Buy the Coin, Not the Holder...
2 2

64 posts in this topic

On 8/20/2021 at 11:54 PM, 124Spider said:

Hi, I'm fairly new to all this, at least compared to most of you. I now have reached the point in the evolution of my collections that I buy few coins, but they're all expensive (and certified).  I have read here the advice, "Buy the coin, not the holder," meaning don't blindly follow the grade, even from NGC or PCGS.....I am really surprised that there could be such variance, but it certainly underscores the advice to buy the coin, not the container! Mark

Welcome, Mark. (thumbsu

No matter where we stand with regards to the TPG and CAC, it is of course true that you have to like the coin.  The fact that a professional grader at a TPG has assigned a grade to a particular coin means that the variance of grading for similar coins is probably lessened...it does NOT mean that each and every coin with that grade is the same.  Some are going to be undergraded, some over graded.

Ultimately...YOU have to like the coin for the grade and $$$ you purchased.  And also like it without regard to either.

I love Saint-Gaudens Double Eagles, a very popular (but expensive) coin to collect.  There are tens of thousands of coins graded MS65 or higher.  They're not all the same.  Some might have cleaner obverses or reverses....some might have 1 or 2 big nicks away from the fields or devices...others might not.....others might have a dozen tiny annoying scuff marks.   No 2 coins are alike and even at MS65 or any other grade the reaons for the grade vary from coin-to-coin.

I'm not an expert on the coins you purchased, but I'm not surprised by the variability in grading.  And that variance does seem to increase as you go LOWER away from Mint State into the AU, EF, and VF grades.

Link to comment
Share on other sites

Welcome to the forum, Mark. It sounds as if you did a great job in following “Buy the coin, not the holder.” If you look at enough coins, you’ll no longer be surprised by such variances in quality. And I believe that applies at all grade levels.

Link to comment
Share on other sites

how-to-create-a-normal-distribution-bell-curve-explanation.jpg

Each numerical grade can be represented by a normal distribution curve similar to this one. Most of the coins graded, for example MS-63, will fall within the two red arrow areas of the curve (one standard deviation). The yellow arrow areas (two standard deviations) will include coins that are labeled “MS-63” but are really either noticeably worse or better that most. The green arrow areas (three standard deviations) are coins labeled “MS-63” that actually fall outside of the “MS-63” grade, either worse (MS-62) or better (MS-64).

Therefore each numerical grade overlaps those adjacent, independent of any official definition. This is the realm of the crack-and-resubmit person.

Further, the relationship between numerical grades and physical condition of coins is non-linear. This produces a somewhat different normal distribution curve for EACH numerical grade, and thus affects the proportion of coins in the overlapping areas.

Edited by RWB
Link to comment
Share on other sites

Thanks.  Yeah, having two degrees in mathematics, and having once been an actuary, I understand normal distributions, as I understand that the "distance" between an MS63 and either MS64 or MS62 is not the same as the "distance" between an XF45 and (were there such a thing) an XF44 or XF46.  My surprise is in finding a 1942/41-D Mercury dime, graded by NGC as AU50, that, to my eye at least, looks (at best) no better than my 1942/41 Mercury dime, graded by NGC as XF40 (both obverse and reverse).  And, further, I am surprised that that AU50 coin would be so very inferior (to my eye, at least) to the AU55 coin that I ultimately bought.

Further, I also have an AU53 (NGC) Mercury dime, and an XF45 (NGC) Mercury dime; the AU53 is clearly better (on both sides) than the AU50 candidate, and the XF45 is better on the obverse and comparable on the reverse to the AU50.

So here I am comparing XF40, XF45, AU50, AU53 and AU55 Mercury dimes, and they are not anything like the linear progression I would expect for five coins that are neighbors on the grading scale (given that there really is no "grade" between those five grades).  The most likely explanation, to me, is a combination of (i) I'm an amateur, not expert at grading coins, (ii) my XF40 is perhaps under-graded, (iii) the AU50 candidate is perhaps over-graded. and (iv) the AU55 that I bought is a strong example of an AU55 Mercury dime.

