On Modern stamps that are "Tagged" is this how you find it?
No, you will need a short wavelength UV light source.
I have been looking at watermarks on the envelopes of some of my embossed, and you can see it in the paper. Haven't tried to look for something on a stamp.
I would say the majority of watermarks can be determined by simply holding the stamp up to a light and looking at the back of the stamp, or simply putting the stamp face down on a black surface. However, some watermarks, such as the US watermarks and some of the more recent British Commonwealth watermarks, are difficult to detect without using watermark fluid.
And how does it work? And where do you get it? It's about the only "supply" I haven't found. Do you need black light too?
You do not need a UV lamp. You will need a shallow black tray, that can be purchased along with the watermark fluid. Put the stamp face down in the tray, and pour fluid into the tray until the stamp is either well wetted (or completely immerse stamp if watermark is difficult to see). Once the stamp is wetted, you should be able to see the watermark pretty clearly.
Purchase watermark fluid from a stamp dealer. Some old-fashioned collectors still use lighter fluid. Yeah, it does the same trick. Of course, they often also smoke around their stamps, too!
The watermark/lighter fluid will evaporate pretty quickly when your remove the stamp from the tray. It only takes about 15-30s for the stamp to dry. Meanwhile, I would pour any excess fluid back into the container. Watermark fluid is not that cheap and evaporates very fast. I would strongly recommended accumulated a several stamps that you have to ID the watermark, before actually pouring the fluid. Then again, I'm sort of a tight-wad.
If you use watermark fluid, doesn't it wreck the gum?
No it does not. It contains no water.
How do you check OLD stamps on hinges without ruining the hinge or stamp.
You will not ruin the hinge with watermark fluid. However, if the hinge happens to cover up some essential part of the watermark, you may not be able to see it clearly. In that case, you will have to remove the hinge first.
There's a good article in Linn's Refresher Course on using watermark fluid. I will try to find the link.