PCGS REGISTRY exclusivity creates top level price differential

[SLUGGO]

A price differential between coins graded by Professional Coin Grading Service and Numismatic Guaranty Corp. frequently comes up and one might ask, “How is it that the two biggest and most reputable grading services can oftentimes be priced so differently at auction for the same grade coin?”

 

Most of the differences occur at the top levels of the grade. This inconsistency needs to be clarified so that a reliable method of pricing coins can be firmly established.

 

PCGS coins, at gem quality or better, will bring a premium because of the exclusivity of the PCGS Registry that allows only PCGS coins. This creates an unusually high demand for the highest-graded PCGS coin of the date. The prices become highly exaggerated as collectors are willing to pay the premium, sometimes as high as one grade, if they are registry competitors. As long as PCGS continues this practice, it seems that the disparity will continue.

 

The question of whether PCGS collectors are getting better coins than their equivalent grade at NGC should be asked. It can never be accurately answered unless a series of high-grade coins, say two hundred, were taken out of their holders and a blind “grade off” was conducted by a neutral group of third party recognized experts. Kind of like CAC, but this time the coins are out of the holders and the right magnifying tools are used.

 

The results could then be analyzed to see if their grades were different than before the test began and then matched to PCGS and NGC.

 

If the grades go up, it would be a nice windfall for the collectors, and as in any grading submission, they cannot go down. I cannot think of a reason why this should not work.

 

NGC has graded well over 50 percent of the coins, if you exclude the recent spate of newly minted coins graded by other third-party grading companies. By closing its registry to coins in NGC holders, PCGS has effectively limited the census by more than half the coins, so it is no wonder that NGC appears to have the higher grades simply because it has allowed both services into its registry.

 

This does not mean that grading is more lenient at NGC. It’s really a numbers game: The higher the volume, the better chance of getting a higher grade. In addition, NGC offers Numismatic Conservation Services, which can make the eye appeal of a coin better, remove some hazing and carbon spots, and other changes, all of which contribute to higher grades.

 

This perception of an easier grading standard is unfair to NGC. PCGS has been instrumental in creating the pricing disparity. The excuse that its self-serving registry members vetoed the idea of inclusion of NGC coins simply does not wash, rather the exclusion of collections with NGC coins has created a higher demand amongst PCGS registry collectors, driving up prices which increases their collection value. Further, it hurts the coin market by creating uncertainty in the accuracy of the NGC grades.

 

NGC should be applauded for including PCGS coins in its registry and PCGS should consider doing the same. The registry idea keeps the market engine going and should not be jeopardized by unfair limitations.

 

A coin market with only one reliable grading company would be a monopolistic disaster. We need them both to keep the market engine flowing smoothly, efficiently and honestly.

 

Since there are two major grading services with registry programs, they should allow equal recognition to their registry set participants by including both NGC and PCGS coins into both of their registries. Then we would know what is in the best set and it would be of keen interest to collectors.

[MarkFeld]

While I wish PCGS allowed NGC coins into their registry, I can understand why they don't and believe it should be their prerogative. After all, it is their registry program.

 

And whether you agree with it or not, there is a widespread perception that in many more cases than not, PCGS grades more strictly than NGC does.That (and not just the registry) is a large reason for the prices differences you spoke of.

[SLUGGO]

Ahhh....the key word is perception. That is not proof, only speculation which seems to guide prices. The PCGS registry has created that perception by driving up prices for PCGS coins.

 

Do you think the perception would change with a well publicized grade off...say with 500 high grade coins to make it less random? What if the results turned out that the both PCGS and NGC were consistent with the experts?

[MarkFeld]

Ahhh....the key word is perception. That is not proof, only speculation which seems to guide prices. The PCGS registry has created that perception by driving up prices for PCGS coins.

 

Do you think the perception would change with a well publicized grade off...say with 500 high grade coins to make it less random? What if the results turned out that the both PCGS and NGC were consistent with the experts?

 

I agree that perception is not proof, though I have seen enough examples over the years, such that I believe it to be correct. I say that as a former NGC grader and a fan of NGC.

 

At this point (roughly 30 years down the PCGS/NGC road), even with and regardless of the results of a large "grade off", I think it would be all-but-impossible to change the general perception.

