Overgraded Coin Dilemma

[gmarguli]

I have a coin I purchased for the color. I like the color and finding this coin with nice color is somewhat difficult, but they are out there. It is not monster color by any means. It's just nice original colorful toning. I did not pay a real premium for this color and I picked up the coin at a good price for a generic example.

 

Since I have owned the coin, maybe a couple of years, it has approximately doubled in value. It's still not an expensive coin (under $1,500).

 

Now the dilemma.

 

In my opinion the coin is overgraded. I would say that the coin is overgraded by 2 full points. I believe that the grading service would readily admit to this. When I purchased the coin I wasn't that familiar with the grading of this series (a mistake) and I was basically buying color and not grade.

 

Its grade really doesn't matter to me personally. I don't intend to actively compete in the registry. It's not a great "registry coin". While a very high grade, it is available in this grade and there are a handful of examples graded one grade higher.

 

My reasoning for not knowing what to do is due to several factors. I like the coin and plan on keeping it. In its current grade it is much more likely to go up in value than if it were regraded either 1 or 2 points lower. Again, this coin has approximately doubled in value since I purchased it. The two grades below have not had much movement and if I had to take a guess, I would say that they went down in value.

 

What would you do with this coin? Should I send it back to the grading service and have them downgrade the coin and pay me the difference (which right now would be more than I paid for the coin, but I don't need the money)? Should I just keep the coin and sell it as is down the road when I tire of it or find a better example? Should I wait to downgrade it hoping that it will go up in value in the future so I can downgrade it later for more money? Something else?

[michael]

i will play fortune teller for you early this morning

 

i see you sending in this coin for grading guarantee

 

then you get your money difference when downgraqded and then keeping the coin till you sell it for whatever reason

 

and the coin sells to someone based on its color and correct grade!

than lets say to a reseller who puts someone who is uninformed into this coin at a huge higher price based on the color and the grade marked on the holder not the coins true grade

 

if the above downgrade and reimbursement happens then i likes it

 

and of course the eventual end buyer and greg wins hopefully? but nothing is for certian

 

sincerely m ichael

[DonHeath]

Greg, how good is the color? Did the coin get bumped based on eye-appeal the first time? Just curious. I don't guess that would have any impact on my answer. I'd ask for a review . As for the timing, tough call. I think your only obligation is to the future buyer, but knowing my personality, I'd do it now because the coin would bug me, and because you never know what the market will be in 6 mos. It's unfinished business.

 

BTW - OT but in your example you were the buyer and not the original submitter. I wonder if the various services keep enough imformation to not refund the original submitter in the same circumstance for a coin that has been holdered for several years?

[CarlWohlforth]

That is a decent dilemma to have. It sounds like sending for a downgrade is a no lose situation. If it does downgrade you recoup the cost of the coin and still have the coin that you like and wanted to keep anyway. If it doesn't downgrade you are out a few bucks but should feel better when you eventually go to sell it.

 

As to timing I would try it now. If things unfold as you and michael predict you have a nice coin with no carrying costs. I can predict the future with %100 certainty: the market will either go up or down or stay the same

[Wihlborg]

Greg,

 

I would send it in for review now. Even if I were happy with the coin and intended to keep it, every time I looked at it I would be bothered by the fact that it is not graded correctly. Also if the time ever comes where you wanted to sell the coin you would have the peace of mind knowing that the coin is in a holder with the right grade without having to put off selling the coin until you had it regraded then.

 

John

 

[keithdagen]

If you think that there is a possibility that you'll upgrade the coin, or replace it at some point, you ought to send it in. You wouldn't want to actively sell an overgraded coin.

 

[Beijim]

Greg,

 

This is one of those "I don't shave your face in my mirror" questions. But since you seem to be a standup guy, I concur with the other respondents who advocate sending it in now for grading guarantee review.

 

The main issues here are:

• How much it bothers you to know that the coin is improperly graded; and
• How much liquidity you want, assuming you plan NOT to hose the next guy.

I'd propose that the peace of mind of knowing you did the right thing coupled with the ability to sell the piece on a moment's notice are worth the (unpredictable) sacrifice you might make in overall capital gain. The problem of knowing when to send it in for the grading guarantee is the same as the problem of knowing when to sell an investment in the absence of concrete performance goals (i.e. triggers). You can't.

 

Regardless of what you decide, I'd rather have your dilemma than a spike through the head.

