Do bidders actually understand the NGC coin grading scale?

[design_hibo 10]

Why on earth are bidders paying upwards of R16K+ for 2008 Mandela Birthday R5 graded MS61?!

 

That's like paying R400 000 for a 2005 Ford Fiesta... simply because the car dealer has fewer 2005 models in his showroom.

 

BIZZARRE!

[MsPlod 10]

Heh heh heh

 

Why on earth are bidders paying upwards of R16K+ for 2008 Mandela Birthday R5 graded MS61?!

 

That's like paying R400 000 for a 2005 Ford Fiesta... simply because the car dealer has fewer 2005 models in his showroom.

BIZZARRE!

 

Excellent analogy!!

Been wondering precisely the same thing - fascinating stuff and fascinating times. Create a scarce resource - folks jump at it - shakes head :confused:

 

(glad someone else has noticed this...)

[JOHNEL 10]

Maybe thats why it is listed as "discreet bidding" so nobody can see who is so stupid. It is the worst strike and people are paying the highest prices for it !!! :confused:

[barbaro 10]

OMF.. i have only heard about grading coins last week and even i know that MS-61 is not great... Imagine what they would pay for a MS-68 or 69....

 

Is it possible that the person putting the coin up for auction is the one increasing the price like this?

[Rare NotesCoins 11]

Hi Guys.

 

Allow me to explain.

The coin in qeustion was one of 4 million minted. It was send for grading and as you can see came back a MS (Uncirculated) 61. Meaning it had 9 faults on it. There are not allot of these grade of Birthday coins availible. So for some one who wants a Full MS set(60,61,62,63,64,65,66,67,68) the will pay so much money. Personally it is not worth R100 as the buyer will never in his life be able to sell the set let alone the coin for that much in the future. Not a good investment. Other wise my MS 60 1897 coin shopuld alsdo be so much. But it is not as all serious collectors know. You want to have the finest known set not a coin in every grade. If a MS66 1892 Penny sells for R260 000

why will a Lessarcoin sell for more. Does not make sense

 

Again this is my opinion.

 

If you see a MS66 selling at R100 with 4 faults and a MS 67 for R200 with 3 faults a MS61 is less than R10.

But because of people collecting sets as mention they will pay so much for a coin.

 

Morne

[barbaro 10]

Ok so the people bidding could need an MS 61 coin to make their set, but they will never get the money back... Interesting information that..

 

Is there a website where we can read up more about the grading rating/scale of coins? I'm still a bit confused with this MS, PF, AU etc gradings that are used. I saw another one called XF i think.. :confused:

[4kids 10]

Barbaro, See my posting and read your PM's

[Norgard 10]

Hi

 

Here is another example of some unsuspecting buyers being taken for a ride!

 

2008 Birthday R5 - *** THE ONE AND ONLY *** - YES !!! THE NGC XF45 NELSON MANDELA 90TH BIRTHDAY R5 - Crazy R1 Start. for sale in Johannesburg

 

The seller SHOULD know that this coins is nor worth more than R5, yet they are advertising it as being the scarcest Mandela coins ever! This is totaly ridiculous and is giving genuine numismatic dealers a bad name.

 

How can we stop this from happening?

[EWAAN Galleries 11]

The Crazy South African way of collecting coins

 

Hi All

 

This is actually crazy how these coins are selling for such high prices. The sellers are obviously damaging coins to get lower grades as we have sold 1000s of them and lowest grade we got was MS63.

 

But strange enough, South Africans collect Mandela coins very differently. I as a normal collector would just keep the highest grade and sell off all the other lower grades.

On the other hand South Africans collect the whole NGC series from MS60 to highest grade they get. They collect one of each. Very funny way of collecting but it's happening.

 

I wish I could understand why they collect coins this way and I wonder if they will get their monies back on the lower grades.

 

Regards

 

Muhammad Seedat

 

Ewaan Auction Galleries

[RISadler 10]

IMHO, the coins are selling because they are graded. Period. The grade actually means nothing, just the very fact that it has been graded makes it "valuable," an "investment" and a "collectors' item."

[Rare NotesCoins 11]

If that was they case that becuase it is graded it attains the price then all graded Mandela coins will sell for high prices. Not happening.

 

Robert Bakewell has the best graded set in the world currentlly. Do you think that because I have a lower graded set mine is worth more than his.

I dont think so.

You want the highest possible grade that means everything for a collector not the lowest grade.

 

Do you see any serious collector collecting Mandela coins , let alone lowest graded coin? No because they all know that it is a waste of money paying so much for a R5 coin. My opion!!!

 

See how many "serious collectors "" names appear on these coins bidding. NONE

 

Uno for sale lots of scrathes only one of its kind R400 000 000. Definitlly not brand new. Same situation

 

My opinion and most collectors agree.

[RISadler 10]

If that was they case that becuase it is graded it attains the price then all graded Mandela coins will sell for high prices.

 

I think you somewhat misunderstood what I am saying, which is that people are buying the coins because they are graded and not because they have any actual value.

