The coin you buy must be worth the same inside or outside the holder.

[truthteller]

I have had this as a topic of conversation with many coin dealers and collectors in the past 6 months. Many have concluded that this is the way to go. If you want to collect slabbed coins, make sure the $100, $1000 or $10000 you spend will be for the coin and not the holder. One day, in the near future, slabs will not be the 'in' thing of the numismatic hobby, so relying on a plastic graded coin may not be the wisest investment or hobby choice years down the line. Think of it this way, when you see a coin, ask the question, "Would I pay XXX of dollars for the same coin with no plastic?"

 

TRUTH

[jtryka]

I could not agree more.

[TomB]

It's a sound pillar of numismatics to think this way. Obviously, not every niche is highly ammenable to this and I believe that's where the numismatically less conservative might congregate.

[DonHeath]

Truth,

 

Would you elaborate? I have a good deal of suspicion regarding the financial importance placed on the holder and I agree wholly with your advice, but I'm curious what direction you believe the hobby will take. Do you feel market grading will become irrelevant?

[michael]

truth you hit the nail on the head

 

the problem is 90% maybe more? of the coins currently in holders are worth less out of their respective holders

and

for some/many the percentage of value out of the holder as compaired to in the holder.......

 

is shall we say HUGE.......

 

alli can say is let the buyer beware and i hope you know what you are buying

 

and of couse as many much better than mee have said

 

buy the coin not the holder

 

sincerely michael

 

pm me truth i gots some proof/ms 70 coins for you.............

 

now i do like the holder

but

the coin has to be all there AND then some ..........................then i love the holder........

 

sincerely michael

[braddick]

I agree, in general, but not specifically. I allow for a 10% premium for coins within NGC or PCGS holders over their raw counterparts.

 

If the spread is more than 10% than the coin- as a future investment- is suspect.

[truthteller]

Hi Don,

 

In general, there are about five criteria today which guide the collector in buying a coin:

 

Slab graded

eye appeal

rare date

population

scarcity(meaning how often do you see the coin for sale)

 

Years ago, when coin collecting was altruistically a hobby, only two of the aforementioned criteria were considered by collectors, eye appeal and rare date. From early collecting, 1850's to early 1950's, a coin's worth remained with only certain grading categories, with the higher values in AU, UNC, and BU. Gem BU came a bit later with the concentration by collectors for a higher level of Uncirculation. For those who entered the hobby after 1987, many collectors did not 'grow up' with these changes, but merely entered the hobby at a time when coins had been commercialized. From 1983 on, we have seen an investment evolution in grades, only driven by price categories, not hobby enthusiasts. The new grades developed with the Mint state categories. MS60-70. In reality, this is nonsense. Why have these subtle coin grade differences. Answer: MONEY. Thus, a coin was commercialized and the collector was 'taught' by the industry what to look for in grading a coin with these absurd technical differences. In fact, how many times have you been told a coin is expensive merely by population, or by a scacity index, or by the slab grade. This is merely an illusion and/or selling point for justification of price. If the bluesheet prices and the sightunseen indices were to disappear, which could happen, then is YOUR coin worth nothing? How does a coin transaction in Chicago determine the value of YOUR collection in South Carolina? But it does. Fast foward today. Many of the more sophisticated collectors are going back to the 'roots' of the hobby, eye appeal and rare date, and many of the post 1987 collectors are learning a hard lesson. The look of a coin will determine price again, not the slab grade. Common coins are simply everywhere, yet eye appeal coins ,outside and inside the holder, are valued for aesthetics. Thus, the slab becomes meaningless. In addition, the slab also gives the unwary collector a false sense of security, whether it be AT or a puttied coin, they are in holders, and it behooves a true coin collector is see beyond the slab and determine if the coin is really worth a dollar value. I would gladly pay 5 times a slabbed grade for the 'right' criteria, and have paid 20 times the slabbed grade because of eye appeal. The hobby comes full circle, in spite of investments, coin doctoring, hype, the well versed collector pays of the basic, eye appeal and rare date. Again, these reasonings apply to higher value and classic coins, not modern issues, where the slab means everything.

