Author - Richard Lehmann | Friday, 20 May 2016

The universe of investment grade stamps for the USA is one of the largest in philately. My analysis focused on over 3000 listed items issued before 1950 and priced at $25 or more. Since our investment grade universe includes some 60,000 items, it means US stamps are the biggest single component country. In terms of aggregate investment value, it represents $13 million in mint and $11 million in used stamps; good to know in case you have as a goal a complete US collection. But then, wouldn't it be a lot more fun putting that together than spending $9 million on the British Guiana?

Since the market for US stamps is so deep and mature, it cannot be expected to perform like that of say China which has only recently accumulated massive discretionary wealth. Still there are several areas and numerous individual USA stamps which continue to do well despite a slow growth in other categories of investment and the economy as a whole. For US mint stamps, those priced $25,000 and higher showed five and ten year growth of 16.47% and 169.33% respectively. These 105 stamps, though few in number, represent 78% of the $12 million investment value being measured and thus need to be considered separately. Stamps between $1,000 and $5,000 showed a respectable 7% and 40.22% appreciation for the 5 and 10 year period, but more importantly, demonstrated a major shift in collector focus. Looking at the 69 mint stamps which have appreciated more than 50% in the last five years, it is noteworthy that 29 were revenue issues and 19 were officials. Only 32% of the top appreciating stamps were regular issues. This rising prominence in back of the book stamps has no obvious reason. If I had to guess I would attribute it to the notion that US collectors are, as a group, mature and advanced collectors who have already bought most of the things they can afford in traditional stamps. They are therefore diversifying into revenue and official stamps because they are more affordable. In any case, the matter deserves some serious debate since it may have long term market consequences.

Note that I have done a separate analysis of the stamps and postmarks for the Confederate States. They have been stellar performers in the last 5 years with used stamps leading the way appreciating 31.04% and 50.02% over the last 5 and 10 years with most of that appreciation in the last 5 years. Mint stamps appreciated 17.31% and 40.94% for the same periods. It was noted, however, that almost all the appreciation in both mint and used took place in only 53 of the mint and 143 of the used stamps out of a universe of about 400 items. Hence, those items that appreciated actually did so at twice the rates shown for the group; in short, it pays to know who the winners are and not just buy the group.

When evaluating buying a high priced stamp, an in depth review of its pricing history is essential. By way of example, albeit an extreme one, is an envelope cut square Scott # U447A which in 1995 was priced at $1500 unused. For subsequent years it went unpriced until in 2005 the price shot up to an astronomical $50,000 where it remained through 2009. In 2010, however, the price was dropped to $3,500 and now became the price for an entire rather than a cut square. In 2011 the price dropped further to $1,500 and then rose again to $3,500 where it stands today. Was this a typo error by Scott, or maybe a rigged auction bid, or did someone actually take the kind of loss I thought only the stock market could deliver? In any case, it demonstrates the potential risks in buying pricy items without a good price history and provenance.

Investors should be aware that US stamps have brought the recognition of price premiums for never hinged stamps to a high art form. I have always been dubious of the concept that the state of the gum on the back of a stamp should garner more than a nominal premium. In US stamps, however, not only do they generally bring premiums of 40%-50%, it can run as much as 1000%! I suspect that investment minded buyers are at the heart of this price disparity since they want to minimize the degree of expertise needed to judge an individual stamp and protect its resale value. The offsetting risk is that no one knows just how rare an old stamp in never hinged condition may be, hence, the value premium is guess work at best. Still and all, never hinged stamps as a rule will likely continue to lead hinged stamps in appreciation. It's only the degree of price premium that is the principal concern, i.e. it's an added element of risk. I will have more to say on this in a future column. Note that all the analysis done here are for hinged fine/very fine stamps.

Due to space limitations, I will publish a list of the best performing US stamps in two months. Meanwhile, I invite your comments on this column and will then provide you with opinions/feedback from NY2016. Email me at

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