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

[clackamas-migration]

At least from the Lincoln and jefferson side of things PCGS has a ceiling at MS67 and IMO do NOT just technically grade wheat Lincolns or Jeffs. You could send in a wheat that technically is an MS68 and if does not have the most awesome flash it going to end up an MS66 at PCGS. This has not always been so and that is my beef, lack of consistancy over time.

 

I do like the 6 step requirement for Jeffersons and I have a batch of 20 coins to go in a couple of days. The fact that NGC requires 6 steps makes the true GEMS stand out.

[EZ_E]

Based upon your comments, it seems that politics is the rule of the game and not strict grading guidelines.

[Android]

Why is it that so many people think that either of the services are "giving out" PR70's? Isn't it possible that the majority of these coins deserve the grade? With so many people sending every mint product they buy directly to PCGS or NGC there's bound to be more simply by the volume of submissions. If anyone subscribes to NGC's news letter, Rick Montgomery talked about the huge increase in submissions since the 2003 mint products came out. He also discussed the huge leap in quality of the 2003 proof eagles and state quarters that NGC has been seeing.

 

Andy

[DonHeath]

Looks like there are still a few collectors that pull the bad ones.

 

A positive sign.

 

 

 

 

[coinman1794]

"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."

 

While it's true that PCGS moderns usually sell for more than NGC coins, the populations can be missleading. NGC's started their modern service much later than PCGS so people had to send their moderns to PCGS in the past. Then NGC started an $11 modern service, and PCGS was cheaper (unless you use the online form and get the 10% discount), so PCGS still got more coins. Now that NGC has a modern service, they are getting more and more modern submissions as people test the waters. After all, it is a newer service that has to build up support. And, just recently, PCGS raised their modern service rates to $12 a coin! With NGC at $9.90 and PCGS at $12, there are bound to be more people choosing NGC.

[coinman1794]

"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."

 

For ten years there were virtually no modern submissions! And, as the most recent NGC newsletter coincidentaly mentions, the mint seems to be making coins more and more perfect every year. So, the quality of product from the mint has increased substantialy in the last 10 years, making 70's possible. Before, they were much less likely, although they did exist.

 

 

 

[Russ-migration]

Isn't it possible that the majority of these coins deserve the grade?

 

Andy,

 

Current submissions, it's a very real possibility that the coins graded 70 do, indeed, deserve the grade. However, I've seen enough earlier graded material to know that most did NOT deserve the grade. Here's a recent example that sold for $1500 on eBay:

 

 

Granted, it's likely that most of that [!@#%^&^] grew on the coin after it was slabbed, but even without it, the coin is nowhere near a 70. For one thing, the strike is too weak. There are plenty more examples like this from that era, and it's not just the 70 graded coins, but the 69s that don't cut the mustard.

 

And, NGC is not innocent in this regard. I've viewed quite a few of their older PR70s and have yet to see one that I would grade at that level.

 

I will note, though, that the above is based on my experience with 1960's era proof coinage, as it is the only area I know anything about.

 

Russ, NCNE

[Android]

Thanks for the pic Russ, I see what you mean! I wonder how PCGS or NGC would handle an appearance review situation of coins like this. I'd be interested to know if the owner of this particular coin submitted for a review. Most of the PR70 coins I've seen are late 80's,90's and 00's. I assumed most deserved it. In all honesty, I wouldn't be able to tell the difference between these slabbed PR70's and the ones in my proof sets! I guess I haven't studied them enough to know.

 

Andy

[BillJones]

My main concern is that NEITHER company ever gets control of the market. Competition keeps them somewhat akin to honesty. That sentence is awkwardly worded because that’s how I feel about both companies; their policies are akin to honesty. PCGS does win the arrogance award, however, hands down. If fact I would love to see a third major company get a foothold in the market. That would be of great benefit to collectors.

 

I really get tired of these “PCGS weenies” who won’t look at any other brand name. If we ever get a collector community that is full of nothing but them, coin collecting as a hobby will go down the tubes.

 

[TomB]

I have to agree with Bill that strong competition from competent third-party certification services not only serves to likely keep them more consistent and to grade closer to the ANA grading scale, but, also gives an incentive to the companies to be more consumer oriented. Please note that I am not saying the companies in existence are already consistent enough, nor am I saying that they grade according to a well respected, universally accepted grading scale for all coins. I just think that they do a better job in competition with one another than they would without one another.

