Up 50% in value in the past year

The Stamp Man

The Stamp Man

2020-12-30 17:16:50

A massive tailwind for rare stamp investors

As we approach the end of what has been a horrible year for most people, we must hang on to the belief that things can and will get better. 

I know a lot of people remain very worried about the future and whether 2021 will be better or even worse than what we have just gone through.

Me, personally, I’m a glass half-full kind of guy. I do think we will get this horrible virus under control next year.

I do, however, have concerns about the economic story which will unfold. I worry about the value of my stock market investments, property and pension.

I take some solace in the fact the market for rare stamps looks like an oasis of security at this time.

I have a huge amount of my own capital committed to rare stamps and that is one thing I am not worried about. Not one bit.

You see, over the past year, some rare stamps have soared in value.

Take an example from this year’s recently published Stanley Gibbons “Commonwealth & British Empire Stamps” catalogue…

A mint example of SG1 from the former province of South Africa, Natal (the 1859 1d blue) is up from a price of £1,200 to £1,800.

That’s growth of 50% in one year.

I’m not suggesting this sort of growth can be seen across the board, but it does prove the kind of increases in value that can occur in a short period of time when a certain area of the market becomes hot.

I have been in the rare stamp market for over 20 years and this is no surprise to me.

The last major event in 2008, when the banking systems collapsed, was the last time rare stamps experienced a major bull market.

I believe 2021 could be the next big wave of growth for the rare stamp market.

There are 10 good reasons why…

Top 10 reasons rare stamps look like the perfect investment for 2021

  1. The stamp market has actually benefited from lockdown

During lockdown, we saw a marked increase in new collectors joining the hobby. We saw previous collectors taking up the hobby again. Existing collectors had more time on their hands. All of this led to a visible and material increase in demand across the whole market.

2. The market has become more transparent and liquid as it moved online during the pandemic

Lockdown restrictions have forced a major transition in the rare stamp market. Online sales have rocketed. The online market provides better transparency of pricing and quality. It also opens up the market to huge potential global liquidity.

3. Many commentators expect high inflation

Out of all the potential macro-economic events, high inflation is the one which has, historically, always led to high growth in the values of rare stamps. The last time of high inflation in the UK was between 1975-1980. The GB rare stamp market soared in value during that five-year period by 600%.

4. The rare stamp market has historically performed very favourably when the stock market performed badly

Whatever happens to the stock market next year, it is sure to be a bumpy ride. In the event of a falling stock market, rare stamps normally benefit. The reason for this is that more money moves out of the stock market when it is going down and into other investments. People tend to look for non-correlating assets and collectors are willing to allocate more cash to their hobby as a store of wealth.

5. We are receiving unsolicited enquiries from people looking to invest

This is exactly what happened in 2008 and we are seeing the same again. The impact of increased demand from investors means scarce assets become even scarcer as some are held, often for the long term, by investors as a store of wealth.

6. As a portable tangible asset, rare stamps can be used as an alternative currency

Rare stamps have been referred to in the past as the “Royal Currency”. They can be sold in multiple currencies around the world providing a protection against exchange rate risks.

7. The pandemic will pass and there will be a flurry of activity as stamp exhibitions take place

Although the stamp market has benefited from the huge growth in online trading during the year, we will also see a short term further boost to sales when lockdown restrictions are finally lifted. There is pent up demand for international stamp exhibitions and I expect record-breaking attendances. In particular, the London 2020 International Stamp Exhibition, which was postponed due to the virus, is now scheduled for 2022.

8. Most auction houses are reporting strong realisations

It is evident from reported auction realisations that prices are rising at auction because of increased competition. The editor of the Stanley Gibbons stamp catalogues recently reported in his preface to the recently published edition:

The market has continued to be very positive, with the results in several major international auctions pushing up prices for rare stamps in fine condition, while demand from collectors has resulted in increases for more modestly priced stamps in most countries and periods.”

9. Rare stamps illustrate less volatility of pricing in what is clearly a more volatile world

Rare stamps tend to show less volatility up and down than most other asset classes. This stability is something of comfort in the most challenging of times.

10. Overhang from major sellers of rare British stamps is coming to an end

A major theme in the market for rare British stamps in 2020 has been a large supply from sellers looking to exit their investments they made some years ago. This spike in supply has held back the potential for price appreciation. However, those sellers now appear to have, all but, dried up and high-end dealers are now complaining about a lack of supply of quality items to satisfy rising demand.

In summary, the rare stamp market looks in better shape than it ever has in the past decade. Never before have I seen so many positive market indicators coming together at the same time.

Hot Tips for 2021

To help you benefit from the potential growth in value of rare stamps in the coming year, I have selected five attractive rarities for your attention.

These are five of my favourites from recent acquisitions we have made. I believe my selections provide strong credentials in terms of long term investment potential.

