Scott #80 Sold For $340,000 + 18% Yesterday

These people are not a "herd". These are very knowledgeable people, almost all with many decades of experience in the stamp market. And these are people with a large and serious clientele who know what they want and have real money to spend. And they often have their professional knives into each other as well. Believe me, they would all love to stick it to the others financially if they could, and they would brag for years if they did so. Even among dealers who are friends, there is a certain amount of competition. If they did not bid it was for sound business reasons of market and client. Nothing else.

This is an interesting thread and I would like to chime in. I see similar assumptions that get made in my profession, numismatics. A seasoned professional assumes that he/she has a read on their respective markets, and more times than not, they do. However, to make a universal assumption, such as since the dealers who had access to this one conduit (which in this case is the aforementioned Siegel sale) did not see the value in a particular item, then the item could not possibly be worth more than the sale price....well, that's just short-sighted. Obviously variables like new collectors, changing market conditions, and future scarcity of existing multiples as they get broken up for various reasons all come into play. These are all x-factors. Irrespective of our experience or market exposure, it is ludicrous to think that our know-all, see-all crystal ball can forecast these variables 100% of the time. Ten years ago, I quietly came back into this hobby. So did two of my good friends. Most of you don't know us, but I will say that all of my group have made a significant financial investment in our respective collections. For all you know, all 3 of us may be quietly buying multiples and socking them away for purely speculative reasons. To rely exclusively on existing knowledge and trends to try to make universal predictions for the future of the stamp market, or any market for that matter, has got more holes in it than a piece of Swiss cheese. I am not selling anybody's knowledge on this forum short-I have learned volumes just by following these threads and soaking up all of your philatelic expertise. But, I do know a little about markets, and the dangers of trying to predict outcomes with 100% accuracy is flawed, at best. This collector who bought the #72 block may have very well gotten a great buy. That's something only the future will tell, and all the stamp dealers in the world with all of their infinite wisdom could not possibly argue to the contrary. Just MHO, in the "for what it's worth" department...

"For all you know, all 3 of us may be quietly buying multiples and socking them away for purely speculative reasons."

Sure, you might be. But you could hardly keep that quiet from the people who have them. Since you could hardly be likely to know a lot of collectors looking to sell blocks, the only places to find them are dealers and auction houses. Other collectors might not know, but how long do you think that would stay quiet between dealers? Even if you only bought material from one specific dealer, he would have to get the material from somewhere. No one has everything. The market would know very quickly that someone or some group was buying blocks, and they would start coming out of the woodwork very quickly.

I guess revcollector, my point is, your assumptions and predictions are based on a status-quo model. If the market were to remain static, it would be predictable and you could say with a degree of certainty what is and isn't going to happen. But that is not the nature of stamps, or any market for that matter. It is only a matter of time before a collector such as myself starts to network with end users and buy potential candidates for my personal collection without the exclusive aid of auction houses or the dealer community. Bill Gross did it by hiring Charles Shreve as an agent, and quietly bought many important properties outside of auction. It happens in the coin business all of the time. A new collector will spend a certain amount of time on a learning curve paying his/her dues, so to speak. But once they paid their tuition, they start to function more independently, and their actions become less obvious to the general public. Kudos to the collector who bought the #72 block. Yes, today it may seem like an average purchase at best. But none of us know what tomorrow holds, and there just may be another group of future collectors who will fight hook-tooth and-nail to buy that block at significantly more money. The only thing an auction price ascertains is what a given item is worth at that moment in time to a very specific group of people.

Charles Shreve was the partner or owner of auction houses (Ivy, Shreve and Mader, Shreves Philatelic Galleries, Spink Shreves Galleries), with MANY philatelic connections. I am sure he used ALL of them in acquiring material for Mr Gross.
One of the unchanging things about philately over the last 150 years is that CONDITION IS THE ALL IMPORTANT FACTOR OF PRICE. That has been written countless times in countless places. Rarity matters, and popularity matters, and a good story matters, but condition most of all. There are a tiny handful of exceptions to this, all with famous stories going back over 100 years (which these blocks do not come close to having). Even the C3a shows this. The finest one just brought $1.3M, but an example with a straight edge, no gum and small faults might not bring more then $200,000.
Sure, it's always possible that two collectors get in a firefight over these blocks some day, but it is not the likely scenario. The fact that so many multiples have been broken up for graded singles and pairs over the last 15 to 20 years should be enough to prove the block market is not remotely what it once was.

.....Precisely why I submit that this area could be due for a renaissance. It's hard to think "outside the box" when you apply current trends to a scenario, and presume that these trends will continue indefinitely into the future. This is the element that none of us know. Yes, GEM material is very hot and with the advent of third party grading, it is experiencing both market exposure and wide-spread acceptance. But I have seen this "run it's course" in numismatics, and collectors are no longer just buying numbers on holders. The concept is not as established in philatelics but I think you will see a similar evolution. That is not to imply that grade doesn't matter-it always has, and always will. What I submit is that a slightly off-quality stamp perhaps is undervalued in today's market, solely because we have used numerical grade to quantify value. But, I digress...Going back to my original premise that as multiples get broken up and disappear, they "could" become more desirable. There is no denying their increased rarity. It could become a simple supply and demand correlation, resulting in increased valuations. I don't think that's a difficult or unrealistic concept to put your arms around.

