The Biggest And Most Destructive Lie In The Hobby Of Stamp Collecting

No stamp has a "value" that is stagnant. On any give day:

There is price it will get as part of a larger collection which sold a a lot.
There is a price that is will get sold as a single stamp to a dealer.
There is a price it will get sold to a collector at auction
There is a price it will get sold as a private transaction.

Add a certificate, and all three of the above prices will change.

Or selling a U.S. stamp here in the states, v. somewhere else in the world

Or special circumstances, like several collectors are all actively chasing after the same material at the same time. Or similar material has been up in a couple of auctions recently. Or the economy is down, and folks are not spending as much.

Which one of the above prices is the "catalog price"?

The whole point of a "catalog price" is to give you an approximation of the value of a stamp given the supply and demand. When it is listed as "worth" say, $350, nobody should believe that is an absolute. It can't be, because the price can vary due to lots of variables. What the catalog is telling you is that you are unlikely to find it for less than $200, and probably won't have to pay $500 for it.

And, when that stamp starts selling pretty regularly for $200 or $500, it is time to update the catalog price.

"There is price it will get as part of a larger collection which sold a a lot.
There is a price that is will get sold as a single stamp to a dealer.
There is a price it will get sold to a collector at auction
There is a price it will get sold as a private transaction.
"

The correct price is what most people pay on any given transaction.
1) Take ebay and hipstamp avg price
2) Take one bid before the winning bid at auction (credit to poster on a few comments back)
3) is what we do now. List a price that 99% of the time no one pays.

1 or 2 are acceptable and the place we should start at. 3 what we do now is self-serving to the dealers and really the reason not to buy a catalogue. Nonsense prices.

That would be the correct answer if people paid a consistent price. So, here is a list of Scott #236 Mint NH that recently sold on ebay. These are priced paid:



What should the catalog price be for Scott #236?

In my opinion, there shouldn't be any subjective pricing in a catalog. Instead, there should be a subjective 'rarity factor'.

The objective pricing in a catalog should be data-based. To develop a reliable data-based pricing; there needs to be a large data set from which significant sampling can be derived.
Don

What would that look like? Isn't that basically what the prices are?

For example, Scott* says #145 used is worth $20. #135 is worth $5.75 and #206 is worth $1.00. Doesn't that tell you the relative supply and demand of those stamps?

*2022 catalog prices

Perhaps this is an unpopular thought but I feel like if the prices were all changed, the same trend would just re-occur. So for instance, if we used a "most stuff sells for 10% of catalog" as a base generalization and then took a catalog and made most or everything 10% of the current price, with a statement saying "this is the expected average selling price but XF examples can sell for much more", in some number of years later, everyone would be looking to pay some percentage of these new values. Psychologically, people often want a bargain and paying 100% CV every time for a stamp might not just simply be the new norm with adjusted prices. Mentally, even if the end price is the same for the same stamp, I'd rather buy it at 10% of CV then 100%. Obviously this may be the opposite as a seller, dealer, re-seller, etc, but sometimes as a seller it benefits to be able to say "Selling this collection at 10% of CV - what a bargain!" (Lol ignore the cheesy sales pitch but you get my point). It might be hard to just list every item at CV and expect it to sell for that.

Now again, this is just a generalization and depends on selling method, platform, and what stamps we are talking about. But what comes first - The final realized selling prices or the catalog values that give some baseline information of a best expected price that can guide those selling prices? Just some food for thought!

"So, here is a list of Scott #236 Mint NH that recently sold on ebay. These are priced paid:"

You would have to take in more data than what you posted. But the catalog value for MH is probably around 100 bucks and may be 150 for MNH.
The answer is less than that. Even in your example it sells for less. The better thing for the catalogue is to list prices that actually sell. So in your example, it could be closer to 50 dollars for MNH.
That would be more useful that the occasional stamp that sells for 150. For every one stamp that sells for 150 maybe 1 gets sold for more and the rest much less. That is why zero people pay catalog for anything. The prices are all wrong.

