Collecting early examples of postage stamps is one of the world’s best kept investment secrets. The prices of investment-grade stamps have grown consistently over the last century even through two world wars and two stock market crashes. Over the past 5 years, as financial & stock markets tumbled, the Stamp Rarities Index grew by 84.3%. This blog follows the collecting of stamps that can offer the opportunity to achieve wealth diversification and profit potential.
The search by Asian investors for alternative assets has extended beyond art into wine, gems, watches, postage stamps and other memorabilia -- the rarer and more exclusive, the better.
With about two-thirds of the world's stamp collectors in Asia, the stamps and collectibles market has surged, says Geoff Anandappa of stamp and memorabilia retailer Stanley Gibbons.
Hong Kong-based InterAsia Auctions -- which specialises in Asian stamps -- broke world records for Chinese stamps in September, raking in $12.6 million over four days. A 1941 Dr Sun Yat-Sen inverted centre stamp fetched $221,000, up 66 percent from a similar sale a year ago.
Demand is boosted currently by a "vast" new generation of collectors in China and India, says Sotheby's world-wide philatelic consultant Richard Ashton, adding that young buyers are also very active in South America. In contrast, he notes, growth in Europe is coming from 50-year-olds newly entering the market, often financial-industry retirees. While the U.S. market is huge, stamps from Great Britain and its former empire are the biggest collecting area, notes Mr. Ashton. In September, Sotheby's London will auction the British philatelic collection of the late Lord Leonard Steinberg, founder of the Stanley Leisure Group, a chain of betting shops and casinos. More than 2,000 items will come under the hammer.
Sotheby's
A block of nine 1840 "Penny Blacks" are estimated at £150,000-£200,000.
In a three-day auction Sept. 6-8, stamps from 75 British Empire countries will be offered. A one-day sale Sept. 21 will be devoted to Great Britain itself. A special aspect of the collection is that Lord Steinberg concentrated on blocks of four or more stamps. Mr. Ashton explains that blocks, which tend to be rarer, are generally more valuable than the same number of single stamps. For example, a block of four may sell for £50,000, and four of the same single stamps for £20,000.
Leading the British Empire auction will be an airmail rarity from Newfoundland, the 1927 De Pinedo Air Mail 60 cents black in a block of four. On May 20, 1927, famed Italian pioneer aviator Marchese Francesco de Pinedo landed in Trepassey, on his return journey to Italy from South America. He had agreed to carry mail back to Europe; and to commemorate the event, stamps used to frank the post were specially overprinted with De Pinedo's name. This example is the only surviving block of four (estimate: £120,000-£150,000).
One of the most attractive blocks of four comes from the British Solomon Islands. The 2 ½ penny was issued during the reign of King George VI. The monarch's profile is in sage green against a background of purplish-red trees and men rowing a boat on peaceful waters. The block has a perforation error, making it rare and much sought-after (estimate: £60,000-£80,000).
From Hong Kong, there will be a block of four 1863-1871 30-cent reddish-orange stamps picturing Queen Victoria that was once owned by Franklin D. Roosevelt (£10,000-£12,000); from the Falkland Islands, a 1933 block of four celebrating the centenary of British administration with a penguin surrounded by a rich yellow border (estimate: £6,000-£7,000); and from Australia a wide range of various-sized, colored and denominated blocks featuring a kangaroo (estimates are from £60 to £20,000).
A highlight of the Great Britain sale later in the month will be a block of nine 1840 "Penny Blacks," the world's first adhesive stamp issued by a public postal service (estimate: £150,000-£200,000). And a block of four 2 ½ penny issued to celebrate the silver jubilee of King George V in 1935 has a striking error. The correct shade should have been a plain blue, but there were sheets printed in a beautiful, deep Prussian blue (£25,000-£30,000).
Meanwhile, a series of auctions at Spink in London devoted to the Chartwell Collection of British stamps started with a bang on June 28 when the "Post Office Mauritius" sold for £1.05 million, well above an estimate of £400,000-£500,000. The two-pence stamp in a lovely blue on soft grayish wove paper with the profile of Queen Victoria was issued by the Mauritius postal service in 1847. It was the first stamp released by a British colony. The extensive collection, assembled by British businessman and philanthropist Sir Humphrey Cripps (1915-2000), is being sold through 2011 and 2012.
British stamp-collecting and memorabilia firm Stanley Gibbons Group posted higher first-half results, helped by growing demand and progress in Far East markets.
"Prevailing economic instability, together with inflationary concerns and low interest rates globally, is expected to result in continued demand for our investment services in top-quality rare collectibles," Non-Executive Chairman Martin Bralsford said in a statement.
Stanley Gibbons is opening a new office in Hong Kong in September, which will help satisfy demand for rare Chinese stamps in Britain and Asia.
The company, whose principal businesses include Fraser's Autographs and Collector Cafe, raised its interim dividend by 11 percent to 2.5 pence.
For the six months ended June 30, adjusted pretax profit was 1.8 million pounds ($2.9 million), compared with 1.6 million pounds a year ago.
Sales rose 25 percent to 15 million pounds.
