Are Authentication and Grading companies "stuck in the mud?" 1 1

[RWB]

How do members think the authentication and grading companies will fare in the future?

[GoldFinger1969]

On 3/24/2022 at 11:47 AM, RWB said:

How do members think the authentication and grading companies will fare in the future?

In theory, outside of moderns and maybe a long inventory of foreign/ancients, most valuable domestic U.S. coins should already be graded/certified, so no future business possible.  Of course, there are always crack-outs. 

I personally think that long after the latest collectible bubble has ended that the buyers of CU will be glad they have the slow-and-steady coin grading business.

Edited March 24, 2022 by GoldFinger1969

[The Neophyte Numismatist]

The coin dealer marketplace is behind the rest of the consumer world.  Historically, coins were bought with an in-hand inspection at shows and shops.  There are some dealers that still do not have a strong online distribution model, however, I think the COVID-19 pandemic has shined a spotlight on the need to be able to diversify distribution in the last two years.  As such, I think more dealers will be selling through online models (GC, EBay, other websites, etc.).  When coin sales are being done online, having a third party to authenticate and grade almost becomes a prerequisite to sale.

I agree with @GoldFinger1969 that many (perhaps most) valuable coins are in holders. But, I also think we have some room here, as many old-school collectors and dealers still have raw coins.  Likewise, some areas (EAC) prefer raw coins.  I think there is still meat on the bone.  I am sure there are many on this forum who have an album of BU Franklin Half Dollars for example - so I take those population numbers with a grain of salt.

Here is what concerns me about TPG - bullion grading.  I am not knocking anyone who wants to collect graded ASE or GE bullion.  However, every collector should be keenly aware that graded bullion can be very difficult to sell.  I challenge anyone to call a dealer with their MS69 ASE and try to sell it - if you think it's an easy sell, you will soon be educated.  That same dealer would buy raw bullion all day long, so by grading the bullion you are limiting yourself to a collector-to-collector sale (more lucrative, but can be much slower to sell in an emergency).  Bullion is a gateway to numismatics.  If a new collector buys piles of graded bullion and doesn't realize the pitfalls, it puts a black-eye on the value of grading.

In short, internet sales will ensure that grading is here to stay.  However, grading can be a double-edged sword and every collector should get educated on the value of grading and pitfalls before investing-in (and especially submitting) graded coins (and especially bullion).

Edited March 24, 2022 by The Neophyte Numismatist

[GoldFinger1969]

On 3/24/2022 at 12:54 PM, The Neophyte Numismatist said:

I agree with @GoldFinger1969 that many (perhaps most) valuable coins are in holders. But, I also think we have some room here, as many old-school collectors and dealers still have raw coins.  Likewise, some areas (EAC) prefer raw coins.  I think there is still meat on the bone.  I am sure there are many on this forum who have an album of BU Franklin Half Dollars for example - so I take those population numbers with a grain of salt.

Mini-hoards, domestic and foreign, continue to be found.  Who's to say if a small South American bank didn't take delivery of 250 Saint-Gaudens or Liberty Double Eagles 100 or 115 years ago and forget about them because their antiquated systems kept recording it as $5,000 face value and it wasn't worth the time to go into the dusty old vault or tunnel to audit it regularly ?

On 3/24/2022 at 12:54 PM, The Neophyte Numismatist said:

Here is what concerns me about TPG - bullion grading.  I am not knocking anyone who wants to collect graded ASE or GE bullion.  However, every collector should be keenly aware that graded bullion can be very difficult to sell.  I challenge anyone to call a dealer with their MS69 ASE and try to sell it - if you think it's an easy sell, you will soon be educated.  That same dealer would buy raw bullion all day long, so by grading the bullion you are limiting yourself to a collector-to-collector sale (more lucrative, but can be much slower to sell in an emergency).  Bullion is a gateway to numismatics.  If a new collector buys piles of graded bullion and doesn't realize the pitfalls, it puts a black-eye on the value of grading.

My understanding is that you may not get back what you paid for the grade/holder but you should still have no problem selling a graded bullion coin, right ?  Easier for gold I would think since the cost/value of the grade/holder is much smaller on a $2,000 coin versus a $30 coin. 

[Coinbuf]

TPG's have been continuously evolving and finding new ways to convince both dealers and collectors to submit and resubmit coins.   As long as they continue to move the goal posts and the mint continues to crank out useless modern junk in volume the TPG's will be set for many decades to come.

[GoldFinger1969]

I know some non-collectors who bought gold/silver coins as presents and liked having it graded and in a holder.  The recipients also liked it that way, too.

[The Neophyte Numismatist]

On 3/24/2022 at 1:13 PM, GoldFinger1969 said:

My understanding is that you may not get back what you paid for the grade/holder but you should still have no problem selling a graded bullion coin, right ?  Easier for gold I would think since the cost/value of the grade/holder is much smaller on a $2,000 coin versus a $30 coin. 