I have only been involved in the hobby 60 years. General attitudes about damaged stamps have not changed in all that time. Why do you expect them to change now? If you want to think the buyer got a major steal, and should expect a huge windfall profit down the road, fine. Look at the mint block prices for #71 and #77 in power search. These are nice blocks, but they are not the British Guiana, or the 3 skilling Banco, or the Dawson cover with stories famous the world over.

None of us knows what the future holds. Fads and tastes change. Whose to say that 20 years from now that the desirability-of-blocks pendulum won't swing the other way? Sure, blocks have been out of fashion for a long, long time, but whose to say that this is permanent? A $100K CV (damaged) block sells for 10% catalog. Suppose it sells to a collector that preserves it intact. In 20 years, after the other 4 or 5 blocks (today's count) have been broken up, so our collector's damaged block is now unique, the one remaining block is sold. Using today's dollars, and in a block-friendly environment, it would still not sell for CV, but it would certainly sell for more than 10%. At that point, you simply need two people who see it for what it is - THE unique, last-of-the-species item that each must have to complete a collection. If blocks become hot, then you could well see MANY collectors driving up the price. For every argument for a blocks-are-going-to-continue-to-lag future, there is an equally cogent argument for a block-friendly future. As with ANY market, there are swings in that market that are based on the tastes at that time - tastes that were unpredicted years earlier. Anything is possible. Out of 1000 people, there are probably 1000 different predictions for the future of a complicated system - AT LEAST 999 will be wrong. And at least a few dozen will admit that they got it wrong.

If there becomes only one block left and two people want it that is all that you need. It is quite simple. Time will tell but I believe that those purchases of the blocks will be seen as shrewd taking of opportunities in the future.

"These people are not a "herd". These are very knowledgeable people, almost all with many decades of experience in the stamp market."

Your argument holds little water. I am sure the thousands of brilliant financial minds, from Ivy league schools who worked at Lehman brothers and other Wall St folks who endlessly analyzed markets for a living thought they knew how to make smart investments based on good information.

If these dealers were all so stellar, knowledgeable, thriving, and building communities of collectors, I'd go visit them on Nassau St, NY. Oh wait- they anticipated that.

One more thing, past performance is a horrendous indicator for future results.

The stock market and the stamp market are two vastly different things with little or no comparison between them. Just the sheer quantity of people and saleable items involved in the stock market makes it a very poor comparison with stamps.
I spoke with a major player about this today, someone who was involved in buying at the sale. He told me that both blocks sold for the right price and that they are very difficult items to sell.
And the fact that most of today's dealers don't have brick and mortar stores does not mean that they aren't highly successful on line, at shows, or wholesaling. Or all three. Apparently some here get much too hung up on catalog values and not enough on condition.

Yes, the stock market and the stamp market are vastly different, as are the oil market and the rectal thermometer market. HOWEVER, they all are governed by the principles of economics, at least to one extent or another. On the supply side of the equation, we can state with a fair amount of confidence the total # of a given issue's blocks will likely not get significantly larger over time, and most likely go down over time. As for the demand side of the equation, we simply don't know what the future holds. Especially on something so 'unnecessary' as old postage stamps. They have little intrinsic value, and don't serve any real purpose. Other than to make people feel good about what they do on a Saturday night when they can't get a date. We can't (well, I can't) know what sub-category of stamp collecting will get hot 20 years down the road. If the vagaries of the human condition cause blocks to make a comeback, the demand side of the equation can go way up. Some people seem to be dead sure that this can't possibly happen because that market has been dead for so long. As someone said, past performance is no guarantee of future results. I can imagine a universe where discussions such as this one cause people to realize that the break-up of rare classic blocks may cause these things to become extinct. Just like some people like to make their cause 'tearing down dams to save the salmon' in a certain river, there may very well be people who adopt the cause of block preservation. It's not that far-fetched. Suddenly, there's more demand, and less supply. What do you think will happen? I doubt there's a brilliant mind ANYWHERE that can predict what ANY market will do (in any great detail) in 5 years, much less 20 years. Opinions abound, but no one knows. To state that the current state of the stamp market (you can talk to all the experts you want, but they only know what's happening now and maybe a few years into the future) will be the state of the stamp market decades from now is ridiculous. Some people see an opening in the rare block market. Who's to say they are wrong? After all, investing in buggy whip makers seemed a shrewd investment at one point, and uranium ore was simply a nuisance. Throw in the 'predictability' of the human factor (since stamps really only have a value based on that human factor) and you've got no idea what stamp collecting sub-category will be hot in 20 years.

Revcollector, with all due respect, you are very knowledgeable and by all definition, a well schooled philatelist. But your years in this business seem to have blinded you to the concepts of change and evolution. To infer that "what is, is all that could ever be" might be based on your 6 decades of past experience, but is not necessarily accurate moving forward. Furthermore, do we really want to discourage a collector enthusiastic about what appears to many on this thread (present company included) to be a great purchase? Let's preach words of encouragement and optimism so collectors remain passionate about this great hobby 60 years from now.