How to make money from stamps

Toby Walne

Financial Mail (26.10.09) - With 50m enthusiasts, stamp collecting is the world's most popular hobby, but only a tiny minority approach philately as a serious investment.

Mike Hall, 39, chief executive of national stamp trader Stanley Gibbons, started to build up his own collection five years ago and has since amassed a portfolio of hundreds of stamps into a substantial 'family heirloom'.

'I came to stamps looking for an alternative investment opportunity, but it has since become a genuine interest,' he says. 'This is the opposite of how most people get involved. You soon realise stamp collecting is not just a pastime for geeks, but can be a rewarding way to make money that also involves the study of fabulous artwork and history.'

Mike, who lives in Guernsey with his wife and two children, aged nine and 13, views his collection as a long-term investment for future generations. Investors should generally keep their stamps for at least five years if they hope for significant capital appreciation.

According to Stanley Gibbons, the most collectable UK stamps have risen in value by 10% every year for the past decade, well ahead of the returns delivered by the average stocks and shares investment over the same period.

But like shares, the value of stamps can go down as well as up. There was a time in the late Eighties when prices crashed after the market became overheated.

Mike says: 'Many people think if they have an album crammed full of stamps it might be worth lots of money. Sadly, the vast majority of stamps are worthless - it is only the most unusual and rare stamps, kept in pristine condition, that are deemed to be investments.'

Stamp collecting officially began with the issue of the first adhesive stamp, the Penny Black, on May 6, 1840. Although they are fantastic pieces of history, few are worth more than a few pounds. This is because stamps used to be cut individually. Imprecise cutting at the hand of a Victorian postal worker drastically reduces value. The appeal to investors of used stamps is also much diminished.

While a single, unused Penny Black in mint condition, taken from the corner of a sheet where the plate number is displayed, could fetch £30,000, a used example can be picked up for £10.

A rare block of ten first-day issue Penny Blacks fetched £200,000 in 1998. The most collectable stamp investments are 'well-centred unmounted mint'.

Mike says: 'The gum on the back of a stamp can be as much as 90% of the value. You don't want to have them mounted in books but kept loose, in special folders. Used stamps are usually also worth far less unless they are historically important and, for example, carry a rare postmark. Condition is always key.'

Mike admits stamp investing can be intimidating because the choice is overwhelming. His first tip is to narrow the scope of a collection by focusing on an area of personal interest - such as a country, period or subject - and start from there. Earlier stamps, from the Victorian era, tend to be most rare, and therefore valuable. Investors should expect to pay a minimum of £200 for a quality stamp of investment value.

His collection targets designs themed around Empire and Commonwealth. 'A particular favourite is a 1933 Falkland Islands illustration of a penguin - it is particularly fine,' he says. It is worth £600.

Another stamp in his collection, from 1931, features a beautiful painting of the Rock of Gibraltar. A sought-after stamp design in the Empire theme, known as 'sea horses', features Britannia riding the waves on a trio of rearing horses. A pristine block of four, from 1915, can fetch £15,000.

The world record price for a stamp is £1.3m paid in 1996 for an 1855 Swedish 'Treskilling Banco' stamp. In terms of density, weight and size the stamp is the world's most costly object.

Although historically important, as an example of the first stamps used in Sweden, one unique selling point was that due to a printing error, the surprisingly plain stamp was printed yellow instead of the usual green. Its provenance is also fascinating. It has changed hands many times, with owners including King Carol II of Romania.



Stamp duty: Mike Hall of Stanley Gibbons

(Quelle: http://www.thisismoney.co.uk/investing/article.html?in_article_id=492423&in_page_id=166&position=moretopstories)