New grades needed? Or just drop the AU and MS letters?

[Tradedollarnut]

Friday April 11, 2003 6:10 PM (NEW!)

 

 

 

I've seen some really nice AU58 coins lately. I'm aware of the debates on the board in the past about technical and market grading. It seems that the grading services have a hard time and switch back and forth on the subject. I wonder if it's time for a change in the way grades are assigned to lightly circulated coins.

 

In another thread I posted pictures of the Amon Carter 1872-CC Seated Dollar. It is graded PCGS AU58 but has the eye appeal of an MS64 or 65 coin - but enough field lines and high point rub that it's certainly circulated. To my eye, the coin should be valued around MS62.

 

Isn't it time for the AU60, AU61, AU62, AU63 and AU64 grades for these super looking coins with a bit of rub? What's wrong with having an overlap of the AU and MS grades? Wouldn't it aid in assigning the proper value to these super looking, lightly circulated gems? Can't the rub on the coin simply be taken into account in assigning the grade and the artificial limit of 58 be ignored?

 

We all know that some technical AU coins are worth 62 or 63 money. I've cracked out AU58's in first generation holders and gotten the MS64 grade. So why beat around the bush - why not assign the proper grade [value] for the whole package, rub included, and be more accurate?

 

 

[DonHeath]

Absolutely. It is an idea I've been comfortable with for some time. As for the value of an AU-64 compared to an MS-64, let the market decide. Is an AU-64 worth more than an MS62? You bet. I hope someone listens. My guess is collectors and dealers will remain resistant to the idea, but it makes for better grading.

[EVillageProwler]

The BHNC folks have used the AU6X grades for a while now. That is why a coin graded AU55 or AU58 but is otherwise superbly lustrous commands easy MS62 money.

 

EVP

 

[Coinosaurus]

I don't disagree, but all the collectors with coins in low MS holders could get pretty POed about this, because an AU60 coin is probably going to be perceived as better than an MS60 coin. My guess is that, under your system, an AU60 coin would have a lot more eye appeal than an MS60 coin.

[Tradedollarnut]

under your system, an AU60 coin would have a lot more eye appeal than an MS60 coin.

 

Probably not a whole lot more. Depends on the rub - and don't forget that a really bad looking former MS60 would become a 53-55 coin. What I'm saying is that rub should just become one more factor in the eye appeal equation. If a coin has rub but it isn't detracting and it has full luster, why should it max out at 58? If a coin is technically unc but looks fugly as hell, why should it floor out at 60? Homogonize the 50-70 range and throw away the letters. Give the coin the number it deserves and get rid of the archaic notion that an unc coin automatically grades higher than a coin with rub.

[TomB]

Give the coin the number it deserves and get rid of the archaic notion that an unc coin automatically grades higher than a coin with rub.

 

Actually, I think the archaic notion also extends to the idea that the numbers that we assign to coins have relevance. If I recall correctly, these numbers were first proposed as having some relation to the value of the coin based upon wear and were specifically conceived for early copper. So, a basal state, but still identifiable issue, would be graded with a number 1 while the same issue but with sufficient detail and eye appeal meriting forty-five times that basal coin's value would be graded with the number 45. This concept was simply married into the adjectival grading scale. It was not a perfect marriage.

 

I have to be honest and say that I do not like your idea in that I think it would potentially cause more chaos than bring order. As it stands now, many knowledgeable people will pay over MS60+ money for the right AU coin. I have also done this when the coin merited it. However, legislating its value within the grade is tough. Of course, any grade given a coin does this to a certain extent, but this idea seems to go toward sight-unseen transactions and we all know that they are generally not of the highest quality. I think I will be in the minority in my position but I am not sold on this idea.

