The Gold and Silver Mine: Don’t take coin grading too seriously
Last weeks’ column dealt with security for your collectibles and valuables should you decide to keep them in your home. Hopefully it made you aware that there are others who want to relieve you of the burden of keeping them safeguarded. One thing I forgot to mention is that it is a good idea to periodically check to see if your collection of valuables or jewelry is slowly shrinking. This happens when someone has access to your home (friends of your children, your children themselves, baby sitters, relatives and others). Instead of taking everything at once, they may take a piece at a time over weeks, months and even years, so that the shrinkage isn’t evident until almost everything is gone. You may think these things won’t affect you, but I have witnessed every one of the examples I described above and in last weeks’ column. Boy Scout motto: Be Prepared.
Enough seriousness, let’s get to some fun issues, which is what this column is supposed to be about.
An article I just read about the four major independent coin grading services written by a grader for one of them said it was his feeling that the same coin (denomination, date and mint) that had the same grade designation – if these four coins were to be placed in auction, they would receive different bids, even though they were graded the same.
The four top grading services, ranked in order of the acceptance of the grades they apply are PCGS, NGC, ICG and ANACS, and this ranking will also demonstrate the difference in values assigned to the coins they grade. The lesson here is to buy the coin, not the slab that the coin is in, (the slab being the plastic container the coin is encapsulated in after receiving its grade).
I have written before about the benefits of having coins graded by a third party grading service, especially very valuable coins, but it is important that you, the buyer be familiar with how the coin should look. Everyone can have a bad day, and graders are no different. I’ve seen coins (and this goes across all grading services) that show obvious signs of wear graded uncirculated and gem coins receive low grades. Also, the grading standards have been somewhat relaxed over the years, where coins graded 20 or 30 years ago would receive a higher grade now, especially uncirculated Morgan Dollars receiving grades now that were never experienced.
An interesting trend I’ve seen is the grading of the modern commemorative coins made by the U.S. Mint. Dealers try to get their hands on as many examples of the new coins when they are released by the mint and have the designation “Early Release” shown along with the grade. The expectation is that these first coins struck will show sharper detail than those that are minted later. The dealers also attempt to get as many coins that they can graded MS70 (perfect) so they can sell them to collectors. This came to a head with the recent release of the new Eisenhower commemorative dollar. It seems more coins found their way into dealers’ hands, resulting in many collectors’ orders not being filled, causing collectors to complain to the mint about their practice.
My take on the practice of grading modern coins: First, consider the service that graded the coin (see above). I will only accept the grade of the first 2. Only MS70 coins (perfect) will command a premium, lesser grades will be priced the same as coins that are raw (ungraded). Only time will tell whether these coins will appreciate in value as supply and demand dictates. A case in point is the Ultra High Relief gold piece struck in 2009. Its value is currently $1,000 less than it was several years ago.
In the past, only dealers could submit coins to the grading services, but now most are accepting submissions from collectors, so if “you’re feelin’ lucky,” try sending in some of your coins to see what grade they will receive. It will be a worthwhile experience.