Market Grading vs. Technical Grading / The Presence of Wear-Rub-/Friction 0

[GoldFinger1969]

From a previous thread, I asked a member here:

"... just curious on where you come out -- how you would characterize yourself -- on this whole grading thing involving wear/rub/friction.  Are you a technical grader, consequences be damned...or do you allow for SOME leeway into market grading ?"

If you have an MCMVII High Relief Saint or some other coin with high points...if you see just 1 SLIGHT point with the faintest wear/rub, are you grading it AU even if the rest of the coin was spectacular and if not for the sole blemish might be an MS-66 or MS-67 ?  You gonna give it an MS-65..or an AU-58 ?

Happy to hear from others here on this, too as this is the ultimate definer of how we see grading and TPGs.

 

This goes into the whole TPG grading issue and especially with CACG appearing to have a reduced-tolerance for any appearance (actual or false) of wear/rub/friction from some coins.

Many heavy hitters are afraid of submitting coins for crossing that are in the MS bucket and might go down to the AU bucket...costing them bigtime on Registry Points and $$$.

Hopefully many of you chime in....what do you do with a single point or minimal amount of the FAINTEST wear/rub/fruction on a coin, especially on a high point ?  Net grade it (market grade) down a few points in the MS section....or strict grade it (technical grade) and give it a high-AU grade ?

Edited Saturday at 08:11 PM by GoldFinger1969

[Coinbuf]

Do I  own the coin or do you, because ownership adds points.   Seriously I'm a technical grade guy, rub is rub it doesn't matter if it came from circulation, roll friction, or whatever.  Rub = AU period.

I personally don't think anyone has the ability to look at a coin and make a definite call on rub being from minor circulation or friction.   That's just baloney. 

Just one of the reasons I like how CACG grades.

Edited Saturday at 06:35 PM by Coinbuf

[RWB]

Abrasion, is abrasion, is abrasion.....Call it what you like but the name will not change reality.

"Value" is determined by the marketplace assuming accurate grading/discretion.

No "grading company" regardless of disclaimers, should ever attempt to mix value and condition. (Think of condition as a fixed statement, and value as a market variable.)

Edited Saturday at 07:29 PM by RWB

[VKurtB]

I am 100 percent fully and completely a market grading guy. Technical grading is BOTH EVIL AND STUPID.

[Henri Charriere]

🐓:  I wouldn't answer that if I were you!

Q.A.:  Quite frankly, I prefer the original, unexpurgated, [unedited] version of your opening volley though I understand why you changed it.

I am going to take the 5th here because volunteering a reply, now, will indicate on whose side I stand and that, sadly, would destroy the credibility and reputation of an unspecified number of fine members as well as having a chilling effect on those who have not yet responded.  How ya like me now, Ricky?

🐓:  Fine, come along now.  

[samclemen3991]

My opinion has to be weighted by the fact I quit collecting uncirculated coins when I saw a major change in how standards  were being applied in 2008/09.  I have concentrated on circulated coins for so many years, I'm not even sure if I know how to grade Unc coins at this point.  To be honest, I put so much more emphasis on appearance rather than technical merit I might actually be a market grader.  Even though I am told market grading only applies to the MS grades.  James

[GoldFinger1969]

On 6/29/2024 at 5:08 PM, samclemen3991 said:

My opinion has to be weighted by the fact I quit collecting uncirculated coins when I saw a major change in how standards  were being applied in 2008/09.  I have concentrated on circulated coins for so many years, I'm not even sure if I know how to grade Unc coins at this point.  To be honest, I put so much more emphasis on appearance rather than technical merit I might actually be a market grader.  Even though I am told market grading only applies to the MS grades.  James

I guess nobody cares if AU coins go down to the EF grades.  Most of the key inflection points are within the MS range or from MS to AU.

I think the consensus is the looser standards came into play long before 2008....maybe 2000 it started ?.  John Alabanese's comments on how market grading was forced onto even unwilling participants in the 2022 article is very interesting.

Interesting post, Sam, thanks !

[Henri Charriere]

On 6/29/2024 at 3:24 PM, VKurtB said:

I am 100 percent fully and completely a market grading guy. Technical grading is BOTH EVIL AND STUPID.

My introduction to "standard" grading was via the Red Book circa the early 1960's. I assume yours was, too.

For thousands of years, adjectival grades were used and the remarkable thing is they were deemed sufficient.

