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Just How Accurate Is the PCGS Population As A Guide to the Rarity of a Coin?

This article is going to be something of a work in progress - the subject matter is one that hasn’t yet been widely discussed in Australia, however I believe it’s an important one to get started. It is a subject that collectors in the US grapple with from time to time.

For those of you that aren’t aware, the Professional Coin Grading Service (PCGS) is now a rather popular service used by collectors in Australia - coins sent to this company are independently assessed for their authenticity and condition, with the number of each coin sighted recorded and displayed in The PCGS Population Report on the PCGS website.

This “Population Report” is used by many collectors (myself included) as a further indicator of rarity that goes above and beyond the knowledge gained from assessing a mintage figure.

My thoughts are that the PCGS population is a useful proxy for the market rarity of a coin - the number of coins that actually exist, and the number of coins that are available to collectors on the open market. I’ve been using the PCGS population to try and identify coins that may either be rarer than their mintage or catalogue value might suggest, something that is a very interesting exercise indeed.

As an indication, here is a screenshot of the current population of the King George VI threepences in mint state:

KGVI 3d Population via PCGS

I look at that information and can see that the pretty significant difference between the population of the 1941 threepence and the 1947 threepence (14 and 78 coins graded respectively) doesn’t align with the difference in catalogue values that these coins presently have ($95 and $150 respectively in UNC).

As PCGS has been on the Australian numismatic scene in a reasonable way for 3–4 years now, I’ve had the opinion that the PCGS population of certain coins would be a more accurate indicator of their market rarity than the prevailing opinions based on mintage figures and catalogue values. Working on this assumption, I'm keen on coins such as the 1941 3d identified above, that appear to be inexpensive relative to coins with a higher catalogue value and also a higher PCGS population.

Assessing the PCGS population for another relatively short series of Australian coins has me question whether this conclusion is entirely correct however. Exhibit B here is the current PCGS population for the half sovereigns of King George V:

KGV Half Sovereign Population Via PCGS

The two coins I’m looking at here are the 1912 Sydney and the 1918 Perth, with a population of 24 coins and 22 coins respectively. The 1918 Perth is easily the key date to this set, and has a current catalogue value of $9,500 in UNC, whereas the 1912 Sydney is considered to be far more readily available and has a catalogue value of just $525 in the same grade.

There are a number of presently-unconfirmed stories that the entire mintage of the 1918 Perth half sovereign was exported to India, and as a result it wouldn't be completely out of this world for a small hoard of them to be discovered, and to then make their way onto the collector market.

That said, I don’t yet accept that the PCGS population for the 1918 Perth half sovereign is an accurate reflection of it’s rarity, relative to other Australian half sovereigns anyway.

If you click through using the links below, you’ll see that the 1918-Perth half sovereign actually has a higher PCGS population than any other Australian half sovereign dated earlier than 1911 (apart from the 1856 half sovereign):

Australian Half Sovereigns Issued Under Queen Victoria

Australian Half Sovereigns Issued Under King Edward VII

If we were to accept that the PCGS population was indeed a razor-sharp accurate guide to the rarity of a coin, it would mean that the 1918-P is far more readily available than nearly all Australian sovereign issued between 1857 and 1910, an argument that even the most ardent devotee of the PCGS system would have to agree is unlikely to stand up to the test of time.

Such a conclusion doesn’t explain how this anomolous situation has come about however - just why is the population of the 1918-P so high relative to other dates?

There is little doubt that increasing numbers of Australian collectors are turning to PCGS to get a clear idea of where the grade of their coins sits in relation to others that are known to exist. I believe the “early adopters” of the PCGS grading system tend to be younger than average, and further the members of this generation that are interested in half sovereigns have more often than not embarked on collecting half sovereigns by acquiring coins in the KGV series in mint state first, rather than getting earlier and more historic coins.

The 1918 Perth has easily been the most keenly sought Australian half sovereign for a few years now, largely because it is the key date in what is otherwise such an accessible series, keenly built by younger than average collectors. Couple all these informal observations together and you get what I believe is a rather disproportionate number of coins of that date having been submitted to PCGS for grading.

