To Slab or not To Slab

To Slab or not To Slab

Post by dave » Wed, 18 Dec 2002 16:51:37



For the past several months I have been carefully reading the lively,
educational, and often heated debate on the topic of slabbing.  I have to
say that I have found these postings very valuable.  However, based on the
number of personal attacks lately, I'd like to find some common ground.

After much consideration, I have tried to summarize these last 9,000
postings in a few simple and undisputable statements of fact perhaps we can
all agree on.  I am hoping that we can reach consensus so that I never have
to wade through another 65 message battle of DONDI3,/Fred/JAM  vs.
Ira/Reid/Eric to find some pearls of wisdom.

Here we go:

1) Due to the subjective nature of eye-appeal and the fact that we are all
human, there is no "absolute" or "perfect" way to grade coins.  Most coins,
if shown to 10 experts, will result in at least two, if not three different
grades.

2) Expert graders (i.e. those with the know-how and experience to expertly
grade coins) get no value in paying a premium for a slabbed coin.  Honest
dealers who also believe that everyone should have such expert skill before
buying coins will never see the value in slabbing.

3) Non-expert graders (i.e. collectors without access to a consistently
honest dealer) are smart to pay premiums for sight-seen coins that have been
slabbed by a highly reputable grading service (PCGS or NGC only).  They are
smart because they have decreased their chances of being ripped off by
tampered, counterfeit, or severly overgraded coins.

4) ACG and the other inconsistent and liberal graders may have good
intentions, but they are mostly the tools of thieves and their uneducated
prey.

5) It is almost impossible for the average collector to find another
collector or dealer that can grade more consistently and accurately than
PCGS or NGC.

6) The practice of using PCGS or NGC to slab low market-value or modern
coins is somewhere between unwise and corrupt.

Any other pearls to add?  Attack away.....
Go easy though, I'm the sensitive type....

Dave

 
 
 

To Slab or not To Slab

Post by Ji » Wed, 18 Dec 2002 17:13:04



Quote:
>Any other pearls to add?<

7.) In the days pre-slab, a "seller" would always grade a coin 2 grades higher
than a "buyer" who would grade the same coin 2 grades lower. And now "with"
slabs, the same discussion still takes place! What did slabs "really" do for
us? Go figger.

8.) Slab collectors for the most part, defend their decision to buy coins you
can't touch, *** or jstonefeel because "at least" they're authenticated. But
if grading is prone to subjectivity, error and corruption, why isn't the
ability to authenticate subject to the same frailities? When's the last time
you heard someone question the assigned authenticity of a slab? Can you say
Hmmmmm?

9.) If subjectivity, error and corruption go on with slabbing outfits, as they
do with the old time "raw" coin guys, why pay the added premium for slabs?

Why not trust your own good senses and capabilities? It's not good enough to
buy the coin not the slab, you must buy with your head, not your wallet. Open
your eyes and think.

          Always here for my fellow syngraphist or oenophile.
--=*=----=*=----=*=----=*=----=*=----=*=----=*=----=*=----=*=----=*=--

 
 
 

To Slab or not To Slab

Post by David Holliste » Wed, 18 Dec 2002 21:13:35


Quote:
> 7.) In the days pre-slab, a "seller" would always grade a coin 2 grades
higher
> than a "buyer" who would grade the same coin 2 grades lower. And now
"with"
> slabs, the same discussion still takes place! What did slabs "really" do
for
> us? Go figger.

They give us an unbiased opinion with no profit margin incentive for the
grade....a mediator imo.

Quote:
> 9.) If subjectivity, error and corruption go on with slabbing outfits, as
they
> do with the old time "raw" coin guys, why pay the added premium for slabs?

It's called insurance.

Quote:
> Why not trust your own good senses and capabilities? It's not good enough
to
> buy the coin not the slab, you must buy with your head, not your wallet.
Open
> your eyes and think

Your thoughts are pretty limited imo.


Quote:

> >Any other pearls to add?<

> 7.) In the days pre-slab, a "seller" would always grade a coin 2 grades
higher
> than a "buyer" who would grade the same coin 2 grades lower. And now
"with"
> slabs, the same discussion still takes place! What did slabs "really" do
for
> us? Go figger.

> 8.) Slab collectors for the most part, defend their decision to buy coins
you
> can't touch, *** or jstonefeel because "at least" they're
authenticated. But
> if grading is prone to subjectivity, error and corruption, why isn't the
> ability to authenticate subject to the same frailities? When's the last
time
> you heard someone question the assigned authenticity of a slab? Can you
say
> Hmmmmm?

> 9.) If subjectivity, error and corruption go on with slabbing outfits, as
they
> do with the old time "raw" coin guys, why pay the added premium for slabs?

