By Doug Winter (republished with permission) www.raregoldcoins.com

Editors Note: The original article was published in 2000, so obviously the prices quotes are no longer accurate. However the concept and application of incremental grading is important especially in todays market.

Old time collectors often bemoan the fact that there are “too many grades.” In their opinion, there is no need for a ten point Mint State/Proof scale (i.e., Mint State-60 to Mint State-70 and Proof-60 to Proof-70) and even less of a need for multiple numerical levels in the circulated grades.

I strongly disagree with the theory that there are too many grades. In fact, I can let you in on a secret that would make many of these old collector’s eyes roll if they were aware of it. Expert graders, such as myself, actually use a whole series of “secret grades” (which I refer to as “incremental grades”) when examining coins.

Before I explain what incremental grades are, it is important to understand why they exist. Back in the “old days,” coins weren’t very expensive and there were not very large spreads between nice coins and not-so-nice coins. A really superb 1927 $20 might sell for $55-60 while an average quality example was readily available for $50-55. This all changed when coins became more popular and a greater emphasis was placed on owning “the best.” Today, a superb quality 1927 $20 might sell for $4000-5000 (or more) while an average quality Uncirculated example is worth just $400-500.

The most important thing to remember about grading is that it is subjective. While most experts can reach an impressive degree of consistency when grading a group of coins, there is always some room for disagreement. The reason this exists is due to the fact that a grade actually represents a shorthand for a range of grades. This is where the aforementioned “incremental grades” come into play. (more…)