A $5000.00 bump, and Why I am Extremely Suspicious of 3rd Party Grading

[dragon]

Bowers ANA Sale, Session 3, Lot # 2130 (can anyone link a pic?)

 

It's a toned 1882-CC now in a PCGS holder graded MS67!! I used to own this EXACT coin in a PCGS MS65 holder, I'll never forget it. I thought this coin was so nice for the grade and a borderline MS66, I actually tried it twice to see if it would upgrade to an MS66 and both times it came back an MS65 again (and I'm not really into the crackout game). I ended up selling it to a very high profile dealer for a bit over MS65 money or about $400.00 because I was so frustrated over it........and now low and behold it's an MS67 and a $5000.00 coin.

 

The funny thing is I originally bought this coin in an old ANACS holder graded MS65 and crossed it over to PCGS, so they actually graded it an MS65 THREE times for me including the two subsequent resubmissions.

 

I remember joking with the dealer I sold it to, telling him that coin would be bumped to an MS66 one day IMO, and he said that he thought it was just a really nice 65 but would NEVER grade out a 66 at PCGS. He was correct, it bypassed the 66 and went straight to an MS67.

 

I have sold many high end coins in the past and seen them graded a point higher down the road, but this one really irritates the livin' snot out of me. I find it extremely hard to believe that a team of graders AND a finalizer at PCGS would grade the same coin THREE TIMES an MS65 for me, and then magically decide it's an MS67 a few months later........and I now question the whole system, and it's not what you know, but WHO you know IMO.

 

dragon

 

 

[coinman1794]

You mean you think PCGS is inconsistent ?

[jtryka]

How much time has passed since you sold it? Not that it makes much difference, but with grader turnover, it could be a partial explanation if it was a number of years versus a few months.

 

As for questioning the system, I stopped long ago. Once you find the answer is that there is a lot of shennanigans going on, and that the big graders are most concerned with pleasing large dealers (I know this is a generalization that applies more across the street in my opinon) rather than grading accurately and consistently, you give up on the games and find a nice quiet and interesting corner of the hobby where you can still find nice additions at fair prices.

[PQSeated]

It sounds like there is insider grading going on at PCGS. You should ask David about it in the Q&A forum. He probably won't respond to it, though, because he probably knows that insider grading is going on. It's a shame that this happens.

[dragon]

jtryka,

 

I bought that piece maybe 18-20 months ago and sold it maybe a year or so ago. I saw it in an MS67 holder several months later after I had sold it, this is now the 3rd time I've seen it.

 

dragon

[Beijim]

Dragon,

 

This tale nearly brought a tear to my eye. What a miserable and demoralizing experience. I'd be annoyed to the point of apoplexy. Other than the obvious conflict of interest issues, your narration raises again the question of whether it's better to break out a coin or resubmit it in the existing holder.

 

Generally speaking, I'd be inclined to resubmit in the existing holder for the two most obvious reasons: minimal risk of physical damage and zero risk of receiving a lower grade. However, in the real world, with human graders, I suspect it's best to break the coin out.

 

It's impossible for me to believe that human graders aren't at least subliminally susceptible to the inertia, if you will, of an existing holder. This issue was discussed numerous times on these boards, and I appreciate greatly (and believe) the candid replies of the NGC graders who've written that they ignore the existing holder's label. However, there's a subtle psychology at work even when the grader is unaware of the coin's previous credentials. It says, "This coin has already been reviewed at least once by several of my peers, possibly even myself, and assigned its current grade. Could we really have been wrong?"

 

Giving everyone in your story the benefit of the doubt (and it's a windfall), there is at minimum the nonzero probability that PCGS resisted admitting it erred. The most generous scenario I can see is that someone subsequent to yourself actually did break the coin out and resubmit it blind. That would in theory have removed the "we're never wrong" consideration, assuming nobody remembered having graded the coin previously.

 

I rather suspect, however, that your worst suspicions are closer to reality .

 

With sympathy,

Beijim

 

[dragon]

Beijim,

 

Each time I submitted that piece to PCGS, I broke it out first, even the first time when it was in an ANACS holder,,,,,,so PCGS saw that coin as a raw coin each of the 3 times when I owned it and submitted it.

