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SANGS Grading -- Inferior to NGC??!!!

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geejay50
Hi George

 

Reading the posts in this forum the last week or two is sad.

 

I think most people dont really understand the bigger picture. We need to start with basics and understand coin grading in a whole. Unfortunately the numismatic industry has evolved as to where every person has his own understanding of coin grading. This makes me think of a specific ZAR coin that someone showed me for comments some years ago. I gave him my answer regarding the coin and the grade. I ended up making the following statement: " NGC will not grade this coin " Just after I made this statement, it got me thinking that I was giving my opinion in terms of "NGC Grading Standards".

 

During the period of 2004 - 2007 I sent numerous coins all over the world for grading. In a close circle of collectors we had a very good understanding of sending certain type coins for grading to NGC, other types to PCGS and even smaller firms. The times we have discussed that this graded coin will get a better grade from the other firm. How many times high grade coins was resubmitted to the "best" grading company for that specific coin" This list is endless. We knew and manipulated the systems to get the maximum possible grade.

 

Today we almost need to ask, what grading standards apply??? the NGC grading standard, ANA Grading Standard, the Brittish Grading system as applied by CGS-UK and many more. For many years before us, the acceptable grading standard adopted was the Sheldon Scale and the Brittish System. As we in South Africa moved away from the Brittish System to Sheldon, we need to decide where we stand. Do we in South Africa accept the Sheldon Scale adopted by ANA or the revised self " NGC " system?

 

I do not believe any grading company to be right or to be wrong. As opinions differ, grading firm choices differ, collectors interest differ - this debate will go on forever!!!

 

Like yourself being a massive supporter of NGC, I do not rate them as being the king as they give to be. Dodgy dealings, inside contacts and the list goes on. I have seen coins being graded wrongfully, eg fake veldponden, 98 penny as 93 and the list goes on.I have seen pennies in holders with single Copper II Acetate verdigris on it. Now to explain this to to the novice or collector that does not understand grading in full: Cu(CH3 COO)2 is a chemical known as Copper II Acetate that acts basically as a disease to copper, bronze or brass coins. It can almost only spread by human contact or coin to coin contact. Now, how does this develop inside a holder (after being graded) from a firm like NGC, handling the coins (each and every one) with the utmost of care? Just to say, it is fairly simple to stop CIIA from spreading.

 

Speaking to actual graders is clearly stated as impossible on the NGC website. It is common knowledge that you are not even allowed to know their names. Now, I can tell you now that some of the NGC graders has given me class in ANA Summer Seminars in the USA. I have spoken to NGC graders and about coins in their personal collection. This whole picture portraid to the world is actually a joke.

 

The difference in prices also makes me think. Like you mentioned the 92 6pence price difference. Maybe the NGC grade was over payed. What is the true market value? it is the value the buyer of that item has placed on it and bought it for in a fair and open market. Willing buyer and willing seller. Does the actual coin differ? no, not at all. If I wanted to make a quick buck, I would have bought the SANGS 6pence, resend to NGC and sold at a profit. Some collectors ad more value, actually much more value to outside influence than the actual coin, like the holder, the firm, the seller, the pedigree and the list goes on. Why would certain sellers achieve better prices? Pedigrees like Remick, Pittman, Ford, Eliasberg and even our own Bakewell will achieve higher prices than the exact counterpart coin. Interesting to note that Remmick was never a fan of the NGC module, but the coins still ended up being pedigreed and slabbed by them. The above now actually makes me think of how important the financial side to our hobby has become!!! To further prove that outside influence have an effect is in lets say a 2008 Mandela MS67, NGC on average sells for about 50% more than their PCGS counter part. Same coin, same grade, difference in prices. Now I wonder why??? lol

 

To get to SANGS, George lets start looking for answers and solutions rather go on with these kind of posts.

 

If coin collectors and dealers should have no influence in grading coins, what is the solution? Who funds this project? Who grades the coins? And more importantly, who expertly and independently grades these coins? I have proven over and over dealer influence in every single grading firm in the world. it will always be there!!!

 

Like you have mentioned, the guys are in for a short and quick gain? Mr Kaplan, 3rd generation dealer and Mr. Schoeman, 2nd generation in the coin industry. Both have a reputable name in the industry for many years. Their family names in our hobby is both older than almost all collectors. I highly doubt they want to make quick money.

 

Very impressive with your grading success as stated in the forum. Would love to know honestly how your opinions and grades differs from NGC and how it will again differ if the same coins was submitted for instance to a Brittish Grading Scale, like CGS-UK or even expertly graded under the original ANA adopted Sheldon Scale. And to quickly explain the differences in very short. One will never receive the same "high" grade in the UK as in the USA, but then one will never receive the high "rejected" coins in the UK like in the USA.

 

All collectors have a right to decide what they prefer, from grading firms to their own collections. No collector has the right do not respect anothers collectors choices and decisions.

 

Regards

 

Thomas

 

Hi Thomas,

 

Diamonds get mined in South Africa, graded in Europe and have been for many years. The obvious reason being that the grading expertise lies there . No-one questions this and no-one tries to create a new diamond grading company elsewhere. Coins are not very different and will not benefit from a disturbance in International Grading standards as set out for over 25 years by NGC and PCGS.

 

I know full well there are other minor grading companies in other countries . They all constitute a tiny share of the market and will not change the overall picture of which I am quite aware.

 

Please load pics of all the bad coins that NGC has graded and you havent substantiated your Copper Acetate story. Talk is cheap and NGC does not defend themselves (have they anything to defend?) .They will in any case refund the owner for proven mistakes they make. SANGS will not.PCGS once graded a Veldpond Forgery as an MS62 that Anthony Govender and I reported to them when Ira Goldberg Auctions in New York put it on the market. They refunded the owner in New Zealand for the market price of the coin and withdrew it. That is Professionalism honesty and accountability that I have yet to see in our local company. They grade a polished or cleaned coin and pretend it isnt and then give out veiled threats about 'those who dont have a clue about grading'. It is no surprise that their coin fetches 38% of the NGC counterpart as per the excellent CoinguideSA analysis. The market has a short answer to inferiority.

