Are the goals of the "Consortium" either realistic or achievable?

[jtryka]

With all the recent threads on the new consortium, I wonder if anyone has taken the time to truly consider whether the stated goals of the consortium are either realistic or achievable. Now, I am talking about stated goals here (and I am not even sure what they all are since no one has really ever offered a complete list) not implied goals - I do NOT want this turning into a bashing thread about this being a marketing gimmick or way to make extra cash etc.

 

So one of the group's stated goals is to improve TPG grading standards and reduce the number of problem/doctored coins in TPG slabs in the market place. I certainly think this is a laudable goal, though I am not sure it's necessarily achievable. Certainly if market pressure could force a tightening of standards that would be good overall for the hobby, but with the overwhelming power of greed motivating crack out artists and coin doctors, I am not sure any TPG could stay ahead of them for long. Even if the TPGs made a concerted effort at tightening standards, some still will get through that are overgraded or problematic, and those coins will just remain entombed. The ultimate measure of success here is that one or all of the TPGs progress to the point where any coin they slab would be approved by the CAG by default, then the CAG's job is pretty much done.

 

The second goal, though perhaps not as explicit is the development and fostering of a sight-unseen market in rare coins. This goal I think is neither laudable nor necessarily realistic. Coins are not soy beans, they are not a commodity, yet for decades now, some people in the hobby have insisted on pushing them to become commodities. This sort of trading works in metals, after all, silver is silver and gold is gold. It works in currencies as euros are euros and Swiss francs are Swiss francs. But what about an MS-65 Morgan dollar? There are some that are brilliant white and others that are vibrantly toned. Granted, it would be good to eliminate the coins that were dipped out to oblivion and the AT jobs, but in the end, the white and toned Morgans will likely not trade effectively sight unseen. The only real attraction for a sight unseen market is for large scale marketing houses (the kind that just want to buy cleaned Morgans to sell in magazine ads for $49.95 each) and investors who just want a line item in a portfolio no different than 1,000 shares of GM. Is this a goal that is either desireable or realistic? I say no.

 

Share your thoughts and feel free to add other goals of the CAG that either are revealed or that I missed (my list is by no means inclusive).

[Count_Erfit]

The only "workable" effort that could be tenuously stretched to match the stated "goals" of "improving the hobby" would be to switch from an acceptance to a REJECTION opinion which could be used for a grade guarantee claim. And a commitment to testifying to same.

 

And ya wanna see some FIREWORKS???

 

Hoo, baby!

 

 

 

[jesbroken]

Jeff,

Is there anywhere that the Consortium group has made public its goals and its gameplan? I have only read opinions and a few of the capital contributors' statements but not of the Consortium itself. I would like to read such a statement before offering any more opinions as I have already done in response to others' statements. To be fair to all concerned the Consortium shoud announce its intentions completely. JMO.

[supertooth]

Jeff---- Convince the masses that they NEED it. Make them believe that without your services you will have nothing. If you can do this, you have a market for whatever that you are selling. And the masses will then follow like sheep to buy into it. It's like convincing folks that they need 'white' teeth instead of just teeth that function. What a racket.

 

PCGS and NGC and ANACS have established a NEED for themselves in our selling of our coins. If the consortium can also establish themselves as a NEEDED entity, then they will get a certain market acceptibility. And their certification will then also establish a certain value to be placed on a coin.

 

The issue that I have is how do we get rid of the "GREED" that causes the whole problem in the first place? And, how do we keep ANY new company from becoming just like all the other human beings trying to make an 'extra' buck? How do we keep a level playing field---no matter the amount of money that you have or the people that you know?? How do we have coins graded fairly where neither the grader---or his friends---or his employer---or his stockholders---can possibly profit from his expertise?? How do we keep said grader from using his knowledge in grading our coins---from making any other money other than the fee he gets from his grading of a certain coin? In short, how do we keep the system from issuing favors to its own kind?? How do we POLICE the system to keep it HONEST?? Will the system even allow for itself to be independantly policed?? How do you make the graders put the 'true' grade of a coin on the holder---the very first time that it is graded?? How do you find people that CANNOT be bought to keep that system from human failings?? Therein lies my problems with the whole of the coin business. How do you take 'subjective' grading and make an 'objective' science out of it??

 

I'm not sure that there will ever be any defense for any collector---other than his own knowledge and expertise. Bob [supertooth]

[Count_Erfit]

Henceforth, ALL coins are to be remanded to the custody of the Treasury Department to be displayed for the public to enjoy.

