Kelleher -June 2023 Collection Auction - A Monster Sale

NSK - No there is a distinction. A stock broker would be like the store clerk at the stamp store.
The dealer is an investor because he or she must acquire the inventory. A stock broker does not own the stocks that he or she sells.

Well, let's make it a bonds trader. They do take the bonds on their book to resell.
And the greengrocer also holds the inventory.

NSK - greengrocer - If you mean the manager at the store - No they are not investors. The owner of the Greengrocer is indeed an investor. They invest in fruit. They buy fruit at wholesale and then sell to you at a profit. They might even shop around for the hot or popular fruit and they will shop for suppliers.

I think you are trying to distinguish between a middle man and investor. They can be both.

The bondtrader can indeed invest in bonds for the person buying the bond. The bond trader can be just a middle person or the bond trader can invest in bonds if they work for a large firm whom invests in bonds. ie there are bond traders/investors who bet whether a bond will go up or down. Esp with interest rates and currency rates constantly fluctuating. This would be similar to a stamp investor.

Since Bonds have entered the picture along with "stamp investors" lets dispel the myth that stamps and investing go together by looking at William (Bill) Gross. Mr. Gross known far and wide as The Bond King is also well known for his United States, Confederate States' Postmasters' Provisionals, British North America, Great Britain, Scandinavia, and British Empire collections. He is also the namesake of the Smithsonian National Postal Museum's William H. Gross Stamp Gallery which he donated $10,000,000 to build. This man, the founder of PIMCO, sold all of his collections over time and by all accounts donated all of the proceeds to charity. He enjoyed collecting for collecting. As a financial giant he unquestionably what an investment was and what it was not. His stamp collections were not. They were however tax write-offs. If you take the time to research his major purchases against what they realized, you will see that his collections from an investment perspective were losers.

There are others such as Erivan Haub that demonstrate similar outcomes. We can't confuse making a buck on a stamp sale with actually investing in the truest sense.

I know a guy who spent multi-millions on his collection and viewed it as an investment. He recently decided to sell and was shocked to learn he was going to have to take a loss. Never once along the way did he try to learn how the market really works and what he could expect to get, he just kept plowing money into it.

Bill gross - He donated his money to charity because well he could. He did not need the money. He could have given the stamps away for free and it would represent the change in his pocket compared to the rest of us. Stamp collecting does not have to be an investment but it can if you want it to be. Anything that does not pay a good dividend or make profits is usually a bad investment. Stamp investing is really just a speculation. Dealers invest in stamps all the time. They buy low and sell high to retail. Some stamp collectors invest in stamps expecting to make a profit. Most won't but some will.

eyeonwall - This is why most people take a loss on stamps collecting. It is not possible for the stamp ecosystem to run if everyone made a profit. Most people must lose money in order for the dealers to get paid, their employees to get paid, CEOs and employees of album makers etc... all need to get paid. This is the same as people who own crypto like bitcoin. Stamps are like crypto in that no dividend is paid or profit is made. Not everyone can make money. Most crypto people do not realize this. And for the ones that say stamps are just a hobby. Sure for most, but you can invest in stamps and make money if you know what your are doing. And that is the key. Most people don't. Right now I am underwater if I tried to sell. However, armed with the knowledge I have now, I could probably invest in stamps and make money. I suspect that the posters on this forum with thousands of posts have the knowledge and experience to invest in stamps and make money. The avg stamp collector does not possess the knowledge to invest in stamps.

Ok, I'll bite. What would your approach be? Here are some ideas that have been tried, some more successfully than others.
- Buy and hold high-powered single items like from the Siegel Rarities sales
- Accumulating popular sellers (zepps, five dollar columbians, cattle in storm, penny black)
- Accumulating bread-and-butter mid-range stamps in good condition
- Cornering the market on items with low printing quantity
- Buying certified graded stamps in top condition
- Buying underpriced bargains or scarce varieties that were misidentified or overlooked by sellers
- Breaking down large collections into smaller affordable group lots for resale
- Buying shares of "the world's most valuable stamp" from Stanley Gibbons
- Speculate in specific under-appreciated countries
- Gamble on unopened Inverted Jenny souvenir sheets, hoping to get one of the uninverted ones
- Buying multiple sheets of every "Forever" stamp, at worst the postage value will increase around the rate of inflation, with potential for a few sleepers to double or triple or more

or do you have some other direction that you care to share?

Of the ideas you listed here.