[DonHeath]

TomB,

 

I respect your opinion, and understand it fully. I wonder though if the necessity for third-party grading isn't largely borne of sight-unseen trading. Something inside me finds it patently unfair that a full strike coin with superb surfaces and great eye appeal should suffer a 58 simply because of slight discoloration on the highest point of the cheek, while a baggy coin without the discoloration might realize a grade of 64. I realize my example is extreme, and am aware such a system would co-mingle marks with wear. Currently, coins with rub are occasionally placed in 62 and 63 holders based on eye-appeal. That solution is a kludge, a work around. It begs market grading, instead of technical grading. Perhaps a reasonable solution would be to allow AU coins to be graded to the full extent of the MS range. I believe AU and MS are simply adjectival designations, not unlike FH or FBL. Since numismatics is about nothing if not accuracy, I see additional accuracy as a possibliliy under a revised scheme in which an AU-64 coin is recognized as such. JMO

[Dermott]

You're correct. The grading companies were created originally for the purpose of sight-unseen trading. At the time, grading varied WILDLY from one dealer to the next (and sometimes with the same dealer depending on if they were buying or selling) and the prices of gold and silver were skyrocketing.

 

As for the idea of AU-6X designations, part of me says it makes sense... the other thinks it will be more of a hassle than it's worth.

[Tradedollarnut]

Before the grading companies came into existance, an AU58 didn't exist. A little bit of rub was called cabinet friction and the coin still sold as uncirculated. Quite often as gem uncirculated.

 

I've been examining my collecting habits and have found some questions that I just can't answer. How much of a premium should be paid for a beautiful AU58 coin? Why would one want to "upgrade" a beautiful slider to even an MS64 coin unless it had superb eye appeal as well? Why aren't AU58's accorded the respect they are due in the Registry? How much is too much when it comes to upgrading a grade and when an AU58 actually takes 4 unc grades to beat, how can you justify the price difference?

 

For instance, a beautiful AU58 coin exists and there are only a few uncs known. Each unc has its own problem and resides in the 60-61 range. Isn't the AU58 actually the finest known specimen? My mind has trouble with that concept. It sure would be nice if the professionals said AU62 and removed a bit of the quandry!

[GDJMSP]

I have to disagree with this idea. A coin is either uncirculated or it isn't. And if it is - then AU is the best grade it deserves. That does not mean that such a coin should not command a premium above its grade - I have no problem with that at all. But when it comes to premium - let the market decide - not the graders.

[Hoot]

I believe that the idea has great merit for allowing the scales to overlap as long as the superlatives of AU and MS are maintained. I think that these are valuable designations, as they provide one with a sense, at least, of whether the coin has been handled on its surfaces. I would think that the natural limit of AU would be 64, as this connotes a "choice" grade and I think that a noticably handled coin, even though its strike, lustre, and surfaces are in excellent condition, simply cannot be gem. The gem state begins at 65 and should connote, at least in part, that the coin has no distraction from handling. On the lower end of the scale, i.e., 60-64, we span a huge gamut from beaten to but still uncirculated, to very near gem. Four points is too narrow of a gap for this depiction. I'd say that we need to lower the MS scale in this range to something around 55-58 (I'm not sure that 55 is too low or that 58 is too high), and then make greater distinction in the grade range of 55-64 for the AU grades, utilizing all of the integers as we do the MS scale. This would clearly remark the condition of a coin.

 

Take for example a very weakly struck but uncirculated coin. I've seen these coins very baggy, but still uncirculated. They almost inevitably get an AU grade. This is no more right than the almost never but detectably handled near-gem getting a 58 grade.

 

So, definitely keep the designations of AU and MS, but expand the ranges of grades that each covers. I'd think this would be far easier to handle grade-wise

 

We've learned to squeeze our thinking around the strange nuances of the narrow and difficult grade ranges of AU55-58 and MS60-64 (especially the dramatic differences that can occur in the MS60-62 range). Such a readjustment would be good. I think that the only process that will allow this to emerge is the acceptance and colloquial usage of such descriptors in the collector community. It will likely be a long process otherwise for this to emerge in the grading services and the ranks of such organizations as the ANA.

 

Hoot

[Hoot]

By the way, in the range of overlap, I think that the consistency of marks, strike, originality of surfaces, and other characteristics should be very close, otherwise the distinction will lose its meaning.

 

The only problem I forsee is that in terms of market value, some high-end AU coins will still outperform some gems, so the ranking according to absolute scale will be reflective only of condition, not worth. This would be fine with me.