 

The Treasury will display the coins and provide guides to explain the historical significance to all visitors to the National Coin Museum.

 

A publicly funded account will be created to maintain the exhibit.

 

This act was made necessary by the confusion resulting from individual groups assaulting each other over what was formerly a hobby.

 

Gloves and magnifiers will be available for rental.

 

Admission will be by credit card only.

 

 

 

[SuperDave]

I believe the goals listed so far are not only realistic and achievable, but necessary. This is spoken from the viewpoint of someone who is unlikely ever to collect in any category the Consortium is likely to influence. Furthermore, even though I'm never going to be a "coins as commodities" collector, I believe in the need for such a market, and in the need for a sight-unseen market.

 

A strong sight-unseen market will enhance the dealer-collector relationship. Many higher-end collectors form specific relationships with just one or a few major dealers, who then fill that collector's needs. It sure would be nice for one of those dealers, on behalf of a client, to be able to obtain a known-good coin, sight-unseen, from a fellow dealer. That process doesn't exist right now, with the current state of the slabbing industry. Sure, the TPG's could revamp their standards overnight if they wanted, and starting tomorrow morning grade in a fashion which suits trustworthy sight-unseen selling.

 

But they won't.

 

Even if they did, then you have the sea of existing slabs, some containing coins completely inappropriate for the grade. Would you expect even a reformed TPG to conduct a wholesale slaughter of its' own reputation, not to mention market value, by downgrading thousands of resubmissions?

 

I wouldn't. In fact, I consider it unlikely that any sort of wholesale downgrading will *ever* happen in existing slabbed coins. Ergo, the only way to properly address the problem of poorly-graded slabbed coins is to identify the ones which are better. If it's a really nice 65, a TPG isn't going to create wealth by putting it into a 66 slab, just to differentiate it from an "overgraded" 65. So a group like the Consortium, if successful, seems to be the only solution. And remember, the Consortium is going to be playing in the waters inhabited by the collectors I'm talking about here, the higher-end guys.

 

I do agree with the people who wish they'd just form a grading company and be done with it. I'd be happy to help them with the widgets. I'm good with widgets.

 

With regard to the "coins as commodities" issue: The best way to create a new numismatist is to put a coin in their hand. It doesn't matter how it gets there, as an investment or an emotional purchase, as long as it gets there. The magic will happen either way. I can speak from experience here - at another numismatic forum I inhabit, we're converting investors to collectors every day. As soon as they start posting questions, they're hooked. I've seen a dozen in the last year come in looking for advice on which Eagle makes the best investment, and end up filling holes in a 7070.

 

As I've said before, I'll never have a horse in this race, but you don't have to be in it to see that it's a good race.

[DC Dawg]

The issue that I have is how do we get rid of the "GREED" that causes the whole problem in the first place?

With no apologies to Gordon Gekko or the writes that created him: The point is, ladies and gentleman, that 'greed'—for lack of a better word—is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms—greed for life, for money, for love, knowledge—has marked the upward surge of mankind. And greed—you mark my words—will [save] that other malfunctioning corporation called the USA.

 

How do we POLICE the system to keep it HONEST??

Who will provide oversight to the police to ensure they are honest and not walking the beat taking kickbacks to protect the folks in their beat?

 

How do you make the graders put the 'true' grade of a coin on the holder---the very first time that it is graded??

I am still wondering if there is a real problem other than a particular president screaming about this like her hair is on fire! Even when pressed, the percentage of issues seem to be minimal given the generally accepted parameters of acceptable business risk. Anyone who has an MBA or studied business knows that the magic number is 5-percent--whether it is spoilage, shrinkage, or even badly graded coins. There seems to be no substantiated evidence that suggests the problems extends beyond that 5-percent business risk number.

 

How do you take 'subjective' grading and make an 'objective' science out of it??

I have written in other threads about using computer imaging for this. The problem is that the technology is not geared to grading coins and requires additional work in order to make it work. I wonder if the ANA would provide a grant to do this as a reference implementation?

 

I'm not sure that there will ever be any defense for any collector---other than his own knowledge and expertise.

Again, with no apologies to Gordon Gekko and the writers: A fool and his money are lucky enough to get together in the first place!