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Quote:
However, armed with the knowledge I have now, I could probably invest in stamps and make money.

Ok, I'll bite. What would your approach be? Here are some ideas that have been tried, some more successfully than others.
- Buy and hold high-powered single items like from the Siegel Rarities sales
- Accumulating popular sellers (zepps, five dollar columbians, cattle in storm, penny black)
- Accumulating bread-and-butter mid-range stamps in good condition
- Cornering the market on items with low printing quantity
- Buying certified graded stamps in top condition
- Buying underpriced bargains or scarce varieties that were misidentified or overlooked by sellers
- Breaking down large collections into smaller affordable group lots for resale
- Speculate in specific under-appreciated countries
- you forgot an important one. Finding collectors or heirs who are motivated to sell to you below market.

Those are the best ideas above that you listed plus one. Now you have to have the knowledge both history and some smarts to get good at one of those things. The people who make money are very good at what they do with the ideas that you listed above. It's the domain knowledge. The vast majority of collectors will try the above but are not good at it. Most collectors lack the discipline, knowledge or experience and fortitude to pull off investing to make money. Look at this way. If you gamble on sports 2 out of 3 people make money. The book maker and the person you lost too. Even in a lottery someone makes money. The person who is most skilled at what you listed above will make money. However, most stamp collector money and investor money must go to the house to pay for the ecosystem and to pay off the person who was good at investing. The other key besides mastering the above strategies is know when you are going to exit and by how much. So many people lose money by holding on until it is too late.

Here is how the typical stamp investor starts out. I will only buy rare stamps. They buy a collection. OOOH that looks pretty and the next thing you know they are a world wide stamp collector who spends more on binders than stamps. Another stamp investor buys the right stamps except they bought one too many forgeries because of a lack of experience. Another stamp investor got ripped off by his or her vendor and the list goes on. Lastly stamp investing is risky because the future of stamp collecting is grim. Many stamp collectors are about to bite the big one in another 15 years or so. Thus, the common stuff and maybe better stamps are in real trouble long term.

I think of myself as both a stamp investor and stamp collector. Unfortunately for me, stamp collecting ate up all my returns. Alas I will be one to pay into the system.

You can index virtually every rarity in the stamp world right now and adjusted for inflation find that very nearly all would be losers in the sense that they either lost money or broke even when traded at auction. We don't know what happened in private treaty sales. And none of that would factor in costs such as tying up capital, commission costs, insurance etc.

Don, our moderator has a great presentation on the C13-15 zeppelin values over the years. Look at the C3a inverted Jenny sales. Use Siegel Power Search and do some homework.

The stamp World has tried for decades to entice people with talk of investment returns and many of the loudest hucksters have gone down in flames and ended up in court.

Call it want you want. If investor makes you feel good so be it. I really don't get the fever over using the term.

Stanley Gibbons introduced several stamp investment schemes. The portfolios consisted of rare stamps only. They even published a few stamp indices.
You will have a hard time finding anything of it now.

Even if you find rare stamps that have provided a good return over a long period of time, you are looking at those examples that are in pristine condition and not every single example. The return is that before the cost of holding on to the stamps.

NSK and Rodcam - the assumption you make is that you bought at retail or paid top dollar. Stanley Gibbons is top dollar and so are most lots won at auction. If you buy or get a good deal you can certainly flip it to the next person. Look I just lost an auction for over twice the 3rd bidder. Had the top bidder not come through, I would have had a great deal and the lot could easily flip to someone else for more than I paid for it. This is not just true for stamps. It's true for all collectibles including trading cards, coins, comic books, antiques. It's all what you acquire it for. As long as there is a market place there is money to be made. The argument against stamp investing is what I stated above. Stamp collectors will be few in the coming future in western markets. Just an opinion but soon it will be an even better time to be a stamp collector. The old baby boomers are liquidating their collections in droves. Even right now you can pick collections at a fraction of what someone paid.

And yes collectibles make bad investments overall. This has been proven time and time again. it is a fact that any security that does not make profit is a bad investment. That being said there WILL be people who beat the system. It's a market place. Look at an extreme example. Bitcoin is essentially worthless. Yet some people will make money speculating in it. Likewise, there will be winners in the stamp market and there will be more losers. Look at an investor like NYstamps. Do you think they are losing money? They buy at wholesale lots that they think will go up; once broken apart they make money. They are really great at what they do. Experts in what they do. Many stamp experts look down on them. I admire them for their business savy and the niche they fill in the market place.