 

dragon

 

[Elcontador]

I bought that piece maybe 18-20 months ago and sold it maybe a year or so ago.

Howard, I don't mean to nitpick, but could you be more specific?

 

The reason I ask is that I don't know exactly when, but I believe PCGS started putiing more emphasis on eye appeal - luster / color, etc., and paid less attention to a coin's surfaces in the last year or two. Frequent submitters could tighten up this time frame, as I rarely submit coins for grading.

 

If you've seen this coin made available 3 times after it made it into a 7 holder -- say in the last year -- I can only believe that dealers bought the coin and are turning it over because it is not nice for the grade and a serious collector wouldn't want to pay 7 money for it. In this market, you get an attractive, scarce coin for the grade out there, a collector will pay strong money for it & the coin stays in his collection.

 

Two recent examples coming to mind are the 1919 P SLQs in FH PC 6 which were recently sold. Bowers sold one at auction & Whitlow sold the other. Gorgeous coins. Both went for over trend. There's currently another one, same grade, which is available at auction which is not nearly as nice.

 

Due to grading inconsistencies, I sincerely believe that if you submit enough coins, mistakes will be made. Also, occasionally a submission sent in its current holder will upgrade. Been there, done that.

[kranky]

dragon, I don't blame you for being irate. I don't know how much the price difference is between 65 and 67 but that's not even the issue.

 

If a coin grades 65 three times, it should never make it into a 67 holder no matter how many times it is submitted. Mistakes? I'm not sure. It could be that certain submitters get the benefit of the doubt, or it could be beyond the capacity of humans to accurately distinguish among 11 levels of mint state.

 

Does anyone ever submit those liner coins through a big dealer to see if that makes a difference?

[gmarguli]

I find it extremely hard to believe that a team of graders AND a finalizer at PCGS would grade the same coin THREE TIMES an MS65 for me, and then magically decide it's an MS67 a few months later........and I now question the whole system, and it's not what you know, but WHO you know IMO.

 

We already know that we were fed the lie of "two graders agreeing and a finalizer concurring" to get the final grade. How many times did PCG$ tell us that story? Then we find out that hasn't been true for a LONG LONG LONG time.

 

Given the level of inconsistency over there, I honestly believe it is one grader assigning a grade and perhaps if it is a money grade or something special it gets looked at again.

 

I cannot believe that after the coin is in a slab that someone actually looks at it again to verify everything is correct. Too much stuff slipping out like my MS CAM cent or my Proof commem that was only minted in MS or that damaged O/C large cent that was talked about across the street.

 

 

[dragon]

If I had more money than brains, it would be interesting to bid on and get that coin back out of the Bowers sale, crack it out again, and see if it would come back from PCGS now as an MS67 for ME....I somehow think I'd have better odds at winning the Powerball lotto.

 

dragon

[Leothelion]

If I had more money than brains,

 

I'll never forget it. I thought this coin was so nice for the grade and a borderline MS66

 

Dragon

Why did you sell it? Not that you wouldn't have a very good reason. As for me, I'd have a tough time letting go any of my best coins. Not that I haven't. I rememeber checking over some dealer/collector FS nickels in a capital holder and I have sold this guy some coins in the past and a coin caught ny eye and I remarked that it was a very nice coin and then I remembered that it used to be mine. I was about to talk this guy out of this coin but again, I remember why I had sold it.

 

Leo

[Oldtrader3]

Dragon:

Here is the Lot Scan (attached).

[GDJMSP]

Dragon -

 

As I said a few weeks ago - I think it has a lot more to do with grading standards changing over time than it does with insider grading. Just my opinion.

[dragon]

GDJMSP,

 

The grading standards on CC dollars have not changed by 2 full grades within a several month time frame.

 

dragon

[crito]

Yeah, you just can't grade. It's an ever evolving standard that only $250,000 per year experts can keep up with. Or maybe it's because you only paid $30 instead of the required $100 for that kind of bump IMHO, ANACS pulls the same kind of krap though.

