10 Secrets to Successful Stamp Investing

The Stamp Man

The Stamp Man

2019-04-30 11:35:49

The hobby of billionaires 

Now the Easter Break and all that crazy hot weather is behind us, it is time to get back to business… 

You may have heard of Michael Dell, the founder of Dell Computers.

At the age of 12, he got a job washing dishes.

At the time he just wanted enough money to fund his stamp collection.

Roll forward another 12 years to 1992 and Dell became the youngest CEO ever to lead a company in the Fortune 500.

By 1999, he was the fifth-richest person in the United States.

Warren Buffet also dabbled in stamp trading in his early days.

There is an interesting correlation between the most successful people and a natural collecting instinct.

These people have always understood the value of tangible assets.

After all, they became the best in the world in the art of buying assets and selling them at a profit.

I would love to be able to say that I will now share with you the 10 secrets to becoming a billionaire.

Sadly, I am nowhere near qualified to write that piece.

What I can do though is to share with you 10 secret buying strategies I have personally used over the years in selecting stamps for investment.

These are the 10 strategies that have never let me down.

These secret strategies will guide you on what to buy to give you the best chance of selling later at a meaty profit.

I also present you with the opportunity to buy 10 stamps today linked to each of these well proven investment strategies.

1. Going cheap  

My first strategy is probably the most obvious one.

The price you pay is a critical component to investment success.

But, alone it does not cut it. To be successful you need to weigh up the price paid to the value of the asset.

In stamps, there is a simple guide to use…

If you can buy a stamp of SG catalogue quality at a good discount to SG catalogue price, you have a margin of safety built in to your investment and a strong head start.

In terms of value at a good discount, I would recommend this stamp from British Guiana…

British Guiana 1863-76 12c lilac, perf 15, brilliant large part original gum. Extremely scarce in this lovely condition, and showing letters of papermaker's watermark. Mint. SG 113 

Price: £795 

Click here to buy now

This classic stamp from British Guiana is notoriously difficult to find in this quality.

British Guiana was part of the British West Indies (Caribbean) on the northern coast of South America. It became independent in 1966 and is now known as Guyana.

British Guiana has a very loyal and passionate base of collectors. It has an interesting philatelic history and is famous because of its record holding of the world’s most valuable stamp (the 1c Magenta, which sold at auction for $9.5m in 2014).

The stamp I have for you does not cost anything like that amount, yet is far more beautiful. If you’ve seen the 1c Magenta, you’ll know what I mean!

The SG catalogue currently lists this stamp at a price of £950. As a result, this is an opportunity to buy an SG catalogue quality example at a 16% discount.

That was the easy money.

Next up needs some inside knowledge…

2. Hot right now  

When you follow auction realisations around the world, as I do, you often see moments where the bar is raised.

For a brief time after these breakthrough auction realisations occur, dealer prices tend to lag behind current market values.

I have this stamp available at what was the market price right up until a recent auction raised that bar (by a considerable margin) …

Long Island 1916 2½d black, typewritten (carbon) on thin wove, left marginal, SG32. Fine unused example. Only 72 produced (plus 24 top copies), of which 29 were destroyed. Only 15 unused examples recorded by Gibbs. 

Price: £1,000

Click here to buy now

The current SG catalogue price for this stamp is £1,100. I was already offering it at a 9% discount. 

It is extremely rare, being one of only 15 unused examples and one of just eight in private hands.

Ground breaking news…

At a recent auction in London, another copy of this stamp realised £8,500.

When you add the buyer’s premium to the hammer price, that is a sales price of £10,200.

I won’t even bother to calculate the discount in this price. My price has been blown out of the water.

This is probably about the most obvious winning investment I could recommend right now.

It will all but certainly rise dramatically in price when the next SG British Commonwealth catalogue is published in September.

Ok, so my first two strategies were no brainers.

It’s time now to be a bit more contrarian…

3. Dogs of the market  

You may have heard of the, often effective, stock market investment strategy of investing in market “dogs”. This is normally based on high dividend yields, which clearly do not apply to stamps.