Then something happened. The Investors showed up and standard grading was deemed to be insufficient and jettisoned. A scale, introduced years earlier, was retro-fitted, and grades replete with numbers prefixed with hyphens, made their debut.

I believe you and I see eye to eye on things like the superfluity of, for example, formally grading Proof coins. But I wasn't aware of your stance on what used to be known as unqualified grading.

You lost me on your denouncement of technical grading. What exactly is EVIL (Stop looking over at Roger!)  AND STUPID about the grading system we all grew up with?  

 

 

[J P M]

On 6/29/2024 at 3:24 PM, RWB said:

No "grading company" regardless of disclaimers, should ever attempt to mix value and condition. (Think of condition as a fixed statement, and value as a market variable.)

I agree but I have seen many a MS coin that looks like it should be graded much lower. Also, many a MS that should be higher than it is but that would increase the value by hundreds and that have to be guaranteed by the TPG company. I think the marketing factor plays a larger part in the grading of coins much more than it used to. Money,Money,Money, why else would there be so many different labels for the same coin struck in the same place. 

[RWB]

Accuracy comes first, then consistency. These are things the TPGs promised when they began. Where is that promise today?

[GoldFinger1969]

All of you make good points...but what do you do when it comes to that 1985 spike in that Gold Type Set ?

"....I remember going back to 1985 when the hottest part of the market, the white-hot part of the market was the gold type sets. Marketing companies were selling them as MS63. And there are certain coins in gold type sets, certain coins that were really the toughest ones, like Type-2 $1 gold pieces, and five Indians, for example. All of a sudden, literally, what is today’s $800 to $1,000 super slider Type-2 $1 gold piece was an MS63. It was $15,000 and people are paying $12,000 or $13,000, selling them for $15,000. To me, it was a head scratcher.

I remember sitting down with a large group of– it was probably the 32 original guys that made markets– and the guys at PCGS. We talked about grading status. I remember saying, “Hey, these are 58.” And some said, “You can’t call those 58. They’re worth $15,000. They’re selling at 63.” I said, “Yeah, but that’s now. There could be a day when they’re going to be AU again.”

Fortunately, I think that the more technical rules prevail because PCGS never got into that trap in 1986 upgrading AU Type-2 ones 63. Fortunately by then, that market had collapsed. For those dealers, sales came way down and then all of sudden, grading got conservative.

But it is a fact. I remember laughing about it as a teenager, whether it was MTB (Manfra, Tordella & Brookes) or A-Mark or the large houses, would always have a disclaimer on their invoices saying that “Grading standards can change with market conditions.”

That’s crazy. That’s BS. That’s impossible. How can that be?

I could never figure it out. But they were right...."

https://coinweek.com/a-cac-grading-service-coinweek-interview-with-john-albanese/

[samclemen3991]

@GoldFinger1969.  Sorry my post was ambiguous.  The 2008/09 reference is personal rather than general.  In the early 2000's I had put together about 50 to 60 thousand dollars in uncirculated coins.  However I lost complete confidence in myself to grade UNC.  coins.  I am a hobby guy and when I reached a point where I was uncertain as to what things should grade I made a conscious decision to retreat to the circulated grades.

As to WHEN grading became subjective and built on loose sand, I always refer to 2 articles written by Q. David Bowers in the 1990's.  In one article he took 10 coins to something called the Silver Dollar Roundtable and asked 10 graders if they would just tell him whether each coin would straight grade and if not why.  To his shock he had only 1 coin that garnered 5 consistent answers.  That means even the top experts disagreed 90% of the time.(OR MORE).

He then took 10 coins and asked 10 experts to just give a specific numerical grade.  Again.  Only 2 coins had 5 or more matching answers and some grades ran the gamut from AU-55 to MS 67.  His advice was this.  "If anyone comes to you with  coins that are over 100 years old and make statements that are 100% guaranteed as to grade or condition.  Hold on to your wallet and suspend belief!".  James

 

[VKurtB]

On 6/29/2024 at 4:08 PM, samclemen3991 said:

I'm not even sure if I know how to grade Unc coins at this point.

Neither does anyone. You're just honest enough to admit it.

[VKurtB]

On 6/29/2024 at 7:58 PM, Henri Charriere said:

My introduction to "standard" grading was via the Red Book circa the early 1960's. I assume yours was, too.

For thousands of years, adjectival grades were used and the remarkable thing is they were deemed sufficient.

Then something happened. The Investors showed up and standard grading was deemed to be insufficient and jettisoned. A scale, introduced years earlier, was retro-fitted, and grades replete with numbers prefixed with hyphens, made their debut.

