Does being ubertight actually lower the quality?

tradedollarnut

Does being ubertight actually lower the quality of coins in PCGS holders? Before you knee jerk respond, contemplate this:

It used to be that PCGS sat almost exactly a half a grade higher than NGC. Both companies graded on a scale of about 8 [60-67] for unc/proof coins. That in effect gave us 16 distinct quality levels for that range of grades. The price guides could handle this as NGC coins sold for a bit of a discount and PCGS coins sold for a bit of a premium. Over the last part of the 1990's they move toward using the entire 11 point scale - in effect, 22 price levels. The coins flowed from NGC for the intial grade to PCGS for the crossover grade. For the most part the high quality coins, some that would even make the next grade at NGC, remained in PCGS holders.

Then everything changed. Now PCGS is grading scared [I won't use the "I" word, but I think it a lot]. They are definitely lumping way more than one quality level into a single grade level. They are NOT grading on the full scale in Classics or copper any more. When was the last time a MS67 Red wheat cent of any value was made (etc, etc). More and more of the WOW! coins are migrating to NGC and are not crossing into PCGS. Or even being tried for crossover. More and more submittors are willing to take that super PQ coin that might or might not upgrade to NGC for the chance of getting into the correct graded holder and then leaving them in that holder because they know that it won't even be considered to cross back. I see more and more high quality NGC coins for sale - coins that USED to be offered [in general] in PCGS holders. It's just simply too hard to retail a coin at double greysheet that isn't wildly toned.

Pretty soon won't buyers be saying "if it was worth double sheet it'd be in the next higher holder at NGC" ???

wondercoin

"More and more submittors are willing to take that super PQ coin that might or might not upgrade to NGC for the chance of getting into the correct graded holder and then leaving them in that holder because they know that it won't even be considered to cross back"

Or, in the case of some important coin series (such as silver Wash quarters), leaving them in the NGC holder, because the * coins are highly sought after by collectors who are willing to pay strong money to own them. Wondercoin

ANACONDA

Pretty soon won't buyers be saying "if it was worth double sheet it'd be in the next higher holder at NGC" ???

I agree......that's the problem with high end PCGS coins.....they're often too expensive and you take all the risk on assuming that it will
get into the next grade at ngc.

For decent coins, i'd rather have it accurately graded in an NGC holder than conservatively graded and one point lower in a PCGS holder.

But, as i just wrote in another thread, if you have to unload your PQ PCGS coins in a hurry, you had better be ready to take a hit.

And that is where the opportunities lie, in buying high end pcgs coins for little premium.....the coins that your buddy had to sell to pay for
his wife's surgery...the ones that he had to sell to the guys who advertise "instant cash for your coins".

You get in tight with these guys, the guys who take out double page ads in the periodicals, and you can cherry pick them. Don't expect that most of their inventory will be good coins, though. Guys hold on to their best and sell those last. It's the dogs that get sold wholesale first.

Just make sure you're not the guy who has to wholesale his coins to raise cash because that big premium for your high end PQ PCGS
coins will just go poof!

adrian

tradedollarnut

Well?

mdwoods

Did it ever occur to anyone that NGC might actually be overgrading coins? I got that impression when I collected Lincolns, and still have the same impressions for the ultra moderns I mostly collect now.

tradedollarnut

Doesn't matter who's standard is accepted by the industry, but if NGC coins go for close to sheet and PCGS are bringing 50-100% over sheet, who's not grading correctly?

Let's focus on the question and not have another debate about grading standards. Does being supertight actually lower the overall quality of coins in PCGS holders?

mdwoods

I am sorry, I can't answer the question if I don't agree they are being supertight. If it is hypothetical, I would answer no. People who buy coins a lot soon learn the difference in quality between the different slabbing companies. That difference is reflected in the marketplace. I wouild also add that difference was present before the Registry became such a big deal.

EVillageProwler

Mark,

It doesn't really matter whether some of us feel that NGC is overgrading. What matters is that both PCGS and NGC are highly regarded as reputable services. And, that most folks would prefer their coins to be in the higher grade as long as the coins are still in a reputable holder.

If PCGS' grading is sooooo uber-tight as to cause people to think that they'll get a "fairer" shake with NGC, then why won't people start to submit their uber-coins with the perceived "fairer" service?

Let's say that you have an uber classical commem that is perhaps 68 and perhaps 69. Do you try PCGS and hope for MS69 but realistically expect to get MS68? Or, do you try with NGC and have greater hope for MS69, and even expect MS69?

EVP

coinguy1

TDN - yes, absolutely!

Many high end or even mid-range (by PCGS's CURRENT standards) coins that might otherwise reside in PCGS holders will go elsewhere. The overall quality of coins in PCGS holders will be affected/lowered.

Clankeye

I know it is a single incident, but won't a case like the Antietam that recently went from NGC 66 to PCGS 68 do a bit to stem the tide of high end PCGS coins going over to NGC? That would weigh heavy on my mind if I were "slab shopping."

I believe, if a trend has started of crossing high end PCGS coins to NGC, and if the submitters find success that way, then yes, IMO it will dilute the quality of coins in PCGS holders overall.

But, I would think, that if people start submitting high end PCGS coins to NGC absolutely expecting a bump or * designation, they may be in for an unpleasant surprise.

Clankeye

Typetone

Here's how I model it.

Take a batch of same type, same date coins that PCGS would grade MS65. Of that group some are low end, some average, some high end. Assume NGC would also grade the low end and average ones MS65, but the high end ones MS66. Well, the high end PCGS 65s would migrate to NGC 66 holders, while the rest would stay in PCGS MS65 holders. So, where are the NGC 65s? They are the high end PCGS 64s that migrated to NGC MS65 holders. Under this regime, for a given grade, the PCGS coins would be better and be priced accordingly. However, the very highest grade would be mostly NGC coins. For example, suppose that PCGS hits the max at MS67 (eg Silver Washingtons). the handful of better ones would show up as NGC MS68s.

Not a bad strategy for PCGS. Since most coins are low end or average for the grade, most coins stay in PCGS holders. Also, (and somewhat counter-intuitively) for a given grade, PCGS coins are better and priced higher further enhancing PCGS's reputation. Sure they will lose a few of the very highest graded coins. But, so what, the number is few, and grading fees are based on volume.

Now, the model changes if PCGS starts grading a full point lower. In that case, even the average and lower end coins risk going to NGC, at least until market perceptions and prices adjust (ie the price of a PCGS 64 = the price of an NGC65). Until then, PCGS certainly does risk market-share. It seems their best strategy is to stay about 1/2 point tighter than NGC.

Seems like NGCs best strategy is to stay about 1/2 point looser than PCGS. That way they always assure a flow and can maintain a stron number two position. So without collusion perhaps an equilibrium is reached. Sounds like a Nash Equilibrium

Greg