An Analysis of POP Reports of PCGS and NGC 70 Grades...

Every now and then, I get questions from other collectors about the top TPG population reports from PCGS and NGC. I explain how many of these reports are scewed due to crack-outs and resubmissions (especially with Morgans and golds).

But...

And here's the big but...I real feel these reports hold their weight and merit with moderns. Think about it...how many proof 1996 Lincolns would you see being cracked out and resubmitted? If anything, I would bet more are broken out to fill an open slot versus playing the resubmission and crack-out game.

Now...with that said. People have asked me WHY PCGS 70 grades realize way more dollars than NGC 70 graded coins?

[Before I go on, let's not debate if there is such thing as a "perfect" 70 coin under 5 times magnification...if you want to, start another thread]

Well...I could tell them a number of things like marketing, registry sets, PCGS was first on the slab scence, etc.

But...

I really think that PCGS's grading standards are more strict and conservative compared to NGC when it comes to moderns and the holy grail of all grades: 70! Hence another reason why they command higher prices. Okay, that is just my opinion so again, I looked and analysed the POP reports and my conclusions support this opinion.

Let's look at some random coin POPs from 1996 and 2002. Why those years? No particular reason but I figured if anybody was interested in submitting these coins, they would have already done so. Also, I doubt if any collector would really crack out a 69 grade and hope it would grade up to a 70 if they resubmitted back to either PCGS or NGC.

So let's look at these PR70 grade reports for 4 coins from 1996 and 2002:

1996 1c:

57 out of 2142 total submissions received a 70 grade, or 2.66% for PCGS
69 out of 756 total submissions received a 70 grade, or 9.13% for NGC

1996 5c:

46 out of 2354 total submissions received a 70 grade, or 1.95% for PCGS
75 out of 730 total submissions received a 70 grade, or 10.27% for NGC

1996 50c (Plain):

43 out of 1615 total submissions received a 70 grade, or 2.66% for PCGS
28 out of 203 total submissions received a 70 grade, or 13.79% for NGC

1996-P ASE:

41 out of 3254 total submissions received a 70 grade, or 1.26% for PCGS
201 out of 3080 total submissions received a 70 grade, or 6.52% for NGC

Okay, that was 10 years ago...let's look at the same PR70 coins for 2002:

2002 1c:

33 out of 3371 total submissions received a 70 grade, or 0.98% for PCGS
302 out of 2396 total submissions received a 70 grade, or 12.60% for NGC

2002 5c:

56 out of 3209 total submissions received a 70 grade, 1.75% for PCGS
168 out of 2420 total submissions received a 70 grade, 6.94% for NGC

2002 50c:

24 out of 1801 total submissions received a 70 grade, 1.33% for PCGS
123 out of 1090 total submissions received a 70 grade, 11.28% for NGC

2002 $1 ASE:

70 out of 4407 total submissions received a 70 grade, 1.59% for PCGS
1758 out of 8533 total submissions received a 70 grade, 20.60% for NGC

******************************************

So why does PCGS slabbed coins, especially the 70 grades command a steep premium for their 69 and 70 graded moderns?? Just maybe...do you think PCGS is a "bit" more conservative with handing out these grades than NGC?

Could this be another reason why their coins realize these higher premiums over the other TPG's because there are not as many out in the population?

Modern coin grading is HUGE for the TPG's. The TPG's are not idiots. They know the future of their business is with getting us collectors to submit our moderns...and we all know that collectors are paying big bucks for the best of the best.

Look up the numbers, do a little 5th grade math and see for yourself. When you want the best of the best, you have to do some research don't you think?

 

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I think a big part of it is the registry war.

 

Midas - were those pictures taken under identical lighting? The PCGS coin certainly appears to have more frost. Black being black, it's pretty tough to differentiate the mirrored fields.

 

No...they are just stock pics for the first post.

BTW...since you bring it up, let's look at 2005 American Silver Eagle POP figures:

PCGS awarded 109 out of 2204 submissions with a PR70DCAM grade, or 4.95% of their total submissions

For the First Strike Designation for 2005:

PCGS awarded 485 out of 8772 submissions with a PR70DCAM grade, or 5.53% of their total submissions.

