Factors behind the rising prices of collectibles such as Rare Stamps

In a recent article on ThinkAdvisor‘s website, Keith Heddle, global head of investment with Stanley Gibbons, talks about several forces supporting the demand for rare stamps, at least for the foreseeable future.

Keith-Heddle-Stanley-Gibbons” (…) The first—no surprise here—is demand from wealthy Chinese collectors and investors. Speaking simplistically, he says, many of them have accumulated sufficient “bling” assets and are seeking something “a bit more considered and less flashy.”

One reason for this cohort’s interest in stamps was Chairman Mao’s ban on stamp collecting as bourgeois and the resulting pent-up demand. “Since the late-‘70s, early- ‘80s, the Chinese have come back to stamp collecting with a vengeance,” he says.

The price performance of stamps varies at different times among the different national markets, which can create pockets of opportunity for investors willing to shop globally.

In India, Heddle says the market is booming. However, since the country has closed its borders to stamps going in or out, access to investment-grade stamps is very limited.

The European market is flat, he says, as are segments of the U.S. market. The market in Great Britain has slowed to single-digit growth.

When it comes to rising prices, rarity is the driving force, and consequently the market for rare Chinese stamps is very strong.(…)

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‘London-based coin and stamp dealers Stanley Gibbons, which provides data for the GB250 index, says this index has never had a negative year and had a compound annual growth rate of 11.9% over the last 12 years.

british-guiana-one-cent-black-on-magentaThe GB30 Rarities Index, which tracks prices of 30 of the most rate and highest-valued U.K. stamps, has had a compound annual growth rate of roughly 10% for the past 40 years.

A visitor looks at the British Guiana One-Cent Black on Magenta stamp at Sotheby's in London

A visitor looks at the British Guiana One-Cent Black on Magenta stamp at Sotheby’s in London- June 2014

A stamp described as the world’s rarest—the British Guiana One-Cent Black on Magenta—sold for $9.5 million recently. That price eclipsed the previous record of $2.2 million set in 1996 for a different stamp, though it fell below Sotheby’s pre-auction estimate of $10 million to $20 million.

Whenever a collectible sets a new price record, it’s natural to ask if that asset class has moved into bubble territory. And while that’s possible, experts say, several factors argue against such a conclusion for today’s stamp market.

(…) First, the British Guiana One-Cent Black on Magenta is unique. Its appearance on the market was compared to seeing da Vinci’s “Mona Lisa” be put up for sale. Thus, its latest sale price isn’t fully indicative of the broader stamp market’s performance.

Second, the broad market price indexes for collectible stamps don’t look bubbly.

The Linn’s U.S. Stamp Market Index, based primarily on fine and very fine stamps tracked by Linn’s Stamp News, was down 1% from April 2013 to April 2014. (…)’

Source: thinkadvisor.com

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John du Pont’s Extraordinary Collection of Falkland Islands Stamps

In the Philatelic News

 

The Falkland Islands collection of notorious philatelist John E du Pont features extraordinary rarities
Source: Paul Fraser Collectibles, Dec 2012

Ahead of a film about his life starring Steve Carell, the John E du Pont Collection of Falkland Islands stamps will be offered at a special March 7, 2013 auction in London.

1c British guiana stamp

1c British Guiana stamp
The 1c British Guiana stamp is often mistaken for an altered 4c magenta

Du Pont is renowned throughout the philatelic world as the man who bought perhaps the most famous stamp in existence, the British Guiana 1c magenta. A unique example discovered by a 12 year old Scottish schoolboy in 1873, du Pont purchased the stamp for $935,000 in 1980 – it has yet to surface from his collection.

The eccentric multimillionaire – heir to the du Pont family fortune – was also a convicted murderer, after killing his friend and Olympic wrestling champion, Dave Schultz, in 1996. He was ruled mentally ill during his trial in 1997 and spent the rest of his life in prison, where he died in 2010 aged 72.

His remarkable life is due to be portrayed in a 2013 film entitled Foxcatcher, named after his father, William du Pont Jr’s famed horseracing stables.
Du Pont Falkland Islands stamps 1d dull claret imperforate vertically
The pair is considered the most
important in Falklands philately

du Pont Faklands Imperforate Stamps Highlighting du Pont’s extraordinary collection of Falkland Islands stamps is the famous 1d dull claret imperforate vertically horizontal pair, which is one of only two known examples. The pair has been taken from the right of the sheet and displays a wide sheet margin.

