Over 200 Years Of Combined Numismatic Experience At Your Disposal.
|November 2016 Issue|
A Newsletter By:
Interview With PCGS, NGC And
CAC Founder John Alabanese
I told our readers that I wanted to ask a few important questions to clarify some points about CAC. John Alabanese was kind enough to answer my questions and give his honest opinions. For brevity, I condensed answers to address the most pertinent points.
Why start CAC?
The reason, Warren, was because guys like you and me have always bought and selected nice coins for the grade and lower-end coins for grade were dragging down the market. Lower-end coins punished high end coins for the grade, and I saw a need to separate the two so that the non-expert coin buyers could identify solid coins for the grade.
How is the market acceptance of CAC coins?
It seems like there is wide acceptance of CAC coins and things are progressing for CAC as planned. CAC-approved coins are selling well and, in many instances, bringing substantial premiums.
CAC is providing buyer assurance for people that are not experts at grading. CAC also posts bids on many coins and is happy to buy them.
What do you see the future to be for CAC?
There are only a finite number of rare coins. As time goes on, almost every relevant rare coin may be seen. As the submissions of coins to CAC dwindle, the future focus for the company will be in making markets for CAC coins. There will be a lower volume of grading and a higher volume of buying and selling CAC coins.
What series of coins has had the highest success rate of passing at CAC and the lowest success rate of earning a CAC sticker?
The highest success rate, without looking at figures, seems to be in Proof Three Cent Nickels. They are a small coin with few hairlines and nice eye-appeal.
The lowest success rate has to be with Saint Gaudens $20’s. Better date, higher-quality Morgan dollars also have a low sticker rate.
Why do you think that some dealers and collectors are resistant to CAC?
Dealers who have always dealt in higher quality coins fully support us whereas those dealers who only purchase a coin based on price alone appear to be resistant to CAC. There is a tendency to look at CAC as the bad guy and not try to emphasize the need for solid graded coins to pass CAC muster.
Right now we are at 100% working capacity. We’ve pulled back our marketing because we are so busy. Our goal at CAC is to support coins that are solid for the grade and to support the dealers who have always dealt in higher quality coins.
This is a sensitive subject to me. When coins with a plus are submitted to CAC, do you just judge the coin on the whole grade point or do you take the plus into consideration?
CAC only takes the whole point into consideration, not the plus. The plus on a coin has caused some confusion in pricing. Also, if registry points were not added to collectors chasing higher points, the plus sticker would bring a much smaller premium. Look at a 1928-S Peace Dollar: the spread between a 64 and 65 is so great that a true solid to high-end 64 may be worth a 10% or more premium. But if it has a plus on it, I don’t see the value when some dealers add a ridiculous number to the price. A 1928-S in MS-64 is bid at $750, but I’ve seen 64+ coins offered for $4,500! Dealers in many instances are capitalizing on over exuberant Registry buyers.
CAC only posts bids for the solid point grade and, in some instances, I may buy a plus coin for my bid on a non plus coin.
Will you ever sticker foreign coins?
No, there are many beautiful and significant foreign coins that are great to collect and buy. But I am not confident in grading them, so we will stick to the U.S. issues that we grade.
I have a problem with CAC stickering dipped coins….why do you not hold the line on original coins and not sticker a dipped coin?
I prefer original coins. If a coin is properly dipped and has full luster, CAC will give it a sticker if it is solid for the grade. To an original coin, we are more apt to give the benefit of the doubt than on a dipped coin. CAC will not automatically reject a coin because it has been dipped. In order to receive a sticker, the coin must have nice surfaces.
I want to thank John for his time and candor. In the next issue, I may elaborate on my thoughts to some of our questions and the answers John provided.
Partner and owner of Rare Coins of New Hampshire, Inc. since June, 1990 and a full time coin dealer since 1979. Warren is a full member of the Professional Numismatists Guild and a life member of the American Numismatic Association. He was selected by the Rosen Numismatic Advisory as one of the ten leading numismatists in the country for twelve consecutive years. He was selected by PCGS and written up in their newsletter as handling and submitting some of the nicest coins they have ever seen.
Crown – A generic term for any dollar size coin.
Hobo Nickel – Most often made from a Buffalo nickel, but it could be any type of coin. These coins mostly originated in the 1930’s and were often made by Hobos.
Matte Proof – Coins struck between 1907 and 1916, they are proof coins with an experimental surface. After striking, the coins were either sandblasted or pickled in acid. They were a radical departure from the traditional brilliant proofs and were not very well received by collectors of the day.
By Joseph Presti
Some of you may have heard of “gradeflation.” This term refers to a coin whose grade may have been MS-64 in 1986 when PCGS started, but now may grade MS-65 or 65+. It is essentially a loosening of grading standards. It has nothing to do with coin doctors or a grand conspiracy, but has everything to do with “market acceptability.”
When the grading services started 30 years ago, grading was for the most part spot on, bordering on conservative. Over time, grading has gotten looser. Some of this could be due to human nature when a grader looks at a coin they mentally form a line in their head, and if the coin falls on that line it gets the grade. Well, over time with fewer nice coins coming in, that line gets longer and coins that initially would not have gotten the grade, now do.
