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HistoryStudent | 02-09-2010 02:41 PM
RIVERBOAT Gamblers & Crack-Out Artists ONLY! Don't read this unless you have the real thing... ************************************************** * GET CRACKING ON 'CRACK-OUTS' BY SCOTT A. TRAVERS COPYRIGHT � 2006, 2007 BY SCOTT A. TRAVERS ALL RIGHTS RESERVED. Safecracking can be highly lucrative for skilled professional burglars. A different kind of "cracking" can be equally as profitable for knowledgeable professional numismatists who understand the finer points of grading rare coins - and unlike the kind involving safes, this one is perfectly legal. "Crack-out" is a term of art that refers to getting certified coins upgraded by either removing them from their plastic grading-service holders and resubmitting them as uncertified or sending them in while still in their holders under a variety of grading service tiers in anticipation of upgrades. The "crack-out game" was spawned by the Grading Revolution of the late 1980s, when encapsulation - or "slabbing" - of rare coins first became a force for dealers and collectors to reckon with. We soon discovered that by removing certain coins from their grading-service holders and resubmitting them to the same service or a competitor, we could get them recertified at a higher grade level, increasing their resale value by hundreds, even thousands of dollars. There were - and are - risks, of course, to removing a coin from its holder. It could get a lower grade the second time around, resulting in serious loss instead of gain. Or, horror of horrors, it could get body-bagged and permanently "no graded" as a result of doctoring the grading service did not notice the first time around-and that we didn't recognize before cracking the coin out for resubmission. But those of us who have mastered the game play it extremely well, and our miscalculations are more than compensated for by upgrades. The most obvious type of crack-out - and the one that gave the crack-out game its name - is to pry open a grading-service holder, remove the coin inside and resubmit it as a "raw" coin, as if it had never been graded in the first place. My personal experience suggests that this is the best way to maximize many potential upgrades. It isn't without significant risks, and it also isn't the only way to play this game. CROSSOVERS AND REGRADES AT NGC AND PCGS Another approach is to leave a certified coin in its holder and take advantage of one of the "crossover" or "regrade" programs offered by the major grading services. The Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation of America (NGC) both provide such programs. NGC and PCGS offer a "crossover" service that lets you send either entity an encapsulated coin graded by another grading service. (Other grading companies offer this as well.) NGC writes: "Coins will be removed from their holder[s] only if they can be graded at the same or higher than your specified minimum grade[s]. You may not request a higher minimum grade than is on the current holder." According to PCGS: "We will grade the [coin] and put [it] in a PCGS holder only if the PCGS grade meets or exceeds the other grading company's grade (unless specifically instructed differently by you). You cannot specify a higher minimum grade. If the PCGS grade is lower than the other grading company's grade, we will return the coin to you in the original holder. You will be charged the full grading fee even if your coin does not cross." NGC and PCGS also offer a "regrade" service for coins graded by each respective entity that you would like to have regraded at a higher grade, but not risk having downgraded: You may submit NGC coins in their holders to NGC and PCGS coins in their holders to PCGS. I have heard favorable comments about the crossover and regrade programs. Submitters using these programs report success in getting coins upgraded. It's essential to choose coins that are candidates for upgrades - meaning either undergraded or premium-quality coins within the original grade level. A coin that ranks near the top of the spectrum for Mint State-64 might well come back as MS-65. Certain series have idiosyncracies that make them hard to grade. The Indian