Business at Dominion Grading Service (DGS) has been clipping along at a solid pace this month. We have now graded 2,812 coins -- only 376 submitted by DLRC.
The buzz around "town" has been really good for our graded coins and dealers, as well as collectors, have been buying DGS coins because they are confident that our coins are conservatively graded. It's really that simple. If we grade the coins correctly, people will buy them. And that's our secret formula.
Also, today we officially broke the $100,000 mark for sales of DGS coins! Between DLRC and DLRC Auctions, we have sold 224 DGS-graded coins for a total of $103,338. That's an average sales price of $461! Clearly, we are not grading bulk submissions of modern coins, but you can take a look at our visual population report and see that.
Speaking of innovative ideas, we certified our first Hobo Nickels this week. To my knowledge, no grading service has ever done this, but a very good client asked if we could put these in holders without grades. It's impossible to grade these coins, since they are technically damaged, but Hobo nickels are a work of art and we were happy to accommodate his request.
If you have any questions or comments about our services, please direct them to me for a personal response. Thanks!
Thursday, August 21, 2008
Monday, August 18, 2008
In Memory of Jack Lee...
I write tonight's blog with a very heavy heart. I was traveling out of the country over the weekend when I heard that my dear friend, Jack Lee, had passed away. Jack has been well known in numismatic circles these past two decades, primarily for the famous Silver dollar collections he assembled. Their quality was been unmatched because Jack had the rare combination of a critical eye, patience, and financial means to build the greatest Morgan dollar collection.
However, I didn't even know Jack when he build and sold those sets. I met him around 2000 when I started to share table space with him at the U.S. Coins (Kenny Duncan & co.) at Long Beach shows, where I would sit adjacent to Jack and his wife, Mary Catherine. The two of them (already in their 60's at the time) were tremendous fun and always teased me, show after show, for some reason or another. Jack was forever giving me grief if I showed up 5 minutes late for the show in the morning, bought an extra Coke, or didn't shave. I remember that he and Mary Catherine always brought their own coffee pot to the shows so a home-brew was never far from hand. Later, Jack and I did numerous deals together. Our biggest deal was a partnership on an 1870-S Seated dollar. He bought the coin in our Richmond Auction for $360,000 in 2005. I told him a few months later that I thought he had purchased the "rip of the auction." Jack simply replied (in his trademark Mississippi drawl), "If you really feel that way, you can half of it for $230,000." In other words, put your money where your mouth is... Well, I did. We marketed the coin for about 6 months and eventually sold it for $550,000 -- this was back in Feb. 2006. Since then the coin has realized near $1 Million. I knew that coin was a steal! Anyway, Jack was cool as a cucumber the entire time and a real gentleman. As a retired successful banker, a few extra zeros never made him nervous.
Jack and I went on to do many, many other deals together and he taught me many things about professionalism in the coin trade. Just two weeks ago we did well over $100,000 in business at the ANA show. I felt he was slowing down, but I truly didn't see this coming. It's quite a loss for me.
Jack, you are sorely missed by all who knew you. And you will always be remembered.
I don't have a picture of Jack, so I have copied this one of Michael Casper and Jack (right) which I found on the pcgs.com site. Michael, I hope you don't mind.
However, I didn't even know Jack when he build and sold those sets. I met him around 2000 when I started to share table space with him at the U.S. Coins (Kenny Duncan & co.) at Long Beach shows, where I would sit adjacent to Jack and his wife, Mary Catherine. The two of them (already in their 60's at the time) were tremendous fun and always teased me, show after show, for some reason or another. Jack was forever giving me grief if I showed up 5 minutes late for the show in the morning, bought an extra Coke, or didn't shave. I remember that he and Mary Catherine always brought their own coffee pot to the shows so a home-brew was never far from hand. Later, Jack and I did numerous deals together. Our biggest deal was a partnership on an 1870-S Seated dollar. He bought the coin in our Richmond Auction for $360,000 in 2005. I told him a few months later that I thought he had purchased the "rip of the auction." Jack simply replied (in his trademark Mississippi drawl), "If you really feel that way, you can half of it for $230,000." In other words, put your money where your mouth is... Well, I did. We marketed the coin for about 6 months and eventually sold it for $550,000 -- this was back in Feb. 2006. Since then the coin has realized near $1 Million. I knew that coin was a steal! Anyway, Jack was cool as a cucumber the entire time and a real gentleman. As a retired successful banker, a few extra zeros never made him nervous.
