The scariest thread I've ever seen on the PCGS forum - to the tune of $37,000!

[James_OldeTowne]

I rarely browse the PCGS forum, but was sent an email about an incident from a numismatic friend who was supportive during the infamous Norweb Hibernia incident. This PCGS thread makes my Norweb disaster look like a mild case of nausea by comparison. It's a fiasco in the making. I hope everyone who collects coins reads about a $46,000 coin becoming a $83,000 coin at the hands of a PCGS grade.

 

This is the kind of incident that can make it difficult to want to stay in coins.

 

James

[goose3]

Holy Cow!

 

How'd you like to be the guy that sold it at FUN right about now??

[Hoot]

And there's a similar thread about a 1797 dollar going from PCGS 53 to NGC 58. Link. I have to wonder how much of this is gradeflation and how much is experience over time? (Although, I'd agree that the dime you point to is clearly AU. The dollar's pics are too tough for me to tell, but some big guns have chimed in on that one, some saying it's not even AU!) I believe this early material is quite difficult to grade. The minting process was so very different at that time, it's tough to get in the mindset of understanding the subtle characteristics such as weakness of strike, rub, wear, and planchet conditions on coins from that period.

 

Hoot

[Merc]

I have seen several posts were the coin gets regraded at a higher grade. Certainly, many coins must go in for a grade review that have been overgraded and get downgraded. I never see posts of coins that go from a MS62 to and AU58. I am sure it happens, but people don't talk about it.

[truthteller]

This is a good example of why you should never buy a coin in an MS62 grade or lower. Since the grading services can grade the same coin up to MS70 one day. Buy all coins in MS68 or MS69, then there is little chance for grade inflation.

 

 

 

TRUTH

[gmarguli]

The dollar's pics are too tough for me to tell, but some big guns have chimed in on that one, some saying it's not even AU!

 

I'd like those "big guns" to sell me some raw coins like this at EF money. Or perhaps it's not even EF in tehir opinion? I'll pay VF money for these coins also.

 

 

 

I never see posts of coins that go from a MS62 to and AU58. I am sure it happens, but people don't talk about it.

 

It happens, but usually on crack outs, not regrades. AU58/MS62 is frequently a more subjective grade than splitting higher MS grades.

[James_OldeTowne]

((( And there's a similar thread about a 1797 dollar going from PCGS 53 to NGC 58 )))

 

Hoot, I think that's a different issue. Two separate grading services can justifiably have different grading standards for certain series. It could easily be an accurate AU-55 coin that PCGS was too conservative on by 2 points, and NGC to liberal on by 3 points. But that's based on two different grading standards. Either way, the value of that particular coin should only vary by say $6000 - $8000.

 

But in the case I linked, the same service graded a coin with a difference in value of almost $40,000! That's inconceivable! Did their own grading standards "change"? Or was there some reason the coin suddenly jumped in value by $40,000? To put it in perspective, my entire inventory is only worth about $75,000.

 

It surely implies a certain level of (1) gross negligence, or (2) fraudulent activity. I am sorry to have to be so blunt, but "professional" graders who work at the same company, allegedly applying the same grading rules, simply do not make $40,000 mistakes, especially on such an esoteric coin!

 

I can easily see where two completely separate companies with completely separate grading standards and a completely different set of employees can show a five point swing between each other. That happens frequently! Say, from EF-40 to EF-45, or AU-53 to AU-58, a change of five points, but you're still within the same grading tier. But to go from AU to UNC (and nearly CHOICE UNC at that) is just unforgiveable. The only two possiblities are that the grading firm is incredibly inept, in which case they shouldn't be in business, OR, there is some motive behind the sudden change in grade or grading standard.

 

I don't have a clue who the original seller is, but at $46,000 compared to $83,000, it seems to me he got gypped out of $37,000, and the blame lies solely with PCGS!

 

James

[chinook]

This is a good example of why you should never buy a coin in an MS62 grade or lower. Since the grading services can grade the same coin up to MS70 one day. Buy all coins in MS68 or MS69, then there is little chance for grade inflation.

 

 

 

TRUTH

 

 

The 97 dollar looks every bit of AU to me. I really dont see any major marks that would justify the 53 grade, but it is hard to tell from the pics.

