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Opinion: The PCGS and NGC Dust Up Shows Market Realities

Image Composite: Heritage Auctions | Ron Drzewucki | CoinWeek

By Ron DrzewuckiModern Coin Wholesale …..
On January 17, NGC Chairman Mark Salzberg published an open letter on the NGC website (it also went out in an NGC email). In the letter, which is accompanied by data, Mark alleges that there has been an unusual increase in the grades given out by PCGS to a broad variety of coins over the last five years, and that this has decreased the value of PCGS-graded coins on the market. He graphs out how several examples, such as the 1912-S Liberty Nickel PCGS MS66, have dropped in price over the last half decade or so as grade populations have seen jumps that Mark says aren’t explained by the recent discovery of hoards or some similar phenomenon.

The insinuation is that PCGS has changed its grading standards and that as a result populations for high-end coins have exploded, while prices for these one-time conditional rarities have gone down because of this.

Then, on January 19, PCGS President Don Willis responded on the PCGS Collectors Forum, essentially turning Mark’s arguments against themselves. Practically every assertion Mark made in his letter is countered with an equal and opposite assertion from Don.

Partisans for both companies can take what they will from these statements. Both of them emphasize how what they’re doing is good for the collector-slash-consumer. As a coin dealer that has spent the majority of my 33-year career either grading coins or working at the highest echelons of the industry, I can tell you that intrigue like this amongst the major services is not good for the industry.

Luckily, what’s going on isn’t so much intrigue as it is a result of, to paraphrase Don, “tough competition”. PCGS has made a concerted effort to broaden the gap between PCGS and NGC coins in the market by relentlessly working to provide dealers and collectors an incentive to get the best NGC coins in PCGS holders.

You’re probably aware of the PCGS crossover program ads. If you’ve been paying any kind of attention over the past five years, you’ve seen them. They appeared in print after the Newman sale in 2013. They’ve appeared online on and elsewhere. And they’ve figured into a number of promotions at the Long Beach Show and the PCGS Members Only show.

I personally know dealers who have crossed the country with their entire inventory of NGC classic coins – just to have them slabbed at Long Beach.

That doesn’t happen by accident. It’s the result of PCGS’ aggressive marketing.

This, and the sudden appearance of coins in the marketplace, is what accounts for the major share of the population increases.

From the Newman sale, which NGC did a great job grading, a number of coins were subsequently crossed over to PCGS holders, usually on par. Collectors and dealers had several motives for doing this: to cater to PCGS collectors, to try to upgrade the coins, or, in the event that coins stayed in the same grade–which many of them did–to try to get more money for them.

Sometimes this worked, sometimes this didn’t.

But one of the most “damning” examples Mark posts is the 1995-W American Silver Eagle. Somebody bought the coin for US$86,000 when PCGS had a population of eight coins. NGC, on the other hand, had many multiples of eight in its holders. These coins were in holders mostly because of two or three coin dealers; I put a few in NGC holders, myself. And in those NGC holders, the coins brought between $15,000 and $30,000 – depending on the market cycle.

So if you were a coin dealer, and you saw a PR70 in a PCGS holder sell for $86,000, and you were sitting on two or three in an NGC holder that might bring $15,000 to $30,000… what would you do?

My Take

Mark is smart and a great businessman. He sees the writing on the wall. If PCGS sucks all of the great material out of NGC holders, then the NGC brand will be diminished. He doesn’t want that and his letter reveals his frustration.

PCGS entered the market in 1986. NGC followed in 1987. Despite developing advantages in certain segments of the market, like Ancients, World Coins and Modern Coins (a not-insubstantial list), PCGS has always led the way when it came to Classic US Coins – which is where the lion’s share of the US coin market is.

I believe both companies will continue to pursue market share aggressively. That’s what great competitors do. I just don’t want collectors to think any funny stuff is going on, because it isn’t. This is just how markets work. And the rare coin market is no different.


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  1. I’ve seriously collected American numismatics for 58 years now (I just turned 73) and own some of the finest and rarest US and pre-federal coins. None are slabbed.

    Like so many other “oldtime” collectors, i prefer my coins “raw”- not in plastic.I simply enjoy physically handling and examining my coins. Sure, when it is time to sell by auction, I realize the market realities and will have most slabbed.

    But with respect to the difference in market values and grading between NGC and PCGS, and having attended most major shows over the decades and examining thousands of slabbed coins, I can honestly say that at arm’s length (or under a 5x glass I use) with classic US coins of all grades , PCGS grading is noticeably stricter and many NGC coins of the same grade as PCGS grades do appear to be 1-2 grading points below PCGS standards. This is most obvious when examining auction lots which is a real education. Hence the major market price difference between PCGS and NGC on classic US coins. I can’t speak to foreign, ancient, or modern coinage as these don’t interest me.

    With respect to early US copper coinage, neither grading companies can get it right, too often overgrading an early copper by as much as 25 points at the worst and even with respect to choice Mint state, getting it wrong by 2 – 5 points. Ask any EAC collector or dealer. or even a Heritage early copper cataloguer.

  2. All the coins I have in both NGC and PCGS holder are appropriately grade IMO. I evaluate a coin by looking for eye appeal and luster without magnification and then use a 3x to make an overall assessment. After that, I use a high grade 10X glass magnifier which is more than enough to see all details clearly to double check any defects such as dings, spots, scratches etc and to appreciate things like tones, frosting… all the things that make the coin special.
    From what I’ve seen, ANACS is stricter than both of them!