 

IMVHO: I think the TPGs actually getting better. While Laura of Legend seems to rail against PCGS, I believe the other TPGs have been getting better. I keep submitting coins to NGC, ANACS, and ICG and have had very similar experiences. I have even received body bags from ICG! whatthe But in looking at the work of the three TPGs side-by-side, the work of these "second tier" services, as classified by study commissioned by PNG, seem to be going out of the way to do a better job. The problems I had with the ICG body bags are similar to those I have had with NGC; and I have received problem slabs from ANACS. But there is nothing in their grading to make me think that they are not doing a credible job (although ICG and I have to talk about a few coins I think are badly undergraded). I cannot comment on PCGS since I do not have direct submission privileges to them.

 

What do I think is the cause of their improvement? The PNG study. It was the market looking at itself and ranking the services by the quality of the service. If I was looking at the study and told I was not amongst "the best," I would try to improve my service to gain a better reputation. We did not need a consortium to do this. Market pressures seem to work.

 

Maybe... rather than another service, PNG should do another study and allow the market to apply the appropriate pressure against the TPGs. Market forces are the hallmarks of capitalism and what makes or breaks companies. Maybe it's time for another study?

 

Scott

[Keleum]

jtryka, I see the world much the same way you do. But I think this consortium can achieve its goals, though not by manipulating the TPGs, but by manipulating the market forces driving the TPGs.

 

As I stated in another thread, this could be a group of market makers, (not just a rag-tag fleet heading for earth...[ooopsss wrong forum]). If they treat it as such, they'll clean up the market place, there-by cleaning up the TPGs. If they don't the TPGs will just grow to incorporate these sticker-grades, and I'm better off either way.

 

I disagree with you that they won't ever deal in anything but the highest grade stuff. NYSE has makers for Google, IBM and even NORTHGATE MINERALS. So too the CAG will have makers for prez dollars, state quarters and 2009 pennies. Just not for a few years.

[Houston Investor]

Their goals are neither realistic or achievable and would add an inordinate amount of subjectivity to the coin business. Such a consortium is damaging to the industry in my view and I hope the TPG's lobby to block them should their efforts actually have some success.

 

What is needed is fresh money entering the coin business and positive encouragement, not some negative marketing campaign.

[Keleum]

But who's doing the negative campaigning, just one person from one dealer, right? I don't see that affecting anyone but them. I certainly am not phased by the rantings of an individual.

[MikeInFL]

Their goals are neither realistic or achievable and would add an inordinate amount of subjectivity to the coin business. Such a consortium is damaging to the industry in my view and I hope the TPG's lobby to block them should their efforts actually have some success.

 

What is needed is fresh money entering the coin business and positive encouragement, not some negative marketing campaign.

 

I am glad the real leaders and visionaries of the coin business do not subscribe to your head-in-the-sand mantra, and I applaud those who are trying to make things better...Mike

[MikeInFL]

The issue that I have is how do we get rid of the "GREED" that causes the whole problem in the first place?

With no apologies to Gordon Gekko or the writes that created him: The point is, ladies and gentleman, that 'greed'—for lack of a better word—is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms—greed for life, for money, for love, knowledge—has marked the upward surge of mankind. And greed—you mark my words—will [save] that other malfunctioning corporation called the USA.

Scott, With all due respect, greed is not the answer. Ask Enron and/or Worldcom employees how well greed worked for them. Ask someone working in the diamond mines of Sierra Leone how well greed is working for them.

 

Unmitigated greed is anarchy. Add the rule of law and a common set of ethics with those involved, and you have a workable system. The problem with the coin market today, in my opinion, is that the TPGs have loosened their ethics chasing quarterly revenues and there are no laws or market forces to reign them in. The result is overgrading/gradeflation, doctored coins, and playing to large submitters -- all caused by greed without ethics and law.

 

 

How do we POLICE the system to keep it HONEST??

Who will provide oversight to the police to ensure they are honest and not walking the beat taking kickbacks to protect the folks in their beat?

A very good question... The consortium, in this case, is trying to act as the police to the TPGs, but your question -- who will watch the police -- is a valid one.

 

 

How do you make the graders put the 'true' grade of a coin on the holder---the very first time that it is graded??

I am still wondering if there is a real problem other than a particular president screaming about this like her hair is on fire! Even when pressed, the percentage of issues seem to be minimal given the generally accepted parameters of acceptable business risk. Anyone who has an MBA or studied business knows that the magic number is 5-percent--whether it is spoilage, shrinkage, or even badly graded coins. There seems to be no substantiated evidence that suggests the problems extends beyond that 5-percent business risk number.

