PSA/SGC Waiting Lines At 2019 National

[jhs5120]

Originally Posted by BobC

Barry,

I concur with you and honestly don't believe that it is physically possible for them to be grading that many cards that quickly given the number of grading "experts" they supposedly have. I was merely pointing out the facts and figures they themselves are putting into their annual reports and financials and doing the simple math. My guess is that the so called "experts" on their staff that do the grading are not the only people actually doing and involved in the grading process and that they may have others who do basic, preliminary work, and then have the "experts" get involved in the more higher-end, higher-valued cards at the back end, or in certain cases as needed. So if that is the true case, you may not always have an "expert" you thought you were paying for doing the work in looking at all your submitted cards and grading them for you.

I am guessing that the expectation of most collectors submitting a card for grading is that a single, expert grader takes that card and looks it over and reviews it against a predetermined standard set of measures and tests; mechanical, visual, touch and otherwise, including review with a black light, to completely examine and determine the authenticity of that card, as well as if it then qualifies for an actual grade, and if so, what that grade should be, again based upon a set of pre-described standards and measures that are applied across the board to all cards they are looking at, without regard to a card's age, the actual set it is in, its value, or otherwise. Heck, it just took me over 75 seconds to type all that out, let alone do all that actual work.

I can see that if a grader clearly finds right away some issue that lets them know that a card isn't legit that they wouldn't have to bother going through all the other tests and reviews to determine grade and such, but otherwise, every card should be graded the exact same way and undergo the same exacting procedures and tests and have the same exact standards applied in determining its authenticity and grade, whether it is a '33 Goudey Ruth or a '75 Topps common. And I would hope that most collectors agree this is how it should be.

Personally, I do not agree. It doesn't take a minute to grade a 1980's common. For ~80% of PSA grades, it shouldn't take more than 20 seconds or so to authenticate and grade.

[bnorth]

Originally Posted by jhs5120

Personally, I do not agree. It doesn't take a minute to grade a 1980's common. For ~80% of PSA grades, it shouldn't take more than 20 seconds or so to authenticate and grade.

I agree, especially with the lower value bulk submissions.

This is just my opinion. I have been involved with a few bulk submissions. It is like they see a pile of cards and go those look like 8's and the pile is graded. This happened to me the last time I was involved with one. I got back cards that ranged from 6s to 10s all graded 8s. Luckily I found a buyer willing to buy the cards and not the grades on the ones that should have been 10s. I also disclosed the obvious crease in one of the 8s I sold to a fellow forum member.

[swarmee]

JHS,
Sure, if you presume that nobody has ever learned how to replicate a rough cut for 1952 Topps Look-N-See cards or 1953 Parkhurst or 1955 Topps FB All-American.
But then you're proven wrong by Moser, who can easily fool PSA graders by applying a false rough cut to issues while trimming fractions of an inch off.

[Peter_Spaeth]

Bob, good discussion. I wonder how efficient the market is for CLCT stock, given that recent developments obviously could have a material impact on CU through the warranty and reserve, but also given that the stock price apparently has not been affected at all other than a brief response to what was probably just a short attack by Seeking Alpha. If one assumes an efficient market, then the market apparently doesn't perceive much risk. Then again, with CLCT being such a small cap company and so thinly traded, the market may not be efficient.

[swarmee]

Yeah, it's a wall of text, but most of those points have been made in the previous threads that have rolled off the board. You might want to read more threads that talk about PSA's grade guarantee and what we've already discussed.
Not to say it can't be rehashed, just that it you're going to pontificate about it, we've already done it.

I'm not hoping for PSA's demise; you can see that because I want them to offload their financial risk onto PWCC and Moser and their other alterers. But if PSA doesn't come out and PUBLICLY STATE that they were incapable of detecting alterations, and have created/proven new techniques to catch these cards from being submitted in the future, I don't see how their company has any more value than the Set Registry, which will wither and die when people stop submitting cards knowing that the whole enterprise is built on fraud. I WANT PSA TO REFORM. But without a significant attack on its warranty reserve or law enforcement intrusion into its business, I don't see PSA having this "Come To Jesus" experience.

I don't agree with the PSA Apologists on this board and others that think that the status quo will never change. It's been about 2 months since the first PSA "conserved" Mantle was outed. Have people forgotten about this yet? Have the blowout detective agency (BODA) stopped finding altered cards? Have people that are invested in the hobby stopped posting about this endemic fraud? No. And the National is coming up in a month. The word about this fraud will only spread from here on out.