[BillJones]

I have been collecting coins since the early 1960s, and I have seen grading services come and go. PCGS and NGC have remained on top because they were first to come up with the encapsulated coin idea, and both of them have maintained their grading standards to a reasonable (or some more critical collectors would say "market acceptable") degree.

 

My observations over the years have been that PCGS is slightly more conservative than NGC, but difference is not significant or consistent enough to reject the NGC product. This difference has been greatly magnified by the fact that many of the best NGC graded coins have been cracked out and crossed over to PCGS. The "mistake coins," and both services have them out there in the market place, tend to stay in their NGC holders.

 

I don't care for the PCGS registry. From a practical standpoint I have found it awkward and difficult to use. If your coin has been registered by someone else, and you are blocked from registering you piece on the PCSG site, it's harder to get that situation fixed on the PCGS registry. I find their upload procedure cumbersome. The only reason I am on the PCGS registry at all is so that I can use their Internet coin search feature. I have found that useful.

 

The fact that PCGS does not recognize NGC coins is a major turn-off for me. I have spent a lot of time photographing my collection and writing detailed to descriptions of my coins on the NGC registry. I have tried to make my registry sets into educational experiences. The PCGS site is not worth my efforts to do that because many of my best coins are NGC graded and are therefore unacceptable to PCGS.

 

PCGS takes a very negative attitude toward their competition. I can understand that attitude to a point, but they take further than is necessary in my opinion. Their registry is myopic and incomplete because it excludes so many rare, high quality coins. It is of much less use than the NGC registry for that reason. The PCGS registry is more of a marketing tool than a learning tool.

 

PCGS brags that they are running the #1 registry, but I disagree with that strongly. They seem to have fewer participants over there, and the emphasis seems to be on collections of the past to which modern collectors should aspire. Why give yourself ulcers over that? I'll never be equal to Louis Eliasberg or Harry Bass. Their relative resources were far greater in the markets of their era than my resources are in my era. Their collections were great; my collection is just good. I don't have a problem with that.

 

[BillJones]

Ahhh....the key word is perception. That is not proof, only speculation which seems to guide prices. The PCGS registry has created that perception by driving up prices for PCGS coins.

 

That perception has been driven home by PCGS marketing and the crack-out situation I discussed in my previous post.

 

When fresh coins to auction, the competition for PCGS and NGC graded coins seems to be similar.

[SLUGGO]

Well written and thought out, Bill, perhaps, if we can get enough steam through this post, we can generate interest at NGC to promote the grade off challenge. It's a long shot, but it's in everyone's interest including PCGS to do it. Collectors which are the base of the coin market would benefit, and that's what this is all about.

 

If NGC issued the challenge and PCGS refused, it could conduct the grade off alone and still get the same results. PCGS would be viewed as aloof and arrogant; not good for their image.

[brg5658]

I have suggested a "grade-off" more than one time here before, and it always gets ridiculed.

 

The short of it is that TPGs don't want any hard evidence to support or disprove their claims to greatness. Perception reigns, and if people only want to collect PCGS graded coins, that's their loss. I'm happy to collect the NGC graded coins that are just as nice (if not nicer in many cases) and at lower prices.

 

I will note that, in general, NGC is still overwhelmingly preferred over PCGS for the grading of exonumia, tokens, medals, and most other non-USA coins. There are exceptions to this, as the Australian market seems to like PCGS better for some reason. In reality, PCGS and NGC are sort of like Pepsi vs. Coke. They are essentially equals, but sometimes people have strong opinions and preferences for one vs. the other.

 

If the brand of plastic entombing your coins has become a dogmatic religious experience (as it seems to be for some), I think it might be time to reassess whether you're in the right hobby.

[brg5658]

If NGC issued the challenge and PCGS refused, it could conduct the grade off alone and still get the same results. PCGS would be viewed as aloof and arrogant; not good for their image.

 

Have you been to the PCGS forum? That kind of image is what PCGS seems to strive for -- and they have many lemming converts to proselytize just such an attitude!

 

[TonerGuy]

And whether you agree with it or not, there is a widespread perception that in many more cases than not, PCGS grades more strictly than NGC does.That (and not just the registry) is a large reason for the prices differences you spoke of.

 

Is this across the board, on all series in all instances, or is that a generalization ?