However, I have intensively studied how stamp prices have moved over the years and observed an interesting angle…

Whilst rare stamps generally go up in price over time averaging growth of around 10% pa, this does not happen on a straight line basis.

Instead, we see prices move in “jumps”. This is driven largely by those auction events referred to earlier.

As a result, I have found buying stamps that have shown no price increase for some time are often good for investment. This is because:

  • They are probably due a price correction
  • They are lagging behind fair value based on comparable stamps in the market
  • Assuming each stamp will ultimately deliver similar long term growth rates, buying in after a lengthy pause in price growth is good market timing

I have one of these “dogs” for you today…

Bermuda 1924-32 Script watermark 2s6d grey-black and pale orange-vermilion/grey-blue, from March 1930 printing, very fine original gum. A lovely example of this rare and distinctive shade. Accompanied with British Philatelic Association certificate (2016). Unmounted Mint. SG 89h 

Price: £2,750

Click here to buy now

This stamp is no “dog”. In fact, it is a stunning rarity from the popularly collected island of Bermuda. 

It is an exceptional quality unmounted mint example of a rare and distinctive printing shade.

The SG catalogue price has not moved in 12 years now. It is a stamp now looking undervalued against its peers and surely due an upward price swing imminently.

My next successful strategy is in complete contradiction to this contrarian approach.

It involves looking at where recent price growth histories have been strong and jumping on that winning train…

4. Recent history of price growth   

Whilst historic growth rates are no guarantee of future growth, as Mark Twain famously said, “history doesn’t repeat itself but if often rhymes”.

For that reason, I often look at stamps showing strong historic growth rates over the past 10 years.

Provided the market dynamics causing such growth appear to remain in place, such stamps are usually safe bets.

This stamp from Bushire during British Occupation fits this bill perfectly…

Bushire 1915 (Sept) Coronation 10ch brown and deep green, SG21. Very fine used example with part '13 X 15' circular date stamp. Only 66 issued. Accompanied by a Royal Philatelic Society certificate of Authenticity (1978).  

Price: £3,250

Click here to buy now

Bushire is a city on the southwestern coast of Iran on the Persian Gulf.

Stamps from these areas have been catching up in recent years as interest has risen from new collectors entering the market.

This stamp is very rare with only 66 issued in total in 1915 and is a very fine used example.

It is one of the best quality examples of this stamp you could hope to find. A lot of the other used examples are in poor quality and don’t come close to this example.

The price of this stamp has risen in the past 10 years from £1,200 to £3,250, recording growth of 171%.

This area of the market is hot right now and looks set to continue to show upward price momentum.

In the same theme, another proven investment strategy is to follow the money.

5. Follow the trend  

To work out where the next spike in prices will occur it is often worth looking at where the big money collectors are and, more importantly, what they are buying right now?

Following the trend and the smart money doesn’t take great intellect, but surprisingly few people consider this when assessing the investment merit of stamps.

Right now, we are seeing stamps from the Middle Eastern countries rising significantly both in the SG catalogue prices and in auctions held around the world.

There is a simple reason for this. This part of the market is more heavily occupied with collectors with big pockets and a desire to build award winning collections.

This demand creates the classic supply squeeze, where there simply are not the rarities available to satisfy demand.

A lot of stamps from these areas are rising in price and becoming out of reach for the average collector.

However, there are still a few out there that have some catching up to do and remain comparatively very cheap …

Transjordan 1930-39 500m brown and £P1 slate-grey tied to piece by very fine Amman circular date stamps, dated '22 MR 36'. A scarce and attractive item. Used. SG 206/7 

Price: £165

Click here to buy now

This philatelic piece is far scarcer than its price demands. It includes both the 500m and £P1 stamps depicting Emir Abdullah with a stunning Amman circular date stamp. 

Abdullah claimed to be a 38th generation direct descendent of Muhammad. He was of significant historical importance to the region.

He was assassinated in 1951 by a Palestinian who feared he was going to make peace with Israel.

In my view, this piece is superb value at the current price.

