5 Secret Investment Strategies Revealed

The Stamp Man

The Stamp Man

2018-01-11 16:33:20

 

The Stamp Man's Investment Tips for 2018

The New Year break is always a great time for reflection.

I spent the New Year in Scotland visiting my parents. Festivities were, unfortunately, interrupted by a horrible bout of flu – not “man flu”, real flu!

Once my fever subsided, I rested up. This rare break from daily responsibilities gave me lots of time to think.

One of the things I found myself thinking about was how I could best serve my readers this year.

In a recent survey, many of you expressed an interest in investing in rare stamps as opposed to “just collecting”.

With that in mind, I spent some time thinking how I could best help to serve that need.

Competitive returns

I have always considered that what I do - buying rare stamps as an investment - is not much different from what a fund manager does in picking which stocks and shares to invest in.

Fund managers apply different strategies, but all with the same aim - delivering competitive returns, at the same time as seeking to limit downside risk.

Some of the most popular and successful investment strategies include: 

  • Small caps
  • Growth/momentum investing
  • Cyclical/turnaround situations
  • Value investing
  • Fundamental Analysis 

It struck me that these investment strategies can be successfully applied to an investment in rare stamps.

5 stamp investment portfolios for you

As a result, I have built stamp investment portfolios to match each of these investment strategies. 5 portfolios in total – all unique in their own way.

Rare stamps are the perfect “lazy investment”. Once you have selected your stamps, you just sit back and allow them to grow in value.

The world of stamps, and what drives their values, is somewhat isolated from the rest of the world. Stamp collectors care little for global macroeconomics. Stamp collecting is a pastime of passion and something to take our mind away from the challenging and unpredictable world we live in.

I have done all the hard work for you in selecting which stamps to buy for the best chance of achieving growth based on 5 popular investment strategies.

If you have an interest in an investment in rare stamps, I urge you to spend the time to look carefully at my recommendations below.

It is a new year and now is a good time to consider diversifying and protecting some of your capital for the year ahead and beyond.

The portfolios range in value from £500 ($677) to £50,000 ($67,690), so whatever level you are thinking of investing, there is something suitable to you. 

1. Small Caps (Value: £500/$677)

The basic premise for investing in small caps is that it is much more frequent for a company worth £1 million to grow to be worth £10 million than it is for a £1 billion company to grow to a £10 billion valuation.

The upside is, therefore, much greater for small caps but, obviously, the downside is that you could lose all your capital.

Fortunately, the downside risk with small caps does not apply to stamps. Unless no one collects stamps anymore, your stamps will always have a value, no matter what.

It is also true that a stamp worth £100 is much more likely to rise in value to £1,000 than a £1 million stamp growing to £10 million (although this does happen!).

The principal reason for this is that a £100 stamp is within the budget of a much larger number of collectors. Such stamps are generally more liquid and trade more frequently.

I have compiled a portfolio of lower value stamps, all less than £100 each. In my opinion, the level of rarity of many of these stamps is not reflected in their current value.

As a result, I consider there are above average chances of seeing prices grow substantially in the future.

 CLICK HERE TO VIEW DATA TABLE

The key points I would bring to your attention are: 

  • The price of the total portfolio is £500 ($677)
  • It has risen in value by 25% over the past 10 years
  • The market value of the portfolio is £550 ($745), meaning your entry price represents a discount of 9% against market value, giving your investment a head start 

This is the perfect entry-level investment if you are looking to dip your toes into the world of stamp investing, without risking too much capital.

 CLICK HERE TO VIEW CONSTITUENTS OF SMALL CAPS PORTFOLIO

2. Growth/Momentum Investing (Value: £2,000/$2,708)

Growth investing, of which momentum investing is a subset, aims to find high growth companies to invest in, ie. strong companies showing high levels of historic growth with a positive outlook.

Momentum investing is “the trend is your friend” style of investing, ie. jumping on to what is hot right now and going along for the upward ride. The principal risk in this strategy is in timing your exit before the inevitable rule of “what goes up must come down” ruins your fun ride.

