Author Topic: To slab or not to slab?  (Read 2719 times)

0 Members and 1 Guest are viewing this topic.

Offline Harpagon Coins

  • New Member
  • *
  • Posts: 17
To slab or not to slab?
« on: July 12, 2014, 08:38:34 PM »
Hi there,

I've just joined and I'm at the crossroads regarding to slab or not to slab. I'm a third generation collector. I've changed my collection over time having learned some mistakes made by my grandfather and then my father. I'll add that I too have made and will continue to make mistakes.

I was left with a large, broad collection, which unfortunately doesn't suit my lifestyle and long term intentions. I'm in the process of slowly selling it off. My predecessors did not give much thought to the long term value of their collection, they simply collected because they enjoyed it - a completely valid reason. I however, belong to an unfortunately (and I mean that, unfortunately) more pragmatic generation where the long term value of my collection does come into play.

I have many crowns that I'm now tempted to encapsulate. A broad criteria for me is that I don't encapsulate coins below $500 value and or that will grade below MS64.

I have my reasons for this criteria which I'm sure you can work out as well.

My questions are:

*Why is there so much inconsistency with the grading from the TPGs? (I mean PCGS and NGC) It is obvious. Even their web grading seminar (shortened) shows example coins in MS 64 or above that simply do not translate to the grades many friends of mine are getting when they're sending their coins in.
*What do you do when you get a beautiful coin in high grade condition and get it back with a clearly incorrectly graded slabbed coin? without having to resend it several times until you get the grade you think it deserves.

A few notes on my intentions: I encapsulate for long term investment and because when a rare coin is in very high grade condition, slabs are a nice form of protection.

Any ideas, directions to take will be appreciated.

Thanks in advance,

Roman




Offline Afrasi

  • Moderator
  • Honorary Member
  • *****
  • Posts: 2 495
  • To do is to doo be dooh ...
Re: To slab or not to slab?
« Reply #1 on: July 12, 2014, 09:54:24 PM »
Congratulations to your predecessors! Great folks!!! I share their philosophy of collecting 100 %!

I have to confess I have not very much coins worth more than 500 US$, but I never in my life would slab any coin. Looking at a slabbed coin is like looking at a coin scan in the web. Perhaps nice, but never thrilling!
Additionally - as you have learned in between - the slabbing companies are by far not serious.

Offline Prosit

  • Moderator
  • Honorary Member
  • *****
  • Posts: 3 842
    • Austrian Coins, Tokens and Medals
Re: To slab or not to slab?
« Reply #2 on: July 13, 2014, 12:10:03 AM »
Let me say up front that I am not a fan of slabbed coins but with that said I confess that they do have their place and I have a few.

If you collect expensive USA coins then slabbed coins are much more acceptable than are world coins, at least in the world marketplace. I would not use any other company other than PCGS. It is the priemier grading company as far as market acceptability at this time. That could change in the future...everything eventually does.

A cost level of $500 is just an arbitrary number and depends on your personal comfortable level of potential acceptable loss. For me it is about $140.

Another reason for grading is potential counterfiet coins....well coins worth as low as a pound have been counterfieted so price level is no guarentee.

What you collect, how you collect, why you collect and weather a coin is graded or not is strictly your decision.

If I was in the market for $500 + coins then i would too go for PCGS graded coins.

It is no guarentee but it does...susposedly offer a professional opinion...but yes they can get it wrong....they are human doing the grading after all.

Dale


Offline Harpagon Coins

  • New Member
  • *
  • Posts: 17
Re: To slab or not to slab?
« Reply #3 on: July 13, 2014, 08:28:22 AM »
Hi Afrasi,

Thank you for your comment. I see where you're coming from.

I totally sympathize with my dad and grandfather. I too started out with that basic love of coins - all coins. I had five full albums by the age of 25 and I read a lot of reference material to support it. I had time then.

I now have two young children and both my wife and I work (like most of us). I simply don't have the time anymore to satisfactorily dabble in all the areas that interest me.

Hopefully retirement will help with that one day!

The word predecessors I used may have come across a little cold. Don't get me wrong my father died eight years ago and I still haven't been able to clear his home of his possessions.

I enjoy understanding... and depth in most facets of life, not just coin collecting. I did see however, my dad over the last decade before his death changing his style of collecting. He became more conscious of the fact he was leaving ME (his only child) a collection and not so much something he was taking away with him. I saw him scramble in many ways to streamline his collection before he died.

I hope you understand that it is something I'd like to preempt for my kids, and not a sign of callousness towards people to whom I'm grateful for having been a part of my life and influenced me immensely.

My English is sometimes a little cold as I wrote above, since I unwittingly use some Italian sentence structures in my thinking.

Offline dheer

  • Moderator
  • Honorary Member
  • *****
  • Posts: 3 085
  • Indian Coins & Currencies
    • Coins of Republic India
Re: To slab or not to slab?
« Reply #4 on: July 13, 2014, 03:24:21 PM »
There are multiple reasons for slabbing, each its own pro's and con's.