Jack and I went on to do many, many other deals together and he taught me many things about professionalism in the coin trade. Just two weeks ago we did well over $100,000 in business at the ANA show. I felt he was slowing down, but I truly didn't see this coming. It's quite a loss for me.
Jack, you are sorely missed by all who knew you. And you will always be remembered.
I don't have a picture of Jack, so I have copied this one of Michael Casper and Jack (right) which I found on the pcgs.com site. Michael, I hope you don't mind.
Monday, August 11, 2008
Third Party Grading, Visited
I was asked a very interesting and challenging question today by Steve T., a collector of certified U.S. coins and customer of ours for just over 2 years. First, Steve was disappointed because he had cracked an NGC MS61 gold piece out of its holder and submitted it PCGS -- and it graded AU58. We had originally sold him the coin and he wanted to know if we would allow him to return it. In other words, "would we guarantee the grade of the coin?" I responded that it simply is not possible for DLRC to guanantee the grades of certifed coins we sell once they are cracked out of the holder, for two reasons. First, we cannot be certain that a coin hasn't met with outside forces which may adversely affect it's current condition; but more to Steve's question... the fact is most coins will NOT grade the same if cracked out and resubmitted. Shocking, perhaps but definitely true. And we could be talking about PCGS to PCGS; NGC to NGC; DGS to DGS; or any cross submissions as well. Assigning a grade to a coin is very difficult and subjective in so many ways.
Many submitters expect a certain grade when submitting coins and when a coin doesn't reach that grade expectation, the coin is cracked out and submitted again. Someone may submit the same coin 4-5 times before the desired grade is awarded. (Not all coins are submitted in this fashion, but there is a cottage industry of "crack out" artists that mkae their living this way.) By this measure, economic theory dictates that the coins remaining in holders tend to be the coins that recevied the highest awarded grade after x-number of submissions; and the mature marketplace will ultimately be weighted in favor of coins that have been "maxed" out. As a buyer, if you then crack out a coin you run the distict possibility that you are regrading a coin that took x-tries to achieve its high grade.
All this being said, Steve was then concerned about the future of grading services in light of this grading variability. I know this can sound disconcerting, but it really shouldn't be. The certified coin market is a great hooby which has achieved a cross-over to investment-grade status for many people. It's a real marketplace in which hundreds (if not thousands) of dealers make individual (and independent!) spreads on coins and values are amazingly dependable year over year. Try buying a five-fiugre paiting and offering it blind to 10 national art dealers. You will find the margin of offers (if any at all) to be much larger and seemingly random. As coin dealers, we buy and sell over $2 million in coins every month. Without the solid repuations of PCGS and NGC, this would not be possible -- not even close.
A word on CAC: Collectors' Acceptance Corp has emerged as a "grader of the grading services". We are fielding a lot of questions about whether this is good for the industry and whether or not collectors should insist on CAC-stickered coins. First, I'll say that CAC'd coins sell faster than non-CAC coins. Becuase CAC has only been in operation a short time it's impossible to know the long-term impact, however, I can say that it will NEVER be a negative. CAC is quickly becoming known as a conservative arbiter of quality standards, and a CAC'd coin should give its buyer an added sense of security that it's grade is accurate. That said, I don't think that a non-CAC'd coin is a negative. Nor do the folks at CAC want you to think so. They've either not seen the coin or decided that it didn't make their standard for the grade. But just as some people like chocolate, and others vanilla, CAC will not always agree with us at DLRC (and our five-star coins, for example). Just use the service as another opinon. We also REALLY like the fact that CAC is putting money behind their stickers. They are making a two-way market in CAC stickered coins and their buy offers are STRONG. Stronger than retail in many cases. That's a great thing for the market. And we wish them much success.