 

I ask because in my experience, PCGS has been far less stringent when it comes to toning. Especially in regards to some series such as ASE. Ive seen numerous QT coins in PCGS plastic and at one point, NGC told me (I wont say who) that they simply will not grade toned ASEs because of the rampant issues with AT. I also found PCGS much more lax with other modern toners as well, ie, Ike Dollars.

 

To be honest, I havent submitted to either service in about a year so I dont know if that has changed however on my last submission of toners to NGC I went 0 for 14. I packed them back up and sent them to PCGS and went 14 for 14.

 

I have found PCGS and NGC to be almost equal in regards to Peace $ toners though. At PCGS I might get a bump in grade for color whereas at NGC its a star. I prefer an accurately graded star coin than an overgraded toner. But thats just me.

[MarkFeld]

And whether you agree with it or not, there is a widespread perception that in many more cases than not, PCGS grades more strictly than NGC does.That (and not just the registry) is a large reason for the prices differences you spoke of.

 

Is this across the board, on all series in all instances, or is that a generalization ?

 

I ask because in my experience, PCGS has been far less stringent when it comes to toning. Especially in regards to some series such as ASE. Ive seen numerous QT coins in PCGS plastic and at one point, NGC told me (I wont say who) that they simply will not grade toned ASEs because of the rampant issues with AT. I also found PCGS much more lax with other modern toners as well, ie, Ike Dollars.

 

To be honest, I havent submitted to either service in about a year so I dont know if that has changed however on my last submission of toners to NGC I went 0 for 14. I packed them back up and sent them to PCGS and went 14 for 14.

 

I have found PCGS and NGC to be almost equal in regards to Peace $ toners though. At PCGS I might get a bump in grade for color whereas at NGC its a star. I prefer an accurately graded star coin than an overgraded toner. But thats just me.

 

It is definitely a generalization, but I think it applies across many series and at many grade levels, particularly higher ones.

 

Also, you seem to be talking about (leniency with respect to) toning, whereas I was commenting on grading - in this case, largely apples to oranges.

[TonerGuy]

 

It is definitely a generalization, but I think it applies across many series and at many grade levels, particularly higher ones.

 

Also, you seem to be talking about (leniency with respect to) toning, whereas I was commenting on grading - in this case, largely apples to oranges.

 

It might be apples and oranges but that all of the fruit counts when a coin in encapsulated and straight graded. For a toning enthusiast I am more forgiving about grade then I am about NT, MA or AT issues.

 

[SLUGGO]

Seems we all agree that the concept of PCGS having stricter grading standards is a generalization, albeit the perception in the coin market.

 

I don't think that that the perception is good for the collector who is the ultimate consumer of coins. Registry contributes to a substantial part of collecting where at lease we can view our valuable coins and compete with others who have similar tastes. By exclusion of NGC coins to the PCGS registry, the participants at PCGS must have somewhat of an empty feeling, well knowing that their top dogs represent less than 1/2 the coins in the universe. It is no wonder that they bid up PCGS coins to improve their sets as they are buying from a very limited pool, less than 50% of the coins in the market.

 

For many years I had the top proof date sets in Shield, Liberty and Buffalo nickels, Seated liberty halves and quarters, Barber halves and quarters, Trade and Morgan dollars. When my collection was sold thru Heritage in April, 2011, many of the better ultra high rated coins, all graded by NGC, brought record prices as did my proof gold coins.

 

So, what does that matter in this discussion? Perhaps an indicator that top collectors will buy the better coins regardless of the grading service and pay top dollar for them. Many of the buyers were dealers or collectors who had good coaching. NGC graded coins easily held their own and those coins went into the NGC registry with both grading services making appearances.

 

Frankly, it's the PCGS collector that loses out as he trumps his top rated set, fully knowing that there are better sets at the NGC registry. PCGS should realize this, participate in a sanctioned grade off, and allow the market of all coins to freely join their registry.

[coinman_23885]

 

I ask because in my experience, PCGS has been far less stringent when it comes to toning. Especially in regards to some series such as ASE. Ive seen numerous QT coins in PCGS plastic and at one point, NGC told me (I wont say who) that they simply will not grade toned ASEs because of the rampant issues with AT. I also found PCGS much more lax with other modern toners as well, ie, Ike Dollars.

