seller, the relative competition for the coin in the moment, and the numismatic sophistication of the current buyers. I do not believe that for coins in the category of 5k or even 10k and less that there is a market-wide amelioration of price realized, as the competition for such coins is intense, widespread, and often irrationally based (i.e. not as much on the basis of a recognition of numismatic import or quality). And the cheaper coins get and the more perceptably common coins get, the worse the effects of irrationality are.

 

2) I've said this before: stingy market grading does not equal tight grading. The former is a judgment call as to where to "create" one's own standard, while the latter reflects a narrowly set and implemented standard. It is like the difference between accuracy and precision in statistics. (Sorry if this is too picky).

 

3) A point that Mark Feld raised: the overall crossover statistics aren't nearly as relevant as is the quality of the coin being sent for crossover

 

I'm sorry Mark, but what planet are you from? Do politics and gambling mean nothing there? I could provide a personal experience where the relevance of this statement made a >100% difference to me monitarily (and a pretty fair sum) but I should refrain. I'll PM the example to you if you wish. The hard fact is that the crossover statistics reflect the madness in what was stated in (1). I hate it, you hate it, but it lives.

 

I don't want to start a fight, but I had to speak up. Thanks, Hoot

[MarkFeld]

Hoot,

 

You have misunderstood me and/or taken some of my comments out of context. I firmly believe that politics are in play when it comes to PCGS and many of the coins they wont cross over to their holders.

 

One of the points I was tying to make in my earlier post to this thread is to quit worrying about all of the statistics and generalizations and focus on the coins, themselves. Sorry if I wasn't clear on that.

[braddick]

If it's coin related, no matter how vaguely, I would hope that it remains here.

[Hoot]

Yup, I misunderstood - still do when I reread your earlier post. But I agree completely about the politics of crossovers. And I believe that the politics rage all directions, not just toward PCGS.

 

Anyhow, I meant no harm, only to bring attention to what I thought was missing.

 

Hoot

[oreville-migration]

I have made my feelings quite clear that both NGC and PCGS (CLCT) need to clean up their act as the public trust should be #1 and that has not yet happened. CLCT problems are obvious because it is a public company but NGC is not far behind.

 

I will await for these two companies to trailblaze this hobby to the next step of avoiding all appearances of conflicts to show the stock market and diamond market for instance, that the coin collecting hobby can do it better and safer.

 

I do like the idea of the slabbing of problem coins without a numeric grade. It represents a fair compromise for all parties and I hope PCGS, ICG and all the services joins NGC in getting the garbage raw coins into a slab. The slab does provide authentication services!