Once part of a block of four from the Hind and Dibble collections, this variety is considered the rarest and most important in Falkland Island’s philately. The pair is expected to sell for £40,000-50,000 ($65,144-81,426), with just slightly clipped perforations marring its otherwise excellent condition.

Sharing the £40,000-50,000 estimate is a mint block of 30 1928 2½d on 2d provisional surcharge stamps. Housed within the 30-stamp block is the extremely rare surcharge double, which is one of only two known to exist.

The issue followed a shortage of ½d and 2½d stamps on the island of South Georgia, when authorities granted permission for 2d stamps to be locally surcharged with the 2½d value.


Du Pont Falkland Islands government notice

The notice has impeccable provenance, once belonging to Baron de Worms, Dr Koefman and Dudley Stone

du Pont Falklands Goverment NoticeOne of the most exciting lots featured in the sale will be an official government notice announcing the 1891 surcharged bisects, which has been signed by acting postmaster Frederick Sanguinetti.

Bearing two cancelled pairs of the resulting ½d on 1d stamps, the piece comes with impeccable provenance and was part illustrated in Malcolm Barton’s 2002 book, The Falkland Islands: The 1891 Provisionals.

More of du Pont’s collection will be featured at the auction house’s March 6 sale, with his selection of postage dues and Papuan stamps from the British Empire set to appear. Starring among du Pont’s offerings in this auction will be a superb block of four 1907 small Papua overprint 1 shilling stamps.

The overprint error affected only 24 stamps in a single sheet of 30, with all but five cancelled. Just three of the stamps in the block at auction have been cancelled by a Port Moresby circular date stamp, warranting an estimate of £30,000-40,000 ($48,854-$65,144).

Paul Fraser Collectibles also has a remarkable collection of rare stamps for sale, including the beautiful Black Empress, the renowned Tyrian Plum and the greatest treasure in Hong Kong philately, the unique 96c olive-bistre block of four.

Source: Paul Fraser’s Collectibles

To read more about the life of John du Pont, click on the cover image of the following book:

No-holds-barred-the-strange-life-of-John-E-du-pont

No Holds Barred – The Strange Life of John E. du Pont


Hope you enjoyed reading about this story.

Share your comments below.

Happy Stamp Collecting!

Talk soon,

Janice


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Want to Invest in Rare Postage Stamps?

Then you need to read Paul Fraser’s article about investing in rare postage stamps – and how you can beat stocks with a stamp investment!

Investing in rare postage stamps

A guide to investing in rare postage stamps – and how you can beat stocks with a stamp investment

Investment-grade stamps – those rarest, most valuable examples – have put the stock markets to shame in the past decade, posting double digit annual returns.

And the world’s sharpest investment minds are taking note.

Business moguls Warren Buffet and Bill Gross are both major investors in the sector. Gross recently sold part of his Great Britain postage stamp collection for $10.5m – up 22.75% pa on his original $2.5m purchase price seven years earlier.

Reasons to invest

Historical returns: Stamps have been a respected asset with investors for decades and have continued to perform well during the recession, much better than the stock markets. As tangible assets they excel during times of high inflation.

Liquidity: There are an estimated 50m serious stamp collectors globally, and the finest rare stamps are always in demand. Rare stamps have worldwide recognition and global tradability.

Low volatility: Prices are underpinned by the sector’s large and passionate collector base – collectible stamps are a $10bn pa global market. In addition, hundreds of books and price guides exist. This extensive data increases the level of comfort for investors. There are no nasty surprises.

Limited supply: With only a finite supply of investment-grade stamps available, prices can only rise as demand increases.

Click here to read full article.

Source: Paul Fraser Collectibles

As mentioned in more details in the rest of the article, changing demographics, growing economies and growing demand from baby boomers’ generation to invest their disposable wealth are other factors that makes stamp collecting an increasingly “aspirational” investment.

Put your stamp investor cap on and enjoy the read.

Talk soon,

Janice



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