Fairy tales for stamp collectors
PostZegelBlog has an interesting article about how Dutch special catalog NVPH’s latest edition cut catalog values by third for virtually all Netherlands stamps issued between 1946 and early 1990s 
This got me thinking how the stamp collecting world would react if commonly used catalogs – Michel, Scott or Stanley Gibbons -did something similar in larger scope
1990 Netherlands. Voor het kind (For the Child) semipostals are well established and beloved stamp series in Netherlands. Michel Bl.34, catalog value 4,50€.
Yes, I know – all of these catalogs are slightly different. Publishers of Scott and Michel don’t sell stamps at all, they just try to track the markets and state rough indicators for market prices. Stanley Gibbons sells stamps, and the catalogs are kind of gigantic sales list – though I think their minimum selling price (at the counter) is a quid or two, LOL. And, AFAIK, NVPH is issued by local dealer association. So there’s a lot of variety in how catalog values are formed.
Ask any stamp collector how catalog values relate to real world selling/buying prices, and very likely each will state that at least one third of the prices is air, and in most cases up to 90% is fairy dust. But of course, there are the exceptions like “truly rare/valuable” stamps where catalog values are usually slightly too low. And then there is of course the question of quality / condition – catalog values apply for stamps in very fine condition – most stamps on the markets are far from this. In many cases having a heavy reduce on catalog value is justified IMHO..
So why the difference between reality and catalog? Are stamp collectors to blame for not believing in catalog values as stated by catalog publishers? Or are catalog publishers doing a lousy job at recording prices? Or are publishers afraid to state more realistic prices in fear of annoying collectors? I do understand that catalog values are a big ship, and they don’t need to change to reflect the smallest of changes. But this issue has existed for eons.
So what would the world be alike if catalog values were suddenly dropped to more realistic level?
A lot of investment minded collectors would very likely freak out and sell. And the more saturated the markets became of “investment items”, the more their price would likely fall. But in the end I think the prices would catch up with their realistic level – whether up or down.
As for dealers… I think most of them sell these days at certain percentage of catalog value. For them I think there would be no lost revenue, just a small single line change in sales ads. LOL.
1913/18 Netherlands. Official stamps, Michel #1,2 and 4, all CTO-used.These were intended for use on correspondence from local authorities administering the poor law (Armenwet). AFAIK, a large number of these are with forged overpints. Very likely these too are fake (I'm not knowledgeable enough to say for sure). But for me the real value of these lies in beauty I see.
However, I think most collectors would be very happy in the end. Yes, it might cut few “imaginary” zero’s from value that never existed, but no hard feelings there. Most (like me) collect stamps for personal pleasure. If the value goes up, then it’s just added bonus that the heirs will hopefully discover. If it goes down, well too bad for the heirs. At least I had a great time collecting all those little pieces of paper and browsing catalogs filled with fairy tales, LOL.
Just my 5 cents of worth (as we Finns don’t have 2 cent dime) 
And as usual, feel free to comment.
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If prices go down, it may be bad for my heirs, but good to me, since I can add stuff to my collection!
It is weird what happens in the stamp market: The amount of available stamps is more or less constant (I’m think in oldest and classic stamps), everywhere you hear there are less stamp collectors, and the prices go always up!!
“If the value goes up, then it’s just added bonus that the heirs will hopefully discover. If it goes down, well too bad for the heirs. At least I had a great time collecting all those little pieces of paper and browsing catalogs filled with fairy tales, LOL.”
I have to agree 100% with you, my friend. Philately brings much more fun when we don’t put too much emphasis on the investment part of it. Nevertheless, philately today has definitely evolved to a very secured investment for many…
@Pablo… I agree. Low prices are always good season for budget-concious collector.
As for amount of available classic stamps… I think a lot of classics are lying in dealer stocks – simply waiting. AFAIK, dealers are usually very aware of supply and demand, and a lot of them don’t simply want to rock the boat by pushing too many similar items on the markets at the same time.
@Ronny… Stamps can make a great investment. But like any investment, they always bear risks similar to stock markets and other investments. History is filled with lots of “interesting examples” LOL.
Ja!…I hate to see those people in the stamp fairs/markets, cheking catalogue prices…pick a stamp and turn the head to see how lucky they are, bollocks!… I can’t stand that…if you want a good investment buy GOLD and put it in a Switzerland bank!!! let the stamps alone,for god sake!
the most important thing is to enjoy yourself with whatever you do
Precisely… Collect for thy personal pleasure, not to please others
Of course when you interact with other collectors, you are abound to “get educated”. I can’t even count how many times I’ve been lectured that CTO’s are utter piece of crap not worth collecting. But that hasn’t stop me from collecting them – maybe even the contrary.
what I’ve got cheap (£0.90) was a SG Great Britain Concise Stamp Catalogue 2009,the retail price is £ 29,00…LOL!
