Financial Poise
Stamp Collecting and Investing

Wealthy Still Investing In Stamps Amid Overall Slide in Value

Billionaire Philatelists Chase Trophies, But Can Average Collectors Get the Same Returns?

There’s been a dramatic divergence of fates in the world of stamp collecting when it comes to investment values. Billionaires still trophy hunt ultra-rare specimens, but most stamps have seen their values collapse due to dwindling demand—and even market collapse as public auctions are put on hold in the wake of a pandemic.

How are Stamps Valued?

Stamps are valued based on several criteria:

  • Image on the face
  • Edges or perforations
  • Country of origin
  • Original denomination
  • History/backstory
  • Errors

While you may assume that errors decrease stamp value, it’s actually the opposite. Stamps with print errors are taken out of circulation, making them more rare, and therefore, more valuable.

Is Investing In Stamps Now Just for the Wealthy?

At the rarified end of stamp collecting, shoe designer Stuart Weitzman paid $9.8 million for an 1856 British Guiana One-Cent Magenta in 2014, which was nearly four times the previous record for a single stamp. Meanwhile, at the hobbyist end of the spectrum, if your grandpa’s prized stamp collection was ever worth anything, it probably isn’t anymore.

The price of collectibles is, at its essence, a supply and demand game, and a significant number of stamp collectors are selling up (one way or another). Peak Stamp was around 1988, when the American Philatelist Society had a record high 56,000 members, according to the organization’s website. Today there are less than half as many.

Most Stamp Investments Now a Losing Proposition

For the wealthy, the rarest of rare stamps still serve as reliable and sometimes lucrative places to park money. Meanwhile, many stamps have depreciated so quickly they are worth a tenth of the price listed in purportedly contemporary guidebooks.

“We are told that postage stamps are a good investment, and this may well be true for very old rare stamps,” British philatelist Paul Sanderson told the Guardian in 2015.

“However, when it comes to less rare stamps we should treat Stanley Gibbons’ catalog values with a large pinch of salt, as in many cases they appear to be absurdly high,” said Sanderson, who was disappointed with the prices he got for his own collection.

Part of the precipitous decline is changing generational interests, with smartphones beating out stamps as entertainment value. Technology has also played a role in deflating prices.

Kids Like Smartphones, Not Stamps

It’s not that today’s kids aren’t excited to receive mail. But their white-pouched Amazon deliveries of electronics hold little in the way of artful, hand-stamped charm. It’s likely many children have never seen, or noticed anyway, a physical stamp, unless someone in their family—almost certainly an evangelist grandpa—has tried to infect them with the philately bug.

Those kids exposed to stamp collecting at a young age are the most likely to circle back around and invest in stamps as a hobby in retirement, investment blog Antique Sage writes in one of the few hopeful passages in “The Long Slow Death of Stamp Collecting.”

Technology Added Transparency to Stamp Market

Online trading forums such as eBay made stamp purchases and trading more transparent, but mostly decreased the value of stamps, because many were found to be less rare than originally thought, Antique Sage noted. The site also cautioned collectors to be on the lookout for fraudulent stamps online, which further contribute to the devaluation of legitimate stamps.

Price Slide is a Buying Opportunity for Stamp Collectors

Robert Lehmann, a Forbes columnist covering philately, had a glass-half-full take, saying the depressed prices should be seen as a buying opportunity for the investor looking for longer-term returns.

“If you are a USA collector, these are buying opportunity years for building a quality collection at price levels not seen in years,” Lehmann wrote. “Stamp buying has rarely been a timing play as investments go, but this is one of those times.”

A March 2018 survey of stamps cited by Lehmann found that stamps valued above $1000 returned “a more respectable 1.7% 3-year rate and an average rate of 3.2% per year, giving such high priced stamps an appreciation rate of 41.3% for the period, or more than twice the rate (19.9%) for stamps below $1000.”

For hobbyists who want to create value, Lehmann explains that collectors can be more proactive by identifying undervalued stamps and making their potential value known, as he did with rare Mexican stamps by researching their history and using that information to establish new values. But will hobbyists—especially those with smartphones in hand—really have the same knowledge, dedication, and luck? Or is it still a rich man’s game?

Billionaires Chase Rare Trophy Stamps

The wealthy sometimes like to see their money expressed in hobby form, and billionaires continue to trophy hunt stamps all but guaranteed to appreciate in value by virtue of their rarity. It’s no surprise the uber-wealthy have some of the most impressive collections, including Bill Gross’, which sold at auction in 2018 for a record $10 million-plus.