Slabbing for Protection of coin: The coin stays much better. However there are alternative packaging available at much cheaper price.

Increasing Future Value: In general slabbed coins fetch slightly more ... however at times non-slabbed coins do fetch more. At times the reputation of dealer matters above anything else.

Counterfeits: From a buyers point of view slabbed coins are more safe, specially the more expensive ones.

I think the key question you are trying to arrive at is 50 years from now, will the coins that are slabbed be of more value, i.e. fetch more than the price of slabbing.

I think if you have the money, just get it slabbed, yes at times a good coin gets a lousy grade and vice versa, its still an art and depends on the person certifying the coin and his mood :)


http://coinsofrepublicindia.blogspot.in
A guide on Republic India Coins & Currencies

Offline Bimat

  • आदित्य
  • Global Moderator
  • Honorary Member
  • *****
  • Posts: 11 312
  • Mumbai, India.
To slab or not to slab?
« Reply #5 on: July 13, 2014, 03:43:58 PM »
Quote
Counterfeits: From a buyers point of view slabbed coins are more safe, specially the more expensive ones.

Recently, Oesho showed us couple of expensive (Indian) coins which were fake but still slabbed by well known professional grading companies. I can't find the links now...

Aditya
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline dheer

  • Moderator
  • Honorary Member
  • *****
  • Posts: 3 085
  • Indian Coins & Currencies
    • Coins of Republic India
Re: To slab or not to slab?
« Reply #6 on: July 13, 2014, 05:49:35 PM »
Recently, Oesho showed us couple of expensive (Indian) coins which were fake but still slabbed by well known professional grading companies. I can't find the links now...

Aditya

Fully agree. The point I was trying to make from a lay Buyers point of view he thinks/believes a slabbed coin is less Likely to be fake. Of Course once the buyer matures he is judges the coin by itself rather than any grading or slabbing.
http://coinsofrepublicindia.blogspot.in
A guide on Republic India Coins & Currencies

Offline Harpagon Coins

  • New Member
  • *
  • Posts: 17
Re: To slab or not to slab?
« Reply #7 on: July 13, 2014, 06:23:58 PM »
This is mainly a response to Posit:

Exactly how I feel about slabbed coins. I'm not too keen on them but I feel that for the general value I'm talking about it is justified.

In the slabbing I also consider the overall cost  to me. Being overseas, the costs are a little higher for shipping both ways and even simply paying for the $40 or $45 a coin cost grading. Anything that potentially couldn't sell for a few hundred dollars I simply don't see the advantage.

Slabbed world coins are not so in demand, at least in Europe, but I have noticed that Asia has increased its interest.

The counterfeiting detection is obviously an additional advantage that TPGs offer, even though, as some other members have pointed out, some fakes have gotten past them.

Ultimately as you say it is up to each collector what direction he takes, and I'm exactly at that stage where I'm still feeling reluctant to go down that path, but I'm definitely considering it.

Typically as is said here, slabbing of a "rare" coin may increase your market value by up to 30% depending where you sell it. This is optimistic I feel, but I have seen it happen enough times to believe it.

The case for and against encapsulating coins for me is broken down into three areas of consideration.

What I've worked out on my own regarding slabs can be broken down into three areas:

Preservation –encapsulation has a distinct advantage over other forms of storage -  it is an exceptional way to protect a coin over the long term. It protects the coin from getting damaged from accidental drops and scratches. The coin is safely sealed in a rectangular slab  similar to a petri dish to be observed, but not touched, however very resilient to breakage. Recently I dropped, a unc 3 RM and it left a nice rim bump. Oh boy...

The grading of a slabbed coin – Graded coins for me have one defect. The Sheldon scale by definition breaks down the grade of a coin to a numeric value. This psychologically sets my mind to process and value a higher number independent of whether I even see the coin. This is nicely demonstrated by site-unseen coins being traded over the internet or phone.  It is a labeling system that elicits an automatic ranking of the coin in my mind, instead of a synergistic evaluation based on experience and my senses working  together. It’s technical – yes. No body denies this, but it is overly mechanical and conditions many new collectors to view coins as a simple commodity based on a number. I admire TPGs’ near clinical exactness with which they want to grade coins but their frequent inconsistency in grading leaves collectors such as me with a bitter taste and diminishing respect for the grading standard they profess to uphold.

Owning an encapsulated (slabbed) coin - . It’s wonderful that a package form of buying coins exists such as slabs. It doesn’t require a collector even to learn all that much about grading, care,  and even allows you to forgo that antiquated and septic habit of touching it. There are those who believe this is the future. I totally agree with them. But, one cannot deny the simple fact that an encapsulated coin creates a physical and psychological barrier that unwittingly changes your relationship with that coin. It reduces tangibly your ability to feel for that coin. You ultimately perceive it through the slab with that graded number printed on its front. It forces the collector to look at it through a plastic layer as if attending a museum exhibition and viewing an artifact from behind a display window. It’s there, but don’t touch!