 

[gmarguli]

Yeah, you just can't grade. It's an ever evolving standard that only $250,000 per year experts can keep up with. Or maybe it's because you only paid $30 instead of the required $100 for that kind of bump IMHO, ANACS pulls the same kind of krap though.

 

Yes Dragon, you do not have a "world class eye" so you have no right to complain.

 

Do you know if the coin was "enhanced" since you sold it?

[Beijim]

Each time I submitted that piece to PCGS, I broke it out first...

 

Oh man. That's grim. Looks like your original hypothesis is quite likely. You simply don't golf with the right crowd or kiss the correct hynie.

 

Beijim

 

[islemangu]

This case and another similar case was discussed/exposed on the other side of the fence and the top brass there have not stepped forward and said anything that I have seen. On this thread, one point is that with the multitude of gradings you will naturally have some outliers of overgrades. If this point is true than the same type things would be happening with all 3rd party graders. Have any long term members here remember any threads along these lines with NGC and if so did NGC mangement step forward and attempt to explain/rectify?

[cointagious]

we cracked out some coins that were holdered by a world class slabber as '63s and sold them raw to a world class grader at '65 money or 3x the money they would have gotten in the holder. you must learn that slabs are not the 'end all' for knowledgable dealers. stop taking a financial beating because a world class grader gave you the back of his hand.

[dragon]

gmarguli,

 

With the type of toning that piece had, I sincerely doubt the coin was 'worked on' since I sold it as that would have been a hard coin to doctor up.

 

dragon

[gmarguli]

This case and another similar case was discussed/exposed on the other side of the fence and the top brass there have not stepped forward and said anything that I have seen. On this thread, one point is that with the multitude of gradings you will naturally have some outliers of overgrades. If this point is true than the same type things would be happening with all 3rd party graders. Have any long term members here remember any threads along these lines with NGC and if so did NGC mangement step forward and attempt to explain/rectify?

 

I've told this story across the street before. In the late 1980s/early 1990s I purchased a beautifully toned Walking Liberty half. This is the type of coin that would be called monster toned today. It was raw and the seller (auction house) graded the coin MS67. I graded the coin MS66. For those who don't know, during this time the market was insane. Priced were skyrocketing daily. A small difference in grade could be massive in price.

 

During this time the grading services were taking several MONTHS to get your coins back and there was no "economy tier". I was using the express tier at ~$75-$100 a pop. I would crack the coin every time I submitted it. First time I submitted the coin to PCGS and it came back MS65. Back to PCGS where it's MS65 again. To NGC where it goes MS65. To PCGS where it goes MS65. To ANACS where it goes MS65. To NGC where it goes MS65. To PCGS where it goes MS65. To NGC and an MS65 grade. Over and over and over again. I probably submitted the coin 15-20 times.

 

For those who think I am crazy, you have to remember the money difference between grades was well worth spending this on submission fees and I fully believed the coin was an MS66.

 

After a while I finally gave up in disgust. I was never getting the coin out of an MS65 slab. I sold the coin for well more than I paid, but probably lost a fair amount of money after spending a fortune on the submission fees. A few years later while flipping thru an auction catalog there is a picture of a coin and it jumps out at me. It is my ex-coin. It's sitting in an NGC MS67 slab.

 

Given the way the services have loosened up now, it might be an MS67 by todays standards, but in no way was it an MS67 by the standards when it was graded. How did it get into an MS67 slab when I couldn't get it into an MS66 slab at 3 grading companies over a bunch of tries?

 

I don't know who bought the coin from me (auctioned it off) or how they submitted it, but it sure wasn't a pleasant feeling seeing a coin jump 2 points after spending serious money on slabbing fees and losing every time.

 

Today that coin would probably be in an MS67* with an insane price tag attached to it.

 

 

[Count_Erfit]

Maybe some "wear" wore off.

 

[crito]

I've heard the same story from so many DIFFERENT people, it just can't be coincidence. I've been under the impression that it's because I'm a cheap skate but I could be wrong in which case, glad I didn't pay even more to get biatch slapped

 

[dragon]

Greg,

 

And the best part of our stories is the services have no liability, nor do they even have to offer any type of explanation to justify their actions, because as we all well know...