And it also strongly points to a nontrivial number of slabbed coins, even from NGC and PCGS, being misgraded (beyond merely being on the weaker side of the normal distribution for what is legitimately a coin of that value).  This, to me, adds value to the CAC approval sticker (although I have only one such coin, but it is my most expensive coin).

"Buy the coin," indeed!

Fun discussion; thanks!

Link to comment
Share on other sites

Whilst getting my collection of ms65 peace dollars I have studied a few hundred coins and being that they are 65 specific I have seen the extremes that fall within the grade from ugly toning and scratched to blast white...most likely dipped but still achieve the grades, its subjective for the most part I think, if you like blasted then something with no signs of history at all will be the best of, if you like history then a scratch is going to give it a story....mine I'd say are pretty level in their grade or of course I'd not have purchased them but there is one been on ebay for a while with no takers and I understand why, just because it reaches a grade does not mean it reaches the price its asking for.

Link to comment
Share on other sites

Posted (edited)
On 8/21/2021 at 12:52 PM, Dark Chameleon said:

just because it reaches a grade does not mean it reaches the price its asking for.

Another excellent point!  Related to the previous discussion of normal distribution, even assuming that a coin deserves to be a certain grade, the price should reflect where it falls within that grade.  When dealing with very rare coins, or high-grade coins, in which the difference in price from one grade to the next may be a great deal of money, the variance in actual value of a particular coin will depend on where it falls within that normal distribution.  My problem with the AU50 dime I did not buy was that it was priced above the value for an AU50 dime of that specification, and it was, at best, a very weak example of that grade (in my opinion).  I bought the AU55 version, despite the fact that it cost a good deal more than I wanted to pay to fill that slot, because I felt (i) the coin was a very strong AU55 coin, and (ii) the price was on the low end of the AU55 price range.  I have yet to feel buyer's remorse after paying whatever I willingly chose, for an excellent coin; I have felt buyer's remorse when I got a worse coin than I thought I was buying (which, of course, is why I now only pay big bucks for slabbed coins, and even they must be coins that I either see in person or see excellent photos of before buying).

Edited by 124Spider
Link to comment
Share on other sites

On 8/21/2021 at 2:51 PM, 124Spider said:

"Buy the coin," indeed!

What you see is a failure to have and maintain standards. Too much money drives the gradual reduction of quality. Once, AU meant an coin with the slightest abrasion on the highest points or disturbance of field luster. Now, that has been bastardized to AU-58, AU-55, AU-50 and other rubbish. The AU-55 and 50 "phony grades" are really EF coins, but given the "AU" tag to boost prices.

Link to comment
Share on other sites

On 8/21/2021 at 2:57 PM, RWB said:

What you see is a failure to have and maintain standards. Too much money drives the gradual reduction of quality. Once, AU meant an coin with the slightest abrasion on the highest points or disturbance of field luster. Now, that has been bastardized to AU-58, AU-55, AU-50 and other rubbish. The AU-55 and 50 "phony grades" are really EF coins, but given the "AU" tag to boost prices.

I can't speak to gradeflation, but I don't take any issue with adding granularity to the scale.  Back when the scale was, G, VG, F, VF, EF, AU BU, a grade meant very little.  While I think it's silly to pretend that we work on a 70-point scale, when no more than 30 of them are ever used, I believe that, e.g., dividing AU into four grades (50, 53, 55, 58) is useful, because I believe that there is that much spectrum between the top of EF and the bottom of MS.

If there is gradeflation, that's a bad thing.  And if a significant percent of the coins graded by NGC and PCGS are assigned the wrong grade, that's a bad thing, IMO.

Mark

Link to comment
Share on other sites

On 8/21/2021 at 7:48 PM, 124Spider said:

dividing AU into four grades (50, 53, 55, 58) is useful

No, it is not useful; it is harmful.

