What did I get myself into?

[Meso Numismatics]

The other day I was preparing a report for my partners and I realized that Latin America is so behind that makes think I have tons of tons of work ahead of me.

Just imagine that if we take into account that Australia has a population of 24 million people and that Latin America has 626 million people, this chart shows the work that we have ahead certifying Latin American currencies that will come to join collectors of other countries. Why collect if no new items are added?

I guess that graphic wont change just with my submissions, but I believe we can teach Latin Americans to submit to NGC. I will try to convince good hombres only.

No wonder why Richard Stuart shined alone in this market.

 

[Abuelo's Collection]

Interesting. However, I wonder if the comparison is fair. For instance according to NGC census, there are 25 million coins form the USA already graded, and except for China with over 2 million, every other country has less than 1 million, in fact much less. But they include Mexico within the top 10 with 105,618. Encapsulation is clearly not a global phenomenon (in Europe as you know there are many people against it) and the process itself is expensive. Moreover, if you are in Central or South-America, submitting coins is not just expensive but flat dangerous as the chance of the coins vanishing in route is a real one.

[World Colonial]

TPG grading isn't going anywhere with the coinage of most countries.

First, most collectors elsewhere (outside the US) don't even like it, as evidenced by the frequency of graded coins appearing in foreign auctions, sold on eBay by foreign sellers and on foreign dealer websites.  It has increased somewhat in the last 15 years but is immaterial and more likely than not with the possible exception of NCLT, most of the world coins in NGC or PGCS holders were more often than not submitted by an American, not anyone else.

Second, the statistic quoted in the initial post presents a biased picture.  Most of the 2MM Chinese coins graded by NGC are NCLT, not real coins.  This is at least 75% to 80% if not more.  South Africa is another one where the 2017 Silver KR had over 70,000 last time I checked and the 2008 Mandela 90th BD 5R over 200,000.  These two coins alone account for more than half of all submissions.  I know this market very well having collected the Union series for almost 20 years.  Australia is another one with a similar profile, though I have noticed some preference for PGCS plastic for the predecimal coinage.  Canada is another market where it's likely that an outsized percentage of the total represents American buyers, not Canadians.

Third, the supply worth grading and likely to be graded in most countries is a miniscule fraction of that available in the United States. The above post mentions Mexico.  Well, an outsized percentage of predecimal coinage (generally though not exclusively prior to 1870) isn't available in any quantity in a quality that is worth grading.  I know this because I am familiar or somewhat familiar with all of these series, especially pillars, quartillos and Cap & Ray minors which I either collect or have followed for years. 

This market isn't an aberration but more the norm.  In Latin coinage, many series are scarce or disproportionately scarce either absolutely and if not, definitely in a quality which a TPG buyer will find acceptable.  Aside from Mexico, it also applies to the most popular series such as most Spanish colonials, Chile Volcano, Ecuador Capped Bust, Central American Republic...

Even in countries with established collecting as in Western Europe and the British Commonwealth (UK, Canada, Australia), this coinage doesn't remotely exist in similar proportion, never mind numbers, to common US classics.  There aren't millions of high grade world crowns from any country as with Morgan and Peace dollars or equivalent supply as with Lincoln cents, Buffalo nickels, Mercury dimes, WLH and Franklin halves.

Lastly, I personally don't think the increase in the populations has been mostly a good thing for collecting anyway.  Most of my better coins are graded (by NGC) but aside from increasing the supply available to buy somewhat, all it has really done is inflate the price level, just as it has with US coinage though still much less.

The inflated price level from TPG is substantially and in some instances mostly created by financial buying, not collecting.

[physics-fan3.14]

While this is an interesting chart, I don't think it shows the entire picture. There are so many American coins graded because the American market demands it. Does the Latin American market want their coins certified, or do they care? In terms of actual number of collectors, I'm guessing there are more collectors of US and European coins than there are collectors of South American material. 