 

And I know I'm jumping into fantasy, but one would have to have the scales so well matched, except for the condition of circulation or not, that an MS coin would always outrank its AU counterpart in the registries.

 

Hoot

[Tradedollarnut]

I have to disagree with this idea. A coin is either uncirculated or it isn't. And if it is - then AU is the best grade it deserves.

 

You miss the point I'm trying to make. When you say AU is the best grade it deserves, what do you mean?

 

 

That does not mean that such a coin should not command a premium above its grade - I have no problem with that at all. But when it comes to premium - let the market decide - not the graders.

 

Grading coins is all about assigning value. If we didn't want an expert's opinion of the value of the coin, grading services wouldn't exist. If an AU coin is worth MS63 money, then grade the darn thing AU63!!!!!!!!!!!!!!!

 

Mark: I disagree on one of your points. If an AU63 were up against an MS63 in the Registry, I'd have to say give them exactly the same points. The graders should have already taken the rub into account in reaching their net grade [ie: the coins have equal value and thus equal rating]. Unless, of course, your point is for them to ignore the rub and grade the coin NOT taking the wear into account. I hadn't thought of it this way as it does not assign an equivalent value and would require more price levels be created.

 

[EVillageProwler]

Why aren't AU58's accorded the respect they are due in the Registry?

 

This issue really isn't about the Registry; that system is merely a reflection of the industry at large.

 

EVP

 

[EVillageProwler]

A coin is either uncirculated or it isn't.

 

Oh? Grading is an art, an opinion, an inexact science. We've all seen coins that, when cracked out, get re-holdered again from UNC to AU and vice versa.

 

When we talk about "technical" vs "market" grading, we must remember that we're still talking about a bunch of expert human beings rendering an *opinion* on a coin. We ought not to speak in absolutes. This isn't a binary system; I'd call it fuzzy logic!

 

EVP

 

[msmhappy]

I personally feel the coin is either uncirculated, or it is not. Its one or the other!

 

Todays grading system is too complex for me!!

 

mike

 

dont forget! collect proof sets!!!!!!!!!

 

[EVillageProwler]

I have to be honest and say that I do not like your idea in that I think it would potentially cause more chaos than bring order. As it stands now, many knowledgeable people will pay over MS60+ money for the right AU coin. I have also done this when the coin merited it. However, legislating its value within the grade is tough. Of course, any grade given a coin does this to a certain extent, but this idea seems to go toward sight-unseen transactions and we all know that they are generally not of the highest quality. I think I will be in the minority in my position but I am not sold on this idea.

 

I was almost persuaded by Tom's argument, but we're not tossing horseshoes!

 

While it is true that most people associate value with grade, that is a situation that is really a by-product of circumstance.

 

What is really happening is that the graders are legislating "quality" or "appeal", and then allowing the market to assign a monetary value. For example, an AU58 that may qualify for AU63+ in this context can be worth barely MS60 money to some people and it can be worth MS63 money to others. The services aren't actually legislating value.

 

We pay graders to grade our coins for us. Each grade is also an assessment of quality or appeal. Some call it "technical" grading, others "market" grading. Either way, we already pay the services to render an opinion regarding the coin's qualitative aspect. The AU6X notion is merely a logical extension, and dropping the 2-letter mnemonic preface should serve to reduce confusion.

 

For example, there's been the occasional debate over what MS means. Does it mean "unc", or more like "fdc"? Is it "technical" or "market"? About all we can agree on wrt MS is that it has nothing to do w/ the developmental dysfunction.

 

By dropping "MS", "AU", "EF", etc., then we can just focus on the numbers. Data would be proud of us!

 

Last thing to keep in mind: if the majority of collectors prefer a true AU58 specimen to a true MS61 specimen, then why should the AU58 specimen garner more value than the MS61 specimen? And, if so, then why not just admit that the AU58 specimen is qualitatively better? And, then, why not just focus on the # and not the confusing AU/MS notation? And, then, why not just drop the stupid 2-letter notation altogether?

 

EVP

 

[Tradedollarnut]

if the majority of collectors prefer a true AU58 specimen to a true MS61 specimen, then why should the AU58 specimen garner more value than the MS61 specimen?

 

I think you mean "shouldn't", in which case I totally agree.