 

I don't disagree with your observations at all, but I think that is a very narrow exception to the general rule. I have seen far more questionably toned coins (i.e. Peace Dollars and other pre-1964 coins) in NGC holders than PCGS holders. I do, however, think that NGC has tightened up considerably. Both services have since the advent of CAC, and I think they are much closer to each other than in the past.

 

Of course, all of this is very subjective as is the grading issue. Going back to grading, I think PCGS tends to emphasize market grading more so than NGC (although NGC undoubtedly engages in some market grading too). Even in the early years, PCGS was very strict about luster on higher graded coins whereas it seems (to me at least) that NGC would put a slightly less lustrous coin in a higher graded holder if it was otherwise all there. Maybe this is part of the perception?

[SLUGGO]

Anecdotal history does us no good, same for random observations about our experiences with PCGS and NGC grading standards. It is highly likely that a grade off will never occur as neither side will agree to it; both for different reasons.

 

Actually, if PCGS were really interested in the collector, both advanced and beginning, it could simply open the registry up to all coins graded by either service. That's a win for everybody but the PCGS collector who has flushed money down the toilet paying artificially high prices to get the top grades which are scarce, especially when dealing with only 1/2 the market.

 

So, PCGS is right when they told me that their registry collectors do not want NGC coins. It is very obvious and transparent as to why.

 

 

[Coinbuf]

The problem with all this is that grading is a moving target, one that is constantly shifting ever so slightly. So you have no way of taking a sample from both services that were graded using the same standards. Additional each service has its own ideas on what attributes are important in grading. By that I have always felt that PCGS values luster over marks and NGC forgives strike over clean surfaces (just my opinion). And then you have the human factor involved in any grading (or regrade) scenario; eye appeal is extremely subjective. So even if you could convince both services to do a grade-off (personally I'm with brg5658 on many of his points) it still would not really prove anything. Plus you would have to grade way more than 200 coins to have any statistical relevance. Something like 10,000 or more would be the only way to have a chance to draw any reasonable conclusion. While I think it would be an interesting project there is no financial gain to either service from such an experiment so I see no possible way it would ever happen.

 

And what’s to gain if PCGS were to allow NGC coins into their registry? The two systems would be redundant, mirror images of each other. I like that NGC allows us to use coins from both services and that’s why I use the registry here vs. ATS; but again it makes no financial sense for PCGS to allow NGC coins in. That would drastically cut down on crossover revenue overnight, not a good thing for stockholders.

 

And since it’s in this thread I also think that PCGS currently is much more lenient on toning.

 

[coinman_23885]

Actually, if PCGS were really interested in the collector, both advanced and beginning, it could simply open the registry up to all coins graded by either service. That's a win for everybody but the PCGS collector who has flushed money down the toilet paying artificially high prices to get the top grades which are scarce, especially when dealing with only 1/2 the market.

 

PCGS, like most other numismatic business entities, is a for-profit entity. It only cares about its bottom line, and it will take all measures it thinks it can legally do in order to improve its bottom line. If that means hyping the PCGS Registry as a way to market PCGS only coins, then that is what they are going to continue to do.

[SLUGGO]

Hmmm..so it seems that we all agree that PCGS is in it for the money, putting their collectors in the back seat so that it can max out on its profits. It is costing the PCGS registry participants a whole lot of unnecessary dough to buy the highest sought after pieces with only half of the population to available in the pond, and when they finally achieve #1 ranking, so what, NGC has better coins in the same set.

 

Oh the inhumanity of it all.......perhaps this post is better suited for the PCGS forum, but then it would most likely be censored as heresy.

[skippy]

Of course, registry distortion in pricing is a fact. Not just on the top end, but now at AU58 since the "everyman" registries were introduced.

 

The solution is simple. Stop caring if you have the top set in the registry if you must have a registry set. Even better would be to stop participating in the registry. Buy coins you like on their own, not coins for registry sets. If a coin you are interested in buying is overpriced due to the registry influence, don't buy it. You don't need it.

 

I participate in the registries, but I have a disclaimer in the descriptions of my sets that says that grading is not the focus of the set (varieties are the focus).

 

Registry price distortion is only a problem for YOU if you YOU make it so.

