A very peculiar Quarter 0

[Crawtomatic]

I was browsing through auction archives last night and came across this one.  Initially listed on greatcollections in October and sold for $381 on 1 bid.  PCGS, MS66 holder, unique toning.

https://www.greatcollections.com/Coin/756692/1976-D-Washington-Quarter-Clad-PCGS-MS-66-Toned

Appears the buyer turned around and had it resubmitted almost immediately.  Got it back in an MS68 holder then listed it in January of this year.  That time it garnered 27 bids and a closing price of $4,051.12.  https://www.greatcollections.com/Coin/765338/1976-D-Washington-Quarter-Clad-PCGS-MS-68-Toned

I recognize the toning is different (though not to my liking with the streakiness) so I'm trying to look at the strike.  I'm not seeing what the original buyer saw that would say to me, "this is a good candidate for resubmission".  The drum has chatter and appears incompletely struck to me.  On the Denver issues for this year it's not difficult to find better.  It's a photo so I can't see luster but with that type of toning do you think there would be a good cartwheel effect?

The date and motto do appear to be very well struck with nice crispness.  No small feat from what I've seen.  Not sure about the center of the obverse so much.  The ribbon knot is almost indiscernible and the detail of the hair is soft (bag mark aside). But wouldn't you net it out vs the reverse's condition?

Granted, quarters are definitely not in my wheelhouse so I appreciate all thoughts and comments.

[kbbpll]

66 to 68 was quite a leap. I don't even understand the original 66 price - the previous GC sales were like $35.

[MarkFeld]

1 hour ago, kbbpll said:

66 to 68 was quite a leap. I don't even understand the original 66 price - the previous GC sales were like $35.

The original 66 price would simply have been the result of two or more bidders thinking the coin would upgrade. 

[Crawtomatic]

58 minutes ago, MarkFeld said:

The original 66 price would simply have been the result of two or more bidders thinking the coin would upgrade. 

Not in this case, though.  The opening bid was set at $300 and it had one (winning) bid only.

[numisport]

Pay no attention to the grade on this coin. PCGS has made a mistake appraising this coin. Unfortunately this one will be sold and resold again and again sucking the numismatic life from the hobby while causing values of a nice MS 67 coin to drop. This (as an outsider to this series) calls into question why even bother putting a numerical grade on the label.

[MarkFeld]

54 minutes ago, CRAWTOMATIC said:

Not in this case, though.  The opening bid was set at $300 and it had one (winning) bid only.

As I was saying 😉 quite simply, one bidder liked the coin enough (for attempted upgrade or otherwise), to meet the required reserve. 
 

Thank you for pointing out my incorrect presumption.

[MarkFeld]

46 minutes ago, numisport said:

Pay no attention to the grade on this coin. PCGS has made a mistake appraising this coin. Unfortunately this one will be sold and resold again and again sucking the numismatic life from the hobby while causing values of a nice MS 67 coin to drop. This (as an outsider to this series) calls into question why even bother putting a numerical grade on the label.

MS67’s sell for a fraction of the price of the upgraded 68 coin. Why would the coin in question cause the prices of 67’s to drop?

[Crawtomatic]

2 hours ago, MarkFeld said:

Thank you for pointing out my incorrect presumption.

No disrespect intended on my part.  I was just pointing out the oddity (to me) of the bid situation lacking competing bidders.

The average closing bid for a 66 last year on GC was between $10 and $27.  For the opening reserve bid to be placed at $300 then either: 1) the seller requested it that high, or, 2) somebody at GC determined that would be the proper starting point.  Then a lonesome bidder came along and agreed that it was correct.  It's all curious to me as I don't see what must be so obvious to at least 2 separate parties - seller/GC and buyer.

So I guess my curiosity is more regarding the finer mechanics of grading the Washington Quarter design.

[MarkFeld]

14 minutes ago, CRAWTOMATIC said:

No disrespect intended on my part.  I was just pointing out the oddity (to me) of the bid situation lacking competing bidders.

The average closing bid for a 66 last year on GC was between $10 and $27.  For the opening reserve bid to be placed at $300 then either: 1) the seller requested it that high, or, 2) somebody at GC determined that would be the proper starting point.  Then a lonesome bidder came along and agreed that it was correct.  It's all curious to me as I don't see what must be so obvious to at least 2 separate parties - seller/GC and buyer.

