Learn how to grade coins: 7 lessons in collecting

Robert W. Shippee, author of 'Pleasure and Profit,' talks to Coin World about how one can succeed in the hobby
By , Coin World
Published : 12/22/14
Text Size

Editor's note: The following post is part of Coin World's "7 lessons in collecting" series. Find links to the other posts at the bottom of this page. 

Investing in rare coins is not easy. It takes dedication to learn various aspects of coin collecting that are always changing: supply, demand, rarity, grading, and understanding how to maximize value when buying and selling. These are skills that take years, if not a lifetime, to master. 

Thankfully plenty of helpful resources exist in the coin field to help collectors willing to put in the legwork to maximize the investment return on their collection, including a new book by Robert W. Shippee recently published by Whitman, titled  Pleasure and Profit. In it, Shippee discusses his pursuit over the course of more than a decade to put together a type set of each major design type from copper half cents to gold $20 double eagles, from 1793 to the present day. It’s a frank, candid tome filled with anecdotes that collectors can learn from. 

Lesson No. 3: Learn how to grade

Grading in today’s market assigns a number that serves as shorthand to describe a coin’s wear, eye appeal, and various other factors. Just like diamonds have the “Four C’s” — cut, clarity, color and carat, some key factors should be considered for coins. 

First is wear, which separates a circulated coin (Poor 1 to About Uncirculated 58) from a Mint State one (MS-60 to MS-70). 

Luster is a key component of Mint State coins, and it can be present in protected design areas on coins with wear. 

Strike refers to how well a coin was struck (and is especially important on coins with notoriously weak strikes, such as Standing Liberty quarter dollars). 

Eye appeal is what distinguishes market grading from technical grading. A coin with eye appeal is an attractive coin and toning plays a part in this. Toning is the result of a coin interacting with its environment and the results can be spectacular, as seen on some rainbow-toned Morgan dollars, or it can be detrimental, such as the spotted, mottled toning that is occasionally seen on Barber dimes, quarter dollars and half dollars and some commemorative issues. 

Shippee advises collectors to train their eyes to determine what is attractive toning and what constitutes good eye appeal. He warns: “Coins with unattractive toning are almost always priced below equivalent examples that sport average or attractive toning. Don’t be tempted—the savings are almost guaranteed to be illusory. You won’t enjoy owning an ugly coin, and you are very unlikely to make any money when it comes time to sell.”

The lot viewing that takes place at nearly all major conventions is a great place to see many different coins and to learn grading. Shippee agrees, writing, “These free events are a perfect way to see many coins, hone your grading skills, compare actual coins to the photographs appearing in the catalog, and learn from the auction-firm representatives and dealers in the room. Even if you’re not intending to bid on any coins in the auction, it is instructive and fun to go to the lot viewing.” 

As a cautionary note, collectors need to look out for some things even when buying coins that have been certified by leading third-party grading services. Looking at a lot of coins can help a collector understand original surfaces, but Shippee warns to not assume that the grade opinion of one grading service will be shared by another service.

More from the "7 lessons in collecting" series:


More from CoinWorld.com:

U.S. Mint moves deadline for ordering 2014 commemorative coins

Sold out: 2014 American $1 Coin and Currency set, with 50,000 sets reported sold

How can someone successfully invest in rare coins?: 7 lessons in collecting

U.S. Mint officials hesitant to declare second sellout of 2014-P National Baseball Hall of Fame silver dollars

Gold Proof Kennedy half dollar sales edging toward maximum issue of 75,000 coins

Keep up with all of CoinWorld.com's news and insights by signing up for our free eNewslettersliking us on Facebook, and following us on Twitter. We're also on Instagram!

You are signed in as:null

Please sign in or join to share your thoughts on this story

No comments yet