 

It is really not difficult to load a number of cleaned coins that SANGS has given their numerical grades to but I will save you that. You have an investment in SANGS to defend and hopefully pay for. I dont regard your comments as being objective.I have proven to you that I can grade coins with a faceless NGC as an examiner. Thats good enough for me and those I have helped.

 

In a previous posting on the Heritage Auction Ted Reams MS64 Pop1 NGC 1927 Shilling finest known (one at PCGS too), I was criticised for predicting that it would go from R100,000 to beteen R120 and R150,000. Last night it sold for $17,625 which after 14% VAT on SA import (assuming it was a South African who won it) would cost $20,092 or R170,076. Many would say - what a ridiculously high price but that is an expression of the regard some TRUE collectors have for an NGC graded rarity.That coin fetched more than any ZAR coin at the auction.Union prices are coming into their rightful place. If you google the late Ted Reams, he was not even a South African but an overseas journalist.

 

I notice you have not addressed the cheaper cost of grading at NGC vs SANGS especially for ZAR gold. There is also no reference to camera monitoring of coins coming for grading as they have at NGC. Do owners not want reassurance that coins cannot be swopped?

 

Geejay.

Edited by geejay50

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jwither

On the 1892 6P, attributing the price difference between that SANGS coin and a comporable NGC to all potential buyers being preoccupied elsewhere is a rationalization, plain and simple. The coin is far too common and there are plenty of potential buyers who both want it and can afford such a nominal price. The logical reason THIS particular coin sold for that price is because most who are interested in an AU-58 consider it inferior.

 

On the 1927 1/ NGC MS-64, I posted my opinion on this coin and the Heritage results elsewhere. As Geejay says, it is an indication of strong demand for coins like it. At the same time, I reject that it is representative of the buying practices of most true collectors. As I stated in my other post, there is no reason why this coin sold for almost 3X the MS-63 and in the same auction. There is only rationalization that as a "conditional" rarity", it is a better "investment". The buyer of that coin essentially paid MOST of that premium for the holder and the label which is hardly what a true collector would normally do.

 

Lastly, while I am indifferent to whether SANGS succeeds or not and have no problem with it doing so, at the same time I find it just plain silly that most who are defending it here are doing so (at least partly) simply because it is a local company based in SA. True, there is the convenience factor but what matters is the product and service quality and not where the provider is located. Do any of you care about the domicile of the company for any other products or services you buy? Would you frequent a local provider otherwise simply because of that? Some would but most would not and logically, the same applies to coin grading.

Edited by jwither

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geejay50
On the 1892 6P, attributing the price difference between that SANGS coin and a comporable NGC to all potential buyers being preoccupied elsewhere is a rationalization, plain and simple. The coin is far too common and there are plenty of potential buyers who both want it and can afford such a nominal price. The logical reason THIS particular coin sold for that price is because most who are interested in an AU-58 consider it inferior.

 

Lastly, while I am indifferent to whether SANGS succeeds or not and have no problem with it doing so, at the same time I find it just plain silly that most who are defending it here are doing so (at least partly) simply because it is a local company based in SA. True, there is the convenience factor but what matters is the product and service quality and not where the provider is located. Do any of you care about the domicile of the company for any other products or services you buy? Would you frequent a local provider otherwise simply because of that? Some would but most would not and logically, the same applies to coin grading.

 

 

Thanks Ernesto,

 

I agree totally with you that the main praise singers of SANGS have apparently the local origin of the Company as a motivation.They are also invested in it which is the behind the scenes motivation really.

 

Lets face it, the SA Mint (ANCappointed) S Coin Shop- Mandela steady sequence of common derivatives is being flogged to death. ZAR is commoner and cheaper in lower grades than the collector body wants to pay the previous prices for. The rare coin market is not the money spinner that it was three or four years ago where you could source a raw coin , have it graded and make some money after having it graded at NGC. The old dealers have always resented NGC and PCGS for taking the grading out of their hands so why not get revenge on the whole grading system by creating their own grading company and give grades for cleaned or problem coins that NGC and PCGS wont grade? There are lots of those around anyway.

 

Even if SANGS charges more than what NGC charges, at least the owner of the coin now has a "Grade" to the coin. He doesnt mind paying for that as long as the market will pay him close to what an NGC graded coin would fetch. At least he doesnt sit with a dreaded "Details" coin of which there is a huge glut anyway. Getting 38% of an NGC graded coin is better than getting only 15% for a "Details" coin.

 

The NGC AU58 1892 6d ran concurrently more or less with the SANGS AU58 1892 6d (Polished) and I really think the market had a good look at both coins (rather than just the Grades) and decided where to put their money mostly. The level of local surveillance of each coin listed at ZAR level is high and there are very few real bargains because of viewer distraction.

 

 

My thoughts

 

 

Geejay

Edited by geejay50

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jwither

Geejay,

 

In this debate, I agree with you more than with the SANGS defenders but not completely. Here is the way I see this and if you think I am not being fair, you or anyone else here can let me know.

 

First, I think that to conclude that SANGS prices realized are less than NGC in and of itself does not say much NOW. This is what should be expected because it is not established. I think defending the price on this particular coin is ridiculous because it cannot be done, but to generalize I believe requires more coins over a longer period of time. How long and how many is a matter of opinion. Personally, I do not expect SANGS prices to ever reach parity with NGC or PCGS with any consistency. I have explained my reasons before in other posts many times.

 

Now whether SANGS can suceed longer term if most or at least the more expensive coins consistently sell for less is another issue. Since I do not expect that many expensive coins to remain in a SANGS holder if they will cross over to NGC or PCGS in the same grade, I'm not sure we will ever know. If this happens, it will likely survive with circulated and low value Union and ZAR plus RSA as I stated before.

 

Second, I agree with you that it is not possible anymore to buy SA coins raw, get them graded and make a windfall profit, at least consistently. Or at least, I can no longer do so and my prior track record shows that I was one of the more successful people in doing so. It is how I bought MOST of my SA coins before, frequently at dirt cheap prices. I was able to do that until 2010 but have not been able to find many raw coins anymore than can be bought at a price which justifies the risk. If supporters of SANGS have this as one of their primary motivations, they are MAKING A HUGE MISTAKE. Good luck with that because it's not going to happen anymore except maybe in isolation. SA coins are no longer "undiscovered"; everyone does not know what these coins are worth but there are enough who generally know that when a coin comes up for sale on BoB it's not going to sell "cheap" anymore.