If you think that 95% of coins are accurately graded, you must look at different slabbed coins than I do, or your grading standards are quite a bit different than my own.

 

Case in point: Go over to Heritage and take a look at NGC graded coins from the Riever collection. How many problem free, accurately graded coins do you find in that collection? Do you still think that NGC grades 95% of their coins correctly?

 

Also, the business risk in a grade (neglecting countefeits), when the ultimate arbiter of the grade is the same business doing the grading, is always controllable, and generally very close to zero -- and that's how the TPGs get around the 5% rule -- they decide the %.

 

Just as there is separation between the judicial and law enforcement communities, so should there be separation between those who judge the grade and those who arbitrate the accuracy of said grade, and that is missing from today's system.

 

Is the Consortium the answer? I'm not sure yet, but to say there's no problem is, frankly, naive.

 

 

How do you take 'subjective' grading and make an 'objective' science out of it??

I have written in other threads about using computer imaging for this. The problem is that the technology is not geared to grading coins and requires additional work in order to make it work. I wonder if the ANA would provide a grant to do this as a reference implementation?

Computers are not the answer, and being a computer professional, I am surprised at your response.

 

As I'm sure you know, computers do objective tasks very well. However, computers don't do subjective well at all. It has nothing at all to do with technology, much of which exists today, and very much to do with the way computers work and how we program them. The only way computer grading will work is to change the subjective into the objective, and I'm not sure that's possible.

 

 

I'm not sure that there will ever be any defense for any collector---other than his own knowledge and expertise.

Again, with no apologies to Gordon Gekko and the writers: A fool and his money are lucky enough to get together in the first place!

 

IMVHO: I think the TPGs actually getting better. While Laura of Legend seems to rail against PCGS, I believe the other TPGs have been getting better. I keep submitting coins to NGC, ANACS, and ICG and have had very similar experiences. I have even received body bags from ICG! whatthe But in looking at the work of the three TPGs side-by-side, the work of these "second tier" services, as classified by study commissioned by PNG, seem to be going out of the way to do a better job. The problems I had with the ICG body bags are similar to those I have had with NGC; and I have received problem slabs from ANACS. But there is nothing in their grading to make me think that they are not doing a credible job (although ICG and I have to talk about a few coins I think are badly undergraded). I cannot comment on PCGS since I do not have direct submission privileges to them.

 

What do I think is the cause of their improvement? The PNG study. It was the market looking at itself and ranking the services by the quality of the service. If I was looking at the study and told I was not amongst "the best," I would try to improve my service to gain a better reputation. We did not need a consortium to do this. Market pressures seem to work.

 

Maybe... rather than another service, PNG should do another study and allow the market to apply the appropriate pressure against the TPGs. Market forces are the hallmarks of capitalism and what makes or breaks companies. Maybe it's time for another study?

 

Scott

Please describe how the PNG study is a market force and the Consortium is not. I think, in so doing, you will come to the conclusion they are both market forces.

 

All IMHO and respectfully submitted...Mike

 

p.s. Supertooth was right when he said "I'm not sure that there will ever be any defense for any collector---other than his own knowledge and expertise," but I welcome the Consortium and any positive effect it might have.

[DC Dawg]

Scott, With all due respect, greed is not the answer. Ask Enron and/or Worldcom employees how well greed worked for them. Ask someone working in the diamond mines of Sierra Leone how well greed is working for them.

Sure... after I talk with GE, Microsoft, Exxon, Berkshire-Hathaway, Donald Trump, etc.

 

Unmitigated greed is anarchy.

Who said I am for "unmitigated greed?" I did not say (for example) to ditch the Sherman Anti-trust Act of 1932 and its subsequent amendments. But when the playing field is level, greed creates competition and competition is good for the consumer, regardless of the market.

 

The problem with the coin market today, in my opinion, is that the TPGs have loosened their ethics chasing quarterly revenues and there are no laws or market forces to reign them in. The result is overgrading/gradeflation, doctored coins, and playing to large submitters -- all caused by greed without ethics and law.

And this consortium is not a market force? I thought its purpose was to be a market force behind the actions (or inactions) of the TPGs?

 

When an industry forms, it goes through a growing period until the original model becomes stalled. Once stalled, the business model is adjusted to try to keep the business going. Third party grading services is a young industry that now has to look for ways to extend its model to continue to be viable. They do what they need to in order to survive in the market they built. But in the end, they are passing business adolescence and need to consider where their place is in the future of the hobby.

