A certain grading service?s reputation has hit bottom with me. I am holding a 1987-S Proof-70 slab in my hand. I see black spots on the reverse of the coin, a scratch in the field in front of Lincoln?s nose and a date: 1992-S.
It was examined by employees of the grading service. It was shipped back to the dealer who submitted it. He put a price on the coin and his profit was included in the price. He placed the coin in his case and sold it to a customer based on the date and grade on the slab.
This coin was offered at auction and the high bid was $9.90. I looked at the coin and explained to the buyer that the grading service had made a mistake because the coin was a 1992-S Proof-65 but not a Proof-70 coin.
The buyer wanted the 1987-S Proof-70. The firm said it cannot supply the coin even though it was in its slab. I paid $20 for the coin from the auction company. I gave a proof 1971-S Ike dollar to the buyer because he was so considerate of the fact I could not find him a 1987-S Proof-70 coin slabbed by the firm.
This firm and all the grading services advertised that they are ?trustworthy ? don?t make mistakes. Believe in them. They are the experts.? But are they? Get a copy of their guarantee ? look at their disclosure statements. Do they promise you a profit? Do they guarantee that your coin will be worth more just because you pay them money to grade and slab your coin?
No, they do not! They have taken well in excess of $200 million in fees. Are your coins worth more? Did they improve the coin you sent in? I do not believe any coin is improved by sending it in for an appraisal.
Wouldn?t it be better to learn how to grade yourself? All they have created is a huge windfall profit for themselves ?a big loss for you, the collector. Who accepts someone else as your grader? They have created a trust among novices who do not realize these slabbed coins with perfect grades will fall back to true collector value when they try to sell to any dealer worldwide.
The slabbing companies know this. That is why their disclaimer or guarantee is worded so you must be a lawyer to understand it. Watch them buy your coins at the grade they put on them. That would be a guarantee. But they don?t buy coins, don?t deal in coins. They only sell opinions.
The only way I know how to protect yourself is do your time to learn about coins, how to grade them, what to pay for them and forget the slab. Buy only coins (not slabs) that you believe are worth what you are willing to pay. Then be proud of your coins. If you have done this, then protect them from atmospheric conditions, protect them from theft and let time pass. It is a natural thing for value to go up as more are damaged or destroyed. Join a coin club. Ask questions of everyone, including dealers. Deal with those who are helpful and honest.
As an afterthought, the Greysheet says 1987-S has a wholesale value of $1 per coin. The 1992-S has a wholesale value of 62 cents per coin. These prices may go up or down in the future, but right now I would want to purchase at or near these prices. Most honest collectors who have learned that a one-cent coin being copper is hard to keep it?s value ? black specks ? toning all affect the coin?s value and over time this does happen.
My advice is simple: ?Don?t quit collecting.? It is the greatest hobby on earth and is the most diverse of any collectibles. There are so many coins from all over the world, paper money, tokens, medals and books. There is gold, silver, platinum, palladium, copper, stainless steel and many other metals.
Accept your position now, profit or loss, and charge it up to education. The key to joy and profit is knowledge. Learn everything you can and use your newfound knowledge to make an honest profit when you sell.
Your obligation is to teach others what you have learned. Anything less than that is a bad investment that only your heirs will learn if you give your collection to them.
I have 75 years of collecting behind me. Coins have been the perfect hobby for me. I hope you will feel the same way 20 years from now.
The Viewpoint was written by an 81-year-old coin dealer who wishes to anonymously share his opinion.
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