News and Analysis on scarce coins, coin markets, and the collecting community #29

A Weekly Column by Greg Reynolds

I explain the PCGS SecurePlus program in part 1. Here in part 2, Don Willis, the president of the PCGS, responds to the explanation that I put forth in part 1, and I argue, with assistance from expert dealers, that the PCGS SecurePlus™ program should be reformed, not by reformulating the program, but by preventing dealers from submitting rare coins through the old “standard” process. The positions of John Albanese, Ira Goldberg and Mark Feld are featured.

I devoted last Wednesday’s column to an explanation because I have found that many collectors and dealers do not really understand the PCGS SecurePlus™ program. For details of the PCGS SecurePlus™ program, and a discussion of its importance, please read part 1.

IV. Don Willis Responds

Don Willis has been the president of the PCGS since Oct. 2008. I knew him before then, when he was a coin dealer. Earlier, he had a very successful career in the field of information technology, including the founding of a large software company. I have found Don to be honest, willing to address controversial issues, and very concerned about the well being of collectors.

Willis graciously responds to the points put forth in last week’s column and to questions I asked. Fortunately, Don found my explanation last week as to how grading procedures under the SecurePlus program differ from standard PCGS procedures to be “correct.”

“Today, in its early stages,” Willis says, “SecurePlus is being driven by the collector community.” My (this writer’s) impression is that many collectors do not know or do not understand the benefits of the SecurePlus program. Moreover, not all collectors are familiar with the problems of grade-inflation and coin doctoring. Besides, the dealers who submit many coins to the PCGS are typically wholesalers, not dealers who sell directly to collectors. It would be illogical for the SecurePlus program to be steered by collector demands and collector feedback.

Willis continues, “We have seen many finest known and top quality sets submitted for SecurePlus grading.” I (this writer) find that this is certainly true. Several sets in the Simpson collection come to mind. “Most of these sets remain with their original owners and off the market,” Willis states. “One exception would be Dr. Steven Duckor’s set of Barber Half Dollars which were submitted through SecurePlus and later sold at auction for record breaking prices.”

Dr. Duckor is a strong supporter of the SecurePlus program. Please see his remarks in my June 2nd column. (As always, clickable links are in blue.) Further, I wrote two articles on Dr. Duckor’s halves (part 1, part 2). Also, I mention more of his halves in my column of Aug. 4th.

As Willis says, Duckor’s halves sold for extremely strong prices at auction and many auction records were then set. It is not clear, though, to what extent PCGS Secure holders (as opposed to regular PCGS holders) played a role in the prices realized. Dr. Duckor is one of the leading living collectors, and he is certainly one of the most sophisticated collectors of all time. For a Barber Half Dollar, or an early 20th century gold coin, a Duckor pedigree often adds considerable value.

The SecurePlus program should not only be for the benefit of those advanced, knowledgeable collectors who understand the program. “SecurePlus is only six months old,” Willis replies. “Currently all coins valued over $100,000 must go through SecurePlus. This will change in the future as the market dictates.” Willis figures that “the pace of SecurePlus submissions and the expansion of SecurePlus services will be determined by collector demand just as original PCGS submissions were back in 1986.” (more…)

News and Analysis regarding scarce coins, coin markets, and the coin collecting community #28

A Weekly Column by Greg Reynolds

On March 25, 2010, David Hall and Don Willis, the top officials at the Professional Coin Grading Service (PCGS), announced and explained the PCGS SecurePlus™ program, known for weeks before as “The Big One”! For most grades between EF-45 and MS-68 inclusive, the PCGS begin assigning plus grades when warranted, such as 45+ or 63+. As the rival of the PCGS, the NGC, incorporated plus grades into their system two months afterwards, and the PCGS later allowed for standard submissions to be eligible for plus grades, not just coins submitted via the SecurePlus tier, plus grades now seem to be a secondary aspect of the program. In my view, the emphasis should always have been, as it is now, on the ‘Secure’ aspects of the SecurePlus program, which are truly revolutionary and have tremendous implications for the future of markets in rare coins.

I hope that those who are not entirely familiar with the PCGS SecurePlus program find this column (part 1) to be very clear and educational. In my opinion, the explanation of the PCGS SecurePlus program on the PCGS website is not extremely clear and, over the past six months, I have found that many collectors are confused about this program.

Collectors who are already very familiar with the PCGS SecurePlus program, and with PCGS policies in general, may wish to wait for part 2, next week. In part 2, Don Willis, the president of PCGS, responds to my explanation and a proposal for the reform of PCGS submission policies is put forth. The views of John Albanese, Mark Feld and Ira Goldberg are included.

In the first section, I provide a definition of the SecurePlus program. In the second section, I explain the benefits of the coin identification part of the SecurePlus program. In Section III, I emphasize that submitters of coins to be graded by the PCGS may choose between the SecurePlus program and standard submission options.

I. The PCGS SecurePlus Program

The SecurePlus program brings three new technologies to coin grading. (1) The introduction of a new technology for scanning and coin identification, through the use of CoinAnalyzer devices that are produced by Richard Haddock’s CoinSecure firm. An image and data from each scanned coin is entered into a database, and, if the same coin is scanned at the PCGS in the future, it will be identified as a coin that was previously scanned.