Head Half Eagle and Quarter Eagle fall under this heading because their incuse (or recessed) designs require an entirely different approach to grading from normal raised designs. Those of us with expertise on grading these two series have a good chance to reap a windfall by taking advantage of inconsistencies by the grading services. After all, these coins pose a major challenge for their graders, too. Despite the satisfaction some have expressed with crossovers and regrades, both of these programs provide less potential for achieving an upgrade - especially a significant one - than removing a coin from its holder and resubmitting it "raw." They also entail virtually no risk, and the only downside is the grading fee - typically $100 when done on a walk-through basis at a coin show - and this would be recouped many times over if even one of the "right" coins were upgraded. In theory, the graders at PCGS and NGC are supposed to disregard the number on a holder - even make an effort not to look at it at all. However, because they can't see a coin completely through the plastic in the holder, people tend to be gunshy about raising the grade too much - maxing it out, so to speak. Either they're just not confident about missing a hard-to-see flaw, perhaps on the rim, or they prefer to play it safe and err on the conservative side. Either way, the temptation is great to sneak a peek at the coin's original grade. Dealer Steve Contursi says he is "confidently certain" that grading services sneak a peek at the original grades of coins submitted in slabs. Contursi certainly must believe that because he recently returned to PCGS 13,535 of its inserts, representing hundreds of millions of dollars' worth of high-end coins he cracked out of slabs since 1986. Among the inserts from PCGS coins that Contursi returned were: 42 certified 1879 and 1880 $4 "Stella" pattern Gold pieces with a combined estimated value of over $5 million; 130 Round and Octagonal 1915-S Panama-Pacific International Exposition $50 Gold Commemoratives valued at over $5 million; and 168 High Relief 1907 Saint-Gaudens Double Eagles valued at over $3 million. The returned inserts were part of a philanthropic promotion for the American Numismatic Association, and PCGS used the opportunity to improve the accuracy of its population reports in the process. CRACKING COINS OUT OF SLABS Most of the coins I know of that received substantial upgrades were physically cracked out of their holders before resubmission. In some cases, the same coins have been resubmitted both ways - in and out of their holders - and did much better as crack-outs than as crossovers and regrades. In one case, one of my clients had a truly magnificent 1881-S Morgan Dollar - a coin with beautiful toning - that had been graded MS-64 by NGC in 1987, when grading standards were very strict. The client didn't want to crack it out and resubmitted it for an upgrade in the holder. It was upgraded to MS65.�Subsequently, I cracked it out of the "65" holder and resubmitted it again as a raw coin - and sure enough, it was then upgraded again to MS67.�This helps explain why I favor playing the crack-out game the traditional way - by cracking the plastic. Several years ago, I learned informally of a passive form of crack-out that also resulted in an upgrade. I had sent a group of coins to PCGS for reholdering because their "slabs" were damaged or scratched, and one of these coins, in a cracked holder, caught the eye of a grader who felt it was undergraded. Even though I never submitted that coin to be upgraded, it came back in a higher-grade holder. The crack-out game has gotten tougher and it would be a serious mistake to think that you can get a coin upgraded with little or no trouble and make yourself a quick return of several thousand dollars. For one thing, coin "doctoring" is much more prevalent today, so doctored coins - those artificially enhanced to look better than they really are - turn up in coin holders more frequently than in the early days of certified grading. Then, when such coins are removed from their holders and examined more closely, the coins may be not only downgraded but no-graded. The greatest downside of cracking out a coin today is that you