March 5, 2006: Thoughts on Coin Grading, Part 1

We thought we’d tackle a not-controversial, simple and easy topic like ‘coin grading’ this week. We’ll start with how we, as dealers, grade and assess a coin:

Whether it is in an auction, in another dealer’s case, raw or slabbed, we evaluate a coin by studying it carefully and determining, regardless of the level of wear in evidence, whether we like it or not.

Now, obviously ‘like’ is a rather subjective and vague concept and we accept that. To us it means that a coin is attractive, and appealing, and original, and pretty. But to be fair, this concept must be applied differently to different types of items, for example:

• We tend to like common coins that are attractive and eye appealing in an absolute sense.

• We tend to like rare coins that are attractive and appealing in a relative sense compared to their ‘peers’ based on our years of looking at such coins and on our extensive research.

Now, you may have noticed that we didn’t mention slab grade here or some concept such as ‘nice for the grade’. That’s because it isn’t part of our equation. Let me repeat that: the slab grade is not part of our evaluation process.

Whether a coin is raw, or slabbed by a well recognized third party grading service, or a small and less reputable one, we assess the coin on its own merits.

That’s pretty much it.

Now, having said that, a slab grade can play a role – basically it dictates what a lot of other people are willing to pay and that, by definition, influences what we may have to pay to acquire an item.

It is a fact that an ‘overgraded’ coin may sell at a level that we believe is too high to someone whose criteria is different than our own. And an undergraded coin may have little interest from some kinds of buyers. And a coin that another dealer thinks can upgrade may sell at an unexpectedly high level, etc., etc.

It’s all noise to us.

We do have customers who seek examples of coin in particular grades and we understand that slab grade is in many ways the currency of the modern market. And that’s fine. We just prefer to operate based on a slightly different criteria which says essentially that the coin is the coin and always has been the coin. If you see enough coins and do enough research, then determining how they rank, where they fit into the mythical condition census and how much they are worth becomes somewhat easier.

Coins that meet our criteria our those that we recommend to our clients and those that you will see on our website. In some cases, for a particularly rare date coin, or those that simply do not come in choice condition, we accept a lesser quality level and may offer such a coin on our website. In such an instance, you will see that noted in the description.

In subsequent Coin Commentaries we’ll look at numerical grades vs adjectival grades, Registry Sets, and other related topics.