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Anyone read the Mark Salzberg article that came out today?
mercurydimeguy
Posts: 4,625 ✭✭✭✭
Curious about your point of view...
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mercurydimeguy
Posts: 4,625 ✭✭✭✭
mercurydimeguy
Posts: 4,625 ✭✭✭✭
mercurydimeguy
Posts: 4,625 ✭✭✭✭
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There are many, many coins that have been and are getting graded. How can anyone sound off like Salzberg on "concerns" without a full technical and statistical analysis? Having read the Rosen numismatic advisory I didn't see any of these wild accusations, rather that PCGS was tighter on the money grades in gem and better. Maybe he is just feeling the heat with their registry changes....
All I can say is ...Wow! I am not an over-the-top fan of PCGS, but I am a bit startled and offended by the Article. While I do understand and it is certainly my opinion that gradeflation exists and that grade creep has occurred over the years, it is also my opinion that our host has been the most consistent grading company around for the last decade or two or more and that is why PCGS brings higher prices, generally, than others, for the coins I collect. And as for the comment on the past 5 years, I have personally noticed very little change from PCGS, other than some very recent grade tightening. Other companies, well, that is a different story.
Sorry, I had to go back and re-read the rules before posting ..... not sure how to even respond without running straight into rule 7, for example, but the article itself seems to run afoul of that rule and so it is difficult to even respond.
Tom
One obvious positive thing stands out. If you are looking to buy the coins mentioned in the article,the falling prices are a plus for you. Not so much for the seller/holder of said coins.
Why didn't he put the NGC pops on the charts/tables?
That's quite an accusation.
Great transactions with oih82w8, JasonGaming, Moose1913.
What is unknowable is what the prices would have been over that period of time even if the pops had stayed level. Would they still have declined, but at a lesser rate? Same rate? While higher pops aren't going to help push prices up, the examples are all for coins that had very small pops to begin with.
This has always and forever been the big risk of paying strong for coins with small pops at the highest grade. That won't ever change. Pops always go up, never down. I don't know how that can be conclusively connected to changes in grading standards. Perhaps in the past there was a tendency to be overly tough on coins that would end up increasing the pop in the top grade - they had to be "all there and then some" to get the grade. And perhaps now that's no longer the case - coins that are solid for the grade get the grade even if it impacts top pop numbers.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
Exactly right kranky.
Great transactions with oih82w8, JasonGaming, Moose1913.
I don't think much of it. Don't throw stones if you live in a glass house.
Both TPG's contributed to the post-1996 gradeflation period through 2008. Who fired the first shot? Who did the most damage? We could debate those questions. While the author cherry picks specific examples to harp on, we could do the same thing for NGC coins. For instance, back in 2003-2006 I posed the question why does NGC show 4X as many MS65 Capped Bust Halves vs. PCGS....when both have seen the same number of mint state coins? It's basically a rhetorical question. We all know what the answer is. Or why back then did an MS65 PCGS seated dollar usually bring 50-100% more than an NGC MS65 seated dollar? That was over 10 yrs ago.
As a holder of mainly NGC gem type coins in 2008 I was shocked at how much they dropped in price, even stickered ones vs. unstickered PCGS coins. It wasn't fair that they were assumed to be a grade lower. Holder bias rules though. All those years I bought by the rule, buy the coin-not the holder was relegated to the waste basket for several years. A nice NGC coin was now worth a 20-30% discount to a nice PCGS coin, at least at auction. And at times a nice stickered NGC coin would fetch considerably less than an unstickered PCGS coin. Bizzarro world. Did Salzburg ever come in out in 2009 and 2010 and offer us NGC coin owners an apology, or at least an explanation of what happened? I don't think so.
We can debate what has happened since CAC has been around but clearly the problem has been with us since 2008. It's quite possible that over the past 5-7 years that NGC coins have outperformed PCGS coins. But the reason would not be what most would think. At the August 2008 market peak typical gem NGC type coins were bringing 85-90% of what a typical PCGS coin would bring. That ratio held through much of the 2000-2008 period. By January 2009, in the post-CAC world, that discount dropped much further, to 60-80% of PCGS coins. It was a blood bath where the pendulum swung too far in one direction. It's taken years to recover some of that. So it wouldn't surprise me that NGC coins had more potential to recover....after taking up to a 40% haircut literally overnight.