[drcy]

I think PSA, PWCC and Moser should all go under. PSA can be the exception only if it can entirely reform and change.

I think the grading system/business is corrupt, and is, in big part, concerned, focused and invested in things other than, and counter to, objective grading and authentication. And if it is unable or uwilling to objectively grade and authenticate, then it shouldn't be in the business . . . And that statement doesn't even touch on if they are capable of grading and authenticating.

If they were intellectually honest they would say "We have to dissolve the PSA Registry, or at least attach a big fat disclaimer to it, because these numbers are obviously not reliable and almost certainly wrong." But honesty and accuracy clearly are not essential to their business model. If they were they would have admitted long ago that the T206 Gretzky Wagner is trimmed and misgraded long. Refusing to admit the Wagner is altered and misgraded is akin to a scientific "authority" refusing to admit the earth rotates around the sun and materials are made up of atoms and molecules ("And we should trust your statements on other scientific topics why?"). And that right there is the problem.

Whether they will, or 'should' as some collectors might say, reform and change is a separate matter. Many collectors and dealers are fine with the old corrupt, and perhaps inept, grading system and want it to continue, because they also are focused and invested things other than, and counter to, objective grading and authentication. Many are literally invested in the system.

Now if PSA wishes to wholesale reform their system and model, then that would be a reasonable response I could subscribe to and support. But that would require a wholesale reform and change in philosophy. To use Thomas Kuhn's once radical and now cliched and misused terminology, it would require a paradigm change.

David Cycleback

[barrysloate]

Originally Posted by drcy

I think PSA, PWCC and Moser should all go under. PSA can be the exception only if it can entirely reform and change.

I think the grading system/business is corrupt, and is, in big part, concerned, focused and invested in things other than, and counter to, objective grading and authentication. And if it is unable or uwilling to objectively grade and authenticate, then it shouldn't be in the business . . . And that statement doesn't even touch on if they are capable of grading and authenticating.

If they were intellectually honest they would say "We have to dissolve the PSA Registry, or at least attach a big fat disclaimer to it, because these numbers are obviously not reliable and almost certainly wrong." But honesty and accuracy clearly are not essential to their business model. If they were they would have admitted long ago that the T206 Gretzky Wagner is trimmed and misgraded long. Refusing to admit the Wagner is altered and misgraded is akin to a scientific "authority" refusing to admit the earth rotates around the sun and materials are made up of atoms and molecules ("And we should trust your statements on other scientific topics why?"). And that right there is the problem.

Whether they will, or 'should' as some collectors might say, reform and change is a separate matter. Many collectors and dealers are fine with the old corrupt, and perhaps inept, grading system and want it to continue, because they also are focused and invested things other than, and counter to, objective grading and authentication. Many are literally invested in the system.

Now if PSA wishes to wholesale reform their system and model, then that would be a reasonable response I could subscribe to and support. But that would require a wholesale reform and change in philosophy. To use Thomas Kuhn's once radical and now cliched and misused terminology, it would require a paradigm change.

A big +1

And David has a new ebook out on baseball card authentication. It's on my to-do list to read over the holiday weekend. Let me thank you in advance for your effort.

[bnorth]

Originally Posted by barrysloate

A big +1

And David has a new ebook out on baseball card authentication. It's on my to-do list to read over the holiday weekend. Let me thank you in advance for your effort.

Awesome, got a link?

[perezfan]

Originally Posted by drcy

I think PSA, PWCC and Moser should all go under.

I think the grading system/business is corrupt, and is, in big part, concerned, focused and invested in things other than, and counter to, objective grading and authentication. And if it is unable or uwilling to objectively grade and authenticate, then it shouldn't be in the business . . . And that statement doesn't even touch on if they are capable of grading and authenticating.

My opinion and others are free to disagree.

+1... very well said.

And with regards to Bob’s lengthy post, I’m glad he shared his perspective as a CPA/Auditor. I know some of it was redundant, but there’s some great insight there. I only hope that PSA is listening and acts accordingly.

[kateighty]

While I agree with the majority of what drcy said where's the name? Am I missing something here? Leon calling me up and asking for my info was mildly (ok actually extremely) terrifying but I get it now. 2k+ posts and one like this without a name.

[drcy]

Originally Posted by kateighty

While I agree with the majority of what drcy said where's the name? Am I missing something here? Leon calling me up and asking for my info was mildly (ok actually extremely) terrifying but I get it now. 2k+ posts and one like this without a name.