[#]

NLI

[Hard Times]

Ahhh....the key word is perception. That is not proof, only speculation which seems to guide prices. The PCGS registry has created that perception by driving up prices for PCGS coins.

 

Do you think the perception would change with a well publicized grade off...say with 500 high grade coins to make it less random? What if the results turned out that the both PCGS and NGC were consistent with the experts?

 

I agree that perception is not proof, though I have seen enough examples over the years, such that I believe it to be correct. I say that as a former NGC grader and a fan of NGC.

 

At this point (roughly 30 years down the PCGS/NGC road), even with and regardless of the results of a large "grade off", I think it would be all-but-impossible to change the general perception.

 

 

Last year I cracked out some NGC holdered coins and sent them to PCGS. They were seated and bust varieties of various types. They were all coins that did not pass CAC. I wanted to test this idea of NGC vs. PCGS grading in these series and what happens with resubmissions in new holders at CAC - knowledge on important issues that like are worth their weight in Osimium or Iridium.

At PCGS, 1/3 went up, 1/3 went down, 1/3 stayed the same in grade. Then sent to CAC, 40% of them beaned this second time around. In fact, a bust halve, I bought from Mark Feld in P45, then upgraded to N50 that did not bean, then upgraded tp P53 in my raw submission test, beaned! One time PCGS called it a 45, next time through, a 53. More strict grading?

So this is one example that shows NGC and PCGS are just about the same in grading for strictness. PCGS appears to be better at marketing and there are alot of folks who have bought into the idea that they are 'better'. Don't make it true, in fact, probably not true.

 

Best, SH

[Hard Times]

Here is the example I mention above.

 

First holder, P45, no bean awarded, clearly PQ for a 45, Mark knows how to pick em

 

 

Cracked out, upgrade to N50, no bean awarded.

 

 

Cracked out, upgrade to P53, bean time! That is no doctoring you see in the change of images over time, that is me getting better (I think).

 

Grading is subjective, it is a myth that P or N overall is any more strict or less strict than the other. N has to be a better marketing job.

 

[Hard Times]

I have suggested a "grade-off" more than one time here before, and it always gets ridiculed.

 

The short of it is that TPGs don't want any hard evidence to support or disprove their claims to greatness. Perception reigns, and if people only want to collect PCGS graded coins, that's their loss. I'm happy to collect the NGC graded coins that are just as nice (if not nicer in many cases) and at lower prices.

 

I will note that, in general, NGC is still overwhelmingly preferred over PCGS for the grading of exonumia, tokens, medals, and most other non-USA coins. There are exceptions to this, as the Australian market seems to like PCGS better for some reason. In reality, PCGS and NGC are sort of like Pepsi vs. Coke. They are essentially equals, but sometimes people have strong opinions and preferences for one vs. the other.

 

If the brand of plastic entombing your coins has become a dogmatic religious experience (as it seems to be for some), I think it might be time to reassess whether you're in the right hobby.

 

People need religion Brandon.............

[TonerGuy]

I have seen far more questionably toned coins (i.e. Peace Dollars and other pre-1964 coins) in NGC holders than PCGS holders.

 

I cannot speak to the other pre-1964 coins but I can speak on the toned Peace $. This is simply not true. In the past 15 years of specializing in toned Peace $ Ive examined thousands of toned Peace $ in PCGS, NCG, IGC and ANANCs slabs. David Hall made a very stupid public generalized comment about toned Peace $ many years ago (before you joined the boards here) and that comment stuck in the community's collectively consciousness as though Moses proclaimed it from Mt Sinai. He and I got into a verbal altercation on the floor of the LB show over it and I was banned from PCGS because of it.

 

I have had PCGS toned Peace $ fail to cross at NGC and Ive had NGC toned Peace $ fail to cross at PCGS. I see relatively few AT toned Peace $ in NGC plastic, except for perhaps the Leather Pouch Hoard (314XXXX). But by now those coins are accepted as MA as are the PCGS Ike Peacock Hoard.

[Conder101]

PCGS and NGC have remained on top because they were first to come up with the encapsulated coin idea,

No that was Accugrade two years before PCGS existed

 

Hardtimes experience also says something about CAC. Coin wasn't good enough to be a solid or high end 45, it wasn't good enough to be a solid or high end 50, but it WAS a solid or high end 53.

