Video: Examining PSA's Grading Practices

[SOX75]

I wanted to share a big research project I've been working on with the collector community. I've been thinking for some time for a way to test a commonly held theory in the Hobby: that PSA grades some cards more harshly than others, in a way that negatively impacts average collectors.

Recently my buddy and I came up with a method to test this. We use the 9:10 ratio of a card, which is the number of 9's divided into the number of 10's as graded by PSA. The rationale is that both a 9 and a 10 are mint grades. It's often very difficult to tell a 9 and a 10 apart and it's hard to argue with PSA's decision either way. The heart of this is: when PSA has a mint card in front of them, how often do they give that card a 9 vs a 10? (And is this rate different if it's a key card vs a HOF card or a common?)

The power lies in being able to compute and compare the 9:10 ratio for any card and set pretty easily. PSA has their entire population reports online so it only takes a few minutes of spreadsheet work to completely sort a set based on the 9:10 ratio. That tells us which cards in the set PSA grades the toughest, i.e. is most reluctant to give a 10.

The card that initially got me started on this was the 1980 Rickey Henderson. It has a 9:10 ratio of 81:1, which means that there are 81 times more PSA 9 grades than 10's. That's an extremely high ratio, especially when you look at the 1980 set as a whole: all the other 1980 cards average 3.3:1.

In the video I analyzed a number of key cards in the Hobby between 1978-1993...cards we are all familiar with. What I found was striking: that in each case these key cards were ranked either the toughest or one of the toughest 10's in their sets.

It's easier to watch the video, which lays it out visually.

https://youtu.be/Wirna8ihUuA

[hcv123]

As if there weren't enough problems with PSA already - ad another big one to the list - REALLY curious to see where the hanging question leads - WHO GETS THE 10'S!?

I have received 2 - 10's from a few hundred submissions (both 1975 OPC - A Brett rookie and a common and both many years ago)

[irv]

Yep, nothing but a scam. It's the same as them charging way more money for a high dollar card than a common card.

It has been argued it is for insurance purposes due to shipping, etc, but why are the fees the same if you drop the card off and pick it up yourself?

[seanofjapan]

That was a really great video, I enjoyed the way you laid out the evidence, its quite convincing.

One question I have though is with the conclusion you reach that the evidence indicates that PSA grades key cards too harshly. It seems to me that the evidence you present is actually consistent with not one but two potential conclusions:

1) PSA grades key Mint cards way too harshly; or
2) PSA grades common Mint cards too lightly

This is a key difference. If it is #1, then it obviously raises serious ethical issues that you allude to at the end of the video, particularly that PSA is basically rigging the market, may be using grading to favor certain customers or to entice resubmission of 9s, etc.

If it is #2, then the problem is that they are just being lazy with common cards and not subjecting them to the same level of scrutiny that they do with higher cards. This is obviously also problematic since it indicates poor quality control, but the ethical implications are also a bit more benign than if #1 is the case.

Its also of course possible that the data is a reflection of a bit of both of these going on at the same time. It seems to me that its likely a combination of the two. There are obvious incentives for PSA to do #1, while at the same time human nature and the temptation to be a lot more generous when the stakes are lower probably also contributes to #2. I guess one would need inside information to understand the relative importance of each.

Either way its quite interesting and certainly shows the stupidity of the hobby putting so much financial importance on what is essentially a totally subjective and arbitrary decision over the difference between a 9 and a 10.

[SOX75]

Thanks for the responses guys.

Sean, I agree with what you said and it's something that my buddy Vince mentioned to me...that these 10 commons could be a giveback to collectors since the stakes are much lower.

A number of commenters on the video believe that the common grading is skewed because collectors are only going to send those in if they believe they are nearly guaranteed a 10. I think this is overstating it because no one can predict what PSA is going to do with any submission.

Ultimately I don't know how to test if PSA is being too easy on commons. What's been helpful to me is comparing the key cards to a 3rd group: the other HOF cards in that set. They share more features with the key cards in that they have higher submission rates and they are submitted as borderline 8/9's vs borderline 9/10's as commons might be.

And you can see in the data than in nearly every case these key cards still have higher 9:10 ratios than the HOF'ers too.

In terms of resolving if PSA is too easy on the commons, perhaps the only way would be to do a content analysis and look at these 10's and see if they really are 10's. There just aren't enough photos/sales of these cards out there to really even do that. It's a mystery at this point.

Thanks for the comments!

[Baseballcrazy62]

I have always thought tha PSA grades the player and not the card. FWIW.

[SAllen2556]

Great Work! And yet....

PSA and PSA/DNA business set another quarterly revenue record at $8.1 million for October-December 2019, surpassing last year’s Q2 revenue by approximately $2.1 million.

https://www.sportscollectorsdaily.co...trading-cards/

[Republicaninmass]

Where are all those people shorting the company stock? I think its doubled since.

[mintacular]

I liked this video because it confirms what I already knew which is that there really is no discernible difference between many 9, 9.5s and 10s.

To spend big $ on 80s to modern cards in a "10" is foolish. Once collectors catch on to this 10 card prices will crater

[Phil68]

Originally Posted by mintacular

I liked this video because it confirms what I already knew which is that there really is no discernible difference between many 9, 9.5s and 10s.

To spend big $ on 80s to modern cards in a "10" is foolish. Once collectors catch on to this 10 card prices will crater

I agree with the first notion that there is often no discernible difference between a nice 9 and a 10.

I completely disagree that purchasing them is foolish (assuming we're talking monetarily)
The prices will continue to climb while 9s will never appreciate. The collecting community, as a whole, is remarkably stupid. As such, "catching on" is something they are incapable of.

People are STILL giving PSA money and a swarmy plastic knucklehead like Joe Orlando still has a job and is regarded as an "expert"....and "The View" is still on television...and people WATCH IT!

[Phil68]

Fantastic work on the video!

[jchcollins]

Great video. I enjoy following you on Instagram as well.

I’ve said for a long time that due to the inherent level of subjectivity in grading that cannot be escaped - at some point sooner or later, all grading is basically fraudulent. It’s just an opinion. I remember 20 years ago the laughing that went on over the distinction between “Mint” and “Gem Mint”, especially for vintage. As Bruce Moreland said on his old grading page from the early 2000’s: “If someone tells you a vintage card is mint, they are probably wrong; so if they tell you it is “gem mint” - they are probably as wrong.” It’s a term that is useless outside the odd world of TPG’s, and sometimes even there.

If 2019-20 has proven anything with grading, it’s that many slab opinions should be taken with a huge grain of salt. It’s just an opinion. And yes, I totally believe that PSA limits the quantities of 10’s given out to key cards so as to drive up the value. When you label a product based only on “opinion” which is subjective and not really subject to a verifiable analysis - and the higher your opinion is, the more - sometimes exponentially more - that opinion is worth - well then, the incentive to lose objectivity and fudge is there from the beginning.


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[luciobar1980]

I've been following your videos for some time now. Good stuff. PSA is the worst.