AM I MISUNDERSTANDING MARKET ADJUSTMENT

[copper toning]

I recently had a few comments on a coin that stated they felt the coin was a slider with choice plus eye appeal. (do you agree ms 62/ can you spare a grade)

 

The comment as I understand it was that the 62 grade was a market adjustment. The grader applied a grade to the coin based on what he/she felt it was worth despite the actual grade.

 

Am I understanding this correctly?

 

Does this happen?

 

If so does this occur on only what the grader perceives as low grade coins?

 

Does this occur on high end coins to protect low pop value?

 

Maybe I am just confused by the answer.

 

 

 

 

[RWB]

Some do not like the idea that a nice AU coin can be more attractive, and sell for more than a strictly uncirculated coin that is banged up. All the rest are just adjectives of justification.

[DaveG]

Supposedly, there are/were two "schools" of grading: technical and market.

 

"Technical" means you give the coin a grade based strictly on your grading criteria.

 

"Market" means you give the coin a grade that it will sell for in the market.

 

For example, you grade a coin based on its strike, luster and lack of marks; but it has ugly toning (which isn't one of your grading factors). Therefore, although it's a technical MS-65, you give it an MS-64 because that's the price it would fetch in the marketplace.

 

My understanding is that technical grading is somewhat archaic and market grading is more common now.

[PerryHall]

From what I've seen, all the grading services use market grading. For example, most Indian $2 1/2 and $5 gold coins in PCGS or NGC MS61 and 62 slabs have light wear on the high points and technically should be graded AU58.

[BillJones]

If strict technical grading were applied to $5 Indian gold pieces, there are very, very few Mint State coins on the market. This type is by far the toughest coin to find in strict Mint State in the eight piece gold type set. From my perspective these coins became technical grade AU pieces almost as soon as they are stacked on top of each other because of the Indian’s cheekbone. The fields were also very prone to marks and a rubs because they were the highest apart of the design.

 

One of the goals of third party grading (TPG) was that coins could be sold in a more “generic” fashion. Some people even dreamed of an active sight unseen market when willing buyers would pay strong prices without seeing the coins. Things have not worked out that way, but to the extent where the low end Mint State grades have been used to reflect market prices, the slab grades have been used that way.

 

Sometimes collectors place too much emphasis on a slight rub IMO. How is a slight rub worse than big bag mark or scrape? Yet our definitions of “Mint State” accept the bag mark, scrape or light edge ding, yet strongly penalize the rub.

 

I merely throw this out as food for thought.

 

[copper toning]

It seems the tpg's have taken in consideration to what you are saying as far grading particular series in a certain manor. By no means do I know gold as I do not collect any. How ever I do know that strike for known weak dates are forgiven to an extent in the wheat/walker series. Perhaps the indians need special attention given to the sliders/ms due to design flaws.

 

Also for the most part au58 coins I have encountered were obvious au's. It just seems a little wild to me that a grader would place a value on a coin to help determine grade. Just score the coin and let the market place take care of the rest.

[copper toning]

Bill what books have you authored? I would like to check them out.

[BillJones]

It is hard to do this photos, but I'll try to illustrate my point.

 

This 1909 half eagle, which was once in my collection, was in an MS-63 holder. I viewed it as an AU-58. I bought this when I was in high school, and it was the best one I could find after looking for over a year. It was graded "Unc." when I bought it, but I viewed as an AU then. Back in the mid 1960s when I bought it cost $45.

 

 

This 1913 half eagle, which is in my collection, is in an MS-64 holder. I grade this coin as a full Mint State piece and agree with the MS-64 grade.

 

[copper toning]

Do you have an example of an AU58 coin for referance. Again I am gold stupid!!

[BillJones]

Sorry, I don't have a picture of an AU-58 $5 Indian.

 

Here is an AU-58 $2.50 Indian graded by me. These coins are not as tough to find in true Mint State as the $5 Indians, but they are harder to find than $2.50 Liberty coin.

 

Here is a 1925-D in AU-58 or some might call it 55.

 

 

Here is one in MS-66.

 

[BillJones]

Here is another example of what might be called "market grading." This 1860-D hafl eagle is in an MS-62 holder. Some might say "AU-59" because of the fields, but Dahlonega gold is tough in grades like this.

 

Doug Winter, who is an expert dealer in this field approved of this coin when I showed it to him.