AU is a singular grade/condition point, just as is MS-70. AU marks the defined beginning of a circulated coin condition. It is a point of reference which cannot be changed without destroying all reliability and consistency in the concept of evaluating coin condition. The illegitimacies labeled "AU-55," "AU-53," "AU-50" are corruptions just as much as MS-73, MS-75 etc. It is merely a greedy squeeze to take in more money for lower quality product from the feeble-minded. Remember "LU" "Slider" "Virtually Unc" and the other in a mutated slime of metastasized numismatic cancers?

I buy for research, so the slab "grade" is irrelevant. For many that is not the case, and they are being cheated and abused for the collective avarice of fat-cat perverts.

:)

Link to comment
Share on other sites

Posted (edited)
On 8/21/2021 at 7:03 PM, RWB said:

No, it is not useful; it is harmful.

AU is a singular grade/condition point, just as is MS-70. AU marks the defined beginning of a circulated coin condition. It is a point of reference which cannot be changed without destroying all reliability and consistency in the concept of evaluating coin condition. The illegitimacies labeled "AU-55," "AU-53," "AU-50" are corruptions just as much as MS-73, MS-75 etc. It is merely a greedy squeeze to take in more money for lower quality product from the feeble-minded. Remember "LU" "Slider" "Virtually Unc" and the other in a mutated slime of metastasized numismatic cancers?

I buy for research, so the slab "grade" is irrelevant. For many that is not the case, and they are being cheated and abused for the collective avarice of fat-cat perverts.

:)

To the extent that you're saying that an AU50 coin (even one correctly graded) isn't, in fact, "almost [or about] uncirculated," I certainly agree. Heck, even the AU55 that I bought doesn't make me pull out the magnifying glass to see signs of circulation (unlike my 1909-S VDB Lincoln cent--AU58--which shows no obvious signs of wear).

But I don't particularly care about the label, only the number.  I believe that coins' conditions cover a wide range, and a 70-point scale (or, more realistically, a 30-point scale) can be more useful than bunching a fairly wide range of conditions into one grade.

So yeah, let's call 40-55 "extremely fine," and reserve AU for 58.  Just like we have a 20-point range for "very fine."  But, in my opinion (and I readily acknowledge neither particular expertise nor a long-term passion for serious collecting nor caring about determining how many angels are dancing on the head of the pin--I'll never own a valuable MS67 coin, and I have a great deal of trouble convincing myself that dividing "uncirculated" coins into eleven classifications makes any sense), that's shifting deck chairs on the "Titanic."

To me, as a guy who has spent (to me, at least) a lot of money on this hobby, and expects to continue buying rare, fairly high grade coins (but not MS65+) for the foreseeable future, the issue is the meaning of a particular numerical grade, not the words (e.g., "AU" or "EF") attached to the number.  I would prefer a world where "50" meant something quite predictable, and I'm not finding that.

Mark

Edited by 124Spider
Link to comment
Share on other sites

On 8/21/2021 at 1:12 PM, RWB said:

how-to-create-a-normal-distribution-bell-curve-explanation.jpg

Each numerical grade can be represented by a normal distribution curve similar to this one. Most of the coins graded, for example MS-63, will fall within the two red arrow areas of the curve (one standard deviation). The yellow arrow areas (two standard deviations) will include coins that are labeled “MS-63” but are really either noticeably worse or better that most. The green arrow areas (three standard deviations) are coins labeled “MS-63” that actually fall outside of the “MS-63” grade, either worse (MS-62) or better (MS-64).

Therefore each numerical grade overlaps those adjacent, independent of any official definition. This is the realm of the crack-and-resubmit person.

Further, the relationship between numerical grades and physical condition of coins is non-linear. This produces a somewhat different normal distribution curve for EACH numerical grade, and thus affects the proportion of coins in the overlapping areas.