 

Third, I cannot speak to SA coin dealers sentiments or motives on what they think about NGC or PCGS. But I will say that it is my opinion that those who are selling expensive ungraded coins at what are presumably the current Hern catalog prices (since I do not know what they are or even care) are ripping their customers off or trying to do so. I just cannot prove it is intentional. I say this first, because the prices in my Hern catalogs did not remotely resemble what these coins actually sold for. For the expensive coins, they were always much higher except maybe in "UNC". And second, because I suspect that many (or even most) of these coins would not receive the advertised grades if submitted to NGC or PCGS. I suspect it because of what I see of ungraded coins on BoB, eBay, dealer websItes and even buying from other auctions myself.

 

Now, I am sure that detractors of NGC or PCGS will say "You are assuming only their grading standards are legitimate." Well maybe, but good luck to the buyer of these coins if it is an NGC or PCGS reject because they will NEVER recover their money unless they can pass it on to another unsuspecting buyer. And besides, no one here can justify why any buyer should accept any seller's grade (whether dealer or otherwise) over the one assigned by NGC or PCGS, whether it is "accurate" or not. There is no motive to do so whatsoever or if there is, what exactly is it?

 

Today, given the demonstrated market preference for graded coins, I do not see that SA dealers (as opposed to possibly collectors) have any legitimate reason to sell expensive coins ungraded. But whatever the potential reasons may be, the MOST LOGICAL is that they are attempting to pass an inferior coin on to an unsuspecting buyer at an inflated price. I AUTOMATICALLY assume this with ANY ungraded SA coin of ANY MEANINGFUL value which is why I only buy them at steeply discounted prices. We CERTAINLY know they are not going to intentionally UNDERPRICE any coin.

 

So yes, if these dealers can get their potential (likely in my opinion) "problem" coins into a SANGS holder to sell it at an inflated price, this would create the bias you described. I disagree with the current prices of "details" coins today (they are too low), but they are what they are.

Edited by jwither

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geejay50
Geejay,

 

So yes, if these dealers can get their potential (likely in my opinion) "problem" coins into a SANGS holder to sell it at an inflated price, this would create the bias you described. I disagree with the current prices of "details" coins today (they are too low), but they are what they are.

 

Ernesto,

 

Thanks for your reply.

 

I would like to point out a Grading Guarantee that NGC gives to cover the market in case of mistakes in their grading.

 

They will basically refund the owner of a misgraded coin with the difference in market value between that coin and the properly graded item.

 

This says two things namely : Firstly that they admit that they do make mistakes and secondly that they are quite prepared to make financial good.

 

Here is the link to that undertaking: NGC Coin Grading Guarantee

 

So Pierre with the missed 1893 Forgery on the 1898 Penny VF20 can be compensated for it. He doesnt have to start another grading company because NGC is big enough and honest enough to make good where they have made mistakes.

 

When SANGS makes opening remarks about mistakes that NGC or PCGS makes, they do not add the above guarantee as part of that statement.

 

Will SANGS make the same undertaking to show their honesty and respect for the rare coin market's grading standards? So far they have tried to tell us we know nothing about grading!! This cannot be the answer and bodes ill for their future.

 

Geejay

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jwither

Geejay,

 

Let me clarify something for everyone here in the event they are not aware of it. On the NGC Message Boards when the subject of TPG has come up, some have specifically made the distinction between a graded coin and a certified coin. I'm not sure how universal this concept is but I believe it to be widely (if not universally) accepted by "serious" collectors and certainly those who have slabbed collections of any significant value. NGC and PCGS coins are the only certified coins because of the grading and authenticity guarantee you mentioned. I cannot speak to SANGS policies but NONE of the other US TPG coins offer certification and I believe this applies to those in other countries such as ICSS and CGS also.

 

Whatever one thinks about the accuracy and pricing of the NGC and PCGS services, the guarantee absolutely has value and I agree that it is a big reason if not THE primary reason why NGC and PCGS coins became and remain the most widely accepted coins with the highest market values. The grading guarantee along with other features such as the PCGS "Secure" holder and the NGC imaging of their graded coins provide the market confidence that the coin in the holder is actually what the buyer paid for given the market standards at the time they made their purchase.

 

When PCGS and NGC started, part of the intent of certified coins was to financialize the coin market through "sight unseen" coin trading. That does not happen except for "widgets" (like common date low end for the grade US Morgan dollars and generic US type gold) and I do not believe it ever will, but without NGC and PCGS, the "investment" market for coins would collapse and prices with it, certainly in the US and I believe also in SA. It would do so because of the reasons I have provided in prior posts which would return coins to the collectibles they mostly were prior to the late 1970's gold and silver boom.

 

In the future, we will all see how well the market does or does not accept SANGS coins based upon the prices they bring compared to NGC and PCGS. But to the detractors of these services, do any of you believe that the prices which most of you want and which I think are frequently not justified (if not completely ridiculous) would exist today without them? The obvious answer to this rhetorical question is no. If NGC or PCGS did not have their existing market standing, those of you who have substantial "investments" today would have collections worth substantially less and individual coins worth 5% or even less of their current value if "conditional" rarities.

 

I'm not sure why the other TPG never offered a guarantee but I can guess. For ANACS which was the leader prior to PCGS, I presume they thought they did not need it or maybe never even considered it. They were essentially a monopoly prior to 1986 in the limited market which existed. Today, they are irrelevant and maybe even headed for extinction. For the others, I suspect that it was a combination of both their lack of financing but also an indication of their poor quality. I have no evidence that counterfeits end up in their holders with any regularity but given the market perception of their grading, any such guarantee would either have been viewed as worthless or sent them into bankruptcy.

Edited by jwither

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geejay50
Geejay,

 

Whatever one thinks about the accuracy and pricing of the NGC and PCGS services, the guarantee absolutely has value and I agree that it is a big reason if not THE primary reason why NGC and PCGS coins became and remain the most widely accepted coins with the highest market values. The grading guarantee along with other features such as the PCGS "Secure" holder and the NGC imaging of their graded coins provide the market confidence that the coin in the holder is actually what the buyer paid for given the market standards at the time they made their purchase.