Apart from looking at where collectors are driving prices, I also look at what’s happening in the world in general…

6. Emerging markets  

Historic evidence shows us that stamp prices are correlated to some extent by the GDP of their country. Countries showing high levels of economic growth generally also show rising stamp prices.

This is simply because some money from rising disposable incomes and newly created middle classes will find its way into the stamp market.

It stands to reason that countries showing high levels of economic growth will create rising home market demand and rising stamp prices.

India and certain countries in Africa are currently showing the most potential based on their real Gross Domestic Product (GDP) growth rates.

India has shown strong economic growth in recent years and recorded GDP growth of 7% in 2018.

Buying stamps from India has been one of the best investments you could have made in stamps in recent years…

Indian Convention States Gwalior 1928-36 Set of 16 to 25r, SG86/101, with large part original gum. Top value with tiny red mark on reverse of one perforation inconsequential and still a fine and attractive set with very fresh colours. Scarce as a complete set.  

Price: £575

Click here to buy now

I don’t think you can go far wrong with this scarce complete set of stamps from the Indian Convention State of Gwalior. 

The growth rate in the past decade has been stellar, up in the SG catalogue from a price of £325 to £800. This equates to 10-year growth of 146%.

Furthermore, I am letting this set of stamps go today at a substantially discounted price of £575, a 28% discount to the SG catalogue price.

The remainder of the secret investment strategies I would like to reveal to you today are all about the stamp rather than price or market strength.

Sometimes a stamp insists upon itself to such an extent that collectors are irresistibly drawn to it…

7. Celebrity status  

Some stamps simply have a celebrity status amongst collectors. They are adored and desired and therefore always in high demand.

I have featured this stamp numerous times before, but I will feature it again. Frankly, I love it and it sells every time I have one to offer…

Great Britain King George V 1929 £1 Postal Union Congress (P.U.C.) black, SG438. Very fine used example cancelled by a lightly struck circular date stamp leaving a clear profile. Recess printed by Bradbury, Wilkinson & Co. A stunning example of this famous British high value stamp design.  

Price: £495

Click here to buy now

It is of course the much adored PUC £1 stamp from King George V’s Great Britain. 

It has always been and probably always will be one of the most adored stamps on the planet. It is quite simply stunning in all respects.

Today, I have a very fine quality used example which is more affordable than mint examples but no less coveted, particularly in this quality.

The key aspect of this stamp’s “very fine” status is the fact the circular date stamp is lightly struck. As such, it leaves a clear profile to admire of this beautifully designed stamp issue.

I should also mention it is a rarer bottom marginal example adding “icing to the cake”.

I am able to let you add this famous stamp to your collection today for the discounted price of £495. The SG catalogue price is currently £550 for used examples of the PUC £1, giving you a 10% discount.

When it comes to stamp investment, I have always held the view that the “holy grail” is in buying unique items which don’t cost the earth.

8. Unique, one of a kind  

As you would expect many unique pieces are way outside the reach of the average stamp buyer selling for £hundreds of thousands, if not £millions.

But, you can still get your hands on some unique philatelic treasures at much more affordable levels…

Great Britain 1962 3d deep lilac (Wales, White Paper), SGW1var. A superb unmounted original gum left hand marginal horizontal pair of imperforate imprimaturs each with a "BPMA" handstamp on reverse, showing variety "Wing-tail flaww" in position R16/1. A wonderful unique philatelic gem with exceptional provenance being released from the British Postal Museum Archives. GB Specialised catalogue number: XW2a. 

Price: £4,000

Click here to buy now

Unique pieces usually present as excellent investments. The simple fact is if something is unique, you only need two collectors to want it when it appears in auction for it to realise a strong price.

Quite often this price will be much higher than its last realised price, which buyers use as the anchor point in determining what they are willing to pay.

The desire to own something unique can be overwhelming to a collector. Especially if said item is needed to enhance or complete their collection. They know, they will only ever get one chance to own it.

So, when I get the rare chance to acquire unique pieces, I seldom turn them down, such is their investment pedigree.

A unique philatelic treasure.