Shares in Stanley Gibbons closed at 175.5 pence on Thursday on the London Stock Exchange. ($1 = 0.613 British Pounds)
(Reporting by Suzannah Benjamin in Bangalore; Editing by Joyjeet Das)
Look out for penny blacks and penny reds with pinholes in them. An article which appeared in "THE LADY" magazine in the 1840's suggested a way to entertain your children by getting them to make a "STAMP SNAKE". You did this by cutting stamps off envelopes and old letters and threading them through with cotton, the red stamps making the body of the snake (GB PENNY RED STAMPS) and the black ones (PENNY BLACKS) making the head. Your children could then run round the drawing-room with their stamp snakes. You can still find lovely-looking copies of the Penny Black to this day which have pinholes right through the centre. Are they worthless? You decide if these affordable stamps are still collectable and should become a seperate catogory of your early British stamp collection.
The value of the stamp itself is sometimes far surpassed by the rarity of the cancel or postmark on it. This example reached the auction price of £22 recently demonstrating that looking closer at your collection could produce dividends. Listing on Ebay
There are reputed to be 30m stamp collectors, or philatelists, worldwide. Numismatists, or coin collections are fewer in number, but growing. So with a collector base like this, there is depth and liquidity to the market and, for these reasons, many now see it as an interesting investment alternative.
As with other forms of tangible asset investment, though, there are traps that they unwary could fall into. The stamp market in particular, dominated by Stanley Gibbons, is known for big spreads between bid (selling) and offer (buying) prices. If the spread is, say, 10 per cent, your investment would therefore have to increase by this amount before you made a profit.
Consequently, other dealers grumble about the stranglehold Gibbons has on the market. Arguably, this militates against short-term gain. However, as with coins, over a longer time span – and discounting bubble conditions that have appeared from items to time – returns can be in low-double-figure percentages.
Like other collectibles, specialising in an area you know about, and buying a relatively small number of items in tip-top condition, is the best route. While no guarantees are offered, in cost cases, if you buy an investment-grade item from a dealer and then change your mind, it be generally be sold back at cost.
With stamps, the areas to avoid are those issuing has been profligate level. For example, while they are interesting to some, modern first-day coves have little value to investors. Stamps from the Edwardian and Victorian era are generally the only game in town.
As with coins, the rarest items are often errors and proofs. Genuine rarities, where there are few known examples in existence, can fetch prices in five or even six figures. Philatelists go into a state of rapture over 'multiples' and examples of stamps from the edge or corner of a sheet.
So, unless you are a real expert, navigating markets like this can be something of a problem. That's why Stanley Gibbons and some other dealers are happy to put together portfolios for would-be investors – and this can be a good first step.
As you become more interested in the subject, you may then strike out on your own. But be careful. Some dealers regard buying stamps for investment as vulgar.
An interesting twist on the investment theme is the guaranteed minimum-return contracts offered by Stanley Gibbons. These specify a level of investment and give a fixed minimum return, calculated on the basis of simple, rather than compound, interest. The contracts are backed by a dedicated portfolio of stamps.
Invest £10,000 for 10 years and you guaranteed to receive £16,000 at the end of the term.
If the stamps are worth more than this, you can either keep them, or sell them commission-free through a Gibbons auction, or sell them back at 75 per cent of catalogue value. Contracts for shorter periods offer lower returns. A five-year contract will return 125 per cent of the amount invested at the end of the period, for example. The stamps are stored by Gibbons free of charge. For more on investing in stamps, see Stamps lick the competition
In 1841 the stamp colour was changed from black to red-brown and the Penny Red was born,
it was to be the work-horse of early Victorian stamps until 1879, over 21 billion were issued.
It had two corner letters at the bottom, four corner letters were introduced in 1864 to avoid forgery.
Red MX postmark
Black MX postmark
Plate 10
Plate 11
Penny reds printed from the same plates used to print Penny blacks
For me these are intersting singles and blocks of this fascinating series of stamps, enjoy...
blued paper
small crown watermark
large crown watermark
Imperforated colour varieties (die I, Alph I or II)
Perforated Stamps 1854
Colour varieties SG 17, watermark small crown, perf 16, blued paper, Die I, Alph II
Die II, wmk small crown, perf 16
Die II
wmk Large crown, perf 16
perf 14
perf 16
perf 14
Letters in all four corners, and plate number on stamp, 1864-79 Plate 195
The extra letters were introduced to avoid forgery
e.g. AB at bottom and BA at top
Numbers issued
Imperforated 1841-54
2,468,000,000
Perforated 1854-61
5,116,000,000
Plate numbers 1858-69
13,434,000,000
The Penny Red is Great Britain's longest running stamp, from Feb 1841 to Dec 1879. It was used for the main letter rate and about 21 billion were issued. The colour of the Penny Black was changed from Black to red so that the black cancelation could be clearly seen. Until 1854 it had no perforations. In 1855 the watermark was changed from small crown to large crown. The first die was used to produce 204 plates, plus 6 reserve plates. A new die II was also introduced in 1855, this was used to produce 225 plates, plates 71-225 have the plate number engraved on the stamp. The paper also changed from blued, to cream to white between 1854 and 58. All these changes together with subtle variations between stamps make the Penny Red an interesting, and inexpensive, stamp to specialise in.
In 1864 the design was modified, there are now letters in all four corners and the plate number is engraved engraved on each stamp. It was printed using the line-engraved method by Perkins, Bacon & Petch (from 1852 Perkins, Bacon & Co). It was replaced by the surface-printed 1d provisional issue in 1880.
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Sotheby's 
Plate 195
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