 

, but without NGC and PCGS, the "investment" market for coins would collapse and prices with it, certainly in the US and I believe also in SA. It would do so because of the reasons I have provided in prior posts which would return coins to the collectibles they mostly were prior to the late 1970's gold and silver boom.

 

If NGC or PCGS did not have their existing market standing, those of you who have substantial "investments" today would have collections worth substantially less and individual coins worth 5% or even less of their current value if "conditional" rarities.

 

For ANACS which was the leader prior to PCGS, I presume they thought they did not need it or maybe never even considered it. They were essentially a monopoly prior to 1986 in the limited market which existed. Today, they are irrelevant and maybe even headed for extinction.

 

Ernesto,

 

What would Diamonds be worth without a central grading organisation? We are dependant on the well worn path that NGC and PCGS have trodden to support our rare coin grading standards.They both offer a Grading Guarantee and thereby prove that they will honour those Grading Standards despite inevitable human error.

 

They also offer a Population Census which gives one an idea of how scarce one's coin is in terms of that grade. This might seem obvious and also open to change as we all know as other coins come onto the market, but it is better than having no idea at all.

 

ANACS has never had a Census for South African Coins and although I have always had respect for their grading, they just dont give the same comprehensive service as NGC and PCGS. There are ANACS coins in my collection and all that I have had crossed over to NGC have done as well except one that got one lower grade (1924 MS64 2/6 ANACS went down to MS63 at NGC).

 

So SANGS must take note of all the above if they want to be respected in the rare coin market. That market is part of a big world coin market with exacting standards and no prizes for losers.

 

Geejay

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jwither

Geejay,

 

The problem with ANACS today is that their grading is not as respected as it was, at least from those who comment on the NGC Message Boards. Apparently, this TPG has changed ownership one or more times recently and does not have the stability or reputation it once had. I agree with your opinion generally on ANACS graded coins in the older smaller slabs. When I started actively buying SA coins in 2002, there were few coins in NGC or PCGS holders for sale and I bought a decent number of them though all of modest value. But today, I would not really be interested in any of their coins in the newer holders except at a substantial discount.

 

On your diamond comments, I intended to address them earlier but forgot. I presume you mean your question as a rhetorical one and yes, I agree with the point you are making to a limited extent. But I do not agree that there is actually that much similarity between the two markets. I do not know that much about diamonds but I am not aware that people actually collect them except maybe in jewelry where the mounting would possibly "damage" the stones from a grading standpoint.

 

From what I know, the whole purpose of having the raw stones certified is the same as for coins, but the difference that I see is that (as an example only) one blue DD flawless diamond (at least previously the most expensive one) is or is supposed to be the same as another. I'm not sure how true this actually is but I would expect a lot more so than with most coins.

 

When I read posts here, the implied assumption is that a coin with a specific NGC or PCGS (and now presumably SANGS) grade is essentially the same as another one. As I stated in a prior post here, this is the opinion of US coins that are considered "widgets" but no knowledgeable collector to my knowledge would act that way in buying or selling any actually scarce coin. So for example, they might buy an 1881-S Morgan dollar in MS-66 sight unseen or simply based upon the stated grade, but that is only because this coin is not scarce even in this grade. This coin has an NGC pop of about 200,000 and I believe thousands even in this grade. But they are not going to do that even with the 1893-CC Morgan dollar which is a "key" date in the series but hardly rare in actuality.

 

So yes, while NGC and PCGS grading provide the benefits described here for SA coins, the scarcer coins are not "widgets" either and should not be bought that way. The obvious reason for this is that unlike diamonds, coins are always first collectibles and only second (if at all) "investments".

 

Eventually, I expect SA collectors to become more discriminating in how they evaluate coins. I expect them to do it because eventually when prices stagnate or decline for an extended period of time as all coins inevitably do, enough people who carelessly bought their coins by only considering the grade are going to get "burned" and learn an expensive lesson. The lesson they will learn will come from paying excessive prices for mediocre looking coins for the grade which they will only be able to sell in a weak market at even lower prices than what they thought they could get.. Remember, buy the coin and not just the holder/slab.

Edited by jwither

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geejay50

Hi Enesto,

 

Somewhere in the past postings we have commented on NNC as a dubious grading company run mainly by one ebay linked dealer who has his coins slabbed. He also slabs a number of South African coins that are usually but not always overgraded in my experience. He uses scans to photograph his coins and thereby kills the lustre making it very difficult to assess the quality of that coin.

 

I have over the years bought his coins, had them cracked out and resent to NGC with varying results. In general I have been very selective and have steered away from frankly problematic coins. I once had a Union 1943 Halfpenny Red that was rejected by NGC as artificial colouration so we must be careful with what he regards as Red.

 

Here are pics of a Southern Rhodesian Sixpence from 1932 which some of you might know has the lowest graded numbers at NGC(3) and PCGS (0) of the denominations issued in that first year of strike. NNC gave the coin MS60 and NGC on resubmission AU55. This is a typical example of what I have said above.

 

58f5a73f84f3c_1932SixpenceSRhoAU55Obv.jpg.960f829aadd51c1bcb3ee350fcfa0a45.jpg

 

A dealer who becomes a grader and sells directly must be influenced in the grades he gives. That is inevitable and is the main reason why dealers should not grade.

 

This same ebay dealer about 6 months ago listed some REALLY rare graded ZAR coins on ebay including an MS62 1896 Shilling (NNC) that I remember. After a few days and a number of bids the whole batch vanished from ebay !!

I still cannot believe this happened and that ebay did not do something about it.

 

My thoughts.

 

Geejay

58f5a73f7512d_1932SixpenceSRhoAU55LogoNNCtagMS60.jpg.ec0f9010e69892a905c3ee8e9cad9133.jpg

58f5a73f7a93c_1932SixpenceSRhoAU55Logo.jpg.c48c3045e2761a0cc99de0d6ea6e20d2.jpg

58f5a73f7fda5_1932SixpenceSRhoAU55Rev.jpg.5fdfa218c516abb6fbeb2a305253b7e4.jpg

Edited by geejay50

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Pierre_Henri

Sucking up to the slab gradings -

 

Remember, buy the coin and not just the holder/slab.