"The Curve....you heard about it...but you never thought it would happen to you" xD -  Kevin Arnold, from The Wonder Years


 

Link to comment
Share on other sites

Mark and I uniformly disagree on this. He is part of the commercial coin world where profit is the most important thing. My approach is accuracy and truth - even if it negatively affects profit. AU-58 is a fixed point just as is MS-70. Deviation created the atmosphere in which grade inflation and "stretch" flourish. The monetary bottom line is: Any coin examined that is "graded AU" must meet the absolute criteria mentioned above. No exceptions. If there is more than a trace of abrasion of luster disturbance, then pay only EF value - because that is what the coin is.

Link to comment
Share on other sites

On 8/22/2021 at 6:49 AM, MarkFeld said:

I disagree. Even if you think certain coins labeled various numerical grades of AU are in fact, XF, it can still be useful to assign grades (50-58) to coins that others believe to be AU. For example,  regardless of how you might categorize them, typically, most people would prefer an AU55 or AU58 to an AU50 or AU53.

And if we're going to take issue with the labels, I don't feel that 40-49 are "extremely fine," 20-39 are "very fine," 12-19 are "fine," etc.  I think ALL labels from 1-55 are somewhere between optimistic (AU55) and absurd (everything on the low end). No, a coin graded 4 is not "good," it's a deeply worn-out coin.  But that doesn't negate the usefulness of a grading system with significant granularity.

Link to comment
Share on other sites

Granularity is only as good as the uniformity of the grains. Humans make too many inconsistent judgements in AU and Unc conditions. For circulated coins, the ANA grading guide has all the detail separation necessary - the individual differences are best left to negotiation and perceived pricing.

Link to comment
Share on other sites

Posted (edited)
On 8/22/2021 at 8:00 AM, RWB said:

Granularity is only as good as the uniformity of the grains. Humans make too many inconsistent judgements in AU and Unc conditions. For circulated coins, the ANA grading guide has all the detail separation necessary - the individual differences are best left to negotiation and perceived pricing.

So do you wish the grading scale were like it was decades ago, with only F, AG,G,VG,F,VF,EF,AU,BU?  I don't; the purpose of my first post here was confusion/unhappiness over what I perceive to be extreme variability in grading standards with a 70-point scale.

I don't know that we need a 70-point scale, because, demonstrably, it's not consistently applied.  I don't even know that we need a 30-point scale.  But, for coins I collect, two levels of "F" are useful, as are several levels of "VF" and three or four grades covering what is now 40-55.

Like you, I like the fairly objective standard of MS70 and AU58 (and for those of us not "investing" as much as we're building an affordable collection of pretty coins, I find AU58 to be sweet spot in the value curve).  I think that dividing MS into eleven grades is ridiculous.  But it's a long continuum between 1 and 55, and I like having a fair number of steps.

Mark

Edited by 124Spider
Link to comment
Share on other sites

Circulation wear is always a continuum. The defined points, adjectives or numbers, are convenient references where distinctions are easily made: 3 letters show; 5 letters show, etc.

The whole numeric scale is a fraud - it implies accuracy that does not exist, and it was not thought through to create a basic uniformity between each adjective/number.

TPS accuracy/consistency for circulated coins is extremely good. For uncirculated coins, it is poor.

Edited by RWB
Link to comment
Share on other sites

On 8/22/2021 at 8:16 AM, RWB said:

TPS accuracy/consistency for circulated coins is extremely good. For uncirculated coins, it is poor.

I don't have many uncirculated certified coins, but among the ones I do have are four GSA Morgan dollars, graded MS64, MS63, MS64+ and MS63.  For the life of me, I cannot tell the difference among them.

Link to comment
Share on other sites

On 8/22/2021 at 11:37 AM, 124Spider said:

I don't have many uncirculated certified coins, but among the ones I do have are four GSA Morgan dollars, graded MS64, MS63, MS64+ and MS63.  For the life of me, I cannot tell the difference among them.

You can improve with experience.

As stated above, the most important thing is to like what you buy, regardless of the label.

