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Cornering The Stamp Market

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Posted 10/23/2020   2:23 pm  Show Profile Check eyeonwall's eBay Listings Bookmark this reply Add eyeonwall to your friends list  Get a Link to this Reply
Shermae - yes Afinsa was manipulating the Europa market. Greg Manning had some involvement.
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Posted 10/23/2020   2:28 pm  Show Profile Bookmark this reply Add rismoney to your friends list  Get a Link to this Reply

Quote:

I have heard stories of modern error dealers trying to corner markets. (Which I assumed to be about dealers who work in collusion with printer employees who were slipping printing waste out the back door.)


Not just stories. scandals. https://caselaw.findlaw.com/us-2nd-...1374663.html

I collect errors and cornering modern errors goes more like this. There are only a handful 5? dealers who specialize in modern errors. If a discovery is made by Joe Buyer at the post office who bought 2 "busted" panes, Joe googles and calls around and sees how to profit from his discover. They call a couple of dealers and get quotes. One offers $250 or maybe $500 or a $1000 a pane if its something nice.

He sells his sheets for 20x what he paid $50 yesterday. Noone knows this yet. Then dealer sits on it...waits... He needs to know if any other panes come out. Maybe he waits, and nothing else surfaces and then notifies Scott/Linns and sends one in for certification (they need to prove imperf/color omit is indeed real and legitimize a scott listing-aka the holy grail). He gets word back it's good, and tears up the 1st sheet into singles/blocks. And then samples the market. Throws a single/block on eBay for a crazy price of $3000. He muddies the water and dumps a better block on Cherrystone. Sets the reserve to $1000 and advertises it as undiscovered, unlisted. Folks jump on lot, and run it to $2000. He made back his initial investment, he's now sitting on an unbroken pane (the prize) and the ability to trickle one at a time at his hearts please either through auction or at exorbitant retail. He's cornered the market, got the listing in Scott, and noone can get a stamp except through him. The whole thing is now pure profit, and maximized prices for a finite supply.


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Posted 10/23/2020   6:03 pm  Show Profile Bookmark this reply Add jkelley01938 to your friends list  Get a Link to this Reply
jogil,

Who would have ever guessed that a $24- investment would yield a $19,999,976- profit?

Jack Kelley
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Posted 10/23/2020   8:16 pm  Show Profile Bookmark this reply Add rogdcam to your friends list  Get a Link to this Reply
I tried to corner the kiloware market.
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Posted 10/23/2020   9:57 pm  Show Profile Bookmark this reply Add stamps101 to your friends list  Get a Link to this Reply
Rodg... ummm can I assist you?? Please!
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Edited by stamps101 - 10/23/2020 9:57 pm
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Posted 10/23/2020   10:52 pm  Show Profile Bookmark this reply Add No1philatelist to your friends list  Get a Link to this Reply
Cornering the market, is an interesting phrase and idea. It definetly would not be an easy thing to accomplish, yet alone profit from as it is literally impossible to do with the vast numbers of stamps. Yes, it is interesting how price can be manipulated and catalogue values assigned.

As Jogil mentions in particular the 92 canada souvenir sheet. Printed by the tnousands! The dealers grabbed up the majority, and the Unitrade catalogue price quickly rose to $125.00 and still listed at that, even though you can pretty well purchase them regularly for $20.00 or slightly more.

And yet, when very few unitrade #699i booklets were released and found, as confirmed by Canada Post they only listed at $50 the first year. The dealers had little or none. Then a couple were sold to market over 2 years and for a good prices as set by public demand and only then did the catalogue value rise to $500. Still a very nice scarce modern booklet variety.
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Edited by No1philatelist - 10/23/2020 10:57 pm
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Posted 10/23/2020   11:37 pm  Show Profile Bookmark this reply Add stamps101 to your friends list  Get a Link to this Reply
I kinda look at this as having two possible goals. If it is simply for the adventure of the hunt, than that is one thing and if you have the patience and bankroll, then power to you. But if doing it for profit, I don't think the risks and time/money costs will lead to worthwhile profits often enough. In order for it to work, you would want to have an assured quantity where you absolutely know how many are left out there and then want to own a good percentage or have ready access to a large % before even starting the task. And finally, you would want to know or have an idea of where the majority of the remainders were or have the market reach to locate and acquire before others figured out what you were doing and kiboshed the efforts.

Some anecdotes in this thread serve as some evidence but I also think to something I recall hearing Rick Harrison say on Pawn Stars. He rarely considers buying coins from a recovered sunken ship. Even though the history can be unique and amazing, if you are paying for that and rarity alone, who's to say in five years, another chest comes up and half's (or worse) the value of whatever you own as more hits the market.

But I agree - this is a great topic and excellent stories and anecdotes.
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Posted 10/24/2020   08:11 am  Show Profile Bookmark this reply Add floortrader to your friends list  Get a Link to this Reply
Cornering the market ,the other part of the puzzle is having something people want . I understand cornering something like food or fuel . But cornering a variety on a recent booklet issue of Canada doesn't sound like something most people care about .Even to Canada stamp collectors .

So the important part is, are collectors willing to chase after it . You can use the example of the "Burning Match " where a group of people stand around and passing a burning match, you pass it fast because you all know the last person to handle it is going to get burned .
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Posted 10/24/2020   10:15 am  Show Profile Bookmark this reply Add jogil to your friends list  Get a Link to this Reply
Let's take an interesting stamp like Canada # 3 which is desired by many Canadian stamp collectors but is affordable to a few. According to the Siegel census (https://siegelauctions.com/display_...us.php?id=37 ) there are around 77 stamps with 33 mint stamps (25 mint singles, 4 mint pairs) and 44 used stamps (36 used singles, 2 used pairs, 4 used singles on cover). If you have the money, you will usually not have difficulties in being able to get a copy of this stamp.