 

Every industry goes through this process. This is not unique to the numismatic industries. For now, it is our focus.

 

If you think that 95% of coins are accurately graded, you must look at different slabbed coins than I do, or your grading standards are quite a bit different than my own.

 

Case in point: Go over to Heritage and take a look at NGC graded coins from the Riever collection. How many problem free, accurately graded coins do you find in that collection? Do you still think that NGC grades 95% of their coins correctly?

How many coins are there in the Riever collection versus how many they have graded during the same time period. One collection is not a statistically sound sample--especially when it could be representing less than one-tenth of one percent of their market.

 

Also, the business risk in a grade (neglecting countefeits), when the ultimate arbiter of the grade is the same business doing the grading, is always controllable, and generally very close to zero -- and that's how the TPGs get around the 5% rule -- they decide the %.

 

Just as there is separation between the judicial and law enforcement communities, so should there be separation between those who judge the grade and those who arbitrate the accuracy of said grade, and that is missing from today's system.

I think I understand what you are saying, but I think it could be presented better. How about saying that the standards need to be set by a third party and the TPGs execute their standards.

 

Is the Consortium the answer? I'm not sure yet, but to say there's no problem is, frankly, naive.

I did not say there is no problem. I used the empirical evidence presented in many of the forum posts to ask if there is really a problem. Maybe I should have asked if there was a "significant" problem that requires appropriate action.

 

I have written in other threads about using computer imaging for this. The problem is that the technology is not geared to grading coins and requires additional work in order to make it work. I wonder if the ANA would provide a grant to do this as a reference implementation?

Computers are not the answer, and being a computer professional, I am surprised at your response.

Be careful, you do not know my background. I put together systems for a living, particularly in the information security arena. Since I do this for the federal government these days, I have seen a lot of different systems--none of which I can talk about. But I have worked with imaging systems that looks at everything from handwriting analysis to satellite imagery. Amongst the most difficult image analysis is in the area of biometrics, which is directly relevant to my work. I know what the issues are and I know what the industry is doing to try to mitigate the risks. It can work on more static items, like coins!

 

As I'm sure you know, computers do objective tasks very well. However, computers don't do subjective well at all. It has nothing at all to do with technology, much of which exists today, and very much to do with the way computers work and how we program them. The only way computer grading will work is to change the subjective into the objective, and I'm not sure that's possible.

First, I NEVER said that computers were the only answer. I have called them tools that could help. They can be significant tools that can do this very well. How, you ask? A coin has a size, weight, and design. At its most perfect (MS70) state. That is an objective fact that cannot be changed. A perfect Morgan Dollar is a perfect Morgan Dollar. Liberty is presented in a certain way, the fields are clear, the lettering is in a specific font and located in a particular place, and the luster is defined as the amount of reflection of light off the metal. Variations can be measured by computer. How many scratches? What is the wear on Liberty? How much light is being absorbed on the surface (measuring luster)? This analysis can be done by a computing system that has the appropriate imaging hardware. The software will be needed to do the pattern analysis and compare the image to that of a coin.

 

Then, using the tool, a subjective analysis can be made based on the objective analysis. But it can be made from a position with more information then relying on human eyesight and human opinions, which are both fallible!

 

Please describe how the PNG study is a market force and the Consortium is not. I think, in so doing, you will come to the conclusion they are both market forces.

Ok... it's a good point. But I am not convinced that using one opinion over another is something that will work. The model has to be changed and human opinion is not the model I would choose.

 

All IMHO and respectfully submitted...Mike

Reasonable people can reasonably disagree. I welcome your opinion. I think the market should welcome your opinion, even if we don't agree!

 

Scott

[jtryka]

Scott, FYI- the Sherman Anti-Trust Act was passed in 1890, not 1932.

[DC Dawg]

Scott, FYI- the Sherman Anti-Trust Act was passed in 1890, not 1932.

oops... I'm bad!!

[MikeInFL]

Scott, With all due respect, greed is not the answer. Ask Enron and/or Worldcom employees how well greed worked for them. Ask someone working in the diamond mines of Sierra Leone how well greed is working for them.

Sure... after I talk with GE, Microsoft, Exxon, Berkshire-Hathaway, Donald Trump, etc.

And how does the fact that there are companies that act responsibly and ethically take away from the fact that greed without the rule of law and ethics (as is evident in the coin market today and the examples I cited) is not good?