> Why not trust your own good senses and capabilities? It's not good enough
to
> buy the coin not the slab, you must buy with your head, not your wallet.
Open
> your eyes and think.

>           Always here for my fellow syngraphist or oenophile.
> --=*=----=*=----=*=----=*=----=*=----=*=----=*=----=*=----=*=----=*=--

 
 
 

To Slab or not To Slab

Post by Ji » Wed, 18 Dec 2002 23:46:46



Quote:
>They give us an unbiased opinion with no profit margin incentive for the

grade....a mediator imo.<

Huh? Don't getcha....

Quote:
>It's called insurance.<

Insurance against what? Your own fallibilities, which with any learning at all
on your part, could be less or at least the same and it didn't cost you an
extra dime?

Quote:
>Your thoughts are pretty limited imo.<

Uh huh, but that response was deep as they come.

You sound like a slabber. That's OK. We can all co-exist, trust me. What you do
with your money is entirely your business. That's what makes America great
(roll Kate Smith........).

          Always here for my fellow syngraphist or oenophile.
--=*=----=*=----=*=----=*=----=*=----=*=----=*=----=*=----=*=----=*=--

 
 
 

To Slab or not To Slab

Post by Crato » Thu, 19 Dec 2002 01:36:35


Quote:

> 6) The practice of using PCGS or NGC to slab low market-value or modern
> coins is somewhere between unwise and corrupt.

This is not true. Slabbing of coins whether they be high or low value or
modern is a personal choice as well as it is a personal choice to buy
them. I don't know how slabbing a low value or modern coin could be
considered corrupt.

--
Jason Craton  ---- CONECA N-3407 --- WINS #5
---------------
"I am certain it will be more agreeable to the citizens of the
United States to see the head of Liberty on their coin, than
the head of presidents."     - George Washington
---------------------------
Interested in error coins?
http://www.error-coins.com

 
 
 

To Slab or not To Slab

Post by Alan & Erin William » Thu, 19 Dec 2002 02:47:19


Quote:

> > 6) The practice of using PCGS or NGC to slab low market-value or modern
> > coins is somewhere between unwise and corrupt.

> This is not true. Slabbing of coins whether they be high or low value or
> modern is a personal choice as well as it is a personal choice to buy
> them. I don't know how slabbing a low value or modern coin could be
> considered corrupt.

I agree with Jason that 'corrupt' may not have been the word you were
seeking.  Any slabbing service seeks business, and slabbing a 1999
Lincoln Cent is business.  Work is where you find it.  I do not fault
any company for slabbing a modern issue.

Paying a big bucks premium for a 'census condition coin' less than 10
years old...that's what I fault!  Any dealer/seller that wants to offer
a slabbed 2002-D Jefferson in MS-69 is certainly free to do so.  I am
also perfectly free to look at the same offer and roll on the floor with
laughter. People willing to competitively bid to own such a
geegaw...well, someone is always buying tickets to the Egress.

Alan
'this way to the Egress'

 
 
 

To Slab or not To Slab

Post by Harv Lase » Thu, 19 Dec 2002 03:09:07



Quote:
> Also overstated. There are experienced dealers who have similar
> expertise as the graders at PCGS and NGC. And it's probably not a good
> idea to put the words "consistent," "PCGS," and "NGC" in the same
> sentence.

Where do the PCGS and NGC graders come from? Were they full time coin
dealers in a former life, or are they grown from seedpods in hydroponic
gardens? Where do they learn their trade? Is there a professional full time
coin grading degree given out at some university?

Where do they learn how to do what they do, and what did they do before??..

Shirley, someone reading this newsfroup must be a former or a current grader
(who could post anonymously) and supply these answers..

I think too much of what goes on inside of the slabbing companies is too
secretive. I don't care about what kind of proprietary plastic the slabs are
made, or who owns which patents, but I would like to know how a human bean
becomes a professional grader.. what is his background, what kind of
education in it does he have, and what kind of interview/process/test does
he have to go through to be employed as a full-time professional grader??..

Harv

 
 
 

To Slab or not To Slab

Post by Stujo » Thu, 19 Dec 2002 04:46:57



Laser spoke thusly...

Quote:



> > Also overstated. There are experienced dealers who have similar
> > expertise as the graders at PCGS and NGC. And it's probably not a good
> > idea to put the words "consistent," "PCGS," and "NGC" in the same
> > sentence.

> Where do the PCGS and NGC graders come from? Were they full time coin
> dealers in a former life, or are they grown from seedpods in hydroponic
> gardens?