The other thing that has to be accounted for: 1.3 million of the Asian coins are the Panda bullion coins (and another 700k are other modern commemorative or other bullion series). The number of actual, numismatic coins graded from Asia is miniscule comparatively. 400k of the Australian coins are modern bullion and commemoratives. *11 million* of the US "coins" certified by NGC are just bullion (and another 4 million are Morgan and Peace dollars). If you were to take out all of the bullion issues from your chart above, I think the results would be much more interesting. 

[Meso Numismatics]

@Meade Collection, @World Colonial, and @physics-fan3.14  

 

Thank you all for your insight and reply. I do agree with many things that you all are saying, especially the fact that South / Central America were generally not big collectors’ years ago. Being in Costa Rica, I can attest to the fact that years ago, many ‘collectors’ would receive the slabs and break them open so that they can touch the physical coins. It was only until somewhat recently that the slabs began to mean something and these same ‘collectors’ recognized the true value.

 

@ Meade Collection, you are 100% right about the dangers in sending coins to be graded from the South / Central American region. Thankfully, I oversee scouting for the rare merchandise down in this region, then I send the coins to my partner in Florida to be graded. All of our inventory is sent out from the United States and knock on wood we have yet to lose any packages.  

 

@ World Colonial, you are also right with nearly all of your statements. Really it just comes down to the quality of coins that are graded, not the quantity. I’d rather see lower numbers of high-quality coins then high numbers of the fake coins that run through Asia and Europe.  

 

@ physics-fan3.14 times have changed and collectors do want their coins certified. Especially as pointed out by @World Colonial, collectors want to know that the items they are receiving are authentic. Moreover, the thrill in grading as a 69 or 70 keep many of the collectors I know in the region going. We have come a long way from people breaking open the slabs to true collectors prominently displaying them in their collections. I do agree that there is a larger audience for U.S. and European coins, but I can attest to the true demand for a lot of our regional coins. I see it more as a niche market with a void compared to the U.S. and Europe. We are going to do everything we can to fill that void and keep the 69’s and 70’s coming!

-- 

[World Colonial]

1 hour ago, Melvin Pereira said:

@ World Colonial, you are also right with nearly all of your statements. Really it just comes down to the quality of coins that are graded, not the quantity. I’d rather see lower numbers of high-quality coins then high numbers of the fake coins that run through Asia and Europe. 

Where do you have a difference of opinion?

As to your other point in my extract from your post, my point about quality and quantity has nothing to do with counterfeits because I don't believe and have seen no evidence to indicate that its an issue for most collectors or any noticeable number or proportion of Latin American coins.

It is a consideration for the most expensive just as anywhere else but contrary to what you imply, the primary reason it is or is likely to become a bigger problem later is because TPG grading has and potentially will inflate the price level more later.  That's what makes counterfeiting more attractive.

It is also an issue with the most "popular" (as in widely collected) Latin coinage such as circulated cobs, pillar dollars and portrait 8R but that's because it is profitable to fake them in large numbers, despite the mostly nominal prices compared to US coinage.  There are millions of these coins still around and its easy to fake tens of thousands and then profitably pass them off for a few hundred each. However, these circulated coins (and others like them) aren't worth the bother of getting graded, most of the time.

With the Latin coinage I collect, I don't see anyone going to the trouble of faking them.  I just bought the 1759 Peru PCGS MS-63 2R from Stack's and it's the most I have ever paid for a coin.  However, I still don't see the likelihood of anyone going to the trouble of creating a die to strike the pitifully low number of fakes that could realistically be foisted off on collectors.  Coins like this one are so scarce or at least hard to find and buy that even a very low number would make it evident that something was amiss.