 

TRUTH

[Hoot]

More and more, I'm running into dealers with great contempt for slabbed coins. They say similar things, but mostly that the grading services have ruined the hobby by making it an industry of slabs, rather than an endeavor to collect excellent coins. While philosophically, I understand their point, I don't agree from the perspective that the grading sevices, particularly the leading services, have brought stability to an otherwise dealer-driven authenticity and grading marketplace. These improvements are, IMO, worth the added costs.

 

Hoot

[nwcs]

You know, by having these constant discussions regarding slabs you're perpetuating them. You're building awareness about them. So really you're marketing the slab companies to the public. And by constantly questioning the legitimacy of slabs, you make people look at the slabbing concept more. And that increases the awareness of slabs.

 

While I cannot say logically whether it increases or decreases sales of slabbed coins and the service of slabbing... I can say that if the market likes slabs, and becomes more aware of slabs, the market will probably go further into slab investment. And so far, it looks like the market likes slabs. With PCGS and NGC combined slabbing around 150,000 coins a month. (or whatever the number is)

 

I don't think certification services are going away any time soon.

 

Neil

[CarlWohlforth]

I think certification provides value. A certified coin is guaranteed authentic. A Certified coin has an independent opinion of the grade.

 

I understand the argument against slabs. One should study and know enough about coins to actually be able to put a value on the coin if it were raw. I strive to learn enough to be in that position. After 9 years of study I am only begining to develop that skill and then only in one or two series.

 

In America many people want instant gratification. They do not want to study coins for several years before buying one. They might want to collect things of value without investing the time required to be an expert. People like this are totally dependent on the dealer. While many (most?) dealers are honest, there are those who aren't. There are also honest dealers who don't know much about some of the coins they sell.

 

The fact of the matter is that there are many people who want to buy coins but can't determine if a coin is worth as much out of the holder as in the holder. Should these people be told they can't buy coins?

 

I think if there were no 3'rd party certification services there would be more rip offs and fewer people buying coins. I think that because I see no alternative that solves the problems encountered when unsophisticated people buy raw coins.

[nwcs]

Another thing that is lost in the argument is that not everyone who appreciates coins wants to be a numismatist. In fact, I would suggest that they may be the majority.

 

To me, a lot of this slab vs. raw thing is a lot like the rantings on both sides of the UNIX/DOS vs. everyone else debates. The purists saying that graphical interfaces were wasteful and useless. A clunky way to get things done. That command line was the only way to go, and only for people who could recompile their own kernels. And the market saying that usability and accessibility were more important. That graphical interfaces made you more productive, that most people don't need to do the things the UNIX/DOS people thought were essential.

 

And there were many predictions of the demise of the GUI, too. But let's see. It's 2003. Who won?

[DonHeath]

Great point Carl. I think the problem may be that most of us (myself included) don't know the value of the coin in the holder either. Is there a real value? I know I bought a coin raw for $5 that was graded $55 two months ago by PCGS. I disagreed with the grade and submitted raw to NGC. They got it right and graded it $800. The dealer I sold the coin to just crossed it back to PCGS as a $1200 coin. The coin is unchanged, and the value wasn't written on any of the holders. I based those prices on actual auction results. Pretty psychotic huh, $5, $55, $800, $1200 all in 90 days. Don't ask me what it's worth, cause I have no clue. I'm just glad I was the $5 buyer. I think certification is a great thing, it's just our valuations that are exaggerated. We tend to treat grading opinions as certainties. They aren't.

 

Truth, to your point, I think should there be a severe economic downturn, the only coins that would be sellable would be the true rarities, and the lesser coins would flood the channels, becoming temporarily worthless. That would change again on recovery. People like nice coins, and seem amenable to the insurance the holder provides. Is much of the market overvalued? You bet. Whose to blame? Is it the promoters of a more exact grading scale? IMO, no. Blame anyone who pays more than a 10% premium for the holder.

 

Neil, I like the analogy.

[nwcs]

I decided to post a much longer version of that thought acros the street.