I believe you and I see eye to eye on things like the superfluity of, for example, formally grading Proof coins. But I wasn't aware of your stance on what used to be known as unqualified grading.

You lost me on your denouncement of technical grading. What exactly is EVIL (Stop looking over at Roger!)  AND STUPID about the grading system we all grew up with?  

 

 

Giving "what used to be" a preference over "what needs to be" are part of "the evil and the stupid". The technical system creates bizarre grade/value graphs and charts.

Edited yesterday at 04:55 PM by VKurtB

[Sandon]

    I think that this controversy has more to do with over what amount or type of friction on certain coins should be regarded as wear than it does with the differences between "technical" and "market" grading. "Technical" grading focuses on one factor, surface preservation, in determining the grade of a coin that has no wear, while "market" grading also takes into account the factors of luster, strike, and overall "eye appeal" for such coins. Whether a coin grades AU or MS is only "market" related in the sense that submitters to grading services want to get higher grades rather than lower ones, and collectors usually prefer coins that have MS instead of AU designations.

   There are very few earlier U.S. coins, such as Capped Bust half dollars, that have no sign of rub. There are many that may never have been used individually in day-to-day transactions but were repeatedly slid across tables, hand counted, stacked, and dumped into bags, resulting in definite loss of luster and dull grayish "rub" on their high points. NGC and PCGS frequently grade such coins MS 60-62--and sometimes as high as MS 64--while CAC Grading claims to grade such pieces no higher than AU 58+. (I haven't had an opportunity to examine CAC graded Bust halves to see whether I agree.)

   Other problems exist with heavier coins such as silver dollars and double eagles due to similar "stacking" friction (with less handling) and with Indian Head quarter and half eagles due to their unusual (incorrectly called "incuse") design resulting in fields that are higher than most of their devices. In the May-July 2024 issue of the CAC Rare Coin Market Review, p. 74, John Albanese deals with this issue primarily regarding the Indian Head quarter and half eagles, noting that "an AU 58 and MS 63 can look strikingly similar". . . Friction [on the Indian's cheek] possesses a dull granular look. Both cheeks [AU 58 and MS 63] will exhibit flatness, but the MS 63 example will have mint luster blanketing the cheek will look 'crusty' under magnification." I wouldn't put the difference in these terms--I would say "dull" for AU and "shiny" for MS--but there is a difference.  

[Carterofmars]

On 6/29/2024 at 2:34 PM, Coinbuf said:

Do I  own the coin or do you, because ownership adds points.   Seriously I'm a technical grade guy, rub is rub it doesn't matter if it came from circulation, roll friction, or whatever.  Rub = AU period.

I personally don't think anyone has the ability to look at a coin and make a definite call on rub being from minor circulation or friction.   That's just baloney. 

Just one of the reasons I like how CACG grades.

This seems totally reasonable. 

[Henri Charriere]

@VKurtB 

Re:  bizarre grade/value graphs and charts...

🐓:  I do not believe Q.A. has the guts to put this out there, so I shall do so for him, to-wit:

"At least technical grading, as above-referenced, is still ON the charts. Market grading, by contrast, is decidedly way OFF the charts.  Q.A. feels PCGS' inordinate fascination with market grading is the sole reason why an invisible wall has been erected at the veritable Line of Partition between grades MS-66 and MS-67 as it relates to F20F/GR, particularly.  NGC, to its credit, has retained its sanity and continues to call the shots as they sit it, with no quotas or other preconceived notions."

[VKurtB]

On 6/30/2024 at 8:45 PM, Henri Charriere said:

@VKurtB 

Re:  bizarre grade/value graphs and charts...

🐓:  I do not believe Q.A. has the guts to put this out there, so I shall do so for him, to-wit:

"At least technical grading, as above-referenced, is still ON the charts. Market grading, by contrast, is decidedly way OFF the charts.  Q.A. feels PCGS' inordinate fascination with market grading is the sole reason why an invisible wall has been erected at the veritable Line of Partition between grades MS-66 and MS-67 as it relates to F20F/GR, particularly.  NGC, to its credit, has retained its sanity and continues to call the shots as they sit it, with no quotas or other preconceived notions."

I am nobody’s PCGS fan. I exclusively use NGC. But only market grading makes a whit of sense to me. “Nick picking” is just a stupid way of grading coins. Strike quality HAS TO COUNT. Lustre HAS TO COUNT. Planchet quality HAS TO COUNT. “Color” HAS TO COUNT. 

