Would like opinions why NGC still trades at a discount to PCGS

[truthteller]

I assume it has to do with the better dealer financial support system in place. Many NGC coins are graded at par or better than PCGS. I surely would like to see a rise in value across the board on NGC products.

 

TRUTH

[gmarguli]

I think it has to do with several reasons, one being an illusion.

 

Obviously there are series that PCGS grades stricter than NGC. The opposite is also true.

 

PCGS tries to keep up the perception that their coins sell for more than the competition. They do this by tightening their grading and reducing the crossover rate. They also like to play games with bodybags making it harder to get coins into PCGS slabs. Many times a nice solid MS65 coin will remain in a PCGS MS64 slab and get sold into the marketplace to knowledgeable buyers at super prices for an MS64, but not for an MS65. Not knowledgeable people point to this as superior prices for PCGS coins or inferior prices for NGC coins.

 

There are also other series where PCGS and NGC have differing standards at certain grade levels. Look at Lincoln cents. PCGS makes VERY few in MS67. Recently in the other forum a member posted about an NGC MS67 bringing $150 while a PCGS MS67 brought $450. They pointed to this as proof that PCGS is stricter. The problem with this was that an MS66 in either slab was a $15 coin, so obviously the market feels the NGC MS67 is better than a PCGS MS66, but worse than a PCGS MS67. Who screwed up grading the coins and/or which coin brought a higher price for the ACTUAL grade?

 

And of course there is the registry that pushed some ego driven people to be PCGS only. For the most part (non-moderns) that has slowed a lot.

[MAULEMALL]

This has been to my advantage.So please don't get anything started.

I have BOXES of NGC graded coins.I only have maybe one box of PCGS and even a box of ICG.

Let the perception of PCGS being so much better continue.All my coins are solid for the grade.(even the ICG).I just refuse to pay the extra for a piece of plastic.

[TomB]

I think you have received good reasons, however, I would like to add one more. In my opinion, in the early '90s, there was a period when NGC graded almost exclusively on a technical paradigm where eye appeal had little to do with the grade of the coin. Consequently, there were some truly unattractive coins slabbed by NGC in staggeringly high grades. This hurt the perception of what NGC quality was about and the persistence of these coins on the market place still hurts NGC, although not nearly to the previous extent. I have seen this many times with Washington quarters, Roosevelt dimes and Franklin halves.

[crito]

With moderns PCGS is the only game in town. I listed this coin 5 TIMES as low as $24.99 with no bids. So I put it up for $1 with no reserve. Now, I know PCGS artificially inflates the value of their coins, but the discrepancy between their price guide and what I realized is astonishing. $150 "list" vs $11 closing price. Auction finished at a good time, not 3 am Monday morning, so thats about a 92% discount for NGC plastic!

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&category=3358&item=3018599457

[gmarguli]

Not really. A PCGS PR67CAM sold for $41.50 and the seller had a good photo that captured the cameo well, is fairly well known, listed the coin as PQ, and indicated that the cameo is ++ than average. Your photo is small, looks B&W, and doesn't show the cameo well at all.

 

You ended the auction on a Saturday (BEFORE EASTER) at 5:30 PM. Lots of people out of town or spending it with their family.

 

Another PCGS PR67CAM failed to sell at $45.

 

From TeleTrash there have been a few sales of this coin this year.

 

$9 NGC

$18 PCGS

$21 PCGS

$24 PCGS

$27 PCGS

 

[jtryka]

Who said there are no bargains in moderns! I think I may have to start looking at the earlier proof Roosies, I have all the proof only coins, but no the early proofs. As for the discrepancy in price, I think much of it is perception, or misperception. The average collector on these boards collects in some very widespread areas, like moderns, Morgans, etc. where PCGS seems to have a perceived advantage, with tighter grading standards (though I would argue that consistent is more of an advantage than tight). I would be interested in what people see in the "less than front page areas" (i.e. areas that are not always on the front page of Coins Magazine). For those who know me, I mainly collect Saints, and there has been little or no premium for PCGS coins for quite some time. In fact, last year I vividly illustrated this point to WSM on double eagles on the Heritage inventory listing, where if I recall, there were more NGC coins trading at a premium than the reverse situation. In general, people that are familiar with this series tend to buy the coin, and not the holder, and we focus on how we would grade it, with less emphasis on the holder regardless of the name at the top of the slab. Are there other series where this situation persists?