So I guess my curiosity is more regarding the finer mechanics of grading the Washington Quarter design.

Thank you and none taken. I posted incorrectly and you politely showed me what I’d missed. I’d much rather know, rather than be unaware of it. 

You were probably placing more emphasis on strike than PCGS did, but that still doesn’t explain a two point grade swing on the same coin. Chalk it up to inconsistent grading, of which everyone is guilty from time to time.

[kbbpll]

Which all begs the question in my mind - as a seller, when the auction house comes back and says nah, don't list it at $30, you'll get $300, does the seller smell a rat, or think "Hallelujah!"?. If the seller in fact thought it was a $300 coin themselves, why not do the resubmit? The second seller walks away with three grand. It is indeed a peculiar quarter.

[VKurtB]

The problem is that you’re expecting third party grading, especially at the firm this thread is about, to make logical sense. That’s your first mistake.  

[MarkFeld]

18 minutes ago, kbbpll said:

Which all begs the question in my mind - as a seller, when the auction house comes back and says nah, don't list it at $30, you'll get $300, does the seller smell a rat, or think "Hallelujah!"?. If the seller in fact thought it was a $300 coin themselves, why not do the resubmit? The second seller walks away with three grand. It is indeed a peculiar quarter.

There’s nothing peculiar about the quarter, itself.😉

[Just Bob]

The description of a MS/PR 68:

From the PCGS website:

"Only the slightest weakness in strike, with a few tiny imperfections visible."

From the NGC website:

" Very sharply struck with only miniscule imperfections."

That coin, judging strictly from the pictures, does not deserve a 68, regardless of whose name is on the holder.

Edited January 27, 2020 by Just Bob
typo

[Coinbuf]

This exact kind of gradeflation is very bad for the hobby, @MarkFeld mentions that "Chalk it up to inconsistent grading, of which everyone is guilty from time to time"  The problem with this cavalier attitude is that its not just one person that is/was inconsistent here, please correct me if I have this wrong but its my understanding that the coin is seen by three graders and a finalizer.  So the whole system has to fail for this type of inconsistent grading to happen, this type of failure is exactly why some collectors believe that the grading system is rigged for certain submitters.

[MarkFeld]

6 hours ago, Coinbuf said:

This exact kind of gradeflation is very bad for the hobby, @MarkFeld mentions that "Chalk it up to inconsistent grading, of which everyone is guilty from time to time"  The problem with this cavalier attitude is that its not just one person that is/was inconsistent here, please correct me if I have this wrong but its my understanding that the coin is seen by three graders and a finalizer.  So the whole system has to fail for this type of inconsistent grading to happen, this type of failure is exactly why some collectors believe that the grading system is rigged for certain submitters.

Please know that my attitude isn’t cavalier, it’s just realistic. I very much wish that grading was more objective and consistent. But sadly, I don’t see that happening.

[numisport]

16 hours ago, MarkFeld said:

MS67’s sell for a fraction of the price of the upgraded 68 coin. Why would the coin in question cause the prices of 67’s to drop?

I guess nobody can know why prices drop; they are just dropping.

[MarkFeld]

26 minutes ago, numisport said:

I guess nobody can know why prices drop; they are just dropping.

Prices often/usually drop as low populations increase. The subject coin might cause the prices of some other 68’s to decline, but it’s unlikely that it will have any appreciable impact on the prices for 67’s.

[physics-fan3.14]

Wow, a 68? With the weak strike and the gash on his head, I'd more accurately put that one at 65. They probably originally bumped it to 66 for the eye appeal (which is another practice I'm not a huge fan of, although it happens all the time). 

Based on what I see in those pictures, I strongly disagree with a 68. However, as we know, pictures don't always tell the whole story. I'm guessing the luster on that coin is superb, which often isn't the case for clad quarters. 

[kbbpll]

15 hours ago, MarkFeld said:

There’s nothing peculiar about the quarter, itself.😉

It does seem to have some pretty crazy die polish. But I meant that the overall scenario is "peculiar".

[LINCOLNMAN]

This is an interesting case. I recently sold a 38d Buff OGH 66 thru GC. I had held it for many years, bought it for my type set, but it no longer fit the set. Really beautiful iridescent toning, a superior example. I sold it with a number of other coins, so didn't pay much attention to the bidding or the result until well after the auction ended. It started at $20, had 11 bids and sold for about $814. Haven't tried to keep track of it but there must be some folks out there with very sharp grading skills or some real gamblers. Yes, I'm very happy, but can't help but scratch my head.  

