PCGS/NGC History

[Android]

With all of the PCGS/CU stuff going on these days, I got thinking about the history of NGC. I've heard that NGC was started by former disgruntled PCGS employees. Is this true? And what were their reasons for leaving PCGS?

 

Andy

[mark]

You maybe should post this on the PCGS board with a request in the title thread for Conder101's input. He is the resident expert on slabs and I would expect his expertise would spill over this question. And, I, too, would be interested in reading the responses to this question.

 

Mark

[Tradedollarnut]

John Albanese left PCGS to start NGC in the late 1980's.

[keithdagen]

PCGS opened doors in 1986, NGC in 1987.

[SeanJ]

John Albanese left PCGS to start NGC in the late 1980's

 

As in Albanese Rare Coins?

[dragon]

At NGC's inception, they were grading right on par with PCGS and their coins traded at very similar prices, in fact, NGC gold traded at a premium to PCGS gold. A while after that, PCGS coins began to trade at a premium to NGC pieces, mostly because PCGS had strong support and a large 'dealer network' with guaranteed sight-unseen bids and what have you. I got the impression that PCGS didn't want competition at that time and was trying to gain dealer backing and force NGC out.

 

Dragon

[dragon]

Also, does anyone remember when there was a PCGS member dealer revolt and PCGS was 'forced' to buy back and take off the market thousands of overgraded generic coins due to numerous complaints from major PCGS sight-unseen market makers? Seems like their PCGS sight-unseen bids were being hit with truckloads of overgraded swill and they didn't like that much.

 

Dragon

[Tradedollarnut]

Not Albanese Rare Coins - John Albanese Numismatics (or similar) in New Jersey.

[braddick]

Dragon, that's a good history lesson.

I also remember

1- Computer Grading. (bust)

2- NGC's policy of not grading anything past 1964, and then sticking with that rule on proofs, and then when they DID decide to grade moderns, not listing them in their pop reports for a year.

3- $800.00 PCGS MS65 1881-S Morgans because collectors (speculators) really WHERE buying the holder and not the coin.

4- Going to the Long Beach coin show in the end of 1986 and seeing 5% holdered coins and 95% raw and then going a couple of years later and seeing the tide changing!

5- Believing the 1964 PCGS MS65 Kennedy would be a grade rarity (one year type coin!) and buying up all the Teletrade examples that came up. I also remember giving up that lame idea (cornering the market) when I 'woke up' and realized there were more Kennedies struck in 1964 than ALL years combined on the Franlkin!

6- Realizing that NGC and PCGS super low grade problem free type was somewhat scarce (who would sent that stuff in at $30. a pop!?). Oh yeah, I still go after those...

6- Having to submit your coins through an authorized Dealer who would then get first shot at scoffing and laughing at the coins I wanted submitted.

 

I guess, in many ways, these are better days!

[gmarguli]

5- Believing the 1964 PCGS MS65 Kennedy would be a grade rarity (one year type coin!) and buying up all the Teletrade examples that came up. I also remember giving up that lame idea (cornering the market) when I 'woke up' and realized there were more Kennedies struck in 1964 than ALL years combined on the Franlkin!

 

Braddick, I would personally like to thank you for doing this. I made a ton of these and sold them on TT back in the beginning. You probably bought me a car. Well, you and that dealer at Long Beach that used to trade me $800 in real coins for PR69 moderns.

 

God I miss those days...

[Guest]

Dragon,

 

You're referring to 1988-89, when a coin dealer named Gary Fernandez counterfeited the old PCGS holders and put coins typically at least 2 grades off in them. He ended up being convicted of fraud and going to federal prison for a good number of years.

 

Even though they didn't have to, PCGS bought back every coin in a counterfeit holder at the grade printed on it. It cost them millions of dollars that they didn't have to lose.

 

Kenya

[gmarguli]

Too bad when I submitted about $50,000 in coins to PCGS thru one of their authorized dealers and the dealer stole and sold my coins, PCGS told me I was SOL and it wasn't their fault. The person at PCGS who told me this is still there and near, if not at, the top of the company. I guess it wasn't as good a PR move for them to pay me for my loss.

[Guest]

There were East Coast/West Coast factions at the time. Albanese was a darling of the East; Hall of the West (and the nation's leading coin dealer). Albanese and Hall didn't get along after a while, so John left to start his own service. Mark Salzbeg--who was always close to John--left to join him.