 

I am all for anything that designates the quality of the coin more accurately. I am also all for anything that aids in assigning value to a coin. I feel that there is too broad a range of quality in the AU58 grade and that the value is too hard to ascertain. In the AU58 grade is lumped AU58 - 64 unless the services choose to put the coins into MS holders [which they do on an inconsistent basis]. I would prefer to have it consistently recognized that AU coins can be valued up to 64 and have the grade commensurate to their value consistently assigned.

[coinman1794]

Wouldn't it be easier to simply pay more for nice AU58's and less for MS60's and just leave it at that. After all, a coin either has wear or it doesn't. Even if AU's were graded in the 60's range, I would still like to know which coins had wear and which ones didn't. After all, they MS64's with friction are worth less than MS64's without it.

[Oldtrader3]

An interesting concept, EVP. Over the years, most have refered to these "cabinet friction" coins as super sliders, but there have been (as everyone is aware) many dealer abuses of this appellation, with some dealers using the appellation for any coin grading VF or above. Because of collecting habits, I presently own or have owned in the past, many of these coins that are AU58+++ coins. Most looking better than many MS63 coins.

 

Maybe a letter grade of AU with an astrick or a letter grade is the answer. Some time ago I had a AU58 1934-S Peace dollar that I sent to PCGS about 6 times. Bless their little hearts, they 58'd it everytime. It looked like a stone cold MS64, full strike, with a very small rub of about (4) lines that required magnification to see on the highest cheek point.

 

I have included a scan of a 1925-S Saint (I have shown this coin before) that will make you start talking to yourself about super sliders. Each MS grade jump of this particular coin adds $1,000-30,000. You can say that a coin is Unc. or an AU period, but the reality is that all advanced collectors will have some AU58's that they would rather have than an MS60/61 coin. This is particularly true with the larger gold denomination. Plus, I have purchased several raw AU58 gold coins in auction that have graded MS62/63 when submitted to the major grading surfaces.

 

The line is not that clearly drawn, particularly with slightly understruck US gold coins (Quarter-Eagles & Half-eagles are notorious in this regard). Sometimes the only way that I can grade these coins is by using the Eagle's bill surfaces on the reverse as a guide, because the feather edges and hair curls are understruck and look AU, but do not have any surface marks.

[cladking]

I've always believed that circulated coins should recieve at least two grades. One to describe the amount of wear and another to describe it's state before the wear. This could be adapted by just using all the grades over AU-55 to describe gem uncs with rub or minimal wear. AU-59 would be a superb gem, AU-58 a gem, AU-57 a near gem, and AU-56 choice. The AU designation could be dropped to further differentiate them from other circulated coins. They could be RU (rubbed unc), or UNC, or VU (virtually unc), or some such.

 

Though it wouldn't be so very long before collectors noticed that many AU-53's looked better than a lot of the VU-57's.

[EVillageProwler]

After all, a coin either has wear or it doesn't.

 

Please read my response time-stamped 9:47AM dated 4/12.

 

For super-sliders, there is no way you can scientifically prove one way or the other on the matter of wear. I suggest that we not speak in absolutes on this matter, as grading is totally a guessing game anyway.

 

Regards,

 

EVP

 

[Julian]

Forget the #'s and go back to verbal descriptions.

 

Numerical grading is good for shorthand and for registry sets.

 

It will never describe a tangilbe item.

 

[Oldtrader3]

This will certainly raise some questions because I feel that PCGS, in particular, has not been very consistant in their assignment of AU grades. I can see a real controversy developing over AU grades, because of this laxity with grading of AU coins.

 

I have many examples of AU55 coins that are nicer that their designated AU58 coins (see attached). I also, often see but do not have, examples to illustrate AU53 coins that should be AU58. The attached Half-Eagle is graded as an AU55. In judging by wear and marks, it should be an AU58. With many gold coins, particularly earlier dates, this can mean difference of several hundred $'s between an AU55 and an AU58 coin.

[GDJMSP]

I agree completely that grading is an opinion. But when we pay a grading a service for their opinion - do we not do so because we somehow value their opinion more than we do our own ? If this is not the case - then why submit them at all ?

