More than ever, it is extremely important for coin collectors to learn how to grade AND to become knowledgeable in the field(s) in which they collect. Now this is easy for me to say. I’m a full-time coin dealer and have been since 1982. 25+ years of daily dealing has helped me learn how to grade pretty well and has made me very knowledgeable in a number of areas. But how does a collector with a full-time job, a family and real world responsibilities become a capable numismatist?
Learning how to grade and how to tell the difference between nice coins and not-so-nice coins is an important facet of enjoying the hobby. Because of the existence of PCGS and NGC, the newer generations of collectors have had a “crutch” to use when it comes to grading and, I believe, some collectors have taken shortcuts when it comes to proficiency this area. PCGS and NGC provide a great safety net as far as grading goes but there is clearly no substitute for personal expertise.
So how does a new collector learn how to grade? I think the first thing that is important to realize is that grading is a step-by-step process and that the first forays a collector takes need to be baby steps. In other words, a new collector is not going to be able to tell the difference between a PR67 and PR68 Barber quarter right away. It is far more likely that he will understand the difference between a PR64 and a PR65 than a PR67 and a PR68 as the differences on lower grade coins are more quantifiable (a PR64 coin has hairlines or marks that are easy to see while a PR67 might only have a single hairline that is very well-hidden).
I have a few suggestions for beginning collectors in regards to learning how to grade. The first is to immediately choose an area to specialize in. It is far easier to learn how to grade a single series (such as Barber quarters or New Orleans double eagles) than it is to try and learn all U.S. coins at once. The second suggestion I have is to try and find a mentor. When I was a young collector, I was fortunate to find two older, more experienced dealers who were incredibly helpful in teaching me how to grade the series I was collecting. Another suggestion is to look at as many coins as you possibly can—in person. You WILL NOT be able to learn how to grade from viewing images. I’ve got a few suggestions that relate to this which I will discuss below. A final suggestion is to begin collecting an area in which grade does not matter all that much. In other words, I don’t think a complete neophyte has any business trying to buy PR65 and finer Proof gold as he is beginning to learn how to grade. He would do much better choosing an area where the learning curve is easier—and far less costly - and then graduating to more difficult areas as he becomes more confident in his ability.
As I mentioned above, I have a few specific suggestions to make as far as improving your grading skills. The first, as I said before, is to look at as many coins as possible. I can’t think of a better place to do this than a major coin show and the two shows that come to mind are FUN and Summer ANA. If I were a collector I would make it a point of attending both shows and spending at least one full day at each looking at the coins in the auctions. Let’s say you collect Liberty Head double eagles. In the FUN or ANA sales you are likely to have the chance to view hundreds and hundreds of coins in a huge variety of grades. You can make the viewing process more of a challenge by covering the grades on each slab and testing yourself as if the coins were ungraded.
If a specialized collection in your area comes up for sale, try extra hard to view the lots. If I were a collector of, say, Dahlonega gold coinage, I would want to look at the coins being sold in an important specialized collection.
I mentioned trying to find a mentor. Let me add that in the context we are discussing, I would amend this to finding a mentor who can grade (!) If you could look at a specialized collection of Dahlonega gold coins with a very knowledgeable mentor, imagine what an incredible learning experience this would be.
In my opinion, the concept of grading and connoisseurship are more related than most people realize. To better understand grading and the level of preservation of a coin, it is very important to understand what makes an object beautiful and what makes it aesthetically desirable. A good connoisseurship class, offered by a museum or an art school, could impart some real insights.
Every year, the ANA offers a beginning and an advanced grading class at their Summer Seminar. I think these are very helpful for the beginning collector, especially as they offer hands-on experience and a chance to work with some top professional graders. The only problem with these classes is that they tend to focus on more basic coins like Morgan dollars and Walking Liberty half dollars. If you collect Charlotte or Dahlonega gold these classes are not going to address these specific coins.
Getting involved with an online group such as the PCGS or NGC message boards has some benefit to the new collector but I really like the idea of a specialized group. I am aware of specialized groups that post images and threads about Seated coinage, Bust coinage and Colonials and this seems to me to be a great place to learn about grading.
Two final thoughts. As a collector learns how to grade, I think it is more important to learn how to tell the difference between something that is choice and original (versus cleaned and/or processed) versus whether a coin is a 64 or a 65. The best way to learn about originality is to, obviously, look at fresh, original coins. These aren’t easy to find any more but truly fresh deals do pop-up at auction from time to time and they are invaluable “time capsules” for the specialist. Or, look at coins in museum collections. As an example, the gold coins in the ANA’s Harry Bass Museum collection are wonderfully fresh and time spent carefully looking at the surfaces and coloration of the pieces on display is invaluable.
I recently had a discussion with a good client who told me that the whole grading process was disheartening to him and that he had decided to sell his high-priced coins which had a good percentage of their value determined by their grade. He had decided to focus on less expensive coins in which one point on the grading scale wasn’t worth thousands (or tens of thousands) of dollars. I can see his point. If you find the whole grading process to be silly or too difficult to fathom, try and collect something like Tokens or Medals where the beauty and rarity of an object determines its rarity; not just its degree of preservation.