This article was originally printed in Numismatic News.
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We seem to be facing an evolution in coin grading, or perhaps more aptly, a degradation of the system. Now most of you realize that we have numerous grading (slabbing) services of which a handful are reputable and many others are not. Then we have raw coins, which still represent a larger number of coins than those that are certified. The market is most influenced at the high end by those certified by the handful of reputable services both because of quality assurance and population reportability.
Where I see a problem developing is with the new plus system and the little green football known as the CAC sticker. These indicate the supposed cream of the crop and have attained varied premiums according to availability. Many dealer bids now require a CAC sticker, or plus designation, or one of the other quality assurance adjectives. This now creates three levels of grade pricing structure and contributes very strongly to pricing confusion, which is not beneficial to the coin market. All markets require clear and concise information to function rationally and this is headed in the wrong direction. If you are a very knowledgeable and experienced numismatist, this confusion creates an opportunity to put that knowledge to use and pick off the bargains and scarcer issues that get caught in the ultimate shakeout.
However for the less knowledgeable it just creates confusion and discouragement. It also creates another venue for price manipulation where bidding can occur for a premium designated item that currently does not exist with that particular designation, but only a small group of insiders really know that.
There are many coins out in the marketplace both uncertified and certified that are both undergraded and overgraded. By developing knowledge of a particular series or date range, you can find some very interesting and fruitful items to add to your holdings. You may wonder how a certified coin can be undergraded. The answer is simple: grading has and continues to evolve and while the various services will deny it, they somewhat tighten and loosen their standards from time to time. This may not be intentional, but more a function of volume and employee workload. An example of grading anomalies would be a grader having just finished a group of very fresh post-World War II cent rolls and then shifting to a group of Lincolns in the teens. This creates the tendency to be harsher on those in the teens, which just do not come as nice as the later ones.