In my opinion, one of the biggest strengths in stamp investing is that stamps rarely go down in value. Sometimes, the value of a stamp can remain flat for a considerable time, but, other than a few isolated “bubble” scenarios, stamps generally appreciate in value over the years.

I have built a portfolio for you focussed on areas of the stamp market showing considerable growth in the past 10 years, mainly from the Far East and Middle East.

Obviously, there is no guarantee that historic growth rates will continue. However, these areas of the market continue to show strength based on the high number of collectors currently in these areas. Furthermore, I have focussed my selections on stamps which still appear of quite low value irrespective of recent price rises and therefore with considerable room for growth to continue.

 CLICK HERE TO VIEW DATA TABLE

The key points I would bring to your attention are: 

  • The price of the total portfolio is £2,000 ($2,708)
  • It has risen in value by 143% over the past 10 years
  • The market value of the portfolio is £2,185 ($2,958), meaning your entry price represents a discount of 8% against market value, giving your investment a head start 

The fact that this portfolio includes stamps from areas of the stamp market which are hot right now, gives a higher likelihood of price growth in the year ahead.

 CLICK HERE TO VIEW CONSTITUENTS OF GROWTH/MOMENTUM PORTFOLIO

3. Cyclical/Turnaround Situations (Value: £10,000/$13,538) 

Cyclical investing works on the principle that companies go up and down in value in cycles. The strategy depends on identifying a turnaround situation in a company that has fallen in value, with the aim of buying in on the recovery.

This can be a risky strategy in that you are effectively buying something that the market once loved but now hates in the expectation it will be loved once again. The risk is that the market continues to hate your company or that the company continues to disappoint and become even more hated.

When it comes to stamps, the situation is slightly different in that specific stamps don’t become “hated”. However, it is true that demand for certain stamps, or the price collectors are willing to pay, can become subdued and flat from time to time.

This can also happen in an area of the stamp market as a whole (eg. stamps from a specific country or a specialised area of collecting such as “colour trials”).

Long term historic price performance analysis in stamps shows that stamps can often show price growth in “step jumps” rather than a consistent annual rate of growth. The reason for this is that prices of stamps often increase based on moments of competition at auction where two or more collectors are determined to get their hands on a stamp.

It is sometimes the case that a stamp is listed at the same price in the SG catalogue for a number of years. This may simply be because it is rare and has not appeared at auction during a lengthy period. In other words, the current market value has not been tested. Once the stamp appears at auction, it is usually the case that a substantial price hike is registered.

As a result, buying stamps that have shown no increase in value for some time is quite an astute strategy. In many cases, the stamps are simply selling at below fair value whilst awaiting a price correction based on auction results.

In this vein, I have put together a portfolio you could, in terms of price growth over the past 10 years, call “the dogs of the market”. However, these stamps are in some cases exceptionally rare and of high quality and therefore it seems only a matter of time before we witness substantial price appreciation.

 CLICK HERE TO VIEW DATA TABLE

The key points I would bring to your attention are: 

  • The price of the total portfolio is £10,000 ($13,538)
  • It has shown zero growth in value over the past 10 years
  • The market value of the portfolio is £12,330 ($16,692), meaning your entry price represents a discount of 19% against market value, giving your investment a substantial “margin of safety” 

The risk in this investment is that the stamps continue to underperform. The attraction, however, is that these stamps may be under-valued and, as a result, have the potential to show above average growth rates in the next 10 years.

 CLICK HERE TO VIEW CONSTITUENTS OF CYCLICAL/TURNAROUND PORTFOLIO

4. Value Investing (Value: £20,000/$27,072)

Value investing, made famous by the legendary investor Warren Buffett, is about buying companies when they are “cheap”, ie. when their price is considerably below their fair value based on earnings potential, assets and dividends.