Heh, Heh, Heh...maybe they are:

http://forums.collectors.com/messageview.cfm?catid=26&threadid=149141

:-)

Seriously, though, the PCGS forums are a good place to lurk for
tidbits of information on the grading services. It can shed a little,
not a floodlight full but a little, light on what goes on at PCGS, at
least some of the basics.

I think anyone who was a regular submitter or dealer of PCGS coins
would be foolish not to at least peruse the QA forum once in a while
or ask some questions that might shed some light. Hall answers
questions every Tuesday evening, I believe.

Some of the stuff on the regular forum as it pertains to the workings
of PCGS and people's personal experience with it can be interesting
too. There are a lot of people posting there who submit coins on a
very regular basis and some bigger dealers who submit too...Pinnacle,
Legend, etc.

--
Stu Miller
ICQ:159336182 AIM:stujoe Yahoo:stujoe
See the new exhibits in the Virtual Museum at:
http://www.thestujoecollection.com/museum/1900room.htm

 
 
 

To Slab or not To Slab

Post by Chri » Thu, 19 Dec 2002 05:29:25


This is bound to be a somewhat messy exercise, but I think you've got a good
idea, since this question is raised so frequently. I like the idea of
consensus as an educational tool for new collectors--perhaps a mature
product would be a valuable periodic post. I commented on your individual
ideas below each paragraph. A few big picture thoughts:

Clearly narrow the post to grading, the most contentious of the
to-slab-or-not-to-slab issues. You barely touch other issues with slabbing:
authentication, coin protection/preservation/presentation, and competitive
(registry) collecting. Rather than try to boil the ocean all at once, I'd
avoid the other issues for now.

Make it clear that the grading value of a slab is derived from consistency,
and that this is not a discussion of market valuation, appraising, or other
misconstrued applications. Thus, the goal of third-party grade certification
is consistency; variation is the enemy.

Quote:
> 1) Due to the subjective nature of eye-appeal and the fact that we are all
> human, there is no "absolute" or "perfect" way to grade coins.  Most
coins,
> if shown to 10 experts, will result in at least two, if not three
different
> grades.

Grading is imperfect science, yes. The reasons are more numerous than you
state. Those I can think of include:
--Individual taste: "eye appeal", as you mentioned
--Perspective: buyers, sellers, and third-parties have differing interests
that, consciously or subconsciously, intentionally or unintentionally,
affect their judgment and stated opinions of any coin.
--Incomplete standards: grading standards don't cover every combination of
possible attributes (far from it). Judgment calls must me made.
--Inconsistent standards: grading companies employ differing standards (and
frequently unstated standards).
--Human error, which is what I think you meant by "we all are human".
Related to this is that graders often are confronted with expert surface
alteration.

Quote:
> 2) Expert graders (i.e. those with the know-how and experience to expertly
> grade coins) get no value in paying a premium for a slabbed coin.  Honest
> dealers who also believe that everyone should have such expert skill
before
> buying coins will never see the value in slabbing.

This is overstated. Experts benefit from slabber's grading opinions in that
a it may become easier to convince a less-expert person they want to sell a
coin to that the grade is what it is. Do you really want the second sentence
in a consensus article?

Quote:
> 3) Non-expert graders (i.e. collectors without access to a consistently
> honest dealer) are smart to pay premiums for sight-seen coins that have
been
> slabbed by a highly reputable grading service (PCGS or NGC only).  They
are
> smart because they have decreased their chances of being ripped off by
> tampered, counterfeit, or severly overgraded coins.

The economic formula for the value of a slab is: [(Change in Value if Wrong)
x (% Likelihood of Being Wrong)] minus (All-in Cost of Slabbing). Remember,
slabs can provide value to both buyers and sellers. A buyer or seller who
slabs for risk-management (note the other purposes for slabbing I mentioned
above) is only "smart" if they slabbed after getting a positive value using
the formula.

Quote:
> 4) ACG and the other inconsistent and liberal graders may have good
> intentions, but they are mostly the tools of thieves and their uneducated
> prey.

There's little value in bringing intentions into this. Intentions are a
subset of the "perspective" source of grading variance I mentioned above.
The damage of misgrading is the same whether the misgrade is intentional or
due to incompetence, differing standards, etc.

Quote:
> 5) It is almost impossible for the average collector to find another
> collector or dealer that can grade more consistently and accurately than
> PCGS or NGC.

The relevant comparison is like-share to like-share. In other words, if PCGS
and NGC have 85% of the slabbing market, their consistency should be
compared to that of the top 85% of the collector/dealer communities.

Quote:
> 6) The practice of using PCGS or NGC to slab low market-value or modern
> coins is somewhere between unwise and corrupt.

The formula will tell you the wisdom of such slabbing, except in the case of
the "other issues" for slabbing I mentioned (e.g., registry collecting).

