Did PCGS sell their reference grading sets?

PerryHall · July 10, 2007 2:20AM

According to the "Hot Topics" on the Legend Numismatics web site, the major grading services have sold their reference grading sets. Why would they do this? Are they desperate for money? Are the coins now so hopelessly undergraded that they can no longer be used as a reference? Enquiring minds want to know.

Doogy · July 10, 2007 2:22AM

Poof!

+1

Connecticoin · July 10, 2007 2:31AM

100

I wonder if this one will end up getting taken down like the prior "hot topics" article on this subject.

roadrunner · July 10, 2007 2:32AM

Inquiring minds want to know.

roadrunner

Connecticoin · July 10, 2007 2:55AM

From the "Behind the Scenes at PCGS" portion of the website:

<< " . . . In addition to their high level of training, graders rely on our comprehensive grading sets of U.S. and international coins in order to maintain PCGS's grading standard. . . ." >>

So if they previously sold their gradeing sets, then did they assemble new ones?

Russ · July 10, 2007 3:03AM

I just posted a question about this in Q&A.

Russ, NCNE

ArgentumRex · July 10, 2007 3:06AM

<< I just posted a question about this in Q&A.

Russ, NCNE >>

Russ · July 10, 2007 3:16AM

Hey! I'm optimistic that he'll finally answer one of my questions.

Russ, NCNE

Doogy · July 10, 2007 3:24AM

<< Hey! I'm optimistic that he'll finally answer one of my questions.

Russ, NCNE >>

PCGS is not known for answering questions from it's clients?

Russ · July 10, 2007 3:26AM

<< << Hey! I'm optimistic that he'll finally answer one of my questions.

Russ, NCNE >>

PCGS is not known for answering questions from it's clients? >>

Well, in fairness to Ron, I've been posting the same question over and over. Basically, I've been bugging him to get PCGS to attribute a certain variety.

Russ, NCNE

ilikebuffaloes · July 10, 2007 3:31AM

They must be on vacation. No A's since 7/2.

But I send them a Q!

Bochiman · July 10, 2007 3:52AM

<< 

<< << Hey! I'm optimistic that he'll finally answer one of my questions.

Russ, NCNE >>

PCGS is not known for answering questions from it's clients? >>

Well, in fairness to Ron, I've been posting the same question over and over. Basically, I've been bugging him to get PCGS to attribute a certain variety.

Russ, NCNE >>

No "DOT-HEADS" for you

homerunhall · July 10, 2007 3:54AM

We have a grading set...our cost in the coins is about $300,000. We have all grades that make sense for Morgans, Peace dollars, $20 Saints, and $20 Libs. We also have a lot of other examples for many series and an extensive "counterfeit" examples inventory.

We are currently expanding our grading set and will be exhibiting various portions of the PCGS grading set at upcoming shows beginning with the upcoming ANA. We try to have 4 examples for each grade that makes sense, so we'd have 4 VF 30 Morgans, 4 VF 35 Morgans, 4 MS63 Morgans, etc., but we wouldn't have 4 (or even one) AG03 $20 Saint because you can't find them and no one submitts them anyway.

The PCGS grading Set is the standards to which our graders refer.

David

Julian · July 10, 2007 3:59AM

That should settle that!!!

Connecticoin · July 10, 2007 4:05AM

Well, looks like the "Hot Topic" report (or at least a portion of it) may go *poof* now!

TwoSides2aCoin · July 10, 2007 4:05AM

So, um...
I'm starting to think POOF is a hair-do
and Kool Aid tastes pretty good.
It's funny though. Once the MAN answers.... people just sit here dumbfounded for a minute or two before we realize: "Wow, this is the man... openly speaking about his business".

That is what we called in the Army

"an Open Door Policy".

It's the stuff I brag about to NON COIN PEOPLE.

ksteelheader · July 10, 2007 4:06AM

<< That should settle that!!! >>

It should......

but, potentially not.

PerryHall · July 10, 2007 4:06AM

I wonder which grading services Laura was refering to when she said they sold their grading reference sets. Or was she just trying to stir up trouble? Naw, Laura would never do that.

saintguru · July 10, 2007 4:08AM

Consider the source...and count what percentage of coins in their inventory are PCGS. (like 95%)

Someone doesn't practice what they preach. Someone doesn't eat their own cooking.

Man....those grapes must be really sour!

IGWT · July 10, 2007 4:08AM

Did PCGS/CU either sell some of its original grading set or sell and replace all of it? If not, someone in the numismatic community has his or her facts wrong.

Cladiator · July 10, 2007 4:09AM

What do you guys have in the capped bust half dime department for the grading set?

tahoe98 · July 10, 2007 4:14AM

<< I just posted a question about this in Q&A.

Russ, NCNE >>

POOOOOOOOOOF!!!!!!!!!

Boom · July 10, 2007 4:32AM

BobGreene · July 10, 2007 4:37AM

<< 

<< That should settle that!!! >>

It should......

but, potentially not.