A word on DGS: Dominion Grading Service, as many of my readers know is the new grading service that we started our own grading service. Not so much to compete with NGC and PCGS, but to supplement them. We are really enjoying the process of grading coins for our customers and it's really giving us a greater relationship with our customers AND the coins we grade. I started in the coin business as a child helping my father at coins shows when there was nosuch thing as third-party grading. EVERY coin dealer graded his own coins and reputations were won and lost based on the dealer's integrity from grade through pricing fairness. I see DGS as a way for us to get back to those roots -- especially on circulated collector-grade coins. And just like CAC, our business model is dependent on supporting this market. We WANT to buy DGS graded coins, becuase we know they are graded conservatively. Collectors have responded by buying our product from day 1, and support grows every day.
This 1807 half dollar is an ideal example. It graded DGS VF35 Lightly Cleaned and consigned by a client -- reserve at $421. It just closed in tonight's auction for $570 (+ 15% buyers premium) with bids from 4 different bidders.
That's all for now... back to Michael Phelps' gold-quest. Please respond with any questions.
Sincerely,
John
Many submitters expect a certain grade when submitting coins and when a coin doesn't reach that grade expectation, the coin is cracked out and submitted again. Someone may submit the same coin 4-5 times before the desired grade is awarded. (Not all coins are submitted in this fashion, but there is a cottage industry of "crack out" artists that mkae their living this way.) By this measure, economic theory dictates that the coins remaining in holders tend to be the coins that recevied the highest awarded grade after x-number of submissions; and the mature marketplace will ultimately be weighted in favor of coins that have been "maxed" out. As a buyer, if you then crack out a coin you run the distict possibility that you are regrading a coin that took x-tries to achieve its high grade.
All this being said, Steve was then concerned about the future of grading services in light of this grading variability. I know this can sound disconcerting, but it really shouldn't be. The certified coin market is a great hooby which has achieved a cross-over to investment-grade status for many people. It's a real marketplace in which hundreds (if not thousands) of dealers make individual (and independent!) spreads on coins and values are amazingly dependable year over year. Try buying a five-fiugre paiting and offering it blind to 10 national art dealers. You will find the margin of offers (if any at all) to be much larger and seemingly random. As coin dealers, we buy and sell over $2 million in coins every month. Without the solid repuations of PCGS and NGC, this would not be possible -- not even close.
A word on CAC: Collectors' Acceptance Corp has emerged as a "grader of the grading services". We are fielding a lot of questions about whether this is good for the industry and whether or not collectors should insist on CAC-stickered coins. First, I'll say that CAC'd coins sell faster than non-CAC coins. Becuase CAC has only been in operation a short time it's impossible to know the long-term impact, however, I can say that it will NEVER be a negative. CAC is quickly becoming known as a conservative arbiter of quality standards, and a CAC'd coin should give its buyer an added sense of security that it's grade is accurate. That said, I don't think that a non-CAC'd coin is a negative. Nor do the folks at CAC want you to think so. They've either not seen the coin or decided that it didn't make their standard for the grade. But just as some people like chocolate, and others vanilla, CAC will not always agree with us at DLRC (and our five-star coins, for example). Just use the service as another opinon. We also REALLY like the fact that CAC is putting money behind their stickers. They are making a two-way market in CAC stickered coins and their buy offers are STRONG. Stronger than retail in many cases. That's a great thing for the market. And we wish them much success.
A word on DGS: Dominion Grading Service, as many of my readers know is the new grading service that we started our own grading service. Not so much to compete with NGC and PCGS, but to supplement them. We are really enjoying the process of grading coins for our customers and it's really giving us a greater relationship with our customers AND the coins we grade. I started in the coin business as a child helping my father at coins shows when there was nosuch thing as third-party grading. EVERY coin dealer graded his own coins and reputations were won and lost based on the dealer's integrity from grade through pricing fairness. I see DGS as a way for us to get back to those roots -- especially on circulated collector-grade coins. And just like CAC, our business model is dependent on supporting this market. We WANT to buy DGS graded coins, becuase we know they are graded conservatively. Collectors have responded by buying our product from day 1, and support grows every day.