Wow…That is one superb deal!
“So what would the world be alike if catalog values were suddenly dropped to more realistic level?”
This happened in the late 1980s in the U.S. Scott considerably lowered the catalogue prices and there was of course a strong reaction from dealers. I recall seeing many advertisements stating that prices were based off of the old catalogues with the higher values.
I wasn’t able to find too much online about this price change, but I did find this archived article from the New York Times.
http://www.nytimes.com/1988/07/24/style/stamps-just-how-much-should-it-cost.html
Ryan
Thanks Ryan – the final quote of the NY Times article still holds true: “What is a stamp worth? Exactly what an informed and willing buyer will pay for it.”
But drops like this have happened in the past, and will surely happen in the future.. For example a lot european mint stamps have fallen from grace especially during the last decade as the old national currency denominated stamps are no longer valid for postage (due to Euro). I recall reading that in German the pre-euro stamps are these days valued about 20% of face value, and similar change is going on with Finnish mint pre-euro stamps too.
If going further to history, I know that Australian stamp markets had a huge drop in 1970/1980s.
A good explanation of why stamp prices rose and then fell in the 1980’s can be found in the book, Stamp Investing, by Stephen R. Datz, copyright 1997. Datz is a long-time dealer in the US and is acknowledged in the Scott Catalogue as assisting in its preparation.
Essentially, in the late 1970’s and early 1980’s, interest rates skyrocketed to 20 percent, inflation was high and stocks went out of favour. The stamp market experienced a bubble as stamps were promoted as investments (like stocks or fine art). Over five years or so, stamp prices increased dramatically and, when the bubble burst (as all bubbles eventually do), prices in the market crashed.
Rather than continue to publish unrealistic inflated stamp prices, Scott repriced the stamps at market values, much to the dismay of dealers whose inventory was now worth less (in catalogue value) and who had to reprice the catalogue value of their stamps.
Over the next decade or two, I expect that stamp prices will fall. The price in a market is based on supply and demand. My observation at stamp shows is that the vast majority of the attendees are elderly and it is rare to see a child. As demand drops (as the elderly collectors die off) and their collections are sold into the market, increasing the supply, and the number of willing buyers is lower (fewer existing collectors and hardly any new collectors–they are playing with electronics, not stamps) the prices will fall. So, look forward to further downward repricing in catalogues in the future.
I agree with Keijo. I enjoy stamp collecting as a hobby, not as a financial investment.
Thanks Doug. This cleared a lot of background for the US situation in the 1980s.
And how on earth did I (nor anyone else) not mention the Afinsa-scheme that boosted the values of EuropaCEPT-stamps sky-high before falling down.
The stamp market experienced a bubble as stamps were promoted as investments (like stocks or fine art).
(cough)…just like what a certain well known British stamp company is doing. LOL.
It will be interesting to see how SG investment portfolios do on the long run…
There was a similar experience with Southern African stamps back in 2009/2010. The South African Colour Catalogue (SACC) slashed prices on many stamps but also left others oddly unscathed. The dealers here however still insist on using 2008/2009 prices and disregard the two subsequent catalogues that have been issued. As a buyer I instead use the latest lower prices and even then I still often apply a discount factor after that to get rid of the remaining ‘fluffy stuff’ in the price.
So in many cases the price cut was justified in my view. Many of those slashed were actually worthless and only useful to someone completing a particular country. I gather (I was too young at the time) there was a previous speculative bubble in those same worthless ones too. The local post office even took advantage of the bubble at one point, issuing ridiculous volumes of stamps and encouraging people to buy them as investments. My grandfather left a lot of such worthless material – many duplicates of it (but alongside other good material).
I admit I’m also a bit of an investor as well in Rhodesia/British South Africa Company (BSAC) but the price cutting and fiddling has also created oddities between the Scott, Stanley Gibbons and SACC valuations that confuses people. I’ve bought stamps where American dealers using Scott ridiculously underpriced some BSAC stamps and I’m able to resell them if I wanted to at an easy profit. Yet I’ve also seen those same dealers woefully overprice others within the very same set because of Scott’s values and being left wondering why they don’t sell.
That being said there are some where the Catalogue Value is indeed too low. A mounted mint BSAC 1 pound Double Heads Price in the SACC for example is actually the bare minimum you’ll pay if lucky, with one’s in better condition demanding premiums.
I’m also very skeptical of SG Investment’s behaviour. ‘Guaranteed returns’ and promises that ‘asset values never drop’ should set off alarm bells as I’ve seen such talk before from my financial market knowledge and experience. When everyone and their dog is collecting stamps it’s unfortunately the sign that sadly another price cut or crash is imminent. If you’re however here for the pleasure and history of the stamps too and been careful it helps one to watch the carnage more easily.
@Wayne… thanks for the insights of South African situation. I found it a very useful read.