For the conspiracy theorists out there the other reason gradeflation may happen is competition between grading services. Let’s face it, there are only so many coins to grade and although there is no fact to point to, that’s why it is a conspiracy theory, the services could overgrade particular coins, to give submitters an incentive to encourage them to keep sending coins to their service for grading. Who knows?
The result of this gradeflation has been a two-tiered market and the introduction and success of CAC. Most collectors, whether new or experienced, question the legitimacy of a two-tiered market. It exists and here is why. Gradeflation. The way I explain it to people is that you could have two 1965 Mustangs, both original in every way but they will bring different prices, why? It could be personal tastes or it could be level of trim or paint color, but they are both original 1965 Mustangs. Same with coins, the strike, attractiveness of toning, bagmarks, etc. Two coins could grade the same but have varying degrees of desire.
The second reason for gradeflation is “market acceptability.” What this means in simple terms is that if you can sell it to a buyer, wholesale or retail then it is okay. To me and my associates at RCNH this is absolutely wrong! People put their trust in you and you owe them your best effort, that is, sell them a coin that is accurately graded. A perfect example of market acceptability are 18th and early 19th century type coins. What would have been considered cleaned years ago now routinely gets graded without any indication of cleaning or other negative connotation. This is wrong and has led to why the sight unseen market for coins is weak and premiums being paid for sight seen coins, thus you have a classic two-tiered market.
The Cash Register Figures It Out
By Dave Carleton
The Fall foliage this year in southern New Hampshire is wonderful. I was thinking that because we’ve been experiencing a drought, the colors would be muted, but that’s not the case. Our view from the top floor of the People’s United Bank building is outstanding and as I survey the surrounding area I’ve been thinking about how much growth has occurred around us since we’ve been here. When Warren and I chose this location 26 years ago, we were the first tenant in the new bank building. We chose this location because the State Police had a barracks across the field from us and the local police were a half mile down the street. The fact that we get to use the bank’s vault facility is a huge bonus too.
One of the businesses that moved in near us is a great grocery store and I use it like my own pantry. I’m over there quite often gathering lunch items or getting supplies for our coffee and lunch room. I haven’t done it lately, but many times in the past just for fun I’ve paid for my supplies with $2.00 bills, Eisenhower dollars, Susan B. Anthony dollars, and Sacagawea dollars. I’m usually met with a response like, “What is this? Is this real money?” Or in many cases the cashier will scoop up the coins and replace the till with more common money. I just tell them not to call us because the money isn’t rare.
I was in the store a few mornings ago and the young cashier said that they were going to have to start charging the New Hampshire food tax for the one donut I was purchasing and the price was going to be .86 cents instead of .79 cents. I wasn’t sure what the food tax was, but I said to the cashier that the tax was about 9 or 10 percent. She said to me that she didn’t know anything about percent and that the cash register figured it out. That got me thinking about several events that have happened lately. It occurred to me that in the last couple of months, I’ve met with at least three gentlemen that have made purchases of “junk silver” (90% pre ’64 dimes, quarters and half dollars) silver Eagles, small gold Eagles and Morgan silver dollars, in an attempt to start making their kids aware of money. They all told me that they had come to the realization that their children had no clue about money in its different forms or even where it came from for that matter.
Recently, I had to go to the vault and the lady that let me in was mentioning that she was going to have to beat (figuratively speaking) on her daughter when she got home from work. I asked why and she told me that her young daughter had “borrowed” her debit card and had racked up a very sizable bill, upgrading her position on some gaming site. Perhaps to pay for a moat around her castle, I don’t know. Anyway, I told her that if I had ever done something like that when I was a kid, my parents would have killed me (figuratively speaking). She told me that she felt partly to blame because her daughter really doesn’t have any perception about money because she never sees cash and only sees a plastic card, which when used, magically results in packages coming to the door, gas pumps filling the car and groceries filling the cart.
My point is that, to me, it is becoming more apparent every day that the youngsters coming up the path to adulthood have very little knowledge about our monetary system. I know that understanding the whole system is daunting, I’m no expert either, but I’m here to say that you’d be doing some youngster in your family a great service if you’d just sit them down once and a while and try to educate them about money. Learning how to count it and make change would be a great start.
David Carleton, a New Hampshire native was introduced to coin collecting by his father and Grandfather in the 50’s. Gold bullion speculation dominated the 70’s culminating in 1980 when focus on Numismatics returned. He became a life member of the ANA , met Warren Mills (his coin Guru) and they cofounded RCNH in 1990.
MCMXXI….Highlights, Expected, Surprising
By Paul V. Battaglia
This year witnessed the official ending of World War I per President Harding; Charlie Chaplin and Jackie Coogan both starred in the silent film, “The Kid”; a young Winston Churchill became British Prime Minister of The Colonies; Warren G. Harding was inaugurated on the 29th of March; Vladimir Lenin proclaims New Economic Politics; Albert Einstein lectures in New York City on his “Theory of Relativity”; Babe Ruth was arrested and fined $100 for speeding (later that year he hit his then record 59th HR); Cy Young at 54 pitched two innings; J. Edgar Hoover became Assistant Director of the FBI and the U.S. Mints in Philadelphia, Denver (first and only time) and San Francisco strike designer Charles Morgan’s final year of his silver dollar.
