During the weekend I bumped into a couple of very interesting conversations (and articles) about stamp market values and collection estimates. I know most collectors are interested about stamp values at some level, me included. So what’s latest story with a very simple question: how much is a stamp collection worth? Below are few very different views on the topic.
If you just want do to a quick (and very rough) estimate/calculation of the value of Your collection, please visit Setting a value for worldwide stamp collection.
About stamps as investment
Everybody dreams that they have a stamp collection worth big bucks. Here’s the painful truth: About 99,9% of all issued stamps are worth nothing else than they’re handling costs. Even my collection (which is about 50,000 philatelic items) is worth very little if looked as an investment.
But still, with every philatelic magazine and auction, we can read of auction results where stamps and collections are sold with selling price equivalent to a new computer, car or even apartment. This is IMO where stamp collecting has turned from hobby to investment – no casual stamp collector has or is willing to spend thousands, possibly tens or hundreds of thousands of dollars/euros just to get few stamps or single item. These stamps are bought and sold only with investment in mind.
The first interesting comment is by Geoff Anandappa, Stanley Gibbons’ investment portfolio manager. He was interviewed by Rick Morrison, Financial Post (actual story was published in StarPhoenix):
Collectors are driven by passion, whereas investors are driven by fear and greed. All these factors make stamps a very stable investment.
This is very true in a way, but also a kind of devil in disguise if thought more precisely.
If investing stamps seriously, then one doesn’t buy the common stamps, or not even the slightly better ones (worth few hundreds like Black Penny, Finnish roulettes etc early stamps). If investing, then one does acquire items worth 4-6 figures at least. This is what stamp investing programmes provide with their investment portfolio: a chance to own a small monetary share on valuable collectors/antiques items.
And here’s the contradiction. Stamp collectors want to personally own items – touch them, feel them, have them physically in their collections. Investment programs don’t provide this option… So these stamp investment programs are by investors and for investors – driven by greed of money and future expectations. My advice would be: do not touch stamps as investment if you don’t want to get burned. Afinsa scandal was just the tip of the iceberg.
About stamps as business
Another opinion for real stamp market values comes from Glen Stephens, one of the best known stamp dealers worldwide. He said recently on StampBoards discussion forum topic:
So, several times a week I end up with near worthless junk, and you need to break the news to the owner of it.
[Common worldwide stamps collections]…on its own is virtually unsaleable via a mail order dealership, as it is exceedingly common. And in 50 years time will still be exceedingly common – so there is little point in you holding onto it, as it takes up room and space, and attracts pests.
Stamp DEALING is a business. Stamp COLLECTING is a hobby.
Huge difference. Collectors think nothing of spending a few hours fossicking and sorting and arranging. For them it is pleasure, fun and enjoyment. For me it is WORK!
As a small business owner (working inside ITC & marketing industry), I can relate to this. A business owner must keep the money rolling and make profit for each deal. And the most valuable asset a business owner has is time.
One of my early mentors in stamp collecting once said, that if you where ever to sell your worldwide collections, most of the stuff would end up in dealer’s junk box for 5 cents/piece. And that 5cent selling price would need to include all sellers’ expenses like storage, handling, time etc. My share of the deal would be 1-2c/piece or less.
Of course not all stamps are equally invaluable, and the larger the collection the more likely it is to contain something of more value. Thus I have developed a “universal formula to estimate a value of worldwide stamp collection: for each 10 000 different (worldwide) stamps in collection, add value by 1 cent per stamp. For example my 50k different worldwide items collection is worth 1 500€/$ using this formula (10000×1+10000×2c+10000×3c+10000×4c+10000×5c). The below cheat table shows how values would develop if using this formula:
So how to make most money when selling a stamp collection to a dealer? If personal time is not the not be counted, then the best practice would be breaking down a collection to bits and pieces: separate the gems from the junk. Sell the gems to dealer as single pieces and place the rest on sale as single lot on eBay or other online auction for no reserve.
About stamps as collector’s items
My personal take on real market values of stamps is complex. And what else could you expect from someone who has collected stamps as a hobby for over two decades.
Like most collectors, I have started by being obsessed with catalogue values. Then I have grown to realize harsh truth – catalogue values are a relative metric. Two stamps with similar catalogue value will do for 1:1 kind of trade/exchange between collectors, but very few (if none) collectors are willing to pay even one third of the catalogue price for common stamps.
Getting familiar with dealers has thought me a lot about business side of stamps (like how dealers appraise, buy and sell collections). If nothing else, it has taught that I would make a crappy stamps dealer. Just to get few new (low value) stamps for my collection I’m ready and willing to go through a messy box hoard for hours.
I simply love these small pieces of paper too much to care about time spent, profits or market values. For a collector like me, a single stamp is worth precisely how much one is willing to pay or consume other resources in order to get it. It’s that simple.