[crito]

Like I said... had it listed at $24.99 with no bids, all 5 times ending on a weekend. And I used a larger image of coin in other auctions, but which didn't show entire slab. Another person suggested that must be the reason it didn't sell, so I switched to the image you see now. Anyways, certainly glad I didn't spend the money to slab it too and I guess I could've done worse selling it on teletrade $9, ouch... that's still a substantial discount to the PCGS high of $27. So, again, PCGS has the only game in town (still a suckers bet, though). I don't slab moderns for my personal collection

 

[nwcs]

Perhaps another explanation can help. PCGS was a first mover. Successfully, that is. And they built a reputation. They survive on the reputation because their grading still is among the best overall. Their ineptitude in a few areas has yet to catch up to them. NGC, having been perceived as #2 for a long time, may in fact be #1 but they need to sway public opinion. And I think that will happen when PCGS's issues come to a head or if NGC does something spectacular to leap frog them in the marketplace's mind.

 

One thing that did not help is when PCGS did the full torch thing, NGC followed right behind them. In the market's mind, I bet it fed the thought that PCGS is an innovator, and NGC is a follower because when PCGS does something, NGC has to match it.

 

I wish NGC would take it upon themselves to be innovative and force the market to follow after them. When people think of NGC as leading the market in innovative ideas, they'll think of NGC as #1 -- even if PCGS overtakes them in numbers again.

 

Neil

[gmarguli]

A few points. The idea of #1 and #2 is very subjective. What is the criteria for being #1 or #2? Is it prices achieved for grade? If so, that is easy to be #1. Send me all your PCGS/NGC MS67 coins and I will regrade them with my home grading service as MS63. Watch these coins sell for major premiums over MS63 money. I guess I am now #1? Of course not...

 

In the past NGC and PCGS have switched positions as the so-called #1 company. They will likely continue to switch in the future.

 

If anything, isn't NGC is the innovator in the industry. I might be wrong, but weren't they the first to list CAM/UCAM? They list PL/DPL on non-Morgans. They have the Star designation. They tried the (T) & (W) designations. They listed varieties. What did PCGS innovate? Perhaps PL/DMPL on Morgans and FB on Mercury dimes? I'm not sure when they started this and when NGC started this.

 

As for the FT on Roosevelts, there isn't exactly a great deal of happiness for this designation in the collecting community. NGC basically had to follow this idea. You can't have a major player take one idea and let it run and allow potential submissions to go elsewhere.

[Hoot]

As for the FT on Roosevelts, there isn't exactly a great deal of happiness for this designation in the collecting community. NGC basically had to follow this idea.

 

I have the suspicion that NGC had this bullet in the chamber and was ready to fire, they simply chose not to take the lead into that realm. Probably a smart idea. Afterall, they are already making the designation. Has PCGS even published their standards for it yet?

 

Hoot

[LucyBop]

There was a link about PCGs's standards with pictures. I am one that digs this designation. I was just reading in Coin World that anacs is also grading Full Torchies...

 

 

 

edited for link on PCGs standards: http://www.pcgs.com/articles/article_view.chtml?artid=3795&universeid=313&universedir=pcgs.com&type=1

[gmarguli]

I have the suspicion that NGC had this bullet in the chamber and was ready to fire, they simply chose not to take the lead into that realm. Probably a smart idea. Afterall, they are already making the designation. Has PCGS even published their standards for it yet?

 

The smart thing about this is that once again, NGC can claim to have stricter standards. I believe PCGS just went just with bands and not torch lines.

[CarlWohlforth]

I like both companies. I have nice coins in both holders. It is in my interest for NGC coins to trade at the same level as PCGS. This is mostly due to my box of Mercury dimes all NGC MS 67 FB. Also to my box of NGC Cameo Proof Roosevelt dimes and my box of NGC Cameo Proof Jefferson nickels, and my Proof Washingtons.

 

People have mentioned it above then go on to look for a deeper reason. In some series there are different standards between the companies. If you combine that with people willing to pay lots extra for the smallest difference in quality you get the big differences in price.

 

[Tradedollarnut]

NGC is an innovator. Look at NCS. Look at the GSA grading. Look at proper weighting for the registry sets [well, ok, except for the classic rarities and early proofs that get a whole darn point].