Fair point. Added my name to the bottom of my post.

[Johnny630]

Originally Posted by swarmee

Yeah, it's a wall of text, but most of those points have been made in the previous threads that have rolled off the board. You might want to read more threads that talk about PSA's grade guarantee and what we've already discussed.
Not to say it can't be rehashed, just that it you're going to pontificate about it, we've already done it.


I'm not hoping for PSA's demise; you can see that because I want them to offload their financial risk onto PWCC and Moser and their other alterers. But if PSA doesn't come out and PUBLICLY STATE that they were incapable of detecting alterations, and have created/proven new techniques to catch these cards from being submitted in the future, I don't see how their company has any more value than the Set Registry, which will wither and die when people stop submitting cards knowing that the whole enterprise is built on fraud. I WANT PSA TO REFORM. But without a significant attack on its warranty reserve or law enforcement intrusion into its business, I don't see PSA having this "Come To Jesus" experience.

I don't agree with the PSA Apologists on this board and others that think that the status quo will never change. It's been about 2 months since the first PSA "conserved" Mantle was outed. Have people forgotten about this yet? Have the blowout detective agency (BODA) stopped finding altered cards? Have people that are invested in the hobby stopped posting about this endemic fraud? No. And the National is coming up in a month. The word about this fraud will only spread from here on out.

I agree with all you’re saying, I really hope and pray it happens.

It’s sad but the sheeple do not care one bit they’re addicted to the Registry and Pop Report.... Newport Beach and Mr Vault on the Lake Know this....They’re Smart they will stay hush hush �� Mr Vault on the Lake will refund the bad cards all under Newport Beaches Watch and Direction each will continue covering each other’s back side.....full on damage control....

[BobC]

Originally Posted by Peter_Spaeth

Bob, good discussion. I wonder how efficient the market is for CLCT stock, given that recent developments obviously could have a material impact on CU through the warranty and reserve, but also given that the stock price apparently has not been affected at all other than a brief response to what was probably just a short attack by Seeking Alpha. If one assumes an efficient market, then the market apparently doesn't perceive much risk. Then again, with CLCT being such a small cap company and so thinly traded, the market may not be efficient.

Peter,

Thanks, and I agree with you, it is thinly traded and likely not an efficient market. However, didn't someone post that CLCT was recently added to the Russell 200 exchange? If so, that would likely up their presence and make them noticed a bit more than in the past.

My hope is that the CU auditors are made aware of the issues and take that into consideration during CU's current year-end audit. I will be extremely interested to see what, if any, mention is made of the current issues in the upcoming Annual Report of CU, or in the impact it may have on their financials through their warranty reserve. And with a 6/30 year-end, those financials and Annual Report will be out sometime by this September/October. And being a publicly traded company, those financials and Annual Report will be available to anyone with internet access as a matter of public record. PSA is in a unique position within the collecting community as to my knowledge they are the first ever party/entity that is being associated with such a potential scandal in the card collecting hobby that also happens to be part of a publicly traded company subject to the additional reporting requirements, scrutiny and oversight of the SEC. So unlike any of the card doctors, collectors, dealers, auction houses, grading companies, etc. involved in all of the earlier scandals and frauds that have come out in our hobby, this will be the first time we can all actually get to see the financial impact such issues can have on some party/entity involved.

What CU management tells the auditors about the current issues, if anything beyond the normal year-to-year issues they have always had with erroneously graded cards, would be extremely interesting to learn and know. We obviously won't be privy to what is actually told to the auditors, but what ends up being reported in the Annual Report and financials should give us a fairly good clue as to what they ended up telling and sharing with them. To my knowledge there are no current or pending lawsuits or litigation involving any of the current issues that PSA may be involved in, so auditor inquiries to the CU lawyers for this year's audit will likely make no mention of any of this. After that, it may just be up to what CU management feels is appropriate to share with their auditors. And frankly, I could see their management saying nothing is really different than it has been in prior years, and even so, any alleged issues or problems would be aggressively refuted and fought, and that in the end, they would expect no material effect on their business or financials. And unless someone on their outside accountant's audit team just happens to also be a collector with knowledge of what is currently going on, the auditors likely won't know about all these issues that we have recently been made aware of and just go with what management is telling them.