 

 

And this 1858-D gold dollar, purchased from Doug Winter, is in an MS-61 holder. It has a CAC sticker.

 

[Kurtdog]

The comment as I understand it was that the 62 grade was a market adjustment. The grader applied a grade to the coin based on what he/she felt it was worth despite the actual grade.

Welcome to market grading.

[Oldtrader3]

I collected the Coronet half eagles for many years but only have a few remaining now. The bottom line with this series is not that much different than with the Pratt gold half eagles which are harder to grade certainly but gold is soft and will rub even with stacking because the rims are below the devices often. Finding mint state half eagles even in the short set (after 1900) is sometimes difficult because most half eagles and heavier gold coins have a rub somwhere in the hair or on the eagle's wingtips.

 

In today's marketplace for coins, all AU58 slider are not equal and collectors will pay a sliding scale of money for nicer than usual sliders that otherwise look like MS62 coins. They sell for the same price. This creates a trap for collectors who have to know how to separate on grading the lackluster BU coins from the lustrous sliders, both of which will be graded or possibly graded as MS62.

 

This accomodation for slider pricing up to MS62 makes this market grading and adds a liquidity function to keep coins trading at resonable prices for their assigned grades. It has become a fact of life that Market Grading is here to stay and is presently the only alternative that fairly prices these coins which are in this pitfall area of AU58 to MS62. They are not equal sometimes but are priced for what they are.

[James_OldeTowne]

If strict technical grading were applied to $5 Indian gold pieces, there are very, very few Mint State coins on the market.

This is an incredibly true statement. Virtually not one single $5 I've ever seen certified as MS-62 was without highpoint friction. Of course, "they" will claim that it's bag friction, roll friction, or some other kind of special "mystery" friction, just as is the case with bust half-dollars.

 

Sadly, MANY certifed as MS-63 also have friction. It is a little frustrating to anyone with at least some purist perspective.

[FishyOne]

High point friction or "rubs" on pieces that otherwise warrant an MS64 grade? Yeah, I'm fine with those in a 62 holder.

 

It all depends on the coin. Market-grading is fine 99% of the time, i.e. in most cases, strict technical grading doesn't make sense (to me).

[RWB]

Stating that "something" is "this" when it is in reality "that" is misleading.

[Mr.Mcknowitall]

High point friction or "rubs" on pieces that otherwise warrant an MS64 grade? Yeah, I'm fine with those in a 62 holder.

 

It all depends on the coin. Market-grading is fine 99% of the time, i.e. in most cases, strict technical grading doesn't make sense (to me).

 

While I understand the comment, I do not understand why strict technical grading does not make sense.

 

Is the comment referring to monetary gain (or loss), or to numismatic pursuit?

 

Market grading fine 99% of the time; is this a general numismatic observation that means the market and technical grading are the same, or is fine only for the monetary evaluation of the coin?

 

Respectfully,

John Curlis

[copper toning]

Grade technical. Then allow the market place to determine value. Why else would the saying be BY THE COIN NOT THE HOLDER. I need a grader to grade. I Need my collecting buddies to determine value. From what I am gathering market adjustment leaves to much opinion in the grading. Which there is already enough of. This can also give dealers to much room to talk down our certified coins. Or talk up there's. We have all seen this from time to time.

[FishyOne]

High point friction or "rubs" on pieces that otherwise warrant an MS64 grade? Yeah, I'm fine with those in a 62 holder.

 

It all depends on the coin. Market-grading is fine 99% of the time, i.e. in most cases, strict technical grading doesn't make sense (to me).

 

While I understand the comment, I do not understand why strict technical grading does not make sense.

 

Is the comment referring to monetary gain (or loss), or to numismatic pursuit?

 

Market grading fine 99% of the time; is this a general numismatic observation that means the market and technical grading are the same, or is fine only for the monetary evaluation of the coin?

 

Respectfully,

John Curlis

 

Because grading is subjective. If coin grading was 100% objective and quantifiable, then technical grading would make sense. To me the monetary value is not the main factor. It's intrinsic numismatic value regardless of money.

 

No one really knows what happened to a coin 100 years ago. Did it really "circulate" or was it simply handled in a collection creating rubs? Technical grading removes a factor in eye appeal that can't be replicated. That doesn't make sense.