[LINCOLNMAN]

Should add the buff had a green CAC sticker, and looked to me all its legs. 

[Coinbuf]

4 hours ago, MarkFeld said:

Please know that my attitude isn’t cavalier, it’s just realistic. I very much wish that grading was more objective and consistent. But sadly, I don’t see that happening.

The problem is that as long as collectors and dealers continue to accept and make excuses for this kind of poor service nothing will improve.  I'm realistic also and I'm well aware that humans make mistakes, but when those mistakes are found and exposed we should have an expectation that the mistakes are then fixed not just swept under the carpet.  The problem is that the company that made this mistake has a history of covering up and hiding their mistakes rather than owning up and fixing the issues.  A very glaring and recent example of this behavior was the complete obliteration of the coin facts pictures which people were using to highlight the gradeflation issues that were (and obviously still are) happening at that company.  Rather than working to fix the problem the self described leading grading company simply destroyed the evidence overnight.  I guess we are doomed to the same old same old as collectors so long as those that have the power and ability to change things continue to profit from the current system.  I would love to be able to say this on the forum ats but we all know any such post would be met with the post being erased along with any further posting privilege's also being removed.

[kbbpll]

36 minutes ago, Coinbuf said:

I would love to be able to say this on the forum ats

This is exactly why I was banned over there. Everyone makes mistakes. Their business model seems to be to erase evidence of it, and apparently it works for them, so let them have at it I guess. In this case, it's an interesting window into the market. At 66 and $300, this coin got one person to bite. At 68 and no minimum, there was a feeding frenzy and the same coin sold for over 10 times what it did 3 months prior. Everyone who plays the resubmit game wants to know what the secret is. To me there's no big secret - somebody made a mistake. Does anybody in this case have any recourse with their guarantee? I doubt it, but I'm just pondering.

[MarkFeld]

2 hours ago, Coinbuf said:

The problem is that as long as collectors and dealers continue to accept and make excuses for this kind of poor service nothing will improve.  I'm realistic also and I'm well aware that humans make mistakes, but when those mistakes are found and exposed we should have an expectation that the mistakes are then fixed not just swept under the carpet.  The problem is that the company that made this mistake has a history of covering up and hiding their mistakes rather than owning up and fixing the issues.  A very glaring and recent example of this behavior was the complete obliteration of the coin facts pictures which people were using to highlight the gradeflation issues that were (and obviously still are) happening at that company.  Rather than working to fix the problem the self described leading grading company simply destroyed the evidence overnight.  I guess we are doomed to the same old same old as collectors so long as those that have the power and ability to change things continue to profit from the current system.  I would love to be able to say this on the forum ats but we all know any such post would be met with the post being erased along with any further posting privilege's also being removed.

If it were up to you, what would you do to try to prevent inconsistent grading and to deal with it when it occurs? Let’s take the coin in this thread as an example How would you determine which grade was a “mistake”? And how would a “mistake” be “fixed”?

[Coinbuf]

1 hour ago, MarkFeld said:

If it were up to you, what would you do to try to prevent inconsistent grading and to deal with it when it occurs? Let’s take the coin in this thread as an example How would you determine which grade was a “mistake”? And how would a “mistake” be “fixed”?

I wish I did have some answers for you Mark, unlike you I haven't worked on the inside of a TPG so in order for me to have any insight or provide a meaningful change I would need to observe the process as it happens over a period of time so that I would have a better handle on the full process.  Having said that taking responsibility when mistakes happen is a step in the right direction.  I also think that instead of focusing the company resources on unimportant and non impactful fluff; like the chip thing; utilizing those resources on providing the best possible product would be a better use of time and dollars.  I know that in this digital age its possible to scan and digitize a coins surface, new raw coin submissions could be scanned and compared to prior graded coins and known counterfeits.  It would certainly take some years to build that database but in time those coins that are identified by the computer as having already been graded can then be reviewed and considered as a reconsideration service and holdered again at the same or new grade.  When returned to the submitter a computer generated note should be included to inform the submitter of how many times the coin has been seen by that TPG.  Those coins that are flagged as fakes can then also be reviewed and a determination made on a case by case basis.  Using technology as a first step in the process would in time speed up the process and eliminate the constant crackouts by the same submitter.