 

 

Unmitigated greed is anarchy.

Who said I am for "unmitigated greed?" I did not say (for example) to ditch the Sherman Anti-trust Act of 1932 and its subsequent amendments. But when the playing field is level, greed creates competition and competition is good for the consumer, regardless of the market.

Thank you for making my point for me. I never said you were for unmitigated greed, but rather I sugested that unmitigated greed is at the heart of the problems in the hobby.

 

Furthermore, I would suggest the playing field is not level -- and those who the hobby looks to make the playing fiend level (TPGs) are, insteand of doing what is best for the hobby, simply looking out for their own best interest -- which strengthens the argument for the need for the Consortium.

 

 

The problem with the coin market today, in my opinion, is that the TPGs have loosened their ethics chasing quarterly revenues and there are no laws or market forces to reign them in. The result is overgrading/gradeflation, doctored coins, and playing to large submitters -- all caused by greed without ethics and law.

 

And this consortium is not a market force? I thought its purpose was to be a market force behind the actions (or inactions) of the TPGs?

 

When an industry forms, it goes through a growing period until the original model becomes stalled. Once stalled, the business model is adjusted to try to keep the business going. Third party grading services is a young industry that now has to look for ways to extend its model to continue to be viable. They do what they need to in order to survive in the market they built. But in the end, they are passing business adolescence and need to consider where their place is in the future of the hobby.

 

Every industry goes through this process. This is not unique to the numismatic industries. For now, it is our focus.

Again, thanks for making the point I was trying to make -- the market is broken and the Consortium is a market force, and please save the patronizing MBA lecture for someone else.

 

 

If you think that 95% of coins are accurately graded, you must look at different slabbed coins than I do, or your grading standards are quite a bit different than my own.

 

Case in point: Go over to Heritage and take a look at NGC graded coins from the Riever collection. How many problem free, accurately graded coins do you find in that collection? Do you still think that NGC grades 95% of their coins correctly?

How many coins are there in the Riever collection versus how many they have graded during the same time period. One collection is not a statistically sound sample--especially when it could be representing less than one-tenth of one percent of their market.

Thank you for pointing out the hole in my logic -- I used a specific example as proof of the wrong case. I should have used it as evidence of rewarding the large submitters who use a large stockholder as their auction site -- but the premise still holds -- if you think that 95% of coins are accurately graded, you are looking at different coins than I or your grading is quite a bit different from my own (and from published and historical standards).

 

 

Also, the business risk in a grade (neglecting countefeits), when the ultimate arbiter of the grade is the same business doing the grading, is always controllable, and generally very close to zero -- and that's how the TPGs get around the 5% rule -- they decide the %.

 

Just as there is separation between the judicial and law enforcement communities, so should there be separation between those who judge the grade and those who arbitrate the accuracy of said grade, and that is missing from today's system.

I think I understand what you are saying, but I think it could be presented better. How about saying that the standards need to be set by a third party and the TPGs execute their standards.

I like your addendum, but I also liked my presentation. Let's see if I can bring them together in a statement we can agree on... The right system would be one where there's a separation (and no conflicts of interest) between those who set the standards, those who grade and guarantee the coins, and those who arbitrate the accuracy of the grade being guaranteed.

 

 

Is the Consortium the answer? I'm not sure yet, but to say there's no problem is, frankly, naive.

I did not say there is no problem. I used the empirical evidence presented in many of the forum posts to ask if there is really a problem. Maybe I should have asked if there was a "significant" problem that requires appropriate action.

In my opinion, that's a better question, but my answer is the same - there is a significant problem and it does require attention. Judging by the actions of those invoved in the Consortium, they seem to agree, and I'm sure you will agree their experience and knowledge of this business is far superior to yours or mine.

 

That's not to say these humans aren't fallible, but rather that I'll give them the chance to prove it and not dismiss it before they've had a chance.

 

An interesting aside is that I will postulate that the argument used by you above was the same argument used against the TPGs during their formation.

 

 

 

I have written in other threads about using computer imaging for this. The problem is that the technology is not geared to grading coins and requires additional work in order to make it work. I wonder if the ANA would provide a grant to do this as a reference implementation?

Computers are not the answer, and being a computer professional, I am surprised at your response.

Be careful, you do not know my background. I put together systems for a living, particularly in the information security arena. Since I do this for the federal government these days, I have seen a lot of different systems--none of which I can talk about. But I have worked with imaging systems that looks at everything from handwriting analysis to satellite imagery. Amongst the most difficult image analysis is in the area of biometrics, which is directly relevant to my work. I know what the issues are and I know what the industry is doing to try to mitigate the risks. It can work on more static items, like coins!