I always look for provenance when buying…

9. Special Provenance  

Sometimes an item’s provenance alone adds value and prestige. When I can find items with this feature at fair prices, I am sure to pounce…

Great Britain: May 1840 1d Mulready letter sheet dated 11 May 1840. 

Price: £1,750

The provenance was the first attraction for me here…

You see, it was part of the Grand Prix multiple gold medal winning “Mayflower Collection”. This collection is the undisputed best collection ever assembled of the beginning of GB postal history.

The collector behind the collection is now one of the most famous names in the stamp world.

Mulready stationery letter sheets were introduced as part of the British Post Office postal reforms at the same time as the Penny Black. They went on sale on 1 May 1840 and were valid for use from 6 May 1840.

William Mulready was a well-known artist at the time and was commissioned to design the illustrations on the face of the letter sheet.

The social reformer, Sir Rowland Hill was responsible for the reform of the postal system based on the concept of prepaid postage with a uniform Penny Post.

He expected the Mulready stationery to be more popular than postage stamps but, as we know, the postage stamp prevailed.

Within two months, the decision was made to scrap the Mulready stationery with the Penny Black becoming the clear winner with the public.

Rowland Hill famously said at the time “I fear we shall have to substitute some other stamp for that design by Mulready… the public have shown their disregard and even distaste for beauty.”

I have always considered the Mulready letter sheet designs to be works of art and they are obviously rare due to only being in issue for two months.

The Mulready I have for your today is extra-special…

The address is in the hand of the postal reformer, Sir Rowland Hill responsible for the introduction of both the Mulready and Penny Black prepaid postal system.

As a result, this is an exceptionally rare piece of postal history important because of the association with Sir Rowland Hill and also because it is a very early cover from the first month of issue.

At the offer price of £1,750, this is an opportunity to own something of absolute privilege at a very fair price.

I have kept the best for last…

The 10th secret investment strategy is all about quality…

10. Quality, Quality, Quality  

In the same vein as the famous rule about buying property, “Location, Location, Location”, when it comes to stamp buying I cannot stress enough the importance of “Quality, Quality, Quality”.

Quality is the underlying and unwavering rule I obsessively adhere to in assessing every stamp I study, before putting in front of you to buy.

My final recommendation is the best quality example in existence of this very rare Victorian stamp…

Great Britain 1884 10 shilling Ultramarine on blued paper, SG177. A superb mint example of this very rare stamp. Exceptional Quality and the finest in existence. Accompanied by a certificate of authenticity from the British Philatelic Association (BPA). 

Price: £40,000

Click here to buy now

When it comes to quality, obviously, you can’t beat “the finest in existence”. However, the normal rule applies that to get the best you will need to pay a premium. 

Likewise, you should also expect a premium price when you sell.

But as I'm offering the finest example in existence at what is the current SG catalogue price, you can be assured you're getting in at a good price.

This is one of the stamps which features in the GB30 Rarities Index, the index including the 30 rarest stamps from Great Britain. This gives it star status.

In the year I was born, 1970, this stamp was valued at £750. At the current valuation of £40,000 this equates to a compound annual growth rate of 9% pa over 38 years.

It is a shame that only those with substantial funds could ever aspire to own a rarity such as this today.

It is an interesting demonstration though of the concept of buying the best you can afford and holding on to them for the very long term.

That’s when stamps come into their own.

All my secrets revealed

It has been a long night writing this communication to you to share my 10 secrets to successful stamp investing.

I sincerely hope you have found it useful - and better so if you have found something of interest in the stamps featured.

I do have other secrets not yet revealed and I look forward to sharing those with you in future communications.

As always, to ask me to reserve any items for you before someone else beats you to it, you can contact me by e-mail at mike@paulfrasercollectibles.com.

Alternatively, you can call us on +44(0)1534 639998.

Thanks for reading and please don’t tell anyone else my secrets!

Kind regards

Mike Hall

CEO, Just Collecting

PS. Attention overseas buyers: Don’t forget you are getting these stamps at an even cheaper price today thanks to the current exchange rate being in your favour. Opportunities like these are those “remember when…” moments so enjoy the benefit whilst it lasts…

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