A thread for those who love to bash second/third tier grading services

[wayneherndon]

Inspired by Mark's thread of similar name. In this thread, Mark asked us to post examples of huge price increases for one grade point. Mark was trying to make us think about the impact of one grade point on value in both classics and moderns.

 

To me, the biggest concern about these huge one-point jumps is the grading services that grade just a little (or in some cases a lot) looser. Coins graded by first tier grading companies with grades just below the price jump are favorites for reslabbing with looser grading companies to get the grade just above the bump. The reslabber then can reoffer the coin at a huge discount to the market price for the new grade but often still make multiples of what was paid for the lower grade.

 

The example I posted was a 1886-O Morgan dollar. In MS 64, this coin bids for $7750. In MS 65, it bids for $160,000. Migrate a MS 64 coin to a second tier MS 65 holder and it can be offered at for as little as 10% of greysheet for the new grade and the resubmitter still doubles his money.

 

WH

[MarkFeld]

Sadly, many buyers of badly over-graded coins mistakenly think that "well, if they graded the coin MS67 I'm OK/safe paying MS64 money for it" or something like that. In many cases, that is a huge mistake, and one that the sellers (a number of whom have graded and slabbed the coins themselves) rely upon to take advantage of buyers. The lure of a bargain usually results in anything but that.

[123cents]

Sadly, many buyers of badly over-graded coins mistakenly think that "well, if they graded the coin MS67 I'm OK/safe paying MS64 money for it" or something like that. In many cases, that is a huge mistake, and one that the sellers (a number of whom have graded and slabbed the coins themselves) rely upon to take advantage of buyers. The lure of a bargain usually results in anything but that.

 

 

That is why I think there are so many "self slabbers" on Ebay. They take circulated and low mint state coins and put a MS-67 label on them. Many novice collectors think they are getting a bargain even if the coin only grades MS-63 or 64 when in truth, the coin is not even close to those grades. The only winner in this transaction is the seller that probably paid a little over melt for the coins he is selling.

[Keleum]

What do you mean when you say second tier grading company? Do you mean in terms of quality? What's the difference between a 2nd tier and a 3rd tier?

[MAULEMALL]

What do you mean when you say second tier grading company? Do you mean in terms of quality? What's the difference between a 2nd tier and a 3rd tier?

NGC,Pcgs first tier,ANACS,ICG second tier,Everyone else Third or forth

[wayneherndon]

Here are my qualifications for a first tier grading service:

 

1. The company's grades are generally accepted to be in line with current industry standards;

2. The company backs the grades/authenticity up with a written guarantee that provides for buyback of improperly graded or authenticated coins;

3. The company uses multiple graders to reach a consensus on the grade; and

4. The company uses professional graders (i.e., individuals who's primary occupation is coin grading/authentication).

 

A second tier grading service has some but not all of those four characteristics.

 

A grading service that has none of these four characteristics is a third tier grading service.

 

WH

[bsshog40]

I think anyone out to purchase coins and are looking for that extra bump in grade is not going to buy self-slabbed coins in this situation. I'm sure that the coin would have to be in a "First Tier" TPG slab. I would never think that someone would pass up an MS64 1886-O Morgan in a NGC or PCGS slab for a MS65 in an SGS slab.

[wayneherndon]

I think anyone out to purchase coins and are looking for that extra bump in grade is not going to buy self-slabbed coins in this situation. I'm sure that the coin would have to be in a "First Tier" TPG slab. I would never think that someone would pass up an MS64 1886-O Morgan in a NGC or PCGS slab for a MS65 in an SGS slab.

 

Yes, but you're educated on the issue. There are a lot of collectors who think "certified" means the coin is that grade no matter who "certified" it.

 

Unfortunately, people buy the third tier holdered coins all the time. Typically, they are not sitting there trying to decide whether to go with the MS64 in a NGC or PCGS slab or a MS65 in a lesser slab. Rather, they are only being offered the lesser slab along with a good amount of hype about recent selling (or price guide)prices for coins in that grade.

