Darren's Rovell take on PWCC, etc.

[BobC]

""In a letter to his customers on Wednesday, Collectors Universe CEO Joe Orlando doubled down on his company accepting no fault for grading trimmed cards, placing the blame on those involved in the trimming.

“Like most other industries, ours contains a fraction of people who choose to do nothing more than complain about how third-party systems are imperfect, instead of offering feasible or logical ways to make it better,” Orlando wrote. “Their expectation of human-based opinion services is simply unattainable.”"


For purposes of giving credit, the above excerpt and quote are from the Rovell article.


I went into some great detail in an earlier thread asking opinions about the lines that would be at this year's National.

http://www.net54baseball.com/showthr...ht=bobc&page=2

Forgive me in advance for my long posts in that earlier thread (and this one) as I don't just type out one or two line zingers, and try to back up everything I'm saying with solid explanations and facts where possible. Pay particular attention to posts #88, 102, 125 and 127 in that other earlier thread.

Based on my background and knowledge, I believe PSA has some serious financial issues they may be dealing with right now internally. As part of Collector's Universe (CU), a publicly traded company, their external auditors (Grant Thornton out of Newport Beach, CA) should be working on the company's annual audit for their fiscal year ending 6/30/2019 as I'm typing this. Of particular importance will be the reported warranty reserve that CU will end up showing in their financials for this most recent 6/30/19 year-end.

As for the Joe Orlando quote above more or less putting down collectors for merely complaining about the problems, and never offering feasible or logical solutions, I've said this before as to what would possibly be a viable solution to this situation. There needs to be a single, independent, non-profit group or organization comprised, backed and supported by the collecting community and collectors to set up and establish a single set of agreed upon grading and authentication standards, measurements and so on. And this collector organization is not to be directly affiliated or controlled in any manner whatsoever, with or by the TPGs, dealers and auction houses. The determination of grading and authenticating standards and measures should have never been left in the hands of for-profit third party grading companies in the first place. What they have created is a mess whereby each grading company has their own, unique and slightly different way of grading and assessing cards. Each TPG ends up grading the same card differently based on their own internal standards, not those agreed upon by the collecting community as a whole. You can still have independent, for-profit TPG companies to do the grading and authentication work, but they would need to be overseen and certified to do so by this proposed collecting community organization, and subject to complete transparency as to what they do and how they do it, and also be subject to ongoing, periodic peer review as to the work they perform so as to assure collectors they are maintaining the quality and standards of their work they are supposed to be doing, and performing such work in a consistent and agreed upon manner as dictated by the collecting community as a whole, not just by what that particular TPG thinks is okay.

The collecting organization and the collecting community as a whole should be the ones voting on and determining any changes in standards or measures, not the TPGs who do so now arbitrarily when and how they see fit, and to their economic advantage one would assume, not necessarily for the benefit or betterment of the collecting community itself. Also, there should be some standardized and agreed upon training or education (and eventual formal certification) of anyone deemed to be a qualified grader/authenticator of cards. As of now, the TPGs are supposedly doing the selection and training of their graders themselves, and does anyone really know what, if any, specific training and knowledge these graders actually have? It appears that from information available and gleaned from different sources that the current graders used by the TPGs (especially at PSA) are likely spending extremely little time in reviewing and grading every single card they look at, so it is no wonder that there could possibly be so many errors and missed alterations that get by these TPGs and into holders with numerical grades. The TPGs (especially PSA as they are part of a publicly traded company that is accountable only to their shareholders) are interested in profits, not doing what is necessarily right and proper for the collecting community as a whole.