 

NGC has the lucrative option of laying just below PCGS's standards - a very good place to be to pick up lots of business. PCGS has the problem of maintaining the perception of being the tightest in order to keep their staked out position.

 

It's not a matter of marketing or perception, it's economic reality for both companies. You can't stake out both the high and midrange ground - it's simply impossible.

[DonHeath]

In my limited experience, PCGS grades more technically than NGC. Most modern collectors understand this approach. There is little to differentiate one full luster great strike coin from another except near invisible ticks. The market has assigned incredible premiums to these miniscule differences, and sometimes irrationally so. I have come to prefer a fuzzier standard where eye-appeal is more coveted. A mark free dead fish coin can be technically superb.

 

In an article about grading on this site, John Maben said " That said, we believe an "ugly" but otherwise problem free coin should get what it deserves in the form of a lower grade. Coins with spectacular original toning are highly preserved, miniature works of art that in some cases should be rewarded with a higher grade. Likewise, a blazing white gem with "pop" could be rewarded. Next, and equally important, remember to always ask yourself the question: "How is it made?" (Or, "How do they come?"). I think most professionals would agree that one of the things to come out of the evolution of grading is acceptance that you simply cannot grade coins from different time periods and of different mints the same way, even though they may be the same coin type. If you submitted an 1896 "O" Morgan dollar that looked like an MS65 1903 "O", I'll bet you would be very disappointed if it came back in an MS65 holder!"

 

That is a perfect description of market grading. How does this approach apply to moderns? Frankly, it probably doesn't. How do you properly assess a coin when the majority of the population is full-strike, full luster, and very common? You count near-invisible ticks. Just for fun, do a quick search of the grading census/pop report for 1971-P Jeffersons on NGC/PCGS's sites respectively, and you'll see that NGC has graded 2 of these coins, and PCGS has graded 222. It seems fairly obvious that PCGS gets the bulk of these kinds of submissions. Common coins, whose value is based on grade rarity have less value in NGC holders. Does that really bother any of you who submit to NGC? I'm not meaning to imply that NGC doesn't do a good job with moderns, or that PCGS isn't great at applying their "stricter than the ANA" standard to the moderns that are submitted to them. I'm simply observing out loud that I don't mind owning a properly graded modern in an NGC holder for a price that makes sense based on the relative differences between an MS67 NGC coin and an MS68 NGC coin. The difference between the two in an NGC holder is one I can easily see, and the grading scale is not tuned to a degree of fineness that it requires a loupe to distinguish a 67 from a 68. I'd also imagine that broader spectrum allows for more consistent results.

 

Don Heath

[Russ-migration]

That is a perfect description of market grading. How does this approach apply to moderns? Frankly, it probably doesn't.

 

Don,

 

Actually, it sometimes does. Witness this coin:

 

 

It was graded PR65DCAM by PCGS. You and I both know how much PCGS HATES hairlines. Well, this puppy has a level of hairlining in the left obverse field that, on a garden variety coin, would have kept it in a 64 holder.

 

The reason it graded 65? Because the eye appeal knocked the grader's in the dirt.

 

Russ, NCNE

[IrishMike]

TomB, I agree 100% with your comments, but I would add that there was a time period that they were looser especially on washingtons. I don't see that now. I own 3 boxes of NGC washingtons. IHC's and Lincolns you can see a gap in the grading standards of past years. I just think PCGS is tougher on the grades but way less consistent. Where PCGS blew it is moderns. For whatever reason they quit grading 70's while NGC remained consistent.

 

The good news is that in the future the trend may very well change, while David Hall seems to be a good guy and knows how to grade, he is clueless on how to run a company. I would not be surprised at all to see them on even footing someday on prices and even see the market swing further towards NGC. They certainly have momentum in their favor given the growth of their registry and the lack of seasoned management at PCGS.

[DonHeath]

Russ,

 

You're right about that one getting the bump based on eye-appeal. All I was saying is based on the two standards, I think they look like this:

 

PCGS

 

<.....64.....><....65....><...66...><..67..><.68.><69>

 

NGC

 

<.....64.....><.....65.....><.....66.....><.....67.....><...68...><..69..><.70.>

 

That's my take.

