[Opinion] Statistics can't be used to determine future grades

Discussion in 'Modern Chinese Coins & Medallions' started by Anthony, Jan 13, 2012.

  1. Anthony

    Anthony New Member

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    I decided to write an article on what grading statistics (census data) does not show you.

    http://www.bulliondata.com/blog/sending-coins-for-grading-is-gambling/

    edit: Updated to now include the full post :)
     
  2. tamo42

    tamo42 New Member

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    Statistically, you are correct. But since it's all we have to go on, all you can really do is pick the best coins if you are doing the raw buying.

    Once the coin compendium is online with it's in-depth analysis capabilities, we will know more about how the graded population has changed over time, and what other factors might be at play.
     
  3. Anthony

    Anthony New Member

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    However, in addition:
    - Think about where and how we are buying.
    - Use the statistics to determine if a coin is worth submitting, based upon our expectations of the future grade and the existing grade rarity. Example: You have a coin that you believe will grade as an MS68. If 95% of the graded population is 69/70 then you wouldn't send it in. If 95% of the graded population is 66/67 you would.
     
  4. yennus

    yennus Well-Known Member Silver Stacker

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    Hi Anthony, that is a wonderful writeup! Reminds me of my days doing statistics! (*ugh* Pain...)

    You should post the full writeup here! :)

    Top stuff!
     
  5. Anthony

    Anthony New Member

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    I shall be doing so when I get home and will update the first post :)

    I just need to reformat it as the copy and paste ruined all the dot points!
     
  6. yennus

    yennus Well-Known Member Silver Stacker

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    A really really well thought out approach... :)

    100 bad bears will likely result in a 100 poor grades...

    But as Tamo42 also correctly writes: "...all you can really do is pick the best coins if you are doing the raw buying." - That describes my current position.
     
  7. Thor122

    Thor122 New Member

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    Or pick up two bad coins and 10 good coins for same year and send all together. Put first the two bad coins and saw what happen
    :)
     
  8. Anthony

    Anthony New Member

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    Updated the original post to now include the complete article :)
     
  9. Austacker

    Austacker Active Member

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    Firstly Thanks Anthony some good points and certainly some things of interest.

    Making a few assumptions, which is all we have at time. And using well proven statistic formulas (Yennus may be able to elaborate more) that is the old chestnut of the 80/20 rule. So we could say that 80% of the stock does indeed come from 20% of the dealers. In America that maybe significantly out with Panda America I believe being the dominant slabber in the US of Pandas ?

    Then if you look a the volumes, you could also argue that in most mintage there is no way that even 20% of the mint has been slabbed. So that leaves an awful lot of coins out there to be slabbed. Of course we have low mints, unproven mint numbers and so.

    I would be comfortable in using the numbers as a guide of future potential grades when selecting my coins, providing I purchase smartly (hopefully) and from reliable sources.

    It is good, to sometimes see the trees in the Forrest for a change.
     
  10. fishball

    fishball New Member Silver Stacker

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    Nice read. Also to add you have to account for the people who probably have stacks and stacks of OMP (read: Chinese in China) and haven't sent a single one to NGC/PCGS.

    They might be holding onto a lot of MS70s but they wouldn't know but of course this could also work the other way, they could be holding a sizable amount of MS67s which would skew the stats.

    Interesting to think about, but too much effort for my brain on a Friday night... haha.
     
  11. yennus

    yennus Well-Known Member Silver Stacker

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    Hahaahah... yeah, it's a lot to think about on a Friday night... but it has got me interested in doing more research on Pandas...

    My priority at the moment is working out how to get my Pandas back to Australia after conservation and grading.
     