 

Good advice - Bad investment

 

The numerical number on the trustable grading slabs counts for 80% of the resale value - and that will never change even if the heavens scream out to us to change our wrongful ways ...

 

Pierre

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jwither

 

Good advice - Bad investment

 

The numerical number on the trustable grading slabs counts for 80% of the resale value - and that will never change even if the heavens scream out to us to change our wrongful ways ...

 

Pierre

 

No, not exactly.

 

You are correct about most of the value being in the holder but I disagree on the financial prospects. Go look at the coins that are signaled out for merit based upon their price on this forum. Invariably, they are the most expensive and overpriced

 

Obviously, I cannot guarantee that the coins I believe will perform better financially will do so anymore than anyone else. I have been harping on this since I started posting here and for the most part, it has not changed. My opinion for why it has not changed is because despite the "tough times" you and others have alluded to, this applies less to those who have the bigger discretionary incomes and larger asset bases who are both able and willing to pay these prices.

 

However, as a universal principle, the idea that one coin is a better "investment" simply because it is a higher grade is patently false. I have pointed out many such examples. The most recent were the 1946 1/ NGC MS-63 and 1939 2/6 MS-65 at about $10,000 each). Before that there were the MS KGV 1/2/D (1925, 1931 and 1933) from about $5,000 to $8000, that 1895 PCGS MS-62 Pond at $32,000, those 1892 ZAR proofs (1D, 2/6 and 5/) from $69,000 to $200,000 and still others that I would have to search to remember.

 

In the examples I just gave, EVERY SINGLE one of those coins were either substandard or absolutely awful "investments" at the prices mentioned. Oh yes, they were great prices for the SELLER, but not remotely for the buyer. And if anyone thinks that they are, then perhaps they might care to explain what kind of annual compund return they think the new buyer is going to achieve which would support their claim, especially when measured on a risk basis? No one has done that here when I have brought this up and I do not think they can because if they tried to do so, I think it would be evident that no such claim can be supported, regardless of whether it actually turns out to be true or not.

 

The point I have been trying to make generally with AU-55, AU-58 and in some instances lower MS coins is that, given the large and frequently ridiculous price spreads, the lower graded coin has a much better prospect of outperforming the higher graded one because its current price enables a larger or much larger pool of buyers to buy it. There are far more actual collectors who will both be willing and able to pay $1000 at some point in the future for a scarce and still quality coin that costs $500 today than there will be for those who will pay $20,000 for either the 1946 1/ or 1939 2/6. This makes it better "investment" candidate with less risk.

 

The only way that I can see that what I have been describing to all of you will not eventually MORE OR LESS occur would be as a result of one of these factors:

 

The existing "investors" in South Africa are either better off or much better off than I believe them to be. I have no insight into this, only anecdotal hearsay based upon what I know some of you here do for a living. Based upon the little I know about those who post here, I doubt that most SA collectors or "investors" are better off than I am and I am hardly "rich". I primarily have the benefit of living in the United States and the income that goes with it which makes me "comfortable" by developed world standards. But in saying this, I do not consider myself in a position to fill my collection with coins that cost the higher amounts I just quoted. Excluding the most expensive, I am able to buy any other SA coin but only in isolation or in small quantities. The collection I retain is still very good though less than before, but most of my coins are worth less than $500. Most collections of similar value or even quite a bit more I would expect are also.

 

A larger number of "deep pocket" "investors" based in SA will enter the market in the future. I can see this happening somewhat because of what has been described here, but nieither I nor anyone else can make it a forecast. I will say that though I expect almost zero collectors or "investors" from the majority population in your country.

 

Existing collectors and "investors" within SA will increase their financial commitments to coins more than I believe. Once again, I do not believe anyone can make a forecast for this. And while I have no evidence of this, I suspect that a disproportionate number of you (generically speaking) already have done so and to increase your expeosure would probably be financially imprudent.

 

A larger number of foreign collectors and "investors" than I believe will buy SA coins. I do not know how many do so today, though I am confident it is a lot more for ZAR than Union. But in any event, if those here are basing their hopes on this outcome, I would not count on it. I explained my reasons for this in prior posts many times before.

 

Lastly, the idea which I was actually refuting in my last post is that two coins with the same grade are also equal. This I admit is not evident yet from a financial standpoint but I attribute that to the fact that because SA based buyers have not experienced an extended period of declining or stagnant prices since grading became preferred, they have been able to get away with it.

Edited by jwither

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jwither

Geejay,

 

I just did a search and to my surprise, NNC actually has a website. I do not know who owns this service but given what I have seen, I still consider them a "self slabber". I have not bought any coins in these holders but if anyone here has bought one that is worth any money and got it crossed over even at a reduced grade, I think you should be thankful for it as long as the price was heavily discounted.

 

At the moment, the eBay seller who is the only one I have seen sell SA coins in these holders (other than those coins on BoB which I presume were bought from them) has listed a partial 1944 proof set. A few of these are graded "PR-70". Assuming these are not actually problem coins, at most I would expect grades six points lower if not more. I doubt that this seller was somehow miraculously able to find a set which is so much better than every other one certified by NGC or PCGS.

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Pierre_Henri

In an uncertain market with future prospects looking not to rosy for SA, I disagree with you.

 

Top coins in top graded slabs will hold their value till kingdom comes - as long as they are really top coins and graded as such

by the bankable grading companies.

 

The middle market (your so called nice looking "AU 58" market) will probably and gradually fall away in uncertain times as some predict is

waiting for SA in days to come.

 

Sometimes I feel that I am the last of a generation who actually buys those AU 55's and AU58s at huge discount prices - but as an investment I am probably doing the wrong thing.

 

But ultimately regarding Union coins, I am a collector and not an investor so stuff the gloomy future!

 

Pierre

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jwither

Pierre,

 

I have absolutely no doubt that the sentiments you just expressed are representative by a lopsided margin by those who post here if not everyone (except for myself of course) and even collectors of SA coins generally. But if this is what you believe, then you have a bad misconception of how people actually act in down markets or under adverse circumstances.