[Peace_Fan]

Back to the original point of the thread, I think it depends on which series of coins we're discussing. In the case of Morgan and Peace silver dollars (my area of knowledge) I don't see much of a difference in price between PCGS and NGC graded coins. Particularly in the case of Peace dollars, my collection has ended up primarily consisting of NGC graded coins. It wasn't by design, but coins from each service are usually priced equivalently and the NGC coins, in my experience, have far greater eye appeal. If you study the top pops for each issue, you'll find that NGC and PCGS have graded equal numbers, for the most part, which points to consistency between the companies.

[TomB]

I agree with you 100%, Barry, for the knowledgeable numismatist. Unfortunately, in coins, as in many facets of life, many people do not "know" by experience, they "know" by having someone else tell them. To this end, the perception of a less worthy product can be as damaging as the reality of a less worthy product.

[cladking]

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.

 

The grading parameters which separates moderns from older coins has far more to do with surface characteristics and intangibles like "eye appeal" than with strike or marking. Most moderns are collected only in unc and proof and do not have a large variation in state of preservation or, type or degree of luster within a given year. Granted, there are some coins like a 1984 cent which comes with a wide variety of surface characteristics but generally with moderns this is determined more by grade or die state than by different storage and handling conditions over many decades. Due to lower standards there is probably much greater variation in strike quality for most circulation issue moderns. These problems range from coins struck with badly misaligned dies to coins struck with worn or poorly made dies. Not only is this range greater there is a higher proportion of the population lying in the bottom of the range.

 

Moderns are a prime candidate for "technical" grading because the primary things separating them in quality are generally much easier to quantify.

 

 

 

[DonHeath]

Cladking,

 

Moderns are a prime candidate for "technical" grading because the primary things separating them in quality are generally much easier to quantify.

 

I agree fully. Since PCGS grades more technically, it seems logical that the market has chosen them as the "go to" service for condition rarities. BTW - I also agree that the clads with their harder alloy, lower strike pressure, and lower relief dies are not always easy.

 

I think for me, the very miniscule differences between coins above say MS67 don't really justify the enormous premium the grade bump would fetch, so although I think PCGS is probably better at grading the extremes of the range, I don't think that ability is too important to me. I prefer a more relaxed scale where the PQ stuff starts at 66 and where 68s are not unheard of. I like the effect that grading scale has on pricing. It just feels better to me.

[Peace_Fan]

I agree fully. Since PCGS grades more technically, it seems logical that the market has chosen them as the "go to" service for condition rarities.

 

Please explain... What is it that PCGS does that makes you think this?

[Elcontador]

The grading parameters which separates moderns from older coins has far more to do with surface characteristics and intangibles like "eye appeal" than with strike or marking.

 

Cladking, I respectfully disagree. I know nothing about moderns, but if you look at Unc. 19th Century type in MS 65 & better, in the last few years, grading has emphasized eye appeal far more than strike, contact marks, etc. The grading services have no problem putting Seated coins in 6 holders with soft stars or Miss Liberty's head missing detail (and I'm not only talking about New Orleans coins, where this is typical). I've seen 5 or 6 MS 66 & 67 1887 P Dimes where Miss Liberty's head is 'flat', much like you'd see with an Unc. 24 D SLQ.

 

I believe this also applies to SLQs. Re the latter, I've seen plenty of dipped, IMO poorly struck coins with an excessive amount of contact marks in 6 holders, while I have seen 3 fully struck 20Ps (yes, full inner shield, and all stars on the outer shield) with some darker toning over Miss Liberty's head in 5 holders. None of these 20Ps had a mark on them, and they all had attractive cartwheel luster. Anything other than very light toning over Miss Liberty's head is death for a super grade SLQ.

[Count_Erfit]

The 10 step program for slabaholics.