This 1807 half dollar is an ideal example. It graded DGS VF35 Lightly Cleaned and consigned by a client -- reserve at $421. It just closed in tonight's auction for $570 (+ 15% buyers premium) with bids from 4 different bidders.
That's all for now... back to Michael Phelps' gold-quest. Please respond with any questions.
Sincerely,
John
Saturday, August 2, 2008
ANA Recap
First, my apologies...it's been over two weeks since I created a new posting but I've been in Baltimore (off and on) since July 25th. I was lucky enough to come home for two days over the weekend, but a a bunch of us that had eaten in Baltimore's Little Italy came down with a nasty food-poisoning bug, so the weekend was a wash-out. But you're not reading this blog to hear about that... so I'll move on.
The Pre-ANA...
As many people may or may not know there is always a "pre-ANA" show that precedes the big event. Usually held in a suburb of the host city, in this case we found ourselves in Towson, Maryland. The pre-show rarely attended by the public but it is a huge part of the commerce that we can expect at the main show, as well as guaging the mood of other dealers. About 30 national dealers attended the Towson show and we had modest expectations going in. We'd seen a lot of the same guys in Chicago a few weeks earlier, and the summer mood had been catious. Well, the pre-show was gang-busters from the opening bell. John Brush and I bought and sold a "pre-ANA show" record amount of coins in 2.5 days. I was able to get all the inventory home to process and this past week's DLRC Internet auction contains most of these new purchases. The most exciting purchases we made were: a beautiful 1921-S Walker NGC MS65 (on hold for a client now); 1795 $5 Small Eagle PCGS/CAC MS61 (almost sold twice at the ANA -- won't make it very long); Wass-Molitor $50 NGC VF25 (sold at ANA).
The Main Event
I rushed back to the main ANA on Tuesday morning for the opening of PNG Day and the momentum continued. We exhausted ourselves trying to keep up with the pace of business. Now, we mostly do wholesale at shows, and the ANA is no exception, but collector traffic was very good for the show. The trend of declining show attendance is still there and I think the ANA will report lower numbers than in previous years. But that's due largely to the fact that serious collectors are happy to stay home and acquire coins via the Internet. Why fly to a hot mid-Atlantic city in the middle of the Summer when you can point and click in your pajamas??? The Heritage sale was very strong, especially the Price Collection, which exceeded expectations. But our small, but very fresh Summer Harvest Sale also went crazy...and it closed during the Heritage auction! We realized over $250,000 against a pre-sale estimate of around $165,000! The coins were fresh and bidding was very aggressive.
DGS Update
DGS submissions are holding nicely at 1000 coins per month which is a sweet-spot for us. We're looking to add new graders and attributors for DGS so we can accomodate the greater number of submissions that are coming in. The market is slowly embracing our new company. Now that everyone realizes we are in this for the long term, and we're not trying to over-grade coins to get submission numbers up, collectors and dealers alike are snapping up DGS-graded coins because they are nicer than most other graded material on the market. We keep hearing that people are going to crack the coins out, but that's just fine with us. As long as buyers are happy with the coins they receive in DGS holders, they keep submitting and/or buying more. I think we've really struck a chord with our Visual Population Report as well. Folks love looking thorugh the coins we've graded. Later this summer we will add some nifty little features to the VPR like a "virtual collection" where you can create a collection of DGS coins that you don't even own.
Quick DGS Stats
Coins Graded as of July 31: 2,175
DLRC-owned coins graded as of July 31: 304
----
# DGS Coins Sold by DLRC/DLRC Auctions as of July 31: 153
Sales Price of DGS graded coins sold by DLRC as of July 31: $78,804
Average sales price of a sold DGS coin by DLRC: $515.05
Interesting Message Board
While I've not been a big contributor to any message boards (due to time constaints), I have enjoyed reading and posting on CoinTalk. The tone of the boards is congenial and professional. There has been a very interesting analysis of DGS on there of late which I've contributed to. CoinTalk thread.
