PCGS and NGC officials address rising populations for rarities

Why are populations for some coins increasing?
By , Coin World
Published : 02/21/17
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The heads of the two leading third-party grading services (Professional Coin Grading Service and Numismatic Guaranty Corp.) traded words in an unusual public debate of sorts as they compete for market dominance.

On Jan. 17, NGC chairman Mark Salzberg published a letter on NGC’s website titled, “Salzberg Advises: Research PCGS Populations and Prices.” The letter addressed the NGC announcement at the end of 2016 that PCGS-certified coins would not be eligible for new inclusion in sets on the NGC Registry.

Salzberg wrote, “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 this has caused an extraordinary reduction in the value of many PCGS-certified coins.”

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Salzberg pointed to the 1912-S Liberty Head 5-cent piece, where the PCGS population in MS-66 has increased from eight in January 2012 to more than 50 today. Of course, when the population of a scarce coin moves up substantially, the prices are bound to fall.

Salzberg cited the sale of a PCGS MS-66 example in January 2012 for $37,375 compared with a sale of a comparably graded example at Heritage’s 2017 Florida United Numismatists show for $3,525. Salzberg noted, “This is a staggering loss of $33,850 (or 91%) of the coin’s value in five years,” before concluding, “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?”

PCGS President Don Willis responded two days later on the PCGS U.S. Coin Forum, writing, “We set the standard for third party grading 30 years ago. Every other grading service has attempted to copy that standard and has been playing a game of catch up for all those years.”

Addressing the population increase of some coins, Willis wrote, “We confess to being the most popular grading service. We process many more Vintage coins than NGC,” noting that populations rarely decrease as “there are always hidden collections, accumulations or hoards that come out.”

Willis pointed out that several original rolls of high-quality examples of 1912-S Liberty 5-cent coins have come to market in the past several years. He said, “These rolls were handled by some of the most knowledgeable dealers in the business. We are proud of the fact that these individuals, who have great insight in the coin market, chose PCGS to grade their coins.”

Salzberg, however, concluded, “An informed buyer is a smart buyer,” and advised collectors to research how a coin’s population and price have changed over time, before buying. The back-and-forth behind these two grading leaders is unusual as it provides a bit of transparency to these normally opaque matters that impact nearly all coin collectors.

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Older Comments (4)
Increasing pops are not hard to explain:
A. Much looser grading standards!
B. Fresh coins being certified particularly after seeing stupidly high auction numbers
C. Competition between and desire for income by TPGs leading to giving out grades more easily
D. Resubmissions of lesser pieces until coin gets grade, see A and C above
This is why I collect great looking coins in the AU-MS 60 range, it’s a lot less subjective between people and the prices are more realistic for long term stability.
I'm glad this surfaced' this will give collectors a heads-up' being more informed and cautious when purchasing their coins. By Studing and observing both grading services' it will give collectors a better understanding which one they prefer.There'll always be a continuous battle being the best grading service.In my opinion YOU'should be the best grader' then decide which grading service you feel comfortable with. It's essential for beginning collectors'getting those Reference books in order to study their coins in population and grade, before buying the coin.
Who were these "some of the most knowledgeable dealers in the business?" Somebody like Mark Halprin who has admitted to cracking out slabs to try to game the system?

And you're going to tell me that someone who finds rarities, gets them graded, and tries to sell them is not going to advertise that they have fresh material? If you had material to sell, wouldn't you advertise its availability? Or are you trying to game the market to keep the prices down?

Colluding to game the market is a violation of the RICO laws. Does this mean PCGS is aiding and abetting illegal market activities?