As many of you know, the 1921 Morgan Silver Dollars are a great challenge to locate well struck, clear and clean-in-look, lustrous….and devoid of those chronic (genetic??) heavy hits that wreck the overall balance of an otherwise fairly pleasant specimen. (You could easily correlate the heavy hits on the 1921 genre to many Carson City dollars, too). Great, you found one, but do not pop the cork on the Boone’s Farm Strawberry Wine quite yet.
Next task….take a huge breath and hold it.
Now, dear reader, I ask you to seek out an attractively toned piece among this trio of mints in addition to the already superior coin you located and of which we just discussed. All grades qualify. Hmmmm, I thought as much. The yeoman’s task sits heavier on your shoulders now, does it not? Sure, those coins do exist, but I will bet you paid dearly for that coin when it surfaced. Did you snap it up? No? Well, I cannot fault you as, I too, have passed on more coins than I can mortally recall in my five decades within Coin Land, USA. Oh, you said you DID make the purchase after all? What was your immediate reaction afterward? How did you feel after displaying your purchase to your coin buddies? How did you feel the next morning? I have both positive and (still) neutral feelings about all the 1921 P, D and S minted silver dollars in my stash. I admit this is one date that nags at me, ha. Yes, we dealers are human (well, most are) and prone to indecision as well as insecurity. To begin with, there were never many of the 1921s around that looked good! Today, through the natural progression of time, accidents, meltdowns, loss and cleaning, there are frighteningly few. One’s attempt to be comfortable and excited over the 1921 P, D and S silver dollars is a challenge, but most worthy, please trust me. Your efforts and time here are well invested
Back on 22nd March, 2012 I was attending the huge Whitman Baltimore Convention with friend/owner Warren Mills. A fellow friend/dealer sought me out and dropped this NGC MS-62 1921-P Morgan into my hands. WOW! The grade was humble, yet the unusual cleanliness-from-large hits, decent strike, decent lustre and elegant coloration were all above the norm for this date. I could envision this coin’s singular attributes to be present on an MS-64, no foolin’, my opinion. I had not given much thought in locating anything for myself while at the show. After all, I was there to work and pound the bourse pavement for a solid twelve hours. Lo and behold, this date of all dates pops up. I paid him his asking price without taking another breath, but then took a big breath upon realization of what I had just forked over! In retrospect, I thought to never see an acceptable specimen of this date for my set OR, I would locate a knockout toned beastie in MS-65 CAC with an equally knockout beastie tag. Not so, Paul, for not all kings are adorned befitting their station, yet they are still kings. Most important, all beauty and goodness emanate from the coarsest and humblest of beginnings. The struggle IS the glory in both coins and in life. Enjoy our hobby and in all you do, dear readers and customers.
Paul Battaglia is the Senior Numismatist and a Life Member of the ANA. He travels with owner, Warren Mills, to the major coin shows across the country. Paul has 50+ years numismatic experience and has been with RCNH since 1990. He also cherishes reading, cooking, language, music, classic cars, lily/orchid culture, chess, economic statistics, differing viewpoints and FISHING.
Questions From The Mail Bag
By Warren Mills
My interview with John Albanese this month is a collection of questions, some were asked to me from our readers in our "Questions From The Mail Bag" articles over the months we have written this newsletter. This article will continue next month as usual, so please keep sending in your questions to me directly or email. Thank you.
November Highlighted Coin
1918-S Walking Liberty Half MS-64 PCGS, CAC
Here is a truly special example of an early Walking Liberty Half. I acquired the coin uncertified thinking the coin would grade MS-64+. The luster and color are way above average with a good strike for the date! Take a look at the surfaces and you’ll see minimum surface abrasion. The price spread between MS-64 and MS-65 is also attractive. Here’s a coin that has a bid price on the grey sheet of $2,500 in MS-64 and $16,500 in MS-65. I feel the spread is justified based on the population. PCGS has graded 426 pieces in MS-64, 26 in MS-64+ (which I believe this coin to be), 31 in MS-65, 2 in MS-65+, 2 in MS-66 and 1 in MS-67. Let’s contrast that to the CAC population, which includes both PCGS and NGC coins. The CAC pop is 45 in MS-64 and MS-64+ combined, 7 in MS-65 and MS-65+ combined, none in MS-66 and 2 in MS-67.
I’ve always liked early Walkers and have seen 1918-S halves in MS-65 holders that are inferior to this coin! Take a moment and examine the photos. In hand, the coin comes to life. In many instances these early pieces may grade MS-64 or MS-64+ but have unattractive color, indifferent luster and a poorer than usual strike. To me, these coins do not merit the grade. A quick check of auction records show over the last year that MS-64+ pieces have sold for a range of $3,760 to $5,058. This superb example is here for your consideration at $3,250.
Please call 1-800-225-7264 or emailif you'd like to order this coin, or if you have any questions or comments regarding it.