 

I try to stay away from the 60, 61, 62 grades. Most of those coins are too ugly anyway, but there are of course exceptions. I will either go for the 63 or better if I can afford it or a 58. I would love to have that 97 dollar

[Oldtrader3]

James: From Heritage's usual (lousy) picture it is hard for me to tell if it is actually the same coin. The original ANR photo shows pretty complete mint luster. The Heritage coin looks AU. I wonder how Heritage continues to stay in business operating in such a slipshod fashion, especially with an $80K coin? I assume that your friend must have an inside track on the miraculous conversion via PCGS (coin vs. coin).

 

The unfortunate fact is that in today's loosy goosy market grading environment, AU58 coins become MS62/63 coins often. In any event, the Heritage buyer must be sweating bullets.

[HaydenTubbs]

I've always wondered why Heritage puts little effort in taking nice pics,even though it's clearly an AU-58,it looks a whole lot worse in Heritage's pic.

[Tradedollarnut]

It surely implies a certain level of (1) gross negligence, or (2) fraudulent activity. I am sorry to have to be so blunt, but "professional" graders who work at the same company, allegedly applying the same grading rules, simply do not make $40,000 mistakes, especially on such an esoteric coin!

 

! This is a pretty silly statement. The AU58 value and MS62 value can be interchangeable at any moment, as well as the grade. PCGS doesn't control the bidding at Heritage. I've seen plenty of AU58's sell for 61/62 money. And how do we know that the purchaser didn't view the coin as a shot 63 and thus paid a huge premium for it?

 

AU58 thru AU63 is a big conglomeration. To throw around charges of fraud or negligence over the interpretation of cabinet friction vs circulation wear is stupid.

[jom]

I've seen plenty of AU58's sell for 61/62 money

 

Yep. I do it all the time.

 

I don't know anything about this particular coin but it's likely the coin was just PQ. Remember PQ does NOT necessarily mean it's the next grade up. It just a very nice AU58 (or whatever) and could very well be worth more (or a LOT more) than a coin graded a number of points higher. Quality and grade are NOT the same thing regardless how many people want them to be.

 

jom

[James_OldeTowne]

((( It surely implies a certain level of (1) gross negligence, or (2) fraudulent activity. I am sorry to have to be so blunt, but "professional" graders who work at the same company, allegedly applying the same grading rules, simply do not make $37,000 mistakes, especially on such an esoteric coin!

 

! This is a pretty silly statement. The AU58 value and MS62 value can be interchangeable at any moment, as well as the grade.)))

 

tradedollarnut, I have no idea how you can possibly support that stance rationally - as it pertains to a 1798 dime with a value difference in those two grades of $37,000. A coin worth $10 in AU-58, and $15 in MS-62, sure, I can see the benefit of the doubt. But there is no way the self-proclaimed "world's best grading service" makes a $37,000 "error" in a coin's grade. If they do, then why would you ever by a coin in their slabs?

 

So, if I believe that it was not a "mistake", then how could it happen that the grade of a coin shifts by $37,000? "Intent is just one of several possiblities. But a "clerical error" because the grades are "interchangeable"?? Now who's making silly statements?!

 

(((PCGS doesn't control the bidding at Heritage. I've seen plenty of AU58's sell for 61/62 money. And how do we know that the purchaser didn't view the coin as a shot 63 and thus paid a huge premium for it?)))

 

Purely academic questions! The finality is that the value of the coin has shifted by $37,000. Only two significant issues have changed. (1) the grade of the coin. (2) the time and place of the sale.

 

I find it extremely believable that the same approximate population of bidders were interested in the coin the second time around as the first. I mean, how many bidders out there twiddling their thumbs until a beautifully toned MS-62 1798 dime comes along?

 

We're not talking about an 1881-S Morgan dollar!

 

So, IF I believe that the only significant change has been the shift in the coin's grade, then your darned right I believe that is what led to the highly inflated winning bid (as compared to the previous winning bid).