[SLUGGO]

Ahhhh...CAC. Why CAC? What purpose does it serve? Seems like PCGS & NGC evaluation isn't good enough, now we need a 3rd party (note, I didn't say 3rd party grading service) to opine that the coin does or does not measure up to their standard.

 

Since they can't take the coin out of the holder, how is that they can be as accurate in their assessment as PCGS or NGC? Without the proper tools and restricted by a holder which might obscure some important details, why do we give them any merit whatsoever?

 

What if the coin doesn't have a CAC sticker? Does that mean it's inferior to a comparable coin that does? Maybe it hasn't been submitted yet. No way of tracking this is there?

 

Bottom line, the grading idea which absolutely catapulted coins into the investment market has now become polluted with subjective opinion, rumor, innuendo, gossip, and hearsay; none of which would ever hold up in a legal proceeding which is really the standard of proof. All of which is not beneficial to the end user, the collector.

 

 

 

 

[Walkerfan]

My thoughts echo those of Bill Jones who said it quite eloquently.

 

I could not have built my set with only 50% of the coins out there, unless I wanted to spend 'crazy money' that I don't need to.

 

I have MS 64 & 65 coins that are much better than some MS 65 & 66 examples from BOTH services and that translates into 1000s or even 10s of 1000s of $$$ and WHY?? For an inferior coin?? That is insane!

 

Crackout and crossover guys skew the numbers in PCGS' favor----part of the reason that PCGS is perceived as better, when it isn't IMHO.

 

I believe that part of the trick is finding 'fresh' material that hasn't been overgraded.

 

I am proud to own quality coins from BOTH services.

[jpcienkus]

This has been a very interesting read for me. I'm new to this hobby, <3 years. I was not around while NGC and PCGS were carving out their positions in the market. I have been in Sales/Marketing for over 25 years though. Many of the comments/explanations posted in the thread ring very true to me.

 

Without knowing squat about either PCGS or NGC, I determined on my own, that I preferred NGC over PCGS. I've never been drawn to companies that are exclusive. I've witnessed similar behaviors in other industries/markets. Things don't always end well for them.

 

I do have some registry sets here and each one of them have a mix of PCGS and NGC coins. I can't understand why seasoned hobbyists would limit their choices when putting together collections.

 

 

[jom]

I'll have to agree with Bill as well. I've been saying that about the crack out game as long as I can remember. When you see overgraded material in an NGC holder (or old ANACS etc) you probably missed the many times they DID get the grade correct when those coins got cracked and sent to PCGS.

 

I've seen just as much "odd colored" coins in PCGS as NGC...if you count Modern ASE's PCGS numbers go WAY in that regard.

 

Also, I think NGC is superior with the "full" desigations as well (bands, bell lines etc etc).

 

Overall I think Mark is correct however when you get to the top grades...NGC seems more lenient.

 

However, I should point out that leniency isn't necessarily a detriment if it applied CONSISTENTLY. Another words as long as you know what you are getting all you need to do is to price adjust accordingly. But if the TPGs constantly change the way they grade this is next to impossible.

 

jom

[SLUGGO]

jpcienkus response , "I can't understand why seasoned hobbyists would limit their choices when putting together collections," gets to the very heart of this whole post.

 

It's a chicken & egg scenario at PCGS. Dammed if they do and dammed if they don't. If they allow NGC coins into their registry, s**t will hit the proverbial fan. The exclusivity they now have has cost the collectors dearly by overpaying for the PCGS label. If NGC coins are allowed, chances are that the other 50% of the population will yield some higher grades than put out by PCGS. Then, those collectors who needed to be at the top of the registry will no longer be the lead dog and the money that they burned getting there will be an empty promise as the market will collapse for those that grossly overpaid.

 

So, then the PCGS registry will see a complete turnover in leadership of the various categories. Those boys aren't going to like losing on both fronts; money and position erosion.

 

They have been living under false illusions. Ok, so you are at the top of a PCGS category; what about the other 1/2 of the population? Nobody but the PCGS addicts believe that an all PCGS set will achieve a higher point score than when mixed with NGC.

 

The conundrum will continue untill PCGS steps up and does the right thing; that which is best for all collectors, a joinder of their registry that allows NGC coins..

 

Voila!