Oh sure... If you want to sell your MS69 ASE for slight under spot (the bullion bid/ask spread), you can certainly to that.  But, I don't know any collector that wants to lose 50%+ on every piece in their collection.  Any newbie that is over-leveraged in this way will certainly get a bad taste, as they bought these graded coins as premium examples (and technically they are), but you get subpar results when it comes time to sell.

If that same collector went in "eyes wide open" and understood this nuance in collecting ASE, much of the sting is removed die to lack of surprise.  Again, nothing wrong with collecting graded bullion, but knowing this is helpful. 

Edit note:  I am not talking about a few of the ASE that have a numismatic premium, or if you had a wild rainbow coin, etc.  BUT... those coins will also come with a heavy premium when you buy them.  Any run-of-the-mill graded ASE will run into this problem when selling.   Call a few dealers and check it out.

Edited March 24, 2022 by The Neophyte Numismatist

[GoldFinger1969]

On 3/24/2022 at 1:58 PM, The Neophyte Numismatist said:

Oh sure... If you want to sell your MS69 ASE for slight under spot (the bullion bid/ask spread), you can certainly to that.  But, I don't know any collector that wants to lose 50%+ on every piece in their collection.  Any newbie that is over-leveraged in this way will certainly get a bad taste, as they bought these graded coins as premium examples (and technically they are), but you get subpar results when it comes time to sell.

Yup...and that's the rub....if you LIKE these coins, it's one thing to buy 1 or 2...if all your silver (or gold) bullion is in the form of graded Moderns, you're going to be paying rich premiums that others might not want to pay for.  I know as I bought a 2.5 ounce gold commemorative and when I had to sell it I only got spot (fortunately, I only paid about a 10% premium at a much lower spot price).

I like the National Park Foundation Saint-Gaudens commemoratives and have bought many at $50-$100 despite there only being 1 ounce of silver.  Many 5 ounce silver coins sell at $200 - $400 a coin in PF70 or PF69 grades which is a huge premium but you pay up for the really big flawless coins.

Edited March 24, 2022 by GoldFinger1969

[Austintuten]

I believe this is the future since only they will stay in the industry. Grading is one of the most popular services, and it's been in the game for good years now. They're known for providing a bit more expensive service, but society needs all this. Even if some communities have doubts about the evolution of authentication and grading companies, the research on https://edubirdie.com/paraphrasing-tool asserts that they are indispensable for the future. Edubirdie's paraphrasing tool and services provide much useful and actual information. Recently, I have read something like a list of domains that would last for many years, and the authentication service was definitely included.

Edited March 30, 2022 by Austintuten

[Woods020]

I don’t think they are going anywhere. As rampant as forgeries are, crooked sellers, and new collectors only wanting a passive knowledge of numismatics it’s almost a necessity. You see here in the newbie section the lack of knowledge. And I’m not knocking anyone that was me not that long ago. The difference is most new collectors won’t put the effort in to learn even enough to be able to collect, and the little learning they want to do is from YouTube or marked money or some other total BS. If the standard collector was more informed, and dealers/sellers were held to a standard of honesty & transparency, then TPGs would be in trouble. However as it stands they are the voice of reason and the oversight authority of junk vs valuable. 
 

I wish I could have a pre-grading company 😂. When I see half of the people think they see or that they say they sent for grading I will bust their bubble for $10. That’s a steal. Tell them it isn’t worth going any further. 

[Woods020]

As I am venturing into dealing it has opened my eyes to so many things. Some good, some bad. I wanted to learn and I sure am. 
 

One thing I have come to learn is I wouldn’t trust 75% of the dealers at coin shows. Some are the salt of the earth, but most are crooks. For example this past weekend I was at a show and I sold another dealer several common date Morgans that were details. Cleaned, stained, etc. I treat them as bullion and sell for the silver. I happened to ask this dealer why he wanted them. He said he would crack them out, put them in 2x2s, and “let buyers decide for themselves if it has an issue or not”. Basically he will sell them as raw straight grade coins knowing they are details. If I had known that before he bought them I wouldn’t have sold them to him. I can’t and won’t do that to someone, but so many of these dealers will do whatever it takes to make a buck. As long as that exists collectors either have to have a TPG or learn what they are doing. 
 

As a side note I have a 12 year old a raw JFK clad proof he needed for his album. It was only a $5 coin on a good day, but to him it was amazing. He and his grandfather stuck around for a while and I started asking him about coins, and telling him the backstory to some of what I had in my case. For example the no cents nickel and why it had to be changed. I told him knowledge was power in every circumstance, but that is especially true in numismatics. So the condition of me giving him that coin for his album was that he would read and study so that he can carry on as a knowledgeable collector. That’s what we need. 