 

1. Collect coins

2. Acquire some nice ones.

3. Learn about slabs.

4. Begin forgetting coins.

5. Concentrate on the difference in slabs.

6. Go through a market "bust."

7. See where chips fall.

8. Begin disregarding slabs.

9. Study coins.

10. Collect coins.

[cladking]

Elcontador: I could have phrased that better. What I meant was that classics have many more different surface characteristics than moderns generally speaking. Where there may be wide spectra of different characteristics of surface preservation in classics, there tends to be just unc or maybe unc and burnished and PL in moderns. Where some classics have been cleaned or recieved minor contact marks, for the main part moderns have not been as widely affected. There are also some very well preserved AU's in the classics and in moderns AU is a rare grade for most coins. Even XF is quite unusual for many. This tends to mean that for a given date one shiny modern is the same as another except for the wide range of striking qualities and marking.

 

Both of these characteristics which so readily differentiate moderns are relatively quantifiable.

[DonHeath]

Cladking,

 

That is exactly my point as well. PCGS grading is primarily based on the absence of marks. There are many more factors to consider when grading classic coins, and NGCs holistic approach to examining the coin works better for those coins. They reward eye-appeal and luster, IMO.

 

Barry, you asked on what I based that opinion. Regarding marks-

 

The ANA guideline for MS-67 says "May have three or four very small contact marks and one more noticeable but not detracting mark."

 

The PCGS guideline for MS67 says "Any abrasions on the coin are extremely light and/or extremely well hidden in the design and do not detract from the coin's beauty in any way."

 

PCGS's grading definition is more suited to creating value in modern coins where many examples have eye-appeal and luster, but absence of marks can be used to differentiate grades. On classic coins where finding a nice piece with "pop" is more important than the number of contact marks, NGC's system better reflects my personal taste. Many submitters believe this too. Many of the nicer toned coins get in NGC holders where their eye-appeal will be rewarded, and many of the moderns get in PCGS holders where their absence of marks will be rewarded.

 

Count Erfit, most people won't dismiss the value of a neutral third party's assessment of a coin they were going to purchase. Should the market for holdered coins collapse, it won't be because of the holders. It'll be because of the premiums some will pay for single point grade increments. Many collectors don't treat the holder grade as an immutable truth, but some still do. Most of the coins I buy are raw, and I usually submit the ones I want holdered. Both services are credible, and perfect is not possible on an assembly line. For the coins I'm most interested in, NGC does just what I want them to do. They provide an honest expert opinion without a political agenda, and do so with prompt courteous customer service. I know they value my business. I submit to them because I believe their grading standard is most similar to my own. If I overpay for a coin, I won't blame them. I think their decision to not overindulge in the condition rarity game is a healthy thing long-term for the collector. By remaining loyal to the ANA standard instead of adopting a more stringent grading scheme for supergrades, they probably cost themselves some market share in that arena, but also IMO have a more balanced focus of the attributes that are most likely to reward the patient collector and are most important to me.

[cladking]

That is exactly my point as well. PCGS grading is primarily based on the absence of marks. There are many more factors to consider when grading classic coins, and NGCs holistic approach to examining the coin works better for those coins. They reward eye-appeal and luster, IMO.

 

Now I see. I should have known from some of your previous comments.

 

While strike could be quantified it is largely ignored in the grading of moderns by the third party graders.

[DonHeath]

Cladking,

 

I'd be the last one to suggest good strike was the norm for moderns, but it's a good generality concerning supergrade submissions. After the lengthy description of marks, the description of strike for MS67s is as follows -

 

ANA - Sharp strike for date/MM

PCGS - The strike will be very sharp and almost always full.

 

I don't believe a coin can exceed low 66 without a good strike. Beyond 66, I think the services tend to ignore it. JMO.

 

[coinman1794]

The difference between ANA and PCGS standards cannot be understood simply by reading these descriptions. These descriptions are merely generalizations. And, if it were possible to understand a standand by reading these generalizations, one would have to know EXACTLY what is meant by phraises like "sharp strike" etc.

 

Further, one would have to pretend that PCGS followed a standard to begin with. They don't seem to follow any standard, from my experience, except for the "make sure we are tighter than NGC" standard. They have a different standard for crossovers, another for regrades, another for economy service, and another for the $30 service, etc.