Interestingly, the same census for Canada # 1 (https://siegelauctions.com/display_...s.php?id=322 ) has 17 mint copies (11 mint singles, 1 pair and 1 block of 4) listed.

Interestingly, the same census for Canada # 2 (https://siegelauctions.com/display_...s.php?id=323 ) has 12 mint copies (10 mint singles and 1 mint pair) listed.
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Edited by jogil - 10/24/2020 10:29 am
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Posted 10/24/2020   11:55 am  Show Profile Bookmark this reply Add cjpalermo1964 to your friends list  Get a Link to this Reply
Hypothesis: cornering micro markets is one reason that services offer grading and dealers transact in graded stamps. When a dealer can say, "the only stamp N graded 100J in the population report," they have cornered the market for that stamp at that grade and can set an inflated price. The goal is a mini monopoly with which you can name your price. The grading services willingly facilitate because every successful inflated-price sale motivates the hunt for the next patient. This is what cornering means as a practical matter in philately today.

Just a hypothesis.
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Posted 10/24/2020   12:08 pm  Show Profile Bookmark this reply Add Climber Steve to your friends list  Get a Link to this Reply
"yes, Afinsa was manipulating the Europa market...." Which is a reason why the stamp catalogues in Portugal are now Mundifil catalogues instead of Afinsa.

Thanks for the reference to Antonius Ra. I notice the name of Mitch Seymour. I have country pages, by a Bill Seymour, previously bookmarked. Wonder if there is a relation?

In terms of "cornering a market," I recall, as a kid in the early 1960s, when H.E. Harris went to court to prevent the Post Office from printing more of the Thatcher Ferry bridge stamp, for the Canal Zone, that was missing the bridge. He had the one sheet that was found and was successful in his litigation.

Legal efforts by others, during the same time period, were not successful in preventing the Post Office from printing millions more of the Dag Hammarskjold invert.
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Edited by Climber Steve - 10/24/2020 12:16 pm
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Posted 10/26/2020   2:55 pm  Show Profile Bookmark this reply Add steevh to your friends list  Get a Link to this Reply
Cornering the market for a stamp -- seems like a good idea on first inspection, but is it?

As you buy up the supply, the price will rise, and then peak when there are few remaining copies left ...

On paper you will have made a huge profit -- if the stamp is now catalogued at 5 times what it was before you cornered the market, your 'paper' gain might be of 200-300%.

But then what happens when you try to realize this paper gain as an actual gain? As soon as you start selling the price will fall...

...

By comparison, you could examine scenarios in the real world where people might attempt to corner the market in some valued resource. The obvious candidate to my mind would be rare earths. Right now the Chinese have a virtual monopoly on production, and they are in high demand for all the latest tech.

But the apparent monopoly wouldnt last very long. There are multiple alternatives, but are currently not operating because of environmental concerns (eg the mine in California). If China really did embargo the rare earths, then other countries would temporarily shelve environmental concerns in the national interest, and re-open these sources.

I really don't see how you could make money out of cornering the market in a particular stamp, even a great rarity.
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Posted 10/26/2020   4:27 pm  Show Profile Bookmark this reply Add rismoney to your friends list  Get a Link to this Reply
steevh - you definitely can corner the market, but it becomes a question if anyone cares.

If you have more people interested in the stamp than there are stamps, and you own all of them, then you have an effective cornering situation. Basically a scarcity situation. You can build a sliding scale of prices 1 way or the other, depending on how well you conceal your stash. But if it is just a rarity, in absence of demand, then cornering isn't most likely effective.

I feel like the CIA inverts haven't appreciated in years for this reason. One would figure, someone would try to make a play on supply, but it's surely not effective once a percentage of stash gets back on the market, and undercuts you. Now if there were >100 people ready to pay upwards of 20k for it, then that's a different scenario, and not one that exists today. CIA's are not even competitive auctions, and every dealer already has a spare just in case.



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Posted 10/26/2020   8:07 pm  Show Profile Bookmark this reply Add floortrader to your friends list  Get a Link to this Reply
I like to make a possible correction to the AFINSA story here .

AFINSA didn't try to corner the stamp market . As I understand it ,they started a investment account for people who had saved money for their retirement and offered some outraideous fiqure like 8% or 12% on your money and they knew if they put peoples money in stamps they could raise the price of stamps in their catalog .


The problems started when tens of thousands of people flooded their money into this investment account ......WHAT IN THE WORLD DO YOU DO WITH BILLIONS of dollars ? You can't buy enough old stamps ,so you go to various governments and ask them to print stamps just for you .....remember we are talking billions .They lost control .


That is the way I understand it It was a scam on people who had life savings and pension money that was lost . They got overwhelmed because the money poured in .
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Posted 10/26/2020   8:16 pm  Show Profile Bookmark this reply Add floortrader to your friends list  Get a Link to this Reply
On this subject of cornering the market .....you first have to understand how big the supplies or inventory is and weather you can buy enough to make a difference . The second is making or feeding the demand ,then your selling and buying to push it higher . After it risen high enough then you offer your whole inventory to a sucker who thinks it will continue climbing after you exit with your profit .
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