By Les Fox. 

As every serious coin collector, investor and dealer knows, PCGS and NGC have made a huge difference in the way coins are traded and graded.  Over the last 20 years, the Professional Coin Grading Service has certified some 11,000,000 coins valued at an estimated $16 billion, with Numismatic Guaranty Corp. boasting similar large numbers.  In common numismatic jargon, PCGS and NGC are the "premier" coin grading services of the industry, followed by ANACS, ICG, SEGS, NTC and numerous "third tier" grading services.

As every serious coin collector, investor and dealer also knows, there is something different about the way PCGS and NGC grades coins.  Borrowing two popular political terms, it is generally believed that NGC is the more "liberal" grading service, and PCGS is the more "conservative."  What this means is that NGC may be more likely to tolerate an extra bag mark or two, a little less mint luster and perhaps a small weakness in strike, while accepting a coin as MS65, whereas PCGS may regard the same imperfections as the reason to grade the coin MS64.  This perception explains why, on eBay as well as in live public auctions and private bourse trading at coin shows, a PCGS coin graded MS65 will generally bring more money than an NGC MS65.  Of course, there are exceptions.  But a random sampling of 1,000 PCGS and NGC coins will show that an MS65 coin is more highly valued in a PCGS holder.  The same is true of price guides and auction estimates. 

Some people say this is wrong.  A coin should be evaluated independently, and purchased for its "true" grade, not the number printed on the paper label in its holder.  However, if the number printed on a certified coin holder does not have any meaning, then why do millions of people demand certified coins?  And why does Collectors Universe (the parent of PCGS is a publicly traded company, symbol CLCT) generate revenue of $35 million a year?  The answer is, certified grades do have meaning, and they have greatly improved the coin market.  Sure, it makes sense to buy an NGC MS65 for whatever you think it's worth.  And if you believe that a particular NGC MS65 is equal to or better than a PCGS MS65, you should buy accordingly.  But as a rule, in my professional opinion, and this is just my opinion although I am not the only one who believes this, an NGC MS65 Morgan or Peace Dollar is often "slightly below" the grade of a PCGS MS65.  Perhaps PCGS is undergrading coins and NGC is grading them correctly.  But until such time as both PCGS and NGC coins trade at the same prices you must factor this grading difference into consideration, which is exactly what the market does.

Now, let me state clearly that I believe that both NGC and PCGS are trying to grade coins accurately, and both companies employ extremely qualified graders.  (Although they do not tell you exactly who graded your coin.)  Regardless of this fact, NGC and PCGS grading standards are not identical, and both companies make errors occasionally, which they strive to correct whenever possible.  I have great respect for both firms, and I have known the founders and leaders of these companies for more than 30 years. 

That said, I am now in the process of writing a new book about coin grading which will attempt to quantity the difference between PCGS and NGC graded coins.  I have assembled a huge file of photos of certified coins, and I have personally graded tens of thousands of coins in my 37 year career.  My experience and reputation qualifies me to write this book, and to begin grading coins according to a decimal point system rather than just the standard grades of MS63, MS64, MS65, MS66, MS67, etc. These are the most critical grades in numismatics, as a "1 point difference" can involve hundreds or thousands of dollars, if not more.  According to my 5-point precision coin grading system, previously certified PCGS and NGC coins can be accurately graded as MS63.2, MS65.6, MS66.8, and so forth.  My system does not utilize computers or measuring tools.  It relies upon the same visual grading techniques as PCGS and NGC, and it does not involve removing certified coins from their PCGS and NGC holders.  Decimal point grading will allow collectors to understand that the difference between PCGS grades and NGC grades may be as little as "0.1" or as much as "0.9." 

Within the next few years, the numismatic community will have an extensive new set of references for judging "how far apart" PCGS and NGC coin grades are.  Without changing the grades on their holders it will be possible to know if a coin is a "just made it" MS65 (MS65.0 or MS65.1) or a "just missed" MS66 coin (MS65.8 or MS65.9). 

The key factors in this new grading system are the same as before:  Surface, Color / Toning, Marks, Strike and Eye Appeal.  The only difference is that, just as the old 3-grade Mint State system ("BU, Choice BU and Gem BU") of the 1970's was replaced with the new 10-grade Mint State system of the 1980's (MS60 to MS70), which is actually 11 grades, the 21st Century will now find itself with the next logical progression:  the 100-grade Mint State coin grading system.  Of course, like all new ideas this system will be met with skepticism at first, but eventually it will take its rightful place in the numismatic industry.  You can't stop change.  Or, in the words of Emerson, "Since a reasonable man accepts the world for what it is and does not try to change it, all progress is made by unreasonable men."  So be it.  Decimal point coin grading is coming.  Welcome it, and get ready to find out how far apart (or close together) PCGS and NGC grades really are.