Bottom line is that they still bring less than PCGS coins today, though probably around 80-90% for non-generic, choice/gem MS/PF coins. Collectors today are smart enough to know what's going on. They read the pop reports and follow auction and bourse floor pricing. Prices are where they are for a reason. For years I was a supporter of nice NGC coins for the grade....at least until 2008. Buy the coin....not the holder. It was a solid crutch to fall back on. I was wrong. And Larry Whitlow, Mike Printz, and Jim Swan who told me to go PCGS only in 2002, were right....though it took 7 years to prove that out.
Why did no one here on the forum ever take note/discuss the "extraordinary reduction in the value of many PCGS-certified coins" that Salzberg appears to have sufficiently documented?
And, is repeated re-submission (until a grade increase) the culprit in the rapid population increase?
Keep an open mind, or get financially repressed -Zoltan Pozsar
The 30 yr standard is not true at all, unless you figure that PCGS was ridiculously strict in 1986/1987...and they were. NGC was super strict in 1987 to early 1988. So cross off the 30 yr comment. While true, it's not in the context of "looser" grading.
20 yrs ago was when the gradeflation started taking over. You would probably have to jump that to 1997/1998 to see the first big changes coming out of Pittman and Eliasberg where coins got big grades....higher than they deserved in many cases. Some of have been downgraded since. In fact, NGC was offering dealers a special discount if they sent coins back for regrade around 1998. My local dealer emptied out all the PQ coins from his SDB and resubmitted them to NGC. He was scoring upgrades at about an 80% clip. He was in heaven. I started sending my coins in with his. I got several NGC upgrades on gem seated coins following the 1997 Eliasberg sale. NGC upped my 1858-0 dime from 65 to 66 and my 1867-s quarter went from 66 to 67. PCGS would not cross them. Those were my early tickets on the inflation train. Today those coins are now PCGS MS66+ CAC and PCGS MS67 CAC. Call it what you like.
10 yrs ago (2006-2008) it was probably a free for all to get coins upgraded and sent to auction. It was wild. From 2002-2008 MS64/65/66 Saints and $20 Libs went through a large loosening in grading...then again, most generic gem gold did. It might be half the reason the market for those actually peaked in May 2006. Only the $20's went on to higher highs based on gold going from $475 to $1920. The other half of the reason is that piles of generic gold have continued to show up over the past 10 yrs. Increasing pops, looser grades.....yes, prices will fall.
Just looked at the article. The 1912-S Liberty Nickel stuff is interesting. They did not note how much the MS65 pops go up and down (yes down). Someone seems to keep re-submitting a bunch of these.
For the MS66, there are now 50 and only 25 back in September of 2015.
During the same time period, the MS65 numbers have been as high as 436 and is now around 305.
(for clarity, this is including the + counts with the non plus counts)
I met this guy recently and talk about arrogant by the way. Here is the lovely NGC MS-69 Morgan. I have MANY PCGS 67's that blow his 69 away! I posted one I just had graded at FUN right below the NGC coin. I invite you to click on the image and look up close. A 69 should be flawless to the eye.
My 67, graded less than 2 weeks ago!!
I'm a nickel collector. I can tell you those pops are going all over the place....
Here's a good example of what's going on with nickel re subs
http://www.pcgscoinfacts.com/CoinImages.aspx?s=3893
My Type Set & My Complete Proof Nickel Set!
Mr Willis needs to respond to this I think. I will hold my thoughts yet continue to submit and buy PCGS graded coins I like..
Too bad hindsight is 20/20, but it would have been interesting to have picked 1,000 different coins from 30 years ago and crack and resubmit them every couple years.
MY COINS FOR SALE AT https://www.pcgs.com/setregistry/collectors-showcase/other/bajjerfans-coins-sale/3876
Couple of comments:
First regarding 12-s liberty nickels, two original rolls have been dispersed in the past 3-4 years. I know this personally from a very well respected national dealer in the biz(please do not ask, will not comment on who).
Also, numerous coins are being re-submitted by the (dealers in the know/or more importantly, the ones that can get the upgrades.) and many cases their getting them.
In the past year or so, I have noticed NGC has gotten much tougher on grades on submissions of classics, ive submitted & Ive been grading for many years and am pretty damn good, so I know. PCGS not so much.
if salzberg is true, market sure don't see it, cause PCGS coins out price NGC coins all day at auction. many CAC NGC coins fail to cross at grade in many cases to pcgs.
also as others have mentioned, the specific coins mentioned, may have been influenced by several other factors than just gradeflation.