 

 

[braddick]

I like everything about NGC more and more other than some of the stuff that 'escaped' their grading five to seven years ago and now all the 70 material being pumped out.

 

NGC though (especially the STAR) is now my number one search on eBay under coins.

[gmarguli]

Why don't you like the 70 stuff coming out of NGC?

[keithdagen]

I can't speak for the PR-70's, but I haven't seen an MS-70 in an NGC holder I didn't think deserved it.

[Elcontador]

I don't think you can make the above blanket statement. Re Classic minor coinage, yes. But I have not noticed much difference

re MS 65-6 Seated or Barber material between the two services..

[Beijim]

What did PCGS innovate?

 

Greg, Greg, Greg. Please!

 

They innovated the illusion of superiority worthy of the 2-10x market multiples on some issues. They also innovated the deep conflict of interest inherent in running both a grading service and a retail coin distributorship.

 

Other than that, I have no strong feelings on the subject.

 

Beijim

 

[Beijim]

Don, that was an excellent and articulate opinion on market grading and moderns. Thank you.

 

Your discussion reminds me of the perennial question as to whether a particular discipline, whether it be coin grading or violin playing, is science or art.

 

The grading of many modern issues seems to tend more toward the science, precisely because strike quality is consistently high and relatively invariant as compared to older coinage. Therefore, a more technical approach in which you survey and maybe even literally count minor flaws under magnification may be appropriate.

 

Grading older isssues, on the other hand, seems to involve both technical precision and a high degree of art, the X-factor that experienced numismatists learn only after exposure to hundreds of examples. How do you assess eye appeal? One man's da Vinci is another's line drawing.

 

It reminds me of differences in professional musicians. There are technicians and there are artists. Some have incredible technical facility but virtually no feeling for the music's aesthetic qualities. They can produce dazzling performances but leave you wondering if they understand what they played. Others may miss a note here and there but endow the music with a life of its own. These are artists.

 

Regards,

Beijim

 

[Beijim]

Because the eye appeal knocked the grader's in the dirt.

 

Well, I certainly hope he washed up before his next social function.

 

[braddick]

NGC (and, PCGS- no one is getting away with anything here. . .) didn't grade a "70" for ten years then suddenly hundreds are located?

It's a shift away from consistency I don't like.

 

Plus, if a coin has the slightest flaw- I don't care if it's MintMade- it's not "perfect" and thus not a 70.

 

PCGS is just to blame, but on a lighter scale.

 

Outside of that rather small complaint/observation I give NGC glowing "TENS" all across the board. They're becoming my favorite service overall.

[truthteller]

Pat,

 

I believe that NGC had a policy from inception to about 1994, that they would not grade any modern coins dated after 1964. I remember sending in a package in 1992 and having a no grade due to this policy. PCGS graded pretty much everything modern from inception.

 

TRUTH

[gmarguli]

braddick, I don't remember the exact date, but very early on a 1986 SOL $5 appeared in the PCGS population report. It remained the only PR70 for quite a while. If I had to guess, I would say this coin resided in a rattler slab, but that would be a guess.

 

PCGS graded MANY MS70s early on. I remember the 1989 $5 Constitution coins hitting the market and selling for $1000-$2000. There were other moderns that graded MS70.

 

PCGS used to have a strict requirement for the PR70 grade. I believe they altered this when ICG came into the market and started giving out the PR70 grade. There has been talk that dealers were getting pissed at PCGS for giving out so many PR70s because the value of them was falling. Even hitting the ultimate grade wasn't a big pay day anymore for the dealers. That's why I believe they tightened. The MS70 grade was always given out.

 

As mentioned, NGC had a policy against grading "modern" coins, so the pool of MS/PF70 coins for them was extremely limited for a long time. I do not know when NGC lifted this policy. Since NGC changed this policy, they have given out many MS/PF70s. Yes, they are a tiny bit easier on these grades than PCGS, but I believe the difference is that PCGS plays games to try and control the population of these coins. The number of MS/PF70 coins I've seen from NGC that I didn't think looked great has been small. Same for PCGS. There is a small percentage for both companies, like the 1963 1¢ in PCGS PR70DCAM and PR70 Ikes that are dogs, but overall they are usually nice. I cannot say the same for ICG.

[EZ_E]

Who graded the 1963 proof Lincoln cent with a big carbon spot as PR-70? (The one that sold for $39.1K)