[GoldFinger1969]

On 6/30/2024 at 8:36 AM, J P M said:

I agree but I have seen many a MS coin that looks like it should be graded much lower. Also, many a MS that should be higher than it is but that would increase the value by hundreds and that have to be guaranteed by the TPG company. I think the marketing factor plays a larger part in the grading of coins much more than it used to. Money,Money,Money, why else would there be so many different labels for the same coin struck in the same place. 

Read that infamous "Franklin Gradeflation" thread ATS.  I may have posted excerpts here.

[GoldFinger1969]

On 6/30/2024 at 9:57 AM, RWB said:

Accuracy comes first, then consistency. These are things the TPGs promised when they began. Where is that promise today?

I think they try and do both, but consistency doesn't mean perfection.  And sometimes you DO have an egregious outlier, like the Franklin Gradeflation situation.  1 1/2 grades and a CAC boost....and it goes up 25x in value ? 

Look at Albanese's comments on market grading back in 1985.  

Edited 3 hours ago by GoldFinger1969

[GoldFinger1969]

I can live with either MARKET or TECHNICAL grading.  It is CONSISTENCY which is the key....PREDICTABILITY is best.

That is why CACG is causing so much hysteria -- it's a change.  A BIG change.  Before, both PCGS and NGC were pretty much 2 peas in a pod. 

And the change is focused on an issue which is not black-or-white or rather has never BEEN TREATED like black-of-white....namely, the rub/wear/friction issue.

[GoldFinger1969]

On 6/30/2024 at 11:11 AM, samclemen3991 said:

"If anyone comes to you with  coins that are over 100 years old and make statements that are 100% guaranteed as to grade or condition.  Hold on to your wallet and suspend belief!".  James

But that's just it.....NOBODY was told to take these grades or numbers -- or even the MS vs. AU split -- as Gospel.  They are almost all JUDGEMENT CALLS, especdially the wear/rub/friction debate on MS vs. AU.

If a coin is definitively MS....then I would hope that PCGS, NGC, and CACG should all be within 1 grade on the number.  I would think that an MS-65 Saint should not differ by more than 1 increment.

Edited 3 hours ago by GoldFinger1969

[RWB]

TPG declarations are not treated as "judgment calls" by the coin buying market....not even when modified as "good judgement calls." No auction company adds "shows a touch of abrasion" when describing a coin whose label says "MS64."

If the CACG experiment in truthfully labeling abraded coins as "AU" fails, then the last moment of trust in so-called "independent grading" will have died. The hobby is already nearing strangulation from frauds, counterfeits, on-line liars, and an overall societal level of ignorance not seen since the middle ages.

Edited 2 hours ago by RWB

[Just Bob]

On 7/1/2024 at 1:22 PM, VKurtB said:

I am nobody’s PCGS fan. I exclusively use NGC. But only market grading makes a whit of sense to me. “Nick picking” is just a stupid way of grading coins. Strike quality HAS TO COUNT. Lustre HAS TO COUNT. Planchet quality HAS TO COUNT. “Color” HAS TO COUNT. 

Then wear has to count also, and a coin with wear can not be considered uncirculated. I agree that strike, luster and eye appeal should be considered in a grade. It has always been that way, and always will be. But saying that a pristine coin with rub can't be priced above MS value if it is graded AU means that you are buying paper labels instead of coins. Hypothetical situation: a raw gem bust dollar comes up for sale. It would easily grade MS66 if not for discernable cabinet friction. The coin is easily worth 63 money, even with the rub. According to what you have written in past threads, it would need to have a label on it stating that it was MS before you would pay what it was worth. That, my friend, is collecting labels, not coins. If I have misunderstood your position, please correct me.

[samclemen3991]

Actually goldfinger you are getting one statement without any context.  In the 1990's several things were going on all at the same time.  One thing was that some people in the coin markets were trying to market coins as being graded so consistently that they advocated a sight unseen market.  You also had people who were trying to turn rare coins into a fungible investment tool.  There were several groups who tried to offer rare coin "Money market" funds that were suppose to hold "fixed" grade coins that would be held say 2 years , then  sold at large profits.  On top of that you had the open competition for "which" grading service was suppose to be the "True" market maker when establishing a supposed grading standard.  The comment he was making at the time was  based on too small of a sampling to meet statistical standards but DID expose that even the people who were suppose to be the top experts and graders could not be counted on for such exacting results.  James