A math problem for PCGS?

DHeath

Having read all the posts and comments regarding PCGS grading, one of the things that struck me as interesting was the notion put forth by PCGS and D.Hall that 80% of NGC coins were overgraded. I decided I would investigate the financial implications for the submitter to either service, and try to understand which was more beneficial to the submitter. I chose a common coin, a 1883-CC Morgan in PCGS MS64. Assuming PCGS would grade the coin MS64, it has a real market value of $165, based on the coins sold in PCGS holders on Teletrade in the last 90 days. Assuming 80% of NGC coins are overgraded, lets assume I have an 80% chance of getting the same coin raw into an NGC MS65 Holder. Market average on Teletrade for the 5 NGC MS65 coins sold in the same period of time was $234. If I was unluck enough to receive a NGC MS64, the coin would be worth $10 less than the PCGS MS64, but 4 out of 5 times, my coin would be worth 40% more because of NGC's "loose" grading. My question is pretty straight-forward. If I will receive 40% more for my coin in an NGC holder based on their 80% overgrade rate, why would I submit to PCGS. BTW - Isn't the crossover rate an indicator of the number of overgraded NGC coins?

I'm not meaning to be flip, I'm just trying to understand why the market doesn't seem to feel the same way about NGC as PCGS does. The average price for the example coin in PCGS MS65 is $252. For NGC in 65, its $234. The discount for the NGC coin seems to be about 7%. The difference between PCGS MS64 and MS65 is 34%. Obviously, the market doesn't treat an NGC MS65 as though it were really an MS64.

Coppernicus

A famous science fiction author was once admonished by a critic who said, "80% of all science fiction is crap."

The author's response? "80% of everything is crap."

Something to ponder.

Coppernicus

Coppernicus

By the way DHeath - You make a very good point. The market views NGC in a much more favorable light than does PCGS.

coppercoins

I take this in a slightly different light - it is possible (and probable) that 80% of NGC coins are overgraded, but likewise, a comparable amount of the PCGS coins I have seen are overgraded as well. Of course since grading is a mostly subjective science (oxymoron intended) my "overgraded" could and probably is much different than someone else's "overgraded" because our interpretation of the standard is different.

The fact remains, though, that after reviewing hundreds of certified coins from all of the different services my opinion of PCGS versus NGC is more or less a pot calling a kettle black. They are more or less one in the same. They both overgrade, they both undergrade on occasion, and they both hit it on the money on occasion as well.

Additionally it is important to note that I am a copper collector (mainly Lincoln cents) and those who review Barber coins or Morgan dollars can and should have a much different arguement of how these two companies compare. When I speak of the two I am speaking only of their comparative abilities in copper...not of their abilities in silver or gold.

EVillageProwler

Don,

Why are you trying to use math to convince someone who prefers sci-fi?

EVP

DHeath

EVP, D.Hall, and PCGS (by virtue of their crossover rates) indicate that fully 80% of all NGC coins are overgraded. Since my one point overgraded sample NGC coin will fetch %40 more than a correctly graded PCGS coin, and NGC is apt to overgrade 4 out of 5 of my submissions, why cross NGC to PCGS? Shouldn't the math say PCGS-->NGC?

IrishMike

Don in the past 12 months on 6 different occasions I made a similar post, daring collectors to crack out their PCGS 69dcam pf 69 sae's and send them across the street for the 70's they would get according to the same statemnt you made. No one has taken me up yet, talk is cheap.

Pushkin

<< <i>Don in the past 12 months on 6 different occasions I made a similar post, daring collectors to crack out their PCGS 69dcam pf 69 sae's and send them across the street for the 70's they would get according to the same statemnt you made. No one has taken me up yet, talk is cheap. >>



Ouch! I'll bet there isn't much space left under the rocks.

DCAMFranklin

DHeath- Some good observations. I like the thread. I was wondering....... what would we tell D. Hall when all 5 coins back from NGC graded the same as PCGS' grade?? He'd only call you a complainer!

Bulldog

TTT