[VKurtB]

On 3/29/2022 at 2:59 PM, Woods020 said:

One thing I have come to learn is I wouldn’t trust 75% of the dealers at coin shows. Some are the salt of the earth, but most are crooks.

And this has been one of my mantras for literally decades.  And that comes from an ANA National Volunteer, too. 

[Woods020]

On 3/29/2022 at 3:22 PM, VKurtB said:

And this has been one of my mantras for literally decades.  And that comes from an ANA National Volunteer, too. 

Maybe it’s because my livelihood doesn’t depend on it, but I would like to believe I would never do this to someone. Sure I may miss grade a raw coin here or there by a grade accidentally, but so many of these guys blatantly lie knowing the truth it sickens me. The more I learn the more I realize how dirty the coin business is. But the good news is that having a basic understanding is plenty of defense. These dealers don’t know much if any, so a basic knowledge base puts you ahead of most of their games. 
 

Heck I rarely even sell raw coins because I rarely see nice, problem free raw coins any more. I get them here and there, but I’m hyper critical of them if I buy them. That and most people want to argue it down to nothing. Most of the raw coins are problem coins I see. Exceptions are of course present say nice Washington silver quarters or other newer issues. But it always cracks me up to look at say bust halves raw at shows. 

Edited March 29, 2022 by Woods020

[Alex in PA.]

On 3/29/2022 at 3:49 PM, Woods020 said:

I wish I could have a pre-grading company

That's the best idea I've heard in this hobby for years.  But...would the TPG's ad CAC love you for it?  Still, a great idea and would save a lot of heartbreak.

[Woods020]

On 3/29/2022 at 3:58 PM, Alex in PA. said:

That's the best idea I've heard in this hobby for years.  But...would the TPG's ad CAC love you for it?  Still, a great idea and would save a lot of heartbreak.

It would make me a lot of money 😂 

$10 for a 3 second glance to say get that road rash coin out of here. 

[GoldFinger1969]

On 3/29/2022 at 3:49 PM, Woods020 said:

I don’t think they are going anywhere.

Have they developed....or are developing....GPS tracking within the holder that only you can track from a smartphone if it is a pricey coin ?

THAT might be worth getting on some 5-figure coins.

 

[GoldFinger1969]

On 3/29/2022 at 4:54 PM, Woods020 said:

so many of these guys blatantly lie knowing the truth it sickens me. The more I learn the more I realize how dirty the coin business is.

Which is why the TPGs are a MUST IMO unless we're all going to be good/expert graders like in the 1950's and 1960's and 1970's....which many of us can't be or don't have the time to pursue.

Edited March 30, 2022 by GoldFinger1969

[Coinbuf]

On 3/29/2022 at 12:59 PM, Woods020 said:

As I am venturing into dealing it has opened my eyes to so many things. Some good, some bad. I wanted to learn and I sure am. 

One thing I have come to learn is I wouldn’t trust 75% of the dealers at coin shows. Some are the salt of the earth, but most are crooks.

This could be said for many collectors as well.    I am constantly nauseated by the things collectors will do when it comes to the coins they say they have in registry sets.

[VKurtB]

On 3/29/2022 at 5:01 PM, GoldFinger1969 said:

Which is why the TPGs are a MUST IMO unless we're all going to be good/expert graderes like in the 1950's and 1960's and 1970's....which many of us can't be or don't have the time to pursue.

I have no sympathy for those with the bucks to play in the big leagues but not the time. I support the 1950’s -1970’s system overwhelmingly with about 0.04% exceptions. 

[Alex in PA.]

On 3/29/2022 at 7:23 PM, VKurtB said:

I support the 1950’s -1970’s system overwhelmingly

I was perfectly happy with the ANA, and then ANACS.  Just saying; I didn't need all the fancy window dressings.

[VKurtB]

On 3/29/2022 at 6:38 PM, Alex in PA. said:

I was perfectly happy with the ANA, and then ANACS.  Just saying; I didn't need all the fancy window dressings.

Chicks love window dressings. Jus’ sayin’. 

[Woods020]

On 3/29/2022 at 4:58 PM, GoldFinger1969 said:

Have they developed....or are developing....GPS tracking within the holder that only you can track from a smartphone if it is a pricey coin ?

THAT might be worth getting on some 5-figure coins.

 

Not to my knowledge. PCGS has added the NFC chip to their slabs to combat counterfeiting, but that’s as tech as it gets that I know of. But your smart phone can scan that chip. Just not track where it’s going haha

[Woods020]

On 3/29/2022 at 5:01 PM, GoldFinger1969 said:

Which is why the TPGs are a MUST IMO unless we're all going to be good/expert graders like in the 1950's and 1960's and 1970's....which many of us can't be or don't have the time to pursue.