 

Neil

[CarlWohlforth]

Don, if you are talking about the coin I think you are it is worth more than $5 out of it's holder to me

[Tradedollarnut]

I'm gonna respectfully disagree and state that the value of the coin raw plus the value of the holder needs to equal what you pay. Grading is an opinion and, whether the purist likes it or not, PCGS's or NGC's opinion carries value in the marketplace. Certainly this value can change regularly, but it still carries weight. Some will put a lot of stock into the holder value, some will put none. But the coins to avoid are those where your personal value of the coin plus your personal value of the holder [ie: your weight of the grading company's opinion] does not equal the cost.

 

[EVillageProwler]

I'm gonna respectfully disagree and say that I like the idea of having an emacs editor as my "windowing" system of choice. I can create several sub-screens, each running its own shell. From there, I can connect to other servers or services -- including using a text-only web browser.

 

If you give me a rich terminal, then I can use emacs' color features too.

 

So much speed, so much functionality, and I'm only using command-line mode. (And, I can always use one of the sub-shells to recompile my kernel!)

 

 

EVP

 

[DonHeath]

TDN, I sure agree that the value of the holder is a personal choice.

 

Carl, it is, and thank you very much!

 

Neil, Although I love your analogy, can I pick on it for just a minute. There are many computer users who have an absolute lack of understanding of the limits of the hardware/software they are using. The secretary who takes the two-day introductory course, who produces the powerpoint presentation linked to an excel spreadsheet she prepared by looking up the correct formulas using the help system usually has no idea regarding the complexities of binary coded decimal math performed in 64-bit hex at the registry level. Important decisions are made based on that presentation, with the sure knowledge that the software performed correctly, while none of the parties involved having any familiarity with how the process works. Intel actually shipped a chip with a floating-point error that went undetected for several months before being discovered by an outsider. Many rely blindly on the results those systems produced, and increasingly less trained personel produce increasingly less reliable information. The GUI enables a computer neophyte to apply computing power to a task. They can prepare pie-charts for the afternoon meeting while IM'ing their kids, and loading weatherbug, using $3000 worth of hardware. Ah....progress.

 

I know for a fact that you are not satisfied being either a neophyte computer user, or an uneducated slab buyer. Your computer skills are obvious, and I attended grading class with you. The slab, just like the GUI aren't the only way or necessarily the best way to do things. They just require the least education. I know that's not how you do things.

[nwcs]

Yep, I like to learn everything. But what I'm trying to say in the analogy is that the tirade against slabs is old. If the market is moving ever onward toward them, then there is a majority that is obviously not as outspoken in their support of slabs as the opponents are against them.

 

I think of it another way, though, than dumbing it down. It leaves room for innovation. If you don't have to spend lots of time and effort to do the basics, it leaves you time to focus on other things. To put it in the analogy of a presentation, it allows you to focus on making a good presentation and not on learning the obscure commands and concepts programmers put in when they are unchallenged to make their software usable.

 

It's not to say that errors never happen. But I think fewer errors happen now and the benefits far exceed the cost. After all, which member here would demand their new car not have a computer chip in it? They certainly have problems now and then. False alarms. Would they be willing to give up the conveniences the chip brings? Who would bring up an objection to having cable for their TV? After all, there are shortages and problems. But the benefits outweigh the costs.

 

That is my argument. The benefits of slabs outweigh their costs.

[BankNote1]

Truth has some truth. I remember when a coin was Unc., and some dealers started to use Choice, etc. to describe their better stuff. But a Unc. Morgan Dollar was $1.50. I remember paying $3.00 for a BU 1880-O! You could also get a great looking Double Eagle for $70.00. I also remember 1979 when every coin was MS65! Also whizzing was very popular among coin dealers. I had a great collection of whizzed up junk. Something was needed and in the last 20 years or so we have been ajusting to coins in slabs. It would be nice not to have to rely on these third party graders, but do we really want to do without them? Yes, I do think there is to much price difference from one point in grade to another. We are talking about grade rarity. But coins aren't rare! Even most of the rare ones aren't rare! I read not long ago about one dealer selling over 10 tons of "rare" coins last year, alone!

 

I guess, it all boils down to why we collect what we do. Are we after that condition rarity for a registry set? Then maybe the price differences are justified?

Maybe we are just interested in having a few nice coins in our collection? Are we buying to resell, then we might be playing that crossover game?

 

I had a thought when I started this post but I lost it somewhere along the way???