Having raved on now beyond necessity, I'll probably go ahead and slab a few. I've owned a few and regardless of how beautiful they were, I've sold most of them, it wasn't the same as holding a raw coin.

Thanks for you input Dale!

Offline Figleaf

  • Administrator
  • Honorary Member
  • *****
  • Posts: 28 626
Re: To slab or not to slab?
« Reply #8 on: July 13, 2014, 06:32:13 PM »
I have recently written a study for the OECD on long-term investment, so I think I may claim some competence on the subject. A long-term investment is not defined by the holding period. Otherwise, Russian railway bonds would be the ultimate long-term investment. Instead, it is a state of mind, the intention and capacity to hold on to an investment for a long time for its return, rather than its appreciation. Coins cannot be a long-term investment, but they can be held a long time.

I am a retired pro investor, so I think I may claim some competence on investing. Investing is not a question of how to get the most money the fastest, because the answer is by crime, fraud and scamming. Those strategies come with risk, though. Real investors look at the combination of return and risk. Coin's return profile is uneven at best (in most cases, price developments are slower than inflation, so by holding coins as an investment, your capital slowly vaporises) and their risk profile is bad to very bad. Coins are in general a bad investment.

My advice to you is to make a clear choice. Be an investor or be a collector, but don't try to be both. If you are an investor, sell all the coins, preferably in one batch or you will never get rid of the cheap ones. Aim for half catalogue quote. That may be difficult to accept for dealers, but if there are enough popular coins, they will accept. Invest the proceeds in a safer bet. If you are a collector, there are only two reasons to sell (apart from severe personal financial difficulties): the coin is a duplicate or you want to use the money to buy another coin.

I don't think slabbing makes sense for a collector, but opinions differ. For an investor, slabbing makes sense when you are selling in the US or Canada. It is probably a waste of time and money in other markets, especially as slabbing increases volume and weight drastically, so storage and shipping becomes more risky and expensive.

Peter
An unidentified coin is a piece of metal. An identified coin is a piece of history.

Offline bruce61813

  • Moderator
  • Meritorious Member
  • *****
  • Posts: 673
    • Gringgotts Coins
Re: To slab or not to slab?
« Reply #9 on: July 13, 2014, 06:53:03 PM »
This may have been mentioned, but if you must put the coin in something, i would go for Cointains, they keep the coin protected, it is help by a safe foam ring, but more importantly, they can be opened. Slabbing is probably the worst thing that has happened to the collecting community. As for grading, I would not trust it. but this is a personal opinion.

Bruce

Offline Harpagon Coins

  • New Member
  • *
  • Posts: 17
Re: To slab or not to slab?
« Reply #10 on: July 13, 2014, 09:22:26 PM »
Hi Figleaf!

Your solid conclusions are refreshing. Many more collectors should read this piece you wrote. I'm sending it to several collectors I know.
You've distilled exactly what many collectors/investors should ask themselves.

I am in fact trying to marry both the investing (with disposable income) and collecting. Investing I don't mean in the strictest of senses. I prefer the collecting, but I don't want to find myself lost in a quagmire of coins that my kids won't know what to do with in 20 years from now. At least if they're high grade "rarities" reputable auction houses may sell them on my kids behalf and worst case scenario they'll have preserved their value; at best, appreciated a little in the interim.

The notion of investing in coins is so vague that it is actually enthralling to me, because you're right - there are much better investments out there.

You are right about the slabbing for a collector. I've been down that path and I ended up selling them or breaking them out of their case.

The clear choice you speak of is a little too binary for my taste. I too, not in any important capacity like you, work in the investment world - a hedge fund in fact, where I'm responsible for making our portfolios look good, statistically speaking, even when they're not doing so well. I spend most of my day massaging numbers. We are far from being exact sciences and coin collecting allows me a beautiful pastime without having to be overly analytical. It adds something human to an overly practical world.

Thanks!

Offline Harpagon Coins

  • New Member
  • *
  • Posts: 17
Re: To slab or not to slab?
« Reply #11 on: July 13, 2014, 09:41:47 PM »
Hi Bruce,

Yes slabbing is terrible for the coin community i feel. It really does change the relationship between the collector and the coin. But it has its temptations when it comes resale. Capsule are good. I had found a decent supplier a few years ago, then he closed down.

Thanks!

Roman

Offline bruce61813

  • Moderator
  • Meritorious Member
  • *****
  • Posts: 673
    • Gringgotts Coins
Re: To slab or not to slab?
« Reply #12 on: July 14, 2014, 04:04:22 AM »
If you must, you can find the slabs for do-it-yourself. The coin won't be graded, but I am  never sure of gradrs, hence i stick to ancients and medallions.

Bruce