PCGS The Standart for the Rare Coin Industry

"This investment boom is focused upon a very narrow segment of the coinage spectrum. Its watchword is quality. True enough, quality will always be a key criterion of value. But today's investors act as though they have finally latched onto the Great Truth that somehow eluded past benighted generations of numismatists. They forgot that fads within numismatics come and go. At one time, Washington medals were all the rage. The past few decades have seen markets in which cents, then Proof sets, then rolls, then dollars, each in turn were kings. Today Quality is king; tomorrow it may be something else.

"American numismatics itself may be viewed as something of a fad. And if there is no law that coin collecting must always be popular, there is certainly no law that the very highest grade coins must always be its holy grail.

"Further, a rule of reason must be applied. Value and quality must be reasonably proportionate. A coin that is greatly better than another should be worth greatly more; a coin only a teensy bit nicer should not. Yet in today's market, minute quality differentials make for huge price differentials.

"Some apparently consider this rational on the basis that a Mint State-65 may be several times rarer than an MS-64 and hence should be worth much more. And admittedly there is greater demand for the MS-65 too; this is what has pushed up the price, and demand is a valid factor. But consider: The extra grading point or two is being demanded not because the market values the added quality for quality's sake, but instead because it is betting that the future demand will be even greater still. And meantime, to the extent such grading increments can be differentiated at all - careful examination under magnification, perhaps under special lighting too, is required - and even then, experts cannot always agree (in fact, many people make their living out of this judgmental element).

"Collectors do desire quality and are willing to pay for it because a higher quality coin is prettier. But when prices reach four and five figures for otherwise non-rare coins based on minuscule quality increments not even apparent to the naked eye, it is unrealistic to imagine future collectors buying them out of love alone (and not investment).