In a 2008 American Stamp Dealer & Collector article, fellow dealer Jim Lee wrote a short piece about legendary and long time stamp dealer Louis K. Robbins. Lou has a tremendous amount of experience in the business.
Jim used a quote from Lou that really hits home. Here is what Lou said about working for New York City dealer Herman Toaspern in the summer of 1930: “On my very first day of employment, ‘Toasty’ educated me about the stamp business. He said: ‘This is a hobby. Most people will lose money when they sell, a few will break even, and a very lucky few will wind up making money.’” That quote is as true today as it was in 1930. What does this mean to you?
If you collect for fun, which I’ve always advocated, then you are on the right path. The return on your investment is the endless hours of fun, the relaxation value that stamps bring, and the knowledge you gain through the things you learn with stamps. Enjoy!
If you are looking for financial gains, you’re probably going to be disappointed when it comes time to sell. Buying inexpensive stamps, placing them in an album, and waiting for the value to go up will not happen. If you don’t believe me, then follow the wisdom of Lou Robbins who has been in the stamp business for decades.
A stamp that you buy today for $20 will be worth about $20 in the years to come. Suppose in ten years the value increases to $25. Are you going to get your initial $20 investment back? Probably not. Most dealers operate on margins larger than 25% (or $5 in this example). Most dealers have one or more copies of this same $20 stamp in stock. Their demand for your copy is small. That is what Lou Robbins means when he says most will lose money when they sell. Most stamps don’t rise in value enough over time to recover the initial investment.
There is one way to potentially increase the value of your collection. A few collectors have done this. But it takes work by you. How?
Research! Putting research into your stamps is one way of increasing their value. Look at Dr. Carroll Chase. He took a relatively common stamp, the 3¢ 1851 issue, and plated it. He was an acknowledged expert on that issue and devoted a lifetime studying that stamp. Did the gain in value exceed the countless hours spent researching that stamp? I don’t know. Another example is Clyde Jennings. His exhibit and book on “The Half” about various ½¢ stamps went well beyond the “buy it and put it in my album” philosophy. A lot of work went into that collection. It included unusual material. In these two cases, the stamps were well researched and had a story behind them. They were no longer just ordinary stamps.
If you’re willing to pick an area and devote your time and research to that area, there may be a potential profit. That is the only way I know of to add value to otherwise common or moderately priced material. If you decide to take this route, good luck! And remember that along the way, you will still have a lot of fun too.