The world of stamp collecting and investing is complex and often misunderstood. When considering buying investment grade stamps, you are looking at less than 2% of the stamp universe. However, advice from dealers or collectors is limited and heavily biased. Auction houses provide a more objective view for stamp investors. Those who identify themselves as investment buyers to stamp dealers or philatelists often face backlash from collectors who have spent years building their collections, only to see the prices of high-value items driven up by investors. Collectors may ultimately take a beating when selling their collections, as they often paid retail prices for common stamps that are in abundant supply.
Dealers are also hesitant to view stamps as good investments, despite passing up few sales of high-priced items. Their main concern is acquiring these items, either by buying entire collections or bidding against investment buyers and wealthy collectors at stamp auctions. The economics of stamp investing differ from other products, as increasing prices do not necessarily result in an increase in supply due to the limited nature of collectible stamps. While some may view stamps as a poor investment, there are exceptions such as Bill Gross, who successfully invested in stamps.
Stamps are a unique investment, as their value is not determined by traditional economic theories. Unlike most products, increasing prices do not lead to an increase in supply, as stamps are limited in nature and owned by individuals who may hold onto them for long periods. The prices of stamps have been steadily increasing over time, with a brief exception in the early 1980s when price manipulations in silver and gold sparked a run-up in collectibles, including stamps. Many collectors and dealers were caught up in this short-term mania, only to realize they had been misled.
In conclusion, the world of stamp collecting and investing is a complex and often misunderstood one. While some may view stamps as poor investments, there are exceptions such as Bill Gross who have successfully navigated the market. The limited nature of stamps and the dynamics of the stamp collecting community can make it a challenging investment. However, for those who are passionate about stamps and knowledgeable about the market, there can be opportunities for success. It is important for potential investors to consider the advice of auction houses and to approach stamp investing with caution and awareness of the unique factors that can impact the market.