Actually, Scott, I am quite aware of your background, as you have many times gone into your background in computer security and information systems. However, you are quite ignorant of my knowledge and experience on this subject. Without going into details, which in the end aren't really pertinent to the argument, it may help you to know that I not only have college degrees in computer science and business, but I also have fifteen years of practical experience in the computer business.

 

Regardless, my challenge to you still stands... Please articulate how grading can be made objective, or identify a subjective problem that computers are effective at solving. Until and unless you can answer one of the two questions, I will continue to call your bluff that grading can be effectively done by computers.

 

As I'm sure you know, computers do objective tasks very well. However, computers don't do subjective well at all. It has nothing at all to do with technology, much of which exists today, and very much to do with the way computers work and how we program them. The only way computer grading will work is to change the subjective into the objective, and I'm not sure that's possible.

First, I NEVER said that computers were the only answer. I have called them tools that could help. They can be significant tools that can do this very well. How, you ask? A coin has a size, weight, and design. At its most perfect (MS70) state. That is an objective fact that cannot be changed. A perfect Morgan Dollar is a perfect Morgan Dollar. Liberty is presented in a certain way, the fields are clear, the lettering is in a specific font and located in a particular place, and the luster is defined as the amount of reflection of light off the metal. Variations can be measured by computer. How many scratches? What is the wear on Liberty? How much light is being absorbed on the surface (measuring luster)? This analysis can be done by a computing system that has the appropriate imaging hardware. The software will be needed to do the pattern analysis and compare the image to that of a coin.

 

Then, using the tool, a subjective analysis can be made based on the objective analysis. But it can be made from a position with more information then relying on human eyesight and human opinions, which are both fallible!

Please see my response above and my response in the other thread on this topic for reasons why this logic is flawed. In short, computers rely on the verbal/written directions of a human and grading is, in large part, subjective. Since we can't (objectively) verbalize the subjective, computers cannot make judgements on it.

 

That's not to say that computers can't play a role in the solution, but rather they are not the 95-99% effective panacea you seem to think they are.

 

 

Please describe how the PNG study is a market force and the Consortium is not. I think, in so doing, you will come to the conclusion they are both market forces.

Ok... it's a good point. But I am not convinced that using one opinion over another is something that will work. The model has to be changed and human opinion is not the model I would choose.

I'm not sure changing the model to remove the human/subjective factors is feasible, as described above. Therefore the human element will be a part of grading for the forseeable future. Given this, I would prefer the world where the Consortium reigns in the abuses of the TPGs, and I will continue to give them the benefit of the doubt until they have a chance to prove their worth themselves.

 

 

All IMHO and respectfully submitted...Mike

Reasonable people can reasonably disagree. I welcome your opinion. I think the market should welcome your opinion, even if we don't agree!

Now that's something nobody can disagree with.

 

Take care, and thank you for the thought-provoking responses...Mike

[DC Dawg]

I am going to limit the response since I don't think we're going to agree. But that's ok... it's what makes the world interesting!!

 

Again, thanks for making the point I was trying to make -- the market is broken and the consortium is a market force, and please save the patronizing MBA lecture for someone else.

I apologize if what I said was taken as being patronizing. That was not the intent. I wanted to point out that the argument is common in a lot of industries but they have found different solutions. I am very much into learning from the mistakes of others so they are not repeated.

 

An interesting aside is that I will postulate that the argument used by you above was the same argument used against the TPGs during their formation.

I thought about that as I was typing my response. It makes for an interesting discussion!

 

Actually, Scott, I am quite aware of your background, as you have many times gone into your background in computer security and information systems. However, you are quite ignorant of my knowledge and experience on this subject. Without going into details, which in the end aren't really pertinent to the argument, it may help you to know that I not only have college degrees in computer science and business, but I also have fifteen years of practical experience in the computer business.

The notches in my belt are a bit longer. I have done 27 years in industries from publishing, television, telecom, research, and government. I have been published, I teach, and have been an expert witness. I have not testified on Capital Hill, but I am not pushing that one, either!!

 

Regardless, my challenge to you still stands... Please articulate how grading can be made objective, or identify a subjective problem that computers are effective at solving. Until and unless you can answer one of the two questions, I will continue to call your bluff that grading can be effectively done by computers.