[World Colonial]

1 hour ago, Melvin Pereira said:

@ physics-fan3.14 times have changed and collectors do want their coins certified. Especially as pointed out by @World Colonial, collectors want to know that the items they are receiving are authentic. Moreover, the thrill in grading as a 69 or 70 keep many of the collectors I know in the region going. We have come a long way from people breaking open the slabs to true collectors prominently displaying them in their collections. I do agree that there is a larger audience for U.S. and European coins, but I can attest to the true demand for a lot of our regional coins. I see it more as a niche market with a void compared to the U.S. and Europe. We are going to do everything we can to fill that void and keep the 69’s and 70’s coming!

-- 

What you are describing in your reply to Physics-Fan is not predominantly collecting, but financial buying and contrived marketing.  Trying to get a 70 instead of a 69 is predominantly if not exclusively financial buying and any claim that there is any thrill from a collecting aspect is an exaggeration and contrived.  There is no difference between the two grades or it is trivial and since this must be for NCLT, anyone who has the money can buy their "collection" in a 70 if that's how they want to spend their money and can afford it.

I also disagree with you that someone who displays their coins in a slab is more of a "true collector" than those who crack the coin out.  This also has absolutely nothing to do with real collecting either.

I already addressed your comments on counterfeits in my last reply, so I have nothing else to add on this topic.  Otherwise though, TPG is predominantly if not exclusively financially motivated and marketing driven, for both the TPG and since you presumably are a dealer or work for one, also from this aspect. 

It increases liquidity by providing an independent (though subjective and inconsistent) opinion on preservation, but this isn't really necessary for collecting either.  It has become a financial necessity but also predominantly due to the inflated price level.  With US coins, the price level for a noticeable number was already inflated long before TPG came into existence.  However, Latin coinage was much cheaper and there would have been little reason to care for it one way or the other, because the price differences between grades (yes, even multiple grades) were immaterial.  Without the inflated price level, the internet would mostly make the more desirable Latin coinage - the coinage you are describing - liquid and easy enough to sell anyway.

It's slowly been changing and you can attribute this substantially to both TPG and mostly US collectors outbidding everyone else buying these coins ungraded based upon their opinion of what TPG grade it will later receive.  That's what I have done with the series I collect in buying from foreign auctions.  Within my price range, I compete for the best and scarcest coins in my series and leave the lower grade and more common coins to anyone else.  I would rather not have to consider the TPG grading decision but I do because of economics.  I'd rather just buy the coins I like for less money,  However, I still don't buy these coins to profit off my collection (or else I would place my money elsewhere) and don't see anything particularly positive from a collecting aspect in the sentiments you have expressed in your posts on this topic. 

I can see that you consider it a positive from a business aspect but this independent of what's better for collectors.

 

[Abuelo's Collection]

I m glad you never had a bad experience with the mail. I had, and would never, ever, would ever consider sending a coin for grading with the post originating in Mexico, Central, or South-America.

[Abuelo's Collection]

About the 69 and 70s, there are people who like to collect that, everyone has their own goals in collecting. But for classic Latin American numismatics the idea of 69or 70 is not relevant as it does not exist. But again, everyone has their own ideas on collecting, all valid even if not mine. Cheers!

[World Colonial]

22 minutes ago, Meade Collection said:

About the 69 and 70s, there are people who like to collect that, everyone has their own goals in collecting. But for classic Latin American numismatics the idea of 69or 70 is not relevant as it does not exist. But again, everyone has their own ideas on collecting, all valid even if not mine. Cheers!

True, but I'd say the majority of NCLT collectors are doing so substantially for financial reasons or if not, are casual collectors.  I don't believe the overwhelming percentage of these buyers have more than a weak affinity for either what they buy or collecting generally.

The intent of the OP isn't really clear to me.  I view it as marketing commentary.  The pie chart doesn't really mean much of anything, except to NGC who earns grading fees off of these submissions and the coin dealers or telemarketers who sell coins as "investments". 

From a collecting aspect, the data doesn't indicate the level of interest in collecting outside the US or even necessarily for TPG.  This is what I was attempting to explain.  Digging into these numbers, what it does prove is financial and causal collecting by NCLT buyers and the outsized influence US buyers have on the prices of world coins by inflating prices through this practice.