Well, that's it for today. It's been a loooooong 10-days of non-stop numismatics with a nice bout of illness thrown in for good measure. I'll be happily back at my desk this week to build on some great ideas I've had for our web sites and auction platform. Have a great week!
John
The Pre-ANA...
As many people may or may not know there is always a "pre-ANA" show that precedes the big event. Usually held in a suburb of the host city, in this case we found ourselves in Towson, Maryland. The pre-show rarely attended by the public but it is a huge part of the commerce that we can expect at the main show, as well as guaging the mood of other dealers. About 30 national dealers attended the Towson show and we had modest expectations going in. We'd seen a lot of the same guys in Chicago a few weeks earlier, and the summer mood had been catious. Well, the pre-show was gang-busters from the opening bell. John Brush and I bought and sold a "pre-ANA show" record amount of coins in 2.5 days. I was able to get all the inventory home to process and this past week's DLRC Internet auction contains most of these new purchases. The most exciting purchases we made were: a beautiful 1921-S Walker NGC MS65 (on hold for a client now); 1795 $5 Small Eagle PCGS/CAC MS61 (almost sold twice at the ANA -- won't make it very long); Wass-Molitor $50 NGC VF25 (sold at ANA).
The Main Event
I rushed back to the main ANA on Tuesday morning for the opening of PNG Day and the momentum continued. We exhausted ourselves trying to keep up with the pace of business. Now, we mostly do wholesale at shows, and the ANA is no exception, but collector traffic was very good for the show. The trend of declining show attendance is still there and I think the ANA will report lower numbers than in previous years. But that's due largely to the fact that serious collectors are happy to stay home and acquire coins via the Internet. Why fly to a hot mid-Atlantic city in the middle of the Summer when you can point and click in your pajamas??? The Heritage sale was very strong, especially the Price Collection, which exceeded expectations. But our small, but very fresh Summer Harvest Sale also went crazy...and it closed during the Heritage auction! We realized over $250,000 against a pre-sale estimate of around $165,000! The coins were fresh and bidding was very aggressive.
DGS Update
DGS submissions are holding nicely at 1000 coins per month which is a sweet-spot for us. We're looking to add new graders and attributors for DGS so we can accomodate the greater number of submissions that are coming in. The market is slowly embracing our new company. Now that everyone realizes we are in this for the long term, and we're not trying to over-grade coins to get submission numbers up, collectors and dealers alike are snapping up DGS-graded coins because they are nicer than most other graded material on the market. We keep hearing that people are going to crack the coins out, but that's just fine with us. As long as buyers are happy with the coins they receive in DGS holders, they keep submitting and/or buying more. I think we've really struck a chord with our Visual Population Report as well. Folks love looking thorugh the coins we've graded. Later this summer we will add some nifty little features to the VPR like a "virtual collection" where you can create a collection of DGS coins that you don't even own.
Quick DGS Stats
Coins Graded as of July 31: 2,175
DLRC-owned coins graded as of July 31: 304
----
# DGS Coins Sold by DLRC/DLRC Auctions as of July 31: 153
Sales Price of DGS graded coins sold by DLRC as of July 31: $78,804
Average sales price of a sold DGS coin by DLRC: $515.05
Interesting Message Board
While I've not been a big contributor to any message boards (due to time constaints), I have enjoyed reading and posting on CoinTalk. The tone of the boards is congenial and professional. There has been a very interesting analysis of DGS on there of late which I've contributed to. CoinTalk thread.
Well, that's it for today. It's been a loooooong 10-days of non-stop numismatics with a nice bout of illness thrown in for good measure. I'll be happily back at my desk this week to build on some great ideas I've had for our web sites and auction platform. Have a great week!
John
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