Gross’ most valuable single lot brought almost $750,000, a four-stamp block of the 24-cent 1869 Pictorial Inverted Center. (It’s a mistake stamp, as so many of the most valuable ones are, with the error being the printing of its illustration of Christopher Columbus’ landing party upside down.)

Before Weitzman paid $9.4 million for the one-and-only One-Cent Magenta, it had not been seen by the public for decades. Weitzman loaned it for three years to the National Postal Museum of the Smithsonian. Visitors flocked to it not just for its rarity, but for its back story.

Stamp Collectors are Story Collectors

One-Cent Magenta Stamp

The rare, British Guiana Once-Cent Magenta stamp. Image via Wikipedia.

That’s because stamp collectors are, at heart, story collectors, and investing in stamps requires a love for history. The most valuable stamp of all, the One-Cent Magenta, has a colorful and romantic story. Philatelists repeat this story to themselves when they see it, where the rest of us just see a scribbled-on purple square.

This particular piece of postage is a makeshift stamp. Something to stand in for something that stands in for something else. In this case, postage on newspapers and letters in British Guiana, made necessary because a delivery of the colony’s official British postage came up 90% short. Typeset at the local newspaper, the stamp includes a stock line drawing of a three-masted ship, along with the colony’s Latin motto, Damus Petimus Que Vicissim, which translates to “We give and we ask in return.”

Leaving a Mark on History

The scribbles, intended to deter counterfeiters, are the initials of the colony’s postmaster, who was just as diligent about destroying all unused copies once his supply of legitimate British stamps finally arrived—another reason there exists only one known copy. It was discovered in 1873 by a Scottish schoolboy stamp collector, who promptly made the unwise financial decision to sell it for $10.

The people after him who’ve owned it add their part to the story, and they also leave their initials, a kind of micro-graffiti on the stamp. Promiscuous collectors leave these tags everywhere. It’s the only kind of collecting I know about where defacing the artifact is par for the course.

Invest in Stamps For Love, Not Money

But unless you are wealthy enough to invest in ultra-rare stamps, it’s probable that the time for stamp collections as a personal investment has passed. Those who continue to invest in stamps in the middle to lower tier of value should do it solely for the love of these historical objects and their stories, and not with the hope of future financial return.

[Editor’s Note: To learn more about this and related topics, you may want to attend the following webinars: Basic Investment Principles 101 – From Asset Allocations to Zero Coupon Bonds and All About Asset Allocation. This is an updated version of an article originally published on February 20, 2019.]

©All Rights Reserved. March, 2021.  DailyDACTM, LLC d/b/a/ Financial PoiseTM

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Article Comments

  • Denis Norrington says:

    I am a full time professional stamp dealer who has been in business 67 years. Also taught and did PhD work in Economics at UC Berkeley. This article nails it precisely as I have told many of my clients. If you have a diversified, well organized and well kept collection it can be a nice medium and long term investment as well. Worldwide collections. as the most diversified type of collecting, are always in demand. As a hobby stamps are superior for the financially minded, much better than say, golf, as you can always realize some return on your activity. Denis Norrington
    San Francisco, Ca.

  • Timberly? says:

    Interesting used to collect&have quite a collection would be neat to see if it becomes of anything. Started early on&if anything always have postage but nice to see new,fun&what they come up w/.Would HATE to see it all go to waste though definitely!! That would be?!!!

  • Christopher G Sahar says:

    I feel that stamp collecting suffered over 70 years ago from its own success and world postal agencies monopolizing on it by overproducing stamps.

    To understand how seldom all but the upper middle class and rich used stamps due to their cost in the 19th century is to read fiction and non-fiction of the mid to late 19th century to see how slow it took for mail to be affordable to many more economic classes of people. Therefore, the reason for their higher value today was that supply made was less than by the 1920’s and even much less by the 1940’s through mid 1990’s. Technology today is the main driver for reduced use of postage except for packages (due to the flourishing of internet commerce). However, even with packages as the author notes, most postage is done as a printed receipt showing payment of postage (a meter strip) rather than a stamp. World postal agencies have been reducing production of several categories of stamps – mainly commemoratives and high-denomination stamps. Strangely the production of first-class mail and low denomination value stamps remains fairly high (for example, production of US Flag first class mail forever stamps is close to or over 1 billion!).

    What this means is some ultra-modern stamps have a higher chance of rising in value at a faster rate than those from the 1930’s to 2000. However, many collectors realize this (and are often told) that the value of most commemorative stamps from about 1935 to about 2000 roughly hold not much value above their original face. So they use them for postage. This in turn is a benefit to those looking for such stamps to increase in value – at least unused. So I foresee over the next 20 – 40 years some common commemorative stamps of the 1930’s – 2000 period becoming scarce in unused condition. You won’t get rich but in 2022 many remain a good buy as the premium is very low or the price is at face value (and in some cases below face). You can see this already on ebay and online stamp dealers in the difference of the value of a common stamp from 1971 versus 1998 (in the US this is more complicated with the rise of Forever stamps about 2004 – 2006 as some of the increased value is that Forever stamps automatically increase or decrease to the current rate of the postal service for which it is intended).