 

where were these mystery high-roller bidders the FIRST time around then? As stated previously, these coins don't just drop out of thin air! There's a very limited population of collectors pursuing a coin like this, and it's astounding that they weren't interested in the coin when it was in a cheaper grade!

 

AU58 thru AU63 is a big conglomeration. To throw around charges of fraud or negligence over the interpretation of cabinet friction vs circulation wear is stupid.

 

Sorry, but it's stupider to bury one's head in the sand! And NOT to question possible motives in the $37,000 shift in value of something is stupider still!!

 

You've jumped to the conclusion that I'm accusing PCGS of fraud. That is not true. But I do believe fraudulent activity could easily be a more plausible explanation than the coin suddenly losing friction and going up in grade - to the tune of $37,000.

 

And the original seller of the coin at AU-58 has been deeply wronged by this "mistake".

 

James

[James_OldeTowne]

I've seen plenty of AU58's sell for 61/62 money

 

Yep. I do it all the time.

 

I don't know anything about this particular coin but it's likely the coin was just PQ. Remember PQ does NOT necessarily mean it's the next grade up. It just a very nice AU58 (or whatever) and could very well be worth more (or a LOT more) than a coin graded a number of points higher. Quality and grade are NOT the same thing regardless how many people want them to be.

 

I can't disagree with that at all - to a certain extent. But if it's PQ now at MS-62, then it was PQ then at AU-58. It's an amazing coincidence that NONE of the bidders in the $45,000 to $85,000, and there can't be a whole lot of them, were interested in the coin a few months ago, don't you think?

 

James

[Tradedollarnut]

A few pertinent points:

 

1) It's my understanding that the coin was originally sold in an old green holder. This means it easily could have been graded 10 years ago. Grading standards regarding 'cabinet friction' vs 'circulation wear' have evolved over time. A coin is only guaranteed to be graded to the standard in effect at the time of grading. How could it be otherwise??? Is it the TPG's fault if someone sells a first generation holder at the PR65 grade when by current standards it's an upgrade? Is it the TPG's fault if someone sells a coin graded BEFORE they added the cameo designation for too little because they didn't add a premium for the cameo? An interesting concept - trying to go back and apply today's standards to coins graded two decades ago.

 

2) How about the infamous FBL Franklin half that sold for $69,000 at auction and then a few months later sold for $46,000? Or perhaps the PR70DCAM cent that sold for a few thousand and then for $40,000? And a multitude of other coins with significant swings in value between auctions? Doesn't this illustrate that time and place is a more important factor than you are allowing?

 

3) What is the market value of an AU58 graded bust coin? Please point to a published number. You can't ... because it depends on the coin and the buyer. I've seen them go for a slight premium over AU50 money and I've seen them go for MS63 and up money. It just depends on the exact circumstance of the sale. You simply can't point to this one sale and throw around the words fraud and negligence.

 

4) How would it affect your thinking if the buyer in each case had a top bid of $100,000 but in the first case the seller's reserve was $40,000 and in the second case it was $75,000? Buyer was willing to pay the same amount, yet it sold for unequal amounts because the seller was willing to sell it for less. Hmmm.

[James_OldeTowne]

(((1) It's my understanding that the coin was originally sold in an old green holder. This means it easily could have been graded 10 years ago. Grading standards regarding 'cabinet friction' vs 'circulation wear' have evolved over time. A coin is only guaranteed to be graded to the standard in effect at the time of grading. How could it be otherwise??? Is it the TPG's fault if someone sells a first generation holder at the PR65 grade when by current standards it's an upgrade? Is it the TPG's fault if someone sells a coin graded BEFORE they added the cameo designation for too little because they didn't add a premium for the cameo? An interesting concept - trying to go back and apply today's standards to coins graded two decades ago.)))

 

It just so happens that I have "The Official Guide to Coin Grading and Counterfeit Detection", published in 1997 (eight years ago, or contemporary with when the coin was allegedly first slabbed). Here is an exact (as far as my typing ability allows) quote from page 120 for "Draped Bust Dime - Small Eagle/Heraldic (Large) Eagle (1796 - 1807):

 

"AU-55/58 Draped Bust dimes have slight wear on the cheek, the hair around the ear, the bust, and the shoulder. ... The reverse will have slight friction on the wreath, head, breast, and leg of the Small Eagle coins...". Now, the PCGS definition of MS-62 is on page 26, and I have read it very carefully. Nowhere does it allow for even "slight wear". Additionally, on page 5, it very clearly states the following for MS-60, MS-61 AND MS-62: "No wear." So I must point out that your previous comment about "AU58 value and MS62 value can be interchangeable at any moment" is just plain ridiculous - according to PCGS' own grading standard.

