My Final Assessment of the Week's Events
tradedollarnut
Posts: 20,162 ✭✭✭✭✭
I'm about as burned out on the whole thing as can be, but figured I'd put down on "paper" my final assessment of the whole shebang:
1) Very few people understand the industry as a whole. One faction thinks that only PCGS can annoint a particular grade and that NGC coins are overgraded unless they cross. The other faction thinks that NGC annoints the grade and PCGS coins are undergraded. Neither are correct. The market is the ultimate judge of whether a coin is correctly graded, adjusted for the "power of the holder". Just because a coin sits in a particular holder does not mean it will exactly bring the listed value for that holder. It will bring a price commensurate to its quality adjusted for the value of the holder it sits in. If the holder grade is too high for the quality of the coin, the coin will bring its true price plus a bit of value for the holder. If the holder grade is too low for the quality of the coin, the coin will bring its true price minus a bit of negative value for the holder. Upgrading/crossing does NOT add value to a coin, it merely adjusts the value associated with the holder!
2) People are too caught up in the arguement over who is the "better" grading service. PCGS and NGC have completely different goals and are both successful at their goals. NGC's goal is to grade to a standard as consistently and accurately as possible. I don't believe that they care if this standard is too high or too low for the market, but the fact is that for the majority of coins, NGC's price realized is closer to the published market value than PCGS's and therefore the arguement could easily be made that the market has adopted NGC's grades as the industry standard. BUT WHO REALLY CARES?! PCGS's goal is to maintain the tightest standard in the industry. For the most part they grade a coin much tighter than any other service, demanding a particular eye appeal for a coin to make the grade. PCGS's coins (on average) usually DO command a premium over market, because of their marketing prowess AND their specific goal of tight standards. BUT - I REMIND YOU - THIS IS STATISTICS. Who collects statistics? Not you and not me. We collect coins. On a coin by coin basis, the statistical average is completely and totally irrelevant. Each individual coin MUST be evaluated on its own and all the averages in the world don't mean squat.
3) Rick's leaving PCGS for NGC is going to be a winner for all involved. How can that be? Well, the fact is that over the past few years NGC has grown immensely and PCGS has become complacent. NGC needs a person of Rick's talents in order to manage their larger organization. He solidifies their grading team and brings needed management skills to their organization. PCGS loses a valuable employee but gains the realization that things were not perfect - that their position was in danger. It's not enough any more to sit back and cherrypick the best coins. Customers are demanding superb service, communication and consistency. In a perfect marketplace, the grade on the coin is becoming less and less of a factor (see item number one) and the quality of the coin determines the lion's share of the value. So the customer's choice of company begins to be associated with those items other than grading ability (within reason). I don't think PCGS understood this until now. They seem to have finally listened to the growing wail of complaints and, if they follow thru and address them, will be the better company for it. And finally, the consumer - us collectors - are better off because both companies will be able to service us better.
Now I need a break from all this! Go away!
1) Very few people understand the industry as a whole. One faction thinks that only PCGS can annoint a particular grade and that NGC coins are overgraded unless they cross. The other faction thinks that NGC annoints the grade and PCGS coins are undergraded. Neither are correct. The market is the ultimate judge of whether a coin is correctly graded, adjusted for the "power of the holder". Just because a coin sits in a particular holder does not mean it will exactly bring the listed value for that holder. It will bring a price commensurate to its quality adjusted for the value of the holder it sits in. If the holder grade is too high for the quality of the coin, the coin will bring its true price plus a bit of value for the holder. If the holder grade is too low for the quality of the coin, the coin will bring its true price minus a bit of negative value for the holder. Upgrading/crossing does NOT add value to a coin, it merely adjusts the value associated with the holder!
2) People are too caught up in the arguement over who is the "better" grading service. PCGS and NGC have completely different goals and are both successful at their goals. NGC's goal is to grade to a standard as consistently and accurately as possible. I don't believe that they care if this standard is too high or too low for the market, but the fact is that for the majority of coins, NGC's price realized is closer to the published market value than PCGS's and therefore the arguement could easily be made that the market has adopted NGC's grades as the industry standard. BUT WHO REALLY CARES?! PCGS's goal is to maintain the tightest standard in the industry. For the most part they grade a coin much tighter than any other service, demanding a particular eye appeal for a coin to make the grade. PCGS's coins (on average) usually DO command a premium over market, because of their marketing prowess AND their specific goal of tight standards. BUT - I REMIND YOU - THIS IS STATISTICS. Who collects statistics? Not you and not me. We collect coins. On a coin by coin basis, the statistical average is completely and totally irrelevant. Each individual coin MUST be evaluated on its own and all the averages in the world don't mean squat.
3) Rick's leaving PCGS for NGC is going to be a winner for all involved. How can that be? Well, the fact is that over the past few years NGC has grown immensely and PCGS has become complacent. NGC needs a person of Rick's talents in order to manage their larger organization. He solidifies their grading team and brings needed management skills to their organization. PCGS loses a valuable employee but gains the realization that things were not perfect - that their position was in danger. It's not enough any more to sit back and cherrypick the best coins. Customers are demanding superb service, communication and consistency. In a perfect marketplace, the grade on the coin is becoming less and less of a factor (see item number one) and the quality of the coin determines the lion's share of the value. So the customer's choice of company begins to be associated with those items other than grading ability (within reason). I don't think PCGS understood this until now. They seem to have finally listened to the growing wail of complaints and, if they follow thru and address them, will be the better company for it. And finally, the consumer - us collectors - are better off because both companies will be able to service us better.
