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CHANGE the standards to "SAVE" the "hobby!"

9 posts in this topic

I just got an email from a major dealer. Golly, it was reminding me that "GRADEFLATION" is a really, really, serious problem.


AND.... that "Wall Street" is back. The same element that destroyed the 1989 "coin boom."


AND....that the grading services may soon be CHANGING some standards.


Along WITH a reminder that coins are not for SHORT TERM gains. (uh-oh)




This is what grade "changes" mean:




Before slabs, in 1980 coins were SOARING in price.


But...in explanation, before grading we had BU, Choice BU, and Gem BU. Some started using the numerical grades and we all lived happily. We traded coins and all KNEW what a 65 was. Then the silver market crashed and a lot of dealers, collectors, and "investors" wanted to sell their coins.


Then came the grading services. But the dealers didn't want to pay the enormous prices that coins had been bringing, so they changed what everyone HAD BEEN paying 65 prices for to appx. MS63. This coincided with a Wall St. coin investment "index" that was making people get the foolish notion that they owned a stock or a commodity instead of a coin.


Thus, by changing the grade standard, the coin peddlers were able to say that there had been no decrease in coin values. But what really happened was that the coins that had been bought at 65 prices could now only find homes in 63 holders.


But.......the mainstream press had no idea. The index was intact because it could be DEMONSTRATED that a 65 still sold for 65 money. But what was NOW a 65 was what used to be "Superb Uncirculated" which was far higher priced than what real people were trading at 65 money.


So, by just upping the standards, the market LOOKED intact and rosy. It was NOT!


Many dealers went down to lawsuits and worse. Even though they committed no crime. Other than falling victim to the then current practice of letting clients think that coins were suddenly an "investment."


But the judges sided with the ignorant people and only saw that what had been sold to them as a 65 was something that they could not sell for 65 money anymore.


So...........any tightening of grade should be considered to be a CHANGE of the market.


Just as happens with raw coins, people pay more for nicer specimens. So if anyone says your specimen is not as "nice" as it used to be, you have suffered a decline in value.


This is a warning bell. When prices begin to outstrip what the market will bear, the easiest thing to do is CHANGE what ..were.. "standards."


It's oh so much "cleaner" than admitting that the market is ..stretched.


Call it "gradeflation" or anything else, this is NOT and never WILL be a fungible "investment" that will reward WALL STREET.


CHANGE is a-brewin.' Be careful what you wish for.



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Investments of any type involve risk. If you put your money down to invest in coinage and the market does not hold, then you lost your money. If the investor is too stupid to learn about what they are buying, then the investor gets what they deserve. "A fool and his money are lucky to get together in the first place!"


I think that any future lawsuits will not have the same results as the ones filed in the early 80s because the defense attorneys should be smarter. It was years later when it was discovered that a some of the judges involved in these cases also lost money in the coin and precious metals markets. Defense attorneys will be more diligent in ensuring that judges who have these conflicts of interest will be recused from these trials.


Finally, it can't be stressed enough: BUY THE COIN, NOT THE HOLDER!


Scott hi.gif

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Investments of any type involve risk.

And that risk is magnified by any CHANGE in standards of reporting.


Sure, buy the coin and not the holder, but why trust a holder if "standards" change? And if standards change and "Wall Street" buyers find that what "WAS" no longer "IS" will they remain?


I vote no.


"Investment" money in ...coins... depends largely on trust of information. If that trust is IN ANY WAY altered, the trust is broken and the money will flee.


What's it got to do with NUMISMATICS? Nuttin at all.


What's it got to do with "values?" The entire world.


There was nothing "wrong" with the authentication of the early ANACS certs. They served a valid collector need. Numerical grading, on the other hand really does not unless all services are equal and consistent.

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I know a lot of gold investment companies are pushing gold coins rather than gold bullion on their clients because the markups on coins are much steeper than on bullion. They probably don't tell their investment customers that the coins can't be sold back to a dealer anywhere near the retail prices they paid. Such dealer have technically done nothing wrong, so this is just another reason why investors should stay out of the coin market. Unless they have a strong interest and are going to take the time to learn coins, become a collector, and as others have said, "buy the coin, not the holder," they will not do well financially.

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PT Barnum had it right there a sucker born every min when there were 25 Million people in the US BUT now there's 300 million people so it's really a sucker born every 6 seconds. or 10 a min 600 hr 14,400 a day 5,256,000 yr plenty of new customers go around

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In the coin business I see a growing problem within its self.

I will try to explain.

In most business supply and demand drive prices and I feel we all know that. But what happened to marking a product (coins in this case) up a certain percentage and leaving it at that price until it sells?


What I find in trying to buy from dealer and other collectors is that they have a coin for sale and you ask the price and they step back and say something like, At today’s spot that coin is worth such n such. Or let me grab my gray sheet and see what the coin is worth. Or the average price on eBay is…….


So it seems these practices have driven buyers to places such as the US Mint to buy at cost and hope to either hit the BIG grade at a TPG or buy enough of a sellout product and cash in big time.


From what I see we are killing our own hobby from within. There are some that will sell at a good deal. Those who do are few in numbers and most times sell common items to make themselves and the buyer feel good.


Wall Street and others just take advantage of what they see in a growing business.

I have no suggestions to fix this. I mean no harm to anyone and I am just posting my opinions.

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coins are not an investment


they are either a speculation or a collectible


as a collector collect coins with discretionary income only

make sure you know what you are buying and only buy value opportunity coins with a fundemential reason to rise in demand


if you do not understand or cant do the above then you are not yet ready to buy coins as a collectible and get value and opportunity you might get lucky but the odds are against you

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My OP wasn't really to call attention to the investor/collector perpetual argument but to the fact that the missive stated that WALL STREET ..was..buying again ...AND... that the grading companies were considering (pick one or more) "changing" "tightening" etc.


THAT, more than anything else destroyed the coin market in it's PERCEIVED "value" (investment or purchase/sale planning) when the grading companies started and made SURE that their numerical designations would amply protect ..THEM... THE GRADING COMPANIES....when they designated what USED TO BE MS65 (to nearly all dealers) as a lower grade.


And it was across the board.


FOR ONE REASON. Not a whit of it for collectors.


But to be able to justify statements that coins were SAFE INVESTMENTS!


Slabs CHANGED grading. They did NOT affirm it.

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