Bill Gross' Retirement as an Active Collector - A Watershed Moment for Philately

Author - Richard Lehmann | Friday, 05 October 2018

We may soon look back at the October 3rd sale of a portion of Bill Gross’ USA collection and recognize what a watershed moment this was for philately. The industry has been in flux for at least the last decade, the victim of demographics and the Internet. This has been most evident in the declining price levels of stamps from almost all nations and the fact that significantly more collectors are dying than new ones coming aboard. In addition, too many active collectors have reached retirement age and are anxious about their financial security or have been collecting so long that they now are missing mostly what is not readily available or beyond their means. Hence, we hear mostly about concern that the hobby is dying, something I have been hearing for the last 20 years.

It came as a surprise to me that the day after the first Gross auction by Siegel Auction Galleries Forbes magazine contacted me to write an article for my stamp blog site on the auction and the $10 million in sales results, the largest single-seller philatelic auction result ever reported. They thought there must be a story here and so did some 1600 readers who viewed the article in the first week. The auction has been of broad interest because of Bill Gross’ prominence in philately and his willingness to pay whatever it takes to obtain the items he wanted. This has made him the dominant buyer in the market for trophy philatelic items, not just US but much foreign material as well. Gross was interviewed as to his motivation in selling this only complete collection of 19th century US stamps. He stated he had great pleasure in putting it together and now wanted to give someone else the opportunity. He also stated as a goal, to draw new collectors into the upper echelons of the hobby i.e. those with a few million dollars lying around or who lost out bidding for their favorite sports team or Picasso painting and must now settle for a more mundane pursuit.

There is no doubting of Gross’ motives, his previous stamp sales have raised millions which he donated to charity, including $10 million for a new visitors’ gallery at the Smithsonian’s National Postal Museum in Washington D.C. Since the entire USA collection is estimated at $42.5 million, This first installment sale is a mere prelude to what may kick-start a new group of wealthy buyers from around the world. The fact that Bill will not be a buyer should encourage broader participation. His buying prowess in the past may well have restrained others from competing and this may become more evident in the follow up auctions being planned. Personally, I would much rather see the most valuable stamp in the world being a US item than a crude local creation from British Guiana for which $9 million was paid. The premier piece in the Gross collection is the unique 1868 1 cent Franklin Z grill stamp which he acquired in 2005 from Mystic Stamp’s owner Donald Sundman in exchange for the plate block of the inverted jenny sheet, for which he paid $2.97 million. It will be a philatelic milestone when this gem comes up for sale. It may seem a stretch to think the Franklin stamp could surpass a $9 million price, but paying such a price is its own cachet for future valuation, e.g. it is wiser to pay over $9 million once the price goes over, $7 million.

What the Gross sale may achieve, however, is to attract investor’s worldwide into buying trophy stamps, not just hobbyists. Collectors with deep pockets such as Bill Gross are a rare breed, but billionaire investors seeking asset diversification are much more common and have been more hampered by the infrequency of sales of six figure trophy stamps than by any reluctance to buy. Stamps after all have price histories going back to the 1840 to which, as the owner of an 1898 Scott Catalogue, I can attest. Expect to see the level of participation in the follow-on auctions of the Gross material to have many more participants. What has also held back investors in stamps is the lack of reliable information and stamps’ low liquidity. This is being improved by the Internet, which provides transparency for an industry where information secrecy has been a key to successful dealing. Catalogs, still the main pricing source, are still overly accommodative to the sell side of the market and provide widely different opinions of value. This needs to change.

What is developing today are information databases that allow for the pricing and evaluation of stamps based on real and current market pricing as well as metrics like those used in the securities business to rate a stamp’s investment potential. In full disclosure, my company has developed an information system similar to the Bloomberg system so popular in the securities industry. The stamp market is finally entering the 21st century. When combined with current blockchain technology, we will soon see a more liquid stamp market where investors and collectors play a much more active role, and not just for trophy items. So, thank you Bill Gross for helping to increase awareness of the investment side of stamps. Through your auctions and example, maybe more than just a few rich hobbyists will come to see the attractions of philately as well.

The Forbes article can be seen at The Siegel Auction Galleries catalog for the first Bill Gross auction can be found at

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