    For ultra-modern stamps there are some which are already rising quickly in value — these tend to be those which are produced only for a year or two, high face value, and only have few design variations and denominations. Examples would be in the US: $1, $2, $5 and $10 stamps, some Priority Mail and Priority Mail Express stamps. The main drawback of collecting some ultra-moderns is the premiums are somewhat high for stamps that are usually 5 – 10 years old. Furthermore with ultra-moderns, it may suffer in the future from the fate modern commemorative coins do today: despite low supply, there remains a greater supply of unused stamps than the demand for them (and for a few issues, they are quite scarce in used condition but relatively common in unused condition).

    As for worldwide stamps, dealers seem to prefer those say before 1970 (with exceptions) as they do know that a fair amount of countries began producing commemorative stamps as an avenue to gain international currency from collectors and those interested in particular subjects. Often such stamps’ subjects were, at times, far removed from the issuing country’s culture and identity (the numerous Princess Diana issues, Whitney Houston and American pop musicians, commemoration of certain world-recognized leaders by a dozen or more countries). I would not avoid worldwide commemoratives and stamps in general but I would research countries carefully and then decide from which one to collect and particular types.

    Last, this article skims the surface of stamp collecting, likely due to necessity. There are many areas though: one may collect first day covers, certain stamps of quite modest value suddenly can be quite valuable with a particular cancel, coil stamps offer a rich area of collecting possibilities as well collecting stamps by their watermark or tagging (a method to deter counterfeiting). It can be arcane to the newcomer but really isn’t. One example is the acquisition of coil stamps with plate numbers. A coil stamp is produce as a round coil of stamps verses on flat sheet. All stamps are printed from a plate with the design, security features, denomination and/or type of mail it is intended on it. The plate number will appear on a stamp occasionally — say every 25th or 37th coil stamp. In addition, there may be fine differences in the design of a coil stamp making a few from a particular plate scarce. So with some sleuthing one can find ways to increase your success at getting a coil stamp of modest scarcity. But again, you will likely only do this IF you enjoy the stamp design and/or enjoy its topic/history. Otherwise it will become a tedious chore.

    As for investment potential of stamps, I do think we are approaching the end of a long cyclical low that began about 1990 and is in its tail end in 2021/2022. The covid pandemic allowed people to rediscover various hobbies one of which being the joys of letter writing as well as stamp collecting (the letter writing in a modest form, postcrossing which is sending postcards to people, or pen pal clubs). One gets tired after awhile of using the usual non-commemorative first-class stamp or postcard stamp and one rarely desires a meter strip showing blandly you paid for postage on a postcard or letter (well until the postal service finds a way to make generic meter strips into a collecting area). So people look to commemorative or old stamps to enliven their missives. This can turn one into a stamp collector and, possibly later on when one has attained a solid foundation of knowledge, an investor second. So I would say philately is looking in better shape compared to the past few decades but one must still enjoy it for non-investment purposes first and be quite judicious about one’s acquisition — although stamps are a sort of currency its use is very restricted.

  • Peter says:

    Same with comics…

  • Me says:

    What to do with stamps now? 1/2 cent 1, 2, 3 etc..

  • SillySod says:

    Now you might well think the age of stamp collecting is over. But 5 or 10 years ago you would have said the same about pinball machines. But now they are back with a vengence, people are tired of the digital games on their phones. Prices of old pinball machines have rocketed in recent years. 10 years ago you could have bought at bargin basement prices. Just like it is now with stamps. Who knows. Maybe there will be a bounce back. You just never know.

    • Dave the Deer says:

      Much the same story with vinyl. If a person had driven across the country in 2000 buying every copy of Dark Side of the Moon from every used record store at $2 each they could reap a nice 1000% – 2000% profit today. Stamps may see their day once again.

      • Jerry says:

        Stamps are pieces of paper with a picture on them. Which may not have any connection with the collector’s life history or emotions. Especially now that colourful pictures are all over us in the digital world. The same with paper books. They loose their value after the short selling season is over.

        • Classic World Stamps says:

          One has to know Philately (history and technical data of each issue) before one can Value Philately. It is not just picture, it is a page of world (country’s) history. Stamps were never designed to reflect a personality, even though each one of us a UNIQUE STAMP – unpredictable, unproduceable, and non-duplicate, and very valuable.

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