 

The idea that the "best" coins will hold their values if by this you mean their peak values (whatever that may be) under practically any circumstances is simply not true. There is no evidence to substantiate such a claim whatsoever. The economic environment today certainly does not remotely support such a claim because times are not that bad even though many may think that they are. In most of the world, economic conditions are poor or very poor for the average person, but thanks to the credit mania which has inflated the values of practically every asset class, it is generally not for the most affluent who buy a much larger proportion of the more expensive coins. These people are the infamous "1%" or relatively near it who buy the six figure and above coins in the US and presumably the high four figure and above coins in South Africa.

 

The primary difference between the "best" coins (such as "conditional" rarities or near it of the scarcer coins) and others is that the owners are usually in a better position to hold them when market conditions are poor while the holder of the slightly lower quality or collector coin may not be because they do not have "deep pockets" and MUST sell under adverse personal circumstances.

 

What this means in practice is that when market conditions turn lower, most of the better material simply disappears from the market because the owner is not willing to accept a loss. Why should they if they do not have to? In the examples that I just gave, I would estimate that the last buyer of that 1892 NGC PR-65 RB Penny potentially has a current "paper" loss of at least $100,000 on their almost $200,000 outlay. This is based upon the recent ATTEMPTS to sell the proof gold pond and 1/2 pond with the latter attracting zero bids at $86,000 (close to $100,000 with buyers fee). Now some may try to RATIONALIZE that because the coin has not been sold, that no loss has occurred. I disagree with this rationalization because something is only worth what it will realize right now. But regardless, most of the time we never see these premium coins obtain "low" prices since they do not come up for sale.

 

That is of course, except under a protracted economic depression which is exactly what i expect to see. I am about as certain as I can be that "eventually" the reckless economic behaviour of the past is going to reap bitter fruit for years to come which is going to impact practically everybody on the planet. I just do not know exactly what it will look like or the specific timing which means that I cannot know where people will choose to "invest". But in the circumstances I am describing, even the most affluent will be both less willing and able in actuality to pay current prices, much less the higher or substantially higher prices everyone here both believes will happen and wants to happen.

 

Even if economic conditions by some miracle turn out to be better than I expect, I would still expect the buyers who overpaid the most to potentially wait years to break even, much less realize a reasonable return on their "investment" especially given the ACTUAL financial risk they took. If this happens, then I consider it far more reasonable to expect that someone who bought 10, 20, 50 or maybe even 100 of the coins I described to do better than the person who bought one or a handful of the coins everyone here goes "ga ga" over on this forum.

 

Another point I want to make is something I did not mention in my last post which is the performance of metal prices which indirectly make a big difference in coin prices or seem to. If you look at the performance of SA coin prices since 2001, they have been going up just as metals mostly have. The same thing happened in the US in the 1970's and to some extent, recently. The reason for this in the US at least is because many novices who look to buy the metals ultimately get "sold" coins (in both senses of the word if you get my drift) which increases the flow of funds into coins and some of these people end up becoming long term collectors and "investors". What I describe here would go along with my points #2 and #3 above. I am bullish on metal prices for the longer term but have incorrectly been bearish on them since I starting posting here. So yes, if if this happens, then what I described is less likely to happen but mostly in a relative and nominal sense. Even if nominal metal prices go up a lot in a depression, I would still expect most (if not all) coins to perform poorly or very poorly. They may increase in price because of price inflation or the metal content, but almost certainly still lose purchasing power and for the most expensive coins, probably substantially so.

 

Finally, to cheer you up a bit. I think you are making the better decision from both an "investment" and collecting standpoint. I know you do not think so but the reason it does not bother me is because I am not a crowd follower. I have told everyone here about many of the coins I bought really cheap and sold for more or a lot more. When I bought them, no one else wanted them. Now that they are a lot more expensive, everyone or al least a lot more people want them. Does that sound like the way to make money in anything? If anyone follows other markets they will see this as the rhetorical question it is intended to be and given what I just described in this post, I consider it lemming like behaviour, including the jump over the cliff which I see on the horizon.

Edited by jwither

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geejay50
Pierre,

 

. This is based upon the recent ATTEMPTS to sell the proof gold pond and 1/2 pond with the latter attracting zero bids at $86,000 (close to $100,000 with buyers fee).

.

 

Ernesto,

 

I dont think just because a Proof ZAR Pond does not APPEAR to have been sold, it has not in fact changed hands. The records of these sales are scanty because there is a small circle of wealthy collectors/investors who know each other and sell out of the eye of ebay or bidorbuy. They merely use the latter as advertising platforms but sell in private.

 

Such private sales make life difficult for the like of CoinguideSA to give a price ruling on the very high end of the market.They also make those buyers vulnerable to exorbitant prices without evidence of preceding sales.

 

 

Geejay

Edited by geejay50

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jwither

Geejay,

 

What you say is technically true and yes, a lack of prior sales increases the risk of overpaying for sure. Your second point is part of the reason that I think the buyer of that 1892 proof penny almost certainly overpaid for that coin as an "investment" and is currencly sitting on a huge unrealized loss.

 

Those 1892 ZAR gold proofs might have changed hands since but what we can almost certainly know is that they did not sell for MORE than the prior opening bids from the last Heritage sale, at least when including the buyer's fee. So yes, it's possible that this half pond I was using as a basis of comparison to the penny sold for somewhat more than $86,000 in a private sale because no buyer's fee was possibly involved, but there is no reason to conclude it sold for more than $86,000 plus 15%. It MIGHT have happened but to conclude that is illogical because there is no motive for anyone to pay a higher price. And in this instance, I would not consider Heritage to be an "advertising platform" since it clearly is not. eBay or BoB yes because I do not see anyone selling a coin of that value in such a manner to a buyer they do not even know. They can list it to let everyone know it is available for sale, let the listing expire and then sell it later.

 

What you are describing of SA coins is to a great extent equally true of the highest priced and scarcest US coins. Many of them also sell through private sale, such as through a dealer like Legend Numismatics who previously sold an example of the 1913 Liberty Head Nickel. They might have disclosed the price (without disclosing the party or parties) but if so, it was entirely voluntary.

 

Going back to the primary point of my last post, today there simply is not enough data to prove my point or what I interpreted to be Pierre's opposing viewpoint. With SA coins, except for maybe a brief spell in late 2008 and into 2009, realized prices for the most expensive coins have mostly been increasing. There has been no long terms "bear" market because grading only created the current environment during an up market which is entirely logical since it has been a primary root cause for it.