>>

I want to know who graded the PCGS grading set and by what standards? I personally think they should be graded by the published ANA grading standards.

StampAlarm · July 10, 2007 4:56AM

<< That should settle that!!! >>

Not really, Mr. Hall didn't touch on selling grading sets. I would of kinda at least seen a 'no, we have never sold...' If someone says I sold my MS65s and I come baxck with "I still have 65's" doesn't mean I didn't sell all my PCGS 65s and now have NTC MS65s.

Jerry

Hyperion · July 10, 2007 5:00AM

<< 

<< That should settle that!!! >>

Not really, Mr. Hall didn't touch on selling grading sets. I would of kinda at least seen a 'no, we have never sold...' If someone says I sold my MS65s and I come baxck with "I still have 65's" doesn't mean I didn't sell all my PCGS 65s and now have NTC MS65s.

Jerry >>

I had the same thought. I guess the question should have been has the grading set changed...or has it been the same.
eh.

greghansen · July 10, 2007 5:04AM

I think it is a great idea to exhibit the grading sets. I would love the opportunity to see the Morgan grading set. It is interesting to learn that they keep 4 coins per grade in the set. That also seems like a good idea. I hope I get a chance to see these at some show in the future.

Geoman · July 10, 2007 5:09AM

I actually would have tried to buy a few grading sets if that was the case. I am working on building a few grading sets (Morgan Dollars, Peace Dollars, and Mercury Dimes) myself for reference. The problem is most common coins in lower grades aren't worth submitting, so you never find those available. I will have to probably submit those myself.

Doogy · July 10, 2007 5:25AM

NO MORE QUESTIONS ON OUR GRADING SETS.......OR ZAP !

(sorry, couldn't resist. i saw this Star Wars movie the other day and was taken by how Christopher Lee resembles HRH from the front page of the PCGS website)

Wolf359 · July 10, 2007 5:42AM

<< That should settle that!!! >>

Yup, so much for that rumor.

Connecticoin · July 10, 2007 5:45AM

<< 

<< That should settle that!!! >>

Not really, Mr. Hall didn't touch on selling grading sets. I would of kinda at least seen a 'no, we have never sold...' If someone says I sold my MS65s and I come baxck with "I still have 65's" doesn't mean I didn't sell all my PCGS 65s and now have NTC MS65s.

Jerry >>

However, the "hot topic" report suggests that the grading sets were done away with completely, which is not the case.

morgansforever · July 10, 2007 5:45AM

How extensive is this reference set? I'll bet it's one gorgeous collection.

Wolf359 · July 10, 2007 5:46AM

The time of truth is just around the corner for the grading services. There will be a major announcement coming soon by a large group of major dealers who are fed up. No honest dealer wants the services to keep bending and bending the grading standards. The pressure from this group is already obvious!

More major announcements. Their giving Biddle a run for his money.

BAJJERFAN · July 10, 2007 8:51AM

It might be good business sense to sell a 89-cc in MS63 from the grading set and replace it with a like quality 1888 in MS63.

clw54 · July 10, 2007 9:14AM

Are there MS65 and MS66 Saints in the grading set? That's where the current controvery is.

coinkat · July 10, 2007 9:17AM

The PCGS graders collectively in the course of their numismatic careers have seen MILLIONS of coins. I trust their judgment based upon their experience and knowledge of the characteristics of specific dates/mints within a series. Overall, they know what to look for in terms of evaluating coins and providing an opinion as to what the most appropriate grade should be. As we all know, grading has a subjective component and that subjectivity has an impact in the final analysis. There are coins that are truly quality for the grade and others that just barely make the grade. In the world of offering an opinion, remember that it is just that... an opinion and some opinions are better than others.

I am sure PCGS as well as NGC have the necessary references to provide the current grading services they do...

Elcontador · July 10, 2007 9:23AM

So they have reference coins for Morgans, $20 Saiints and $20 Libs in the most commonly submitted grades. I don't collect these coins. It would be helpful if we knew what coins are in their new "reference grading set, " or whatever it now may be called.

I am a CPA and although I am very familiar with the tax code, I like to have my library service around when questions invariably arise.

CalGold · July 10, 2007 9:29AM

Mr. Hall,

Now that it is settled that you still have your grading sets, wouldn't this be as good a time as any to put them online? Remember this Q&A item from November 2005? LINK

CG

Barndog · July 10, 2007 9:39AM

I thought Tuesday nights were the desingated Q&A Forum answer nights from PCGS leadership?

AU58WALKERS · July 10, 2007 9:55AM

<< Consider the source...and count what percentage of coins in their inventory are PCGS. (like 95%)

Someone doesn't practice what they preach. Someone doesn't eat their own cooking.

Man....those grapes must be really sour! >>

I wonder when TDN will show up.....hmmmm

theFonz · July 10, 2007 9:57AM

<< It might be good business sense to sell a 89-cc in MS63 from the grading set and replace it with a like quality 1888 in MS63. >>

It may, if those dates were graded under the same standards, but they aren't.

