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Time for new grading system?

A new coin grading system will be the topic of Indian cent specialist Rick Snow’s presentation at 9 a.m. Aug. 11 at the American Numismatic Association convention in Anaheim, Calif.

Snow, proprietor of Eagle Eye Rare Coins, Tucson, Ariz., states in an email announcement that his “talk will be about a new system of grading that could eliminate the problem of overgrading of certified coins if used universally.”

What he will propose is not a new grading service or anything that requires payments to be made.

Snow will not reveal the specifics until his talk.

“The problem of overgrading in the age of certified coins, now in its 30th year of existence, is now a real problem as a large percentage of coins in certified holders are deemed overgraded by ANA grading standards.” Snow said.

So far, he said he has shared his assessment with only a few industry leaders.

One way the overgrading problem distorts the market is in reports of auction results, he said.

“When an overgraded coin sell(s) at auction, it will usually sell below market. When these lower data points are reported as the market, then the market prices will inevitably go lower,” Snow said.

He illustrates this effect in an article he wrote for “Longacre’s Ledger” in January 2015.

He shows various AU-50 examples of the key 1877 Indian Head cent, along with the prices they sold for at auction.

Readers can readily see the difference in the quality of the coins.

The photographs show that obviously inferior coins bring lower prices and the best looking coin brings the highest price.

The problem is all of the coins are assigned the same grade.

So is an AU-50 1877 Indian Head cent worth $4,500 or $2,500?

Any owner of a correctly graded AU-50 1877 Indian Head cent has a large stake in the answer to this question.

Snow calls his article, “Systemic Overgrading and how it Effects Coin Values.”

It is an interesting presentation illustrating Snow’s diagnosis of a problem.

A month from now at his Anaheim talk Snow will share his answer with us.

I can hardly wait.

Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."

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