I might add: I am not knocking NGC at all, I use them routinely especially lately because of the PCGS turn around times for coins for the business, to get em back and out quicker. But My personal collection is 100% PCGS and most likely will stay that way while I own them for several reasons
_ Couple of comments:
....."many CAC NGC coins fail to cross at grade in many cases to pcgs. "
>
That's an issue not really related to actual technical grading. I've never crossed a gem quality CAC seated coin to PCGS despite a dozen or more attempts. Some of those even later upgraded at PCGS when I no longer owned them.
So basically he's saying 'PCGS is almost as loose as we are and that sucks'
RR, yeah, I agree with that
If you go back to the time that they started charging 1% for a crossover, I'm fairly certain that's about the time in question. I do believe that they started crossing more coins at that time - but I don't think that's necessarily a negative and I don't think that means their standards changed. Natural grade inflation has taken its toll in that regard
And people wonder why CAC coins sell for big premiums in certain series. Well not perfect CAC is one weapon at your disposal in fighting gradflation.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
To me it is just so obvious that PCGS standards have changed. I have to largely agree with Salzberg's premise. That being said, I hardly ever send my coins to NGC. 95%+ of my raw coins go to PCGS for grading.
I have no doubt that we've had some gradeflation over the years on both sides of the street, and I doubt that anyone at PCGS or NGC would disagree.
What I would take away from the article is this. Take a look at the individual coins, the initial populations, and the initial prices. IMHO, it should have been obvious to any knowledgeable buyer that virtually all of these populations would likely rise dramatically. And the prices were insanely high, even if the populations didn't increase. People who bought these coins back then at those prices were doomed to take a big haircut, one way or another.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I have used both NGC (3 times only) and PCGS (50+ times) and all I can say is the NGC photo department is PATHETIC in comparison to PCGS TrueView...PERIOD...that's all I got
That does help explain the pops of the 12-S. I do notice that MS64 counts have not changed that much.
This letter screams of being written from a position of weakness rather than one written from a position of strength. I don't think PCGS should even respond
To illustrate my point, consider the 2011 population of SIX on a PCGS 1945-S Half Dollar in 67. Yes, this is a hard coin to find in that grade, but it is not rarer than an 1884 Trade Dollar. So what that the population rose to 35? This is just the beginning.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
The act of a desperate man.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
This video is what comes to mind after reading the foolish article by Mr. Salzberg
I crossed a NGC 67 to PCGS 67 during this time.
Ironically there are also 35 1945-S walkers in 67 at NGC.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
One does wonder about the motive for throwing down this gauntlet and making such a public and contentious accusation, without any more dispassionate stats to back it up. Why the provocation? Why now?
Here's a warning parable for coin collectors...
This may have been mentioned....But:
The current PCGS pop report, (as of 6:30PM PST), shows 33 1912S in MS-66, and NOT the 50 mentioned in the letter. So, assuming Salzberg wasn't making up data, (I highly doubt he was), then someone has corrected the records? Reviewed the CoinFact pictures? (Which we all know contains some serious duplication). Don't know. But apparently, the War is ON!
Anyway, the current pop reports show:
Count of PCGS 66 and 66+ is 35 out of 2670 = 1.3%
Count of NGC 66 is 14 out of 1409 = 1.0%
Guess we can argue why....but it isn't all that different.
How many crackouts are in those numbers? Coins are cracked all the time and end up with the same grade, pushing the total number up. I never send the old labels back.
_These coins represent a cross section of types and eras. I think that they are simply far too diverse to be explained by a plethora of new hoards being discovered or a sudden wave of high-grade crossovers.
I do not know why these PCGS-certified coin populations have changed so dramatically in recent years, however. All I know is that it has happened and that there has been a profound reduction in value for many PCGS-certified coins___
What they have in common, is that they're all relatively common coins, that were widely saved and preserved and suffered little attrition. It does not surprise me at all that the populations have, and continue, to grow as additional coins get graded.
the effect still exists, but is not nearly so profound in pre 1836 and especially pre 1808 coins, is it?
There are tons, yes literally TONS, of gem modern coins that have never been to a TPG.. yet.
Liberty: Parent of Science & Industry
And....whether it's an accurate reflection of grading changes at PCGS or not, you have to appreciate the hard-nosed attempt by NGC to compete with the acknowledged "leader" in the grading game.
Gloves off!
Maybe the backlash from him throwing PCGS out of their registry. Has to defend it
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
+1
Tom
My guess is that decision and this letter are part of the same game plan concocted to gain market share. The question is, what's phase 3
The letter reeks of desperation. It's weird. He should come up with a better holder, optics, marketing etc. The last good idea they had was the * program.