[BillJones]

Okay, maybe we need new, larger slab labels that can read like this.

 

"AU-58, however because of excellent eye appeal this coin has the market value of a low end Mint State coin."

 

"MS-61, however the value of this piece is little better than Choice AU because of spots and bag marks."

 

The intent of third party grading was to put some limit on the "dead beat" aspect of numismatic marketing that hurt so many collectors with less than perfect grading skills.

 

A small rub is only one numismatic defect. When you overemphasize it by pricing things strictly with technical grades, you not providing the full picture of numismatic value.

 

[Mr.Mcknowitall]

High point friction or "rubs" on pieces that otherwise warrant an MS64 grade? Yeah, I'm fine with those in a 62 holder.

 

It all depends on the coin. Market-grading is fine 99% of the time, i.e. in most cases, strict technical grading doesn't make sense (to me).

 

While I understand the comment, I do not understand why strict technical grading does not make sense.

 

Is the comment referring to monetary gain (or loss), or to numismatic pursuit?

 

Market grading fine 99% of the time; is this a general numismatic observation that means the market and technical grading are the same, or is fine only for the monetary evaluation of the coin?

 

Respectfully,

John Curlis

 

Because grading is subjective. If coin grading was 100% objective and quantifiable, then technical grading would make sense. To me the monetary value is not the main factor. It's intrinsic numismatic value regardless of money.

 

No one really knows what happened to a coin 100 years ago. Did it really "circulate" or was it simply handled in a collection creating rubs? Technical grading removes a factor in eye appeal that can't be replicated. That doesn't make sense.

 

Thank you for your thoughts.

 

But (of course), this does not answer the core observation re. technical grading.

Yes, grading is subjective. So is the market.

 

Strict technical grading is used by both Buyer and Seller to their individual advantage (or disdain).

 

The basis of any subjective opinion is based on a technical foundation.

 

The Market certainly determines subjective value. The original comment was based on high point friction or rubs. The present comment changes the focus of the comment to "...did it or didn't it...". This is more of an ojective pursuit.

 

From my less than adequate personal numismatic pursuits, STRICT technical grading allows for a level playing ground. How does a coin that meets my personal criteria of eye appeal trump yours, as a technical observation?

 

This would require that everyone have the exact same depth/color/sharpness/brightness/etc. capability of sight.

 

I am sorry if I offend, but (blah blah) I adamantly disagree that strict technical grading "removes" a factor in eye appeal that can't be replicated. It simply levels the foundation. The numismatic Architect now has the license of personal freedom to decide the aesthetic nature of the numismatic Building to be placed on the Foundation.

 

If monetary value is not the main factor, then strict technical grading is the logical choice.

 

I know, useless muttering by me, and I apologize. Its the Logic thing that always gets me in trouble.

 

Respectfully and Sincerely,

John Curlis

 

[FishyOne]

.....but since even strict technical grading is subjective, doesn't market grading always play a role?

 

I understand your point, and from a purists point of view it seems to be best, but reality has brought market grading into play for decades now.

 

I remember a few years ago when NGC explained that "rubs" would be factored into MS grades as contact marks. Caused a mini-uproar but they were only stating what had been occurring for years. I appreciated their honesty.

 

I'm fine with a 58 that is a light rub from a 64 being placed into a 61 holder. I realize others would prefer otherwise.

 

Another issue is the gorgeously toned 66 in a 67 holder. Same concept.

[copper toning]

I am not saying at all that a technical grade should be the end all when placing value. I am saying that that the technical grade is what is.

 

For those of us who are limited at grading skill we should not have to determine what the market adjustment may have been for a particular coin. If any.

 

We should take the grade for what it is and then place our own value based on the eye appeal we like. Especially since eye appeal can be very different for everyone. As a toned collector I know this is very true.

 

We have all seen the 63's that went for 65 money and vice versa. That is what I am talking about. These coins had tech grade set aside and the bidders bought do to eye appeal something they saw disregarding the grade.

[copper toning]

Bill I am still very interested in checking out your writing.

[copper toning]

Well put. Your wording states my opinion clearly. From now on I will PM you my thoughts and let you reply for .