 

It is only or mostly with more common scarcer coins such as the Veldpond that we can clearly see that prices have declined from one sale to the next, though this may only be temporary. It sells often enough and there are enough of them where one of the following may be true. The first is that the seller bought it a favorable enough price to where they still made a substantial profit anyway, despite the prices for the examples you and I exchanged in recent posts. The second is that because quite a few people are going to own this coin since it is NOT that rare, one or several of owners might really need the money and sold it for a loss anyway.

 

This is also going to be the same for US coins. In a down market, "rare" and expensive US coins such as maybe "key" date US Morgan dollars that sell for six figures today will or have probably occasionally been sold at a loss in the past. But if you look at the prices of a REAL RARITY such as the 1804 dollar or the 1913 LBH, probably not. Except for a brief spell from around 1987 (or so) to the early or maybe mid-1990's, prices for most better US coins have only been increasing thanks to the asset and credit mania. So there would be no reason for an owner of this coin to sell at a loss even if they paid "stupid" money for it because they can just wait and sell later. I have not done so, but if anyone here were to perform a Google search for prices realized on either of these two coins, I doubt that they are going to see that the SAME SPECIMEN sold for less from one sale to the next and this would be for records that go back a century or even more. However, this DOES NOT mean that while the owner held the coin that the coin did not lose value to below what they paid for it. In a worst case, it only means that they had the staying power to hold on to the coin until the market trend balied them out. Contrary to what some or most seem to think or believe here, there is nothing unique or special about SA coins (or ANY coin) which makes it immune to creating a loss for the buyer, even if it bought at its current or supposed value.

 

Both here and in prior posts, I have expressed my opinion on the pricing structure of SA coins and what I interprept to be the buying practices of many. Since I have no control over anyone's buying decisions, it's entirely possible that a small group of buyers and sellers can choose to pay what I consider to be exorbitant or excessive prices anyway which would negate everything I have said, no matter how little sense these actions make. If it happens, it happens but that hardly means that such practices are either an optimal or prudent method to make an "investment" decision. Both common sense and what I have described in all my posts show that they are not far more than the opposite.

Edited by jwither

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Pierre_Henri

Going back to the primary point of my last post, today there simply is not enough data to prove my point or what I interpreted to be Pierre's opposing viewpoint. With SA coins, except for maybe a brief spell in late 2008 and into 2009, realized prices for the most expensive coins have mostly been increasing.

 

The statistics I am keeping just do not support your view. For really high end items, Union coins has exploded in terms of high prices reached / realized of late. (I am talking about the last few months if one looks at the latest BoB prices realized for really TOP Union coins)

 

Union coins could well be surpassing ZAR coins soon if one looks at the latest stats in terms of ROI.

 

Pierre

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EWAAN Galleries
Geejay,

 

What you say is technically true, but it does not change the conclusion of the point I was trying to make which is that the buyer of that 1892 proof penny almost certainly overpaid for that coin as an "investment" and is currencly sitting on a huge unrealized loss.

 

Those 1892 ZAR gold proofs might have changed hands since but what we can almost certainly know is that they did not sell for MORE than the prior opening bids from the last Heritage sale, at least when including the buyer's fee. So yes, it's possible that this half pond I was using as a basis of comparison to the penny sold for somewhat more than $86,000 in a private sale because no buyer's fee was possibly involved, but there is no reason to conclude it sold for more than $86,000 plus 15%. It MIGHT have happened but to conclude that is illogical because there is no motive for anyone to pay a higher price. And in this instance, I would hardly consider Heritage to be an "advertising platform" either because it clearly is not. eBay or BoB yes because I do not see anyone with any common sense selling a coin of that value in such a manner. They can list it to let everyone know it is available for sale, let the listing expire and then sell it later.

 

What you are describing of SA coins is to a great extent equally true of the highest priced and scarcest US coins. Many of them also sell through private sale, such as through a dealer like Legend Numismatics who previously sold an example of the 1913 Liberty Head Nickel. They might have disclosed the price (without disclosing the party or parties) but if so, it was entirely voluntary.

 

Going back to the primary point of my last post, today there simply is not enough data to prove my point or what I interpreted to be Pierre's opposing viewpoint. With SA coins, except for maybe a brief spell in late 2008 and into 2009, realized prices for the most expensive coins have mostly been increasing. There has been no long terms "bear" market because grading only created the current environment during an up market which is entirely logical since it has been a primary root cause for it.

 

It is only or mostly with more common scarcer coins such as the Veldpond that we can clearly see that prices have declined from one sale to the next, though this may only be temporary. It sells often enough and there are enough of them where one of the following may be true. The first is that the seller bought it a favorable enough price to where they still made a substantial profit anyway, despite the prices for the examples you and I exchanged in recent posts. The second is that because quite a few people are going to own this coin since it is NOT that rare, one or several of owners might really need the money and sold it for a loss anyway.

 

This is also going to be the same for US coins. In a down market, "rare" and expensive US coins such as maybe "key" date US Morgan dollars that sell for six figures today will or have probably occasionally been sold at a loss in the past. But if you look at the prices of a REAL RARITY such as the 1804 dollar or the 1913 LBH, probably not. Except for a brief spell from around 1987 (or so) to the early or maybe mid-1990's, prices for most better US coins have only been increasing thanks to the asset and credit mania. So there would be no reason for an owner of this coin to sell at a loss even if they paid "stupid" money for it because they can just wait and sell later. I have not done so, but if anyone here were to perform a Google search for prices realized on either of these two coins, I doubt that they are going to see that the SAME SPECIMEN sold for less from one sale to the next and this would be for records that go back a century or even more. However, this DOES NOT mean that while the owner held the coin that the coin did not lose value to below what they paid for it. In a worst case, it only means that they had the staying power to hold on to the coin until the market trend balied them out. Contrary to what some or most seem to think or believe here, there is nothing unique or special about SA coins (or ANY coin) which makes it immune to creating a loss for the buyer, even if it bought at its current or supposed value.

 

 

 

The 1892 Proof Halfpond Sold for R1.25m :smile: - Thats almost double to what Heritage could not sell it for!