Auction records are yet another means by which collectors (incuding myself!) obtain a proxy idea of the rarity of a coin. My study of auction records over the past few years reminds me that I’ve only seen one (raw or unslabbed) 1918-P in what I’d describe as unimpaired mint state (MS62) in the past two years, as wellas one other raw coin that I assessed as Choice Uncirculated (MS 63). While these coins may well have been adjudged by PCGS as being a point or two either side of my own estimates, I believe the auction records show that although an unforseen number of 1918-P half sovereigns may well have been graded by PCGS in recent months, these coins aren’t making their way onto the open market in any way, much less at discounted prices.

I’m interested to hear how you use the PCGS population report to assess market rarity, or auction estimates, or mintage figures, or even catalogue values.

Are they finally an unbiased view of rarity, or do they really need to be taken in context of the other data that is available? At this stage, I believe the latter is the case.

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Comments (4)

Comments

The Population of a coin can't be determined by just the PCGS "POP" report as PCGS is NOT the only grading service in North America of consequence. There is PCGS, NGC, ANACS as the top 3 in the U.S and ICCS in Canada. PCGS, NGC and ICCS have a substantial market share and are all very reputable. Australian coins are and have been graded with all of them. You can get an understanding of "Relative" rarity but be careful as the above example can be somewhat confusing. Take line item 143615 for example. A 1943 S 3D....the total is 20 but is you look closely and count there are only 17 in "Mint-State" that have been graded, the remaining 3 are obviously in the "Circulated column. In order to get a better "view" it would be necessary to look at the "Pop" reports of those aforementioned coin grading services. As for crossgrading between those services they all have their grading philosophies as far as how they interpret grade. I personally have used in order of preference only, PCGS, NGC, ICCS and ANACS as the grades are very close.

- Jerry Himelfarb (AKA JH from Beecroft)

Population reports are also skewed by the same coin being submitted multiple times. This is especially the case for low mintage coins where a point upgrade could be worth thousands. This may explain the higher populations for coins such as the 1918 half sovereign. Eric Eigner is quite correct pointing out that scarcer coins are more likely to be graded. Their owners see more value in spending the money getting them graded and dealers find them more liquid when third party graded.

- Mark Nemtsas

I think that the two examples you have provided give an interesting insight into how we can use the PCGS population reports and why we also need to be careful when considering the motives behind why collectors and dealers are selecting particular coins for grading. I feel that the first example does present a potential anomaly in previous perceptions regarding the rarity of the 1941 and 1947 3d. Unlike the half sovereign example there is no significant difference between the two dates in terms of their perceived scarcity and their market values (relatively speaking) and collectors may have an opportunity to find themselves a 1941 in high grade before it's true scarcity becomes apparent. However, the half sovereign is a different scenario. As you say, we all know the 1918p is a scarce coin and has a much higher value than any other coin in it's series. Therefore, if I am a collector or dealer with a bunch of George V's in my inventory the 1918p will probably be the first coin I choose to spend money on to have graded. In other words, where there is a clear difference in scarcity of a particular coin one needs to take it's population report relative to other coins with a grain of salt. In a way, I would suggest that for the immediate future the 1918p needs to be viewed in isolation to the other half sovereigns in the same way we would not compare the half sovereigns with the Threepence; they really are different beasts with different motivations behind the owners reason for grading. Thanks for the interesting article.

- Daniel Johns

A rarer coin is more likely to be graded. I’ve seen dozens of 1912 Sydney halves in various grades, but hardly any of them are worth grading (even in MS62). Conversely, I’ve seen only a small number of 1918 Perths in any grade, and most of these (except for the impaired pieces) are worth grading, which is what happens. This boosts the population of the rarer date disproportionately. There are a lot more Mint State coins graded than XF or AU coins – doesn’t mean the Mint State coins are more common, of course! The Mint State coins are simply worth grading.
If you look across the pop reports, you’ll find countless examples of rare dates with high numbers graded. Examples include:
59 x 1923 half pennies versus 39 x 1936 half pennies
70 x 2000 mule dollars versus the 8 x 2000 Victoria Cross dollars
30 x 1932 florins versus 21 x 1933 florins
135 x 1954 Royal Visit florins versus 182 x 1934/35 Centenary florins
And so on. So the absolute numbers of coins graded by PCGS must be taken within context.

- Eric Eigner