 

It's all about packaging and presentation. Like those "make-it-go-faster" stripes they stick on Ford Fiesta's just so they can ask a few thousand Rand more for it.

[Norgard 10]

Considering that it costs someone no more than say R350 to get a coin graded at the NGS it is still daylight robery to let the Buyers think that a coin is worth R15000. The Sellers selling these lower grade coins are putting these figures in under "Market Price" when they sell these coins.

 

According to me they are "Con Artists" and should be "Blacklisted" by BoB.

 

 

My opinion!

[RISadler 10]

"A price is what a fool pays for it."

 

"If a bargain looks too good to be true, then it usually isn't true."

 

"Never over-estimate the intelligence of the general public."

 

"You can sell anything to somebody, i.e. there's a sucker born every minute."

[design_hibo 10]

 

How can we stop this from happening?

 

Frontal lobotomy?

[xsiandreas 10]

I believe people are fooled by the NGC census report. They think that because only 5 coins were graded in AU50 and a 1000 coins were graded MS60, the AU50 coin is more valuable. However, this is not true. As years pass, coins become more circulated and the figures for lower graded examples normally tend to increase. Also, many more Mandela coins will be sent for grading and in a few years there may be more AU50 than MS60 coins.

I think that any true coin collector will prefer a higher grade over a lower grade. It is also interesting to see that a set of Mandela coins from MS60 to MS67 is called a collection. For me a collection needs to be made up of different coins and not the same coin in different grades.....

[Dulal 10]

I believe people are fooled by the NGC census report.

 

How one interpret the avaiable infomation that`s the matter.If assumption is incorrect, outcome will be likewise. you can take your horse to the water, it upto horse to drink or not.

[MsPlod 10]

Unbelievable!!!

 

Frontal lobotomy?

 

Look - it is happening again this Friday... I suspect the frontal lobotomy may be too late! :eek:

 

2008 Birthday R5 - MS 61 NESLON MADELA R5 BIRTHDAY COIN for sale in Johannesburg

 

The only reason I would specifically buy an MS61 is if it is under R15 (and then I would buy a number of them at that price as gifts for my son and his friends... Phew!!:confused:

[lilythepink 11]

Look - it is happening again this Friday... I suspect the frontal lobotomy may be too late! :eek:

 

2008 Birthday R5 - MS 61 NESLON MADELA R5 BIRTHDAY COIN for sale in Johannesburg

 

The only reason I would specifically buy an MS61 is if it is under R15 (and then I would buy a number of them at that price as gifts for my son and his friends... Phew!!:confused:

 

Someone I know says: "I would rather have a bottle in front of me than a frontal lobotomy!" Perhaps both apply to some sellers and buyers?

[Guest Guest]

Gravel Rash

 

I have to tell you that this fetish with grading by coin slabbers and population/census reports is, in my view, nothing more than a slick sales gimmick by the same. Investors who suffer "gravel rash" from buying slabbed coins should remember this simple truth.

 

Do not depend on others when investing, do your own research. With passion in your hobby comes the expertise to KNOW. And the most important lesson of all to be learnt is that it is YOUR money you are investing.

 

As I have said so many times before I am not into slabbed coins but DO happily buy raw coins from sellers who I know I can trust. To me that beats a slabbed coin by NGC etc on BoB any day!

 

Kind regards

 

Scott Balson

[MsPlod 10]

Invest time and effort before investing money...

 

I have to tell you that this fetish with grading by coin slabbers and population/census reports is, in my view, nothing more than a slick sales gimmick by the same. Investors who suffer "gravel rash" from buying slabbed coins should remember this simple truth.

 

Do not depend on others when investing, do your own research. With passion in your hobby comes the expertise to KNOW. And the most important lesson of all to be learnt is that it is YOUR money you are investing.

 

As I have said so many times before I am not into slabbed coins but DO happily buy raw coins from sellers who I know I can trust. To me that beats a slabbed coin by NGC etc on BoB any day!

 

Kind regards

 

Scott Balson

 

Thanks for this Scott - have to say that I do appreciate at least some potential for grading having its place - although am thoroughly appreciative of an ungraded proof or uncirculated coin. What I am blown away by is that the coin I have just mentioned is an MS61 Mandela 90th birthday coin - now at R1500+ - where the MS67 and MS66 coins (all on the same Friday Crazy auction) are being bid at between R100 - R300!

 

As you quite correctly say - folks must really do their research before leaping into a mad frenzy about a "rare" grade - quite extraordinary... :eek:

 

And this MS61 coin finally closed at R1755.00 after a Friday morning's frenzied bidding!! Too much!

[MsPlod 10]

And another...

 

This is getting beyond ridiculous!!

 

Graded - *** SCARCE GRADE !!!!! MS62 !!!!! *** Birthday Mandela R5 *** Crazy R1 Start !!! for sale in Johannesburg

 

:p:p:p:p

 

It is a mind-blowing experience out there on the auction "floor"...

[Norgard 10]

It still boggles my mind how the grading census reports are being used to determine supposed rarity in the lower grades.

