Posted on 1/17/2017

Dear Fellow Numismatists:

In November I announced that PCGS-certified coins would no longer be eligible for inclusion in the popular NGC Registry. I received many positive comments from those who have closely followed graded coin populations and prices. Others asked me, “Why? What is the difference between NGC and PCGS?”

Let me show you.

Over the last five years or so, I have noticed a perplexing trend at PCGS. There has been a dramatic increase in the grades assigned by PCGS for a wide range of coin types and, consequently, I believe that this has caused an extraordinary reduction in the value of many PCGS-certified coins.

As an NGC grading finalizer for the last 30 years, I have worked to ensure the accuracy and consistency of NGC’s grading. I have also closely observed the grading standards employed by our competitor and I can say with confidence that I believe that the grading standards PCGS uses today are completely different from the standards it used 10, 20 or 30 years ago.

It is my belief that the sudden change in PCGS grading standards around five years ago is harmful not just to collectors of PCGS-certified coins, but to the entire hobby

NGC has always focused on the positive in its marketing—we believe that our expert and impartial services speak for themselves. What is happening at PCGS, however, is so extreme in my opinion that I feel compelled to address it personally. I have been a collector for virtually my entire life and I care deeply about our hobby. I think it would be irresponsible for me to remain silent about the damage that I think is being done.

There are numerous examples of how the significant change in PCGS-certified coin populations for many coins has had what I believe is a devastating effect on the value of those PCGS-certified coins.

In January 2012, for example, the PCGS Population Report showed eight 1912-S Liberty Nickels graded PCGS MS 66, the highest grade then assigned by PCGS. Now, in January 2017, the PCGS Population Report shows 50 examples in PCGS MS 66 and two in PCGS MS 66 . The PCGS population in MS 66 increased from eight to 52 in less than five years—an increase of 550%!

What happened to the value of a 1912-S Liberty Nickel in PCGS MS 66? It plummeted. In January 2012, a PCGS MS 66 sold at auction1 for $37,375. In January 2017, a PCGS MS 66 sold at auction2 for $3,525. This is a staggering loss of $33,850 (or 91%) of the coin’s value in five years.

How is it possible that eight 1912-S Liberty Nickels were graded PCGS MS 66 in the company's first 25 years and 44 other examples were graded PCGS MS 66 in the last five years? Imagine being the collector who bought a PCGS MS 66 for $37,375 five years ago based on the belief that it was one of only eight MS 66s and now seeing that there are 52 MS 66s and some are trading for $3,525!

There are similar examples across all US coin series, both vintage and modern. Below are some other extreme cases, all of which have been footnoted with third-party sources so that you can verify my research.

1939-S Washington Quarter, PCGS MS 67 Date PCGS Population Actual Auction Result April 19, 20123 21 $3,220 January 8, 20174 80 $881.25



1995-W Silver Eagle, PCGS PF 70 DCAM Date PCGS Population Actual Auction Result March 31, 20135 8 $86,655 January 5, 20176 171 $18,800



1945-S Walking Liberty Half Dollar, PCGS MS 67 Date PCGS Population Actual Auction Result February 11, 20117 6 $37,375 August 12, 20168 35 $5,170



1991 $5 Gold Eagle, PCGS MS 70 Date PCGS Population Actual Auction Result August 7, 20149 4 $8,519 September 7, 201610 54 $1,116



1918 Lincoln Cent, PCGS MS 67 RD Date PCGS Population Actual Auction Result April 19, 201211 13 $12,075 August 10, 201612 33 $1,293



1969-D Lincoln Cent, PCGS MS 67 RD Date PCGS Population Actual Auction Result August 12, 201013 3 $7,475 January 8, 201714 26 $317.25



1974-S Washington Quarter, PCGS PF 70 DCAM Date PCGS Population Actual Auction Result January 8, 200915 1 $10,925 January 8, 201716 30 $376



1986 Silver Eagle, PCGS MS 70 Date PCGS Population Actual Auction Result February 8, 201317 3 $21,150 September 7, 201618 64 $1,645



1976-S Silver Washington Quarter, PCGS PF 70 DCAM Date PCGS Population Actual Auction Result June 6, 201319 54 $2,115 January 8, 201720 300 $141



1953-S Washington-Carver Half Dollar, PCGS MS 67 Date PCGS Population Actual Auction Result January 10, 201321 5 $10,575 October 4, 201622 14 $3,995



1910-S $10, PCGS MS 63 Date PCGS Population Actual Auction Result February 27,201422 91 $9,400 September 8, 201623 111 $4,935





Let this sink in for a moment. Do you have PCGS-certified coins in your collection? Have you checked their populations and values recently?

Admittedly, these examples are some of the most extreme. There are many more that show less dramatic but I think still very obvious changes, and I believe that these cases are just as concerning, if not more so, because of their wide-reaching impact on the market.

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.

Interestingly, I just read an article in Coin World over the weekend that describes a 1997 Lincoln Cent in PCGS MS 68 that sold for a strong price of $763.75. According to Coin World: "PCGS had graded 17 in this grade with none finer when the coin was offered last autumn, and the population has subsequently exploded, with the PCGS Population Report recording 24 as of December 2016." This is exactly what concerns me.

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:



Has the graded coin population changed in the last six months, year, two years or five years?

If it has, can the change be explained by the discovery of a hoard or an increase in submissions?

How has the price changed in the last six months, year, two year or five years?

What is the price difference between this grade and a grade point lower?

Is this coin a good value?

I encourage everyone to ask these same questions. An informed buyer is a smart buyer. And remember: buy the coin, not the holder.

