How many times have you heard these words? “Grading is subjective” or “Grading is an art not a science?” That leaves a lot of room for interpretation, and we’ll examine some of that in this column. The subjective nature of grading is possibly one reason many numismatists are conservative buyers or liberal sellers. There is less risk of taking a hit to the wallet. Knowledge is power. It can be a jungle out in the marketplace where the uninformed can be eaten alive.
I don’t choose to tell you how many times I have fallen victim and sold an item under market because I didn’t do any research before offering a coin at my price.Anyway, it has been a long time since I’ve sold a coin; yet to this day I can feel certain coin dealers salivate as I pass their tables at shows.
One personal story I use in my grading seminars is about the time I kept telling a well known dealer that he really didn’t want to purchase the gem AU-58 Type 1 Standing quarter in my coin wallet because it was not a true uncirculated specimen. He kept asking for a price and finally bought it. I learned that the small amount of rubbing on the coin did not matter in the commercial side of our hobby and the coin was sold as uncirculated.
Since grading and value have been interconnected (commercial grading) for so many years, a competent professional grader must keep up with the coin market. That is surely one reason so many of the top graders in the country are or have been coin dealers. They know how much cabinet friction to overlook on an “uncirculated” coin or when a coin merits the extra Mint State grade point that can revise its price upward by several multiples.
For the average collector, possibly most of you who read my columns, this amount of knowledge will take years of active commitment to acquire. Until you approach that level, it’s best to follow the advice of many writers who insist that you purchase the best quality coins you can afford. It’s also important that you stick with coins that have been authenticated and encapsulated by the major grading services.
I think it was President Ronald Reagan who said, “Trust but verify,” when speaking about the old Soviet Union. This holds true for the coin dealers you use also. They are a mixed bunch with varying degrees of knowledge. I’ve met quite a few who would not be in business if it were not for slabbed coins and they still want a break.
A typical case happened just last week. One “dealer” wanted to cross an expensive type coin in an XF Details CLEANED slab into a Very Fine holder. While that might equate to its perceived market value, it was still an imperfect specimen – actually buffed up quite well. What made him think that one grading service would take a problem coin out of another grading service’s holder and not mention the problem? Grading should not be that subjective – or is it?
Let’s examine one particular nuance of grading that perplexes me; yet an example such as this is common in the marketplace. I’ve illustrated both sides of two 1920-D Standing Liberty quarters graded by a major service. We’ll refer to micrographs number one and two as coin “A” and the others as coin “B.” Which coin has more detail? Which coin grades higher? How would you grade each coin?
The amount of detail present on these coins is very close and readers may be hampered by the printed illustrations here. Nevertheless, coin “A” has slightly more of its design remaining. Most will grade both these coins in the F-15 to VF-20 range. Don’t you agree?
Well it turns out that we would be incorrect. Although coin “A” has slightly more detail, it will be commercially graded as AG-3 or G-4 at the maximum, while coin “B” merits the higher grade. Have you guessed why?
Look at the date area for the answer. Coin “B” has a full date while only the last digit shows on coin “A.”
Therefore coin “A” grades much lower. As you see, there is a lot more to learn about the commercial grading practiced by the major grading services than meets the eye.