So, it is a matter of public record that Grant Thornton LLP is the outside auditor for CU, and has been since 2005. They are a national accounting firm with offices all around the country, and the audit of CU is run out of their Newport Beach, California office. So the actual audit team members directly working on the CU audit, and the partner in charge of and responsible overall for that audit, will likely be working out of that office as well. There is the possibility that CU has decided to change auditors for this year-end, but that is not likely as it is usually more efficient and cost-effective for a company to retain the auditors they have had in the past. And the contact information for Grant Thornton's Newport Beach office is easily found on the internet. i will stop there!

[Peter_Spaeth]

I suspect, Bob, that PSA will aggressively downplay it with their auditors, and claim nothing is new here just an intensification of the chatter that's always in the background. I think they could probably afford a significant increase to the reserve, as they seem to have (you would know better than I would, interested in your opinion) a decent amount of cash for a company their size, but at the same time that could affect perception of their confidence in their own abilities to grade and I doubt they want to send that message. But we'll see.

[BobC]

Originally Posted by Peter_Spaeth

I suspect, Bob, that PSA will aggressively downplay it with their auditors, and claim nothing is new here just an intensification of the chatter that's always in the background. I think they could probably afford a significant increase to the reserve, as they seem to have (you would know better than I would, interested in your opinion) a decent amount of cash for a company their size, but at the same time that could affect perception of their confidence in their own abilities to grade and I doubt they want to send that message. But we'll see.

That is exactly what I'm thinking also, that they will downplay any current issues as nothing new and assert that as always they will vigorously defend themselves against any and all false or misleading allegations. And quite frankly, that is really all everything is right now, allegations. Despite all the scans and evidence that the Blowout guys have unearthed, and what looks to be fairly damning evidence across the board, nothing has yet been definitively proven as factual in any applicable court or by any other organization or party deemed/felt by the hobby community to represent it in determining such things. The sad truth is that up to now, the hobby has been looking to the likes of TPGs like PSA to be considered and treated as the be-all-end-all arbiters of what is or isn't authentic or altered. So with the recent, sudden revelations of all the suspect graded cards that are showing up, do we really expect any of the TPGs to suddenly realize they may not know as much as they profess to in regards to cards and what they are doing in grading them, and to openly start to admit that they have mistakenly been grading altered/doctored cards for years? It financially could be ruinous to them to now start doing so, and upend the hobby itself by putting things like the entire Registry in question. So as I've said before, it seems that even if the TPGs were not knowingly involved and collusive with card doctors, dealers and any other parties possibly involved in these fraudulent schemes, because of the financial and business effects these revelations could have on them, it behooves them to shut up and say nothing about this. They are in a virtual Catch-22 where if they admit to their prior grading errors and mistakes, it can end up costing them financially and reputation/business-wise. And if they say and do nothing and stick by their earlier grading opinions, the evidence found about their alleged mistakes will still find them guilty in the court of public opinion, which these myriad of threads about the issue already seem to prove true, at least among people on the BO and Net54 forums. In all the threads and posts I've seen, I don't seem to remember many, if any, posters taking the side of the TPGs and defending them as being correct.

And think about this, despite all the before and after scans the Blowout guys have been able to find and share with everyone, does anyone truly think the card doctors would have limited themselves solely to only picking up cards from other recent auctions to then perform their magic on and have re-graded and sold right away? What about all the cards the card doctors may have picked up at shows, from private sales, that were originally raw, etc., etc., where there were no convenient, recent, high-res scans the Blowout guys could go back to and show the similarities and then highlight the alterations made to such cards? My guess is that given the years over which these card doctors have been known to be operating and the multiple sources and areas they could have been getting their subjects to work on and alter, the number of supposedly altered/doctored cards that the Blowout guys have been able to find before and after scans of and show us are probably only an unbelievably small fraction of the doctored/altered cards that actually could be out there in the hobby, all sitting in otherwise legitimate, TPG graded holders.

And here is the scariest thing of all to me. If these card doctors are that good and can make these alterations so that they cannot be readily detected by the so called expert TPG companies when looking at them, without the availability of these before and after scans that the Blowout guys have been able to find and share with us, there is no way to tell beyond a doubt that any other graded cards with a numerical grade, regardless of what that grade is, have not also been altered or doctored. Unless it was found that these cards doctors over the years had been keeping records of all the cards they had worked on and then got re-graded and what they got as a bump in the grades, the new cert numbers, and so on, it will be impossible to tell. And I sincerely doubt the card doctors or anyone else possibly involved would be that stupid to keep such detailed records around that could possibly incriminate them. And even if they did keep such records, how would you be able to coerce them into making them public unless legal authorities started going after them criminally and somehow getting such data from them before they had a chance to destroy it.