 

The flaw in my process is that in time submissions would be reduced and thus profits, as I said in my earlier reply as long as those in charge of the process continue to profit from the current system it will not be easy, if possible at all, to see any real change.  And even with my system human error can still happen but it would greatly reduce the number of times it would happen, which circles back to the taking responsibility for errors when they happen.

 

For the coin in this discussion I don't know which grade is correct, did the system fail on the MS66 grade or with the new MS68 grade.  I personally don't think the new grade is correct but I haven't seen the coin myself so the only true statement I can make is that the current grading system failed at least once, I say at least once because perhaps the coin really should be a 67 and both the prior and current grades are/were wrong.

[MarkFeld]

2 minutes ago, Coinbuf said:

I wish I did have some answers for you Mark, unlike you I haven't worked on the inside of a TPG so in order for me to have any insight or provide a meaningful change I would need to observe the process as it happens over a period of time so that I would have a better handle on the full process.  Having said that taking responsibility when mistakes happen is a step in the right direction.  I also think that instead of focusing the company resources on unimportant and non impactful fluff; like the chip thing; utilizing those resources on providing the best possible product would be a better use of time and dollars.  I know that in this digital age its possible to scan and digitize a coins surface, new raw coin submissions could be scanned and compared to prior graded coins and known counterfeits.  It would certainly take some years to build that database but in time those coins that are identified by the computer as having already been graded can then be reviewed and considered as a reconsideration service and holdered again at the same or new grade.  When returned to the submitter a computer generated note should be included to inform the submitter of how many times the coin has been seen by that TPG.  Those coins that are flagged as fakes can then also be reviewed and a determination made on a case by case basis.  Using technology as a first step in the process would in time speed up the process and eliminate the constant crackouts by the same submitter.

 

The flaw in my process is that in time submissions would be reduced and thus profits, as I said in my earlier reply as long as those in charge of the process continue to profit from the current system it will not be easy, if possible at all, to see any real change.  And even with my system human error can still happen but it would greatly reduce the number of times it would happen, which circles back to the taking responsibility for errors when they happen.

 

For the coin in this discussion I don't know which grade is correct, did the system fail on the MS66 grade or with the new MS68 grade.  I personally don't think the new grade is correct but I haven't seen the coin myself so the only true statement I can make is that the current grading system failed at least once, I say at least once because perhaps the coin really should be a 67 and both the prior and current grades are/were wrong.

Thank you - I appreciate your thoughtful response.
While I don’t know how practical such scanning would be, if feasible, I think it would be a very good thing. However, as you correctly pointed out, it would also result in reduced submissions and profits. And that might prevent it from being utilized. 

I don’t see an end to the subjective aspect of grading and the inconsistencies that accompany it. Thus, I think that education and knowledge are essential for hobbyists. I realize that doesn’t solve problems, but it can help protect against them. I also realize that for various reasons, many market participants will remain (at least largely) clueless, just as occurs in other areas of collectibles. 

[Kirt]

My profession is managing what happens when things go wrong in another industry, and I think despite not knowing the inner workings of TPGs the similarities are there. It starts with acknowledging mistakes, rather those are pointed out internally, on resubmission, or in the court of collector opinion. The volumes are high enough that you can reasonably forecast an "error rate" and reserve revenue to address the errors - this assumes TPGs aren't running a razor thin margin; if they aren't making > 5% or more then this whole argument is moot; they simply can't afford mistakes nor can they afford to fix them. I completely agree with @Coinbuf, the long-term solution is digitization and machine learning based on high resolution imaging. It's important to note that what looks right to a human may not be what a computer needs to see and I'd be investing heavily in alternative imaging to see what works best to show a computer the surface of the coin in a way that allows comparison.

On 1/26/2020 at 5:32 PM, MarkFeld said:

While I don’t know how practical such scanning would be, if feasible, I think it would be a very good thing. However, as you correctly pointed out, it would also result in reduced submissions and profits. And that might prevent it from being utilized.

