Just One of Several Factors
Of course not everyone agrees with my contention that
grading is not precise and that a numerical grade is only one of several
determinants of market value. Many feel that trading sight-unseen is the key to
achieving a truly active stock-exchange-like coin market, and they don't want to
listen to anyone who doesn't agree. However, as of this writing, I have never
met even one collector who has told me that he will buy a coin sight-unseen and,
without question or complaint, will keep it if he doesn't like it. I and
numerous other professionals believe that collectors are the foundation of the
hobby, and how they feel is of paramount importance to the health and well-being
of numismatics.
The first certification company was the Professional Coin
Grading Service, launched in 1986 by David Hall, one of the most brilliant
thinkers in numismatics, who had been prominent as a rare coin dealer for many
years. His basic premise was that a coin, if encased in a sealed transparent
holder and marked with a grade that represented the combined opinion of several
experts, would be more likely to actually be in that grade than a coin graded by
just one person, and that once encapsulated, the grade of the coin would remain
fixed in time. For the investor, a sealed slab offered a security not possible
with coins stored loosely in envelopes or ordinary plastic holders, as the
latter could be easily switched. PCGS was a success from the very start, and
within two years it announced that over one million coins had been certified. By
1990 the enterprise employed about 80 people. Today, it stands as the most
successful of the various services.
Today, the three top grading services are these:
Professional Coin Grading Service (PCGS), Numismatic Guaranty Corporation (NGC),
ANACS, International Numismatic Service (INS), Photo-Certified Coin Institute.
Staffing certain of these organizations are some of the most experienced, most
qualified coin graders in numismatics. In June 1993, in the company of Dwight
Manley, I went on a behind-the-scenes tour of PCGS in Newport Beach, California,
and was very impressed with the employees and the methods used.
These certification services sonically seal coins in
plastic encasements called slabs. The slabs have a market all their own. Bid and
ask prices for certain slabbed coins are quoted continuously on electronic
exchanges and are printed weekly in the Certified Coin Dealer Newsletter.