[physics-fan3.14]

Below is an excerpt from my book-in-progress, "The Art and Science of Grading Coins." I hope you find the passage helpful, and it may serve to clear up some of this confusion:

There are two major schools of thought when it comes to grading: Technical and Market grading. There has been discussion for many years about what each means, and I will attempt to clear up any confusion. Jim Halperin, founder of Heritage Auction Galleries, defines technical grading as “A system of grading which only takes into account that which has happened to a coin after the minting process (i.e. the state of preservation). Technical graders often ignore strike and eye-appeal.” The technical grade only takes into account the marks, rub, and hits that the coin has suffered – it nearly completely disregards the other factors we have been discussing. Confusion about technical grading stems from the fact that characteristics such as strike and luster are “technical” in nature, not subjective like eye appeal. As an aside, Jim Halperin’s excellent and foundational book on grading can be read in full at www.coingrading.com.

[copper toning]

.....but since even strict technical grading is subjective, doesn't market grading always play a role?

 

I understand your point, and from a purists point of view it seems to be best, but reality has brought market grading into play for decades now.

 

I remember a few years ago when NGC explained that "rubs" would be factored into MS grades as contact marks. Caused a mini-uproar but they were only stating what had been occurring for years. I appreciated their honesty.

 

I'm fine with a 58 that is a light rub from a 64 being placed into a 61 holder. I realize others would prefer otherwise.

 

Another issue is the gorgeously toned 66 in a 67 holder. Same concept.

 

I thought that ngc/pcgs state that eye appeal does add or subtract from a grade in MS coins. I believe they may even stated how much it may raise or lower a grade 1/4 point-1 point not sure what it is. However they do not state that eye appeal can take a slightly circulated coin to MS.

[Mr.Mcknowitall]

Well put. Your wording states my opinion clearly. From now on I will PM you my thoughts and let you reply for .

 

Please, please don't do that- I already get in enough trouble without questioning fisics.

 

If you innocently start supporting my illogical Logic, then fisics will just be another Pi in my face.

 

Fisics and Logic don't seem to mix. If we start throwing opinions into the Ring, there will be no end of the Book.

 

Better to be a 2009 Star than agree with me and be a 2012 PITA.

 

I do sincerely appreciate your kind words, though.

 

Respectfully,

John Curlis

[michael]

correct

 

the services never grade coins as most all of the submitters already know the grade within reason as grading is subjective

 

so the services have never yet graded a coin

 

but they do price coins and so they priced your coin

 

i have yet to see ANYONE truly send in a coin to the services to get their subjective grade opinion

 

as

 

the coin

 

is only sent to the services for pricing and this ties in with

ease of sale

more demand etc

a score to sell a coin for way more than it is truly worth due to the holder

 

ever see a proof 70 graded coin in a holder that is worth less/lots less out of the holder??

 

pcgs professional coin grading service

 

pcps professional coin pricing service correct

 

and there is nothing legally wrong with sending in coins to be priced

 

just wake up and understand the game ( pricing the coin in a sonically sealed slab usually increases the demand, marketability ie. price)

[copper toning]

correct

 

the services never grade coins as most all of the submitters already know the grade within reason as grading is subjective

 

so the services have never yet graded a coin

 

but they do price coins and so they priced your coin

 

i have yet to see ANYONE truly send in a coin to the services to get their subjective grade opinion

 

as

 

the coin

 

is only sent to the services for pricing and this ties in with

ease of sale

more demand etc

a score to sell a coin for way more than it is truly worth due to the holder

 

ever see a proof 70 graded coin in a holder that is worth less/lots less out of the holder??

 

pcgs professional coin grading service

 

pcps professional coin pricing service correct

 

and there is nothing legally wrong with sending in coins to be priced

 

just wake up and understand the game ( pricing the coin in a sonically sealed slab usually increases the demand, marketability ie. price)

 

I am sorry but that spew you just threw out makes no sense at all!!!

 

Coins get busted out all the time to become more valuable and marketable.

 

Granted I had my own reasons for grading this coin since a 1911 does not get graded for monetary reasons. Still this is an example of a coin that if I sold to a dealer would likely be cracked out since the 62 holder would would more difficult to sell than the raw coin.

 

The services never grade? Only price? Only reason to grade is to establish value? All submitters know the grade of their coin?

 

If the last statement were true the why don't we all save our money since we also should know value to. The fact that that statement is so false is why the tpg came to exist. Sheesh you must post more than you collect.