Logical fallacy

[jtryka]

In watching so many posts on grades (mostly on the other forum, but recently here with the * thread), I started thinking of third party grading like a fiat currency. Yes, we all think it would be great if the government started printing more money, and we were walking around with $100 bills falling out of our pockets, but most of us fail to realize that all of these actions have consequences. We wouldn't be the only ones with all that cash, everyone would have it! And then it would cost us $1,000 for lunch, and suddenly all that money wouldn't seem so great. I think many of us look at grading the same way, and we are ticked when we don't get the high grade we feel we deserve. But how often do we think about the repurcussions of looser grading standards such that every modern was MS-70? Would this not have the same effect as a currency devaluation? Wouldn't all of our coins suddenly be worth less? Look at the many examples of third tier grading companies and the values they bring, would we want the same for NGC or PCGS? Now don't get me wrong, I want consistency and accuracy from any grading company, and they do make mistakes that legitimize our gripes, but next time you get a coin graded and it comes back MS-65 and you thought it should be an MS-66, ask yourself, is it really a 66, or is the fact that it's your coin adding a +1 point bias to your assessment. Just some food for thought after reading countless griping threads and so very few threads where the submitter say, wow, they got this group right on!

[Hoot]

I like to think that all of my coins should grade 1 point higher! But yes, it's true that just like the economic counterparts, inflation or deflation of grades have serious and significant consequences. Thus, it is logical to desire consistency as the thematic trait of good grading.

 

Still, all of my coins are undergraded.

 

Hoot

[Guest]

Good Point's . My method is this and never disappointing ( So Far ) , I buy coin's and send In Coin's with the expectation That If I'm Sending In a MS67 Then It will be returned as a MS65 or MS66 , If It come's back as What I oridiginaly thought It would be then that's just Icing on the cake , Or In this case Extra Luster On the coin .

I would say since there are not 2 or 3 other people grading the coin with me when I buy It , then the obvious conclusion that the grading company would be right In the Final Grade .

Of course there are always occasional mistake's and wrong grading's assigned to a coin , but I would think that that number would be very low .

As with human nature nothing Is 100% correct 100% of the time .

I would assume this Is why we can send It for a Regrade .

I don't work for a grading company , but I would think that when a coin is sent In for a regrade that the coin is question is looked at In a Slightly Different manner then It was the first time around .

About everyone having loads of cash , You are right about the consequences .

When the gold rush was at It's peak In Cal , you could buy a 5¢ breakfast for about $16 ( A Ounce of Gold ) .

Just my thought's about It .

 

P.S. When I say Grading Company's being Right about It I mean NGC - PCGS , Not the Grades for Cash Shop's .

 

 

[MarkFeld]

jtryka,

 

Interesting post!

 

I have discussed some of these thoughts with various dealer friends over a period of several years. This is my personal take on it, though simplified, quite a bit, for discussion purposes :

 

There is a certain amount of money out there (in the known universe) with which to buy rare coins and, at any one time, there is a population of coins which is the object of that money.

 

If, for example, all certified coins magically increased in grade by one point over night, their value would certainly be reduced significantly. Why? Because the same amount of money would be available for the same group/number of coins.

 

In the scenario above, unless the gradeflation was met with an increase in the amount of available funds with which to purchase those coins, their value would be reduced accordingly. Contrary to what some people might think, an increase in grades assigned to coins, doesn't have the same effect as printing money out of thin air. For every coin that goes up in grade, there is a proportional decrease in the overall value of each certified coin, all other factors being equal.

 

I see you posted on the other board so I will post this reply there, too.

 

 

[gmarguli]

It has nothing to do with looser grading standards. Who cares that if a coin that looks like it was run over by a truck is graded MS67 as long as every coin they grade MS67 looks like that. It's ONLY about consistency.

 

The problem occurs when a coin really is an MS66 and it is graded MS65. Yes, many of the people who complain about not getting the grade don't know how to grade themselves. However, there are many others that can grade with the best of them and still get off the wall grades.

 

I've cracked and had coins change grades by 2 POINTS. These were freshly graded coins that got cracked and resubmitted in a few weeks.

 

I understand they aren't perfect, but that doesn't mean I want to take a financial screwing because they want to increase their resubmissions by grading everything like an SOB.

 

I've complained a lot across the street about their inconsistent grading and phantom body bags. The usual response from the ostriches is that if I want a higher grade I should go to NGC. They never have a reply when I tell them that overall, NGC has been more brutal to me than PCGS, but it's that NGC has been consistently brutal to me while PCGS is all over the map. I can respect and work with consistent brutality, but not inconsistent brutality.

 

And yesterday on the other forum, I complained about getting a coin back graded too high. Yes, too HIGH. They graded it MS66 when it really was an MS65 and I expected them to grade it MS64. This coin will now go into the market place as a representative of MS66, yet when someone submits a coin just like it, instead of grading like this albatross as MS66 or the proper grade of MS65, it will likely grade MS64 and they will not understand it.

[BankNote1]

This has been a very though provoking thread! Maybe that is why I try to buy coins that have already been slabbed by NGC or PCGS! I also stay away from modern coins. IMO that is where the most confusion in grading seems to be. At least for me that is!!

[Guest]

Perhaps if you locate and give the coin grader a $50.00 tip under the table he will give you a higher grade for your coin.Has this ever happened???

 

Coinholeio

KINGKOIN KING OF KOINS

 

 

[Guest]

I can see your point's and I agree with them totally .

When It's people that are grading coin's there are always going to be Inconsistencies , whether It be them having a bad day or a good day or on someday's just sick of seeing so many coin's .

Which most collector's would say there are no such day's possible as seeing to many coin's .