might never be able to get it back into a holder. In the days before doctoring became so widespread, there was really only a one- or two-point downgrade risk. Today you may crack a coin out of a holder in hopes of getting it upgraded and end up never being able to get it graded again at all. Jim Halperin is one of the most successful dealers in the nation at getting coins upgraded. He and Steve Ivy, his fellow co-chairman of the board at Heritage, together own 24.254% of non-voting NGC stock. (That number is current as of February 15, 2005.) This chart lists samples of Halperin's favorite upgrade coins. Halperin says in cracking out a coin, he considers the downside as well as the upside. Upgrade Winners Downgrade Target Buy Target Upgrade Coin Service Grade/Bid Grade/Bid Grade/Bid 1923-S $1 NGC/PCGS MS-63 $55 MS-64 $255 MS-65 $4,500 1924-S $1 NGC/PCGS MS-63 $450 MS-64 $1,250 MS-65 $7,200 1928-S $1 NGC/PCGS MS-63 $455 MS-64 $1,190 MS-65 $14,250 1883-S $20 NGC/PCGS MS-60 $645 MS-62 $1,500 MS-63 $9,500 88 CRACK-OUTS Maurice Rosen, publisher of the Rosen Numismatic Advisory, agrees that the greatest upgrades come from actually cracking coins out of their holders - especially NGC and PCGS holders from the late 1980s, when standards were tight, resulting in many coins that were seriously undergraded by comparison to most coins graded later. This spring, Rosen submitted a group of 88 common-date Saint-Gaudens Double Eagles to PCGS for regrading, and achieved remarkable success. More than half the coins were in PCGS holders, while the rest had been graded by NGC. All were cracked out of holders for certified coins graded in the late 1980s, so they not only were graded strictly but also weren't subject to the same doctoring risk as coins that were graded more recently. The coins, dated 1924 through 1928, received upgrades averaging 1.52 points. Here's a brief summary: Two MS-61 coins ($635) made MS-64 ($855) total increase in Bid: +$440 Two MS-62 coins ($685) made MS-63 ($740) +$110 Fourteen MS-62 coins ($685) made MS-64 ($855) +$2,380 Two MS-62 coins ($685) made MS-65 ($1,230) +$1,090 Two MS-63 coins ($740) remained MS-63 ($740) unchanged Thirty-six MS-63 coins ($740) made MS-64 ($855) +$4,140 Twenty-six MS-63 coins ($740) made MS-65 ($1,230) +$12,740 Four MS-64 coins ($855) made MS-65 ($1,230) +$1,500 Nothing was downgraded +$22,400 HOW TO CRACK-OUT COINS FROM SLABS When cracking a coin out of its grading-service holder, always use caution, and wear goggles to protect your eyes. Crack-out practitioners are careful to also protect their fingers. Remember, too, that you can always crack a coin out, but you cannot put it back into a holder once it has been cracked. So be absolutely certain in advance of cracking any coin out of its holder that this is what you want to do. A heartbreaking mistake can result from cracking an older holder, when you assume the coin is undergraded, only to find that the services will no longer grade that coin because it was doctored in a manner that is recognizable today, but wasn't back then. So you will have not only lost the advantage of the old holder premium, but you will have a coin that is now ungradable. An NGC holder comes apart after a solid hit by a flat hammer on each edge. After no more than two twists, the holder should easily separate. PCGS holders can be opened by using sheet metal nippers-a pliers-type tool with the cutting edge perpendicular to the handle. Cut the holder on the edge across from the coin, and the holder breaks in two. The insert ring with the coin will then slide out. For removing coins from any type of slab, a bandsaw can be used. The coin is left sandwiched in the holder so you don't have to handle it. Persons who use this method make a few straight cuts away from the coin. This leaves small squares of plastic on each side of the coin which lift off. The crack-out game is no sure thing, and playing it requires a high degree of skill, savvy and guts. But while winning may be harder than it used to be, the fruits of victory can be very sweet indeed. Remember, there's more than one way to skin a cat or crack a coin! SCOTT TRAVERS RARE COIN GALLERIES, LLC P.O. Box 1711, F.D.R. Station, New York, NY 10150-1711 so get CRACKIN'

