Private note grading ruining the hobby?

News: Welcome to the Canadian Paper Money Forum.

The very idea of a voluntary grading panel is so appealing, but as Rick says completely "unrealistic."  I know a few people who would be qualified to grade with little quibble from other veteran members, and when I posed the question of them participating voluntarily (as a grader) they laughed.   If someone takes the time to inspect and grade a note they're going to want reimbursement.

 

I don't think third party grading is ruining the hobby,at least not to those who treat it as a hobby,but it is a way to make it easier for people who treat it more as an investment or a buisness,to sell notes at a higher price than they might normally command,if not professionally graded

I think we've already established the fact that if TPG becomes the standard, or if all new collectors become fixated for the highest grades of UNC than that can't be good for the hobby since fewer collectors will be satisfied with lower grades.   I do think there is potential for TPG upsetting the hobby.  If TPG is inconsistent, biased, or poorly applied then it can mean big profits for a seller, jaded buyers, and people quitting the hobby.  

I for one used to collect mostly EF to AU until I realized that these grades are not appreciating in book value.   I still collect lower grades in the older issues, but have recently become more demanding with 1954 and on.   Part of this may be due to my change in tastes...but I sometimes wonder how much am I influenced by recent trends, my fellow collectors desire for UNC, and all this furor over TPG/and the grading of UNC.  Honestly, sometimes I'm more focused on the investment side of the hobby.  That's what I believe TPG does-- forces people to think about the note more as an investment, than as a collectible artifact.  

Liken this to coin slabbing.
Coins graded as MS-65 by ICCS command heavy premiums, while those in only MS-64 are often difficult to sell, with much less demand. Coins graded by other services have less demand (generally), and lower prices. If a collector knows his grading well, it matters not at all who graded it, or who called it what. If the items meets the needs of the would-be buyer, it will sell. There are some real bargains in coins of less than MS-65. For notes, the ultimate note may be -65, with real price differences for the notes with lesser grades.  As has been pointed out before, It is harder to judge the grade of a note encased in heavy plastic. Trust becomes a real factor, perhaps the only factor on third party graded notes.

More time is still needed to see where this is going in the future.

Rick

I was not implying that graders should not be paid as this would be very unrealistic as stated. I was just making a point that when a collector who goes to a TPG firm is paying client, there may be a tendency that the TPG firm may want to not grade too harshly or note the flaws on the holder so that they do not hurt future business.

For those that use this service, they expect, no demand, impartial grading. How that is achieved is yet to be answered. It is better that the graders are known, from a panel, and not one person. Prices and service speed are still to be determined.  If the price is deemed too high, no one will use it. How much should it cost to do good third party grading? One service is available in Canada now, and the grader does deal in banknotes.

Rick

I would give $30 for a notes to be TPG by threee people. Split to $10 each way, I could present them with my UNC $25 bill from 1935, serial number 123456, and they could all arrive at a grade independently, then collaborate AFTER writing down an intial grade on paper. Then views could be debated, and flaws/perfections could be pointed out or highlighted in order to form a consensus.

I imagine my self coming to the Niagra Falls show with some juicy notes, and presenting them to a table of panelists, (at a table which might be open only for 2 hours) on the main floor where everyone else is.  To get them Certified as GEM UNC 70 or 67 or whatever would be a great thing for my resale value (because that is the trend).  Now, I obviously do not know how much time and equipment it takes to properly grade a note, but I always thought that a panel of three could easily look over a note and draw a conclusion in about 15 minutes.  Add 30 seconds to print off a customized label from a computer program and put it on a specially designed holder, and you are done, right? (I know there has got to be alot more to it than that!)

Voila - a TPG note, done at a show, cost $30.  (Remember this was all an idea in my head, without knowing the logistics of how it would really function).

The idea is, a walk-up table would create alot of attention (and alot of people would bring notes in my opinion.

I still don't have an ultimate solution.

How the money is distributed to the graders is up to the owner of the company. $10 each is far too high to make sense from a business standpoint. The cost of a table at a major show is $500, and the travel expenses on top of that. Unless the guys all lived in close proximity, $30 per note would not cover expenses. Better to sent them by express post.
Insurance is available for shipping, although it is private insurance.

