This very short article is on coin grading and honesty among coin dealers and collectors. Two of the biggest problems in the coin market, as laid out in a recent Coin World article by Q. David Bowers, are current grading standards and honesty in the hobby.
Although coin grading does not effect the error market very much, it is still relevant. Without going into much detail, the bottom line in our opinion when it comes to grading (and we cannot overstate these points):
1. Buy the coin for it’s eye-appeal, and not for the grade on the holder.
2. Do not ignore detractors (ugly toning, surfaces problems, poor strike) just because the coin has a high numeric grade.
3. Do not pay a large premium for 1 or even 2 grade points higher. It’s not worth it, and when grading standards are as lax as they are, and when eye-appeal plays so little a role in determining grade, it’s especially not worth it.
Grading standards go up and down, and what are currently the grading standards may not be the standards in 10 years time. Paying very high premiums for minute differences in a coin’s appearance is a bad idea almost always.
Honesty is another problem. Coins should be sold at a reasonable profit to the seller (be it a collector selling or a dealer), but all coins should be sold at a price that the dealer/collector would be willing to buy the item back for a reasonable discount, if offered the coin the next day. It’s important to add the “next day” because if market conditions change, obviously a dealer or collector should not feel obligated to base their “buy” price on coins sold in a now evaporated market. A coin worth $1000 3 years ago may only be worth $200 now because a "hoard" of the coin came out, or because demand (and therefore the retail price) has dropped. Or it may be still worth $1000, in which case the dealer/collector shouldn’t pay $200 for it, but should be honest and pay a reasonable price.
Honesty does not have a price, and we should all do to others as we would have them do to us. Its the right thing to do, and will also benefit the dealers, the customers, and the hobby as a whole in the long run.