BAJJERFAN · July 10, 2007 12:12PM

<< How extensive is this reference set? I'll bet it's one gorgeous collection. >>

Actually, based on info from another board member the coins in the sets are probably low end for the grade so that they might be of more use to the graders in grading liner coins. I doubt that you will find a bunch of PQ coins in the set.

BAJJERFAN · July 10, 2007 12:20PM

<< It might be good business sense to sell a 89-cc in MS63 from the grading set and replace it with a like quality 1888 in MS63. >>

It may, if those dates were graded under the same standards, but they aren't.

..............

Were they market grading back then too or are you referring to the tendency of PCGS to cut CC minted coins a little more slack in the grading room.

roadrunner · July 10, 2007 9:19PM

My understanding (or misunderstanding) was that PCGS had or was building grading sets for all series back in the pre-1990 era. That would include bust, barber, seated plus all late 19th to 20th century sets.

roadrunner

Elcontador · July 11, 2007 6:48AM

Roadrunner, if you are correct, that answers part of my question. However, if you have a Capped Bust Half that graded MS 65 in 1989, how helpful is this coin in grading a Capped Bust Half (for the sake of argument, of the same date and variety) today? I suppose it's a matter of the glass being half full.

roadrunner · July 11, 2007 7:32AM

Elcontador,

While maintaining a grading set from 1989 poses its own issues, my point was that a comprehensive grading set would have been a major sales tool in helping to sell their product and maintain it consistent back in the early days. Without such a set how could one say that the product is consistent over time.

It would not be hard to confirm as there are dozens of dealers who graded back in the 1980's that could confirm if such a set ever existed or was being assembled.

roadrunner

BobGreene · July 11, 2007 8:44AM

<< I thought Tuesday nights were the desingated Q&A Forum answer nights from PCGS leadership? >>

stev32k · July 11, 2007 9:08AM

<< We have a grading set...our cost in the coins is about $300,000. We have all grades that make sense for Morgans, Peace dollars, $20 Saints, and $20 Libs. We also have a lot of other examples for many series and an extensive "counterfeit" examples inventory.

We are currently expanding our grading set and will be exhibiting various portions of the PCGS grading set at upcoming shows beginning with the upcoming ANA. We try to have 4 examples for each grade that makes sense, so we'd have 4 VF 30 Morgans, 4 VF 35 Morgans, 4 MS63 Morgans, etc., but we wouldn't have 4 (or even one) AG03 $20 Saint because you can't find them and no one submitts them anyway.

The PCGS grading Set is the standards to which our graders refer.

David >>

Mr. Hall

Someone ATS is reporting this: "What I did find was information regarding the PCGS reference set in the Collectors Universe 10- K (annual report as of 9/13/06) for coins and stamps being worth $62,000. The report does not break down the how much is in coins versus stamps. These costs are not amortized since they are fixed assets with appreciating values. Their 10-Q (quarterly report as of 5/10/07) shows an increase in the value of the reference set to $218,000--but that now includes CU's gem grading business.

You can find more financial reports online at the SEC EDGAR website."

Is this true?

BAJJERFAN · July 11, 2007 9:20AM

Did they bother to post the same info for NGC?

stev32k · July 11, 2007 9:43AM

As a follow up I posted this ATS:

" I have looked all over(I think) the 10Q for 5/10/07 and cannot find any reference to a value of the PCGS grading set. Can someone copy and paste that section of the document - I just can't find it."

Anyone here find it? Does it exist?

Connecticoin · July 11, 2007 10:05AM

<< As a follow up I posted this ATS:

" I have looked all over(I think) the 10Q for 5/10/07 and cannot find any reference to a value of the PCGS grading set. Can someone copy and paste that section of the document - I just can't find it."

Anyone here find it? Does it exist? >>

Here it is -- Per Note 7 of the financials, the grading sets are classified as "property and equipment":

<< 7. Property and Equipment

Property and equipment consist of the following at June 30:

(in thousands)

2006
2005
Coins and stamp grading reference sets $ 62 $ 62
Computer hardware and equipment 1,271 988
Computer software 972 900
Equipment 2,020 1,330
Furniture and office equipment 793 689
Leasehold improvements 607 438
Trading card reference library 52 52
5,777 4,459
Less accumulated depreciation and amortization (3,880 ) (3,602 )
Property and equipment, net $ 1,897 $ 857

Depreciation and amortization expense relating to property and equipment for fiscal 2006, 2005 and 2004 was $486,000, $443,000 and $647,000, respectively. >>

Interestingly, the carrying value of coin and stamp grading sets is only $62,000. The fair value may well be $300k -- accounting rules might not allow them to write them up, and the "fair value" adjustments below the line typically only apply to financial instruments (bonds, stock, etc) which coins are not.

Did PCGS sell their reference grading sets?

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