New Stamp Investment Idea At San

I think we've gotten a little off track here. Tom Droege's proposal isn't a scam. The question is "Do do you think it will work?"

so off topic here again, but reading the previous link ikeypikey added, a fabulous quote was in there, I just had to requote. One I shall abide by.

Not saying that SAN nor Hip's investment vehicles/plans are scams. History of other philatelic investment efforts is well worth noting though.

"Russ, I put my beer and cigarettes' money into stamps. My time is better spent with them. They will not make me rich but they will be worth more than a pile of empty beer cans and cigarettes' wrappers."
Ray Sinn

Enjoy the pleasures of our hobby.

"There is one born every minute". P. T. Barnum

cavate emptor

Fundamentally, the SAN offering is a data play. Tom has a proprietary database of transactions that no one else has, so he's seeking to sell that data at $1K or $2.5K per year to people who will use it, alone or with others, to make decisions on what to bid on (and then bid using his agent service). He's positioning SAN like Bloomberg, a data service that people then use to make other decisions and ultimately investments.

To make this work, the customer must first have accepted the viability of "investment-grade" stamps (apparently stamps priced at above $5K with certificates) as a 5-10 year investment. The problem is that unlike NYSE market data, Tom's data isn't transparent, and can't be independently validated, so there is no way to know whether stamps have been a good long-term investment, or even whether the data purchased from Tom is correct. It could be, frankly, fudged.

So a cynic would say, if your data is that good, why not go all the way and act as an end-to-end data supplier AND advisor, and take the risk that people will sue you for fraud or misrepresentation if they follow your advice and data and the investments fail. He wants to make money from the data alone, and pass that risk to others.

The white paper suggests that appropriate investment is $50K to $100K. This concerns me because it is relatively low as alternative investments go. For proper diversification, that level appears appropriate only for people who have $500K to $1M in investible assets, that is, NOT retirement funds, but cash, real estate or other securities AND a tolerance to lose 10%.

My forecast is that this succeeds only with an extremely small customer base, maybe 25 people per year. For most, the inability to see, before committing $1K or $2.5K, whether the data actually shows positive returns, and the inability to confirm that data with others, will be a serious deterrent. And most collectors won't have the $50K to $100K of free investible cash that's needed to make $1K to $2.5K in transaction costs worthwhile.

That seems like a pretty good analysis. Interesting comparison to Bloomberg - and appropriate.

Everyone these days, is trying to figure out new ways to monetize data, of all sorts. It is a new 'natural resource' these days which is being seriously mined for cash.

These investment opportunities tend to rear their head more often when economies are good. The US economy right now is smoking hot with low interest rates and 2% inflation and few if any negative indicators. I expect to see more. Of course, things will change and I personally would not expect these vehicles to survive much of a downturn.

Agreed there currently appears to be plenty of folks with expendable income; in October US citizens spent $480 million on Halloween pet costumes. No self-respecting dog would ever like being dressed up!
Don

On a more serious note, I hope this helps stamp hobbyists better understand how their data is being sold. Google is not 'free'. StampWorld is not 'free'. Facebook is not 'free'. SANS is not 'free'.
Where we go, what we look at, what we click on, what we buy is all data that is being harvested, packaged, and sold.
Don

Google Australia top Hits for "DIY" 2019

The URL includes an apostrophe, which is a catastrophe.

https://www.internationalinvestment.net/ ... begin here

Search for { stanley gibbons } sans the curlies.

That search fails.

Find (the hard part) and select [ Full Archive ]

Look down the page a bit, and find the headline:

No stamp of approval for Stanley Gibbons' failed Guernsey investment vehicle

Cheers,

/s/ ikeyPikey

The third sentence in those twenty-two pages reads:




It takes a brave soul to recite that sentence aloud with a straight face, and ignore the delicious double entendre.

Cheers,

/s/ ikeyPikey (whose impression of Mr Droege is entirely positive)

The problem with these investments is the 20% in juice you pay on the purchase and the 10% you pay to sell .....it is hard to see a profit when the broker makes that much .

And the tax man wants a cut......unless you deduct the loss.

Bravo Mr.Pikey,
Chicanery, but finally got there...Thank you.