(2) The use of ‘Sniffer’ technology to detect added foreign substances and changes in the surfaces, the metal, on coins that have been deliberately harmed by coin doctors for the purpose of deceiving experts and others into believing that doctored coins merit higher grades than were (or would have been) assigned before such coins are doctored. Additionally, the adding of metal to the surfaces and/or the deliberate heating of the metal on the surfaces of a coin will, hopefully, be detectable by ‘coin sniffer’ technology as well. The PCGS has already begun using ’sniffer’ technology to an extent, and will be phasing additional sniffer applications into the PCGS SecurePlus grading program over time. I will devote a future piece to coin sniffer technology. The subject is so complicated that it must really be treated in a long article.

To gain some understanding of coin doctoring and the urgent need to contain the coin doctoring problem, please read five previous pieces of mine. Last year, I devoted a series of three articles to the reasons why naturally toned coins are preferred and the topic of coin doctoring is discussed at length therein (part 1, part 2 and part 3). This year, I wrote two columns that address the PCGS lawsuit against alleged coin doctors, on June 3rd and on Sept. 8th. In these two columns, coin doctoring is defined, the lawsuit is analyzed, and the seriousness of the matter is emphasized.

(3) The third ‘Security’ issue relating to the PCGS SecurePlus program is the anti-counterfeiting technology incorporated into the new inserts. In each PCGS holder, there is a paper insert that provides information about the coin contained therein. A gold eagle with a shield is pictured on an insert in the PCGS holder that houses each coin that has been graded under the PCGS SecurePlus program. Unethical businesses in China have produced forgeries of PCGS holders with misleading grades printed on fake inserts. New anti-counterfeiting features are important, though less so than the coin identification and sniffer technologies that constitute the core of the PCGS SecurePlus program. (more…)

Next Grading Week Event Will Be October 25 – 29, 2010

PCGS Authorized Dealers from across Europe eagerly attended another successful Grading Week conducted at the Paris, France offices of Professional Coin Grading Service, September 13 – 17, 2010.

Photo: Don Willis, Fabrice Walther, David Hall

PCGS Co-Founder and Collectors Universe President David Hall personally met with the attendees to talk about the current rare coin marketplace in Europe, the importance of third-party grading, and the next scheduled Paris Grading Week, October 25 – 29, 2010. “There is a thriving market for world coins in Europe and there are a lot of U.S. gold coins still in Europe. Paris is the center of the European coin market. There are dozens of dealers there and a ton of activity,”

“Certified grading is starting to be accepted in Europe. Many dealers and collectors are beginning to see the advantages of third-party certification and are quite enthusiastic about the new PCGS grading office in Paris. said Hall.

“There were many outstanding coins submitted, including an amazing collection of high-grade Greek coins and several hundred Brittany coins,” said Don Willis, President of PCGS, a division of Collectors Universe, Inc. (NASDAQ: CLCT).

Dealer Takis Syvridakis of Collector’s Shop International in Athens, Greece, who submitted a 1901 (Creta) 2 Drachmas that was graded PCGS MS64, said: “My client was more than pleased with such a grade and he promised to continue to send his collection to PCGS for grading.”

Syvridakis was also pleased to meet Collectors Universe President and PCGS Co-Founder David Hall in person in Paris.

“I was very impressed with his enthusiasm, his honesty, his knowledge and his visions on the coin market. He was very helpful with my collection, gave me great ideas for my business and many solutions to offer to my clients. I was very glad to meet him in person and felt quite privileged.”

Jonathan Fhal of Godots et Fils in Paris agreed: “We were very happy to get the opportunity to actually meet Monsieur David Hall. He had great advice and, indeed, guided us all along the process of selecting the coins which we should grade or not.”

Laurent Fabre of Monnaie d’Antan in Poses, France submitted over 200 Brittany coins from the prestigious collection of collector Alexis Bigot for an upcoming auction (www.catalogues.monnaisedantan.com/vso8) including an 1861 Napoléon III 5 Francs that was graded PCGS MS65. He described it as “certainly the most beautiful known today.”

PCGS Authorized Dealer Fabrice Walther of Numisaisne in Paris brought in for authentication and grading a large quantity of important rare coins he is offering in the upcoming Salon de Brogniart Paris show on October 16, 2010. PCGS will participate in that show.

“We’re now also eagerly looking forward to attending the big Coinex show in London, October 1 and 2, and the Warsaw Coinexpo in Poland, October 14 and 15, and, of course, hosting the next PCGS Paris Grading Week, October 25 to 29,” said Muriel Eymery, Manager of the Paris office and PCGS Director of International Business Development.
For a list of PCGS Authorized Dealers in the EU, visit www.PCGS.com/dealers and click on the map to locate your country.

To make an appointment for PCGS’ next grading sessions or to obtain more information, EU dealers can contact the Paris office at info@PCGSglobal.com or by calling Muriel Eymery at 33 (0) 1 40 20 09 94. Additional information on PCGS is available in English and other languages at www.PCGSglobal.com.