I think expert is a high bar. I’m far from an expert, and honestly may never be what I consider an expert. I don’t do this all day every day. However I think all collectors owe it to themselves to get a basic form of education. At a minimum be able to within reason grade a coin in segments like 63-65, know if a coin is cleaned, and the tell tale signs of a counterfeit. Additionally learning strength of strike, the basic minting process/errors, and AT are pretty important. Fake errors and AT are rampant these days. I’m not saying you need to have a PHD in numismatics, which I believe actually exists, but no one should spend a large sum of their hard earned money without knowing the basics of what they are buying. 
 

I will also acknowledge sadly this is not reality. Therefore I do not believe TPGs have anything to worry about. 

[Woods020]

On 3/24/2022 at 12:58 PM, The Neophyte Numismatist said:

Oh sure... If you want to sell your MS69 ASE for slight under spot (the bullion bid/ask spread), you can certainly to that.  But, I don't know any collector that wants to lose 50%+ on every piece in their collection.  Any newbie that is over-leveraged in this way will certainly get a bad taste, as they bought these graded coins as premium examples (and technically they are), but you get subpar results when it comes time to sell.

If that same collector went in "eyes wide open" and understood this nuance in collecting ASE, much of the sting is removed die to lack of surprise.  Again, nothing wrong with collecting graded bullion, but knowing this is helpful. 

Edit note:  I am not talking about a few of the ASE that have a numismatic premium, or if you had a wild rainbow coin, etc.  BUT... those coins will also come with a heavy premium when you buy them.  Any run-of-the-mill graded ASE will run into this problem when selling.   Call a few dealers and check it out.

They are almost as bad as proof sets and modern commems on the buy/sell spread. Almost 

Edited March 30, 2022 by Woods020

[zadok]

On 3/29/2022 at 8:20 PM, Woods020 said:

I think expert is a high bar. I’m far from an expert, and honestly may never be what I consider an expert. I don’t do this all day every day. However I think all collectors owe it to themselves to get a basic form of education. At a minimum be able to within reason grade a coin in segments like 63-65, know if a coin is cleaned, and the tell tale signs of a counterfeit. Additionally learning strength of strike, the basic minting process/errors, and AT are pretty important. Fake errors and AT are rampant these days. I’m not saying you need to have a PHD in numismatics, which I believe actually exists, but no one should spend a large sum of their hard earned money without knowing the basics of what they are buying. 
 

I will also acknowledge sadly this is not reality. Therefore I do not believe TPGs have anything to worry about. 

...yes, virginia, there is a phd in numismatics...e.g. don kagin...

[The Neophyte Numismatist]

On 3/29/2022 at 10:09 PM, zadok said:

...yes, virginia, there is a phd in numismatics...e.g. don kagin...

If one were to receive a masters/PhD in numismatics, what would the coursework consist of?  What do you read/study?

[zadok]

On 3/29/2022 at 10:37 PM, The Neophyte Numismatist said:

If one were to receive a masters/PhD in numismatics, what would the coursework consist of?  What do you read/study?

...not aware of any masters being offered at present, but the phd program(s) r individually tailored to complement the subject area of the phd dissertation...i.e. each phd is unique in its scope n subject...

[VKurtB]

On 3/29/2022 at 9:37 PM, The Neophyte Numismatist said:

If one were to receive a masters/PhD in numismatics, what would the coursework consist of?  What do you read/study?

You need to work with a college or university to create a custom major. 

[The Neophyte Numismatist]

Welp... that solves the riddle why there is only one person with a numismatic degree.

I asked because I like to read and study.  In my opinion, one would be better-off volunteering 50+ hours a week at a major coin dealer for three years; really busting their tail and do anything/everything they wanted... then... work for PCGS or NGC for a few years, and grind for 50+ hours a week.  Build a solid reputation as an "animal at work" and "someone who gets it done for you".  In six years, you come-out truly understanding the business, with solid relationships at the TPG and at least one (likely more) coin dealers/auction houses.  

And, you have no student debt.  

[VKurtB]

On 3/30/2022 at 3:31 PM, The Neophyte Numismatist said:

Welp... that solves the riddle why there is only one person with a numismatic degree.

I asked because I like to read and study.  In my opinion, one would be better-off volunteering 50+ hours a week at a major coin dealer for three years; really busting their tail and do anything/everything they wanted... then... work for PCGS or NGC for a few years, and grind for 50+ hours a week.  Build a solid reputation as an "animal at work" and "someone who gets it done for you".  In six years, you come-out truly understanding the business, with solid relationships at the TPG and at least one (likely more) coin dealers/auction houses.  

And, you have no student debt.  

There are those who seriously want the ANA to become an accredited college to convey such degrees. They have zero idea how utterly expensive such an undertaking would be, but they ARE seriously talking about it. Better to stick with a certificate program, such as Microsoft does. That’s already well done with ANA’s “Numismatic Diploma” program.