The OP clarified things a bit by stating he views Latin America as a niche market and I agree with this conclusion.  There isn't going too be large scale collecting of this coinage in the foreseeable future where it will matter to anyone reading this topic. 

I agree with you completely that relying on mail carriers (whether the local postal service or otherwise) is a risk that those who don't live in these countries either aren't aware of or ignore.  Not only is this an obstacle for getting the coins graded, it's equally so for collecting generally.  Most of the better Latin American coins (not just those in high grade) aren't in the home country but in the US and Europe.  Since there is a far more limited market to essentially none at all at current prices locally, this means that the coins must be bought from elsewhere and likewise when sold.  NCLT may be available to be bought locally but it makes collecting anything else above a nominal value a lot less appealing

[Meso Numismatics]

So, @WorldColonial, where do you see the Latin numismatic market going from here? It seems like you disagree about a collecting void there and I'm curious to know your thoughts. I'm not here to argue with you, only learn your perspective to evaluate ours.

The 1759 Peru coin is a lovely one. We had one as well but it came back with details while certifying so it was sold in a lot of coins. 

And, just so I understand you correctly, from a business model, as a business, you agree with what we're doing. However, as a numismatic collector, you are against it? I ask because I've been a collector far longer then a business operator. Even as a collector, I would still rather get the PF 70 rather then the 60's. Business aside, I know that if I ever 'cracked the slab open', I would have a perfect coin. And I understand that to the naked eye, there is almost no difference between a high 60 and a 70. However, as a collector, wouldn't you prefer the 70 as well? I feel like there is more you can do with it, trade it for more sought after inventory, etc. thoughts?

[World Colonial]

5 hours ago, Melvin Pereira said:

So, @WorldColonial, where do you see the Latin numismatic market going from here? It seems like you disagree about a collecting void there and I'm curious to know your thoughts. I'm not here to argue with you, only learn your perspective to evaluate ours.

The 1759 Peru coin is a lovely one. We had one as well but it came back with details while certifying so it was sold in a lot of coins. 

And, just so I understand you correctly, from a business model, as a business, you agree with what we're doing. However, as a numismatic collector, you are against it? I ask because I've been a collector far longer then a business operator. Even as a collector, I would still rather get the PF 70 rather then the 60's. Business aside, I know that if I ever 'cracked the slab open', I would have a perfect coin. And I understand that to the naked eye, there is almost no difference between a high 60 and a 70. However, as a collector, wouldn't you prefer the 70 as well? I feel like there is more you can do with it, trade it for more sought after inventory, etc. thoughts?

I am not clear on your original point, as you have been co-mingling NCLT with circulating coinage.

If you are primarily referring to NCLT, I don’t consider this to be real collecting and don’t believe most of the buyers have an interest in it either.  I consider most of them financial buyers with the balance mostly causual collectors.  The distinction I would make is between those who have a material outlay (to them, not you or me) whom I call financial buyers and those with relatively nominal one which I define as casual collectors.  The level of interest varies by market and series but overwhelmingly, I’d say most of them have a (very) weak affinity both for what they buy and collecting generally.  I believe most of them will dump their collections if they lose money on it or find better financial opportunities elsewhere.  A low proportion may or will supplement this collecting with circulating coinage but I certianly wouldn’t count on this group “carrying the torch” for the hobby anywhere, not in the US and not in Latin America.

If you are also referring to circulating coinage, I have written extensively on this subject in an attempt to demonstrate that there is no reaosn to believe collecting outside the US will resemble what happens here (either financially or otherwise) in any timeframe which will matter to anyone reading our exchange now.  My evaluation hasn’t been specific to Latin American coins or these markets but I don’t see that it’s going to differ much.

