AN INTRODUCTION TO

THE ART OF COIN GRADING

Contrary to popular belief, not all coins are created equally. Ideally, when a coin is created, the coin blank should be struck evenly, and with sufficient force, to bring about the full details and relief of a coin's design; however, this is seldom achieved in total.

Furthermore, once a coin has left the Mint, it will often begin service in daily commerce, accumulating all sorts of wear and tear. Eventually, a coin used in commerce might accrue such wear that it is no longer recognizable as to it's type or denomination. At that point, a coin has reached Basal state- meaning that it's value comes only from its Melt value.

All other factors being equal, coins that have been well-struck, or have accumulated little to no wear and tear, are almost always more desirable than those that have been poorly-struck, and/or accumulated an excessive amount of wear and tear.

THE SHELDON SCALE:

The Sheldon Scale is a standardized coin grading system, based on a 70 point scale developed by Dr. William Sheldon. This scale is a universally-recognized method for quantifying the appearance and condition of any Coin.

Any coin which is graded a 60 or higher on the Sheldon Scale is said to be in Mint or Uncirculated State, while a coin which scores a 70 is said to possess an absolutely perfect strike, with no flaws visible upon 10x magnification.

In addition to the numerical score, the Sheldon Scale also provides for a two-letter prefix. Three common Grade Prefixes are AU (Almost Uncirculated), MS (Mint State), and PR (Proof). An Uncirculated coin might be graded anywhere between MS60 and MS70, for instance, while the highest quality of Coin possible (a 'Perfect Proof') would be graded as PR70.

When purchasing graded coins, it is highly advisable to do so only if the score of the coin has been certified and registered by a well-established coin grading service, such as NGC or PCGS.

Compared with the NGC, PCGS grading standards are generally recognized to be more conservative, particularly with modern coins. In addition, the Coin Holders used by PCGS are preferred by many collectors, as they are lighter in weight, and allow a better view of the coin. For these reasons, PCGS Graded coins will often realize higher prices at auction.

A Few Final Remarks...

While we cannot recommend strongly enough investment in PCGS graded coins, there are some coin collectors who do not like graded and slabbed coins in general, partly because the coin holders prevent direct contact with the coin itself. Furthermore, Macro Photography specialists often complain that it is more difficult to take photographs of coins which have been placed in holders.

Most importantly, however, there exists a popular 'rule' in Numismatics:

"Buy the Coin, not the Grade."

What this saying means is that no two coins, even with the same grade from the same grading service, are ever completely identical. Therefore, it is highly advisable to never purchase a coin sight unseen, based solely on the Grade it has been awarded. Moreover, when hunting for rare coins, it is not uncommon to find a lower-grade coin, which actually looks better to the naked eye- this is called 'Eye Appeal'.

The Coin you choose to buy is ultimately your decision, of course, but investors would be wise to base their buying decisions on Eye Appeal first, and Grade second; and therefore, so should you, if you seek both maximum liquidity and value for your coin collection.

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