I have a different opinion than both of you on this point. I think the diminishing submissions and profits would happen so far into the future that for all practical purposes it is not meaningful. Additionally, investment in digitization of parts of the grading process would reduce overhead long-term and therefore maintain profitability. The first effect would be a decrease in guarantees being honored, which would only be positive from a bottom-line perspective. TPGs would also then be capable of devoting their resources to developing additional revenue streams related to the graded coins; as the cost of grading decreases the number of coins being slabbed could be expanded into lower-graded circulation tiers through introduction of new super-economy service tiers at lower price points - if done well, you could make it worthwhile to slab coins in the $50-75 price range or even a bit lower, vastly expanding the number of slabbed coins.

However, where I completely agree is the short- to mid-term; that's gonna be a mess. The way my industry addresses mistakes is by understanding how they happened and training employees on what went wrong using real events. We show them using real documents, materials, whatever we have to hand where the error occurred. TPGs could easily do the same with a combination of high-resolution images and videos of the coin in hand. The problem with this is I strongly suspect - based on what I've experienced from collectors and dealers - that part of this hobby is holding strongly to one's subjective opinion in the face of overwhelming disagreement. That kinda makes learning from prior mistakes a difficult thing. 

[coinman1794]

The toning is modest, even for a clad toner. I'm also surprised it was able to make MS68 with a 2mm long bag mark on Washington's head.

[World Colonial]

On ‎1‎/‎29‎/‎2020 at 7:05 AM, Kirt said:

I have a different opinion than both of you on this point. I think the diminishing submissions and profits would happen so far into the future that for all practical purposes it is not meaningful. Additionally, investment in digitization of parts of the grading process would reduce overhead long-term and therefore maintain profitability. The first effect would be a decrease in guarantees being honored, which would only be positive from a bottom-line perspective. TPGs would also then be capable of devoting their resources to developing additional revenue streams related to the graded coins; as the cost of grading decreases the number of coins being slabbed could be expanded into lower-graded circulation tiers through introduction of new super-economy service tiers at lower price points - if done well, you could make it worthwhile to slab coins in the $50-75 price range or even a bit lower, vastly expanding the number of slabbed coins.

However, where I completely agree is the short- to mid-term; that's gonna be a mess. The way my industry addresses mistakes is by understanding how they happened and training employees on what went wrong using real events. We show them using real documents, materials, whatever we have to hand where the error occurred. TPGs could easily do the same with a combination of high-resolution images and videos of the coin in hand. The problem with this is I strongly suspect - based on what I've experienced from collectors and dealers - that part of this hobby is holding strongly to one's subjective opinion in the face of overwhelming disagreement. That kinda makes learning from prior mistakes a difficult thing. 

It's my opinion that the TPGs are going to have a real longer term problem with submission volume that isn't fixable.

I have never seen a breakdown but my assumption is that a substantial minority or maybe even majority now and in the recent past is modern NCLT.  I expect a noticeable decline in the intermediate term since I concurrently expect silver prices to be much lower for several years.

World coinage aside from NCLT?  In most countries, there isn't enough supply worth grading because it doesn't exist.  In countries with longer term traditions of collecting where it does, it will take a culture change toward a preference for TPG.  Even if this happens, much of this coinage is so common that it isn't worth grading even at lower grading fees.

US coinage?  Same problem.  The largest supply outside of NCLT is in 20th century classics and moderns.  Most of this coinage apparently financially viable now will never be graded, as any noticeable increase in the populations would send the price level crashing, even from its supposedly low current level.  Decades from now, I expect most of it to sell for less than the grading fee even where it sells for a noticeable multiple now.

The problem for the TPGs is that a stagnant US price level (purportedly since at least 2008) and limited growth elsewhere combined with continuously increasing operational costs doesn't "add up".  I first submitted in 2005 and grading fees have increased noticeably which makes it uneconomical to submit coins I previously did.  This is also going to negatively impact prices as many coins aren't very marketable if sold outside of a holder.

As for this quarter, the buyer paid most of the price for the label.

[cladking]

On 1/25/2020 at 7:13 PM, MarkFeld said:

There’s nothing peculiar about the quarter, itself.😉

Well,  it's a little "peculiar" inasmuch that it's not a mint set coin yet is pretty clean.  

It's also a weak strike even compared to the best strikes made for circulation.  It appears that one is either buying the toning or that it was probably made for circulation.  

I wouldn't mind owning the coin but it would have to be at a very substantially lower price.