 

Finally, it is simply not true that PCGS only grades technically. In fact, I have seen many PCGS coins, INCLUDING MODERNS, that were upgraded due to great luster and eye appeal. For instance, vivid luster can make otherwise noticabe abrasions less visible, and those abrasions are rendered less detracting. Especially prooflike coins. A coin that would normally grade MS65 if it had satiny surfaces can grade MS67+ with prooflike luster. And, I once read (I think it was in Coin Collectors Survival Manual or something) that PCGS uses a slogan in the grading room that goes something like this: Eye appeal gives a little, and forgives a lot.

[TomB]

I realize this is well off-topic from the original title, however, I would have to agree that even though PCGS published a truly wonderful numismatic book, they simply do not follow their own guidelines consistently and broadly enough to embrace the publication as the PCGS standard. This isn't to say that I cannot discern what PCGS will grade my coins as since, in about 99 cases out of 100, I am plus or minus one point in my grade vis a vis the PCGS grade on coins that I send in. This is to say that I know the PCGS grade simply by looking at thousands of PCGS graded coins. If I went by what they have written I would be lost.

[DonHeath]

Coinman and Tom,

 

I wouldn't pretend for a moment that one could assume anything from those texts regarding PCGS's grading, except PCGSs intention to promote a stricter standard regarding supergrades. I agree that they don't always adhere to the specification, and that they are sometimes quite inconsistent. I have one coin that PCGS has graded PR65, bodybagged, and PR67 Cam on subsequent raw submissions.

 

My experience submitting to PCGS is limited (200-300 coins), but based on those submissions, I find PCGS far more technical in the 66+ range, and NGC more concerned with booming luster, and more forgiving of a few marks. Perhaps your experience has been different. I believe that difference is best explained by the two companies different grading styles. JMO

 

 

[coinman1794]

PC*S used to be very much like the way NGC is now, as far as grading is concerned (PC*S has always been inconsistent, but 8 months ago, there was a tremendous shift in PC*S grading). Now, PC*S seems to grade tighter based on how much you payed for the submission, or how many coins were submitted, not how smooth the coin is. For instance, a crossover MS68 state quarter that "did not cross" but will make MS68 if sent in raw. There was a post right here a few weeks ago that demonstrated a clear bias against crossovers. PC*S is not using a tighter standard, they are simply undergrading.

 

PC*S is grading tighter than it's own published standard. Their book was published long before their most recent spell of undergrading started, so it is clear that they are not following the published standard. Besides, their standards don't make sense anymore, because the coins are undergraded now. When I try to submit coins that were graded under their old standard, they downgrade. Most state quarters graded in 1999-2001 would grade 1-2 grades lower today. And, the concervative material that comes out of there now, will grade differently if it is submitted differently, so, to say they are more technical on 66+ coins just isn't true. They are very tough, granted, but not because the coin has marks, but becuase of politics. As I mentioned, NGC is grading the way PC*S used to, before 8 months ago. So, if PC*S weren't off in space right now, the two services would be the same (with the exception of the overwelming day to day inconsistencies and bad customer service at PC*S and ect.).

 

I have heard that NGC was loose some time in the mid 90's. I don't have direct knowledge of that, but I will assume it is true. I have seen a number of older holder coins that are overgraded. I think that is where most of the bright, lustrous liberally graded stuff comes from. However, I will note that a lot of the bright coins that make nice grades at NGC deserve it. And the PC*S coins that don't make it at PC*S are also deserving of it, and knowledgeable numismatists buy them up at great prices, because they are buying the coin and not the holder. (((Hint: Do you know how many 1954-S PCGS MS64 Franklins are MS65+ coins. Especially the FBL's.))) Since I have been submitting to NGC, they have been absolutely strict with all coins, including bright whites. And they have been unbelievably consistent. So consistent, in fact, that I can almost always guess what grade I will get!

 

Before the tightening of 8 Months ago, NGC was grading tighter than PC*S. It was possible to upgrade into PC*S slabs, but not because PC*S was overgrading. It was becuase PC*S was giving eye appealing coins a bost. It is exactly what you say NGC does that PC*S does not. In conclusion, I find that both services are willing to give beautiful coins gem grades, but PC*S has forgotten how to grade in recent times; for any number of reasons that may or may not have anything to to with the grading process. Recent PC*S grading can't be used relyably as an indication of their reluctance to upgrade MS66+ eye appealing coins because they are not only too inconsistent, but they they are also grading for the wrong reasons!