Now I need a break from all this! Go away!
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Comments
In a nutshell, as you mentioned, both PCGS and NGC will likely become stronger companies as a result of Rick's departure and this should be wonderful as well for collectors and dealers alike. As I mentioned on another thread, I see a great deal of optimism out there this week as far as NGC and PCGS are concerned
You're making too much sense! You should be booted from the message board!
I do feel that most of us get way too carried away with statistics and generalizations, while losing focus of the particular coin or coins being discussed.
People want to know, sight unseen, what the chances are of a coin in an old NGC or PCGS holder being upgraded - why not look at the coin itself to try to make a determination?!!
People want to know what the chances are of a given coin being crossed from PCGS to NGC or from NGC to PCGS - the overall crossover statistics aren't nearly as relevant as is the quality of the coin being sent for crossover. Well, hopefully, at least.
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The fact that one grading company might be stricter than others from time to time doesn't make it better or even more consistent or accurate.
As you mentioned, while people are worried about which holder their coins are in, the coins themselves, when sold on the marketplace, bring prices commensurate with their individual qualities and attributes. The grade on the label and the holder the coins are in, often become secondary. Look at all of the examples of coins of the same date, grade and grading company, which bring significantly different (sometimes multiples) prices in auctions and on bourse floors of major coin shows. Many coins trade like commodities but many do not and should not.
Let's worry and talk more about the coins, not their holders.
Looking for Nationals, Large VF to AU type, 1928 Gold, and WWII Emergency notes. Also a few nice Buffalo Nickels and Morgan Dollars.
Monty...
TDN, I have to agree with most of what you have said. The funny thing to me is that alot of the people who complained bitterly about PCGS's service seemed to think it was great for NGC that Rick M. was moving over there. As president of PCGS, didn't he have some responsibility for those complaints? I am sure Rick is a great guy, but as President of PCGS, he never was able to fix the perception that PCGS's customer service was lacking, and now he goes to NGC!
I do have to agree with you that it can be a good move for both companies. NGC gets great experience and knowledge in Rick, and PCGS gets an awakening that more can be done to improve on their end. Now, if they could just find a way to forever rid the coin industry of the likes of ACG, NTC, etc.
JJacks
The Hering coins was not an attempt at a complete variety set; rather, it was simply a massive accumulation of coins of the same series. Perkins used the 1795 FH 3Lv ``Bar'' variety (Bol.5, BB-27) as an example because that variety was well represented and because the variety is considered a type coin.
Perkins chose many examples in the EF and AU grade range, all slabbed by various services (PCGS, NGC, ANACS, and maybe more). In looking at the prices realized for these specimens, he concluded that the slabbing service and the slabbed grade meant very little. The prices realized were all over the place, but generally reflecting the quality of each individual specimen.
In other words, Perkins found that the buyers bought the coin instead of the holder. The nice, original specimens brought excellent money, while the crappy ones did poorly.
EVP
How does one get a hater to stop hating?
I can be reached at evillageprowler@gmail.com
The market is the ultimate judge of whether a coin is correctly graded, adjusted for the "power of the holder". Just because a coin sits in a particular holder does not mean it will exactly bring the listed value for that holder. It will bring a price commensurate to its quality adjusted for the value of the holder it sits in. If the holder grade is too high for the quality of the coin, the coin will bring its true price plus a bit of value for the holder.
Unfortunately their are many collectors (especially newbies) who the only way they know how to grade is read the insert in the slab and of course they believe all the hype and BS spewed by PCGS and dealers that say ALL PCGS coins are more conservatively graded compared to any other slabbed coin. And whether the people with the blue or red mustaches want to admit it or not there are MANY MANY overgraded coins in PCGS slabs (just go look at the Teletrade listings) and they are pawned off on these unknowledgeable collectors as accurately graded or even worse PQ coins and they believe the BS and pay the high prices (premiums) thinking they are accurately graded when in fact they are not and they only find this out AFTER they try to sell. If I remember correctly PCGS claimed the whole idea of their grading was to protect the less knowledgeable from being ripped off and in fact they are just helping to rip of these very same people.
I suspect David Hall is a bit exhausted as well.
It's great to be alive and have your health!!!!!
I agree with your comments, and find them totally consistent with mine (though I'm sure some disagree). In terms of the three classes I considered, it seems like you are in the camp of the coin stands by itself. Therefore I would assume you do not try to cross coins from NGC to PCGS, and I assume you would not care if PCGS chooses not to loosen its crossover standard, or eliminates the service altogether.
However, you did indicate you feel that PCGS is trying to position itself as the tightest grader, and therefore its coins on average have a higher market value. I assume you would therefore oppose a loosening of standards crossover or otherwise, as it would dilute the value of the current PCGS holdings of all of us.
Finally, how can you stand writing such a long composition on this subject?
Greg
Being strictly a collector I really do think too much emphasis is place on the holder and the minute differences that distinquish 66's from 67's and 67's from 68's, etc. Off course the reasons for this undue emphasis are the monumental grade rarity premiums (10x, 20x, 30x or more) being paid based on these minute cosmetic differences.
When will it all stop? I don't participate in it so I don't know. I guess when collectors wake up and realize that the focus shouldn't be a contact mark here or a spot of toning there but the coin as a whole, it's history, artistry and overall eye appeal.