And because of these grading/authenticating standard variances and alleged deficiencies in the work being performed by TPGs, it has left things wide open for card doctors/alterers to step in and take advantage. And since there is no single standard consensus among collectors as to what is exactly considered and acceptable or not acceptable as card alterations/doctoring, it is going to be hard to actually convict someone of wrongdoing. Remember who is considered the grading experts by the collecting community currently (the TPGs). So who do you think would most likely be called into court by defense attorneys to act as expert witnesses in some trial about alleged card alterations? And then remember, if those same TPGs agree and testify that they did erroneously end up grading altered/doctored cards that they could in some instances end up being financially liable for such admissions, do you think that could possibly affect how they would testify in such a case? And then don't forget, the TPGs only give their OPINIONs as to a card's grade or authenticity. And as the old saying goes, "Opinions are like ***holes, everyone has one!" But since those grades are only opinions, what is to stop a TPG from merely testifying they stand by their original opinion? I doubt you could hold someone in contempt or claim they perjured themselves by sticking to an opinion. And since the TPGs are the de facto experts for the collecting community in grading and authenticating, who do you bring in to prove them wrong? Now if you could get one of the card doctors to admit that a particular card graded by that TPG was altered by them, that may help the argument, but do you really think any card doctor will openly admit to what they've done, especially in court? And also don't forget, for PSA's grading warranty to be effective, the current owner of a PSA graded card would have to go back to PSA and give them the PSA graded card, still in its PSA holder, to review and determine if it was erroneously graded due to alterations, doctoring or anything else. But again, who is the sole arbiter as to whether or not that card was graded incorrectly.........PSA! Not the guys on the BO forum doing all the detective work, not any other TPG, not any court, nor you or I.

Joe Orlando would likely not feel my suggestion was a viable or feasible solution though, mostly because it wouldn't be his company calling the shots and making the decisions, and would likely have a negative impact on their business. From a practical standpoint, what I'm proposing would not be something easy or happening overnight either. You would have to organize the collecting community and get a large majority of collectors to buy in and agree to work together, set aside differences and come up with agreed upon standards among all the collectors, and then probably the toughest part, have everyone in the collecting community agree in both word and action to only work and deal with those TPGs, dealers, auction houses and so on that agreed to recognize the collector organization as the sole body to determine and set standards, and to oversee adherence and compliance with those standards, oversights, peer reviews, and so on. You'd likely need to impose some kind of dues/fees for members of the organization to help fund the work and such that would need to be done to oversee and run everything. And you'd also have to find people willing and able to work in the organization to run and manage things. These are not simple things to easily or quickly be put in place or get done. And sadly, because there are so many collectors, dealers and others that currently have significant investments in graded cards, forcing everyone to comply with such new standards and changes would/could call for pretty much having everything re-reviewed subject to the new rules. And doing all this would likely have some serious negative financial implications for a lot of collectors/dealers that like things just the way they are now, and don't want to hear or see any changes to the status quo whatsoever. It would not be a quick or easy fix, and it wouldn't necessarily stop a card doctors/alterer who can do things to cards that really can't be detected in some cases. It also wouldn't necessarily solve the problems or issues with people trying to manipulate the market, shill bidding and other detrimental things in the collecting hobby as outlined in the Rovell article, but at least it would standardize some things and force the TPGs and others to work for and on behalf of the collecting community and collectors, instead of the other way around.

Oh, and the other comments in that Rovell article about the significant sales of stock by the PSA CEO are factual statements. As a publicly traded company, in accordance with SEC rules, they have to report such significant sales of a company's stock by their owners/officers to be fair to the investing public and so they can't supposedly take advantage of insider knowledge to the detriment of investors at large. Collector's Universe, though actually a very small company in relation to most publicly traded companies, had recently been added to the Russell 2000 index, which an investor would normally see as a positive sign for the business and would likely help to see that stock going up in price. The fact that a main officer of that same company would then be selling off a significant portion of their stock could simply be him/her taking advantage of a recent price rise and pulling some profits off the table, or they could have had some recent personal cash needs that prompted them to sell part of their ownership to fund the cash need. Of course, if there was also some potential bad financial news coming down the road that they were aware of that could negatively affect the company's stock price, they may be selling so as to cash out as much as they could and cut their losses before the bad financial news becomes mainstream public knowledge and the stock price takes a serious hit. I'll give all of you three guesses as to the possible motivation for Mr. Orlando's sales of his stock in CU, and the first two guesses don't count!!!