Saturday, March 10, 2012
Flip open any coin catalog, CCN Trends, on-line price guide or the like and you are faced with a table format showing different retail pricing for any given date based on grade. Other items factor into the equation to determine price, but it is listed by grade. How good are you at grading coins? This is one of the most important and least end user mastered aspects of our hobby. If the price we are going to pay is determined by grade, why then are we all too willing to accept the grade offered on the holder or uttered by the vendor as being correct? If you are a good grader and are confident in your skill, you can probably stop here. If you generally buy the grade offered on TPG holders, you probably need to keep reading. If you accept the scrawl on a 2x2 you definitely need to keep reading!
Complicating this pesky grading business are things like weak strikes, eye appeal, colour, toning, marks, rim nicks, planchet flaws and the fact that I change my mind. What looked to be fine today might look very good next week when I look again. Am I splitting hairs? Could be, particularly if I’m vacillating between VG10 and F12 on a common date large cent, sometimes it just doesn’t matter. Other times it does. I was just looking at a particular discussion board and some of the opinions on grade offered against a key date variety coin were from VG to F15. It looked more like G4 to me.
OK so on this grading thing, you know more than you think. Here is an exercise for you. This is best done on the same design so for Victoria, choose a particular portrait like obverse 4 as an example. Select 10-15 coins. If you are a date collector you will have this many without difficulty. Flip them all over so that you are looking at the obverse side and not the date. Now without prejudice, sort them from the most worn looking obverse to the least worn obverse. At the most basic level you have graded the group in front of you. You could do this day after day and probably put the coins in the exact order you have in front of you now. You could be consistent. That is good because you can do exactly the same on the bourse. I was off at a show a few weeks back and I was looking at obverse 1 coins. This one particular vendor had a ton of 1876-82 coins marked VG-VF. I thought his grading was subjective I flipped the group over and picked the best 10 from the bunch and put the rest back. The grades on the holders and the associated prices were a split between VG and VF, but I purchased the best of the bunch.
That approach works fine for groups but what about single coins. With your group still sorted from most to least worn, your next task is to identify a particular grade. What is the highest grade for the coins in the group? What is the lowest grade? If you have VG to EF as your end points, which coin in the group represents F, VF20 and VF30 and how will you know if you are right?
You can assemble a grade set of coins to use as standards if you want. You can then compare against your grade set. How do you set up a grade set? You have resources. Use quality pictures on the internet auction sites, or grading sets already assembled like that from Mike Walsh link. You can even assemble a set based on TPG if you want and purchase an example of each grade you are interested in for your set. If you do this, stay with one TPG company and only use a respected one. Grades can vary significantly between the TPG’s so stay top tier to minimize errors. Staying with the same company for this exercise will drive consistency into your sample set based on the standards the TPG employs, grade creep notwithstanding. Charlton has also published a Standard Grading Guide for Canadian & Colonial Decimal Coins. This deals with circulated grades up to AU.
The more coins you look at and mentally grade, the better you get. Come back to exercise your skill at grading against known standards frequently to stay sharp. Don’t let other factors influence your grade. Since the cost of the coin will be determined by a variety of factors including grade, master the variables like grade to minimize mistakes on your part. You can’t control mintage, survivability, demand, inventory etc. but you can control your ability to assess the offering independently of the dealer and then determine if your money stays in your pocket or if it gets replaced by a nice EF Vickey.
Now for your final task, flip the coins back over to the reverse. Do your grades match those written on the holders? What adjustments do you need to make? Are the grades on the holder correct? Were they influenced by something else? The three biggest influence's are date, price and variety. As we just found out, none of these plays a role in grade. Protect yourself and your cash by learning how to grade. The cost of a mistake is minimal on common coins but gets large on keys, varieties and better grade coins. Cherry pick by grade next time you are at a show. Your collection will thank you and so will your wallet.