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How can a coin be graded as MS 70 when it has an obvious flaw?


Ray Lane
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I've just started collecting one MS 70 coin each month as an investment but I am very new to numismatics and don't know much about it yet.

 

I was very excited when my first coin arrived and sat studying it for ages. I have a x15 magnifier, which I use in my job, so I had a much closer look at it. I noticed that there was a very definite flaw in one of the T's in 'STATES'!

 

From what I have learnt so far MS 70 coins are supposed to be the best you can get and they have been independently checked by three grader's before they can be classed as MS 70.

 

Is this common or is it just me being paranoid? :shock:

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May I ask which grading company it came from? Some do stand behind their grades by offering replacement value for any incorrectly graded pieces. And there are some companies whose standards are not so strict...

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Graders grade the coins, but practically nobody grades the graders. There are a few of us purist collectors that live by the "buy the coin, not the holder" axiom because the coin is what is the factor - not the plastic tomb that someone puts them in. I can cite examples of clear instances of overgrading, undergrading etc because sometimes it is not so much what the coin is, but who submitted it that factors in the grade given. And that is all I will say.

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Thank you for all your comments.

 

The grading company is NGC. The flaw I have found can actually be seen without magnification once you know where it is! I have posted photos of my coins so far but the quality is very poor until I get a better camera.

 

As I said I am very new to this and I have to admit, for my sins, I am not really a purist but am buying MS 70's for the investment value.

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buying MS 70's for the investment value.

 

I've cringed both times you've said this. My best advice would be to buy coins because you like them, not as investments. If you insist on buying coins that you hope will increase in value, go for non-modern (pre-1960s) key date circulation coins that have been graded. Modern MS68+ graded coins are (again, in my opinion) a fad and will turn out to just be expensive plastic.

 

My rule of thumb is this. If you were to remove a coin from the plastic (or mint packaging) that it is in, and the value drops significantly, that just means you were paying a lot for that packaging/holder. If you have a key date coin in say a F-12 grade, removing it from a holder doesn't reduce it's saleability much. Now it's just a raw key date coin in the same grade/condition.

 

As you can see with your "MS-70" graded coin. If you were to to crack it out of the holder, there would no longer be that "MS-70" premium for it. And if you were to get it graded again, it may well only come back "MS-69". Expensive plastic.

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A few other notes to the excellent advice already given.

I would suggest a few books to refer to: 1. ANA Grading Standards for US Coins, Bressett/Bowers and 2. Collecting Rare Coins for Profit, Bowers. I am not saying that these should be treated as revered bibles but suggest they may give some insight to grading, and collecting for pleasure/investment. To add to the saying "buy the coin and not the holder" I would add "buy the book before the coin" as well. As far as your 15 power, relegate it to the pocket for most inspection and pick up a QUAILITY 3 to 7 power. I personally use an Eschenbach 3+6. It has two lens that when stacked together provide for a total of 9 power. While not cheap it has great optics and it has served me well for inspecting coins. The larger the lens diameter the better. The 3 to 7 comes right out of the ANA grading standards book. The higher power is usually used to note minute die differences etc. I also use a standard stereo microscope and a digital 200x camera for research but you may want to leave those to the advanced collector or researcher. Really, the best advise was given by KoRnholio above----collect what you like and if the investment works out it's a bonus.

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Agree wholeheartedly with KoRnholio, "with enough magnification, you will see a flaw." Thus, in agreement with Roger, use just enough magnigication, not too much. Like the 'perfect circle'... it's just a matter of what finite degree you measure or magnify it. Also, a good note about the limited potential investment value of current coinage just because it grades MS70. Just happened across this site today, signed up and picked up some interesting insight. My thanks to all!

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Sort of already stated. Being new to this you probably have not heard that coins are a hobby, not an investment. If your thinking of an investment in coins, try reselling any that you have now. Just where would you sell them? On the internet? If on ebay, there are costs for that service and then too, you might end up with less than you paid. Take to a coin store and find you'll get offered much less than you think. Same at a coin show. This is a great hobby, but to make money on it takes a lot of knowhow, education, location and a great big inventory.

As to your so called MS-70 grading. Remember that although from one of the larger TPGS's, they still have people working there. People make mistakes all the time. And too as already noted as you enlarge any coin, you may well find flaws. Nothing man made is perfect.

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"with enough magnification, you will see a flaw."

 

I believe that some in the TPG's have blinders on whence they grade coins for larger consigners, ala auction companies, big name clients.

 

 

Just have a look at that Farouk $20 from 1933, it is way overgraded. Farouk is known to have played with his coins, shown them to his girlfriends etc.

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