And because of all this uncertainty and the ultimate inability to be able to possibly prove definitively what graded cards are or aren't altered/doctored, I can see a large part of the hobby community turning a blind eye and deaf ear to the whole thing and waiting till it blows over. Too many people have too much money tied up in their collections or inventory, or associated with their Registry holdings to want to see the entire hobby trashed to the point that they end up suffering financially as a result. Because of the unknown numbers of already altered/doctored cards that may be sitting in graded holders, and the inability for anyone to now go back and prove otherwise, the hobby in general may just end up accepting the fact that there are probably a lot of altered/graded cards in TPG company holders out there, but that if the TPGs couldn't detect any issues, then the'll leave them as is and basically the hobby will have started accepting these as restored/conserved cards and leave them as graded.

Otherwise, how can you feel comfortable buying any graded card then? Will one/some of the TPGs admit they may have had shortcomings and revise their grading procedures and testing so as to be able to detect these alterations in the future? if so, could it possibly mean that any future sales of graded cards will now require the seller to have a card re-graded to see if it were possibly altered before someone purchased it? I just can't see that happening due to the sheer number of graded cards out there and the costs to go through doing all that. And even so, who would trust any of the existing TPGs to get it right anyway. Quite honestly, you know who would probably be the best party/group to set up a new TPG to do the grading and detect these alterations, the card doctors themselves! Who else would be better able to detect the alterations than those who knew how to do them in the first place, right? But hopefully, that isn't ever happening either.

Getting back to the issues with regard to the CU financials and Annual Report, we don't know what their year-end numbers as of 6/30/19 will look like right now, but the measure of what is considered material to the financial statements will be determined based on those year-end numbers. And I already mentioned that based on the prior year-end numbers as of 6/30/18, the measure of materiality on those financial statements would probably have been around $500K, not really that much. So depending on what PSA graded cards were showing up on those Blowout lists as questionably graded, and the potential differences in their cumulative value should they actually only have been graded as "A" (authentic) instead of receiving numerical grades, that is what should be considered and factored into the Warranty Reserve that will show up on CU's financials. What actually ends up on their will thus be very telling.

[swarmee]

Originally Posted by BobC

And because of all this uncertainty and the ultimate inability to be able to possibly prove definitively what graded cards are or aren't altered/doctored, I can see a large part of the hobby community turning a blind eye and deaf ear to the whole thing and waiting till it blows over.

This is what has happened in all the previous scandals, and you can see those heavily invested parties already hoping this will blow over too, so their their baseball card nest eggs aren't decimated in value.
However, now the investigators are the collectors that are fed up with Beckett, PSA, and to a lesser extent, SGC claiming to be unbiased arbitrators of card condition. They are not letting this blow over. It's now been 2 months since the first card was noted to be "conserved" through PSA, and the number of fraudulent cards detected and number of Cert # submission records are only INCREASING in severity and sheer numbers. Currently, PSA is liable for approximately $1,000,000 in Grade Guarantees for just the cards with before and after pictures.
But as I informed them, if PWCC pays for the reimbursement, that lessens their liability. If PWCC or Gary (or other fraudsters) then try to get reimbursement through the Grade Guarantee on cards they KNOWINGLY submitted as altered, PSA should tell them to pound sand since they violated the rules they signed when they submitted the cards. And Brent himself in that hour-long video, promised to refund from PWCC's pocket the fraudulent cards submitted directly by the company.
We haven't even gotten to the National yet. PSA may be sticking its head in the sand, but if their reserve doesn't go up to the millions in the next shareholder statement, someone should refer it to the SEC for investigation. PSA still has not made ANY notification to its collectors, save the worthless "we were duped" statement on their never read message board. It's never been on their website, emailed to their customers, and they haven't been calling anyone, as far as I know.
PWCC actually had reached out to some of the collectors who had cards outed (a.k.a. "slandered" as a Brettism) on the Blowout boards, but not to any of the other customers who bought cards on the same tainted submissions. If people aren't willing to demand accountability for PSA, Beckett, and SGC's lack of accuracy, then nothing will change without law enforcement. But some are speaking with their wallets.

I know I've directly contacted about 30 of their Set Registry guys to inform them their cards were tainted. If PSA isn't going to protect their customers (despite their "NEVER GET CHEATED" motto), I will step in. And so will the other Blowout Detectives. This isn't really like any scandal they've had in the past.