 

Then you state that "A coin is only guaranteed to be graded to the standard in effect at the time of grading". Are you saying that the standard for a circulated versus non-circulated grades has changed? To where "non-circulated" now means it can be "slightly circulated"? And if this is true, is that really a company that I want to have grading my coins??

 

Furthermore, I've reviewed my copy of the PCGS guarantee very carefully, and maybe mine's out of date, nowhere does it state that "A coin is only guaranteed to be graded to the standard in effect at the time of grading". In fact, David Hall has clearly stated that grading standards at PCGS have never changed. Furthermore, if such a "guarantee" statement of what you say were in effect, it would surely be fraudulent, because there's no date on the slabbed grades (that I'm aware of), so no way of proving when and to which standards the coin was graded to!

 

I sure find this apparent contradiction to be confusing!

 

(((How about the infamous FBL Franklin half that sold for $69,000 at auction and then a few months later sold for $46,000? Or perhaps the PR70DCAM cent that sold for a few thousand and then for $40,000?))) Did the grades on those coins change? Those examples have no relevance here. Please give examples of coins where the grade of a classic rarity has, for instance, gone DOWN while the grade shifted UP from "slightly worn" to "not worn"!

 

(((What is the market value of an AU58 graded bust coin? Please point to a published number. You can't ... because it depends on the coin and the buyer. I've seen them go for a slight premium over AU50 money and I've seen them go for MS63 and up money. It just depends on the exact circumstance of the sale. You simply can't point to this one sale and throw around the words fraud and negligence. )))

 

Your question has nothing to do with the issue here! This issue involves a single coin with two different grades! The "market value" is not the issue, it's the radical change in grade, which precipitated a radical change in market value that is at issue.

 

(((4) How would it affect your thinking if the buyer in each case had a top bid of $100,000 but in the first case the seller's reserve was $40,000 and in the second case it was $75,000? Buyer was willing to pay the same amount, yet it sold for unequal amounts because the seller was willing to sell it for less. Hmmm. )))

 

Same answer, this has nothing whatsoever to do with the fact that the coin's grade has changed, and I'm sorry, but AU-58 to MS-62 on a toned 1798 bust dime is a radical change.

 

Maybe you'll change my mind if you could state that every AU-58 in an old green holder is actually an MS-62 in the new blue holders, but I would have serious issues with such a concept.

 

James

[Oldtrader3]

IMHO, there is also some "good ole boy" cronyism in this hobby as well. Many high rarity coins with important collector provenence are considered by many to be in over-graded holders. James has first hand experience with PCGS in this matter. I just hope that this was not the case with this coin.

[Tradedollarnut]

So I must point out that your previous comment about "AU58 value and MS62 value can be interchangeable at any moment" is just plain ridiculous

 

I'm sorry, but you are wrong. I've seen plenty of AU58 coins sell for MS62 money. So have others. It all depends on what value the buyer and seller place on the coin.

 

The "market value" is not the issue, it's the radical change in grade, which precipitated a radical change in market value that is at issue.

 

You are making the erroneous assumption that the grade change is solely responsible for the change in sale price. Per my quoted example, dramatic swings in price can occur between auctions with absolutely no change in the holder - so how can you point to this one instance and say it's all about the grade? I once bought an early proof seated half for $23,000 at auction, got it upgraded and sold it at the next auction for $18,400. Was that all about the grade as well? Any attorney worth his salt would use these [and a multitude of other examples] to totally destroy your supposition that the original seller was harmed simply because his coin sold for two different values at two different auctions.

 

 

Please remember to have a solid basis in fact before spouting 'fraud and negligence'.