I explained how this could be done. I said the computer can do 95-99 percent of the work. you responded saying 50-percent. I may have overstated my case, but from what I have seen in imaging research, 50-percent is very understated!

 

If a business case could be made, I can work with someone to put together a plan to get venture capital to do this. I have seen an amazing things done by some modern imaging systems. I would used part of that VC to hire these people to put together the imaging systems. These people, who are working on biometrics, tell me coins would be easy in comparison. I defer to these experts!

 

Please see my response above and my response in the other thread on this topic for reasons why this logic is flawed. In short, computers rely on the verbal/written directions of a human and grading is, in large part, subjective. Since we can't (objectively) verbalize the subjective, computers cannot make judgements on it.

Computers can pick out faces in a moving crowd and determine the parameters to make an identification. Computers can be told what is MS70 looks like and other data points along the way to PO-1. The computer can then be "trained" to find the data points in between. This type of analysis is not new since it is used for guidance systems from missels to the space shuttle!

 

That's not to say that computers can't play a role in the solutoin, but rather they are not the panacea you seem to think they are.

I called them a tool, not a panacea.

 

I'm not sure changing the model is feasible, as described above. Therefore the human element will be a part of grading for the forseeable future.

Feasible or desirable? While I agree that humans will be part of the equation, the industry has to change to meet new demands. Ransom Olds figured that out when he updated his cars that included colors and started to outsell Henry Ford's cars.

 

All IMHO and respectfully submitted...Mike

Reasonable people can reasonably disagree. I welcome your opinion. I think the market should welcome your opinion, even if we don't agree!

 

Now that's something nobody could disagree with.

I think that's going to be what we're going to have to agree on here!

 

Scott

[Houston Investor]

The major TPG's are doing a fine job and there is enough protection to rare coin consumers already. If consumers don't like the grade on a slab, let them send it in for review, regrade, etc. then. What we are now supposed to worry about people making bad buying decisions in numismatics - let them pay their tuition and learn from their mistakes.

 

The idea that some of these proponents of the consortium somehow know more about grading and the market than the major TPG's, especially NGC is an obnoxious joke. NGC is currently my grading service of choice. Furthermore, I have no use for a consortium telling me if a coin is nice or not or how to market my material.

 

 

[carson city]

I agree. Who is the spokesperson for this CAC debacle ? I'm sure the legal teams at NGC and PCGS will weed them out !

[Tradedollarnut]

I agree. Who is the spokesperson for this CAC debacle ? I'm sure the legal teams at NGC and PCGS will weed them out !

 

So your thinking is that the two market leader TPG's will conspire to legal action to prevent any potential competition.

 

Brilliant!

[carson city]

Just the opposite. I think that competition as another TPG service would be wonderful. My understanding is that this is not what CAC is all about. Rather it is a mean-spirited group hell-bent on the destruction of the two most respected coin grading companies in the World, by demeaning criticising and ridiculing their work product and dedicated employees.

[IGWT]

Just the opposite. I think that competition as another TPG service would be wonderful. My understanding is that this is not what CAC is all about. Rather it is a mean-spirited group hell-bent on the destruction of the two most respected coin grading companies in the World, by demeaning criticising and ridiculing their work product and dedicated employees.

 

CC - You're staging quite a negative campaign with harshly worded opinions without any facts. I'm ambivalent about the formation of C.A.C., mostly because I lack enough information to form a sound conclusion. I'm wondering if you have any facts to share that will help us form our own opinions. If so, I'd like to hear them. If not, your unreasoned rants detract from your credibility and hurt your cause.

[carson city]

I do not have a cause. The dealers that conceived the idea of CAC have not come forward only Ms. Laura of Legend Numismatics. You can read the "facts" as she sees them in her numerous Market Reports.

 

Hopefully, by asking questions we can all become more enlightened before our wallets become lightened !

[IGWT]

I do not have a cause. . . . Hopefully, by asking questions we can all become more enlightened before our wallets become lightened !

 

Rather it is a mean-spirited group hell-bent on the destruction of the two most respected coin grading companies in the World

 

Sounds more like a cause than a question.

[carson city]

Say la vi !

[Tradedollarnut]

"la vi"

 

 

Is there a prize?

[carson city]

When you don't like the message, attack the messenger----Sabotage 101

[Tradedollarnut]

I love ya, CC - you're the best thing we've got going for us!

[carson city]

Thank you---You have made my day !