 

Consider the dynamics: John Albanese was a leader who couldn't take a back seat to anyone. And with David Hall at the time, it was "my way or the highway." John went off on his own and formed NGC, and Mark Salzburg followed.

 

I'm a friend of all 3 of them...but haven't seen John in years. IMHO, NGC's grading standards have declined over time in relation to PCGS's. That's evident in the Blue Sheet: category for category, PCGS coins are worth more than NGC's. In some cases, dramatically more.

 

Ask any questions...I'll answer.

[chrisfuccione]

Hi Kenya: Welcome to the board! it's always great to see new people here! Sounds like you in the know with all the players in this"mess". Can you tell us a little about yourself. Sounds like you work for or have worked for PCGS or CU at one point. Sorry if that came right out, But I have a few questions that I've been wanting to ask someone over at PCGS for a while. THANKS CHRIS

[braddick]

Thanks Greg! Fond memories. . .

 

Now, couldn't you have thrown me a bone and at least had a couple of them rainbow toned?!

[dragon]

kenya,

 

Welcome to the boards, actually I wasn't referring to the Fernandez ordeal which I also remember. I was referring to a time in the early 90's when that happened.

 

Dragon

[Android]

Kenya,

 

Thanks for your post, and welcome! I've also heard that Mr. Albanese may have started NGC in response to what was perceived at the time as Mr. Halls blurry distinction between owning a third party grading company that also deals in rare coins, primarily those encapsulated by PCGS and sold by DHRC. Also that various graders at PCGS may also be active dealers. I've read many "conflict of interest" allegations regarding this. I don't know what NGC's policy with regard to this is other than reading somewhere that NGC does not allow ths practice. Any insight?

 

Thanks,

 

Andy

[gmarguli]

Albanese was a darling of the East; Hall of the West (and the nation's leading coin dealer).

 

Hall was a darling of the west? As far back as I can remember he has been rather hated by many. Perhaps that's only the private views of him and the dealers won't say it publicly?

 

 

IMHO, NGC's grading standards have declined over time in relation to PCGS's. That's evident in the Blue Sheet: category for category, PCGS coins are worth more than NGC's. In some cases, dramatically more.

 

Is this because NGC's grading has slipped or PCGS's grading has tightened? Besides, for most series the prices received are the same. AND, the premium for PCGS coins is inflated because when they have an agenda and grade an MS66 as MS65 and the coin sells for a major premium, that is reflected into the bid/ask prices. A generic MS65 will usually sell for the same price in a PCGS or NGC slab.

 

[Guest]

Android,

 

Graders can't be dealers at PCGS. Been that way since 1989ish. I graded there once, but left when that rule was made.

 

Kenya

[EVillageProwler]

Kenya,

 

What plane of reality do you occupy? David Hall - you know, the one whose arse people are kissing across the street -- owns both PCGS and DHRC. He is both grader and dealer. Or, he has considerable influence over both.

 

I'm not saying that he's actually done anything wrong, but there's no external check and balance against tis type of abuse. And, you can't say for certainty that he (or anyone else there) hasn't tried to take advantage of the situation.

 

EVP

 

[keithdagen]

What plane of reality do you occupy? David Hall - you know, the one whose arse people are kissing across the street -- owns both PCGS and DHRC. He is both grader and dealer. Or, he has considerable influence over both.

 

Who reviewed Legend's doctored slabbed Saint? David Hall said he looked at it, and made your case for you on their boards.

[Hoot]

IMHO, NGC's grading standards have declined over time in relation to PCGS's. That's evident in the Blue Sheet: category for category, PCGS coins are worth more than NGC's. In some cases, dramatically more.

 

This also ignores the obvious - marketing, marketing, marketing. PCGS first convinced dealers of their superiority through aggressive marketing. Dealers passed the rumor on to collectors. Lately, PCGS started the registries. Another excellent marketing ploy to convince insufficiently_thoughtful_persons that idiotic statements such as the above are true. Ever heard of correlation vs. cause and effect?

 

It may be fact that some coins hold a value in PCGS holders greater than the same coin in an NGC holder, but this is due to marketing and not grading. Anyone who collects coins can tell this in the measure of experience.

 

Hoot

[keithdagen]

IMHO, NGC's grading standards have declined over time in relation to PCGS's. That's evident in the Blue Sheet: category for category, PCGS coins are worth more than NGC's. In some cases, dramatically more.

 

Of course, marketing means that nobody considers that NGC's standards have remained the same, and PCGS has continued to tighten, which means that a coin graded MS-65 5 years ago might not be as valuable as the same coin graded MS-65 today?

