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jwither

Eye appeal versus TPG assigned grading

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jwither

In prior posts, I have commented many times on how many collectors on this forum seem to place a disproportionate emphasis on the number on the slab assigned by the TPG (NGC or PCGS) as opposed to what the coin actually looks like. I read the same sentiments in my limited private communications with collectors from South Africa. It makes little sense and given that ocassionally the LOWER graded coin is a BETTER specimen than the HIGHER graded coin, makes even LESS sense when this is true.

 

For those who are interested, the purpose of this post is to have them assess different coins in different grades so that they can see this for themselves. The coins in question are included in the Ponterio (now part of Bowers Stacks Galleries) Baltimore Auction in session "A" which will occur on March 31. The lots can be viewed on Sixbid.com. The coins I am using as examples are the Mexico "Cap & Ray" 4 Reales. These are not South Africa coins but it does not matter because the principle is the same, regardless of the coin.

 

For reference, this collection must be world class because it contains more high grade examples of these issues than I have seen in my 10 years of following this series. I own a single NGC MS-61 (1847 Go-MP), have seen maybe as many as a dozen MS and slightly more in AU. I doubt that any but the most "common" DAM (date, assayer, mint) combinations (such as the 1868 Zs YH) have even 10 survivors in MS.

 

There are about 40 AU or better specimens in this auction of this denomination. For illustrative purposes, I will use lot 8357 and lot 8364. Both I believe to be about equally scarce being from the same mint.

 

Lot 8357 is an 1844 GoPM NGC MS-61. On the obverse, the strike is full as all the letters are visible but the toning is not particularly attractive. On the reverse, the strike I would describe as mostly full but there appear to be adjustment marks. The estimate for this coin is $700 USD.

 

http://www.sixbid.com/nav.php?p=viewlot&sid=372&lot=8357

 

Lot 8364 is an 1850 GoPF NGC AU-55. On the obverse, the strike is also full and the toning I consider to be much better than the other coin. The same on the reverse. The strike is sharp with only detail lacking on part of the snake. The toning is also attractive. The estimate for this coin is $175 USD.

 

http://www.sixbid.com/nav.php?p=viewlot&sid=372&lot=8364

 

Of course, not every collector will agree with my assessment and someone who knows this series better would be in a position to know which coin most specialists will prefer. But I believe that my assessment is represetative of the opinion of most selective though non-specialist collectors.

 

In my opinion, the NGC AU-55 is not only a better coin, but possibly also a better "investment", though the mindless preference for the number on the slab may invalidate the latter opinion. Even if not, lot 8357 should not sell for four times more (and ultimately may not). Additionally, I do not even see how NGC came up with a grade of AU-55 because I see little evidence of any wear at all. It is hard to tell from the image and sometimes lack of detail on this design is just a weak strike.

 

To support this last statement, the coin that I own was actually in an AU-58 holder before I bought it. (In the census, both grades are still included.) I know this because it showed up in two different auctions with the same firm. In the first auction, I won the coin but they could not find it. In the next auction, I saw it again but in the MS-61 holder. I knew this by comparing the images in both auctions which both contained five distinctive marks. Apparently, the prior owner was paid but also received the coin back and tried to resell it later cracking it out and having it regraded. In my opinion, the coin I own is not an AU-58 and possibly also better than an MS-61 since it has few field contact marks and a razor sharp strike.

 

In this collection, there are other coins that I do not think are undergraded but even with light wear, I still consider them to be better than lot 8357. They are better because they look better.

Edited by jwither

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Pierre_Henri

There is an old story regarding a former US President who always had a horse shoe mounted on his desk. So a visitor once asks him why he believed in things like “good luck” charms that are actually old wives tales.

The president replied that he does not really believe in it bringing him good luck, but he keeps it anyway because someone once told him that it will bring good luck even if you do not believe in it!

That brings me to the two Mexican 4 reales you showed us.

I agree with you that the 1850 date is a more beautiful and collectable coin than the 1844 date and there should be no reason why the latter should have an estimated value of 4 times that of the former, but irrespective of what we believe, the market will rather go for the MS grading than the aUNC grading.

Because the market believes that it will be a better investment because the good old catalogue assigns a higher value to a mint state vs. an almost mint state coin.

Another reason might be that a coin that has eye appeal to collector A might be an eye sore to collector B so to avoid “what I think the other guy will like” most bidders will likely go for the “number on the slab”

So as a collector I will go for the “better looking” coin, but as an investor I would probably go for the grading number on the slab. The reason being, as I have mentioned above, that I do not know what others like and would rather not take a chance on what I think they would find appealing – simply put, as an investor, I would rather not try to outguess my future clients.

BTW, in my old Krause world catalogue, there is indeed a 4 times difference in value between the 1844 date in unc and the 1850 date in EF (no values for aUNCs are given)

Regards

Pierre

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Pierre_Henri
I n prior posts, I have commented many times on how many collectors on this forum seem to place a disproportionate emphasis on the number on the slab assigned by the TPG (NGC or PCGS) as opposed to what the coin actually looks like.

 

Oops, sorry for forgetting to ask this in my previous reply, but what does the abbreviation TPG stands for?

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admin

Third Party Grading (coin valuation)

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jwither

In my prior post, I was trying to make two points.

 

The first is that "investors" tend to prefer coins that are inferior to others simply because of the grade on the holder. I consider it nonsensical and an opportunity for the discriminating buyer to acquire better coins cheaply. I intend to buy some of the coins in this auction including possibly the 1850. I defintely will not bid on the 1844 because while it may not be an inferior coin, it is not a superior one either. Even though all these coins are scarce in AU or better, I would rate it "dead money" at a price of $700 plus buyer's fee.

 

The second is on the merits of two coins like these as "invesments". I'm not sure that the 1850 is a good "investment" coin either.. But I would absolutely NOT AGREE that it is not a better "investment" just because it is an AU-55 and the other one is an MS-61. The sentiment that the coin in the higher grade is always (or even usually) the better "investment" is not always true. I believe that most collectors on this board believe that to be true and the price structure of South African coins is consistent with that belief, but that is not necesarily a valid predictor of FUTURE performance.

 

Given the price spreads of South African coins today, particularly between AU-58 versus MS coins, I am more interested in buying the former as a graded coin but generally not the latter unless the MS graded coin sells for a nominal price. I have said so many times. Examples of price spreads which are excessive include the 1895 PCGS MS-62 pond discussed on this board plus many KGV issues. With price spreads of up to 20 or 30 times (the 1929 NGC MS-64 6P), I see little likelihood that these MS coins will appreciate more.

 

As for the Krause values, it is not accurate. I do not have mine with me but I would absolutely not pay $175 for a "common" date of this issue in XF. The last time I looked, most of the dates were also listed at $600 in UNC. I consider any MS coin of this issue a good buy at that price today.

Edited by jwither

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