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.(…)

Read full article

‘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

Other related articles

Want To invest in Rare Postage Stamps?

A Selection of Rare Stamps


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A selection of rare stamps

I recently stumbled upon this interesting article on stamp investing by Lily Kuo and Ritchie King on qz.com and happy to share:

Here are some of the most expensive pieces of paper in the world

selection-of-rare-stamps

Source: qz.com

 (….)  Postage stamps have some of the hallmarks of any great investment craze. They’re tangible assets for those concerned about global economic stability. They’re rare. And the Chinese government has been promoting its citizens’ interest in them.

By all available indicators, the value of stamps is surging accordingly. Investment-grade stamps return between 10% and 12% annually according to Nick Salter, a stamp investment specialist who runs the website Philatelic Investor. Britain’s Stanley Gibbons, the world’s oldest rare stamp dealer, is starting an investment fund for rare British stamps, which the firm says will return 10% a year. On average, the GB250 Rare Stamp Index has risen 13.9% a year (in compound annual growth) over the past decade. Since the financial crisis, the return has been even better—and, as you can see from the chart below, has outperformed other major investments since 1995.

(….)

Postage collecting has been around since the first postage was printed in the mid-1800s. Some believe the growth in stamp investing is driven in part by Westerners born after World War II who studied philately in school and are now collecting stamps in their retirement.

Today, there are an estimated 50 million stamp collectors worldwide.

Hedge funds and wealth managers are also looking to stamps as an alternative asset that doesn’t follow stock market trends. That’s partly because collectors tend to hold onto them, and their buying and selling isn’t triggered by changes in the economy. In China, investors with limited access to equity markets are pouring money into tangible assets like stamps, art and tea. (Also, in 2000, the Chinese government started promoting stamp collecting to encourage interest in Chinese history.)

Some of the most valuable stamps traded today are from India, China and Europe. One particularly valuable stamp: The Swedish Treskilling Yellow, a tiny three-shilling stamp accidentally printed in yellow, which sold for £1.6 million ($2.1 million) in 2010.

selection-of-rare-stamps

Source: qz.com

To meet rising demand from emerging markets, Stanley Gibbons has opened offices in Brazil, Singapore and Hong Kong this year. The firm says Asian investors account for about 5% of stamp sales in terms of volume but 18% in value (paywall).

The market isn’t without risks. A speculative stamp bubble burst in the 1970s, when prices fell as much as 50%. It took stamps two decades to recover. Rare stamps aren’t guaranteed to increase in value, especially if they fail to attract more young philatelists. The market for Chinese stamps looks particularly dodgy. The value of Chinese stamps issued after 1949 increased by 10- to 30-fold in 2009 and then plummeted in 2011 before stabilizing last summer, according to Louis Mangin, director of stamp auctioneer Zurich Asia.

To read full article, click here.


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Stamp Values: Investing In Rare Asian Stamps?

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If so, this article is of interest to you!

I stumbled upon it while reading Paul Fraser Collectibles newsletter and the headline caught my attention:


“I worried that I would be jailed”: China stamp artist’s error could bring $44,900.Two Chinese 8f ‘Entire Nation Is Red’ stamps, popular among collectors, are selling in Hong Kong.

 

Stamp Values: Chinese rare stamp Entire Nation Is Red

Stamp Value of 'Entire Nation Is Red' is estimated at $44,917

(…)

Expectations for the sale are high, as the rarest and finest-quality Chinese Cultural Revolution stamps are among the most sought-after on the markets.

Indeed, if you want to get an idea of how much these coveted stamps can sell for, look no further than another sale which is due to take place in Hong Kongnext month…

Dynasty Auctions Company Ltd of Hong Kong – a division of Daniel F. Kelleher Auctions, LLC – will be offering four whole catalogues of collectible Asian stamps between August 5-7.

This stamp was originally withdrawn on the day it was issued for… well… failing to show that the ‘entire nation is red’.

Or actually Taiwan which, as you can see from the pictures, the stamp’s designer had neglected to colour-in red to match the rest of China.

Designer Wang Wei Sheng was later quoted as saying: “For a long time I was really worried that I would be jailed. Officials told me that it was a really big mistake, but in the end nothing happened.”

Two rare copies of the Chinese 8f “Entire Nation Is Red” stamps will auction at Dynasty.(…)

Read the full story here => Paul Fraser Collectible’s Newsletter.

scott postage stamp catalogue 2011 china

Stay on Top of Postage Stamp Values with the Scott Standard Postage Stamp Catalogues Series

Available on Amazon: Scott 2011 Standard Postage Stamp Catalogue, Vol. 2: Countries of the World- C-F

The 2011 edition of the Scott Standard Postage Stamp Catalogue Volume 2 includes countries of the world C-F.  (<-China)

Value activity was robust with more than 30,000 changes. Leading the way was the People’s Republic of China with more 7,000 changes.

Other countries showing a high number of value changes are Colombia (3,101), French Offices Abroad (2,263), Canada (2,120), Chile (1,496) and Ethiopia (1,003).

In the People s Republic of China, early issues show generally modest increases in value. The startling increases appear in the late 1950s and early 1960s and the Cultural Revolution era.

 


Further readings on stamp collecting and stamp investing:


Best,

Janice

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