Grading standards evolve over time as we study more coins and learn from our collective experiences, but I believe that this evolution happens glacially, not suddenly. I think that we, the third-party coin grading services, have a tremendous responsibility to collectors and dealers who have made buying and selling decisions based on our grading. It is essential to them and to us that we uphold our grading standards.

NGC is committed to doing the right thing for the hobby. We will continue to maintain our grading consistency as I and the rest of the NGC grading team have done for the last 30 years. At the end of the day, this is not about competition or profits for us, but protecting our fellow collectors.

Sincerely,

Mark Salzberg

Chairman

Sources:

1. https://coins.ha.com/itm/liberty-nickels/nickels/1912-s-5c-ms66-pcgs/a/1166-3085.s?ic4=ListView-ShortDescription-071515 2. https://coins.ha.com/itm/liberty-nickels/nickels/1912-s-5c-ms66-pcgs/a/1251-3552.s?ic4=ListView-ShortDescription-071515 3. https://coins.ha.com/itm/washington-quarters/quarters-and-twenty-cents/1939-s-25c-ms67-pcgs/a/1169-4283.s?ic4=ListView-ShortDescription-071515 4. https://coins.ha.com/itm/washington-quarters/quarters-and-twenty-cents/1939-s-25c-ms67-pcgs-pcgs-population-64-0-ngc-census-41-0-cdn-750-whsle-bid-for-problem-free-ngc-pcgs-ms67-min/a/1251-9484.s?ic4=ListView-ShortDescription-071515 5. http://www.greatcollections.com/Coin/108300/1995-W-1-Silver-Eagle-PCGS-Proof-70-DCAM-Struck-at-West-Point-Mint-Label 6. https://coins.ha.com/itm/modern-bullion-coins/us-bullion-coins/1995-w-1-silver-eagle-pr70-deep-cameo-pcgs-secure/a/1251-6129.s?ic4=ListView-ShortDescription-071515 7. https://coins.ha.com/itm/walking-liberty-half-dollars/1945-s-50c-ms67-pcgs-cac/a/1152-3839.s?hdnJumpToLot=1x=0&y=0 8. https://coins.ha.com/itm/walking-liberty-half-dollars/half-dollars/1945-s-50c-ms67-pcgs/a/1238-4945.s?ic4=ListView-ShortDescription-071515 9. https://coins.ha.com/itm/modern-bullion-coins/1991-g-5-tenth-ounce-gold-eagle-ms70-pcgs/a/1208-4990.s?hdnJumpToLot=1x=0&y=0 10. https://coins.ha.com/itm/a/1239-3314.s 11. https://coins.ha.com/itm/lincoln-cents/small-cents/1918-1c-ms67-red-pcgs-cac/a/1231-4599.s?ic4=ListView-ShortDescription-071515 12. https://coins.ha.com/itm/lincoln-cents/small-cents/1918-1c-ms67-red-pcgs/a/1238-3197.s?ic4=ListView-ShortDescription-071515 13. https://coins.ha.com/itm/lincoln-cents/small-cents/1969-d-1c-ms67-red-pcgs/a/1143-3970.s?ic4=ListView-ShortDescription-071515 14. https://coins.ha.com/itm/lincoln-cents/small-cents/1969-d-1c-ms67-red-pcgs-pcgs-population-26-0-ngc-census-15-0-/a/1251-8432.s?ic4=ListView-ShortDescription-071515 15. https://coins.ha.com/itm/washington-quarters/quarters-and-twenty-cents/1974-s-25c-pr70-deep-cameo-pcgs-pcgs-population-30-ngc-census-0-/a/1240-7376.s?ic4=ListView-ShortDescription-071515 16. https://coins.ha.com/itm/washington-quarters/quarters-and-twenty-cents/1974-s-25c-pr70-deep-cameo-pcgs-pcgs-population-30-ngc-census-0-/a/1240-7376.s?ic4=ListView-ShortDescription-071515 17. https://coins.ha.com/itm/modern-bullion-coins/1986-1-silver-eagle-ms70-pcgs/a/1182-4660.s?hdnJumpToLot=1x=0&y=0 18. https://coins.ha.com/itm/modern-bullion-coins/us-bullion-coins/1986-1-silver-eagle-ms70-pcgs/a/1239-3295.s?ic4=ListView-ShortDescription-071515 19. https://coins.ha.com/itm/kennedy-half-dollars/half-dollars/1976-s-50c-silver-pr70-deep-cameo-pcgs/a/1186-4255.s?ic4=ListView-ShortDescription-071515 20. https://coins.ha.com/itm/washington-quarters/quarters-and-twenty-cents/1976-s-25c-silver-pr70-deep-cameo-pcgs-pcgs-population-300-ngc-census-1-/a/131702-23369.s?ic4=ListView-ShortDescription-071515 21. https://coins.ha.com/itm/commemorative-silver/classic-commemoratives/1953-s-50c-washington-carver-ms67-pcgs-secure/a/1181-5979.s?ic4=ListView-ShortDescription-071515 22. https://coins.ha.com/itm/commemorative-silver/classic-commemoratives/1953-s-50c-washington-carver-ms67-pcgs/a/1240-4476.s?ic4=ListView-ShortDescription-071515 23. https://coins.ha.com/itm/indian-eagles/eagles/1910-s-10-ms63-pcgs/a/1203-4228.s?ic4=ListView-ShortDescription-071515 24. https://coins.ha.com/itm/indian-eagles/eagles/1910-s-10-ms63-pcgs/a/1239-5723.s?ic4=ListView-ShortDescription-071515