Value investing is arguably the safest form of investing in that buying something for less than it is worth is inherently likely to make you money. However, the hard part is finding “true” value which, in the “smoke and mirrors” world of the stock market, is no easy feat.

When it comes to stamps, the exercise is much easier. The simple fact is that the stamp market is less efficient than the stock market in terms of price mechanisms.

As a result, it is sometimes possible to buy stamps at considerably below their fair value. This can happen for many reasons such as buying at a poorly marketed auction where you are the only bidder. As a trader in stamps, this is my core skill and effectively how I make a living!

I have compiled the best value investment portfolio I could muster from my recent stock acquisitions for you. This portfolio benefits from both being offered at a massive discount to market value at the same time as containing desirable stamps showing strong historic growth rates. As I said, this is probably the lowest risk investment you could make in stamps.

 CLICK HERE TO VIEW DATA TABLE

The key points I would bring to your attention are: 

  • The price of the total portfolio is £20,000 ($27,072)
  • It has risen in value by 116% over the past 10 years
  • The market value of the portfolio is £86,350 ($116,883), meaning your entry price represents a discount of 77% against market value, offering an exceptional “margin of safety”

This is a rare opportunity to buy a portfolio of rare stamps at a huge discount to market value. I would not be able to replicate another portfolio at this level of discount.

 CLICK HERE TO VIEW CONSTITUENTS OF VALUE INVESTING PORTFOLIO

5. Fundamental Analysis Investing (Value: £50,000/$67,681)

Fundamental analysis is the cornerstone of investing. Some would say it is not an investment strategy, but a necessary step required for any investment strategy to be successful.

Quite often, fundamental analysis is about analysing companies to find qualities such as strong and credible financial metrics, sustainable growth factors and a competitive advantage. This requires a lot of skill, patience, attention to detail and - I would suggest - experience, to do well.

For my last investment portfolio recommendation, I have compiled a selection of rare stamps, which I believe TICK ALL THE BOXES, and are: 

  • Key rarities
  • Of high quality in terms of condition
  • With a history of long term consistent and stable price appreciation
  • In areas of the stamp market which have always shown high levels of demand with a large number of passionate participants
  • Available to purchase at a substantial discount to market value

CLICK HERE TO VIEW DATA TABLE

The key points I would bring to your attention are: 

  • The price of the total portfolio is £50,000 ($67,681)
  • It has risen in value by 72% over the past 10 years
  • The market value of the portfolio is £79,750 ($107,955), meaning your entry price represents a discount of 37% against market value, giving your investment a substantial “margin of safety” 

In my view, this is a portfolio perfect as a long term “buy and hold”. I would specifically recommend this portfolio as suitable for retirement planning and as an integral part of a diversification strategy within your overall investments.

 CLICK HERE TO VIEW CONSTITUENTS OF FUNDAMENTAL ANALYSIS PORTFOLIO

Next steps?

To secure any of my investment portfolio recommendations, please complete the online subscription form in the link below:

 CLICK HERE TO SUBSCRIBE TO PORTFOLIO

Alternatively, you can call me today on +44(0)117 933 9500 or email me atmike@paulfrasercollectibles.com.

I will let you know straight away whether you have been successful in securing the portfolio. Each portfolio is unique and offered on a first come, first served basis.

If you have more questions to ask before making a decision, that is fine. I would be more than happy to organise a free, no obligation and personal consultation. If you would like to organise a free personal consultation to find out more about investing in rare stamps, please email me at mike@paulfrasercollectibles.com.

My aim is to provide you with an investment portfolio in rare stamps, which is a joy to yourself and a satisfaction to your descendants.

I look forward to hearing from you and being of assistance in formulating your investment strategy in rare stamps for the year ahead.

Kind regards

 

Mike Hall

CEO, Just Collecting Limited

PS. Once you have secured your portfolio, I will send your stamps recorded delivery, FREE OF CHARGE.

PPS. I will also provide you with annual valuations and an investment report of your portfolio so that you can monitor your portfolio’s performance.

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