NGC does not have a First Strike Designation, but did grade a whopping 13,223 submissions!

Out of these 13,223 submissions, 5,780 received the perfect grade of PR70UCAM (NGC calls it Ultra Cam in lieu of Deep Cam). That 5,780 represents 43.71% of the submissions!!

Is it possible that NGC is getting most of the "perfect" 70 coins? For just 2005, NGC is awarding almost 8 times MORE 70 grades compared to PCGS.

I wonder why that it???

 

Great analysis!

 

Well I won't post in this thread.....I think Midas knows what I think.....
I will say one thing.....I have done some research and NGC might be alittle more open for MS/PF70 grades.....but I do think that they are more strict and conservative when looking at PCGS---I will say that they might be more strict and conservative in every grade other than PF/MS70 but I still have some looking to do before I would say for sure.
Just remember....POP reports are junk.....they really don't mean alot.

Speedy

 

Interesting statistics. Possibly something to know when shopping at the coin shows. However, I always wonder about such numbers and who made them and where they obtained thier information. I always remember the famous Kinsie Reports that were made into a book that was a really big seller until the sources of the statistics were found to be all corrupted. Sort of like asking people coming out of WalMart if they ever shopped at WalMart.

 

Great analysis Midas! The point of Midas' analysis is a comparison of PF70 and MS70 grades from PCGS and NGC. For this purpose, I would agree with his assumption...that most people don't crack out 69 coins and re-submit them. It's just not worth it for the small percentage that may get a 70 if re-submitted. The analysis is not a comparison of grading amongst all grades, just 70. For that, I don't believe that the numbers lie. Also, I will have to disagree with Speedy. I don't think that the POP reports are all junk. For the MS/PF69 and MS/PF70 modern graded coins, I think that the numbers are probably pretty accurate. They are most likely off some, but not enough to skew the results of Midas' study the other direction. I think this analysis confirms what many people think about the high graded modern coins. Of course, this analysis is only true for coins graded up until today. Things could easily change at the TPGs and go the other way without notice.

 

Thank you tcore...it is the reason why I concentrated this analysis on moderns...for this is the future of TPG's as these coins are the life line of their business going forward.

Collectors are payiing some serious dollars for the "best of the best" and with that said, anybody can see why certain companies realize more dollars for their slabbed products than others...even though both have the SAME posted grade for the SAME coin.

I don't think it would be that much of an issue, but when one TPG gives out 4, 5, 10, 15 times MORE 70 grades than the other...you have to think that the numismatic community is taking notice!

Run your own numbers yourself. Take a look at the number of total submissions for a given coin in a given grade and see how many were graded MS66 versus MS67. Go ahead and make the argument that the given TPG happened to receive MORE MS67 submissions, but when you see a pattern to these numbers, anybody understanding 5th grade math can easily figure them out.

 

Midas's point is that PCGS is stricter (as backed up by his numbers), but I think the scope of that assesment must be limited to the scope of the numbers presented. It appears to me that PCGS is stricter in the way it handles 70 grades for those series. The real question is does this mean that PCGS is stricter across the board or do they just have a greater threshold for 70? Say that both companies have identical satndards for 64, 65, 66, 67, 68, and 69, but when a coin is obviously a 69 and they are inspecting it for the possibility that it is a 70 then PCGS breaks out the 7x magnifying glass to look for blemishes while NGC keeps using their 5x loupes. I'm hypothesizing here, obviously, but it seems clear that PCGS is stricter with the 70 grades, but many insist that NGC is more consistant throughout the 1-70 range, meaning that somewhere there must be a break where NGC ceases to have the same standards as PCGS. Is that break at 69? or is it at 67/68 (like ICG on moderns)?

 

It is in the best interest of PCGS not to hand out a lot of 70 points. The crack out game. Same with NGC for that matter.

 

I collect Modern Commemoratives and silver dollars

I have collected for forty years. My opinion and my opinion only, I have found NGC to be the most consistent third party grader for silver dollars: ie, Morgan, Peace and commemorative silver dollars.
:thumb:

 

so your contention is that it is not a result of extra strictness that a coin is less likely to be graded 70 at PCGS, but it is a result of random luck, where equal coins are sometimes given their appropriate grade (70), but most times they are not. I suppose that advantage to this is that it increases the public's (those who cannot grade for themselves) perception that pcgs is more strict, when in fact that isn't the case, but it does serve to inflate the prices of PCGS graded 70 coins.

hmmm, I'd never considered that...