Link to comment
Share on other sites

On 8/22/2021 at 10:50 AM, RWB said:

Mark and I uniformly disagree on this. He is part of the commercial coin world where profit is the most important thing. My approach is accuracy and truth - even if it negatively affects profit. AU-58 is a fixed point just as is MS-70. Deviation created the atmosphere in which grade inflation and "stretch" flourish. The monetary bottom line is: Any coin examined that is "graded AU" must meet the absolute criteria mentioned above. No exceptions. If there is more than a trace of abrasion of luster disturbance, then pay only EF value - because that is what the coin is.

I'll wait till its all electronic grading so every number and + and * is represented and a site explaining exactly why and why it didn't reach the next level for slab hounds, for raw collectors it's personal appearance over any number, looking at multimillion dollar coin sales and thinking it appears hideous to me or a barely readable coin with history is invaluable yet sells for a few dollars then grading would be nothing more then keeping it protected from worsening.

Link to comment
Share on other sites

Over time you will begin to see the finer differences between the MS grades.  The more coins you inspect across the spectrum of graded coins, the more your brain absorbs even though you often don’t realize it.  One day you will be looking at an MS 63 and without realizing it you will say to yourself ‘that looks over/under graded’.

Link to comment
Share on other sites

On 8/21/2021 at 5:57 PM, RWB said:

What you see is a failure to have and maintain standards. Too much money drives the gradual reduction of quality. Once, AU meant an coin with the slightest abrasion on the highest points or disturbance of field luster. Now, that has been bastardized to AU-58, AU-55, AU-50 and other rubbish. The AU-55 and 50 "phony grades" are really EF coins, but given the "AU" tag to boost prices.

I hope the collectorate-ar-large takes these words to heart  as indisputable, unassailable truth.  My filters do not accommodate any 🐓 that reflects less than Mint State status but it disturbs me to no end to see the standards of the hobby so cavalierly disregarded and compromised.. Kudos to @RWB for continuing to sound the alarm to the dismay of the guilty, complicit parties. To those who may be curious, I am merely a competitive hobbyist who prefers playing on a level field. There is much talk on these Forum posts about counterfeiting, and the like. I dislike manipulation, dishonesty --  and what amounts to undisguised contempt.

Link to comment
Share on other sites

Are you guys saying that a coin graded "50" now is a poorer specimen than a coin graded "50" fifteen years ago?  Or are you saying that you object to the game of applying the "AU" tag to a coin that is not almost uncirculated (e.g., AU50)?

If the former, that is a bad thing for the hobby, and largely undermines the entire purpose for TPGs.

If the latter, I don't see where the complaint is.  Given that a coin graded "G" is a deeply worn coin, and not "good" by any rational standard; a coin graded "VG" is still a very worn coin, and not "very good" by any rational standard, etc., right up until AU58 (which is, IMO, "almost uncirculated,"), and given that those labels were attached long ago, I don't see the complaint about labels.

Numbers are supposed to be objective, and a coin given a certain grade today, should look very, very similar to the same type of coin given the same grade many years ago.  But attaching fluffy letters to the number, if the numbers ARE objective and consistent, does not offend me in the least.

Mark

Link to comment
Share on other sites

To me, the big dichotomy or "kink" in the grading scale is how low-60's Mint State coins are treaated, valued, and priced.....versus AU-58's.

We've talked about it before so I won't beat a dead horse.  But for many popular American coin types, that split between them and how the coins are valued/graded is noteworthy.

Link to comment
Share on other sites

Posted (edited)
On 8/22/2021 at 5:12 PM, GoldFinger1969 said:

To me, the big dichotomy or "kink" in the grading scale is how low-60's Mint State coins are treaated, valued, and priced.....versus AU-58's.

We've talked about it before so I won't beat a dead horse.  But for many popular American coin types, that split between them and how the coins are valued/graded is noteworthy.

I'm enjoying this discussion, and learning; thanks to all of you!

