1) The only reliable way to make money in collectibles, is to spend many years at them, understand what you are doing, and act as a quasi-dealer. That is, you regular sell your duplicates, unwanted items to fund your purchases, and you buy out collections. The net result is that you have a good collection that really didn’t cost much (because it was self-funding), but you can cash you when you sell.

2) People who collect at the retail level, that is, buying specific items at retail without carrying a tradestock, I don’t care at what price level or rarity, almost always lose money. In this case you are looking for the greater fool. Someone willing to pay MORE than what you just did (which at the retail price was already a lot).

I have seen plenty (hundreds) of people in category #1 make money, but I have yet to see ONE person in category #2 make money.

I am speaking from not 1, not 5, but 15 years of experience here (not in stamps, but in expired license plates). The principles are the sample.

1. Because the whole country/region is undervalued, even the low run stamps are priced low.

2. Completing whole sets is much easier.

3. I learn a tremendous amount about the country/region.

4. I have a whole lifetime to wait – I’m not in a hurry to cash out – what doesn’t go up, I can give to my children. Unlike stock in a company, there is nothing that can go out of business.

5. Speaking of children, I can’t think of a more entertaining way to learn geography & history that also keeps them away from a computer/TV screen.

6. There is no pressure to buy & sell at a specific time – we just enjoy the stamps at our leisure.

7. Because they were purchased dirt-cheap, little is lost when I do need to auction some off.

8. A well organized, documented and complete Rwanda collection will fetch far more than what one would pay to put it together.

9. Back-of-catalog stamps from many undesired countries/regions are typically less expensive as well.

10. Because there is no urgency, there is more time to select the best specimens, replace space-fillers with better stamps, and to complete sets.

11. Finding an overlooked Penny-Black-type stamp in an “undesired” lot is more likely. I have come across $50-100 stamps that way.

12. Stamps make great gifts especially if they reference something that is of personal value. I gave a complete set of B. Guyana stamps as a wedding present one time.

13. As a donation to a charity (well documented & organized, of course), the value of this donation is likely to be much greater than the initial investment, depending on where you live.

14. I have a very nice set that I actually framed and is hanging in my office – great conversation starter (and sure beats a motivational poster).

15. What is worthless in Europe, may not be so worthless in the Far East. Because they are easy to ship, stamps are easy to sell to far-away customers.

16. I don’t need to keep buying the latest Scott & Michel catalogs. I used to have online subscriptions to both, but it got too expensive – now I just have a 4-year old print version I bought for a few dollars (the Scott is a 7 years old).

Ultimately, the investment is the best kind – it will seldom go below what it cost initially, but has every chance to go up over time. In that way it is a lot like art and just like a nice piece of art, the enjoyment of owning it and learning from it over time is priceless.

For those who really want to collect for profit by collecting undesirables, I do have one recommendation: let dealers know what you have and keep in touch with them. Sooner or later they’ll call you with an offer for something you have. You’ll have to part with it, but with so many “undesirable” stamps out there, there’s plenty to collect.

If you are a collector of stamps – collect!
If you are a philatelist – study!
If you are a philatelist/collector – collect and study!
If you are an investor – study, study, study, and then, after careful consideration, collect very specifically with options to hedge based on market trends and assemble some specific stamps as leverage to be used in the precious metals markets so, if an when, China, in an attempt to bolster their economy, makes a run on gold, you profit greatly and can in turn re-invest heavily into a hundred copies of a rare stamp in order to destroy 98 copies of it to drive the prices up realizing too late that the population has aged and that the PS2, Wii Generation simply aren’t into collecting postage stamps and that you obviously over-estimated the risk capital you should have invested into stamps,….welcome fellow “collector”!

And to Fred – just remember,..catalog values are merely a subjective, “opening” valuation before the real bartering begins. I have paid as little as 0.05% catalog for a stamp, and as much as 215% catalog. Its all about supply and demand and how much disposable income is out there!