 

GRADING IS AN ART, NOT A SCIENCE, AND OPINIONS OF ANY PARTICULAR COIN(s) CAN AND DO CHANGE OVER TIME AND/OR AS MARKET STANDARDS EVOLVE EVEN AMONG EXPERTS

 

and that blanket statement just about covers everything.

 

dragon

[shirohniichan]

And koolaid drinkers wonder why I don't prefer slabbed coins over raw.

[mark]

Shiro:

 

I was collecting back in the 1960s--obviously pre-slab. A few years ago, I submitted a few coins I had purchased in the 60s to PCGS and NGC. These coins ranged from BU gold coins, purchased for circa $75 in the 60s (=perhaps $500 in today's money) to BU trimes, purchased for circa $50 in the 60s. Several of the coins came back "whizzed." Others came back as AU. I didn't bother to submit what I nowadays am pretty confident is a counterfeit 1914-D cent. These are reasons why I MUCH prefer today's slabbed market, with all its flaws, to yesterday's raw market. (I also prefer the slabs because I had no problem allowing my kids to look at my coins even when the kids 3 or 4 years old. Drop a slab on the floor--generally no big deal. Drop a coin on the floor and it's a potentially big deal.)

 

That said, I can well understand why other collectors prefer raw coins. And, to those who prefer raw: That's absolutely okie (to quote Michael, the source of many a wise comment!) with me!

 

Mark

[crito]

I've had the exact opposite experience. I bought a bunch of Bust Halves in the mid-70's, pre-slabs. They were all problem coins that I didn't pay more than $5-$10 for. I recently sent some in to be graded and they all came back in slabs without net grades, as problem free... even from ANACS.

 

That's why I only buy raw coins

[shirohniichan]

Shiro:

 

I was collecting back in the 1960s--obviously pre-slab. A few years ago, I submitted a few coins I had purchased in the 60s to PCGS and NGC. These coins ranged from BU gold coins, purchased for circa $75 in the 60s (=perhaps $500 in today's money) to BU trimes, purchased for circa $50 in the 60s. Several of the coins came back "whizzed." Others came back as AU. I didn't bother to submit what I nowadays am pretty confident is a counterfeit 1914-D cent. These are reasons why I MUCH prefer today's slabbed market, with all its flaws, to yesterday's raw market. (I also prefer the slabs because I had no problem allowing my kids to look at my coins even when the kids 3 or 4 years old. Drop a slab on the floor--generally no big deal. Drop a coin on the floor and it's a potentially big deal.)

 

That said, I can well understand why other collectors prefer raw coins. And, to those who prefer raw: That's absolutely okie (to quote Michael, the source of many a wise comment!) with me!

 

Mark

 

I'm not saying that I only buy raw coins. My point is that I don't see the point in paying much more for a coin because it's in a certain slab when a raw coin can be had for much less. I also lean so heavily to eye-appeal that I don't care if the coin I buy is MS-63 or MS-65 according to the higher powers. If I can look at it with an educated eye and figure it's choice BU, I'll pay a choice BU price. If it's in an AU-58 holder, some may say I'm paying way too much. If it's in an MS-65 holder, some may think I'm being cheap.

[mark]

Shiro:

 

I, too, am big on eye appeal. I tend to use slabs as the foundation for buying a coin: I (or, my wife and I...sigh....) set a minimum grade (she more often sets a maximum grade...again, sigh), and then look at only coins that are slabbed in the acceptable grade range. But just becaase a coin is slabbed at a certain grade is not sufficient for us to buy. We have to like the coin, which is where eye appeal comes into play.

 

Our process is different than yours. If you might want a coin that appears to be MS65, you look at MS63 coins as well as higher grades and if you find a GREAT MS63, you are willing to buy. We don't; we would look at only MS65 coins. I think it's a lack of confidence on my part--I figure if a coin is graded lower than we want, I MUST be missing something when I look at it. I think your way is better--I wish I had confidence...

 

 

Mark