 

Instead, the marketed assumption is that NGC has become lax over time.

[Tradedollarnut]

Both company's standards have changed over time. Both were a lot tougher in the late 80's and moved slowly looser thru the 90's, especially 1996-1999. NGC got tighter after that and started to catch up on the graysheet. PCGS then went crazy - half supertight and half loose. They've been so inconsistent the past two years it's hard to say what they've been.

 

It still comes down to the quality of the coin - not the holder.

[oreville-migration]

Interesting about "changing standards."

 

NGC at one time was much tougher than PCGS on the grading of mercury dimes,

 

Case in point: My NGC graded 1916-D MS-67FB dime was graded by NGC in 1996/1997 and to this day I believe they still have only graded 2 of them. PCGS now has 6 in 67FB of which 2 are probably duplicates.

 

For the 8 or 9 years until around 1996 NGC prided themselves on their toughness in grading mercury dimes. Then all of a sudden coins that were very weakly split started getting FB designation from NGC when PCGS continued to refuse to give such FB designation.

 

What seems to have happened is that NGC has seemed to be tougher in absolute grading of the mercury dimes in more cases than PCGS but in the all important test of FB or no FB PCGS was much tougher.

 

About 1/2 of my mercury dimes are in PCGS holders and the other 1/2 in NGC. I have noticed that NGC has recently toughened up on their grading of mercury dimes once again.

 

So in this series I believe PCGS had been more consistent than NGC in grading over the long haul. However, the last two years for PCGS has been something of a puzzlement for me. They seemed to suddenly relax their standards then suddenly re-tightened them up again.

 

Another case in point, I once owned a NGC 1945-S micro s in MS-66FB. While the coin was a blazer and very beautiful, the center bands split on the fasces were on the weak side with more than the usual chatter for a 66 although split.

 

I wanted to upgrade to a 67FB and finally settled on the Kritzman 67FB micro-s dime in a PCGS holder and while the central bands are beautifully and deeply split, the rest of the coin barely makes and even would be questionable for the NGC standards for a 67.

 

Also look at the PCGS MS-67FB 1916-D dime being advertised on the Heritage site for $122,000 and change. It has clean surfaces and strike for a 67 but the rest of the coin does not meet the standards for a 67. Possibly the lighting is bad but this coin sure looks like a 66FB to me and looks very familiar to me in a former 66FB holder.

 

In another area of coins, I believe PCGS has been more consistent in grading the Washington quarter series for the last 15 years than NGC. Why? I have numerous slabs of both NGC and PCGS of the earlier washington quarters and NGC has vacillated from being equally as tough as PCGS in the early years to being more lax for the past 8 years.

 

Now for some of the other series, I can see where PCGS has seemed to be more variable in their grading standards, sort of a reaction to price movement in the coins.....when prices dropped standards eventually became tougher and when prices rose standards relaxed. This is the first time I recall in a period of rising prices that standards have also tigtened as well.

 

But then NGC has done the same in other series as well.

 

These are but a summary of some of my observations.

 

 

 

-------------------------

Happy collecting,

 

Oreville

 

 

[Spooly]

"It may be fact that some coins hold a value in PCGS holders greater than the same coin in an NGC holder, but this is due to marketing and not grading. Anyone who collects coins can tell this in the measure of experience."

 

Not true, (Well maybe for your series) but Lincoln grading at NGC is looser than PCGS.... then mix in the weak copper guarantee at NGC....... the result is NGC Lincolns sell for half of PCGS coins.

 

I have found that for every 3 NGC lincolns I buy.... I only keep 1 because of the grading.

[Oldtrader3]

In Peace Dollars and in gold Quarter, Half and gold Eagles NGC grades are tighter and IMHO more accurately than PCGS.

[IrishMike]

I wonder how much the advent of the registry has affected not only the perception but in some cases the reality of price differences in some series. Many dealers have told of their pratice of cracking out high grade lincoln cents from NGC slabs to feed the registry at PCGS, not bothering with coins they thought would not cross. They tell me that many of the lesser PCGS coins end up in teletrade and ebay auctions. the cracked out NGC coins end up in PCGS slabs in their cases to be sold at major shows or large regional ones. Thus the truly eyeappealing coins are disappearing from NGC slabs. Could this be true of other series, I don't know.

 

In any event no denying the registry was and is a terrific marketing ploy for their product. I might add I have heard this about IHC's also.