 

WH

[bsshog40]

I think anyone out to purchase coins and are looking for that extra bump in grade is not going to buy self-slabbed coins in this situation. I'm sure that the coin would have to be in a "First Tier" TPG slab. I would never think that someone would pass up an MS64 1886-O Morgan in a NGC or PCGS slab for a MS65 in an SGS slab.

 

Yes, but you're educated on the issue. There are a lot of collectors who think "certified" means the coin is that grade no matter who "certified" it.

 

Unfortunately, people buy the third tier holdered coins all the time. Typically, they are not sitting there trying to decide whether to go with the MS64 in a NGC or PCGS slab or a MS65 in a lesser slab. Rather, they are only being offered the lesser slab along with a good amount of hype about recent selling (or price guide)prices for coins in that grade.

 

WH

 

Well, these people are those that are not very knowledgeable buyers. I wouldn't call them collectors so much as I would hobbyists. A collector usually has the knowledge to know the difference between these third world Tpg's. If these type slabs are bought, then there has to be knowledge in buying them. Just because it say's MS69, doesn't mean it's 69. I don't mind buying a third party tpg slab but I will also indentify the coins with it's actual grade and not it's slabbers description. Unless the slab has NGC or PCGS on it, I don't have the fullest reliability of any other TPG that the grade shown is the grade of the actual coin. This is where you have to have the experience and knowledge to be able to distinguish the true grade of the coin from the advertised grade.

[MikeKing]

these are excellent points, the understanding of which, hopefully, will make us all better collectors. what an excellent post.

 

What is it that Sy Syms says?

[Count_Erfit]

Just defining TPGs in "tiers" is enough to damn them all.

[RUSS BEGA]

1. Ngc

2. pcgs

3. Anacs

4. ICG

 

and i love third world slabs because i need a good laugh now and again

[Zoins]

Is this similar to concerns about gradeflation, market grading and designation standards at "top tier" TPGs? Or should those have their own threads?

 

Also don't forget that according to the 2006 PNG Survey, PCGS and NGC are "second tier" with no TPGs being rated as "first tier."

[MarkFeld]

Is this similar to concerns about gradeflation, market grading and designation standards at "top tier" TPGs? Or should those have their own threads?

 

Also don't forget that according to the 2006 PNG Survey, PCGS and NGC are "second tier" with no TPGs being rated as "first tier."

I believe that "gradeflation" and over-grading by the top grading companies are perfectly legitimate concerns. It's just that those are different concerns from the blatant over-grading on the part of lower tier grading companies and sellers who grade and slab their own coins without disclosing such.

[Shortgapbob-migration]

Is this similar to concerns about gradeflation, market grading and designation standards at "top tier" TPGs? Or should those have their own threads?

 

Also don't forget that according to the 2006 PNG Survey, PCGS and NGC are "second tier" with no TPGs being rated as "first tier."

I believe that "gradeflation" and over-grading by the top grading companies are perfectly legitimate concerns. It's just that those are different concerns from the blatant over-grading on the part of lower tier grading companies and sellers who grade and slab their own coins without disclosing such.

 

There has been some talk about some "consortium" to clean up the gradeflation problems. Is there any truth to this? If so, it could be a great thing for the hobby.

[just-john]

When you can buy 1986 thru 2007 silver eagles gem brillian unc for $413.95

1986 thru 2007 silver eagles ngc certified ms 69 for $759.95

OR

1986 thru 2007 silver eagles 44 coins 22 gem proof unc and 22 gem uncirculated for

$1689.95

the same 44 coins graded are $2314.90 Myself I'll take the $624.95 savings and use it for something more than plastic.I don't see the value added for me by any TPG .When at any time a

MS69 may regrade to ms 70 or a Ms 70 by one TPG regades to MS 69 by another /cool aid is what it is plan and simple