  12. jc888888888

    jc888888888 New Member Silver Stacker

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    Wow .......that was alot to read.......... and worth reading, I agree with lots of the points made, especially the points
    worst case scenerio: only a small # of submitters , this is a spot on statement, if you look at the census of the 2012 dragon bullion 1 oz ER ,virtually all these coins where submitted by 1 dealer in the US
    or to my knoledge 2500 coins,they had 4000 coins and had there people move thru them and sent what they thought was the best 2500 my friend works for them result:ms 68 33, ms 69 1473, ms70 1195,so you say to yourself WOW jackpot, im sending my 20 coin roll in........ no way will you get that % of ms 70:)
    #2 point buy in sheets, raises your odds , I agree ,you have a group, in panda,s instance either 10 coins or 30 coins ,that no one could grade out the best coins........ increasing your odds dramatically of at least some great grades ,if someone has 100 coins, 10 sheets and try,s to pick out the best 2 sheets to keep GOOD LUCK!! there is no best 2 sheets ......sure there might be an outstanding coin in 1 sheet but odds are unless he is extremely experienced or some of the sheets have milk spots etc. it is pot luck because the likelehood of a good portion of all the percieved ms70:) being in 1 sheet is zero. until he cuts those sheets in little squares then he can pick out the best 20 percieved coins. and 30 coin trays raise your odds even more. its just that odds ,the more unpicked pool of coins you start with the better the result.
    BUT WHAT EVERYONE HAS TO REMEMBER; GRADING IS VERY SUBJECTIVE.................... too many times I have had a coin that came back less than i thought or alot higher than I thought, i recently graded 90 colorized dragons and i can show you an ms 68 coin that IMO is better than 5 of the ms 70 coins out of the same batch.
    And these graders make mistakes another variable , I am not a grader , i have sent into be graded at least 1500 coins over 10 plus years........ and i dont think i can pick an MS70 out of a crowd, what is helpful for me especially with panda,s is to get a couple of MS70 and maybe a couple of ms67 different years and compare them close together with a loupe against your raw coins, you start to be able spot the differences
    and of course the best way to buy a nice raw coin ,is to be in person and have a bunch of the same coin to pick from but with uncommon dates that is hard to come by these days,
    and of course the summary is spot on !!
    happy grading everyone! Anthony that was a great post!
     
  13. jc888888888

    jc888888888 New Member Silver Stacker

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    Yennus ,that GST that you guys pay seems to be the rub for the panda collectors in Australia who want to grade:eek:nly a suggestion here ,and this depends on your risk tolerence, but NGC only ships out USPS registered mail ,the reason? because it is the SAFEST way to mail a parcel, it is required that everyone that touches that package along the way signs for it, all postal employee,s etc ,NGC has a blanket insurance policy on shipments , and all coin dealers here use it for high value parcels becuase of safety,so if you have a comfort level, you send 50 coins, if the gst limit is 1000.00 ,value them at 18.00 each ,thats what will be on the invoice from NGC, as I said in an earlier post, the hope diamond was shipped by its owner for 3.00 no insurance registered this is a fact ,you will note when you get a package shipped registered ,it can only be sealed with paper tape, because when the post office takes the package they stamp all along the paper tape to insure that the package was not tampered with along the way...just some info for you guys.,,,,,,,,,,,,,,,the only downside risk is if by some ultra small chance it does get lost ,NGC will only pay the claim on your delared value.If it was me knowing what I know I would be comfortable............
     
  14. yennus

    yennus Well-Known Member Silver Stacker

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    Thanks jc888888888... I'm interested in trying this out :)

    Let's see how it goes :)
     
  15. hiho

    hiho Active Member Silver Stacker

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    I think we need a 'nerds' sub forum
     
  16. Pandacollector

    Pandacollector Active Member

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    Another consideration: some people submit the same coin over and over again until they get the grade they want. If a coin is borderline between two grades this strategy will very often work eventually. Then the Census may show 10 coins submitted when in reality there was only one. Whether this is fair, or not, it is a fact of life in the coin business. The result is a distorted, less reliable census.

    Best wishes,
    Peter Anthony
    www.pandacollector.com
     

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