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Coin-Rating System at the Crossroads

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That ubiquitous one through 70 scale that’s used to rate US coins and the two leading third-party grading services that use it are in the spotlight once again. That’s because now, for the first time in history, the two main founders of the Professional Coin Grading Service (PCGS) and the Numismatic Guaranty Corporation (NGC) are both free agents and able to share their opinions of coin grading outside of the services they founded.

PCGS and NGC are the renowned and highly respected independent coin-rating services that encapsulate coins in sonically sealed, tamper-evident holders and assign coins a rating using that one through 70 scale. The rating of “one” is used for a coin that is so well worn you can hardly tell what it is and “70” is assigned to a perfect coin. World-class graders and authenticators are employed by both services.

PCGS, with offices in both the U.S. and Asia, boasts 40,726,177 coins certified as of February 11, 2019. NGC, an international leader with seven locations and websites in 11 languages, says that is has more than 42 million coins certified.

You can learn how to get your coins graded and certified by watching my Bottom Line video on the subject.

PCGS founder David G. Hall, who founded PCGS in 1986, was recently terminated by PCGS’s holding company, Collectors Universe.

NGC founder, John Albanese, sold his interest years ago in NGC, only to watch its revenues climb mightily since he walked away from the operation he started in 1987. Interestingly, Albanese was also one of the original co-founders of PCGS in 1986.

Hall is busy buying and selling millions of dollars worth of certified coins for his namesake coin dealership, David Hall Rare Coins. He says that he is willing to share his opinions of coins graded by the service he presided over for more than 30 years. Hall is still a Collectors Universe stakeholder with about 400,000 shares.

Albanese took a different path. In 2007, he founded the Certified Acceptance Corporation (CAC), which renders “verification” opinions on certain coins already graded and certified by market leaders PCGS and NGC. If, in the opinion of Albanese’s CAC, a PCGS- or NGC- certified coin is graded correctly (Albanese is quick to correct me: He calls this “solidly graded or high-end for the grade”) it will receive a green holographic sticker.

Albanese appears to be on to something here. With the perception of changing grading standards at PCGS and NGC, collectors and investors are demanding an unwavering and stable grading standard, and CAC seems to have provided this.

In the meantime, PCGS is looking to the future. In early January 2019, it appointed Brett Charville as its new president. Shortly after taking the reins at PCGS, Charville presided over a luncheon attended by hundreds that was sponsored by PCGS at the Florida United Numismatists (FUN) convention. A PCGS press release describes its new president as “a dealer in collectible coins for over 15 years” and “an expert in grading and evaluating U.S. vintage coins.” PCGS says that he got his break in the world of professional numismatics “like many others have, as an intern at Heritage Auction Galleries in Dallas, Texas.” I’ve met Brett, and he seems innovative and reasonably open minded about what it will take to elevate the industry and get more collectors involved.

Charville used his FUN lunch hosting to outline a promising and realistic vision and introduce his “mentor”—Heritage Auctions president Gregory J. Rohan, himself widely recognized as an innovator and grand dealmaker for the Dallas-based global auction giant.

At the Heritage auction conducted at the FUN convention, some CAC-approved coins brought substantial premiums over coins of the same date, type and certified grade sold at the auction or previously. For example, a PCGS AU-50 graded 1793 half cent with a CAC sticker was auctioned for $37,200. A few minutes later, another PCGS AU-50 graded 1793 half cent without a CAC sticker sold for $20,400.

Demand from knowledgeable collectors and investors, as well as from leading auction houses and high-profile dealers (including me—my own coin firm is a CAC authorized dealer) has propelled CAC from relative boutique status to purveyor of integrity and rock-solid grading consistency.

PCGS has a presidential vision to expand and improve services for the future. NGC has unwavering dedication to employ exceptionally skilled authenticators and graders. And the respective PCGS and NGC founders, Hall and Albanese, are now available outside of the services they founded to render independent opinions. So, the playing field may now be so level and grade opinions so easily available that collectors and investors will flock to the coin field in greater numbers than ever.

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