 

 

Ewaan Auction Galleries

Africa's Largest Numismatic Auctioneer

Items for sale from EWAAN Galleries on bidorbuy.co.za

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jwither
The 1892 Proof Halfpond Sold for R1.25m :smile: - Thats almost double to what Heritage could not sell it for!

 

 

Ewaan Auction Galleries

Africa's Largest Numismatic Auctioneer

Items for sale from EWAAN Galleries on bidorbuy.co.za

 

Actually about 150% because that is $150,000 USD and the opening bid was about $100,000 with buyer's fee. I also presume that this was a private sale which you either facilitated or where you have direct knowledge that I lack. So yes, I was wrong about it not selling for more than the Heritage bid but this does not negate my original point. It could not sell for the opening bid or meet the minimum on two occassions and especially if this sale price you quote is a private sale, there is no assurance whatsoever that it would sell for the same amount (or near it) if placed on the market again today.

Edited by jwither

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jwither
The statistics I am keeping just do not support your view. For really high end items, Union coins has exploded in terms of high prices reached / realized of late. (I am talking about the last few months if one looks at the latest BoB prices realized for really TOP Union coins)

 

Union coins could well be surpassing ZAR coins soon if one looks at the latest stats in terms of ROI.

 

Pierre

 

You did not read my post in its entirety or at least understand it, though I admit it is long. This quote you are using was in response to your initial reply to my prior post.

 

The point I was making with that quote is this one. Due to the incomplete and mostly irrelevant long terms sales history of SA coins, I cannot prove to you that the scarcest SA coins can or will lose value under adverse economic circumstances as I am sure everyone here who agrees with you probably is looking for me to do (though no one says it). I cannot prove but neither you nor anyone else can prove the opposite either.

 

First, prior to about 2002 or maybe slightly before, there was no "investment" market in SA coins and certainly not Union coins of any consequence. Yes, I presume (since I do not have specific data) that because your currency (the ZAR) has performed so abysmally since I left SA in 1974 that nominal prices increased and maybe a lot, but that is simply a reflection of currency depreciation and not the "investment" performance of these coins. From what I know, they were "dead money" until around 2002 when ZAR and slabbing took off or else I would not have been able to buy the coins I did for such dirt cheap prices. One such coin was that 1892 NGC MS-64 RB PL penny which cost me all of $50 (ungraded) or the listed price in the Krause manual.

 

The second is that since about 2002 (which I admit I did not specify in the quote you used), there HAVE BEEN NO "bear" markets in SA coins to speak of. That short period in 2008 and 2009 is the only one of any notice (if even that) unless someone wants to try to claim that now is one which it obviously is not except for the collector material.

 

And by historical standards, during this time there have been no adverse economic circumstances of any conssequence either because the "hard times" I have heard you and a few others mention I do not see as qualifying as remotely adverse in any real sense per the comments I made before. Take a look at the chart in the link below. Except for the brief period in late 20008-2009 when coin prices also fell, there has not been one single quarter of negative GDP growth. So even if government economic statistics are misrepresented (something I expect many of you believe and which I will address in a follow-up reply if necessary), I do not see how this still gets us to anything remotely representing depressionary conditions which is what "hard times" actually look like.

 

http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_kd_zg&idim=country:ZAF&dl=en&hl=en&q=south+africa+gdp+growth

 

So given that there have been no price declines even worth mentioning for these coins and the economy has mostly been expanding during this time (2002-2012), I obviously cannot provide empirical data to answer your claim because no negative can be disproved. It is a logical impossibility. And since I cannot, I was attempting to explain from US experience how elite coin prices actually behave in protracted down markets.

 

In terms of your statement of Union vs. ZAR, i hesiate to confuse the issue even further but since you brought it up, why not? (It is loads of fun.)

 

Until recently, I considered Union underpriced relative to ZAR. Now maybe somewhat but far, far less. And no, I do not see that changing though i cannot prove it either. I base this statement from my observations in other countries. In the US since I first collected in 1975, ZERO series that can be compared directly have overtaken another during that time. Yes, NOT EVEN ONE. If you take a country like the UK or Canada, I presume (since I cannot prove it at this time), that Queen Victoria "Young Head" was always more popular versus later coins like it is now and in Canada, KGV also more popular than KGVI and QEII like it is now. With the Spanish colonial pillars I collect, these have been and almost certainly always will be more popular than the later "Bustos" version. I happen to like Union and KGV specifically more than ZAR but I see no reason why existing preferences will change either.

 

I'm not sure which coins you have in mind, but if anyone compares ZAR and Union coins of approximate equal scarcity, I think it is evident that they are still worth a lot more now and by my reckoning, only the biggest wild eyed optimist could expect yet another price explosion which would cause Union to overtake ZAR. it is wild eyed optmism because not only has ZAR always been more popular, but many of the scarcest Union are not that much IF ANY scarcer than the scarcer date ZAR except when grades below MS are included. And as you know, SA "investors" do not care about these coins so they certainly cannot try to have it both ways in using them as evidence in support that Union will overtake ZAR.

Edited by jwither

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Pierre_Henri

Ernesto

 

As the issues we are debating here have nothing to do with NGC and SANGS per se, I wonder if we can do it under another thread - maybe under the Scare Coin Watch in the Stickeys? Or somewhere else? Maybe you can start a new thread regarding the issues we ponder here?

 

Pierre

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jwither

I agree. Sorry about that. If anyone is interested in thais subject, please do so.

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goldengun

So I had the following SANGS coin regraded by NGC as per request of the buyer:

Graded Coins - 1896 ZAR Kruger 2 Shillings graded MS62! was sold for R7,550.00 on 1 Aug at 21:01 by goldengun in Pretoria / Tshwane (ID:71743273)

It was graded MS62 by SANGS, and NGC graded it MS61

Verified certification information for 2778752-022 1896 S.AFRICA

 

I know this is just one example, but there is nothing wrong with SANGS grading.

Yes, they can work on the quality of the slabs, but the grading is on par.

 

Look at this monster coin that was recently graded by SANGS:

58f5a740b6897_ms63coarse.jpg.1e4a5701471a5e4b80572c053fd63cd1.jpg

58f5a740b183c_ms63coarse2.jpg.5af114e39db8a434b2745a80cfda3dc6.jpg

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