Bill Gross, billionaire and founder of PIMCO, recently sold some of his collections. The proceeds of these collections were donated to various charitable organizations including the National Postal Museum. His collections contained fabulous and rare material that sold for millions of dollars.
Despite the global economic recession, this goes to show that quality, high value material holds its value over time. Not every lot realized more than what Mr. Gross paid for it. But overall, the collections sold for more than he paid for them.
This illustrates an important point that I’ve continually made. You simply cannot buy inexpensive or even moderately priced material for “investment” purposes. Even holding onto these items for years results in little, if any, financial gain. Sometimes, even rare items sell for less than their original purchase price. Some items in the Gross sales performed poorly. Because of the breadth of the Gross collections, the overall realizations were higher despite a few dogs that did not perform well.
Investing in stamps requires many thousands of dollars (or more) to buy rare and high quality material. Those items have, in general, always gone up in value. There are always a handful of wealthy collectors looking to buy such material. Do the names Ferrari, Col Green, Hind, Newberry, Boker, and others come to mind? Who will be the names of wealthy collectors in the years to come? I don’t know, but they will be there.
Investing in stamps is a lot like investing in the stock market. Would you put all of your money into a single stock? It’s a very risky proposition. What if you bought Enron stock years ago? Ouch! Smart investors balance their portfolio by buying lots of different kinds of stock. Yes, a few stocks will do well and you may miss out on some handsome gains had you invested more in those stocks. But many more stocks are apt to go down in value. Stamps are the same way. You need to invest in many items to balance your philatelic portfolio.
I don’t sell stamps for investment purposes. I provide competitively priced stamps that are for collecting and enjoyment purposes only. When it’s time to sell, your “gain” should be the years of enjoyment you received working with your collection.
The day of reckoning will come to the investors who buy inexpensive or moderately priced material and sit back in their chair and say, “Come on baby! Show me the money!” It will never happen.