--Chris

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To Slab or not To Slab

Post by Alan & Erin William » Thu, 19 Dec 2002 08:16:11


Chris wrote, in part:

Quote:

(snip)

> > 4) ACG and the other inconsistent and liberal graders may have good
> > intentions, but they are mostly the tools of thieves and their uneducated
> > prey.

> There's little value in bringing intentions into this. Intentions are a
> subset of the "perspective" source of grading variance I mentioned above.
> The damage of misgrading is the same whether the misgrade is intentional or
> due to incompetence, differing standards, etc.

Chris, were you ever a carpenter? Because you show again how to hit the
head of the nail.

Alan
'impressed'

 
 
 

To Slab or not To Slab

Post by Mark » Thu, 19 Dec 2002 08:46:41


Quote:



>>Also overstated. There are experienced dealers who have similar
>>expertise as the graders at PCGS and NGC. And it's probably not a good
>>idea to put the words "consistent," "PCGS," and "NGC" in the same
>>sentence.

> Where do the PCGS and NGC graders come from? Were they full time coin
> dealers in a former life, or are they grown from seedpods in hydroponic
> gardens?

Yes, Harv, they are grown in seed pods. It is clear you know too much.
"They" will be in touch.
 
 
 

To Slab or not To Slab

Post by Chri » Thu, 19 Dec 2002 11:17:50


Thanks, Alan. This particular idea probably stems from my "six sigma black
belt" days, many of which were spent trying to "fix problems, not people".
--Chris



Quote:
> Chris wrote, in part:

> (snip)

> > > 4) ACG and the other inconsistent and liberal graders may have good
> > > intentions, but they are mostly the tools of thieves and their
uneducated
> > > prey.

> > There's little value in bringing intentions into this. Intentions are a
> > subset of the "perspective" source of grading variance I mentioned
above.
> > The damage of misgrading is the same whether the misgrade is intentional
or
> > due to incompetence, differing standards, etc.

> Chris, were you ever a carpenter? Because you show again how to hit the
> head of the nail.

> Alan
> 'impressed'

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To Slab or not To Slab

Post by Deven Atkins » Fri, 20 Dec 2002 23:32:18



Quote:
>> 7.) In the days pre-slab, a "seller" would always grade a coin 2 grades
>higher
>> than a "buyer" who would grade the same coin 2 grades lower. And now
>"with"
>> slabs, the same discussion still takes place! What did slabs "really" do
>for
>> us? Go figger.

>They give us an unbiased opinion with no profit margin incentive for the
>grade....a mediator imo.

I do not agree with this.  There is a profit margin incentive, and that is
to do whatever it takes to keep the perception of the brand name where the
company wants it.  ACG wants the "great deal" crowd and PCGS want the "best
of the litter" crowd.  Both market grade specifically to those markets.  
Market grading is more about creating markets than it is about grading.

Quote:
>> 9.) If subjectivity, error and corruption go on with slabbing outfits, as
>they
>> do with the old time "raw" coin guys, why pay the added premium for slabs?

>It's called insurance.

There is no insurance for a market grade.  I do feel that several of the
third party graders do provide some level of comfort with attribution and
authentication.


--
Penny Lane Numismatic - Categorized Web Links
http://www.bright.net/~deven/pennylane.htm
ANA Member #1197707

 
 
 

To Slab or not To Slab

Post by Bob Rud » Sat, 21 Dec 2002 01:40:24




Quote:
> I do not agree with this.  There is a profit margin incentive, and that is
> to do whatever it takes to keep the perception of the brand name where the
> company wants it.  ACG wants the "great deal" crowd and PCGS want the "best
> of the litter" crowd.  Both market grade specifically to those markets.  
> Market grading is more about creating markets than it is about grading.

I would agree with you almost 100 percent Deven.  The
exception would be with NGC.  As I look at the Greysheet
trends relative to the listed grading companies, it appears to
me that NGC is very, very, close to overtaking PCGS in terms
of relative worth and relative value.  PCGS remains the high
every week but not by more than a point on a scale of 100.  
OTOH, the PCGS low every week is several points lower than the
NGC low.  Both continue to dwarf the rest.

I am carefully watching the stock situation of the PCGS parent
company.  I wonder if there is a point at which the devaluing
of the stock (regardless of the negative split) affects the
perception of PCGS?  I don't know the answer but I do think it
is something to be determined.

Quote:

> There is no insurance for a market grade.  I do feel that several of the
> third party graders do provide some level of comfort with attribution and
> authentication.

My feelings exactly, as long as the graders currently are PCGS
and NGC.

--
I hope we can all be good neighbors online!