Ed, assuming I've accurately summed up Doug's position, what do you think of that?

 

Some very interesting points have been brought up by all involved. The intent of Midas' analysis was to look at the number of "70" coins from PCGS as opposed to NGC. I suppose that in order for that kind of study to be true, one has to work under the assumption that the grading is consistent at the companies involved. GD's thoughts about inconsistency add a whole new variable into the matter.

 

I watched the "grading" seminar that took place at the FUN show this past January. Bower, Travers and all of the big guys in numismatics were there taking questions. Matter of fact, you can watch the video of this meeting by going to PCGS's website:

http://www.pcgs.com/articles/article_view.chtml?artid=4641&universeid=313

One thing I took away from listening to these guys is that no two coins are identical. No two MS69's are identical. One may have a hair line here and the other else where. Still, both coins may grade out at the same grade, but we really have to state, they are NOT the same!

The purpose of my analysis was to demonstrate that some of these numbers from PCGS to NGC are dramatically differant. I hear from supporters of NGC that NGC obviously gets more 70 coins coming across their submission tables than PCGS, but I don't buy it. When you see NGC hand out 3, 5, 7, 10 times more 70 grades than PCGS, you would think the market would respond...and the market has!

For instance, I talked to many dealers about this subject just yesterday at the Palm Beach Show in West Palm. One dealer had boxes and boxes of NGC slabbed coins for sale. $15 per NGC slab, $20 per NGC graded coin all the way to $40. He had two tables of just a hodge podge of all NGC slabbed coins for less than $40. (right across from the NGC booth who was sponsoring this meeting!) This dealer had 100's of PR69UCAM 2004 and 2005 nickels for sale at $15 each! (no Bison's) and he told me that he is trying to get rid of them because there are so many out there. Another dealer told me, that if a modern is graded PR69UCAM by NGC, it is worth at least 25% less than "same" coin slabbed by PCGS! He summed it up as "market perception" and that NGC is more liberal on grading proofs and MS coins than PCGS. Don't beleive me...Look up a Lincoln MS66RD for any date from 1930 going forward. PCGS's MS66RD's cost and sell for WAY more dollars than NGC MS66RD Lincolns. Are all of these buyers that stupid...or do these buyers trust a PCGS 66RD more so than a NGC66RD? Somebody (a lot of somebody's) is demonstrating this market forces in action!

Sure they are exceptions here and there...but all things being equal, what I have seen, and dealers have told me face-to-face that if you have a 1914-D Lincoln graded by PCGS as AU55 and the same coin graded by NGC as AU55, the PCGS coin will sell for dramatically more dollars. Blame it on registry sets!?! Well, NGC has registry sets too!

I buy slabbed coins for a number of reasons outlined in "why slabs?", but when it comes to liquidating my collection (goal date of 2010), I want the highest bucks I can get...and I will realize that with PCGS over everybody else hands down!

 

Good Reading! Thanks to all.

 

This is a great topic and thanks for this post Midas. Now my question is this. With all the hoopla about the difference between PF69 and PF70, the subjectiveness of the TPS's, why is it that when your coin is graded by whom ever, there is no report or reason given for the subjectiveness of the grade? If graders are sitting there viewing coin after coin and making determinations via "their companies guidelines" then there should be a "reason for giving a 69 instead of a 70. Otherwise it is almost luck of the draw that your coin will get a grader who is feeling well, not angry at the world, or just loves to give "good" grades. The bottom line is there is no bottom line. You get what you get with no explaination. For the money spent and the potential money involved I for one think grades given to coins should be justifyable to some degree. No?

 

That question was asked at the FUN forum. Bottom line...COST!! You could have 10 of the 10 top numismatics grade your coin for one nice average grade among all of them, but who is willing to spend $2 to $300 per coin per grading with a detailed report about why your coin received "X" grade?

It is a cost of doing business issue. Maybe for an additional $5 they could give you a paragraph summary, but that will add more time to process submissions.