A rare stamp for just £100

Brunei 1906 $1 on 8c black and vermilion, type 3 surcharge on Labuan, SG22.

Price: £100

CLICK HERE TO BUY IT NOW

  • A lovely stamp and a brilliant quality mint example, rarely seen so fine for this elusive stamp issue
  • A rare stamp as only 2,000 issued and fewer surviving examples
  • Available to purchase today at a 17% discount to the current Stanley Gibbons catalogue value of £120
  • I think this stamp is ridiculously under-valued comparative to its rarity and therefore has huge room for price appreciation
  • Stamps from Asia have been rising in value in recent years as a strongly contested area of the market. For some reason, this little beauty remains lowly priced.

The last remaining bargain from the Great British stamps sell off

Great Britain 1967 4d British wild flowers, error of missing colour, SG720c

PRICE: £850

CLICK HERE TO BUY IT NOW

  • It is all about the price. Buying great rarities, when the opportunity arises, at deep discounts to normal market values is a straightforward investment strategy. This is the last of the bargains we have from recent sellers looking for a quick sale.
  • A very scarce Queen Elizabeth II stamp error. Pierron, the recognized experts in QEII stamp errors, records only 30 mint blocks in existence.
  • Superb unmounted mint condition (full original gum) se-tenant block of four, offered with normal for comparison
  • Highly attractive visual error with the colour reddish purple omitted. The missing colour affects the bottom right stamp from the block resulting in the loss of flowers and leaf shading on the Red Campion and shading on the Wood Anemone.
  • It is available today at a 58% discount to full retail price and represents the price you would have paid for this great rarity 20 years ago!

There are only two in the world… and this is the best one

Long Island 1916 (7 May) ½d black on pale green paper with horizontal grey lines, error, SG4a 

PRICE: £5,500

CLICK HERE TO BUY IT NOW

  • Startling error showing the “G.R.I.” in double (with the first impression under “G ISLA” of “LONG ISLAND”
  • A major rarity, being one of only two recorded, with this example being much the finer of the two in existence and a superb quality right marginal mint example
  • A hot area of the market recently, with a similar rarity to this from Long Island selling for $13,000 at auction this year
  • Superb provenance as it once belonged to the famous Long Island Mountrobeck Collection and was part of a high-profile sale in 1994 through Christie's Auctions
  • Accompanied by a 1990 independent certificate of authenticity from the revered expert, Peter Holcombe

A Stamp fit for a Queen

New Guinea 1915-15 1d on 5pf green, 5mm space from setting II, variety, SG17ga

PRICE: £8,950

CLICK HERE TO BUY IT NOW

  • A fascinating variety of this beautiful stamp, showing “G.R.I.” without the stops
  • This is one of only two used examples known and probably the only chance you will ever get to own it. The only mint example resides in the Royal Philatelic Collection of Her Majesty Queen Elizabeth II.
  • Accompanied by a British Philatelic Association independent certificate of authenticity (1991) and Royal Philatelic Society certificate of authenticity (1965)
  • This major rarity is available today at a 19% discount to the Stanley Gibbons current catalogue value of £11,000

UNIQUE but still affordable

Nyasaland 1913-19 £10 purple and dull ultramarine on chalk-surfaced paper, Watermark MCA, perforation 14, variety, SG99c

PRICE: £10,000

CLICK HERE TO BUY IT NOW

  • This great rarity from the African nation of Nyasaland (now Malawi) depicts a classic King George V stamp design with the variety showing a nick in the top right scroll
  • The face value of £10 in 1913 represented the equivalent in value to over £1,000 in today’s money!
  • They don’t come any rarer than this as this is believed to be the only surviving example of this variety in mint condition
  • It is also one for the connoisseur being a wonderful fresh mint example with original gum and fine colour
  • Africa is an up and coming area of the stamp market with SG catalogue prices rising considerably in the past three years
  • Accompanied with an independent certificate of authenticity from the British Philatelic Association (2009)

A safe haven for the year ahead

I truly believe each of the stamps I have selected for you today represent sound long term investments. I also picked them because they are rarities I think have an above average chance of showing growth in value in the year ahead.

I sincerely hope that the oasis of joy within the rare stamp market will extend to everything else and next year will prove a better year all round for everyone.

As always, you can reserve any of these rarities, before someone else beats you to it, simply by contacting me by e-mail at mike@paulfrasercollectibles.com.

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

As this is my last communication of 2020, I wish you a Happy and Safe New Year and hope you are able to spend some much-valued time with your loved ones.

Kind regards

Mike Hall

CEO, Just Collecting

PS. Stamps are famous for being the most valuable commodity in the world by weight and look set to become even more valuable in the year ahead. 

PPS. If you are interested in building a valuable stamp collection over time, but need some help and guidance, please organise a call with us. You can schedule a call by clicking on the link below:

 SCHEDULE A CALL

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