 

And when it comes to opinions - we all have one. And it is virtually impossible that any group will ever be of the same opinion when it comes to deciding the condition of a coin or its value. There will always be those who think that a given AU58 is nicer than a given MS62. And there will always be those who think that a given AU55 is nicer than a given AU58. The same thing can be said any coin in any grade. It all comes back to opinions.

 

What this whole thing boils down to is changing the grading standards - yet again !! I have seen repeatedly here on this Forum where every single person who has responded in this thread has voiced their thoughts about how much they wish we could have consistentcy in grading. That this particular company is consistent and this company isn't and that company can't decide it they are they aren't.

 

Well the companies who are doing the grading respond to the people who provide them with their business. So if you truly want consistentcy - quit changing the standards !

 

If you wish to pay more a coin in any grade - fine - do so. If a coin of a lesser grade appeals to you more than a coin of a higher grade - then buy it - and pay a premium if you wish. It is your opinion that matters when it comes to your money. And if you think your opinion is more accurate than the person who graded the coin and put it in a slab - great. Isn't that what is meant by - buy the coin not the slab.

 

But leave the grading standards alone or we will never have consistentcy.

[Wihlborg]

GDJMSP,

 

But leave the grading standards alone or we will never have consistentcy.

 

AMEN to that! You put my thoughts on this matter into words perfectly.

 

John

[RotatedRainbows]

Forget the #'s and go back to verbal descriptions.

 

I completely agree!!! As we all know not everyone agrees on the grade of a coin so trying to put an exact number on a circulated piece is just one persons opinion. A few years ago when I sold a number of raw coins I never put a number on them they were just described as VF or CH.VF etc. and I never had a complaint from anybody.

[coinman1794]

There are still coins that don't have any friction that should be seperate from AU's. There is a judgement call that must be made by the grader on whether the coin is AU or Unc. Most of the time I agree with their assessments. If a coin has MS luster and just light friction and looks MS, they will make a judgement call that is is MS and grade it as MS60-62, even if it has MS66 surfaces. That is because they count friction as contact and take points off the grade.

 

 

With regard to AU coins that look MS, perhaps it is better to err on the side of caution by giving a coin AU58, instead of calling it UNC. I think where the problem lies is in letting coins with friction grade MS. If you want a radical change in grading to solve the problem, it would be easier to simply stop letting coins with noticable friction be called MS. This could seperate the AU's from the MS coins and there would no longer be as much of a problem in deciding if it is MS or not. By eliminating AU and calling AU's MS, we will create a group of coins that are even more widely varied within their grade, and a new problem will have arisen. The elimination of the AU grade would be a major step in the wrong direction. That is, if we start calling AU coins MS64 and call MS64 coins MS64 too, which one do you think is better? I don't see why we would want to eliminate the distiction between a coin with wear and a coin without it. Sure there are cnsistency problems with deciding if its Au or Unc, but eliminating the distincion between the two all together would create a much larger gap.

 

I expect an MS coin to have no wear and unbroken luster. AU's do not have these characteristics so I don't want them graded MS. It is true that these coins will often sell for MS money, but they are not truely equal to MS coins. They just have the same eye appeal.

 

[Oldtrader3]

We do not have cosistancy now. Coins that a year ago would have graded MS62 are now MS63. What we have is "Market Grading", that floats according to the ecomomic changes in the market. Or, in effect, what the market will bear. In a "Bull Market" we have loose grading and high pricing. In a "Bear Market" we have tight grading with tighter prices.

 

The present market is getting pretty pricey, particularly for Gold. The best buys seem still to be Barber and Seated Coinage.

[keithdagen]

Why aren't AU58's accorded the respect they are due in the Registry?

 

TDN,

 

One of the limitations of the NGC * system is that NGC will not recognize a * coin below MS-63. In my opinion, that's a huge mistake. I have two or three coins that I think would easily qualify.

 

But I have seen hundreds of coins in AU that look no better than a MS-60, or even worse, mark-wise, and there is not a way that you can differentiate between the good AU and the bad AU when scoring.

 

Just post pics and let us enjoy these coins as they are. Even an MS-65 can be butt-ugly.