[James_OldeTowne]

(((So I must point out that your previous comment about "AU58 value and MS62 value can be interchangeable at any moment" is just plain ridiculous

 

I'm sorry, but you are wrong. I've seen plenty of AU58 coins sell for MS62 money. So have others. It all depends on what value the buyer and seller place on the coin. )))

 

How many of them had a $40,000 value difference between the grades of AU-58 and MS-62.

 

Why you are blurring the two issues? An AU-58 that sells for MS-62 money, I have NO problem with that! But a coin in a PCGS holder that states AU-58, then later states MS-62 is a big problem! Especially when that is what caused the value to change by $37,000!!!!!

 

Sorry, but you cannot gloss over the fact that PCGS screwed up, and because of their screw up, the person who undersold the coin at AU-58 is out $37,000.

 

(((The "market value" is not the issue, it's the radical change in grade, which precipitated a radical change in market value that is at issue.

 

You are making the erroneous assumption that the grade change is solely responsible for the change in sale price. )))

 

Please go back and re-read, as I have explained why it is a valid assumption in this case. Again, we're not talking about an 1881-S Morgan sliding from AU-58 to MS-62, or an 1911 Barber dime. It is unforgiveable that "the best professional grading service" can make a $37,000 grading error on a coin, especially one of that caliber. UNFORGIVEABLE!

 

(((Any attorney worth his salt would use these [and a multitude of other examples] to totally destroy your supposition that the original seller was harmed simply because his coin sold for two different values at two different auctions)))

 

Now who's being completely silly! All you have to do is have that wonderful attorney of yours discuss the issue with the guy who lost $37,000 due to PCGS' negligence!

 

Here's a simple definition of negligence: failure to exercise the degree of care expected of a person of ordinary prudence in like circumstances in protecting others from a foreseeable and unreasonable risk of harm

 

There is no rational argument you can give that defends PCGS's sudden determination that a $40,000/$80,000 coin's grade has changed by four points (which is A LOT OF POINTS in the AU/UNC range), and not admit that they were negligent. And spouting off about what fictional attorneys would or wouldn't do is just not a rational argument.

 

I am curious as to why you are so defensive, and so concerned about this single NGC thread, when you haven't contributed much to other threads in the past couple of months. Is it possible that some of your PCGS graded MS-62 Trade Dollars are really AU-58s? Or maybe, since four points is not big deal, some of your MS-66 coins really grade MS-62.....

 

James

[Tradedollarnut]

James: you really are being silly. First off, I have no MS62 trade dollars. Second, the line between AU58 and MS62 is very fine and crossed all the time back and forth - it's one of the hardest determinations to make in grading coins. Frankly, I'm surprised that a 'coin dealer' doesn't have this knowledge. Third, saying that PCGS [or any TPG] 'screwed up' because they graded a coin AU58 ten years ago and MS62 today is laughable.

 

Why so concerned about this thread? Because your position amuses me.

[EZ_E]

The only way that I can make sense of PCGS's position or any other TPGS's is that the holder's grade sets the market value and not necessarily the actual grade of the coin.

 

Both TDN and James have valid points but unless we know the mind of the graders, it is all supposition anyway.

 

Granted, by definition rub precludes a coin from the uncirculated grade. And, by definition, is cabinet friction acceptable for a mint state grade? It depends upon what the market accepts. Who is the market? We collectors and dealers. So if this practice was unacceptable then market grading would collapse since the coins would no longer be purchased by the public.

 

As I mentioned in an earlier thread, I would rather pay the same money for a monster AU 58 coin than for a mediocre low mint state coin.

 

p.s. TDN, great taste for not purchasing MS62 TD's! It is too big of a coin to have any eye-appeal for that low of a grade, IMHO.

 

p.p.s. This thread also brings to mind an old thread that Jeff Tryka started quite a while back: price vs. value.

 

I see no value in the above mentioned half-dime with its current price.

[James_OldeTowne]

(((James: you really are being silly. First off, I have no MS62 trade dollars.)))

 

I assumed as much, and of course I was just being silly.