HistoryStudent | 02-09-2010 05:35 PM
Re: RIVERBOAT Gamblers & Crack-Out Artists ONLY! I hired this guy to assist in CRACKIN' out my coins. He puts them on rock and his buddy act as sorta a SHOCK ASSORBER so my coins don't get HAMMERED! We have a party first then on the bottom second up is the HOW DO example... http://images.google.com/imgres?imgu...a%3DN%26um%3D1 :36_1_25:

Irons | 02-09-2010 06:32 PM
Re: RIVERBOAT Gamblers & Crack-Out Artists ONLY! With all due respect to collectors, I will not buy a coin sealed and graded. If I cannot take it out and weigh it or check it with calipers, as far as I'm concerned it was put in there in china.:signs14:

HistoryStudent | 02-09-2010 07:59 PM
Re: RIVERBOAT Gamblers & Crack-Out Artists ONLY! :36_1_37::36_1_11::captain: I got YAR NUMBAR Irons, me boy, and we's understands YAR viewpoint. However, some of us want to sell our coins someday and the :sheep::marchmell:sheep::marchmell:sheep::marchmel l:sheep::marchmell:sheep::marchmell:sheep::marchme ll (times 10 millions) will pay more whence they's in that LITTLE slabby dealie with a way to check the number on-line. And since they'll pay more than ten times today's price - that's a pretty good dealie...:bull-smile:

Irons | 02-10-2010 09:08 AM
Re: RIVERBOAT Gamblers & Crack-Out Artists ONLY! Quote:
Originally Posted by HistoryStudent (Post 2171619) :36_1_37::36_1_11::captain: I got YAR NUMBAR Irons, me boy, and we's understands YAR viewpoint. However, some of us want to sell our coins someday and the :sheep::marchmell:sheep::marchmell:sheep::marchmel l:sheep::marchmell:sheep::marchmell:sheep::marchme ll (times 10 millions) will pay more whence they's in that LITTLE slabby dealie with a way to check the number on-line. And since they'll pay more than ten times today's price - that's a pretty good dealie...:bull-smile:
I hear you Chief, I know a couple of numi folks who look down thier noses at me, the common bullion stacker. I just can't make myself pay more for the same flippin' material!:hissyfit_m:

HistoryStudent | 02-10-2010 10:25 AM
Re: RIVERBOAT Gamblers & Crack-Out Artists ONLY! The word comes from Latin fungibilis from fungi, meaning "to perform". [edit] Fungibility versus liquidity Fungibility is different from liquidity. A good is liquid if it can be easily exchanged for money or another different good. A good is fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place. Examples: Cash is fungible: one US$10 bank note is interchangeable with another. Crude oil is fungible: a barrel of West Texas Intermediate crude oil is fungible (direct exchange) with another barrel of the same type and grade of crude oil. Different issues of a government bond (maybe issued at different times) are fungible with one another if they carry precisely the same rights and any of them is equally acceptable in settlement of a trade. Fungibility does not imply liquidity, and liquidity does not imply fungibility. Diamonds can be readily bought and sold (the trade is liquid) but individual diamonds, being unique, are not interchangeable (diamonds are not fungible). Indian rupee bank notes are mutually interchangeable in London (they are fungible there) but they are not easily traded there (they cannot be spent in London). In contrast to diamonds, gold coins of the same grade and weight are fungible, as well as liquid. The above is why I like different type of P.M. baskets. Having just bullion is like having just SLV and/or GLD - as the founders were banksters and we all know we can trust them to have the reserves they are supposed to have, right? I could write a song - "Fungibility BLUES" What happened to my gold at Fort Knox What happened to my gold in New York Fed What happened to my gold in GLD I was right but got screwed - Why can't I trade my bullion I was right but got screwed - I'm so BLUE and in DEPRESSION I could die....:signs14:

HistoryStudent | 02-10-2010 04:54 PM
Re: RIVERBOAT Gamblers & Crack-Out Artists ONLY! Quote:
Originally Posted by Irons (Post 2172357) I hear you Chief, I know a couple of numi folks who look down thier noses at me, the common bullion stacker. I just can't make myself pay more for the same flippin' material!:hissyfit_m:
Not the noses - not mine anyway - just wish the folks could have a bigger picture and a different set of baskets - in addition TOO! Never know what will be shall we politely say, available by custom, WTPSHTPF :fan: I rather be on the cruise ship than the TAXI in Escape from NEW YORK with DUKE "O" chasing me... :signs14: :504:

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