Yet to be determined is who the graders are. I would like it to be something like:
Head guy (owner), 2 of 4 possible graders. Total of 3, with the head guy having the final call.
The holders and computer programs are all a cost consideration as well.

Rick

It could look like this!

Louis



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Could you make the scan larger please?

We often forget that "American" grading standards have traditionally been much more liberal (i.e., much looser) than "Canadian" and "International" grading standards. Since the biggest third-party grading companies (PMG & PCGS) are American operations it's logical to assume that these companies will be applying the looser American grading standards when they grade Canadian and foreign notes. The inevitable result of all this will be an undesirable erosion of the more conservative Canadian and International grading standards.

In view of the above, an impartial Canadian-based grading company having the stature and recognition of ICCS is badly needed. However, if Canadian dealers and collectors insist on sending their notes to American companies for grading this will never happen! However, I can certainly understand the appeal of sending out an EF note to a US grading company and having it come back as an AU .....  

I recently bought a couple of PMG-graded notes on eBay (one Canadian, one foreign) just to satisfy my personal curiosity. When I receive them I'll submit my report.

If this really needs to happen, then I would like to see CCCS start grading notes. It is nice to have others involved in the grading of coins/notes other then the main players. I find their grading to be accurate, cost to be affordable and turn around times quick.

I've been subscribing to Bank Note Reporter magazine for about 30 years and I must say that it is perhaps the most valuable paper money publication around (www.banknotereporter.com). This magazine deals primarily, but not exclusively, with US currency.

Once a month this magazine publishes "Paper Money Market" (i.e., the US paper money trends) and prices are given for two UNC grades, i.e., CHOICE Crisp Unc-63 and GEM Crisp Unc-65. I've attached scans of some representative prices below.

You will see that there is a VERY LARGE difference in price between UNC-63 and UNC-65 which suggests to me that there must be a correspondingly large difference in the quantity of handling marks for these two UNC grades. Assuming that UNC-65 is synonymous with a Charlton UNC (i.e., 100% perfection) then one can conclude that an MS63 is probably an AU(?) on the Charlton scale.

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Here's another example of the large differences between MS-63 and MS-65 prices.

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At the risk of imminent lynching...a few points:

I would suggest that UNC 60 is likely the current Charlton UNC price and UNC 63 and UNC 65 will bring premiums over the current catalogue UNC prices. (hint...they alreday do)

My personal experience is that dealers AND COLLECTORS tend to pay a premium over the catalogue UNC price for notes that are, in their view, superior with respect to originality, paper quality, centering etc.

Some may see this comment, and this trend, as reinforcing the observation that the introduction of multiple UNC grades, and the concurrent growing popularity of TPG notes ,as just a greedy profit drive. That will doubtless be partly true.

Is anyone naive enough to think that categorical reliance on dealer grades ( ANY DEALER ) is a better bet ?? Do you not think that many ( majority ? ) of raw notes sold are overgraded by Charlton or any other standard ? Comments ? Some of you on this forum I know are excellent graders - what is your show/auction experience ?

Lastly, and this may be a repeated comment, what are your comments on this observation/hypothesis:

On average, if a collector who is not really confident of his grading buys 100 raw notes and 100 TPG notes, will he not likely find fewer overgraded notes in his TPG group ?

OK ! Hit me hard !

OleDon

Hey, I don't know where this note would pass as a AU note, not going to say where I got these pictures....

I still cannot get over the grading of Archey80's PMG "AU-50" note! If nothing else, it confirms in spades just how erratic and unreliable third-party grading can be. It's laughable in the extreme and totally inexplicable. Perhaps the American grading companies don't treat foreign currency with the same sort of respect as they treat US currency, or perhaps they just haven't seen enough foreign notes to pass judgment .... ?

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CCCS should start grading paper in 2007. My offer of consulting with the CPMS board of director still stand. I can be contacted privately if needed. If no approach is done, grading will be as CCCS see it. I also understand if they don't want to have any involvement in TPG of paper money and respect that. At least, I can't be accuse of not being available before the fact.

Louis