As far as pcgs , I believe they are more worried about their reputation , then If a coin Is the exact grade It should be , I cant begin to count how many Undergraded pcgs coin's I have saw .

I believe The Only Thing that Is going to make Coin Grading Consistent is One Of two things :

Double the step's taken now In grading a single coin , which would not be cost effective In any way because no company could make enough profit .

Or Technology , Surely If we can put a man on the moon we can scan a coin for the perfect dimensions .

As It Is now , It's just one of the fact's that we have to deal with .

A MS63 to one guy Is a MS65 to other and vise versa .

No one like's It but only time will change the way It is now .

I hope I didn't put more then my two ¢ in

 

[GDJMSP]

In my opinion people who grade coins for a living are a whole lot less likely to make a mistake than the person who submitted the coin. Nobody's perfect - so the even the graders do make mistakes. But when a submitter is unhappy with the assigned grade - whether he thinks it too low or too high - I would first question the opinion of the submitter. There is a whole lot more to being accurate and consistent when it comes to grading to coins than most people realize.

 

It is pretty much human nature - that most folks think they know more about a given subject than they really do. So it is only natural for them to question the opinion of others when it is regarding a subject they think themselves to be knowledgeable about. But are they really ?

 

When you deal with a professional in any trade - and he or she gives you their opinion - do you always question it ? Usually not - unless you think you know something about the subject yourself. But when you do question it - how often are you right ? I'd wager not very often. The same is true with coin grading.

 

 

[Guest]

If your referring to me then your right , I gave nothing more then my opinion .

Which I guess Is what most of this thread is about .

I do know this though , most pro coin dealer's that want a coin a certain grade may send In the same coin many time's to get the grade they want ,

Which brings us back to the first post , Consistency and why Is the Same coin a Different Grade on a Different Day.

[GDJMSP]

I wasn't referring to you Rak - I wasn't referring to anyone in particular. On the contrary - I was referring to the vast majority of coin collectors - myself included. I've been following this pursuit now for over 40 years - and there is still a lot more that I don't know than there is that I do know. And as one progresses in coin collecting - you come to learn that.

 

Too many times people think they know more than they really do - especially regarding coin grading. And the first person that says - NOT ME - is the first person that needs to learn more.

 

Some think that because they have looked at 10 thousand coins - they know how to grade them. Well they don't. While it may be possible that some could learn it that easily - the vast majority can not. Ask the graders that post here - I'll ask em - how many coins have you seen or attempted to grade - in the entire time you have spent being involved with coins ? And I don't mean just as a grader - I mean since you first picked one up and looked at it.

 

When you hear the answers - then compare it to how many you have seen. Then tell me if you know how to grade better than the guys doing it for a living.

[GDJMSP]

I forgot to reply to your question there Rak. As to why a coin can be one grade one day and another the next. I only wish I knew. Based on what I do know of coin grading - it should not be possible. Nonetheless it happens.

 

Nothing would make me happier than to see consistency when it comes to coin grading. I don't mean 100% - that's never gonna happen. Sure - a different group of graders can end up with a 1 point difference every now and then. But for the most part - they should almost always arrive at the same grade.

 

And I believe that if all the grading companies were to come to an agreement and all of them agree to use the same set of standards and enforce those standards on all of their employees - and have some sort of an independent board of supervisiors to oversee all the graders in all of the companies - then perhaps we could see that consistency some day. As it is - we don't have it.

[jtryka]

As an equity analyst, I can fully appreciate the average folks questioning of experts. I can tell you many a horror story (actually they are usually pretty funny) of being questioned and completely ridiculed on the Yahoo message boards after I dare to say anything negative about someones favorite stock! Unfortunately, like the professional graders, I am not really allowed to defend myself to these attacks other than my official comments released to our clients.

[EVillageProwler]

Jeff,

 

What do you think of Stephen Friedman? And, do you think he'll have an impact on our economic recovery?

 

EVP

 

[jtryka]

EVP,

 

I am certainly not an economist, and by comparison to them, I have only a rudimentary understanding of economics. That disclaimer aside, I can't say a whole lot on Mr. Friedman, other than I know he was co-chairman with Robert Rubin at Goldman. Mr. Snow however is an interesting choice since he was chairman of a class I railroad, and can likely see the need for strengthening and weakening of the dollar (as an old economy guy he would see stronger dollar helping manufacturing, as a transport guy he would see weaker dollar helping imports). He's publicly made comments on the need for the dollar to weaken in the current environment which would cause some inflation but would also likely increase manufacturing and reduce unemployment. On the fiscal side, I would expect some stimulus, since the economy could use it, and since Greenspan's bag of tricks is just about empty. So far, the jury is still out in the market's opinion on these two, but we shall soon see what they have planned.

[Oldtrader3]

Back to the issue at hand. It know that it is very difficult to have an ideal environment to grade coins. Grading Services are after all businesses and the first priority of businesses is to make a profit.

 

If graders could be spared the internal politics of the owners, influential collectors and pressures of the Market Place, we might have a more consistant grading mix than we currently have. Maybe the ultimate destiny should be to have Grading Services become non-profit organizations, covering only their variable costs and overhead?

 

That would eliminate the economic pressures of Grading Services but not the pressures of influence and internal politics. The human element however, remains static in the equation. Having been involved with Manufacturing Plant Management for many years, I certainly am aware that even the best intentioned, most dedicated humans have bad days.

 

That having been said, I quess the best that we can hope for is to minimize the internal pressures and politics of Grading Services. I must say that IMHO, NGC does a better job of filtering these elements than PCGS sometimes does. As for the human element of grading, it will always be with us until the process can be automated.