During the weekend I bumped into a couple of very interesting conversations about real values, prices and appraisal practices of stamps and stamp collections. I know most stamp collectors yours truly included are interested about the question ‘how much are my stamps worth (in real life)’, and below are few very different views on this topic.
About stamps and stamp collecting as investment
Every stamp collector dreams every now and then that their collection would be worth big bucks. The painful truth is that about 99.9% of all stamps are worth nothing more than handling costs. Of the remaining 0.1% only a handful of well known stamps are worth a lot of money, whereas the rest are usually worth from few bucks to a hundred or two. Even my collection (which is about 80,000 philatelic items) is worth very little (in monetary sense).
Still, with every philatelic magazine and auction, we can read of news where stamps and collections have been sold with hammer prices equivalent to a new computer, car or even an apartment. So what’s the catch?
Casual stamp collectors (like me) don’t have the resources nor the will to spend thousands, possibly tens or hundreds of thousands of Dollars/Euros into a tiny piece of paper that somebody used to lick. These major headline stories are all about successful investment collections where the owner has put some serious money into purchase of the stamp first place. One could even go to extreme lengths, and say that these truly valuable stamps haven’t got any connection to hobby known as stamp collecting.
The first interesting comment is from Geoff Anandappa, Stanley Gibbons (world leading stamp investment company) 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 to stamps, then one does not want to buy common stamps as they were cheap yesterday, they are cheap now, and they will be cheap also in future.
One does not even want to invest to slightly better items (like the Penny Black, Finnish roulettes etc.) worth a hundred or two. These can go up in value over the years, but only to such small degree that it might not necessarily even beat the inflation.
If investing seriously, then one does acquire items worth 5-6 figures that have the potential to go up by several thousands (if not more). And this is where stamp investment companies come in with their portfolios; they provide a chance to own a small share of some extremely rare collectible and cash in when it’s sold on later date.
And here lies the contradiction (and the risk) of seeing stamps as investment. Stamp collectors like me want to own the items. Touch them, feel them, have them at their hands. Investment programs don’t provide this option. What’s the purpose of having a collectible that is no longer a collectors item? I leave that for everyone to decide. My only advice with anyone considering investing to stamps would be a very simple “don’t“.
About stamps as business
Another opinion of real world stamp market values comes from Glen Stephens, one of the best known stamp dealers worldwide. He wrote on StampBoards:
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!
Something stamp dealers dislike seeing in stamp collection: common stamps. 1973 Equatorial Guinea ships miniature sheet, Michel #Bl.54
As a small business owner (working with B2B ICT-services) 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 5 cent selling price would need to include all seller expenses like storage, handling, time etc. If I would be lucky, 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 80k different worldwide items collection is worth 3 600€/$ using this formula (10000×1+10000x2c+10000x3c+10000x4c+10000x5c+10000x6c+10000x7c+10000x8c). The below cheat table shows how values would develop if using this formula:
A simple cheatsheet that can be helpful when trying to set a value for large scale worldwide collection.
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
Stamp catalogues (like Michel)are a usefull tool for collectors, but I would not trust the catalogue values too much.
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 unless You are offering something really unique.
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. I am ready and willing to go through a messy box hoard for hours just to add few items I need for my collection.
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.
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