I originally became interested in this subject when trying to explain to South African collectors why their financial expectations were completely unrealistic which they had because an outsized proportion of these coins are unsually scarce,  Below is a list of six attributes which I believe explain the US market with my comments on how it applies to Latin America generically:

1.     A long term widespread numismatic tradition and culture of collecting; No

2.     A large population with above average income and net worth; No, but not a factor

3.     A vast variety of options in terms of denomination, design and supply across the quality distribution; Variety sometimes but not supply

4.     A demonstrated cultural tendency to actually pay prices which are much higher than elsewhere, even when considering the same level of scarcity and numismatic appeal; Absolutely not

5.     An established numismatic infrastructure; Absolutely not

6.     Specialization practices such as "conditional rarity" collecting die varieties, toning, special designation strikes and errors. Outside of varieties, no

 

What I am describing here varies by market, series and sometimes by coin.  It’s a simplification of a complicated subject to which I can add a lot more to the extent you want to discuss it, either here or by private message.

[Meso Numismatics]

Hola again,

Thank you very much for the follow up. At the very beginning I only submitted Central American NCLT to NCS-NGC aiming for the higher grade. The local market reacted very shy and after several months this one set from 1970 got really hot to a point NCS Newsletter featured on my coins:

• https://www.ngccoin.com/news/article/5995/NCS-conservation/

Then I started submitting circulating coinage and of course everybody down here called me crazy. Well, few weeks later we have collectors buying these coins to replace their pieces. 

• Do I collect? Yes. Costa Rican banknotes from 1950 to present. What we called the Second Republic with the abolishment of the army also came with the Costa Rican Central Bank. The CRCB started printing and minting in 1950. 
• Do we have a business? Of course and, as any other business at its initial steps, we are testing between NCLT and circulating coinage. We struggle trying adding a coin variety: sometimes they say yes, sometimes they say no.
• Which has became more profitable? Certified circulating coinage (varieties, errors, low mintage ones)

The goal now is to get the certified coins become a trend down here and it is happening, believe me when I tell you.

Muchas gracias World Colonial. Your input has been very appreciated with gratitude.

Melvin 
 

[physics-fan3.14]

I don't own a whole lot of Latin American coins, but I really do enjoy what I have. I collect prooflike coins, and so countries like Guatemala and Mexico provide ample fodder for my purchasing. There is quite a bit of PL Mexican coinage. 

[World Colonial]

9 hours ago, Melvin Pereira said:

• Which has became more profitable? Certified circulating coinage (varieties, errors, low mintage ones)

The goal now is to get the certified coins become a trend down here and it is happening, believe me when I tell you.

Muchas gracias World Colonial. Your input has been very appreciated with gratitude.

Melvin 
 

You are welcome.

I believe the biggest challenge you are going to have is finding a sufficient supply of better quality coins to sell.  I believe there is a lot more potential demand that will remain unfilled due to this reason.

I don't follow the coinage from every Latin country but I know the availability varies a lot.  Aside from the series I mentioned earlier, I know that Bolivian coinage is scarce but in this instance, few seem to want it aside from the high grade crown sized Bolivianos, Bolivar 8 soles and Bolivar gold.  I'm one of the few collectors of the late 19th century decimal coinage.  I have also noticed that late 19th century Argentina decimal coinage appears to be quite scarce, at least in better grades.

On the other side, many Brazilian coins seem to be available with a reasonable supply.  Brazil is near the top in the Heritage archives for coins sold over $10,000.  Many of the colonial issues are quite expensive and it appears that there is also sufficient collector interest for this market to grow.  I have also noticed that many Peruvian coins after the monetary reform (change away from Spanish system) are either common or not hard to buy.  However, I don't believe very many of these coins have enough appeal where the demand will be that great for them.

Lastly, you mentioned Costa Rica.  Is this where you are based?

[Meso Numismatics]

12 hours ago, World Colonial said:

Lastly, you mentioned Costa Rica.  Is this where you are based?

Yes boss. Born and raised and I got the T-Shirt.

[Abuelo's Collection]

The land of one of the most beautiful coinage of all times, República del Centro de América.