 

((( Second, the line between AU58 and MS62 is very fine and crossed all the time back and forth - it's one of the hardest determinations to make in grading coins. Frankly, I'm surprised that a 'coin dealer' doesn't have this knowledge)))

 

That's what you are saying, and may be that's what 'coin dealer's are saying (though frankly, I'd love to see where you see and hear this "all the time"), but PCGS' own published standards state otherwise, as I quoted above. And I'm sorry, but you've just not shown how a professional grading service can't be held responsible for grading by their own published grading standards. There's nothing mysterious here. Check your PCGS book!

 

((( Third, saying that PCGS [or any TPG] 'screwed up' because they graded a coin AU58 ten years ago and MS62 today is laughable. )))

 

Well, again, that's what you say. Laugh all you want, but when David Hall himself says that "grading standards at PCGS have not changed", then either you are saying David Hall is a liar, or you are wrong and PCGS did screw up. So, what are we to believe?

 

You need to go back and re-read your copy of PCGS' "Official Gude to Coin Grading and Counterfeit Detection", and that includes David Hall's foreword on Page ix:

 

"Under the PCGS system, the world's top professional coin graders would use consensus-of-opinion method to grade coins ... coins would then be sonically sealed in tamper-evident holders, thereby permanently attaching the grade to the coin." (my underline).

 

If the word "permanently" doesn't imply that a coin's grade is the same today as it was ten years ago as it will be in ten years, then I don't know what would. How you can possibly trust any of your expensive Trade dollars to the service that, according to you, runs slip-shod over their own grading standards at their whim?

 

Finally, if we really are to believe that the PCGS standard allows such a fine line between AU-58 and MS-62, then why don't they just say so? How come we need to hear that from you?? If it's such common knowledge, then surely it wouldn't hurt for a PCGS representative to clearly state this, so that bidders in auctions no longer have to be so worried about this alleged "fine line", and price guides can eliminate one entire column from their listings.

 

(((Why so concerned about this thread? Because your position amuses me. )))

 

I wish other threads amused you enough to make as much of a contribution!

 

James

[JadeRareCoin]

 

I think that the big issue here is not the money ($37,000 or whatever), but rather the inconsistency of third party grading in general. We have all seen PCGS graded coins get bagged at NGC and vice versa. We have all heard stories of the guy who submitted the same coin 10 times only to get the MS-65 grade after 9 MS-64 grades (or maybe even a body bag or two). The stories go on and on.

 

It is logical to assume that no grading service can grade with 100% consistency or accuracy, simply because we are all humans and humans make mistakes. Some, like me, make more mistakes than others. What amazes me is how the masses follow what the grading companies say with such trust and blind faith. I am also amazed at how people rely on the coin price guides so religiously. It seems that few people can think for themselves anymore. An example is the guy who comes to my table to buy my toned Bust Half at bid, because it is NGC certified as AU-50, so he should be able to buy it close to AU-50 bid. He doesn't understand that the rainbow toning makes it worth double AU bid. Those types of people don't even look at the coins, they just look at the grade on the slab and then find the corresponding grade on the Greysheet.

 

Surely the guy who sold the coin as an AU-58 is upset since he could have made another $37,000 if he (or a qualified representative) would have resubmitted the coin to PCGS. Or would he have received the MS-62 grade.......? Was the coin enhanced? Did it take some "submitter influence"? I doubt it. I just think that we are witnessing gradeflation at its worst.

 

Or....is the guy who paid $80,000 for the MS-62 the one who is getting screwed here? Will he be able to sell the coin in the future for $80,000?

 

I miss the good ole days when we graded coins based on each coin's aesthetic qualities and not so much the technical grade. The sea of slabbed coins at shows, coupled with the fact that everyone and thier grandma is toting around a CDN Bluesheet at shows, takes a lot of the class and elegance out of coin collecting.

[Hoot]

Great addition to this thread, Dennis. Serves as a nice philosophical backdrop for all of the points made.

 

Hope you keep coming 'round and posting here.

 

Hoot

[Count_Erfit]

I will not even MENTION my old rattler PCGS 1871 dollar in 64 that now resides in an NGC ....66....... holder!

No, I will not mention this. Nor will I remind TDN of it as he is aware of my extremely sensitive nature regarding this coin.

So ..... consider it not mentioned.

 

Thank you.