It is clear that the bidders do not understand the NGC coin grading scale and then the census reports are being used to fool them even further into thinking that a certain grades makes for a scarce coin.

They just don’t seem to realize that they are buying a 1 of millions coin and not a 1 of 30 as the seller is making out.

Totally ridiculous !

[MsPlod 10]

Mind blowing stuff!

 

It still boggles my mind how the grading census reports are being used to determine supposed rarity in the lower grades.

 

It is clear that the bidders do not understand the NGC coin grading scale and then the census reports are being used to fool them even further into thinking that a certain grades makes for a scarce coin.

 

They just don’t seem to realize that they are buying a 1 of millions coin and not a 1 of 30 as the seller is making out.

 

Totally ridiculous !

This "one of thirty" (and one of five million or so) "scarce grade" :rolleyes: MS62 is currently going for over R2000! Quite mindblowing...

 

A post by Aljada (31 July 2008) in the numismatics Q&A (http://forum.bidorbuy.co.za/coins-notes-numismatist/3143-numismatics-q-hosted-aljada-3.html) gave an interesting calculation of the ratio(s) between graded MS and catalogue values - these were as follows:

 

"All the ratios are formulated aganst the constant of 1 in MS60 grade which as I stated is the catalogue value at the time.

 

AU50 - 0.45

AU55 - 0.55

AU58 - 0.90

MS60 - 1.00MS61 - 1.10

MS62 - 1.45

MS63 - 2.15

MS64 - 3.75

MS65 - 7.75

MS66 - 17.50

MS67 - At this level the market forces would dictate what ratio would be applicable and it could be anything from 25.00 to 500.00 or more."

 

Since the MS66 is currently hovering between R100-R180 this SHOULD indicate that the MS62 would be around R8.29 - IF the bidders did their homework. But the advertising gimmicks and razz of "scarce grade" - "one of only 30" - "rare grade" are creating this extraordinary situation... Where is this going to go?

 

One can only wonder whether the folks bidding and buying these "scarce" :rolleyes: grades are going to spit hot nails when they realise that they have been so foolish as to jump at the advert and not at reality - tch tch tch...

 

In the meantime - some of the traders are making "a mint" on some slightly more scratched coins that should only be selling for a little more than their catalogue value...

[jwither 12]

This "one of thirty" (and one of five million or so) "scarce grade" :rolleyes: MS62 is currently going for over R2000! Quite mindblowing...

 

A post by Aljada (31 July 2008) in the numismatics Q&A (http://forum.bidorbuy.co.za/coins-notes-numismatist/3143-numismatics-q-hosted-aljada-3.html) gave an interesting calculation of the ratio(s) between graded MS and catalogue values - these were as follows:

 

"All the ratios are formulated aganst the constant of 1 in MS60 grade which as I stated is the catalogue value at the time.

 

AU50 - 0.45

AU55 - 0.55

AU58 - 0.90

MS60 - 1.00MS61 - 1.10

MS62 - 1.45

MS63 - 2.15

MS64 - 3.75

MS65 - 7.75

MS66 - 17.50

MS67 - At this level the market forces would dictate what ratio would be applicable and it could be anything from 25.00 to 500.00 or more."

 

Since the MS66 is currently hovering between R100-R180 this SHOULD indicate that the MS62 would be around R8.29 - IF the bidders did their homework. But the advertising gimmicks and razz of "scarce grade" - "one of only 30" - "rare grade" are creating this extraordinary situation... Where is this going to go?

 

One can only wonder whether the folks bidding and buying these "scarce" :rolleyes: grades are going to spit hot nails when they realise that they have been so foolish as to jump at the advert and not at reality - tch tch tch...

 

In the meantime - some of the traders are making "a mint" on some slightly more scratched coins that should only be selling for a little more than their catalogue value...

 

Alex made a good attempt to provide an answer to an unanswerable question but the answer to this question is exactly that, it cannot be answered.

 

I presume (since I have not spoken to him and have not seen or do not recall the additional specifics) that this scale is based upon what exists in the United States today for US coins graded by NGC or PCGS.

 

But what I can tell you is, as a collector who lives in the United States though one who does not collect US coins at all, that the price structure of US coins does not make any sense to me at all.

 

The primary defect with this structure is that the grade is given far too much weight versus the scarcity of the coin.

 

Now, even in relative terms (for the size of the market) South African coins are generally much scarcer than US coins especially from the same period, but the logic is backwards when a coin which is otherwise common or not really that scarce sells for a higher, much higher or exhorbitant price versus another coin which is much scarcer simply because of the grade NGC or PCGS assigned to it.

 

I for one can tell you that when I find these coins that come back with higher grades, I get rid of them as fast as I can. Contrary to what most people believe, quite a few of them will turn out to have a lot more coins end up as MS in the census than what shows at this time. I do not think so for the KGV (except for some of the bronze) but I consider it so for many of the KGVI. Probably many of the QEII are actually much scarcer in grades say, MS-64 or above, than these coins. I have seen few of them though that is partly because the prices are so low.