  3. I think the dustup started in January 2016. PCGS changed its bulk Modern grading pricing and went after the lead that NGC had (NGC was doing 70% of Modern volume as per PCGS). With the price change it looks like the volume is about 50/50 now. You can verify this yourself by looking at the pop reports by both companies. This really hurts NGC as that is where they made their money as PCGs holds a Vintage lead of 70/30 (as per PCGS and as per CAC which shows 80% of CAC coins are PCGS). So the only lead that NGC holds now is World coins. That came to a halt last summer as PCGS signed an exclusive deal with the Chinese Mint and started grading coins last Fall. Volumes jumped by a huge margin last quarter for PCGS.

    Keep in mind, one company is private (NGC) and hides everything and one company is public (PCGS Nasdaq:CLCT). PCGS is the most open public company ever. They have a statistics page on their home page that shows you how many coins they grade every day. BTW – crossovers are less than 2% of volume and less than 50% of coins are successfully crossed. Imagine if Apple told you how many iPhones they sold every day.

    So it looks to me like Mr Salzburg vented out of frustration to losing market share and revenue. Competition is good for collectors. It keeps the companies honest. I hope NGC does not fall too far from the lead. It’s better to have #1 and #1A rather than #1 and a distant #2.

  4. Unfortunately it appears to me that both of the major services are guilty of grade inflation. Some series seem to be more affected than others. $10 Indians and type one $20s seem to be the most affected IMHO, but it affects everything to some degree. On modern stuff, just check the sold listings on ebay for graded 2016 gold dimes and compare the numbers. I seriously doubt that over 90% of the dimes are truly worthy of a 70 grade, based on comments and coins that I’ve seen..

  5. As a Collector and private dealer I can see where the real problem with “Moderns” really made a huge change in perception of grades being assigned to these coins. I will refer in this comment mainly to American Silver Eagles.

    I have been a Collector for more than 50 years, a Dealer for the past 37 years. During that time I learned as much as I could about grading coins, I would not consider myself an expert by any means, yet I am not ignorant when it comes to grading either.

    In 2007 I was a paid member of both PCGS and NGC, I preferred my coins in PCGS holders, it was obvious to me that if it was worth grading it was worth the few extra dollars I would have to pay PCGS to have a “True Grade”, the only reason I became a member of NGC was the fact that PCGS would not give a 70 grade to any ASE’s, and face it PCGS was loosing money to NGC on this issue. When you could flip an NGC 70 for three times the price of a PCGS 69 your going to go to NGC.

    I went through more than 500 Proof eagles fresh from the mint in 2007, out of 500 Mint State I managed to come up with 62 that I would give a 70 grade to based on my experience, I got back 54 70’s and eight 69’s. of the 200 Proofs that I went through I sent in 90, I got back 79 70’s, 10 69’s and a single 68, the 68 had a noticeable “ding” on the edge, I attribute that to mishandling at NGC. after all the work I put in I thought I had a pretty good percentage rating, when I got the report I was pleased,

    I did not like so many others send back the others that I did not send in, I sold them on the open market, I did not hide the fact that I had “Cherry Picked” them. Before I could even get these coins to market PCGS announced that they would begin to assign 70 grades to ASE’s. Overnight the value of NGC 70’s dropped like a rock, even though not a single 70 had yet to be assigned by PCGS, and for the longest time I did not hear of a single PCGS rating a 70.

    This “Late” announcement by PCGS in my honest opinion was not a fluke, I believe it was intentional. I believe that PCGS meant to teach dealers a lesson, go with NGC and you will pay a price. I like many others would have been more than happy to have sent these coins to PCGS to begin with if only PCGS had made this announcement prior to the release of the 2007 Eagles, even with the problems with Milk Spots turning up on ASE’s. I still have an MS 70 and PF 70 NGC that are as pristine as the day I received them from NGC.

    By the time the Platinum coins came out they all went to PCGS, I did better on that batch with a 92% getting 70’s, again I thought I had hit the Jackpot, the market said otherwise. Yes I made money off both NGC and PCGS, but not what I was hoping for, lesson learned.

    I took a break in 2008, my Father was dying of Cancer, he was on Home Hospice and I was his caretaker until his death seven months later. I spent all of my capital on his care, what I had left was just a few thousand dollars in coins, two years later I was diagnosed with Cancer and have been fighting that battle for the past seven years, now I’m the one on Home Hospice, for me the fight is over, I was lucky enough to have a good friend that was able to get me a little over 100 PCGS MS 70’s with various labels (whats the deal with all these labels anyway, it the coin and the grade that should make the difference). For some reason I thought I might be able to make enough money to at least pay for my funeral expenses, it does not look that way now. I’m seeing PCGS MS 70’s selling for less than $40.00 on eBay.

    Just for fun I watched the “Coin Collector” on one of the shopping channels, he was displaying a “Special Premium Label” from PCGS that was unique to that show that would be released soon, and bragging that it would be limited to 12,000 MS 70’s each with a unique number, Claiming that this deal had been in the works for the last year and a half. I really have to wonder how PCGS can guarantee that he will get 12,000 70’s is a real mystery to me. That is until someone mentioned on the show that to get a “70” it had to have Two or less blemishes on the coin, Two or less? I thought he must have been talking about ANACS. Then I examined my 70’s, more than a few that don’t make the grade with me.

    I feel sorry for all of those that hope to make a profit on ASE’s this year, it seems that it’s back to the drawing board for me, If I live long enough to recover my expense on buying what this year has turned into a “Pig in a Poke”. Maybe i’ll get lucky and Silver will take a major jump in price.

    Is anyone at PCGS and NGC paying attention? One Company One Label? Maybe then I will have the respect I once had for the grading business, that the Coin and it’s grade is what will matter, If I cant trust the Moderns how am I expected to trust any of the grading.

    Just my honest opinion.

    Timothy Mayberry


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