Generalization is a good word when discussing subjective opinions like 'catalog value'. And I think this is why rarity factor (something like a 1 through a 5) is better than a valuation. And I agree with the points made above about catalog values being used as marketing fodder and collectors falling into the trap that they are actually true market values. Look at how catalogs are marketed; you will always find something like "10,000 value updates". You do not ever see anything like "10,000 value updates due to us simply accounting for inflation".

This is about demand; the majority of collectors, dealers, and companies who want to see higher catalog values than actual market values.

So, this is what we get. This contributes to having so many silly values on ebay. This contributes to disappointment when new hobbyists find out that a catalog value cannot be taken at face value and actually requires much more 'special knowledge' (i.e X% of catalog value) than their $800 catalog investment got them.
Don

Sorry for the double post, but allow me to rephase my opinion...

The most dangerous thing in philately is to be disappointed when the evidence does not support your beliefs.

Don

You are correct... in theory. Many extremely specialized and niche catalogues use this approach, but they cater to extremely advanced collectors that have sufficient knowledge to turn that into a dollar value. This approach does not work for the average collector, and especially the novice/general collector. How do they convert R2 into a dollar value, since at the end of the day that is the measurement that they have to use to determine the dealer/seller they are buying from is being fair in their pricing and/or how much they can expect to pay.

Additionally, an R1 to R5 scale doesn't have anywhere near the granularity required to price material.

A valueless catalogue system industrywide is dead on arrival, in my opinion. It would fail immediately.

It's useful for experts who already know their area front to back, but is useless for 90%+ of the collectors out there.

There is no static price for any collectable.

I had a stack of a limited edition Edward Gorey posters. Only a 1000 were made for a special event, and it was never reprinted. I put them up on ebay. One week I'd get $45. the next I'd get $120. This is for the exact same item with the exact same listing.

I've put items up starting at $25 and gotten no bids for several weeks in a row. Then it gets bid up to $45. Same item, same listing.

Stamps prices are under the same constraints: there are factors beyond the general supply v. demand that can change what the stamp sells for one week to the next.

Yes there are collectors who will not pay more than some percentage of catalog. And I'm sure they enjoy the hobby. But they are also going to find that there is some material that they will never be able to purchase.

Agreed.
But cannot the same thing be said about the 'catalog values' published today? We have not endlessly seen repeated in our hobby, 'oh catalog values are best used in a relative way'?

As has been previously mentioned, there is little doubt that the majority of catalog buyers want to see catalog values that are higher than actual market values.

If catalog publishers were not simply being influenced by the 'good old boys', dealers, and others who want to see higher catalog values, then let's see the data or at least the selection criteria and methodology they use to form their catalog values opinions.

But I think little of this matters because the day is approaching where there are big enough data sets and quantified sampling that they will be forced to move away from their opinion based model. From my chair it would be a 'no brainer' for me to buy an accurate data-based market value catalog over an opinion based catalog value.
Don

What makes collectables any different than other sold things? I can get Carvana to buy my car today and therefore they have to be able to understand and be accurate about a market value. (Today, right now. If I ask again tomorrow the price they pay will change.) Cars come in millions of combinations of models, options, conditions, etc etc etc and are more complex things than a simple, small pieces of paper.

If you have enough data, this is VERY doable.
Don

Used cars are like stamps. There is still a kelly blue book for used cars. No not every car will sell for that price. Some more and some less. But at least they are close.
The current catalog prices in EVERY major catalog are wrong. They are mostly over priced. One day the major catalogs will get a a clue. The first person that puts out real catalog will make bank.
There is a huge demand for real-time pricing.

No worries. I am working on a new 'Don's Stamp Catalog' where I publish my opinion for catalog values. Luckily it will be very easy to do annual catalog values updates.

Don