 

Regards,

Beijim

 

[Oldtrader3]

If it was me, I would send it in for a regrade (to quit obsessing over it). That way, if you ever decide to, you can sell or trade it with a clear conscience.

 

I have exactly the opposite problem. I have a scarce date coin that I purchased (graded raw as MS63) in a Major Auction over a year ago. I sent it in for grading and it was bagged for "Cleaned". After a year of sitting in my safe, I am pretty sure that the coin is not still under warrantee by the Auctioner. I guess that I am stuck. The coin surfaces looked a little "off" but I never considered it as "cleaned". So, I get to lose money on this coin.

 

Ah, the darkside of the hobby!

[jtryka]

Greg,

 

Clearly, the grade on this coin was the result of a mechanical error, and it's your responsibility to send it back so that it can be corrected. If you don't, I'm afraid the service may come after you for not abiding by the terms of the submission agreement.

[Elcontador]

Greg,

 

As a collector, I would not keep a coin about which I felt uncomfortable (my mother was an English teacher, hence the sentence structure). One thing that has not yet been discussed is that I have seen a number of type coins in the $2,000 to $5,000 range upgraded one or two points due to color -- not Morgan $s -- being routinely sold at large auctions. The color on these coins was attractive, though they're available if you are willing to look around.

 

Part of me says that getting the $ re the downgrade is the most honorable thing to do. OTOH, the collector should know what he / she is buying, and if you sell the coin "as is," you are not making any false representations about the coin. You could sell it on E-Bay making what you think to be appropriate disclosures.

 

We all see these overgraded coins routinely on the bourse floor, and they 'magically' appear at large auctions every three months or so. Think about it.

[BushMan]

Personally, if it were me, I would go ahead and submit the coin for the grade guarantee today. Though, since you feel the upside potential for appreciation is strong, I could understand waiting. Even though you don't think you need the liquidity, with your knowledge I'm quite certain you could, using the money from the grade differential, obtain a new coin with lots of appreciation potential. You get to keep your coin, graded properly, for your collection and you have another nice coin with lots of appreciation potential. Much of my decision would be based upon my expectation for the continued success, and demand, for that coin's series. If new collectors aren't being drawn to the series and demand is faultering or if the series' Population is rising significantly, then I would definitely submit the coin for the grade guarantee today. Good luck!

[gmarguli]

I showed the coin to an extremely knowledgeable grader today to get his opinion. I did not tell him that this was the coin I mentioned in this thread nor do I know if he has read this thread.

 

His opinion was that the coin was overgraded. He basically said that he did not like the coin at the current grade and felt that 1-2 points lower was more appropriate.

 

He also stated that should I send it in to be downgraded that there was no guarantee that it would downgrade since coins that look like this are readily available in slabs and that if they downgraded it, they would be admitting that all hose coins are mistakes.

 

We will see what happens. The coin will go in for downgrade in the near future.

[clw54]

Since you plan on keeping it, why not just crack it out and keep it as a raw coin?

[gmarguli]

Since you plan on keeping it, why not just crack it out and keep it as a raw coin?

 

Because I want someone to pay me for the grade difference. If I crack it out without getting the downgrade I lose the money that the grade difference guarantee would give me. After they downgrade it, they will return the coin in a new slab with the correct grade. No need to crack it then.

[lazeroo]

so we know the coin is in an pcgs holder , right ?

 

and we know it's from the 1900's right.

 

how about giving me a hint gregg.

 

it would be helpful to know exactly what coin we were talking about.

 

 

[gmarguli]

so we know the coin is in an pcgs holder , right ?

 

and we know it's from the 1900's right.

 

how about giving me a hint gregg.

 

it would be helpful to know exactly what coin we were talking about.

 

 

 

I never said what holder the coin was in or what type of coin it is. I didn't mention that because it wasn't really material to my dilemma. Having said that, I wasn't keeping it a secret.

 

The coin is a Columbia commemorative (1936) in an old NGC slab graded MS67.

[clw54]

Since you plan on keeping it, why not just crack it out and keep it as a raw coin?

 

Because I want someone to pay me for the grade difference. If I crack it out without getting the downgrade I lose the money that the grade difference guarantee would give me. After they downgrade it, they will return the coin in a new slab with the correct grade. No need to crack it then.

That makes sense.

[MichaelG-migration]

you could start a pool - post a picture of the coin and we can guess what what the grading service will do. If it's ANACS, based on my experience, the grade won't change and they'll keep your $12.