Could you please elaborate on this statement?  I buy coins whose appearance pleases me, and I cannot play in the high mint-state world.  So I have developed a fondness for AU58, which strikes me as often being a sweet spot in the value curve; if I'm willing to pay what it costs to buy a coin in the range of AU55 to MS62, I don't have an emotional attachment to the "mint state" tag, finding them visually almost indistinguishable, so I'll buy the grade that seems to be to be the best value.  Are you saying that you think that AU58, which is practically indistinguishable from MS60 (and may, in fact, have more eye appeal), is undervalued compared to low mint-state coins?  And, if so, do you consider that a bad thing (and, if so, why is it a bad thing?)?

Mark

Edited by 124Spider
Link to comment
Share on other sites

On 8/22/2021 at 10:05 AM, MarkFeld said:

Roger, you certainly need not (and apparently don’t) believe it, but I’m perfectly capable of thinking from a collector’s point of view and my opinions aren’t based on “profit”. I believe that my approach is based just as much upon truth as yours is. As I’ve said before, I tend to express my opinions as opinions, whereas you tend to express yours as facts.

Ding! Ding! Ding! WINNAH!!!

Link to comment
Share on other sites

On 8/22/2021 at 8:26 PM, 124Spider said:

I'm enjoying this discussion, and learning; thanks to all of you!

Glad you are enjoying it...we have some really good threads on some topics here. (thumbsu

On 8/22/2021 at 8:26 PM, 124Spider said:

 Are you saying that you think that AU58, which is practically indistinguishable from MS60 (and may, in fact, have more eye appeal), is undervalued compared to low mint-state coins?  And, if so, do you consider that a bad thing (and, if so, why is it a bad thing?)? Mark

I'll use my specialty, Saint-Gaudens Double Eagles, as an example but it also applies really to any coin but especially larger ones with large fields.

From an aesthetic viewpoint, a very nice AU-58 can look much better than an MS-61 or MS-62 which has lots of scuff marks, dings, or bag marks. The AU-58 might have a single or dual contact marks on high points as evidence of circulation or rub.  The MS-62 might be 100% uncirculated but have lots of distracting bag marks in the (large) fields.

Strictly speaking, no matter how much bag wear and how many bag marks and dings a coin got...if it wasn't circulated, it's considered mint state.....wheras an AU coin can have the slightest wear on the high points but have really clean fields and very few bag marks or ding but is considered a lesser coin grade-wise.  

Edited by GoldFinger1969
Link to comment
Share on other sites

Posted (edited)
On 8/22/2021 at 9:28 PM, GoldFinger1969 said:

Strictly speaking, no matter how much bag wear and how many bag marks and dings a coin got...if it wasn't circulated, it's considered mint state.....wheras an AU coin can have the slightest wear on the high points but have really clean fields and very few bag marks or ding but is considered a lesser coin grade-wise.  

I agree, as I said above; AU58, to me, is a nice value point, because the market (in my aesthetic viewpoint) overvalues the mere fact of being "mint state," and undervalues eye appeal.  To me, that's not a bad thing, because I get to buy the coin I like better at a lower price.  Heck, the coin about which I started this thread is a perfect example.  It's a fairly rare coin, especially certified (the only way I would buy the coin, because it is often counterfeited or altered) in higher grades.  And the price increases exponentially above AU53 even into the very low mint state grades (an MS62--without full bands--costs about 3.5 times what an AU53 costs, and I think I got a very strong example of an AU55 at a price significantly below the NGC listed price for that coin at that grade).  So, when I found a beautiful coin, at the very high end of what I was wiling to pay, but one so nice it probably has better eye appeal than the vast majority of those few that exist in the next several higher grades even if I could find one, I bought it.

In any event, it's not as if dealers are forcing that on collectors; coins are a classic non-essential good, and the buyers, in aggregate, decide how much a coin is worth (with a floor, of course, which is a function of the melt value of the coin--not a significant issue for a rare dime like it is with your Saint-Gaudens beauties).  If buyers as a group prefer low mint state to pristine AU, so be it (and, as I said, that really does work for me).

Mark

Edited by 124Spider
Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
2 2