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Example showing that the letter was probably a matter of "glass house stone throwing":
PF 70 1995W populations:
NGC: 451/4951 = 9.1%
PCGS: 175/3570 = 4.9 %
Oh, that was a bad example.
(Of course, in any analysis of these raw numbers, you need to take into account who is getting the most submissions, who is the preferred company, etc. And I don't have NGC changes over time).
_The PCGS Population Report and auction prices realized are all public record, and the numbers do not lie. I encourage everyone to do their own research and see the facts for themselves before they buy any PCGS-certified coins—or any coin for that matter, including NGC-certified coins.
As a collector myself, there are some questions I always ask before making any purchase:
I encourage everyone to ask these same questions. An informed buyer is a smart buyer. And remember: buy the coin, not the holder._
==============
Ahh, the pops don't lie....but man can they fib.
If you answer those first 4 questions above....you probably still won't get enough to tell you whether something is worth purchasing as most of that information is highly tainted. You have to be an expert to work around and through that information. There are just too many changing inputs....many times meaningless. The only thing that matters is the 5th question: "Is this a good value?" But, to answer that you need accurate answers to the first 4 questions and why, as well as being an expert grader and good judge of coin values. If you had all that, you wouldn't need a slabbed coin in the first place! DOH! And don't just look back 1-5 yrs in pricing, take it back 20-30 years. None of those questions asks what company's holder the coin is in....a very important input.
"Do buy the coin...and not the holder." But, understand that you're potentially starting out 15-30% in the hole if you aren't buying PCGS. Just ensure you're smart enough to be able to arbitrage a non-PCGS coin at PCGS prices, into PCGS money no matter how you get it done. Either that, or buy at NGC prices, and expect NGC prices when you sell.
Basically.
Is he right or not? I am retired and no longer see coins coming back from the TPG's.
TD
I have not been in the hobby long enough to make any factual statement. With that being said, I would think the author could have included NGC pops and prices realized for NGC coins for the exact same dates across the exact same time as a statement of fact.
As a (small) market participant, I'll continue to vote with my wallet.
Concerning the 1912-s PCGS pops. In MS65 there are 289 graded....the highest number for any with motto Lib nickel. Based on that, I HAVE to conclude that 12-s is the most common coin is MS65 and must be WAY overpriced vs. say a 1909. Do all the research you want on this....it's not going to help you come to any conclusion other than a 12-s nickel in gem (in any holder) must be a "bad deal." Whether it's true or not is another story.
I have PCGS and NGC pop reports from 1998, 2001, 2003, 2007 and can compare them. Now that's actual useful data as to what occurred in the first 20 years of TPGs.
Interesting, I suppose. I don't think this forum is the place to have a worthwhile discussion of this. As had been said, to do so would risk running aground with a number of the rules here. The business methods, practices, techniques, and standards of the TPGs are closely held trade secrets which our host has every right to defend. Best to not discuss such things in their own living room.
I'm guessing that a thorough search of the thousands of various coin types graded by any TPG would turn up similar anecdotal cases of pop explosion coupled with value loss. As an educated, scientific-thinking person, I would require a well-done statistical analysis of these trends from large swaths of coin types and degrees of scarcity before I would be a supporter of Mr. Salzberg's position.
It is no secret that coins are endlessly submitted and resubmitted at both of the major TPGs when a financial incentive to do so exists. It's also no secret that the TPGs earn huge profits from this repetitive torrent of regrades. This naturally leads to a never-ending upward grade trend.
Finally, if a certain pop goes from 10 to 50, the market value of the best 10 is still probably about what it was before the redistribution of grades. The market is pretty good at eventually sorting all of this out. Except for cases of progressive environmental damage or doctoring, the coins ain't changing folks.
By my math, it is much harder to cross a PCGS coin into NGC then the other way around. Not to say that has anything to do with grading (more like feuding), but just saying what my experience has shown.
I'm 100%. 0 for 0
The only population that I specifically noticed had jumped was the PR70 1995W Silver Eagle. For the longest time there was a pop of just 1. You just know that a lot of raw coins were submitted or PR69s were resubmitted in an attempt to cash in on the huge price jump for a 70, but absolutely nothing for years. Then a second 70 was eventually graded and then suddenly the floodgates opened.
Proof Buffalo Registry Set
Capped Bust Quarters Registry Set
Proof Walking Liberty Halves Registry Set
If anyone reads this far down I have just two comments:
bob